1 SCOPE FOREIGN CURRENCY TRANSACTIONS AND BALANCES EXCEPT DERIVATIVES WITHIN THE SCOPE OF IAS 39 & IFRS9 TRANSLATING THE RESULTS AND FINANCIAL POSITION.

11

SCOPE

FOREIGN CURRENCY TRANSACTIONS

AND BALANCES EXCEPT DERIVATIVES WITHIN THE SCOPE OF IAS 39

&IFRS9

TRANSLATING THE

RESULTS AND FINANCIAL

POSITION OF FOREIGN

OPERATIONS BYCONSOLIDATION,

PROPTIONATECONSOLIDATION

OR EQUITYMETHOD

TRANSLATING AN ENTITY’S RESULTS

AND FINANCIAL POSIION

INTO A PRESENTATION

CURRENCY

HOWEVER THOSE FOREIGN CURRENCY

DERIVATIVES OUTSIDE IAS 39 & IFRS 9 ARE

WITHIN THIS IAS.

TRANSLATIONS

DEFINITIONSDEFINITIONSCLOSING RATECLOSING RATE-SPOT RATE AT THE END OF THE -SPOT RATE AT THE END OF THE

REPORTING PERIODREPORTING PERIODEXCHANGE DIFFERENCEEXCHANGE DIFFERENCE-DIFFERENT EXCHANGE -DIFFERENT EXCHANGE

RATERATEEXCHANGE RATEEXCHANGE RATE-RATIO BETWEEN TWO -RATIO BETWEEN TWO

CURRENCIESCURRENCIESFAIR VALUEFAIR VALUEFOREIGN CURRENCYFOREIGN CURRENCY-OTHER THAN FUNCTIONAL -OTHER THAN FUNCTIONAL

CURRENCY OF THE ENTITYCURRENCY OF THE ENTITYFOREIGN OPERATIONSFOREIGN OPERATIONS-IS AN ENTITY THAT IS -IS AN ENTITY THAT IS

SUBSIDIARY, ASSOCIATE, JOINT VENTURE OR SUBSIDIARY, ASSOCIATE, JOINT VENTURE OR BRANCH OF A REPORTING ENTITY, THE BRANCH OF A REPORTING ENTITY, THE ACTIVITIES OF WHICH ARE BASED OR ACTIVITIES OF WHICH ARE BASED OR CONDUCTED IN A COUNTRY OR CURRENCY CONDUCTED IN A COUNTRY OR CURRENCY OTHER THAN THOSE OF THE REPORTING ENTITYOTHER THAN THOSE OF THE REPORTING ENTITY

DEFINITIONS-CONTINUEDDEFINITIONS-CONTINUEDFUNCTIONAL CURRENCYFUNCTIONAL CURRENCY IS THE CURRENCY OF THE PRIMARY IS THE CURRENCY OF THE PRIMARY

ECONOMIC ENVIRONMENT IN WHICH THE ENTITY ECONOMIC ENVIRONMENT IN WHICH THE ENTITY OPERATESOPERATES

A GROUPA GROUP IS A PARENT AND ITS SUBSIDIARY IS A PARENT AND ITS SUBSIDIARYMONETARY ITEMSMONETARY ITEMS-RIGHT TO -RIGHT TO RECEIVE OR OBLIGATIONRECEIVE OR OBLIGATION TO TO

DELIVER A FIXED OR DETERMINABLE NUMBER OF UNITS DELIVER A FIXED OR DETERMINABLE NUMBER OF UNITS OF CURRENCY.OF CURRENCY.

NON MONETARYNON MONETARY-ABSENCE OF RIGHT(NOT FOUND IN -ABSENCE OF RIGHT(NOT FOUND IN DEFINITIONS)DEFINITIONS)

NET INVESTMENTS IN A FOREIGN OPERATIONSNET INVESTMENTS IN A FOREIGN OPERATIONS-REPORTING -REPORTING ENTITY’S INTEREST IN THE NET ASSETS OF THAT ENTITY’S INTEREST IN THE NET ASSETS OF THAT OPERATIONSOPERATIONS

PRESENTATION CURRENCYPRESENTATION CURRENCY-IN WHICH FINANCIAL STATEMENTS -IN WHICH FINANCIAL STATEMENTS ARE PRESENTEDARE PRESENTED

SPOT EXCHANGE RATESPOT EXCHANGE RATE-RATE FOR IMMEDIATE DELIVERY.-RATE FOR IMMEDIATE DELIVERY.

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HOW THIS STANDARD IS APPLIED?

DETERMINE THE FUNCTIONALCURRENCY

ACCOUNTING FORFOREIGN CURRENCY

TRANSACTIONS

TRANSLATION OF FOREIGN OPERATIONS

TRANSLATION FROM FUNCTIONAL CURRENCY

TO PRESENTATION CURRENCY

PRIMARY INDICATORSPRIMARY INDICATORSCONCEPT OF ECONOMIC ENVIRONMENT-GENERATION AND EXPENSES OF CONCEPT OF ECONOMIC ENVIRONMENT-GENERATION AND EXPENSES OF

CASH.CASH.

DOES IT INFLUENCE THE SALE PRICE?-DENOMINATION AND SETTLEMENT.DOES IT INFLUENCE THE SALE PRICE?-DENOMINATION AND SETTLEMENT.

DOES IT INFLUENCE THE COST? (LABOR, MATERIAL AND OTHER COSTS)DOES IT INFLUENCE THE COST? (LABOR, MATERIAL AND OTHER COSTS)ADDITIONAL INDICATORSADDITIONAL INDICATORSIN WHAT CURRENCY THE FINANCING ACTIVITIES TAKE PLACE?IN WHAT CURRENCY THE FINANCING ACTIVITIES TAKE PLACE?

IN WHAT CURRENCY RECEIPTS FROM OPEATING ACTIVITIES ARE USUALLY IN WHAT CURRENCY RECEIPTS FROM OPEATING ACTIVITIES ARE USUALLY RETAINED.RETAINED.

CAN THE FUNCTIONAL CURRENCY CHANGED?-YES IF THERE IS A CAN THE FUNCTIONAL CURRENCY CHANGED?-YES IF THERE IS A CHANGE IN THOSE UNDERLYING TRANSACTIONS, EVENTS AND CONDITIONS.CHANGE IN THOSE UNDERLYING TRANSACTIONS, EVENTS AND CONDITIONS.

DETERMINATION OF FUNCTIONAL CURRENCY OF THE ENTITY-

KEY CONSIDERATIONS

IS FOREIGN OPERATIONS AN EXTENSION OF THE REPORTING ENTITY IS FOREIGN OPERATIONS AN EXTENSION OF THE REPORTING ENTITY RATHER THAN WITH SIGNIFICANT AUTONOMY?RATHER THAN WITH SIGNIFICANT AUTONOMY?

WHETHER TRANSACTIONS WITH THE REPORITNG ENTITY ARE HIGH WHETHER TRANSACTIONS WITH THE REPORITNG ENTITY ARE HIGH OR LOW PROPORIION OF THE FOREIGN ENTITY’S ACTIVITIES?OR LOW PROPORIION OF THE FOREIGN ENTITY’S ACTIVITIES?

WHETHER THE CASH FLOWS FROM THE FOREIGN ENTITY’S WOULD WHETHER THE CASH FLOWS FROM THE FOREIGN ENTITY’S WOULD DIRECTLY AFFECT THE CASH FLOWS OF THE REPORTING ENTITY?DIRECTLY AFFECT THE CASH FLOWS OF THE REPORTING ENTITY?

WHETHER CASH FLOWS OF FOREIGN ENTITY IS SUFFICIENT TO WHETHER CASH FLOWS OF FOREIGN ENTITY IS SUFFICIENT TO SERVICE ITS EXISTING DEBT OBLIGATIONS?SERVICE ITS EXISTING DEBT OBLIGATIONS?

IS IT CLEAR OR MIXED? USE JUDGEMENT, WHICH FAITHFULLY IS IT CLEAR OR MIXED? USE JUDGEMENT, WHICH FAITHFULLY REFLECTS THE ECONOMIC EFFECTS OF THE UNDERLYING REFLECTS THE ECONOMIC EFFECTS OF THE UNDERLYING

TRANSACTIONS.TRANSACTIONS.

DETERMINATION OF FUNCTIONAL CURRENCY OF FOREIGN OPERATIONS-

KEY CONSIDERATIONS

FUNCIONAL CURRENCY IN A FUNCIONAL CURRENCY IN A HYPERINFLRATIARY ECONOMY IS TO HYPERINFLRATIARY ECONOMY IS TO BE RESTATED IN ACCORDANCE BE RESTATED IN ACCORDANCE WITH IAS 29-FINANCIAL REPORTING WITH IAS 29-FINANCIAL REPORTING IN HYPERINFLATIONARY IN HYPERINFLATIONARY ECONOMIES.ECONOMIES.

NET INVESTMENT IN A FOREIGN NET INVESTMENT IN A FOREIGN OPERATIONOPERATION

A A MONETARY ITEMMONETARY ITEM FOR WHICH FOR WHICH SETTLEMENT IS NEITHER PLANNED SETTLEMENT IS NEITHER PLANNED NOR LIKELY TO OCCUR IN THE NOR LIKELY TO OCCUR IN THE FORESEEABLE FUTURE IS, IN FORESEEABLE FUTURE IS, IN SUBSTANCE, A PART OF THE SUBSTANCE, A PART OF THE ENTITY’S NET INVESTMENTS IN ENTITY’S NET INVESTMENTS IN THAT FOREIGN OPERATION.THAT FOREIGN OPERATION.

1010

FOREIGN CURRENCY TRANSACTIONSFOREIGN CURRENCY TRANSACTIONS

INITIAL RECOGNITION-WHETHER INITIAL RECOGNITION-WHETHER MONETARY OR NON MONETARYMONETARY OR NON MONETARY

– BY APPLYING SPOT EXCHANGE RATE BY APPLYING SPOT EXCHANGE RATE AT THE DATE OF TRANSACTION.AT THE DATE OF TRANSACTION.

– CAN AN AVERAGE RATE BE USED?CAN AN AVERAGE RATE BE USED?

SETTLEMENT OF MONETART ITEMS SETTLEMENT OF MONETART ITEMS WITHIN THE PERIODWITHIN THE PERIOD

GAIN OR LOSS RECOGNIZE IN P&LGAIN OR LOSS RECOGNIZE IN P&L

1111

FOREIGN CURRENCY TRANSACTIONSFOREIGN CURRENCY TRANSACTIONSAT THE END OF EACH REPORTING PERIODAT THE END OF EACH REPORTING PERIODMONETARY ITEMSMONETARY ITEMS– REPORT USING CLOSING RATEREPORT USING CLOSING RATE– PROFIT OR LOSS ON EXCHANGE RATE PROFIT OR LOSS ON EXCHANGE RATE

ADJUSTMENTS SHOULD BE RECOGNIZED IN ADJUSTMENTS SHOULD BE RECOGNIZED IN INCOME STATEMENTINCOME STATEMENT

NON MONETARY ITEMSNON MONETARY ITEMS- MEASURED AT HISTORIAL COST-NO MEASURED AT HISTORIAL COST-NO

ADJUSTMENTADJUSTMENT- MEASURED AT FAIR VALUE-USE EXCHANGE MEASURED AT FAIR VALUE-USE EXCHANGE

RATES AT THE DATE WHEN THE FV WAS RATES AT THE DATE WHEN THE FV WAS DETERMINED.DETERMINED.

- INVENTORY/IMPAIRMENT OF ASSETS?INVENTORY/IMPAIRMENT OF ASSETS?

RECOGNITION OF EXCHANGE DIFFERENCES.RECOGNITION OF EXCHANGE DIFFERENCES.WHEN A GAIN OR LOSS ON A WHEN A GAIN OR LOSS ON A NON MONETARYNON MONETARY ITEM IS RECOGNIZED DIRECTLY IN OTHER ITEM IS RECOGNIZED DIRECTLY IN OTHER COMPREHENSIVE INCOME, ANY EXCHANGE COMPREHENSIVE INCOME, ANY EXCHANGE COMPONENT OF THAT GAIN OR LOSS SHALL BE COMPONENT OF THAT GAIN OR LOSS SHALL BE RECOGNIZED IN OTHER COMPREHENSIVE RECOGNIZED IN OTHER COMPREHENSIVE INCOME. CONVERSELY, WHERE A GAIN OR LOSS INCOME. CONVERSELY, WHERE A GAIN OR LOSS ON A ON A NON MONETARYNON MONETARY ITEMS IS RECOGNIZED IN ITEMS IS RECOGNIZED IN PROFIT OR LOSS, ANY EXCHANGE COMPONENT PROFIT OR LOSS, ANY EXCHANGE COMPONENT OF THAT GAIN SHALL BE RECOGNIZED IN OF THAT GAIN SHALL BE RECOGNIZED IN PROFIT OR LOSS. PROFIT OR LOSS.

WILL THERE BE A CONVERSION IN RESPECT NON WILL THERE BE A CONVERSION IN RESPECT NON MONETARY ITEMS?MONETARY ITEMS?

RECOGNITION OF EXCHANGE DIFFERENCES.RECOGNITION OF EXCHANGE DIFFERENCES.EXCHANGE DIFFERNCES ARISING ON A EXCHANGE DIFFERNCES ARISING ON A MONETARY ITEM THAT FORMS PART OF A MONETARY ITEM THAT FORMS PART OF A REPORTING ENTITY’S NET INVESTMENTS IN A REPORTING ENTITY’S NET INVESTMENTS IN A FOREIGN OPERATIONS SHALL BE RECOGNIZED FOREIGN OPERATIONS SHALL BE RECOGNIZED IN PROFIT AND LOSS ACCOUNT IN THE IN PROFIT AND LOSS ACCOUNT IN THE SEPARATE FINANCIAL STATEMNETS OF THE SEPARATE FINANCIAL STATEMNETS OF THE REPORTING ENTITY OR THE INDIVIDUAL REPORTING ENTITY OR THE INDIVIDUAL FINANCIAL STATEMENTS OF THE FOREIGN FINANCIAL STATEMENTS OF THE FOREIGN OPERATIONS, AS APPROPRIATE. OPERATIONS, AS APPROPRIATE.

IN THE FINANCIAL STATEMENTS THAT INCLUDE IN THE FINANCIAL STATEMENTS THAT INCLUDE FOREIGN OPERATIONS AND THE REPORTING FOREIGN OPERATIONS AND THE REPORTING ENTITY, SUCH EXCHANGE DIFFERENCES SHALL ENTITY, SUCH EXCHANGE DIFFERENCES SHALL BE RECOGNIZED INITIALLY IN OTHER BE RECOGNIZED INITIALLY IN OTHER COMPREHENSIVE INCOME AND RECLASSIFIED COMPREHENSIVE INCOME AND RECLASSIFIED FROM EQUITY TO PROFIT OR LOSS ON DISPOSAL FROM EQUITY TO PROFIT OR LOSS ON DISPOSAL OF NET INVESTMENTSOF NET INVESTMENTS

CHANGE IN FUNCTIONAL CURRENCYCHANGE IN FUNCTIONAL CURRENCY

WHEN THERE IS A CHANGE IN AN WHEN THERE IS A CHANGE IN AN ENTITY’S FUNCTIONAL CURRENCY, ENTITY’S FUNCTIONAL CURRENCY, THE ENTITY SHALL APPLY THE THE ENTITY SHALL APPLY THE TRANSLATION PROCEDURE TRANSLATION PROCEDURE APPLICABLE TO THE NEW APPLICABLE TO THE NEW FUNCTIONAL CURRENCY FUNCTIONAL CURRENCY PROSPECTIVELYPROSPECTIVELY FROM THE DATE OF FROM THE DATE OF CHANGE.CHANGE.

TRANSLATION TO THE PRESENTATION TRANSLATION TO THE PRESENTATION CURRENCYCURRENCY

-ASSETS AND LIABILITIES SHALL BE -ASSETS AND LIABILITIES SHALL BE TRANSLATED AT THE CLOSING RATE.TRANSLATED AT THE CLOSING RATE.

-INCOME AND EXPENSES SHALL BE -INCOME AND EXPENSES SHALL BE TRANSLATED AT EXCHANGE RATES AT TRANSLATED AT EXCHANGE RATES AT THE DATES OF THE TRANSACTIONS ANDTHE DATES OF THE TRANSACTIONS AND

(CAN THE AVERAGE RATE BE USED?)(CAN THE AVERAGE RATE BE USED?)

-ALL RESULTING EXCHANGE -ALL RESULTING EXCHANGE DIFFERENCES SHALL BE RECOGNIZED IN DIFFERENCES SHALL BE RECOGNIZED IN OTHER COMPREHENSIVE INCOME.OTHER COMPREHENSIVE INCOME.

TRANSLATION TO THE PRESENTATION TRANSLATION TO THE PRESENTATION CURRENCY-OF A HYPERINFLATIONARY CURRENCY-OF A HYPERINFLATIONARY ECONOMYECONOMY-ALL AMOUNTS (INCLUDING COMPARATIVES) -ALL AMOUNTS (INCLUDING COMPARATIVES) SHALL BE TRANSALTED AT THE CLOSING RATE SHALL BE TRANSALTED AT THE CLOSING RATE AT THE DATE OF THE MOST RECENT STATEMENT AT THE DATE OF THE MOST RECENT STATEMENT OF FINANCIAL POSITION EXCEPT THATOF FINANCIAL POSITION EXCEPT THAT- WHEN AMOUNTS ARE TRANSLATED INTO THE - WHEN AMOUNTS ARE TRANSLATED INTO THE CURRENCY OF A NON HYPERINFLATIONARY CURRENCY OF A NON HYPERINFLATIONARY ECONOMY, COMPARATIVE AMOUNTS SHALL BE ECONOMY, COMPARATIVE AMOUNTS SHALL BE THOSE THAT WERE PRESENTED AS CURRENT THOSE THAT WERE PRESENTED AS CURRENT YEAR AMOUNTS IN THE RELEVANT PRIOR YEAR YEAR AMOUNTS IN THE RELEVANT PRIOR YEAR FINANCIAL STATEMENTS.FINANCIAL STATEMENTS.BEFORE APPLYING THE ABOVE, IAS 29 TO BE BEFORE APPLYING THE ABOVE, IAS 29 TO BE APPLIED.APPLIED.

TRANSLATION OF A FOREIGN TRANSLATION OF A FOREIGN OPERATIONSOPERATIONS

-SAME PROCEDURE AS THAT OF TRANSLATION TO THE -SAME PROCEDURE AS THAT OF TRANSLATION TO THE PRESENTATION CURRENCY EXCEPT THATPRESENTATION CURRENCY EXCEPT THAT

ELMINATION OF INTRA GROUP BALANCES AND ELMINATION OF INTRA GROUP BALANCES AND TRANSACTIONS, AFTER ADJUSTMENT OF EXCHANGE RATE TRANSACTIONS, AFTER ADJUSTMENT OF EXCHANGE RATE DIFFERENCES IN RESPECT OF MONETARY ITEMS.DIFFERENCES IN RESPECT OF MONETARY ITEMS.

ANY GOODWILL ARISING ON THE ACQUISITION OF A FOREIGN OPERATION AND ANY FAIR VALUE ADJUSTMENTS TO THE CARRYING AMOUNTS OF ASSETS AND LIABILITIES ARISING ON THE ACQUISITION OF THAT FOREIGN OPERATION SHALL BE TREATED AS ASSETS AND LIABILITIES OF THE FOREIGN OPERATION. THUS THEY SHALL BE EXPRESSED IN THE FUNCTIONAL CURRENCY OF THE FOREIGN OPERATION AND SHALL BE TRANSLATED AT THE CLOSING RATE

DIPOSAL OR PARTIAL DISPOSAL OF A DIPOSAL OR PARTIAL DISPOSAL OF A FOREIGN OPERATIONFOREIGN OPERATION

-THE CUMULATIVE AMOUNT OF -THE CUMULATIVE AMOUNT OF EXCHANGE DIFFERENCES ACCUMULATED EXCHANGE DIFFERENCES ACCUMULATED IN THE SEPARATE COMPONENT OF IN THE SEPARATE COMPONENT OF EQUITY, SHALL BE RECLASSIFIED FROM EQUITY, SHALL BE RECLASSIFIED FROM EQUITY TO P&L, WHEN GAIN OR LOSS ON EQUITY TO P&L, WHEN GAIN OR LOSS ON DISPOSAL IS RECOGNIZED.DISPOSAL IS RECOGNIZED.

DIPOSAL OR PARTIAL DISPOSAL OF A FOREIGN DIPOSAL OR PARTIAL DISPOSAL OF A FOREIGN OPERATIONOPERATION

-ON THE PARTIAL DISPOSAL OF A SUBSIDIARY THAT -ON THE PARTIAL DISPOSAL OF A SUBSIDIARY THAT INCLUDES A FOREIGN OPERATION, THE ENTITY SHALL RE-INCLUDES A FOREIGN OPERATION, THE ENTITY SHALL RE-ATTRIBUTE THE PROPORTIONATE SHARE OF THE ATTRIBUTE THE PROPORTIONATE SHARE OF THE CUMULATIVE AMOUNT OF EXCHANGE DIFFERENCES CUMULATIVE AMOUNT OF EXCHANGE DIFFERENCES RECOGNIZED IN OTHER COMPREHENSIVE INCOME TO THE RECOGNIZED IN OTHER COMPREHENSIVE INCOME TO THE NON-CONTROLLING INTERESTS IN THAT FOREIGN NON-CONTROLLING INTERESTS IN THAT FOREIGN OPERATION. OPERATION.

IN ANY OTHER PARTIAL DISPOSAL OF A FOREIGN IN ANY OTHER PARTIAL DISPOSAL OF A FOREIGN OPERATION THE ENTITY SHALL RECLASSIFY TO P&L ONLY OPERATION THE ENTITY SHALL RECLASSIFY TO P&L ONLY THE PROPORTIONATE SHALL OF THE CUMULATIVE THE PROPORTIONATE SHALL OF THE CUMULATIVE AMOUNT OF THE EXCHANGE DIFFERENCES RECOGNIZED AMOUNT OF THE EXCHANGE DIFFERENCES RECOGNIZED IN OTHER COMPREHENSIVE INCOME..IN OTHER COMPREHENSIVE INCOME..

DISCLOSUREDISCLOSURE-AMOUNT OF EXCHANGE DIFFERENCE -AMOUNT OF EXCHANGE DIFFERENCE RECOGNIZED IN PROFIT OR LOSS.RECOGNIZED IN PROFIT OR LOSS.

-NET EXCHANGE DIFFERENCES RECOGNIZED IN -NET EXCHANGE DIFFERENCES RECOGNIZED IN OTHER COMPREHENSIVE INCOME AND OTHER COMPREHENSIVE INCOME AND ACCUMULATED IN A SEPARATE COMPONENT OF ACCUMULATED IN A SEPARATE COMPONENT OF EQUITY AND A RECONCILIATION BETWEEN EQUITY AND A RECONCILIATION BETWEEN OPENING AND CLOSING DIFFERENCESOPENING AND CLOSING DIFFERENCES

-IF PRESENTATION CURRENCY IS DIFFERENT -IF PRESENTATION CURRENCY IS DIFFERENT FROM FUNCTIONAL CURRENCY THAT SHOULD FROM FUNCTIONAL CURRENCY THAT SHOULD BE STATEDBE STATED

-CHANGE IN FUNCTIONAL CURRENCY-CHANGE IN FUNCTIONAL CURRENCY