SCC Holdings Berhad Annual Report 2017

SCC Holdings Berhad (511477-A) | Annual Report 2017 79 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2017 (CONT’D) 30. Financial Instruments (Cont’d) (b) Financial risk management objectives and policies (cont’d) (ii) Market risks (cont’d) (a) Foreign currency exchange risk (cont’d) Foreign currency sensitivity analysis The following table demonstrates the sensitivity of the Group’s profit before tax to a reasonably possible change in the USD, EUR, BND and SGD exchange rates against RM, with all other variables held constant. Effect on loss before tax Change in currency rate 2017 2016 Group RM’000 RM’000 USD Strengthened 5% (83) 98 Weakened 5% 83 (98) EUR Strengthened 5% 1 1 Weakened 5% (1) (1) BND Strengthened 5% 0 - Weakened 5% (0) - SGD Strengthened 5% (1) - Weakened 5% 1 - (b) Interest rate risk The Group’s fixed rate deposits placed with licensed banks are exposed to a risk of change in their fair value due to changes in market interest rates. The Group’s variable rate borrowings are exposed to a risk of change in cash flows due to changes in market interest rate. The Groupmanages its interest rate risk exposure from interest bearing borrowings by obtaining financing with the most favourable interest rates in the market. The Group constantly monitors its interest rate risk by reviewing its debts portfolio to ensure favourable rates are obtained. The Group does not utilise interest swap contracts or other derivative instruments for trading or speculative purposes. The interest rate profile of the Group’s and of the Company’s interest-bearing financial instruments, based on carrying amounts as at the end of the reporting period was: Group 2017 2016 RM’000 RM’000 Fixed rate instruments Financial Liabilities - Bank borrowings 276 71 - Finance lease payable 25 92