Annual Report 2016
105
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31, 2016
5.
F I NANC I AL I NSTRUMENTS , F I NANC I AL R I SKS AND CAP I TAL
MANAGEMENT
– continued
(b)
Financial risk management policies and objectives
– continued
(i)
Foreign exchange risk management
– continued
THE COMPANY
Assets
Liabilities
2016
2015
2016
2015
HK$’000
HK$’000
HK$’000
HK$’000
United States dollars
39
39
–
–
Singapore dollars
1,629
1,957
(21)
(53)
Certain companies in the Group use forward contracts to reduce the currency risk
exposure. Further details on the forward exchange derivative instruments are found in
Note 13.
Foreign currency sensitivity
The following table details the sensitivity to a 5% increase and decrease in the
relevant foreign currencies against the functional currency of each Group entity. 5%
is the sensitivities 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
year end for a 5% change in foreign currency rates. The sensitivity analysis includes
external loans where they gave rise to an impact on the Group’s profit or loss.
