259 FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS ʹˢ˥ ˧˛˘ Ѓˡ˔ˡ˖˜˔˟ ˬ˘˔˥ ˘ˡ˗˘˗ ʦʤ ʷ˘˖˘ˠ˕˘˥ ʥʣʥʧ (cont’d) 45. FINANCIAL INSTRUMENTS (CONT’D) (b) Financial risk management objectives and policies (cont’d) (iii) Market risk (cont’d) (b) Interest rate risk The Group’s and the Company’s financing receivables, fixed rate deposits placed with licensed banks and borrowings are exposed to a risk of change in their fair value due to changes in interest rates. The Group’s and the Company’s variable rate borrowings are exposed to a risk of change in cash flows due to change in interest rates. The Group and the Company manage their interest rate risk of its deposits with licensed banks by placing them at the most competitive interest rates obtainable, which yield better returns than cash at bank and maintaining a prudent mix of short and long-term deposits. The Group and the Company manage their interest rate risk exposure from interest bearing borrowing by obtaining financing with the most favourable interest rates in the market. The Group and the Company constantly monitor their interest rate risk by reviewing their debts portfolio to ensure favourable rates are obtained. The Group and the Company do not utilise interest swap contracts or other derivative instruments for trading or speculative purposes. The interest rate profit of the Group’s and of the Company’s significant interest-bearing financial instruments, based on carrying amounts as at the end of the reporting period was: 2024 2023 RM’000 RM’000 Group Fixed rate instruments Financial assets Fixed deposits with licensed banks 25,178 23,825 Financing receivables 209,737 251,593 Financial liabilities Block discounting (16,596) (22,020) Lease liabilities (25,797) (34,026) Sukuk wakalah (1,000,000) (575,000) (807,478) (355,628) Floating rate instruments Financial liabilities Revolving credit (71,200) (119,400) Term loans (166,284) (130,238) Margin financing (10,824) - (248,308) (249,638)
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