DESTINI Annual Report 2020

38. Financial Instruments (Cont’d) (c) Financial risk management objectives and policies (Cont’d) (iii) Market risks (Cont’d) (a) Interest rate risk (Cont’d) Interest rate risk sensitivity analysis Fair value sensitivity analysis for fixed rate instruments The Group and the Company do not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore, a change in interest rates at the end of the reporting period would not affect profit or loss. Cash flow sensitivity analysis for floating rate instruments A change in 0.25% interest rate at the end of the reporting period would have increased the Group’ and the Company’s loss before tax by RM263,112 (2019: RM286,872) and RM40,390 (2019: RM61,366) respectively, arising mainly as a result of higher interest expense on floating rate loans and borrowings. This analysis assumes that all other variables remain constant. The assumed movement in basis points for interest rate sensitivity analysis is based on the currently observable market environment. (b) Market price risk Market price risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market prices (other than interest or foreign exchange rates). The Group and the Company are exposed to equity price risk arising from its investment in quoted instrument. This investment is listed on Bursa Malaysia and is classified as fair value through profit or loss. Management of the Group and the Company monitors the value of the equity investments by considering the movements in the quoted price. The buy and sell decisions are approved by the Risk Management Committee of the Group. Market price risk sensitivity analysis At the reporting date, if the stock indices had been 10% higher/lower, with all other variables held constant, the Group’s and the Company’s loss before tax would have been RM343,646 (2019: RM43,013) lower/higher, arising as a result of higher/lower fair value gain on held for trading investment in equity instrument. ANNUAL REPORT 2020 DESTINI BERHAD Notes to Financial Statements 191