UEM EDGENTA BERHAD Integrated Annual Report 2025 362 NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2025 41. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD.) (d) Interest rate risk Interest rate 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 interest rates. As the Group has no significant interest-bearing financial assets, the Group’s income and operating cash flows are substantially independent of changes in market interest rates. The Group’s interest-bearing financial assets are mainly short term in nature and have been mostly placed in fixed deposits or occasionally, in short term commercial papers. The Group’s interest rate risk arises primarily from interest-bearing borrowings. Borrowings at floating rates expose the Group to cash flow interest rate risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk. The Group’s policy is to manage interest cost using a mix of fixed and floating rate debts. Sensitivity analysis for interest rate risk A sensitivity analysis had been performed to determine the sensitivity of the Group’s profit net of tax to a reasonably possible change in the interest rate at the reporting date. This analysis assumes that all other variables, in particular foreign currency rate, remain constant. Based on the analysis, there is no material impact to the Group’s profit net of tax. The following tables set out the carrying amounts, the weighted average effective interest rates (“WAEIR”) as at the reporting date and the remaining maturities of the Group’s and of the Company’s financial instruments that are exposed to interest rate risk: At 31 December 2025 Note WAEIR % Within 1 year RM’000 1-2 years RM’000 2-5 years RM’000 > 5 years RM’000 Total RM’000 Group Fixed rate Deposits with licensed banks and other financial institutions 27 2.84% 306,924 - - - 306,924 IMTNs 35 4.25% (250,000) - - - (250,000) Lease liabilities 15 3.66% (9,406) (6,847) (2,323) (1,670) (20,246) Floating rate Revolving credit 35 3.62% (102,556) - - - (102,556) Term loans 35 4.89% (28,820) (14,403) - - (43,223) Company Fixed rate Deposits with licensed banks and other financial institutions 27 1.05% 481 - - - 481 IMTNs 35 4.25% (250,000) - - - (250,000) Lease liabilities 15 3.45% (548) - - - (548) Floating rate Revolving credit 35 3.78% (52,030) - - - (52,030)
RkJQdWJsaXNoZXIy NDgzMzc=