31.
Financial instruments: information on financial risks (cont’d)
Financial risk management (cont’d)
Interest rate risk (cont’d)
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
2015
$’000
2014
$’000
2015
$’000
2014
$’000
Financial assets
Fixed rate
9,001
24,948
3,889
2,641
Floating rate
55,942
51,874
2,236
5,474
64,943
76,822
6,125
8,115
Financial liabilities
Fixed rate
4,527
33
–
–
Floating rate
8,858
6,481
–
–
13,385
6,514
–
–
Sensitivity analysis
For the floating rate financial assets and liabilities, a hypothetical increase of 100 (2014: 100) basis points in interest rate
at the end of the reporting year would increase pre-tax profit for the reporting year by the amounts shown below. A
decrease of 100 (2014: 100) basis points in interest rate would have an equal but opposite effect. This analysis assumes
all other variables remain constant.
Group
Company
2015
$’000
2014
$’000
2015
$’000
2014
$’000
Pre-tax profit for the reporting year
471
454
22
55
The hypothetical change in basis point is not based on observable market data (unobservable inputs).
Foreign currency risk
The Group has exposure to foreign currency movements on financial assets and financial liabilities denominated in foreign
currencies. It also has exposure on sales and purchases that are denominated in foreign currencies. The currencies
giving rise to the foreign currency risk are primarily the SGD, United States Dollar (“USD”), Hong Kong Dollar (“HKD”),
Thai Baht (“THB”) and China Renminbi (“RMB”). The Group hedges its foreign currency exposure should the need arise
through the use of forward foreign currency contracts.
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