Registration No. 200301030845 (633265-K) - 140 - 36. Financial Instruments (Cont’d) (b) Financial risk management objectives and policies (Cont’d) (iii) Market risks (Cont’d) (b) Interest rate risk The Group’s and the Company’s fixed rate deposits placed with licensed banks and borrowings are exposed to a risk of change in their fair value due to changes in interest rates. The Group’s and the Company’s variable rate borrowings are exposed to a risk of change in cash flows due to changes in interest rates. The Group and the Company manage the interest rate risk of their deposits with licensed financial institutions by placing them at the most competitive interest rates obtainable, which yield better returns than cash at bank and maintaining a prudent mix of short and long term deposits. The Group and the Company manage their interest rate risk exposure from interest bearing borrowings by obtaining financing with the most favourable interest rates in the market. The Group and the Company constantly monitor their interest rate risk by reviewing their debt portfolio to ensure favourable rates are obtained. The Group and the Company do not utilise interest swap contracts or other derivative instruments for trading or speculative purposes. The carrying amounts of the Group’s and of the Company’s financial instruments that are exposed to interest rate risk are as follows: 2026 2025 RM RM Group Financial Assets Fixed rate instruments Fixed deposits with licensed banks 5,715,026 15,377,641 5,715,026 15,377,641 Financial Liabilities Fixed rate instruments Lease liabilities 6,426,783 3,589,641 Floating rate instruments Bank borrowings 63,511,412 70,397,701 DESTINI BERHAD 253 ANNUAL REPORT 2026
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