DEFINING DESIGN
QUALITY
90
Notes to the Financial Statements
31 December 2014
30.
Financial instruments: information on financial risks (cont’d)
Financial risk management (cont’d)
Interest rate risk
The Group’s exposure to interest rate risk relates primarily to interest-earning financial assets and interest-bearing
financial liabilities. Interest rate risk is managed by the Group on an on-going basis with the primary objective of
limiting the extent to which net interest expense could be affected by an adverse movement in interest rates.
The interest rate risk exposure is from changes in fixed and floating interest rates. The breakdown of the significant
financial instruments by type of interest rate is as follows:
Group
Company
2014
2013
2014
2013
$’000
$’000
$’000
$’000
Financial assets
Fixed rate
24,948
16,647
2,641
2,635
Floating rate
51,874
40,810
5,474
4,071
76,822
57,457
8,115
6,706
Financial liabilities
Fixed rate
33
1,086
–
–
Floating rate
6,481
4,489
–
–
6,514
5,575
–
–
Sensitivity analysis
For the floating rate financial assets and liabilities, a hypothetical increase of 100 (2013: 100) basis points in interest
rate at the end of the reporting year would increase/(decrease) pre-tax profit for the reporting year by the amounts
shown below. A decrease of 100 (2013: 100) basis points in interest rate would have an equal but opposite effect. This
analysis assumes all other variables remain constant.
Group
Company
2014
2013
2014
2013
$’000
$’000
$’000
$’000
Pre-tax profit for the reporting year
454
363
55
41
The hypothetical changes in basis points are not based on observable market data (unobservable inputs).
