Annual Report 2019

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2019 140 The United Laboratories International Holdings Limited Annual Report 2019 41. FINANCIAL INSTRUMENTS (Continued) Financial risk management objectives and policies (Continued) Market risk (Continued) Fair value and cash flow interest rate risks (Continued) Interest rate sensitivity analysis No sensitivity analysis was prepared for pledged bank deposits and bank balances as the financial impact arising on changes in interest rates was minimal due to limited changes in interest rate. The sensitivity analysis below has been determined based on the exposure to interest rates for the floating rate borrowings at the end of the reporting period. The analysis is prepared assuming the financial instruments outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase and decrease is used which represents management’s assessment of the reasonably possible change in interest rate. At the end of the reporting period, if interest rates of HIBOR, LIBOR and LPR had been increased/ decreased by 50 basis points, respectively and all other variable remained constant, the Group’s post-tax profit for the year ended 31 December 2019 would decrease/increase by RMB5,311,000, RMB1,222,000 and RMB1,432,000, respectively (2018: decrease/increase by RMB3,184,000, RMB634,000 and RMB10,000, respectively). The Group monitors interest rate exposure and will consider hedging significant interest rate exposure should the need arise.