Frontken Corporation Berhad 200401012517 (651020-T) • A N N U A L R E P O R T 2 0 2 1 144 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) 27. FINANCIAL INSTRUMENTS (CONT’D) (a) Financial Risk Management Policies (Cont’d) Market Risk (Cont’d) (i) Foreign currency risk (Cont’d) Foreign Currency Risk Sensitivity Analysis The following table details the sensitivity analysis to a reasonably possible change in the foreign currencies at the end of the reporting period, with all other variables held constant:- The Group The Company 2021 2020 2021 2020 Increase/ Increase/ Increase/ Increase/ (Decrease) (Decrease) (Decrease) (Decrease) RM RM RM RM Effects on profit after taxation/equity Singapore Dollar: - strengthened by 5% 231,908 (18,096) 249,447 1,075,490 - weakened by 5% (231,908) 18,096 (249,447) (1,075,490) United States Dollar: - strengthened by 5% 2,145,228 3,482,879 199,893 301,578 - weakened by 5% (2,145,228) (3,482,879) (199,893) (301,578) Others*: - strengthened by 5% (922) 278 - - - weakened by 5% 922 (278) - - * Denominated in Euro, Great Britain Pound and Indonesian Rupiah. (ii) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s fixed deposits with licensed banks are carried at amortised cost. Therefore, they are not subject to interest rate risk as defined in MFRS 7 since neither carrying amounts nor the future cash flows will fluctuate because of a change in market interest rates. The Group does not have any floating rate borrowings and hence, is not exposed to interest rate risk.
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