NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2023 22. Financial risk management objectives and policies (Cont’d) (c) Interest rate risk (Cont’d) The interest rate mentioned below will have an impact on the management of the Group and the Fund, regardless of whether it is an Islamic fund or otherwise. It does not in any way suggest that the Group and the Fund will invest in conventional financial instruments. All the investments and placements carried out for the Group and the Fund are in accordance with Shariah requirements. 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) profit before tax by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. Group Fund 2023 2022 2023 2022 RM RM RM RM Financing rate - 25 bp decrease 1,816,717 2,000,651 1,816,817 2,000,749 - 25 bp increase (1,816,717) (2,000,651) (1,816,817) (2,000,749) (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 2023 2022 2023 2022 RM RM RM RM Denominated in AUD Trade receivables 33,394,436 25,756,239 - - Cash and cash equivalents 17,104,759 18,926,130 1,188,288 1,132,576 Other payables - (133,238) - - Net exposure in the statements of financial position 50,499,195 44,549,131 1,188,288 1,132,576 AL-`AQAR HEALTHCARE REIT ANNUAL REPORT 2023 FINANCIAL STATEMENTS 1 2 3 4 5 221
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