Annual Report 2011 - T-Hrvatski Telekom
Annual Report 2011 - T-Hrvatski Telekom
Annual Report 2011 - T-Hrvatski Telekom
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119<br />
Year ended 31 December <strong>2011</strong><br />
Croatian Kuna<br />
Euro<br />
Increase/decrease<br />
in basis points<br />
+100<br />
-100<br />
+100<br />
-100<br />
Effect on profit<br />
post tax<br />
HRK millions<br />
6<br />
(6)<br />
10<br />
(10)<br />
Consolidated financial statements<br />
Year ended 31 December 2010<br />
Croatian Kuna<br />
Euro<br />
+100<br />
-100<br />
+100<br />
-100<br />
6<br />
(6)<br />
6<br />
(6)<br />
d) Foreign currency risk<br />
The Group’s functional currency is the Croatian Kuna<br />
(HRK). Certain assets and liabilities are denominated<br />
in foreign currencies which are translated at the valid<br />
middle exchange rate of the Croatian National Bank<br />
at each statement of financial position date. The<br />
resulting differences are charged or credited to the<br />
statement of comprehensive income but do not affect<br />
short-term cash flows.<br />
A significant amount of deposits in the banks,<br />
available for sale financial assets and cash<br />
equivalents are made in foreign currency, primarily<br />
in Euro. The purpose of these deposits is to hedge<br />
foreign currency denominated liabilities and liabilities<br />
indexed to foreign currencies from changes in the<br />
exchange rate. The following table demonstrates the<br />
sensitivity to a reasonably possible change in the Euro<br />
exchange rate, with all other variables held constant,<br />
of the Group’s profit post tax due to changes in the<br />
fair value of monetary assets and liabilities.<br />
Year ended 31 December <strong>2011</strong><br />
Year ended 31 December 2010<br />
Increase/decrease<br />
in Euro rate<br />
+3%<br />
-3%<br />
+3%<br />
-3%<br />
Effect on profit<br />
post tax<br />
HRK millions<br />
28<br />
(28)<br />
19<br />
(19)<br />
e) Fair value estimation<br />
The fair value of securities included in availablefor-sale<br />
financial assets is estimated by reference<br />
to their quoted market price at the statement of<br />
financial position date. The Group’s principal<br />
financial instruments not carried at fair value are trade<br />
receivables, other receivables, long-term receivables,<br />
trade and other payables. The historical cost carrying<br />
amounts of receivables and payables, including<br />
provisions, which are all subject to normal trade credit<br />
terms, approximate their fair values.<br />
f) Capital management<br />
The primary objective of the Group’s capital<br />
management is to ensure that it supports its business<br />
and maximise shareholder value. The capital