FirstChoice Wholesale Investments - Colonial First State
FirstChoice Wholesale Investments - Colonial First State
FirstChoice Wholesale Investments - Colonial First State
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COLONIAL FIRST STATE - FIRSTCHOICE WHOLESALE INVESTMENT FUNDS10. FINANCIAL RISK MANAGEMENT (continued)NOTES TO THE FINANCIAL STATEMENTSFOR THE PERIOD ENDED 30 JUNE 2011(a)(ii)Market Risk (continued)Foreign exchange riskCertain Funds hold both monetary and non-monetary assets denominated in currencies other than the Australian dollar.The foreign exchange risk relating to non-monetary assets and liabilities is a component of price risk not foreign exchangerisk. Foreign exchange risk arises as the value of monetary securities denominated in other currencies will fluctuate dueto changes in exchange rates. The risk is measured using sensitivity analysis.Certain Funds manage this risk by entering into foreign exchange forward contracts to hedge the risks. The terms andconditions of these contracts rarely exceed twelve months and are contracted in accordance with the investmentguidelines. However, for accounting purposes, with the exception of <strong><strong>First</strong>Choice</strong> <strong>Wholesale</strong> Global Share - Hedged, theseFunds do not designate any derivatives as hedges in a hedging relationship, and hence these derivative financialinstruments are classified as at fair value through profit or loss.The Compliance Department of the Responsible Entity regularly monitors these hedging activities.The table below summarises the Funds' assets and liabilities, monetary and non-monetary, that are denominated in acurrency other than the Australian dollar.<strong><strong>First</strong>Choice</strong> <strong>Wholesale</strong> Global Share - HedgedUnited <strong>State</strong>s European Uk Pound Japanese OthersDollar Euro Sterling Yen30/06/2011 AUD AUD AUD AUD AUD$'000 $'000 $'000 $'000 $'000Net increase/decrease in exposurefrom:- foreign currency contract ( 553,019) ( 162,782) ( 104,514) ( 98,886) ( 127,006)Net exposure ( 553,019) ( 162,782) ( 104,514) ( 98,886) ( 127,006)<strong><strong>First</strong>Choice</strong> <strong>Wholesale</strong> Global Share - HedgedUnited <strong>State</strong>s European Japanese Uk Pound OthersDollar Euro Yen Sterling30/06/2010 AUD AUD AUD AUD AUD$'000 $'000 $'000 $'000 $'000Net increase/decrease in exposurefrom:- foreign currency contract ( 542,358) ( 150,151) ( 109,739) ( 101,399) ( 120,972)Net exposure ( 542,358) ( 150,151) ( 109,739) ( 101,399) ( 120,972)<strong>Colonial</strong> <strong>First</strong> <strong>State</strong> <strong>Wholesale</strong> BalancedUnited <strong>State</strong>s European Uk Pound Japanese OthersDollar Euro Sterling Yen30/06/2011 AUD AUD AUD AUD AUD$'000 $'000 $'000 $'000 $'000Cash and cash equivalents - - 5 1 1Bank overdraft ( 46) ( 11) - - -Net exposure ( 46) ( 11) 5 1 1Page 108