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DYNA-MAC HOLDINGS LTD.
2016 ANNUAL REPORT
100
NOTES TO THE
FINANCIAL STATEMENTS
For the financial year ended 31 December 2016
31.
FINANCIAL RISK MANAGEMENT
(CONT’D)
(a) Market risk (Cont’d)
(i)
Currency risk
(Cont’d)
If the USD, RMB and PHP change against the SGD by 5% (2015: 5%) with all other variables
including tax rate being held constant, the effects to the Group’s loss after tax (2015: loss after
tax) arising from the net financial liability/asset position at balance sheet date will be as follows:
Increase/(Decrease)
2016
2015
Loss
after tax
Other
comprehensive
income
Loss
after tax
Other
comprehensive
income
$’000
$’000
$’000
$’000
Group
USD against SGD
– Strengthened
(3,059)
–
(5,524)
(2,860)
– Weakened
3,059
–
5,524
2,860
RMB against SGD
– Strengthened
(4)
–
(12)
–
– Weakened
4
–
12
–
PHP against SGD
– Strengthened
(5)
–
(3)
–
– Weakened
5
–
3
–
The Company is not exposed to significant currency risk as it transacts mainly in SGD, which
is the functional currency of the Company. The effects of changes in foreign currency rates on
the profit after tax of the Company are insignificant.
(ii) Cash flow and fair value interest rate risks
Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will
fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that
the fair value of a financial instrument will fluctuate due to changes in market interest rates.
The Group’s borrowings at variable rates on which effective hedges have not been entered into
are denominated mainly in SGD. If SGD interest rates were higher/lower by 0.5% (2015: 0.5%)
during the year with all other variables including tax rate being held constant, the loss after tax
(2015: loss after tax) would have been higher/lower (2015: higher/lower) by $175,000 (2015:
$171,000) as a result of higher/lower interest expense on these borrowings.