OUHUA ENERGY HOLDINGS LIMITED
Year ended 31 December 2015
NOTES TO
THE FINANCIAL STATEMENTS
82
29. Financial instruments and financial risk (Continued)
Market risk (Continued)
Foreign currency risk (Continued)
A 10% strengthening of RMB against the following currencies at the end of the financial year would
increase or (decrease) consolidated profit or loss by the amounts shown below. This analysis
assumes that all other variables, in particular interest rates, remain constant.
Group
Consolidated profit or loss
Other component or equity
2015
2014
2015
2014
RMB’000
RMB’000
RMB’000
RMB’000
As at 31 December
USD
(17,781)
17,514
(17,781)
17,514
SGD
361
345
361
345
A 10% weakening of RMB against the foreign currencies would have an equal but opposite effect.
The Company has no significant exposure to foreign currency risk.
30. Fair value of assets and liabilities
The fair values of applicable assets and liabilities, are determined and categorised using a fair value
hierarchy as follows:
(a) Level 1 - the fair values of assets and liabilities with standard terms and conditions and which
trade in active markets that the Group can access at the measurement date are determined
with reference to quoted market prices (unadjusted).
(b) Level 2 - in the absence of quoted market prices, the fair values of the assets and liabilities are
determined using the other observable, either directly or indirectly, inputs such as quoted
prices for similar assets/liabilities in active markets or included within Level 1, quoted prices for
identical or similar assets/liabilities in non-active markets.
(c)
Level 3 - in the absence of quoted market prices included within Level 1 and observable inputs
included within Level 2, the fair values of the remaining assets and liabilities are determined in
accordance with generally accepted pricing models.
The Group does not hold financial assets nor liabilities carried at fair value or at valuation.
Accordingly, the disclosure requirements of the fair value hierarchy (Level 1, 2 and 3) under IFRS 7
Financial Instruments: Disclosures does not apply.
31. Capital management policies and objectives
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a
going concern in order to provide returns for shareholders and benefits for other stakeholders and to
maintain an optimal capital structure to reduce the cost of capital.
The capital structure of the Group consists of debts, which includes the borrowings disclosed in Note
22 and equity attributable to equity holders of the Company, comprising share capital, share premium,
statutory reserve, foreign currency translation reserve, and accumulated losses as disclosed in
consolidated statement of financial position.
The Group manages its capital structure by making necessary adjustments to it in response to the
changes in economic conditions.
