NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December 2024 41 FINANCIAL INSTRUMENTS (CONT’D) (iii) Market risk (cont’d) Derivatives The Group holds interest rate swaps and cross currency swaps for risk management purposes. The interest rate swaps have floating legs that are indexed to SORA, SONIA, TONA, TIBOR and EURIBOR. The Group’s derivative instrument are governed by contracts based on the International Swaps and Derivatives Association (ISDA)’s master agreements. Cash flow sensitivity analysis for variable rate instruments An increase of 100 basis points (bp) in interest rates on the variable rate instruments held by the Group and the Company at the reporting date would have decreased profit or loss (before any tax effect) by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant and does not take into account the effect of qualifying borrowing costs allowed for capitalisation. Group Company 31 December 2024 31 December 2023 31 December 2024 31 December 2023 $’000 $’000 $’000 $’000 100 bp increase Reduction in profit before tax (70,936) (55,041) (13,708) (14,075) A 100 bp decrease in interest rates at the reporting date would have had an equal but opposite effect to the amounts shown above, on the basis that all other variables remain constant. FINANCIALS CITY DEVELOPMENTS LIMITED 184
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