PRG Holdings Berhad Annual Report 2017

• PRG HOLDINGS BERHAD 150 33. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D) (i) Foreign currency risk (cont’d) Sensitivity analysis for foreign currency risk (cont’d) Sensitivity analysis of other currencies are not disclosed as the fluctuation of these foreign exchange rates against the Group’s functional currency would not be significant. (ii) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of the Group’s and of the Company’s financial instruments will fluctuate because of changes in market interest rates. The Group’s and the Company’s deposits placed with financial institutions and borrowings are exposed to a risk of changes in their fair values due to changes in market interest rates. The Group’s and the Company’s borrowings are exposed to a risk of change in cash flows due to changes in interest rates. Short term receivables and payables are not exposed to interest rate risk. The Group and the Company borrow for operations at fixed and variable rates using hire purchase, term loans, trade financing facilities and bank overdraft. There is no formal hedging policy with respect to interest rate exposure. N O T E S T O T H E F I N A N C I A L S T A T E M E N T S 3 1 D E C E M B E R 2 0 1 7 ( c o n t ’ d )