China Communications Services Corporation Limited Annual Report 2015
152
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2015
40. FINANCIAL RISK MANAGEMENT AND FAIR VALUES
(continued)
(d) Currency risk
(continued)
Sensitivity analysis
(continued)
Results of the analysis as presented in the above table represent an aggregation of the instantaneous effects on each
of the Group’s entities’ profit after tax measured in the respective functional currencies, translated into RMB at the
exchange rate ruling at the end of the reporting period for presentation purpose.
The sensitivity analysis assumes that the change in foreign exchange rates had been applied to remeasure those
financial instruments held by the Group which expose the Group to foreign currency risk at the end of the reporting
period, include inter-company payables and receivables within the Group which are denominated in a currency other
than the functional currencies of the lender or the borrower. The analysis excludes differences that would result from
the translation of the financial statements of foreign operations into the Group’s presentation currency. The analysis
is performed on the same basis for 2014.
(e) Equity price risk
The Group is exposed to equity price changes arising from listed equity investments classified as available-for-sale
securities (see note 23). Other than unquoted securities held for strategic purpose, all of these investments are listed.
The Group’s listed investments are listed on the Shanghai Stock Exchange and Shenzhen Stock Exchange. Listed
investments held in the available-for-sale portfolio have been chosen based on their longer term growth potential
and are monitored regularly for performance against expectations.
The Group is also exposed to equity price risk arising from changes in the Company’s own share price to the extent
that the Company’s own equity instruments underlie the fair values of other financial liabilities of the Group. As at
the end of the reporting period the Group is exposed to this risk through the share appreciation rights scheme issued
by the Company as disclosed in note 38.
At 31 December 2015, it is estimated that an increase/(decrease) of 5% (2014: 5%) in the relevant share price (for
listed investments) or the Company’s own share price (for the share appreciation rights scheme) as applicable, with
all other variables held constant, would have (decreased)/increased the Group’s profit after tax (and retained profits)
and other components of consolidated equity as follows:
2015
2014
Increase/
(decrease)
in equity
price
Effect on
profit after
tax and
retained
profits
Effect on
other
components
of equity
Increase/
(decrease)
in equity
price
Effect on
profit after
tax and
retained
profits
Effect on
other
components
of equity
RMB’000 RMB’000
RMB’000 RMB’000
Changes in the relevant
equity price risk
variable:
Increase
5% (9,897)
2,549
5% (12,273)
1,938
Decrease
(5%)
8,763
(2,549)
(5%)
9,946
(1,938)
