Annual Report - Končar Distribution and Special Transformers Inc.

Notes to the financial statements - continued
a) Foreign currency risk management
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
foreign exchange rates.
The Company is exposed to this risk through sales, purchase and loans stated in foreign currency which is not the Company’s
functional currency. Foreign currencies to which the Company is mostly exposed are EUR, USD, SEK, CZK, CHF and GBP.
The Company exposes itself to foreign currency risk through sales, purchasing, loans and depositing of funds denominated
in foreign currencies. EUR is not considered a significantly risky currency and the Company does not hedge itself
against it, as opposed to all other currencies where the Company protects itself through forward contracts on the trade of
currencies with banks.
The Company’s exposure to the currency risk as at the balance sheet date is as follows (expressed in thousands of HRK):
31/12/2012
Trade receivables
Other receivables
Advances
Cash and
cash equivalents
Total assets
Trade payables and
other liabilities
Advances received
Financial liabilities
Total liabilities
EUR USD MAD SEK CZK CHF GBP Total
foreign
HRK Total
’000 ’000 ’000 ’000 ’000 ’000 ’000 currencies ’000 ’000
81,412 801 — 22,065 — 124 — 104,402 72,761 177,163
33 — — — — — — 33 15,554 15,587
18 — — — — 2,490 — 2,508 2,709 5,217
14,558 16 362 89 1 344 2 15,372 289 15,661
96,021 817 362 22,154 1 2,958 2 122,315 91,313 213,628
35,053 66 — 562 137 15 — 35,833 39,296 75,129
21,971 — 356 6,621 — — — 28,948 144 29,092
58,572 — — — — — — 58,572 7,500 66,072
115,596 66 356 7,183 137 15 — 123,353 46,940 170,293
31/12/2011
Trade receivables
Other receivables
Advances given
Cash and
cash equivalents
Deposits made
Total assets
Trade payables and
other liabilities
Advances received
Financial liabilities
Total liabilities
EUR
’000
USD
’000
SEK
’000
CZK
’000
CHF
’000
GBP
’000
Total
foreign
currencies
HRK
’000
Total
’000
59,042 1,151 1,974 — 229 — 62,396 49,153 111,549
324 — — — — — 324 18,563 18,887
5,789 11 — — — — 5,800 4,659 10,459
19,773 1,229 486 1,162 264 1 22,915 15,013 37,928
64,009 — — — — — 64,009 — 64,009
148,937 2,391 2,460 1,162 493 1 155,444 87,388 242,832
32,514 29 646 — 114 33,303 47,552 80,855
26,848 681 1,539 — 42 — 29,110 1,710 30,820
9,300 — — — — — 9,300 — 9,300
68,662 710 2,185 — 156 — 71,713 49,262 120,975
59