NTUC Income AR 2017

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 4. MANAGEMENT OF INSURANCE AND FINANCIAL RISKS (CONTINUED) (c) Financial risk (continued) (i) Market risk (continued) (c) Foreign currency risk (continued) The Group’s foreign currency risk exposure is closely tracked and the net exposure is minimised through monthly rebalancing. Based on monthly volatilities, management estimates ±2% (2016: ±2%) change in the relevant currency risk to be reasonably possible at the reporting date. Sensitivity for changes in risk variable that was reasonably possible is as follows: Currency 2017 Impact on net operating surplus $’000 Impact on equity $’000 USD 2% strengthening (14,331) 26,931 2% weakening 14,331 (26,931) EUR 2% strengthening (14,796) 12,195 2% weakening 14,796 (12,195) HKD 2% strengthening (10) 654 2% weakening 10 (654) GBP 2% strengthening (1,404) 349 2% weakening 1,404 (349) JPY 2% strengthening (2,067) 228 2% weakening 2,067 (228) Currency 2016 Impact on net operating surplus $’000 Impact on equity $’000 USD 2% strengthening (17,093) 24,557 2% weakening 17,093 (24,557) EUR 2% strengthening (11,703) 10,756 2% weakening 11,703 (10,756) HKD 2% strengthening (1,138) 650 2% weakening 1,138 (650) GBP 2% strengthening (802) 290 2% weakening 802 (290) JPY 2% strengthening (1,126) 152 2% weakening 1,126 (152) ANNUAL REPORT 2017 EVERY DAY MADE DIFFERENT 77