Page 193 - S P Setia Annual Report 2016

 

 

 

 

 

Page 193 - S P Setia Annual Report 2016
P. 193

S P Setia Berhad Group                                                                                191
          Annual Report 2016




                                                                               Notes To The Financial Statements

                                                                                  For The Financial Year Ended 31 December 2016

          40.  FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D.)
              (c)   Foreign currency exchange risk (cont’d.)


                   The following table demonstrates the sensitivity of the Group’s equity to a reasonably possible change in the exchange rates, with
                   all other variables held constant.

                                                                                                     Group
                                                                                                  2016          2015
                                                                                                RM’000        RM’000

                   Great British Pound/RM           -  strengthened by 10%                      161,518        99,632
                                                    -  weakened by 10%                          (161,518)     (99,632)
                   Australian Dollar/RM             -  strengthened by 10%                      84,049         73,137
                                                    -  weakened by 10%                          (84,049)       (73,137)

                   Singapore Dollar/RM              -  strengthened by 10%                      48,021         48,024
                                                    -  weakened by 10%                          (48,021)      (48,024)
                   Chinese Yuan/RM                  -  strengthened by 10%                       12,187        12,022
                                                    -  weakened by 10%                          (12,187)      (12,022)

              (d)   Liquidity and cash flow risks

                   Liquidity and cash flow risks are the risks that the Group and the Company will not be able to meet its financial obligations when
                   they fall due. The Group’s and the Company’s exposure to liquidity risk arises principally from its various payables and borrowings.

                   The Group and the Company seek to ensure all business units maintain optimum levels of liquidity at all times, sufficient for their
                   operating, investing and financing activities.

                   Therefore, the policy seeks to ensure that each business unit, through efficient working capital management (i.e. inventory,
                   accounts receivable and accounts payable management), must be able to convert its current assets into cash to meet all demands
                   for payment as and when they fall due.

                   Owing to the nature of its businesses, the Group and the Company always maintain sufficient credit lines available to meet their
                   liquidity requirements while ensuring an effective working capital management within the Group and the Company.
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