On 1 July 2018, Portsmouth Ltd is a UK company which has the sterling pound () as its functional currency. Portsmouth Ltd formed a foreign subsidiary in a country which has the Egyptian Pound as its currency. The summarised financial statements of this subsidiary for the years to 30 June 2019 and 2020 are as follows:

Statements of comprehensive income for the year to 30 June

	2019	2020
	Egyptian Pound	Egyptian Pound
Sales revenue	672,000	718,200
Expenses	403,200	415,800
Profit for the year	268,800	302,400

Statements of financial position as at 30 June

	2019	2020
	Egyptian Pound	Egyptian Pound
Assets	1,124,000	1,459,200
Share capital (issued 1 July 2018)	600,000	600,000
Retained earnings	268,800	571,200
Total Equity	868,800	1,171,200
Liabilities	255,200	288,000
Total Liabilities & Equity	1,124,000	1,459,200

Exchange rates are as follows:

1 July 2018 1 = 19 Egyptian Pound

30 June 2019 1 = 20 Egyptian Pound

30 June 2020 1 = 21 Egyptian Pound

The average exchange rate for the year to 30 June 2019 was 1 = 20 Egyptian Pound and the average exchange rate for the year to 30 June 2019 was 1 = 19 Egyptian Pound

Required:

1:Translate the financial statements for both years into sterling, in accordance with the requirements of IAS21.

2:What is the balance of the foreign exchange reserve for the years 2019 and 2020?

3:What is the gain/loss of the foreign exchange reserve for the years 2019 and 2020?