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The sterling principal amounts of forward foreign currency purchase contracts and contracted forward rates were as follows:
26 april 2009 27 april 2008
£’000 £’000
US dollar purchases 350,000 1,081,668
Contracted rates 1.46-1.88 1.86 – 2.00
US dollar sales (250,000) (397,000)
Contracted rates 1.92-1.94 1.92-1.98
Euro sales (202,179) (259,716)
Contracted rates 1.08-1.40 1.25 – 1.40
Euro purchases 223,662 -
Contracted rates 1.12-1.12 -
Forward foreign currency purchase and sale contracts generally have a maturity at inception of approximately 12 months. At 26 April 2009 no purchase contracts and no
sale contracts had a maturity at inception of greater than 12 months (2008: £250 million of purchase contracts).
(c) sensitivity analysis
Foreign currency sensitivity analysis
The Group’s principal foreign currency exposures are to US dollars and the Euro. The table below illustrates the hypothetical sensitivity of the Group’s reported profit and
equity to a 5% increase and decrease in the US dollar/Sterling and Euro/Sterling exchange rates at the year end date, assuming all other variables remain unchanged.
The figures have been calculated by comparing the fair values of outstanding foreign currency contracts at the current exchange rate to those if exchange rates moved as
illustrated.
Positive figures represent an increase in profit or equity:
income statement equity
26 april 2009 27 april 2008 26 april 2009 27 april 2008
£’000 £’000 £’000 £’000
Sterling strengthens by 5%
US dollar (11,044) (32,603) (11,044) (32,603)
Euro 4,580 12,367 4,580 12,367
Sterling weakens by 5%
US dollar 11,596 34,233 11,596 34,233
Euro (4,809) (12,986) (4,809) (12,986)
Interest rate sensitivity analysis
The table below illustrates the hypothetical sensitivity of the Group’s reported profit and equity to a 0.5% increase or decrease in interest rates, assuming all other
variables were unchanged.
The analysis has been prepared using the following assumptions:
• For floating rate assets and liabilities, the amount of asset or liability outstanding at the balance sheet date is assumed to have been outstanding for the whole year.
• Fixed rate financial instruments that are carried at amortised cost are not subject to interest rate risk for the purpose of this analysis.
Positive figures represent an increase in profit or equity.
income statement equity
26 april 2009 27 april 2008 26 april 2009 27 april 2008
£’000 £’000 £’000 £’000
Interest rate increase of 0.5% (2,420) (2,453) (2,240) (2,453)
Interest rate decrease of 0.5% 2,420 2,453 2,240 2,453
Sports Direct International PLC Annual Report 2009 61