3 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(b) Liquidity risk (continued)
On demand
or within
1 year
RM’000
1 – 5 years
RM’000
Over
5 years
RM’000
Total
RM’000
2014
Group
Payables
565,158
–
–
565,158
Borrowings
960,277
258,140
153,119
1,371,536
Deposits
17,996
–
–
17,996
Total undiscounted financial liabilities
1,543,431
258,140
153,119
1,954,690
Company
Payables
234,853
125,911
–
360,764
Borrowings
260,100
–
–
260,100
Total undiscounted financial liabilities
494,953
125,911
–
620,864
The Group has total undrawn borrowing facilities amounting to RM1.0 billion as at 31 December 2015.
(c) Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of the Group’s and of the Company’s financial
instruments will fluctuate because of changes in market interest rates.
The Group’s and the Company’s exposure to interest rate risk arises primarily from their borrowings. The Group’s policy
is to manage interest cost using a mix of fixed and floating rate debts.
Sensitivity analysis for interest rate risk
At the reporting date, if interest rates had been 10 basis points lower/higher, with all other variables held constant,
the Group’s profit for the financial year would have been RM51,901 (2014: RM724,000) higher/lower, arising mainly
as a result of lower/higher interest expenses on floating rate loans and borrowings. The assumed movement in interest
rate for interest rate sensitivity analysis is based on the currently observable market environment.
(d) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in foreign exchange rates. The Group does not face significant exposure from foreign currency risk.
(e) Offsetting financial assets and financial liabilities
There are no offsetting of financial assets and financial liabilities during the year for the Group and Company.
263
KPJ Healthcare Berhad
Annual Report
2015
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 (CONTINUED)
