| ANNUAL REPORT 2015
192
NOTES TO THE FINANCIAL STATEMENTS
30 June 2015 (cont’d)
37. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d)
(iv) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument would fluctuate because
of changes in foreign exchange rates.
Subsidiaries operating in Singapore, Hong Kong, China, Vietnam and Indonesia have assets and liabilities together with
expected cash flows from anticipated transactions denominated in foreign currencies that give rise to foreign exchange
exposures.
The Groupmaintains a natural hedge, where possible, by borrowing in the currency of the country inwhich the investment
is located or by borrowing in currencies that match the future revenue stream to be generated from its investments.
The Group also holds cash and bank balances denominated in foreign currencies for working capital purposes. At the
end of each reporting period, such foreign currency balances (in Singapore Dollar and other currencies) amounted to
RM31,614,000 (2014: RM19,663,000) (see Note 16(c) to the financial statements) for the Group.
The Group did not enter into any material forward foreign exchange contract in the current financial year.
Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity analysis of the Group and the Company to a reasonably possible change
in the Singapore Dollar (“SGD”), Hong Kong Dollar (“HKD”), Chinese Renminbi (“RMB”), U.S. Dollar (“USD”), Vietnamese
Dong (“VND”) and Indonesia Rupiah (“IDR”) exchange rates against the respective functional currencies of the Group
entities, with all other variables held constant:
Group
Company
2015
2014
2015
2014
Profit after tax
RM’000
RM’000
RM’000
RM’000
SGD/RM - strengthen by 3% (2014: 3%)
-377
-651
-152
-153
- weaken by 3% (2014: 3%)
+377
+651
+152
+153
HKD/RM - strengthen by 3% (2014: 3%)
+115
+142
-
-
- weaken by 3% (2014: 3%)
-115
-142
-
-
RMB/RM - strengthen by 3% (2014: 3%)
-12
+153
-
-
- weaken by 3% (2014: 3%)
+12
-153
-
-
USD/RM - strengthen by 3% (2014: 3%)
+291
+89
-
-
- weaken by 3% (2014: 3%)
-291
-89
-
-
VND/RM - strengthen by 3% (2014: 3%)
+113
+52
-
-
- weaken by 3% (2014: 3%)
-113
-52
-
-
IDR/RM - strengthen by 3% (2014: 3%)
-139
-22
-
-
- weaken by 3% (2014: 3%)
+139
+22
-
-
