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2010/11 Annual Report Lenovo Group Limited
94
NOTES TO THE FINANCIAL STATEMENTS (continued)
3 Financial risk management (continued)
(a) Financial risk factors (continued)
(iv) Liquidity risk (continued)
Company
Repayable
on demand
3 months
or less
but not
repayable
on demand
Over 3
months
to 1 year
Over 1
to 5 years Total
US$’000 US$’000 US$’000 US$’000 US$’000
At March 31, 2011
Bank loans – – 200,000 –200,000
Accruals and other payables – – 39,319 –39,319
Amounts due to subsidiaries 549,503 – – – 549,503
Derivative financial instruments
Forward foreign exchange
contracts (gross-settled)
– outflow –4,496 – – 4,496
– inflow –(4,497) – – (4,497)
Forward foreign exchange
contracts (net-settled) –4,545 – – 4,545
Interest rate swap contracts
(net-settled) –476 544 –1,020
At March 31, 2010
Bank loans – – 230,000 200,000 430,000
Convertible preferred shares – – – 98,611 98,611
Accruals and other payables – – 19,848 –19,848
Amounts due to subsidiaries 526,686 – – – 526,686
Derivative financial instruments
Interest rate swap contracts
(net-settled) –1,759 2,203 –3,962
(b) Market risks sensitivity analysis
HKFRS 7 “Financial instruments: Disclosures” requires the disclosure of a sensitivity analysis for market risks that show
the effects of a hypothetical change in the relevant market risk variable to which the Group is exposed to at the balance
sheet date on profit or loss and total equity.
The sensitivity analysis for each type of market risks does not reflect inter-dependencies between risk variables. The
sensitivity analysis assumes that a hypothetical change of the relevant risk variable had occurred at the balance sheet
date and had been applied to the relevant risk variable in existence on that date. The bases and assumptions adopted
in the preparation of the analyses will by definition, seldom equal to the related actual results.
The disclosure of the sensitivity analysis on market risks is solely for compliance with HKFRS 7 disclosure requirements
in respect of financial instruments, and are for illustration purposes only; and it should be noted that the hypothetical
amounts so generated do not represent a projection of likely future events and profits or losses of the Group.
(i) Foreign currency exchange rate sensitivity analysis
At March 31, 2011, if United States dollar had weakened/strengthened by one percent against all other currencies
with all other variables held constant, post-tax profit for the year would have been US$2.56 million (2010: US$3.35
million) higher/lower, mainly as a result of foreign exchange gains/losses on translation of unhedged portion of
receivable and payable balances.
The analysis above is based on the assumption that United States dollar weakened or strengthened against all
other currencies in the same direction and magnitude, but it may not be necessarily true in reality.