116 EXCEL FORCE MSC BERHAD Notes to the Financial Statements (Cont’d) 35. Financial Instruments (Cont’d) (c) Financial risk management objectives and policies (Cont’d) (iii) Market risks (Cont’d) (a) Interest rate risk (Cont’d) The interest rate profile of the Group’s and of the Company’s significant interest-bearing financial instruments, based on carrying amount at the end of the reporting period are as follows: Group and Company 30.6.2023 31.12.2021 RM RM Fixed rate instruments Financial assets 243,227 216,331 Financial liabilities (632,211) (672,117) (388,984) (455,786) Floating rate instruments Financial assets 2,639,206 10,440,367 Interest rate risk sensitivity analysis Fair value sensitivity analysis for fixed rate instruments The Group and the Company do not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore, a change in interest rates at the end of the reporting period would not affect profit or loss. Cash flow sensitivity analysis for floating rate instruments A change in 1% interest rate at the end of the reporting period would have increased/(decreased) the Group’s and the Company’s profit before tax by RM26,392 (31.12.2021: RM104,404), arising mainly as a result of higher/lower interest income on floating rate instruments. This analysis assumes that all other variables remain constant. The assumed movement in basis points for interest rate sensitivity analysis is based on the currently observable market environment. (b) Foreign currency risk The Group is exposed to foreign currency risk on transactions that are denominated in currencies other than the respective functional currencies of Group entities. The currencies giving rise to this risk are primarily United States Dollar (USD) and Singapore Dollar (SGD). The Group has not entered into any derivative instruments for hedging or trading purposes. Where possible, the Group will apply natural hedging by selling and purchasing in the same currency. However, the exposure to foreign currency risk is monitored from time to time by management.
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