Adcock Ingram Integrated Report 2018

123 ADCOCK INGRAM  Integrated Report 2018 Annexure E – Financial instruments continued The following table demonstrates the sensitivity to change in foreign currencies, with all other variables held constant, of the Group’s profit before tax (due to changes in the fair value of monetary assets and liabilities) and the Group’s equity (due to changes in the fair value of open forward exchange contracts and net investment hedges): Change in foreign currency exchange rate (Decrease)/ Increase in profit before tax Increase/ (Decrease) in other comprehensive income % R’000 R’000 2018 Euro +10 (8 108) 19 965 -10 8 108 (19 965) US dollar +10 (9 476) (19 308) -10 9 476 (19 308) 2017 Euro +10 (10 703) 23 579 -10 10 703 (23 579) US dollar +10 (8 986) 12 068 -10 8 986 (12 068) CAPITAL MANAGEMENT The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios, in order to support its business and maximise shareholder value. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Group monitors its capital using gearing and interest cover ratios. The primary methods of measurement used are interest-bearing debt to total equity and interest cover. 2018 2017 Continuing operations R’000 R’000 Interest-bearing loans and borrowings 248 877 257 527 Less: Cash and short-term deposits (404 629) (592 070) Net cash (155 752) (334 543) Equity 3 914 919 3 495 004 Gearing ratio (%) N/A N/A