70
GDS Global Limited Annual Report 2015
NOTES TO
FINANCIAL STATEMENTS
As at 30 September 2015
4
FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL MANAGEMENT (cont’d)
(c)
Financial risk management policies and objectives (cont’d)
(i)
Foreign exchange risk management (cont’d)
The Company has a number of 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.
Foreign currency sensitivity
The following table details the sensitivity to a 10% increase and decrease in the
relevant foreign currencies against the functional currency of each entity. 10% is the
sensitivity rate that represents management’s assessment of the reasonably possible
change in foreign exchange rates. The sensitivity analysis includes only outstanding
foreign currency denominated monetary items and adjusts their translation at the
period end for a 10% change in foreign currency rates.
If the relevant foreign currency weakens by 10% against the functional currency of each
entity, profit or loss will increase (decrease) by:
United States
dollar impact
Australian
dollar impact
Euro impact
2015
2014
2015
2014
2015
2014
$
$
$
$
$
$
Group
Profit or loss
(90,910)
(148,269)
(48,228)
235
3,877
375
If the relevant foreign currency strengthens by 10% against the functional currency of
each entity, profit or loss will increase (decrease) by:
United States
dollar impact
Australian
dollar impact
Euro impact
2015
2014
2015
2014
2015
2014
$
$
$
$
$
$
Group
Profit or loss
90,910
148,269
48,228
(235)
(3,877)
(375)
