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TEHO INTERNATIONAL INC LTD Annual Report 2012 61
Notes to the
Financial Statements
30 June 2012
28. Financial Instruments: Information on Financial Risks (Continued)
28G. Foreign Currency Risks (Continued)
Sensitivity analysis:
Group
2012
$
2011
$
A hypothetical 10% strengthening in the exchange rate
of the functional currency $ against the US$ with all other
variables held constant would have an adverse effect on
pre-tax proft of (23,570) (32,094)
A hypothetical 10% strengthening in the exchange rate
of the functional currency $ against the Euro with all other
variables held constant would have an favourable/(adverse)
effect on pre-tax proft of 33,655 (24,615)
A hypothetical 10% strengthening in the exchange rate
of the functional currency $ against other currencies with
all other variables held constant would have a favourable
effect on pre-tax proft of 21,618 25,204
The above table shows sensitivity to a hypothetical 10% variation in the functional
currency against the relevant foreign currencies. The sensitivity rate used is the
reasonably possible change in foreign exchange rates. For similar rate weakening of the
functional currency against the relevant foreign currencies, there would be comparable
impacts in the opposite direction on the proft or loss.
The hypothetical changes in exchange rates are not based on observable market data
(unobservable inputs). The sensitivity analysis is disclosed for each currency to which the
entity has signifcant exposure at end of the reporting year. The analysis above has been
carried out on the basis there are no hedged transactions.
In management’s opinion, the above sensitivity analysis is unrepresentative of the foreign
currency risks as the historical exposure does not refect the exposure in future.
29. Capital Commitments
Estimated amounts committed at the end of the reporting year for future capital
expenditure but not recognised in the fnancial statements are as follows:
Group
2012
$
2011
$
Commitment to renovate the offce premises 22,300 –
30. Operating Lease Income Commitments
At the end of the reporting year, the total of future minimum lease payments commitments
under non-cancellable operating leases are as follows:
Group
2012
$
2011
$
Not later than one year 538,735 493,789
Later than one year and not later than fve years 1,098,603 1,202,331
Later than fve years 1,127,046 1,315,645
Rental expense for the year 557,678 467,569
Operating lease payments are for rentals payable for certain properties. The lease rental
terms are negotiated for an average term of 3 to 30 years and rentals are subject to an
escalation clause but the amount of rent increase is not to exceed a certain percentage.