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FINANCIAL REPORTS
176
Bursa Malaysia •
Annual Report 2015
NOTES TO THE
FINANCIAL STATEMENTS
31 DECEMBER 2015
36. Financial risk management objectives and policies (cont’d.)
(b) Market risk: Interest rate risk (cont’d.)
Interest rate risk sensitivity
The following table demonstrates the sensitivity of the Group’s and the Company’s profit after tax and equity to a 25 basis points (2014: 25 basis
points) increase/decrease in interest rates with all other variables held constant:
Group
Company
2015
2014
2015
2014
RM’000
RM’000
RM’000
RM’000
Effects on profit after tax if:
- Increase by 25 basis points
668
564
193
105
- Decrease by 25 basis points
(668)
(564)
(193)
(105)
Effects on equity if:
- Increase by 25 basis points
(409)
(37)
(193)
(163)
- Decrease by 25 basis points
409
37
193
163
The sensitivity is the effect of the assumed changes in interest rates on:
•
the net interest income for the year, based on the financial assets held at the end of the financial year; and
•
changes in fair value of investment securities for the year, based on revaluing fixed rate financial assets at the end of the financial year.
Interest rate risk exposure
The following table analyses the Group’s and the Company’s interest rate risk exposure. The unquoted bonds, commercial papers and deposits
with licensed financial institutions are categorised by maturity dates.
Maturity
Total
Effective
interest
rate
Less than
one year
One to
five years
More than
five years
RM’000
RM’000
RM’000
RM’000
%
Group
At 31 December 2015
Investment securities
30,048
54,734
-
84,782
4.41
Deposits with licensed financial institutions:
- Cash set aside by the Group for Clearing Funds
90,000
-
-
90,000
4.10
- Cash and bank balances
265,983
-
-
265,983
4.10