Al-`Aqar Healthcare REIT Annual Report 2019

Al-`Aqar Healthcare REIT 06 FINANCIAL STATEMENT 159 (c) Financing Rate Risk Financing rate risk is the risk that the fair value or future cash flows of the Group’s and of the Fund’s financial instruments will fluctuate because of changes in the market financing rates. The Group and the Fund manage their financing rate exposure by maintaining a prudent mix of fixed and floating rate of borrowings. The Group and the Fund place cash deposits on short-term basis and therefore this allows the Group and the Fund to respond to significant changes of financing rate promptly. Sensitivity analysis for profit rate risk At the end of the reporting period, a change of 25 basis points (“bp”) in financing rates would have increased/(decreased) post-tax profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The Group The Fund 2019 2018 2019 2018 RM RM RM RM Financing rate: - 25 bp increase (272,841) (74,209) (272,841) (74,209) - 25 bp decrease 272,841 74,209 272,841 74,209 (d) Foreign Currency Risk Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. It is not the Group’s policy to hedge foreign currency translation risk. The Group also maintains bank accounts denominated in foreign currencies, primarily in AUD, as a natural hedge against foreign currency risk. The Group’s exposure to foreign currency risk, based on carrying amounts as at the end of the reporting period was: The Group The Fund 2019 2018 2019 2018 RM RM RM RM Denominated in AUD Trade receivables 8,428,875 1,029,859 - - Cash and cash equivalents 23,338,277 20,796,786 9,633,147 - Other payables and accrued expenses (419,159) (298,502) - - Net exposure in the statements of financial position 31,347,993 21,528,143 9,633,147 - Notes To The Financial Statements For The Financial Year Ended 31 December 2019 (Continued) 23. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIESS (CONTINUED)