01 02 03 Financial Statements 04 39. Risk management continued Market risk continued Currency risk continued The tables below indicate the currencies to which the Group had significant exposure at 31 December 2018 and 31 December 2017 on its monetary assets and liabilities. The analysis calculates the effect of a reasonably possible movement of the currency rate against the Georgian Lari, with all other variables held constant on the profit or loss. A negative amount in the table reflects a potential net reduction in profit or loss, while a positive amount reflects a net potential increase. 31 December 2018 GEL US$ EUR Total Assets Cash and cash equivalents 35,469 349 336 36,154 Amounts due from credit institutions 4,134 7,673 – 11,807 Receivables from sales of pharmaceuticals 18,427 1,109 904 20,440 Other assets: loans issued and lease deposit 728 2,556 – 3,284 Total monetary assets 58,758 11,687 1,240 71,685 Liabilities Accounts payable 60,582 18,758 25,752 105,092 Accruals for employee compensation 25,860 755 – 26,615 Payable for share acquisitions 71,831 19,643 – 91,474 Insurance contract liabilities 22,222 90 232 22,544 Borrowings 223,813 68,702 4,302 296,817 Finance lease liabilities – 8,676 – 8,676 Total monetary liabilities 404,308 116,624 30,286 551,218 Net monetary position, before derivatives (345,550) (104,937) (29,046) (479,533) Derivative financial instruments (48,139) 48,159 – 20 Hedge accounting position – 15,805 – 15,805 Net monetary position including derivatives (393,689) (40,973) (29,046) (463,708) % Reasonably possible increase in currency exchange rate 10.04% 8.55% Effect on profit before income tax expense (4,114) (2,483) % Reasonably possible decrease in currency exchange rate -10.04% -8.55% Effect on profit before income tax expense 4,114 2,483 31 December 2017 GEL US$ EUR Total Assets Cash and cash equivalents 38,269 9,738 833 48,840 Amounts due from credit institutions 5,659 9,109 – 14,768 Receivables from sales of pharmaceuticals 17,293 775 1,730 19,798 Other assets: loans issued and lease deposit 769 2,430 – 3,199 Total monetary assets 61,990 22,052 2,563 86,605 Liabilities Accounts payable 64,011 15,275 26,677 105,963 Accruals for employee compensation 21,248 696 – 21,944 Payable for share acquisitions 67,361 30,897 – 98,258 Insurance contract liabilities 20,676 131 146 20,953 Borrowings 189,042 73,363 4,605 267,010 Finance lease liabilities – 8,834 – 8,834 Total monetary liabilities 362,338 129,196 31,428 522,962 Net monetary position, before derivatives (300,348) (107,144) (28,865) (436,357) Derivative financial instruments (50,780) 49,819 – (961) Hedge accounting position – 15,307 – 15,307 Net monetary position including derivatives (351,128) (42,018) (28,865) (422,011) % Reasonably possible increase in currency exchange rate 11.45% 17.19% Effect on profit before income tax expense (4,811) (4,962) % Reasonably possible decrease in currency exchange rate -11.45% -17.19% Effect on profit before income tax expense 4,811 4,962 As part of its risk management, the Group uses foreign exchange forward contracts to manage exposures resulting from changes in foreign currency exchange rates. As at 31 December 2018 the Group had US$26 million (2017: US$20.3 million) notional value foreign exchange forward contracts. 171