ENRA Group Berhad Annual Report 2020

ENRA Group Berhad - Annual Report 2020 138 NOTES TO THE FINANCIAL STATEMENTS 31 March 2020 41. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Cont’d) i. Credit risk (Cont’d) As at the end of the reporting period, other than the amounts owing by the subsidiaries amounting to RM40,871,000 (2019: RM60,182,000), which represent 88% (2019: 98%) of trade and other receivables of the Company, there is no significant concentration of credit risk of the Company. Exposure to credit risk At the end of the reporting period, the Group’s and the Company’s maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statements of financial position. Information regarding credit enhancements for trade and other receivables is disclosed in Note 13 to the financial statements. ii. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of the financial instruments of the Group and of the Company would fluctuate because of changes in market interest rates. The Group’s and the Company’s exposure to interest rate risk arises primarily from their fixed deposits with licensed banks, short term funds, borrowings, lease liabilites and amounts due from subsidiaries. The Group borrows at both, fixed and floating rates of interest to generate the desired interest profile and to manage the exposure of the Group and of the Company to interest rate fluctuations. Sensitivity analysis for interest rate risk The following table demonstrates the sensitivity analysis of the Group and of the Company if interest rates at the end of reporting period changed by 10 basis points with all other variables held constant: Group Company 2020 Profit / (Loss) after tax RM’000 2019 Profit / (Loss) after tax RM’000 2020 Profit / (Loss) after tax RM’000 2019 Profit / (Loss) after tax RM’000 Increase by 0.1% (2019: 0.1%) (53) 3 43 54 Decrease by 0.1% (2019: 0.1%) 53 (3) (43) (54)