Content2011 - PETRONAS Gas Berhad

Notes to the Financial Statements
31 MarCh 2011
32. Financial Instruments (Continued)
186 petronas gas berhad (101671-h)
Fair value sensitivity analysis for fixed rate instruments (Continued)
The sensitivity analysis is hypothetical and should not be considered to be predictive of future performance because the Group’s actual
exposure to market prices is constantly changing with changes in the Group’s portfolio of among others, commodity, debt and foreign
currency contracts. Changes in fair values or cash flows based on a variation in a market variable cannot be extrapolated because the
relationship between the change in market variable and the change in fair value or cash flows may not be linear. In addition, the effect of
a change in a given market variable is calculated independently of any change in another assumption and mitigating actions that would
be taken by the Group. In reality, changes in one factor may contribute to changes in another, which may magnify or counteract the
sensitivities.
The following table demonstrates the indicative pre-tax effects on the profit or loss and equity of applying reasonably foreseeable market
movements in the following securities:
+/-
Change in Profit or
interest loss
Group/Company b.p.s. RM’000
2011
Local securities 47.39 b.p.s 1,877
2010
Local securities 44.54 b.p.s 813
This analysis assumes that all other variables, in particular foreign currency rates, remain constant.
Cash flow sensitivity analysis for floating rate instruments
The following table demonstrates the indicative pre-tax effects on the profit or loss and equity of applying reasonably market movements
in the following interbank offered rates:
+/-
Change in Profit or loss
Group/Company b.p.s. RM’000
2011
KLIBOR 60.00 b.p.s 210
2010
KLIBOR – –
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 and the Company are exposed to varying levels of foreign exchange risk when they enter into transactions that are not
denominated in the respective companies’ functional currencies or when foreign currency monetary assets and liabilities are translated at
the reporting date.
The Group and the Company operates predominantly in Malaysia and transacts mainly in Malaysian Ringgit. As such, it is not exposed to
any significant foreign currency risk.