KUWAIT ENERGY plc GROUP
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2012
F-114
30.
FINANCIAL INSTRUMENTS (CONTINUED)
Market risk (Continued)
Foreign currency sensitivity analysis
The Group’s main foreign currency exposure is to fluctuations in the Kuwait Dinar, Ukraine Hryvnia and
Russian Rouble.
The following table details the Group’s sensitivity to a 10% increase and decrease in the USD against
Kuwaiti Dinar, Ukraine Hryvnia and Russian Rouble. The sensitivity analysis includes only outstanding
Kuwaiti Dinar, Ukraine Hryvnia and Russian Rouble denominated monetary assets and liabilities and adjusts
their translation at the year end for a 10% change in foreign currency rates. A positive number below
indicates an increase in profit and a negative number indicates decrease in profit. All other variables are held
constant. There have been no changes in the methods and the assumptions used in the preparation of the
sensitivity analysis.
2012
2011
USD 000’s
USD 000’s
Impact on consolidated statement of income
Kuwaiti Dinar
(244)
(283)
Ukraine Hryvnia
185
134
Russian Rouble
176
703
Interest rate risk management
The Group is exposed to interest rate risk as it has borrowed funds from banks and financial institutions and has
placed funds in interest bearing time deposits with banks during the year.
The Group’s exposures to interest rates on liabilities are detailed in note 20 to these consolidated financial
statements. The Group uses interest rate cap (see note 24) to manage interest rate risk on the Deutsche Bank loan
facility.
The Group’s exposure to interest rates on financial assets and liabilities are detailed in the liquidity risk
management section of this note.
The following table illustrates the sensitivity of the profit for the year to a reasonably possible change in interest
rates of + 1% with effect from the beginning of the year. These changes are considered to be reasonably
possible based on observation of current market conditions. The calculations are based on the Group’s financial
instruments held at each consolidated statement of financial position date. All other variables are held constant.
There has been no change in the methods and the assumptions used in the preparation of the sensitivity analysis.
A positive number below indicates an increase in profit and negative number indicates decrease in profit. A 1%
decrease in the interest rates would have the opposite effect.
2012
2011
USD 000’s
USD 000’s
Impact on consolidated statement of income
(600)
(530)
