180 KEYFIELD INTERNATIONAL BERHAD 202001038989 (1395310-M) NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2024 (cont’d) 35. FINANCIAL INSTRUMENTS (CONT’D) 35.1 FINANCIAL RISK MANAGEMENT POLICIES (CONT’D) (a) Market Risk (Cont’d) (ii) Interest Rate Risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The exposure to interest rate risk arises mainly from long-term borrowings with variable rates. The Group and the Company adopt a policy by obtaining the most favourable interest rates available and by maintaining a balanced portfolio mix of fixed and floating rate borrowings. The fixed rate debt instruments of the Group are not subject to interest rate risk since neither carrying amounts nor the future cash flows will fluctuate because of a change in their market interest rates. The exposure to interest rate risk based on the carrying amounts of the financial instruments at the end of the reporting period is disclosed in Note 19 to the financial statements. Interest Rate Risk Sensitivity Analysis The following table details the sensitivity analysis to a reasonably possible change in the interest rates at the end of the reporting period, with all other variables held constant:- The Group 2024 2023 RM’000 RM’000 Effects on Profit After Taxation/ Other Comprehensive Income Increase of 100 basis points - (67) Decrease of 100 basis points - 67 There is no impact on the Group’s equity. The Company does not have any floating rate borrowings and hence, no sensitivity analysis is presented. (iii) Equity Price Risk The Group and the Company do not have any quoted investments and hence, is not exposed to equity price risk.
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