37. Financial risk management objectives and policies (cont’d.) (a) Interest rate risk (cont’d.) As at 31 December 2016, the Group’s and the Corporation’s exposure to the risk of changes in market interest rate relates primarily to the Group and the Corporation’s placement of deposits with licensed banks, cash and bank balances, loans to subsidiaries and joint ventures, interest-bearing loans and borrowings and loans from subsidiaries and joint ventures. The interest rate profiles of the Group and of the Corporation’s interest-bearing financial instruments based on carrying amount, as at reporting date were as follows: Group Corporation 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000 Fixed rate instruments Financial assets Deposits with licensed banks 228,013 765,317 401 1,485 Deposits with IFSSC 5,401,275 3,600,430 3,468,220 2,067,585 Loans to: Subsidiaries – – 1,714,960 4,259,595 Joint ventures 47,887 48,240 47,887 48,240 Financial liabilities Fixed rate borrowings 20,000 34,208 – – Floating rate borrowings (swapped to fixed rate) 1,740,783 1,489,803 – – Loans from subsidiaries – – 769,533 728,218 Floating rate instruments Financial assets Cash and bank balances 929,919 1,288,277 235 1,613 Loans to: Subsidiaries – – 2,994,935 1,692,591 Joint ventures – 32,567 – 32,260 Financial liabilities Floating rate borrowings 10,840,723 4,980,392 807,210 – Loans from subsidiaries – – 8,160,983 1,028,099 MISC BERHAD • Annual Report 2016 310 notes to the financial statements - 31 december 2016
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