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CSIR ANNUAL REPORT 2010/11
Notes to the Annual Financial Statements
for the year ended 31 March 2011
22
FINANCIAL INSTRUMENTS (continued)
22.1 Market risk
Foreign currency risk
The Group is exposed to currency risk on sales and purchases that are denominated in a currency other than the
respective functional currencies of Group entities, primarily the rand, and on investments in foreign operations.
The Group enters into forward exchange contracts to buy specifi ed amounts of foreign currencies in the future at a
predetermined exchange rate.
Forward exchange contracts are entered into mainly to cover import orders. The Group has no policy to enter into
forward exchange contracts for anticipated foreign receipts. The Group does not use derivative fi nancial instruments for
speculative purposes.
The Group’s exposure to foreign currency risk was as follows:
31 March 2011
Total ZAR EURO USD GBP Other
R’000 R’000 R’000 R’000 R’000 R’000
Trade receivables 92 752 77 860 2 950 10 491 1 088 363
Bank accounts 179 663 92 143 17 336 68 378 1 745 61
Trade payables (526 542) (518 275) (2 349) (4 903) (996) (19)
Gross statement of fi nancial position exposure (254 127) (348 272) 17 937 73 966 1 837 405
Forward exchange contracts (1 109) - - - - (1 109)
Net exposure (255 236) (348 272) 17 937 73 966 1 837 (704)
31 March 2010
Total ZAR EURO USD GBP Other
R’000 R’000 R’000 R’000 R’000 R’000
Trade receivables 112 847 96 869 4 397 9 293 1 268 1 020
Bank accounts 87 764 24 646 8 586 53 658 697 177
Trade payables (445 195) (443 283) - - (1 912) -
Gross statement of fi nancial position exposure (244 584) (321 768) 12 983 62 951 53 1 197
Forward exchange contracts (2 564) - (2 564) - - -
Net exposure (247 148) (321 768) 10 419 62 951 53 1 197
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