FGV HOLDINGS BERHAD | AUDITED FINANCIAL STATEMENTS 2023 65 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023 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 2023 RM’000 2022 RM’000 2023 RM’000 2022 RM’000 Financial assets At fixed rate Fixed deposits 1,029,986 1,027,029 96,724 51,869 At floating rate (exposed to cash flow finance rate risk) Loans due from subsidiaries - - 490,308 207,011
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