NOTES TO
FINANCIAL STATEMENTS
December 31, 2015
80
CITIC ENVIROTECH LTD.
Annual Report
2015
4 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS
MANAGEMENT (cont’d)
(d)
Financial risk management policies and objectives (cont’d)
(i)
Foreign exchange risk management (cont’d)
The Company has a number of investments in foreign subsidiaries, whose net assets are
exposed to currency translation risk. The Group does not currently designate its foreign
currency denominated debt as a hedging instrument for the purpose of hedging the
translation of its foreign operations.
Foreign currency sensitivity
The following table details the sensitivity to a 10% increase in the functional currency
of each group entities against the relevant foreign currencies. 10% is the sensitivity
rate used when reporting foreign currency risk internally to key management personnel
and represents management’s assessment of the possible change in foreign exchange
rates. The sensitivity analysis includes only outstanding foreign currency denominated
monetary items and adjusts their translation at the period end for a 10% change in
foreign currency rates. A positive number below indicates an increase in profit and/or
equity where the functional currency of each Group entities strengthens 10% against the
relevant currency.
US$ impact
RM$ impact
HK$ impact
S$ impact
December
31, 2015
$’000
March
31, 2015
$’000
December
31, 2015
$’000
March
31, 2015
$’000
December
31, 2015
$’000
March
31, 2015
$’000
December
31, 2015
$’000
March
31, 2015
$’000
Profit or loss
Group
(18,580)
8,146
(492)
(244)
–
(10)
26,450 10,652
Company
(19,230)
5,213
(240)
(244)
–
–
32,039 8,914
Other equity
Group
–
–
–
–
–
– (31,993)
(i)
(9,823)
(i)
Company
–
–
–
–
–
– (31,993)
(i)
(9,823)
(i)
For a 10% weakening of the functional currency of each Group entities against the
relevant currency, there would be an equal and opposite impact on the profit or loss
and/or equity.
(i)
This is mainly attributable to the exposure from the Singapore Dollar denominated
Medium term note at the end of the reporting period.
