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Notes to the Financial Statements
28 FINANCIAL RISK MANAGEMENT (CONTINUED)
(d) Interest rate risk (Continued)
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss,
and the Group does not designate derivatives as hedging instruments under a fair value hedge accounting model.
Therefore, a change in interest rates at the reporting date would not affect the profit or loss.
Cash flow sensitivity analysis for variable rate instruments
For variable rate loans and borrowings, it is estimated that an increase of 100 basis points (bp) in interest rate
at the reporting date would increase/(decrease) profit or loss (before any tax effects) by the amounts shown
below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.
Profit or Loss
Group $’000
As at 31 December 2011
Cash and cash equivalents 258
Variable rate interest-bearing borrowings (8,553)
(8,295)
As at 31 December 2010
Cash and cash equivalents 365
Variable rate interest-bearing borrowings (6,663)
(6,298)
29 ESTIMATION OF FAIR VALUES
The methodologies and assumptions used in the estimation of fair values depend on the terms and characteristics of
the various assets and liabilities and include the following:
Financial instruments for which fair value is equal to the carrying value
These financial instruments include trade and other receivables, cash and cash equivalents, trade and other payables,
current portions of interest-bearing liabilities and interest-bearing liabilities with floating interest rates. The carrying
values of these financial instruments are an approximation of the fair values because they are short-term in nature or
repriceable.
SAR1112034_TCT_AR_().indb 110 3/23/2012