Annual Report 2007 - Hmdatalink.com hm datalink

Notes to the consolidated financial statementsfor the year ended 31 December 200731. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)Interest rate riskThe Group’s fair value interest rate risk relates primarily to convertible bonds (see note 19 for details of theconvertible bonds). The Group does not apply any derivatives to hedge the fair value interest rate risk.The Group’s cash flow interest rate risk relates primarily to variable-rate borrowings in respect of discountingnotes receivables (see note 17(b) for details).The interest rate profile of the Group as at the balance sheet date has been set out in the liquidity risksection of this note.Since the Group only has minimal variable-rate borrowings during the years, sensitivity analysis on theexposure to interest rates has not been presented.Currency riskThe Group does not have sales and purchases that are denominated in a currency other than the functionalcurrency of the operations to which they relate. At 31 December 2007, the Group had forward foreignexchange contracts not used for hedging with a net fair value of HK$4,681,000 (2006: Nil) recognised asderivative financial instruments.The following table details the Group’s exposure at the balance sheet date to currency risk arising fromrecognised assets or liabilities denominated in a currency other than the functional currency of the entity towhich they relate.2007 2006United States British United States Britishdollars pounds dollars poundsHK$’000 HK$’000 HK$’000 HK$’000Bank balances and cash 282,091 44 – –Notional amounts of foreign exchangecontracts not used for hedging 135,626 – – –GEELY AUTOMOBILE HOLDINGS LIMITED107ANNUAL REPORT 2 0 0 7