7 207 206 Notes to the Financial Statements Notes to the Financial Statements 30. FINANCIAL INSTRUMENTS (CONTINUED) 30.6 Market risk (continued) 30.6.2 Interest rate risk (continued) Exposure to interest rate risk The interest rate profile of the Group’s and the Company’s significant interest-bearing financial instruments, based on carrying amounts as at the end of the reporting period was: Group Company 2023 RM’000 2022 RM’000 2023 RM’000 2022 RM’000 Fixed rate instruments Financial assets 15,590 35,414 128,245 192,242 Financial liabilities (774,583) (665,905) (23,840) (4,000) Lease liabilities (210,777) (171,559) - - (969,770) (802,050) 104,405 188,242 Floating rate instruments Financial assets 330,909 445,717 256,153 348,673 Financial liabilities (480,483) (694,490) (606,398) (807,067) (149,574) (248,773) (350,245) (458,394) Interest rate risk sensitivity analysis (a) 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, and the Group and the Company do not designate derivatives as hedging instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the end of the reporting period would not affect profit or loss. (b) Cash flow sensitivity analysis for variable rate instruments A change of 50 basis points (“bp”) in interest rates at the end of the reporting period would have increased/(decreased) equity and the post-tax profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remained constant. Profit or (loss) 50 bp increase 2023 RM’000 50 bp decrease 2023 RM’000 50 bp increase 2022 RM’000 50 bp decrease 2022 RM’000 Group Floating rate instruments (568) 568 (945) 945 Company Floating rate instruments (1,331) 1,331 (1,742) 1,742 30. FINANCIAL INSTRUMENTS (CONTINUED) 30.7 Hedging activities 30.7.1 Cash flow hedge The Group entered into forward exchange contracts as hedges for purchases denominated in foreign currencies. The Group and the Company also entered into cross currency swap and interest rate swap to hedge against its exposures of borrowings in foreign currency and movements in interest rates. The commodities futures were entered into with the objective of managing and hedging the Group’s exposure to adverse commodity price movements. During the year, the Group and the Company had recognised net gain of RM5,151,000 and RM5,210,000 (2022: net gain of RM5,784,000 and RM6,317,000) respectively in other comprehensive income.
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