ESR AR 2019 EN

Notes to the Consolidated Financial Statements 31 December 2019 226 Focused 45. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued) Interest rate risk (continued) The following table demonstrates the sensitivity to reasonably possible changes in interest rate, with all other variables held constant, of the Group’s profit before tax (mainly the impact on floating rate borrowings). The Group’s equity is not affected, other than the consequential effect on the accumulated losses of the changes in profit before tax as disclosed below. Increase/(decrease) in basis point (Decrease)/increase in profit before tax USD’000 USD’000 Year ended 31 December 2019 100/(100) (13,615)/13,615 Year ended 31 December 2018 100/(100) (4,548)/4,548 Foreign currency risk The Group had monetary assets and liabilities, which were denominated in foreign currencies, and were exposed to foreign exchange risk arising from various currency exposures. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities, which are denominated in currencies that are not the functional currencies of the relevant entities. The following table details the Group’s sensitivity to a 1% increase and decrease in the relevant foreign currencies against the functional currency. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at 31 December 2019 for a 1% change in foreign currency rates. 2019 2018 USD’000 USD’000 Increase/(decrease) in profit before tax If USD weakens against RMB 2,100 997 If USD strengthens against RMB (2,100) (997) If USD weakens against JPY (268) (2,008) If USD strengthens against JPY 268 2,008 If USD weakens against SGD (1,158) – If USD strengthens against SGD 1,158 – If USD weakens against AUD 477 – If USD strengthens against AUD (477) –