ANNUAL%20REPORT%202015%20eng

Notes to Consolidated Financial Statements
30 FINANCIAL RISK MANAGEMENT AND FAIR VALUE OF FINANCIAL
INSTRUMENTS (Continued)
(d)
Interest rate risk
The Group’s interest rate risk arises primarily from short-term borrowings, long-term borrowings and
convertible bond. Borrowings issued at variable rates expose the Group to cash flow interest rate risk
and fair value interest rate risk, respectively.
The following table details the profile of the Group’s net borrowings (interest-bearing financial liabilities
less interest-bearing financial assets) at the balance sheet date. The detailed interest rates and maturity
information of the Group’s and the Company’s borrowings are disclosed in Note 23.
2015 2014
USD’000 USD’000
Net fixed rate borrowings:
Borrowings 55,000 40,000
Obligations under finance lease — 8
Senior notes 597,634 595,906
Promissory notes 72,230 66,601
Less: Bank deposits (50,000) (50,000)
674,864 652,515
Net floating rate borrowings:
Borrowings 142,631 236,796
Less: Bank deposits (689) (202,808)
141,942 33,988
Total net borrowings: 816,806 686,503
At 31 December 2015, it is estimated that a general increase/decrease of 100 basis points in interest
rates, with all other variables held constant, would have increased/decreased the Group’s loss after
taxation and decreased/increased retained earnings by approximately USD1,737,000 (31 December
2014: USD332,000).
The sensitivity analysis above indicates the instantaneous change in the Group’s loss after tax that
would arise assuming that the change in interest rates had occurred at the balance sheet date and had
been applied to re-measure those financial instruments held by the Group which expose the Group to
fair value interest rate risk at the balance sheet date. In respect of the expose to cash flow interest rate
risk arising from floating rate non-derivative instruments held by the Group at the balance sheet date,
the impact on the Group’s loss after tax and retained profits and other components of consolidated
equity is estimated as an annualised impact on interest expense or income of such a change in interest
rates.
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Annual Report 2015