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| Notes to the Consolidated Financial Statements |
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43. |
Financial instruments (continued) |
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Financial risk management |
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The Group does not trade in financial instruments but, in the normal course of its operations, the Group is primarily exposed
to currency, metal price, credit, interest rate and liquidity risks. In order to manage these risks, the Group may enter into
transactions that make use of financial instruments. The Group has developed a comprehensive risk management process to
facilitate, control and monitor these risks. This process includes formal documentation of policies, including limits, controls and
reporting structures. |
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Controlling risk in the Group |
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The Executive Committee and the Financial Risk Sub-committee are responsible for risk management activities within the Group.
Overall limits have been set by the Board. The Executive Committee is responsible for setting individual limits. In order to ensure
adherence to these limits, activities are marked to market on a daily basis and reported to the Group Treasurer. The Finance Risk
Sub-committee, composed of Marketing and Treasury executives, meets monthly to review market trends and develop strategies
to be submitted for Executive Committee approval. The Treasury is responsible for monitoring currency, interest rate and liquidity
risk within the limits and constraints set by the Board. The Marketing Department is responsible for monitoring metal price risk,
also within the laid-down limits and constraints set by the Board. |
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Currency risk |
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The carrying amount of the Group's foreign currency denominated monetary assets and liabilities at balance sheet date is as
follows: |
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South African
rand
Rm |
US dollar
Rm |
Euro
Rm |
Other
Rm |
Total
Rm |
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2007 |
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Financial assets |
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Investments held by environmental trusts |
120 |
— |
— |
— |
120 |
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Other financial assets |
116 |
— |
— |
— |
116 |
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Accounts receivable |
1,395 |
2,804 |
12 |
35 |
4,246 |
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Derivative financial assets |
— |
4 |
(1) |
—* |
3 |
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Cash and cash equivalents |
1,307 |
2,755 |
11 |
6 |
4,079 |
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2,938 |
5,563 |
22 |
41 |
8,564 |
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Financial liabilities |
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Obligations due under |
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finance leases |
(490) |
— |
— |
— |
(490) |
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Interest-bearing borrowings |
(7,465) |
— |
— |
— |
(7,465) |
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Accounts payable |
(1,344) |
(2,124) |
(13) |
(27) |
(3,508) |
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(9,299) |
(2,124) |
(13) |
(27) |
(11,463) |
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2006 |
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Financial assets |
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Other financial assets |
110 |
— |
— |
— |
110 |
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Accounts receivable |
2,263 |
2,300 |
11 |
31 |
4,605 |
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Derivative financial assets |
— |
2 |
3 |
— |
5 |
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Cash and cash equivalents |
2,991 |
1,974 |
13 |
10 |
4,988 |
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5,364 |
4,276 |
27 |
41 |
9,708 |
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Financial liabilities |
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Obligations due under |
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finance leases |
(475) |
— |
— |
— |
(475) |
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Interest-bearing borrowings |
(100) |
— |
— |
— |
(100) |
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Accounts payable |
(2,874) |
(1,255) |
(13) |
(31) |
(4,173) |
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|
(3,449) |
(1,255) |
(13) |
(31) |
(4,748) |
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