Page 104 - Learn Africa 2021 Annual Report

Learn Africa Plc
Notes to the Financial Statements (cont’d)

For the year ended 31 March 2021

Learn Africa’s maximum exposure to credit risk for the components of the statement
of financial position at 31 March 2021 and 31 March 2020 is the carrying amounts as
illustrated in Note 15.

2 Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument
will fluctuate because of changes in market prices. Market risk comprises three types of
risk: interest rate risk, currency risk and other price risk, such as equity price risk and
commodity risk. Financial instruments affected by market risk include trade receivable
and trade payable. The Company’s exposure to foreign currency is as shown below:

Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in foreign exchange rates. The Company
undertakes transactions denominated in foreign currencies; consequently, exposures to
exchange rate fluctuations arise. Exchange rate exposures are managed within approved
policy parameters. The Company’s exposure to the risk of changes in foreign exchange rates
is low as most of its major transactions are carried out with local suppliers and customers.
However, the Company is exposed to the US Dollars and British Pound Sterling.

The Company’s exposure to foreign currency changes for all other currencies is as a result
of payable to foreign printers. The Naira carrying amounts of the Company’s foreign
currency denominated monetary assets and monetary liabilities at the reporting date are as
follows:

Liabilities 2021 2020
Currency of USA (USD) 528,509 1,764,248
Currency of Britain (GBP) - -

Assets
Currency of USA (USD) 4,197 22,004
Currency of Britain (GBP) 3,794 3,794

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