121
121
2015/2016 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the financial year ended 31 March 2016
26. FINANCIAL INSTRUMENTS (CONTINUED)
(e) Market risk (continued)
(iii) Equity security price risk (continued)
Sensitivity analysis
A 10% increase in the price of equity securities at the reporting date would increase the Group’s
earnings by approximately US$9,000 (2015: US$11,000). A 10% decrease in the price of equity
securities would have an equal but opposite effect.
The above analyses assume all other variables remain constant.
Management is of the view that the above sensitivity analyses may not be representative of the
inherent equity security price risk as year-end exposure may not reflect the actual exposure and
circumstances during the year.
(f) Capital management
The Board’s policy is to have a strong capital base to maintain investor, creditor and market confidence
and to sustain future development of the business.
The Group defines capital to include funds raised through the issuance of ordinary share capital and
all components of equity. The Group manages its capital to ensure entities in the Group will be able
to continue as a going concern while maximising the return to shareholders through optimisation of
the debt and equity balance. The Group actively reviews its capital structure and considers the cost
of capital and the risks associated with each class of capital. As at 31 March 2016, the Group had
an outstanding debt exposure of US$95.4 million (2015: US$107.6 million). The Group balances its
overall capital structure through the payment of dividends, return of capital to shareholders, new share
issues as well as the issue of new debt or the redemption of existing debt.
There were no changes in the Group’s approach to capital management during the year.
The Group’s ship-owning subsidiaries are subject to externally imposed capital requirements as
required under Regulation 7 of the Merchant Shipping Act (Chapter 179). These companies have
complied with the requirements during the financial year.
