100 / 128
DYNA-MAC HOLDINGS LTD.
2016 ANNUAL REPORT
98
NOTES TO THE
FINANCIAL STATEMENTS
For the financial year ended 31 December 2016
31.
FINANCIAL RISK MANAGEMENT
(CONT’D)
(a) Market risk
(i)
Currency risk
The Group operates in Asia with dominant operations in Singapore. Entities in the Group
regularly transact in currencies other than the functional currency of the Group, which is
Singapore Dollar (“SGD”).
Currency risk arises within entities in the Group when transactions are denominated in foreign
currencies. The Group manages the foreign exchange exposure by keeping cash balances
in different currencies and maintaining a policy of matching as far as possible, receipts and
payments in each currency.
In addition, the Group’s risk management policy is to hedge the foreign currency exposure
for at least 80% of the revenue contracts denominated in foreign currencies by entering into
currency forward contracts.
Fair value changes of currency forward contracts are recognised in profit or loss at each
reporting date, except for the effective portion of cash flow hedges, which is recognised in
other comprehensive income.
The Group’s currency exposure based on the information provided to key management is as
follows:
SGD USD RMB PHP Others
Total
$’000 $’000 $’000 $’000 $’000 $’000
2016
Financial assets
Cash and bank balances
26,138 41,844
133
63 1,357 69,535
Trade and other receivables
42,968 50,564
–
137 3,979 97,648
Deposits
3,881
–
–
20 248 4,149
72,987 92,408
133
220 5,584 171,332
Financial liabilities
Trade and other payables*
52,732
53
54
102 4,414 57,355
Bank borrowings and unsecured
unquoted fixed rate notes
35,000
–
–
–
– 35,000
Finance lease liabilities
138
–
–
–
–
138
87,870
53
54
102 4,414 92,493
Net financial (liabilities)/assets (14,883) 92,355
79
118 1,170 78,839
Add: Expected progress billings
in foreign currencies
#
– 8,810
–
–
– 8,810
Currency profile of financial
(liabilities)/assets
(14,883) 101,165
79
118 1,170 87,649