HKSI Institute AR2023

75 HKSI Institute Annual Report 2023 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) (Expressed in Hong Kong dollars unless otherwise indicated) 19 FINANCIAL RISK MANAGEMENT AND FAIR VALUES (continued) (d) Currency risk The Group and the Institute are exposed to currency risks primarily arising from transactions that are denominated in Renminbi (“RMB”). In respect of transactions denominated in RMB, the Group monitors its exposure on a regular basis. (i) Exposure to currency risk The following table details the Group’s exposure at the reporting date to currency risk arising from recognised assets or liabilities denominated in a currency other than the Institute’s functional currency. 2023 2022 Hong Kong dollar equivalent: Cash and cash equivalents in Renminbi $ 5,185,320 $ 4,685,865 Net exposure in Renminbi $ 5,185,320 $ 4,685,865 (ii) Sensitivity analysis The following table indicates the approximate change in the Group’s surplus for the year and general fund in response to reasonably possible changes in the foreign exchange rates to which the Group has significant exposure at the reporting date. Other components of equity would not be affected by changes in the foreign exchange rates. 2023 2022 Appreciation/ (depreciation) in foreign currency Effect on surplus for the year and general fund Appreciation/ (depreciation) in foreign currency Effect on surplus for the year and general fund Renminbi 10% $ 518,532 10% $ 468,587 The sensitivity analysis above has been determined assuming that the change in foreign exchange rates had occurred at the end of the reporting period and had been applied to the Institute’s exposure to currency risk for financial instruments in existence at that date, and that all other variables, in particular interest rates, remain constant. The stated changes represent management’s assessment of reasonably possible changes in foreign exchange rates over the period until the end of next reporting period. The analysis is performed on the same basis for 2022. (e) Fair value All financial instruments are carried at amounts not materially different from their fair values as at 31 March 2023 and 2022.