Page 151 - China Mobile Limited - Annual Report 2012

China Mobile Limited
Annual Report 2012
145
Notes to the Financial Statements
(Expressed in Renminbi unless otherwise indicated)
38 Financial Risk Management and Fair Values (Continued)
(c) Interest rate risk (Continued)
On the whole, interest rate risk of the Group is expected to be low due to the high balance of cash and cash
equivalent and low level of floating rate debts. The Group consistently monitors the current and potential
fluctuation of interest rates to monitor the interest risk on a reasonable level.
During the year, the Group and the Company had not entered into any interest rate swap contracts.
(d) Foreign currency risk
The Group has foreign currency risk as certain cash and deposits with banks are denominated in foreign
currencies, principally US dollars and Hong Kong dollars. As the amount of the Group’s foreign currency
represented 0.9% (2011: 1.2%) of the total cash and deposits with banks and predominantly all of the business
operations of the Group are transacted in RMB, the Group does not expect the appreciation or depreciation of
the RMB against foreign currency will materially affect the Group’s financial position and result of operations.
During the year, the Group and the Company had not entered into any forward exchange contracts.
(e) Fair values
All financial instruments are carried at amounts not materially different from their fair values as at 31 December
except as follows:
As at 31 December 2012 As at 31 December 2011
Carrying
amount Fair value
Carrying
amount Fair value
RMB million RMB million RMB million RMB million
The Group
Interest in associate 48,343 37,008 43,794 31,674
Interest-bearing borrowings – bonds 4,986 4,908 4,984 4,845
The fair value of investment in associate and bonds is based on quoted market prices at the balance sheet date
without any deduction for transaction costs.