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BLUE LABEL
INTEGRATED ANNUAL REPORT 2017
Notes
to the Company annual financial statements
continued
For the year ended 31 May 2017
2.
Financial risks
continued
Liquidity risk
Liquidity risk arises when a company encounters difficulties to meet commitments associated with liabilities and other
payment obligations. The Company’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. Company finance monitors rolling forecasts of the Company’s
liquidity requirements to ensure it has sufficient cash to meet operational needs. Due to the dynamic nature of the
underlying businesses, the Company aims to maintain flexibility in funding by keeping committed credit lines
available.
Management is satisfied as to the liquidity of the Company since the majority of the current liabilities relate to the
loans from subsidiaries. These subsidiaries are 100% held by the Company and therefore the Company has control
of their assets including cash resources.
The Company and a subsidiary company have issued a cross surety as security for an overdraft facility in the amount
of R19.85 million in favour of FNB, a division of FirstRand Bank Limited. This facility was unutilised as at 31 May 2017.
In addition, the Company and four of its subsidiaries have issued a cross surety in the amount of R1.3 million in
respect of a credit card facility.
The Company has issued a surety in respect of guarantees in the amount of R85.5 million in favour of third parties,
for normal trade obligations of Group companies.
BLT’s co-shareholder in BLM, being Grupo Bimbo S.A.B DE C.V (“Bimbo”) has guaranteed the performance of BLM’s
obligations to Radiomovil Dipsa S.A. de C.V. (trading as Telcel) (“Telcel”). BLT has in turn provided Bimbo with a back
to back guarantee in terms of which BLT shall reimburse Bimbo a percentage of any loss it incurs as a result of Telcel
calling on the aforesaid guarantee, which percentage it shall pro-rata to BLT’s shareholding in BLM (currently 47.56%).
At year-end there is no amount due to Telcel by BLM.
Maturity of financial liabilities
The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on
the remaining period at the statement of financial position date to the contractual maturity date.
The amounts disclosed in the table are the contractual undiscounted cash flows.
Payable in:
Less than
one month
or on
demand
R’000
More than
one month
but not
exceeding
one year
R’000
More than
one year
but not
exceeding
two years
R’000
More than
two years
but not
exceeding
five years
R’000
More than
five years
R’000
2017
Loans from subsidiaries
1 491 625
—
—
—
—
Trade and other payables*
258
50 143
2 623
—
—
Total
1 491 883
50 143
2 623
—
—
2016
Loans from subsidiaries
1 183 399
—
—
—
—
Trade and other payables*
3 537
54 282
24 790
—
—
Total
1 186 936
54 282
24 790
—
—
* Trade and other payables exclude non-financial instruments being VAT and certain amounts within accruals and sundry creditors.