Frontken Berhad Annual Report 2023

Frontken Corporation Berhad 200401012517 (651020-T) • ANNUAL REPORT 2023 143 NOTES TO THE FINANCIAL STATEMENTS (CONT’D) 28. 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 2023 2022 2023 2022 RM RM RM RM Effects on profit after taxation/equity Singapore Dollar: - strengthened by 5% 1,545,126 (1,489) - 15,443 - weakened by 5% (1,545,126) 1,489 - (15,443) United States Dollar: - strengthened by 5% 4,282,768 3,981,975 222,919 - - weakened by 5% (4,282,768) (3,981,975) (222,919) - Others*: - strengthened by 5% (3,430) (8,290) - - - weakened by 5% 3,430 8,290 - - * Denominated in Chinese Renminbi, Euro, Great Britain Pound, Indonesian Rupiah and Japanese Yen. (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 exposure to interest rate risk arises mainly from investments in fixed rate debt securities and short-term borrowing with variable rate. The Group and the Company adopt a policy of obtaining the most favourable interest rates available and by maintaining a balanced portfolio of mix of fixed and floating rate borrowings. The fixed rate debt instruments of the Group and of the Company are not subject to interest rate risk since neither carrying amounts nor the future cash flows will fluctuate because of a change in market interest rates. Interest Rate Risk Sensitivity Analysis The Group and the Company do not have any floating rate borrowings and hence, no sensitivity analysis is presented.

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