Fraser & Neave Holdings Bhd Annual Report 2020

215 06 financial statements ANNUAL REPORT 2020 Notes to The Financial Statements (Cont’d.) 30. FINANCIAL INSTRUMENTS (CONTINUED) (F) MARKET RISK (CONTINUED) (ii) Interest rate risk The Group’s investments in fixed rate debt securities and its fixed rate borrowings are exposed to a risk of change in their fair value due to changes in interest rates. The Group’s variable rate borrowings are exposed to a risk of change in cash flows due to changes in interest rates. Investments in equity securities and short-term receivables and payables are not significantly exposed to interest rate risk. Exposure to interest rate risk The interest rate profile of the Group’s and the Company’s interest-bearing financial instruments, based on carrying amounts as at the end of the reporting period are as follows: Group Company Note 2020 RM’000 2019 RM’000 2020 RM’000 2019 RM’000 Fixed rate instruments Short-term deposits 15 174,309 316,739 – 35,000 Loans and borrowings 17 (91,868) (123,311) – – Lease liabilities (25,667) – – – 56,774 193,428 – 35,000 Floating rate instruments Shareholders’ loan to a joint venture 10 – 126,820 – 126,820 Loan to a subsidiary 12.2 – – 543,877 427,039 – 126,820 543,877 553,859 Interest rate risk sensitivity analysis Fair value sensitivity analysis for fixed rate instruments The Group does 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 variable rate instruments A change in 100 basis points in interest rates would have decreased or increased pre-tax profit or loss of the Group and of the Company by the amounts shown below. Group Company 2020 RM’000 2019 RM’000 2020 RM’000 2019 RM’000 Floating rate instruments – 1,268 5,439 5,539