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Food Empire Holdings Limited Annual Report 2013
152
38. Financial risk management objectives and policies (cont’d)
(c) 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 and the Company’s exposure to interest rate risk arises primarily from interest-bearing loans
and borrowings. The Group monitors the interest rate on loans and borrowings closely to ensure that the loans and borrowings are
maintained at favorable rate.
The following table demonstrates the sensitivity of the Group’s profit net of tax to a reasonably possible change in interest rate, with
all other variables held constant.
Increase/
Effect on
decrease in
profit, net
basis points
of tax
US$’000
2013
Cash and cash equivalents
+10
32
Amounts due from associates (non-trade)
+100
130
Other receivables
+100
56
Interest-bearing loans and borrowings
+100
(322)
Other payables
+100
(82)
2012
Cash and cash equivalents
+10
41
Amounts due from associates (non-trade)
+100
260
Interest-bearing loans and borrowings
+100
(129)
Other payables
+100
(139)
notes to the financial statements
For the year ended 31 December 2013