| |
|
| |
| |
|
| a. |
Market risk (cont'd) |
| ii. |
Foreign currency risk
The Group operates globally and is exposed to foreign currency exchange rate volatility primarily for United
States dollars (“USD”), euros (“EURO”), pounds sterling (“GBP”), Australian dollars (“AUD”) and Chinese
renminbi (“RMB”) on sales and purchases of assets and liabilities, which arise from the daily course of operations.
Such risks are hedged either by forward foreign exchange contracts in respect of actual or forecasted currency
exposures which are reasonably certain or hedged naturally by a matching sale or purchase of a matching asset
or liability of the same currency and amount.
The Group’s exposure to foreign currencies is as follows: |
| |
|
| |
|
SGD |
USD |
EURO |
GBP |
Others |
|
S$’000 |
S$’000 |
S$’000 |
S$’000 |
S$’000 |
|
|
|
|
|
|
Group |
|
|
|
|
|
2009 |
|
|
|
|
|
Financial assets |
|
|
|
|
|
Cash and cash equivalents |
81,042 |
180,920 |
159,355 |
8,454 |
4,227 |
Trade and other receivables |
20,783 |
86,237 |
69 |
337 |
2,698 |
Other financial assets |
— |
72,238 |
— |
— |
28,438 |
|
101,825 |
339,395 |
159,424 |
8,791 |
35,363 |
|
|
|
|
|
|
Financial liabilities |
|
|
|
|
|
Trade and other payables |
190,224 |
446,982 |
114,796 |
3,173 |
7,204 |
Interest-bearing borrowings |
140 |
70,198 |
— |
— |
— |
|
190,364 |
517,180 |
114,796 |
3,173 |
7,204 |
|
|
|
|
|
|
Net financial (liabilities) / assets |
(88,539) |
(177,785) |
44,628 |
5,618 |
28,159 |
|
| |
|
| |
|
SGD |
USD |
EURO |
GBP |
Others |
|
S$’000 |
S$’000 |
S$’000 |
S$’000 |
S$’000 |
|
|
|
|
|
|
Group |
|
|
|
|
|
2008 |
|
|
|
|
|
Financial assets |
|
|
|
|
|
Cash and cash equivalents |
98,220 |
928,866 |
71,687 |
98 |
12,088 |
Trade and other receivables |
14,239 |
339,173 |
27,535 |
5,205 |
10,964 |
Other financial assets |
— |
2,365 |
(23) |
— |
1,990 |
|
112,459 |
1,270,404 |
99,199 |
5,303 |
25,042 |
|
|
|
|
|
|
Financial liabilities |
|
|
|
|
|
Trade and other payables* |
101,965 |
273,561 |
44,655 |
3,875 |
8,881 |
Interest-bearing borrowings |
— |
139,235 |
— |
1,912 |
1,937 |
|
101,965 |
412,796 |
44,655 |
5,787 |
10,818 |
|
|
|
|
|
|
Net financial assets / (liabilities) |
10,494 |
857,608 |
54,544 |
(484) |
14,224 |
* Excludes share of net liability of an associate |
| |
|
| |
Company
The Company’s financial assets and liabilities are predominantly denominated in Singapore dollars at balance sheet dates.
Notional Amount
At the balance sheet date, the Group had foreign exchange contracts with the following notional amounts:
|
Group |
|
2009 |
2008 |
|
Notional amount |
Notional amount |
|
S$'000 |
S$'000 |
|
|
|
Foreign exchange forward contracts |
2,191,713 |
2,980,835 |
Foreign exchange swap agreements |
266,774 |
175,811 |
|
2,458,487 |
3,156,646 |
Sensitivity analysis
A 10% strengthening of the following currencies against the functional currencies of the Company and its
subsidiaries at the balance sheet date would have increased / (decreased) equity and profit before income tax
by the amounts shown below. The analysis assumes that all other variables, in particular interest rates, remain
constant. The analysis is performed on the same basis for 2008.
|
Group |
|
Equity |
Profit before income tax |
|
S$’000 |
S$’000 |
|
|
|
2009 |
|
|
SGD |
(13,854) |
(525) |
USD |
105,561 |
3,092 |
EURO |
16,779 |
4,971 |
Others |
2,354 |
613 |
|
|
|
2008 |
|
|
SGD |
6,106 |
63,485 |
USD |
202,810 |
44,577 |
EURO |
517 |
5,858 |
Others |
(198) |
1,192 |
A 10% weakening of the above currencies against the functional currencies of the Company and its subsidiaries
at the balance sheet date would have had the equal but opposite effect on the above currencies to the
amounts shown above, on the basis that all other variables remain constant. |
| |
|
| iii. |
Price risk
Equity securities price risk
The Group is exposed to equity securities price risk because of the investments held by the Group which are classified on the consolidated balance sheet either as available-for-sale or at fair value through profit or loss.
Sensitivity analysis
If prices for equity securities increase by 10% with all other variables held constant, the increase in equity and profit before income tax will be: |
| |
|
| |
|
Group |
|
2009 |
2008 |
|
S$’000 |
S$’000 |
|
|
|
Equity |
17,195 |
14,605 |
Profit before income tax |
4 |
3 |
|
| |
|
| |
A 10% decrease in the underlying equity prices would have had the equal but opposite effect to the amounts
shown above. The analysis is performed on the same basis for 2008 and assumes that all other variables remain
constant.
Commodity risk
The Group hedges against fluctuations in commodity prices that affect revenue and cost. Exposures are
managed via swaps, options, contracts for difference, fixed price and forward contracts.
Contracts for differences are entered into with a counterparty at a strike price, with or without fixing the
quantity upfront, to hedge against adverse price movements on the sale of electricity. Naphtha swaps are
entered into for fixed quantity to hedge revenue indexed to naphtha. Exposure to price fluctuations arising
on the purchase of fuel is managed via fuel oil swaps where the price of fuel is indexed to a benchmark fuel
price index, for example Singapore High Sulphur Fuel Oil (“HSFO”) 180 CST fuel oil.
Sensitivity analysis
If prices for commodities increase by 10% with all other variables held constant, the increase in equity and
profit before income tax will be: |
| |
|
| |
|
Group |
|
2009 |
2008 |
|
S$’000 |
S$’000 |
|
|
|
Equity |
18,584 |
4,637 |
Profit before income tax |
— |
— |
|
| |
|
| |
A 10% decrease in the prices for commodities would have had the equal but opposite effect to the amounts shown above. The analysis is performed on the same basis for 2008 and assumes that all other variables remain constant.
Notional amount
At the balance sheet date, the Group had financial instruments with the following notional contract amounts: |
| |
|
| |
|
Group |
|
2009 |
2008 |
|
Notional amount |
Notional amount |
|
S$’000 |
S$’000 |
|
|
|
|
|
|
Fuel oil swap agreements |
188,785 |
199,483 |
Power swap contracts |
7,072 |
116,053 |
|
195,857 |
315,536 |
|
|
|
| |
|
| |
|
|
|
|
|
