87
SUNMOON FOOD COMPANY LIMITED
ANNUAL REPORT 2015
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015
25.
FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL MANAGEMENT
(CONTINUED)
25.2 Market risks
(i)
Foreign currency risks
The Group incurs foreign currency risk on transactions and balances that are denominated in
currencies other than the functional currency of entities within the Group. The Group transacts business
in various foreign currencies and therefore is exposed to foreign exchange risk mainly from United
States dollar.
As at the end of the reporting period, the carrying amounts of monetary assets and monetary liabilities
denominated in currencies other than the respective entity’s functional currency are as follows:
Group
Assets
Liabilities
2015
2014
2015
2014
$’000
$’000
$’000
$’000
United States Dollar
5,908
5,344
1,275
3,621
The Company has 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.
Exposure to foreign currency risk is monitored on an ongoing basis in accordance with the Group’s
risk management policies to ensure that the net exposure is at an acceptable level.
Foreign currency sensitivity analysis
The following table details the Group’s sensitivity to a 5% (2014: 5%) change in Singapore dollar
against the United States Dollar. The sensitivity analysis assumes an instantaneous 5% (2014: 5%)
change in the foreign currency exchange rates from the end of the reporting period, with all other
variables held constant. The results of the model are also constrained by the fact that only monetary
items, which are denominated in United States Dollar are included in the analysis.
Profit or Loss
2015
2014
$’000
$’000
Group
United States Dollar
Strengthens against Singapore Dollar
232
86
Weakens against Singapore Dollar
(232)
(86)
