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BLUE LABEL
INTEGRATED ANNUAL REPORT 2017
Notes
to the Group annual financial statements
continued
For the year ended 31 May 2017
3.
Financial instruments and financial risks
continued
3.2 Financial liabilities continued
3.2.2 Borrowings continued
Interest rate sensitivity
The interest rate sensitivity analysis is based on the following assumptions:
t $IBOHFT JO NBSLFU JOUFSFTU SBUFT BGGFDU UIF JOUFSFTU JODPNF PS FYQFOTF PG WBSJBCMF JOUFSFTU åOBODJBM JOTUSVNFOUT
t $IBOHFT JO NBSLFU JOUFSFTU SBUFT POMZ BGGFDU JOUFSFTU JODPNF PS FYQFOTF JO SFMBUJPO UP åOBODJBM JOTUSVNFOUT XJUI åYFE
interest rates if these are recognised at fair value; and
t 6OEFS UIFTF BTTVNQUJPOT B JODSFBTF PS EFDSFBTF JO NBSLFU JOUFSFTU SBUFT BU
.BZ
XPVME JODSFBTF PS
decrease profit before tax by R14.8 million (2016: R5.9 million).
Foreign currency sensitivity
Financial instruments by currency
2017
Financial assets
ZAR
R’000
USD
R’000
GBP
R’000
GHS
R’000
EUR
R’000
LSL
R’000
Total
R’000
Cash and cash equivalents
1 348 845
290
— — 1 531
— 1 350 666
Trade and other receivables*
2 577 264
5 245
— — 3 067
— 2 585 576
Loans receivable
225 080
— — — — — 225 080
Loans to associates and joint ventures
19 338
— — — — — 19 338
Loans to venture capital associates
and joint venture
— 252 615
— — — — 252 615
4 170 527
258 150
— — 4 598
— 4 433 275
Financial liabilities
Interest-bearing borrowings
— — — — — — —
Non-interest-bearing borrowings
18 026
— — — — — 18 026
Trade and other payables*
3 538 338
393
— — 2 464
— 3 541 195
3 556 364
393
— — 2 464
— 3 559 221
Net financial position
614 163
257 757
— — 2 134
— 874 054
2016
Financial assets
Cash and cash equivalents
588 717
310
— — — — 589 027
Trade and other receivables*
2 525 960
318 15 959
— 3 223
— 2 545 460
Loans receivable
104 126
— — — — — 104 126
Loans to associates and joint ventures
8 945 273 251
— — — — 282 196
3 227 748 273 879 15 959
— 3 223
— 3 520 809
Financial liabilities
Non-interest-bearing borrowings
16 087
— — — — — 16 087
Trade and other payables*
2 646 837
214
— 119 2 368
42 2 649 580
2 662 924
214
— 119 2 368
42 2 665 667
Net financial position
564 824 273 665 15 959 (119)
855 (42)
855 142
*Trade and other receivables and trade and other payables exclude non-financial instruments.
With a 10% strengthening or weakening in the rand against the US dollar, profit before tax would have decreased
or increased by R22.6 million. In the prior year, with a 10% strengthening or weakening in the rand against the
US dollar, profit before tax would have decreased or increased by R19.4 million. The effects of movements in other
currencies are insignificant.
In the current year the Group incurred a foreign exchange loss of R52.2 million (2016: R73.5 million profit) mainly as a
result of the Group’s USD exposure.
Capital risk
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in
order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital
structure to reduce the cost of capital.
In order to maintain or adjust this capital structure, the Company may issue new shares, adjust the amount of dividends
paid to shareholders, return capital to shareholders or sell assets to reduce debt. The Group defines capital as capital and
reserves and non-current borrowings. The Group is not subject to externally imposed capital requirements.
There were no changes to the Group’s approach to capital management during the year.