124 / 248
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS
CONTINUED
For the year ended 31 May 2015
122
BLUE LABEL INTEGRATED ANNUAL REPORT 2015
2014
R’000
3.
FINANCIAL RISKS continued
Cash at bank and short-term bank deposits
Credit rating based on latest Fitch local currency long-term
issuer default ratings
AAA
1
1
A+
1 045
363
A-
102 822
82 287
BBB
210 523
—
BBB-
473 299
1 100 758
Other
593
655
788 283
1 184 064
Liquidity risk
Liquidity risk arises when a company encounters difficulties in meeting commitments associated with
liabilities and other payment obligations. The Group’s objective is to maintain prudent liquidity risk
management by maintaining sufficient cash and marketable securities, the availability of funding
through an adequate amount of committed credit facilities and the ability to close out market
positions. Due to the dynamic nature of the underlying businesses, the Group aims to maintain
flexibility in funding by keeping committed credit lines available.
Cash flow forecasting is performed in the operating entities of the Group to ensure sufficient cash to
meet operational needs while maintaining sufficient headroom to ensure that borrowing limits (where
applicable) are not breached.
Surplus cash held by the operating entities over and above the balance required for working capital
management is transferred to the Group treasury. Group treasury invests surplus cash in interest-
bearing accounts, identifying instruments with sufficient liquidity to provide adequate headroom as
determined by the abovementioned forecasts.
The Group has a short-term loan facility with Investec Bank Limited of R1.5 billion (2014: R1 billion).
The facility was unutilised. Drawdowns were made and fully repaid during the year.
2015
R’000