Investor Presentaiton
78
13.
Financial instruments and risks managements-
Types of financial instruments-
Financial assets:
Cash and cash equivalents
$
385,639,741
Trade and other accounts receivable
6,813,723
Accounts receivable from related parties
42,725,455
Financial liabilities:
Suppliers
Accounts payable to related parties
Properties' acquisition liability
Other payables
$
11,339,095
12,044,381
275,500,000
4,856,177
Market risk management-
Fibra INN's activities expose it to the financial risk of changes in interest rates and foreign currency.
Interest rate risk-
Fibra INN can obtain financing under different conditions, either from third parties or related parties and
variable interest rates would expose it to changes in market rates. As of December 31, 2013, the Trust is
not significantly exposed to interest rate variations because it does not have any financial instruments
that accrue interest. However, Fibra INN may obtaing loans to finance future hotel acquisitions, for which
managing this posible risk is subject to future operating plans.
Foreign currency risk
Fibra INN enters into transactions denominated in U.S. dollars, therefore, is exposed to currency fluctuations
between the exchange rate of the Mexican peso and the U.S. dollar.
The financial instruments that Fibra INN holds are classified within the category of loans and other receivables,
and investments in government bonds, which are classified as cash equivalents. Fibra INN does not have
financial instruments measured at fair value.
Fibra INN considers that the carrying amounts of these financial intruments approximate their fair values
given their short maturity period.
Capital management-
Fibra INN manages its capital to ensure that it will continue as a going concern, while seeking to maximize
the wealth of its shareholders through dividend distributions and by optimization the ratio of debt
and equity.
Fibra INN's capital consists mainly of equity. The objectives of capital management are to manage the
capital to make sure that the operating funds are available to maintain consistency and sustainability in
the ditributions to its shareholders and fund required capital expenses, as well as provide necessary
resources for the acquisition and development of new properties.
Financial risk management-
The objective of the Trust's financial risk management strategy is to comply with its financial expectations,
operation results and cash flows that improve the financial position of Fibra INN, also to ensure the ability
of making distributions to CBFIs holders' and to satisfy any future debt obligations.
The role of the Technical Committee of Fibra INN is to advise and instruct the trustee with the sale or
repurchase of CBFIs, analyze and approve potential investments, acquisitions and disposals, provide
business services, coordinate access to domestic financial markets, monitor and manage the financial
risks associated with Fibra INN's operations through interal risk reports which analyze exposures by degree
and risk magnitude. These risks include market risk (including currency risk and interest rate risk), credit
risk and liquidity risk.
a.
The financial position in foreign currency as of December 31, 2013 is:
U.S. Dollars:
Financial assets - Short position
Financial liabilities - Short position
153,382
186,070
32,688
b. The exchange rate between the U.S. dollar and the Mexican peso, as of the date of the consolidated financial
statements is as follows:
U.S. dollar
Sensitivity analysis to foreign exchange risk-
$
13.0652
If the exchange rate were to increase or decrease $1 Mexican peso per U.S. dollar with all other variables
held constant, the results of the year and equity of Fibra INN for the period ended in December 31, 2013,
would have a positive or negative effect, respectively, of approximately $32,688.
Exchange rate
+$1MXN/USD
No change
-$1MXN/USD
Effect in equity
and profit/loss
Sensitivity
(MXN)
$
(394,387)
$
32,688
$
(427,075)
$
(459,763)
$
(32,688)
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