Vision - Alibaba

More documents

Recommendations

Info

108 Annual Report 2007 Notes to the Financial Statements 3 FINANCIAL RISK MANAGEMENT (Continued) (a) Foreign currency exchange risk Foreign currency exchange risk arises from future commercial transactions, recognized assets and liabilities and net investments in foreign operations. Although the Group operates businesses in different countries, substantially all of the revenue-generating and expense related transactions are denominated in RMB which is the functional currency of the Company and most of the Group’s subsidiaries. RMB is not freely convertible into other foreign currencies. All foreign currency exchange transactions in China must be effected through either the People’s Bank of China (“PBOC”), or other institutions authorized by the PBOC to buy and sell foreign currencies. Following the completion of the Global Offering in November 2007, the Group holds a signifi cant portion of cash and cash equivalents in currencies other than RMB. Such foreign currency-denominated cash and cash equivalents are exposed to fl uctuations in the value of RMB against the currencies in which these cash and cash equivalents are denominated. Any signifi cant appreciation of RMB against these foreign currencies may result in signifi cant exchange loss which would be recorded in the income statement. Sensitivity analysis As of December 31, 2007, if RMB had strengthened/weakened 5% against United States dollars, Hong Kong dollars and Australian dollars with all other variables held constant, profi t for the year would have been RMB83,187,000 (2006: RMB513,000) lower/higher, mainly as a result of foreign exchange losses/gains on translation of Hong Kong dollars and Australian dollars denominated cash and cash equivalents. Profi t attributable to equity owners of the Company is more sensitive to movement in RMB/Hong Kong dollars and RMB/Australian dollars in 2007 than 2006 because of the increased amount of Hong Kong dollars and Australian dollars denominated cash and cash equivalents being held by the Group. Other than exchange differences arising from translation of results and fi nancial positions of certain Group companies from functional currencies to the presentation currency, which are dealt with as a movement in exchange reserve, a change of 5% in exchange rate of each foreign currency against RMB does not affect any components of equity. (b) Interest rate risk The Group has no interest-bearing borrowings. The Group’s exposure to changes in interest rates is mainly attributable to its interest-bearing assets including term deposits with original maturities of over three months and cash and cash equivalents. Sensitivity analysis As of December 31, 2007, if the interest rate increased/decreased by 50 basis-point with all other variables held constant, profi t attributable to equity owners of the Company would have been RMB26,333,000 (2006: RMB7,428,000) higher/lower, mainly as a result of higher/lower interest income on bank balances.
3 FINANCIAL RISK MANAGEMENT (Continued) Notes to the Financial Statements (c) Credit risk The Group’s credit risk is considered minimal as a substantial part of the income is prepaid by a diversifi ed group of customers. The extent of the Group’s credit risk exposure is represented by the aggregate of cash held at banks and at other fi nancial institutions. All of the Group’s cash held at banks is placed with fi nancial institutions of sound credit quality. The Group’s maximum exposure to credit risk without taking account of the value of any collateral held is represented by the carrying amount of each fi nancial asset in the balance sheets. (d) Liquidity risk The Group has maintained its own treasury function to monitor the current and expected liquidity requirements and aims to maintain fl exibility by keeping suffi cient cash and cash equivalents generated from operations. The Group adopts prudent treasury management objectives which include maintaining suffi cient cash and cash equivalents to meet its commitment over the foreseeable future in accordance with its strategic plan. The Group does not have signifi cant fi nancial liabilities except for amounts due to related companies, trade payables, other payables and certain accruals. The contractual maturities of amounts due to related companies are disclosed in Note 33(d). For trade payables and other payables, they are generally on credit terms of one to three months after the invoice date. For accruals, there are generally no specifi ed contractual maturities and are paid upon counterparty’s formal notifi cation, of which should be within 12 months from the balance sheet date. (e) Fair value estimation The fair values of the Groups’ fi nancial instruments are not materially different from their carrying amounts. The fair values of fi nancial instruments that are not traded in active market is determined by using discounted cash fl ow valuation techniques. The carrying values less impairment provision (as applicable) of amounts due from related companies, prepayments, deposits and other receivables are a reasonable approximation of their fair values. The fair values of fi nancial liabilities for disclosure purposes is estimated by discounting the future contractual cash fl ows at the current market interest rate that is available to the Group for similar fi nancial instruments. 109
Page 3 and 4:
Financial and Operational Highlight
Page 5 and 6:
orld’s leading nline marketplace
Page 7 and 8:
CORPORATE HEADQUARTERS 6th Floor, C
Page 9 and 10:
November Launched TradeManager inst
Page 11 and 12:
Awards and Recognitions Awards and
Page 13 and 14:
Global E-Commerce Leader Alibaba.co
Page 15 and 16:
Along with other members of Alibaba
Page 17 and 18:
2007 Financial highlights We achiev
Page 19 and 20:
CEO’s Statement This mission star
Page 21 and 22:
Global Trade Starts Here Alibaba.co
Page 23 and 24:
BUSINESS ENVIRONMENT Buoyant China
Page 25 and 26:
International marketplace operating
Page 27 and 28:
localize user services and facilita
Page 29 and 30:
selling branded advertisements main
Page 31 and 32:
Management Discussion and Analysis
Page 33 and 34:
provider and other related expenses
Page 35 and 36:
expenses include a royalty fee paid
Page 37 and 38:
Profi t attributable to equity owne
Page 39 and 40:
such land to accommodate our growth
Page 41:
Corporate Social Responsibility —
Page 45 and 46:
Biographical Details of Directors a
Page 47 and 48:
Page 49 and 50:
Page 51 and 52:
Directors’ Report RETIREMENT SCHE
Page 53 and 54:
Directors’ Report DIRECTORS’ RE
Page 56:
52 Annual Report 2007 Notes: (a) Th
Page 60 and 61:
56 Annual Report 2007 2. Outstandin
Page 62 and 63: 58 Annual Report 2007 D = the maxim
Page 64 and 65: 60 Annual Report 2007 (ii) Maximum
Page 66: 62 Annual Report 2007 DIRECTORS’
Page 69 and 70: Directors’ Report We have also en
Page 71 and 72: Directors’ Report Alibaba Group h
Page 73 and 74: Directors’ Report Disclosure of d
Page 75 and 76: Corporate Governance Report Corpora
Page 77 and 78: Corporate Governance Report Since w
Page 79 and 80: Corporate Governance Report Composi
Page 81 and 82: Corporate Governance Report Composi
Page 83 and 84: Corporate Governance Report INVESTO
Page 85 and 86: The Leading B2B E-Commerce Company
Page 87 and 88: Independent Auditor’s Report We b
Page 89 and 90: Consolidated Balance Sheet As of De
Page 91 and 92: Balance Sheet As of December 31, 20
Page 93 and 94: Consolidated Statement of Changes i
Page 95: Consolidated Cash Flow Statement 20
Page 100 and 101: 96 Annual Report 2007 Notes to the
Page 128: 124 Annual Report 2007 Notes to the
Page 160: 156 Annual Report 2007 Financial Su
show all

Vision - Alibaba

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?