Integrated Annual Report 2023 2 3 4 5 6 7 8 9 1 367 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 41. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD.) (c) Foreign currency risk (contd.) Sensitivity analysis for foreign currency risk The following table demonstrates the sensitivity of the Group’s profit before tax and equity to a reasonably possible change in the SGD and TWD exchange rates against the RM, with all other variables held constant. Change in SGD rate Effect on profit before tax RM‘000 Effect on equity RM‘000 2023 6% 22 35,181 -6% (22) (35,181) 2022 6% 1,579 33,305 -6% (1,579) (33,305) Change in TWD rate Effect on profit before tax RM‘000 Effect on equity RM‘000 2023 5% - 6,752 -5% - (6,752) 2022 6% - 7,230 -6% - (7,230) The impact of sensitivity analysis of the rest of the foreign currencies is not material to the Group. (d) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates. As the Group has no significant interest-bearing financial assets, the Group’s income and operating cash flows are substantially independent of changes in market interest rates. The Group’s interest-bearing financial assets are mainly short term in nature and have been mostly placed in fixed deposits or occasionally, in short term commercial papers.
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