NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2022 22. Financial risk management objectives and policies (cont’d) (c) Interest rate risk (cont’d) Sensitivity analysis for profit rate risk (cont’d) Group Fund 2022 2021 2022 2021 RM RM RM RM Financing rate - 25 bp decrease 2,000,651 1,608,433 2,000,749 1,608,529 - 25 bp increase (2,000,651) (1,608,433) (2,000,749) (1,608,529) (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 and the Fund also maintain bank accounts denominated in foreign currencies, primarily in AUD, as a natural hedge against foreign currency risk. The Group’s and the Fund’s exposure to foreign currency risk, based on carrying amounts of assets and liabilities as at the end of the reporting period was: Group Fund 2022 2021 2022 2021 RM RM RM RM Denominated in AUD Trade receivables 25,756,239 19,814,463 - - Cash and cash equivalents 18,926,130 26,732,251 1,132,576 7,205,394 Other payables (133,238) (351,539) - - Net exposure in the statements of financial position 44,549,131 46,195,175 1,132,576 7,205,394 Sensitivity analysis for foreign currency risk The following table demonstrates the sensitivity of the Group’s and the Fund’s profit/(loss) net of tax to a reasonably possible change in the AUD exchange rates against the functional currency of the Group and the Fund, with all other variables held constant. AL-`AQAR HEALTHCARE REIT ANNUAL REPORT 2022 188
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