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| Bidcorp Limited Annual integrated report 2016
32.
FINANCIAL INSTRUMENTS
(continued)
32.4 Market risk
(continued)
32.4.2 Interest rate risk
(continued)
Sensitivity analysis
Group borrowings have been categorised by geographical location and the percentage change used for each category has been selected
based on what could reasonably be expected as a change in interest rates within that region based on historical movements in interest rates
within that particular region.
This sensitivity analysis has been prepared using the average borrowings for the financial year as the actual borrowings at June 30 are not
representative of the borrowings during the year. This analysis assumes that all other variables, in particular foreign currency rates, remain
constant. The analysis is performed on the same basis as 2015. A decrease in interest rates would have an equal and opposite effect on
profit after taxation as detailed below.
2016
2015
Increase in
interest rates
%
Decrease in
profit after
taxation
R’000
Increase in
interest rates
%
Decrease in
profit after
taxation
R’000
Southern Africa and other Emerging Markets
0,50
6 360
0,50
4 874
United Kingdom and Europe
0,25
9 955
0,25
7 688
Australasia
0,25
7 352
0,25
8 974
23 667
21 536
32.4.3 Equity price risk
Equity price risk arises from investments classified as held-for-trading and available-for-sale (refer to note 18). Unlisted investments
comprise unlisted shares and loans which are classified as held-for-trading and available-for-sale, and are valued at fair value using a
price earnings model.
Notes to the consolidated financial statements
for the year ended June 30