AUDITED FINANCIAL STATEMENTS 2022 59 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022 4 FINANCIAL RISK MANAGEMENT (CONTINUED) (a) Financial risk management policies (continued) Market risk (continued) (iii) Finance rate risk The Group’s finance rate risk mainly arises from LLA liability and borrowings issued at variable rates which expose the Group to cash flow finance rate risk. The Group has been in constant engagement with its lender to manage its finance rate risk and has been advised that the current KLIBOR is still being referenced for its borrowings. The Group has also been informed that currently, the lender shall be guided by further announcement by Bank Negara Malaysia (“BNM”) on the timeline for the migration to the alternative reference rate (“ARR”) upon the cessation of the current KLIBOR rate. Upon the issuance of the guidelines, the lenders will engage the Group on the transition plan. The finance rate profile of the Group’s and Company’s finance bearing financial assets, based on carrying amounts as at the end of the reporting period is as follows: Group Company 2022 RM’000 2021 RM’000 2022 RM’000 2021 RM’000 Financial assets At fixed rate Fixed deposits 1,027,029 1,606,219 51,869 327,178 At floating rate (exposed to cash flow finance rate risk) Loans due from subsidiaries - - 207,011 216,830 The finance rate profile of the Group’s and Company’s finance bearing financial liabilities, based on carrying amounts as at the end of the reporting period is as follows: Group Company 2022 RM’000 2021 RM’000 2022 RM’000 2021 RM’000 Financial liabilities At fixed rate Loans due to ultimate holding company 333,316 634,665 333,316 634,665 Loans due to subsidiaries - - 811,034 806,789 Sukuk 497,374 496,451 497,374 496,451 Islamic short term trade financing 1,222,040 1,946,431 - - Short term trade financing 399,371 241,173 - - Islamic term loans 13,424 12,732 - - 2,465,525 3,331,452 1,641,724 1,937,905 At floating rate (exposed to cash flow finance rate risk) Islamic term loans 543,452 666,710 - - At fair value (exposed to cash flow finance rate risk) LLA liability 3,680,354 3,804,790 - - 4,223,806 4,471,500 - - 6,673,331 7,802,952 1,641,724 1,937,905
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