NATS-Annual-Report-2015

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Annual Report and Accounts 2015 | NATS Holdings Limited Financial Statements 120 Notes forming part of the consolidated accounts (continued) 19. Financial instruments (continued) Foreign currency sensitivity analysis The group holds foreign currency cash balances of £4.8m at 31 March 2015 (2014: £5.3m) in euro, US dollars, Canadian dollars, Kuwaiti dinar, Norwegian krone and UAE dirham. The following table details the group’s sensitivity to a 10% increase or decrease in the value of sterling against relevant foreign currencies. 10% is the sensitivity rate that represents the reasonably possible change in foreign currency exchange rates in a financial year. The sensitivity analysis includes foreign currency cash balances, trade receivables, trade payables and forward foreign exchange contracts and adjusts their translation at the period end for a 10% change in foreign currency rates. The table below shows the effect of a 10% strengthening of sterling against the relevant currency (to the nearest £0.1m). A positive number below indicates an increase in profit and equity and a negative number a reduction in profit and equity. There would be an equal and opposite impact on profit and equity if sterling devalues by 10% against the relevant currency. 2015 2014 Impact Impact Currency £m £m Euro 4.3 6.3 Canadian dollar - (0.3) US dollar (0.1) - UAE dirham (0.1) - Qatari riyal - (0.2) 4.1 5.8 The group’s sensitivity to the euro decreased during the year reflecting a net increase in euro monetary assets and a net increase in euro denominated forward contracts taken out to hedge future receipts. Exposure to other currencies has remained fairly constant. NATS believes that this sensitivity analysis accurately reflects its inherent foreign exchange risk. Financial Statements
Annual Report and Accounts 2015 | NATS Holdings Limited Financial Statements 121 Notes forming part of the consolidated accounts (continued) 19. Financial instruments (continued) Forward foreign exchange contracts The group entered into forward foreign exchange contracts to sell euro forecast to be received from Eurocontrol in respect of UK en route revenues and to sell other currencies it will receive on its overseas contracts. In addition, the group entered into other forward foreign exchange contracts to fund purchases of equipment. The group has designated these forward contracts as cash flow hedges. The following contracts were outstanding at year end: 2015 2014 Average exchange rate Euro sold £m €m Euro sold £m €m Average exchange rate 0-3 months 160.2 215.6 0.7429 0-3 months 144.4 174.3 0.8285 Euro bought €m £m Euro bought €m £m 0-3 months 15.9 12.4 0.7801 0-3 months 6.3 5.3 0.8361 Over 3 months 47.5 38.9 0.8197 Over 3 months 1.6 1.3 0.8268 63.4 51.3 0.8093 7.9 6.6 0.8352 US dollar bought US$m £m US dollar bought US$m £m 0-3 months 0.1 0.1 1.5320 0-3 months 0.1 0.1 1.6592 Canadian dollar bought C$m £m Canadian dollar bought C$m £m 0-3 months - - n/a 0-3 months 1.5 0.8 1.8244 Over 3 months - - n/a Over 3 months 3.3 1.8 1.8503 - - n/a 4.8 2.6 1.8422 Qatari riyal sold £m QARm Qatari riyal sold £m QARm 0-3 months - - n/a 0-3 months 0.2 1.1 6.0519 Kuwaiti dinar sold £m KWDm Kuwaiti dinar sold £m KWDm 0-3 months 0.3 0.1 0.4858 0-3 months - - n/a Norwegian krone bought NOKm £m Norwegian krone bought NOKm £m 0-3 months - - n/a 0-3 months 0.9 0.1 9.0079 Financial Statements
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