CAHYA MATA SARAWAK ANNUAL REPORT 2016

189 Cahya Mata Sarawak Berhad A N N U A L R E P O R T 2 0 1 6 Section 07 Financial StatementS NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2016 41. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT'D.) (c) Market risk (cont'd.) (ii) Interest rate risk (cont'd.) • Exposure to interest rate risk As the Group and the Company have 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. The Group’s borrowings at floating rates are contractually re- priced at intervals of less than 6 months (2015: 6 months). 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 was: Group Company 2016 2015 2016 2015 RM’000 RM’000 RM’000 RM’000 Fixed rate instruments Financial assets 68,287 7,003 64,067 3,910 Financial liabilities 339,317 356,796 35,000 - 407,604 363,799 99,067 3,910 Floating rate instruments Financial assets 70,964 64,561 297,548 305,510 Financial liabilities 827 1,378 993,014 815,933 71,791 65,939 1,290,562 1,121,443 • Interest risk sensitivity analysis The Group has minimal exposure to interest rate risk at the reporting date and a change in interest rates would not materially affect profit or loss hence, sensitivity analysis is not presented. (iii) Other price risk Equity price risk arises from the Group’s investment in equity securities. • Risk management objectives, policies and process for managing the risk The Group and the Company are exposed to market price risk and the risk of impairment in the value of investments held. The Group and the Company manage the risk of impairment by evaluation of investment opportunities, continuously monitoring the performance of investments held and assessing market risk relevant to which the investments operate. • Exposure to equity price risk At the reporting date, 52% (2015: 65%) of the Group’s and the Company’s investment securities consist of income debt securities fund, 48% (2015: 35%) in equity portfolio quoted on Bursa Malaysia Securities Berhad.