NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2024 (CONT’D) 43. FINANCIAL INSTRUMENTS The activities of the Group and of the Company are exposed to a variety of market risk (including foreign currency risk, interest rate risk and equity price risk), credit risk and liquidity risk. The overall financial risk management policy focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group and of the Company. 43.1 FINANCIAL RISK MANAGEMENT POLICIES The policies in respect of the major areas of treasury activity are as follows:- (a) Market Risk (i) Foreign Currency Risk The Group and the Company do not have any transactions and balances denominated in foreign currencies and hence, are not exposed to foreign currency risk. (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 longterm borrowings with variable rates. The Group and the Company adopt a policy of obtaining the most favourable interest rates available and by maintaining a balanced portfolio of mix of fixed and floating rate borrowings. The fixed rate debt instruments of the Group and of the Company are not subject to interest rate risk since neither carrying amounts nor the future cash flows will fluctuate because of a change in 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 Notes 24, 25 and 28 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 THE COMPANY 2024 2023 2024 2023 RM’000 RM’000 RM’000 RM’000 Effects on Profit After Taxation Increase of 26 basis points (2023: 93 basis points) -519 -2,069 -363 -778 Decrease of 26 basis points (2023: 93 basis points) +519 +2,069 +363 +778 (iii) Equity Price Risk The Group does not have any quoted investments and hence, is not exposed to equity price risk. FINANCIAL STATEMENTS MATRIX CONCEPTS HOLDINGS BERHAD 206
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