34. FINANCIAL INSTRUMENTS AND FINANCIAL RISKS (CONTINUED) Market risk (Continued) (ii) Foreign exchange risk management (Continued) Foreign currency sensitivity analysis (Continued) If the relevant foreign currency strengthen or weakens by 5% against the functional currency of each group entity, profit or loss will increase/(decrease) by: Profit or loss 2025 2024 $’000 $’000 Group United States dollar Strengthens against functional currencies* 2,797 6,000 Weakens against functional currencies* (2,797) (6,000) Malaysian Ringgit Strengthens against functional currencies# – – Weakens against functional currencies# – – Maldives rufiyaa Strengthens against functional currencies 3 16 Weakens against functional currencies (3) (16) * Primary Singapore dollar and Japanese yen # Primary Singapore dollar (iii) Interest rate risk The Group’s exposure to market risk for changes in interest rates relate primarily to variable rate bank borrowings with financial institutions. The Group maintains an efficient and optimal interest cost structure using a combination of fixed and variable rate debts, and long and short term borrowings. The exposure of the Group’s borrowings to interest rate changes and contractual repricing dates as at the end of the reporting period are as follows: Weighted average effective interest rate Group 2025 2024 2025 2024 % % $’000 $’000 Within 6 months 3.16 4.31 9,292 8,921 After 6 months but within 12 months 3.71 3.53 437 934 After one year but within five financial years 3.71 5.60 3,470 3,660 After five financial years 3.71 5.60 – 693 Total 13,199 14,208 The Company is not exposed to significant interest rate risk. Interest rate sensitivity analysis The sensitivity analysis below has been determined based on the exposure to interest rates at the end of the reporting period and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period in the case of instruments that have floating rates. A 50-basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates. ANNUAL REPORT 2025 KEONG HONG HOLDINGS LIMITED 123 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2025
RkJQdWJsaXNoZXIy NTM2MDQ5