366 / 396
40. Financial risk management policies (cont’d.)
(a) Market risk (cont’d.)
(iii) Foreign currency risk
The Group and Company is exposed to currency exchange risk. These exposures are managed, to the extent possible, by
natural hedges that arise when payments for foreign currency payables are matched against receivables denominated in
the same foreign currency or whenever possible, by intragroup arrangements and settlements.
46% (2016: 59%) of USD denominated borrowings are hedged by long dated foreign exchange forward contracts (Note
21).
If RM had weakened/strengthened by 5% against the USD as at 31 December 2017 with all other variables held constant,
post-tax profit for the financial year would have been RM122.293 million (2016: RM149.67 million) lower/higher. Similarly,
the impact on other comprehensive income would have been RM6.34 million (2016: RM13.4 million) higher/lower due to
the cash flow hedging in USD.
The exposure to other foreign currency risk of the Group and Company is not material and hence, sensitivity analysis is
not presented.
The Group’s currency exposure profile of financial instruments denominated in currencies other than the functional
currency is as follows:
USD
RM’mil
SGD
RM’mil
RMB
RM’mil
Others
RM’mil
At 31 December 2017
Financial assets
Receivables
290
10
–
974
Deposits on aircraft purchase
916
–
–
–
Amounts due from associates
148
–
–
–
Derivative financial instruments
193
–
–
–
Amount due from a related party
3
–
–
–
Deposits, cash and bank balances
917
–
183
573
2,467
10
183
1,547
Financial liabilities
Trade and other payables
1,857
12
23
230
Amounts due to associates
146
–
–
–
Amounts due to related parties
48
–
–
–
Borrowings
8,127
183
–
264
Derivative financial instruments
144
–
–
–
10,322
195
23
494
Net exposure
(7,855)
(185)
160
1,053
NOTES TO THE
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017
[ ]
AirAsia Berhad
REPORTS AND FINANCIAL STATEMENTS
352