124
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2015
(In Singapore dollars)
32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)
(d)
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments will
fluctuate because of changes in market interest rates. The Group’s exposure to interest rate risk arises
primarily from its cash and bank balances placed with reputable banks as well as bank borrowings. Bank
borrowings are contracted with the objectives of minimising interest burden by carefully evaluating the
relative benefits between fixed rate and variable rate whilst maintaining an acceptable debt maturity profile.
Sensitivity analysis for interest rate risk
The following table demonstrates the sensitivity of the Group's profit before tax to a reasonably possible
change in the interest rates, with all other variables held constant:
Effect on Group’s profit
before tax
2015
$’000
2014
$’000
50 basis points increase (2014: 50 basis points increase)
(298)
(323)
50 basis points decrease (2014: 50 basis points decrease)
298
323
Information relating to the Group’s interest rate exposure is also disclosed in the notes on the Group’s cash
and cash equivalents, bank borrowings and finance lease payable where applicable. The assumed movement
in basis points for interest rate sensitivity analysis is based on the currently observable market environment.
33. FINANCIAL INSTRUMENTS
Classification of financial instruments
Note
Loans and
receivables
$’000
Financial
liabilities at
amortised cost
$’000
Financial
liabilities at
fair value through
profit or loss
$’000
Total
$’000
Group
2015
Assets
Receivables
15
1,144
–
–
1,144
Trade and other receivables
17
68,873
–
–
68,873
Cash and cash equivalents
18
44,135
–
–
44,135
Total financial assets
114,152
–
–
114,152
Total non-financial assets
142,253
Total assets
256,405
Liabilities
Trade and other payables
19
–
(44,460)
–
(44,460)
Finance lease payable
20
–
(797)
–
(797)
Bank borrowings
21
–
(59,635)
–
(59,635)
Derivatives
–
–
(120)
(120)
Total financial liabilities
–
(104,892)
(120)
(105,012)
Total non-financial liabilities
(13,043)
Total liabilities
(118,055)
