Download - AHG Limited

Notes to the Consolidated Financial Statements
(continued)
Consolidated 2012 $’000 $’000 - 25Bps - 50Bps
Weighted
Average
Interest
Rate 1
Notional
Amount
Carrying
Amount
Profit
(after
tax)
Equity
(after
tax)
Profit
(after
tax)
Equity
(after
tax)
Financial Assets
Cash and cash equivalents 3.7% 81,382 (203) (407)
Financial Liabilities
Vehicle borrowings 5.9% (501,946) 1,255 2,509
Derivatives - cash flow hedges 4.7% (90,000) (796) (225) (450)
Other borrowings 3.6% (100,396) 251 502
Total Increase / (Decrease) 1,302 (225) 2,605 (450)
Consolidated 2011 $’000 $’000 + 50Bps + 100Bps
Weighted
Average
Interest
Rate 1
Notional
Amount
Carrying
Amount
Profit
(after
tax)
Equity
(after
tax)
Profit
(after
tax)
Equity
(after
tax)
Financial Assets
Cash and cash equivalents 4.1% 129,996 492 985
Derivatives - cash flow hedges 5.0% (30,000) 7 150 300
Financial Liabilities
Vehicle borrowings 6.9% (382,134) (1,375) (2,750)
Other borrowings 5.0% (40,616) (142) (284)
Total Increase / (Decrease) (1,025) 150 (2,049) 300
1
based on weighted average interest rates in effect at 30 June, excluding fees
Group Sensitivity
The above table for the year ended 30 June 2012 reflects a sensitivity analysis on potential interest rate
movements of up of 25 and 50 basis points (bps to relevant floating borrowing balances as at reporting
date); there is significant ongoing volatility in the current market regarding expectations of likely interest
rate movements, the quantum of such movements and the direction of these movements. Accordingly,
the above tables equally reflect the impact for both interest rate decreases and increases on the Group’s
financial performance. The above table for the year ended 30 June 2011 reflects a sensitivity analysis on an
interest rate movement up of 50 and 100 basis points (Bps) to relevant floating borrowing balances as at
reporting date.
Foreign currency risk
The Group is exposed to foreign exchange risk arising from the currency exposures centred on the
purchase of inventory (and associated trade payables and finance company loans) and, accordingly,
had entered into forward exchange contracts to buy EUR26.9 million (2011: EUR15.0 million) and
USD13.9 million (2011: USD12.3 million) as of 30 June 2012.
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities
denominated in a currency that is not the Group’s functional currency. The risk is measured using cash
flow forecasting and sensitivity analysis. The Group’s Treasury Committee assists the Group subsidiary in
managing their foreign exchange risk exposure through the use of forward exchange contracts such as
detailed above. All material short-term foreign exchange exposures are hedged and therefore changes in
exchange rates will have an immaterial impact on profit or loss or equity.
Price risk
The Group holds an available-for-sale financial asset in One Way Traffic (Carsguide). This is an unlisted
security and is immaterial in terms of the possible impact on profit and loss or total equity.
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Automotive Holdings Group