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Food Empire Holdings Limited Annual Report 2013
154
38. Financial risk management objectives and policies (cont’d)
(d) Foreign currency risk
The Group has transactional currency exposures arising from sales, purchases or operating costs by operating units in currencies
other than the unit’s functional currency. Approximately 1.5% (2012: 1.7%) of the Group’s sales are denominated in currencies other
than the functional currency of the operating unit making the sale, whilst 57.4% (2012: 86.2%) of purchases and operating costs are
denominated in the unit’s functional currency.
The management ensures that the net exposure is maintained at an acceptable level by buying and selling foreign currencies at spot
rates where necessary to address short-term fluctuations.
Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity to a reasonably possible change in the USD, SGD, EURO, Malaysia Ringgit (RM),
Ukrainian Hryvnia (UAH) and Russian Ruble (RUR) against the respective functional currencies of the Group entities, with all variables
held constant, of the Group’s profit before tax.
Group
Profit before tax
2013
2012
US$’000
US$’000
SGD/USD
- strengthened 5% (2012: 5%)
74
82
- weakened 5% (2012: 5%)
(74)
(82)
EURO/USD
- strengthened 5% (2012: 5%)
35
33
- weakened 5% (2012: 5%)
(35)
(33)
RM/USD
- strengthened 5% (2012: 5%)
184
238
- weakened 5% (2012: 5%)
(184)
(238)
UAH/USD
- strengthened 5% (2012: 5%)
1,064
559
- weakened 5% (2012: 5%)
(1,064)
(559)
RUR/USD
- strengthened 5% (2012: 5%)
1,167
–
- weakened 5% (2012: 5%)
(1,167)
–
notes to the financial statements
For the year ended 31 December 2013