EXCEL FORCE MSC BERHAD Annual Report 2017

107 30. Financial Instruments (cont’d) (b) Financial risk management objectives and policies (cont’d) (iii) Market risks (cont’d) (A) Interest rate risk (cont’d) 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 RM104,944 and RM104,944 (2016: RM106,616 and RM106,616) respectively, arising mainly as a result of higher / lower net interest 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. The carrying amounts of the Group’s and of the Company’s foreign currency denominated financial assets and financial liabilities at the end of the reporting period are as follows: Denominated in USD SGD RM RM Group and Company 2017 Trade receivables 18,235 - Cash and bank balances 361,471 3,818 379,706 3,818 2016 Trade receivables 15,968 147,118 Cash and bank balances 517,375 4,465 533,343 151,583 Notes To The Financial Statements 31 December 2017 (cont’d)