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Notes to the financial statementsConvertible Bond (cont’d)The convertible bond is recognised on the balance sheet as follows:The Group and Company2006 2005$’000 $’000Face value of convertible bond issued on 23 June 2006 300,000 -Equity conversion component, net of deferred income tax liability (31,917) -Deferred income tax liability (7,979) -Liability component on initial recognition on 23 June 2006 260,104 -Interest expense 6,899 -Interest paid (3,914) -Prepaid issued expenses (5,450) -Liability component at 31 December 2006 257,639 -Interest expense on the convertible bond is calculated based on the effective interest method by applying the interestrate of 4.78% per annum for an equivalent non-convertible bond to the liability component of the convertible bond.The carrying amounts of long-term borrowings are denominated in the following currencies:GroupCompany2006 2005 2006 2005$’000 $’000 $’000 $’000Singapore dollars 1,480,141 1,903,499 997,389 1,186,419United States dollars 549,964 658,702 444,384 488,289Others 81,002 63,072 40,335 35,9042,111,107 2,625,273 1,482,108 1,710,612200 Notes to the financial statementsKeppel Land LimitedReport to Shareholders 2006