COMPANY INCOME STATEMENT For the year ended 27 December 2015

Transcription

1 COMPANY INCOME STATEMENT December 2015 December 2014 Rm Notes 52 weeks 52 weeks Revenue , Sales Management and administration fees received Dividends received ,319.8 Depreciation (0.4) - Employment costs (45.7) (22.7) Other income Other operating costs (0.3) (4.5) Operating profit before interest , Finance costs (0.7) - - Finance income Net finance income Profit before taxation ,322.5 Taxation 4 (3.7) (1.5) Profit for the year ,321.0

2 COMPANY STATEMENT OF CASH FLOWS December 2015 December 2014 Rm Notes 52 weeks 52 weeks Cash flows from operating activities Cash outflow from trading activities 13.1 (25.6) (10.9) Working capital movements 13.2 (15.7) 10.0 Cash utilised in operations (41.3) (0.9) Interest paid 3 (0.7) - Interest received Dividends received ,319.8 Dividends paid 13.3 (905.6) (914.0) Taxation paid 13.4 (5.4) (3.1) Net cash (outflow)/inflow from operating activities (223.5) Cash flows from investing activities Investment to expand operations 6 (3.3) - Investment in subsidiaries 5 (13.3) - Loans advanced to subsidiaries - (8.3) Proceeds received from/(loans repaid to) subsidiaries 97.9 (381.1) Other investing activities Net cash inflow/(outflow) from investing activities 96.8 (381.4) Cash flows from financing activities Net acquisition of treasury shares 13.6 (23.6) (27.4) Proceeds received from subsidiaries Net cash inflow/(outflow) from financing activities (27.4) Net decrease in cash and cash equivalents (0.1) (0.4) Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year

3 COMPANY STATEMENT OF CHANGES IN EQUITY 2 Rm Share capital Share premium Preference shares Other reserves Retained profit Total Balance as at December , ,206.3 Total comprehensive income , ,321.3 Profit for the year , ,321.0 Other comprehensive income for the year Share trust loss (27.4) (27.4) Dividends paid (914.0) (914.0) Treasury shares (note 10 and note 11) - (9.9) - (0.3) - (10.2) Share-based payment expense (note 11) Balance as at December , ,578.9 Total comprehensive income (0.1) Profit for the year Other comprehensive loss for the year (0.1) - (0.1) Share trust loss (23.6) (23.6) Dividends paid (914.1) (914.1) Treasury shares (note 10 and note 11) - (58.3) (56.9) Share-based payment expense (note 11) Balance as at December , ,340.2 December 2015 December 2014 Dividend per share (cents) - Interim Final Declared after the financial year-end. 2 Value is less than R100,000. Details of the dividend can be found in note 11 in the Group Financial Statements.

4 COMPANY STATEMENT OF FINANCIAL POSITION Rm Notes December 2015 December 2014 ASSETS Non-current assets 1, ,185.0 Investment in subsidiaries 5 1, ,167.9 Property, plant and equipment Other financial assets Deferred taxation Current assets 1, ,018.1 Other current financial assets Trade and other receivables Amounts owing by subsidiaries 5 1, ,992.3 Cash on hand and bank balances Total assets 3, ,203.1 EQUITY AND LIABILITIES Capital and reserves 2, ,578.9 Share capital Share premium Other reserves Retained profit 1, ,822.9 Total equity 2, ,578.9 Current liabilities Trade and other payables Taxation Amounts owing to subsidiaries Total equity and liabilities 3, ,203.1

5 COMPANY STATEMENT OF COMPREHENSIVE INCOME December 2015 December 2014 Rm Notes 52 weeks 52 weeks Profit for the year ,321.0 Items that will not subsequently be re-classified to the Income Statement - - Items that will subsequently be re-classified to the Income Statement Revaluation of listed investments 7 (0.1) Less taxation relating to the revaluation of listed shares - - Total other comprehensive (loss)/income for the year, net of taxation (0.1) 0.3 Total comprehensive income for the year , Value is less than R100,000.

6 Accounting policies and critical accounting judgements and key sources of estimation uncertainty With the exception of the accounting policies relevant to the basis of consolidation, the accounting policies and standards and interpretations issued are in line with the Massmart Group accounting policies. Refer to note 1 and note 3 in the Group Financial Statements. The accounting policy of the Company is to hold investments in subsidiaries at cost less impairment. Details of critical accounting judgements and key sources of estimated uncertainty are disclosed in note 2 of the Group Financial Statements, where relevant.

7 1. Revenue December 2015 December 2014 Rm 52 weeks 52 weeks Sales Dividends received ,319.8 Management and administration fees received ,342.9

8 2. Operating profit before interest December 2015 December 2014 Rm 52 weeks 52 weeks Other income comprises: Foreign exchange gain Charges to operating profit includes: Share-based payment expense Contribution to pension scheme

9 3. Net finance income December 2015 December 2014 Rm 52 weeks 52 weeks Finance costs Interest on Group loans (0.7) - Finance income Interest on Group loans Interest from Banks Interest other Net finance income

10 4. Taxation December 2015 December 2014 Rm 52 weeks 52 weeks Current year South African normal taxation Current taxation Deferred taxation 0.8 (1.1) Total % December 2015 December 2014 The rate of taxation is reconciled as follows: Standard corporate taxation rate Exempt income (27.3) (27.9) Other (0.2) - Effective rate

11 5. Interest in subsidiaries Rm December 2015 December 2014 Interest in subsidiaries Capensis Investments 241 Proprietary Limited Game Discount World (Mauritius) Limited Massbuild Proprietary Limited Masscash Holdings Proprietary Limited Massmart International Holdings Limited Unison Risk Management Alliance Proprietary Limited Tiradeprops 60 Proprietary Limited Tiradeprops 66 Proprietary Limited , ,167.9 Rm December 2015 December 2014 Amounts owing by subsidiaries Imagegate Limited Massbuild Proprietary Limited Masscash Holdings Proprietary Limited 1, Massmart Management and Finance Company Proprietary Limited Micawber 269 Proprietary Limited Mystic Blue Trading 62 Proprietary Limited Fresh Food Direct Proprietary Limited (previously The Fruit Spot Proprietary Limited) Wild Developments Proprietary Limited , ,992.3 Rm December 2015 December 2014 Amounts owing to subsidiaries Massmart Management and Finance Company Proprietary Limited (168.3) - Game Discount World (Mauritius) Limited - (0.1) Masstores Proprietary Limited (563.9) (581.9) The Drop Inn Group of Liquor Supermarkets Proprietary Limited (2.7) (2.7) Tiradeprops 60 Proprietary Limited (5.9) (5.9) Tiradeprops 66 Proprietary Limited (5.9) (5.9) (746.7) (596.5) The loan with Massmart Management and Finance Company Proprietary Limited is unsecured, bears interest at a variable rate linked to the South African (SA) prime overdraft rate, and is payable or receivable on demand. The rest of the loans are unsecured, interest free and are payable on demand.

12 6. Property, plant and equipment Rm Cost Accumulated depreciation and impairment Net book value December 2015 Owned assets Motor vehicles 3.3 (0.4) 2.9 Total property, plant and equipment 3.3 (0.4) 2.9 Reconciliation of property, plant and equipment December 2015 Rm Opening net book value Additions Depreciation Closing net book value Owned assets Motor vehicles (0.4) 2.9 Total property, plant and equipment (0.4) 2.9 The Company has reviewed the residual values and useful lives at year end. No significant adjustment resulted from such review in the current financial year.

13 7. Other financial assets Rm December 2015 December 2014 Loans and receivables Employee Share Trust Loans to the Executive Directors and other employees of Massmart 1 Holdings Limited: Balance at the beginning of the year Advanced during the year Repayments (0.8) (9.2) Less included in other current financial assets (note 9) - (15.1) Available-for-sale investments Investment in listed shares The Employee Share Trust Loans to Executive Directors and other employees of the Company are non-interest bearing and are secured by the underlying ordinary shares in Massmart Holdings Limited. The loans are repayable 10 years after the grant date. Recourse is not limited to these shares and should shares sold to repay these loans be insufficient to recover the balance outstanding, the unrecovered portion remains a debt due and payable. 186,377 (December 2014: 481,045) shares with a market value of R19,234,106 (December 2014: R69,236,807) have been pledged. For more information on the recognition and measurement of these loans and receivables, and these available-for-sale investments refer to note 16 and note 17 of the Group Annual Financial Statements.

14 8. Deferred taxation Rm December 2015 December 2014 The major movements during the year are analysed as follows: Asset at the beginning of the year Charge to the Income Statement for the year (0.8) Charge to Other comprehensive income for the year - - Asset at the end of the year The major components of deferred taxation are analysed as follows: Other temporary differences Value is less than R100,000.

15 9. Other current financial assets Rm December 2015 December 2014 Employee Share Trust Loans to the Executive Directors and other employees of Massmart Holdings Limited For more information on the terms and conditions of the Share Trust Loans, refer to note 7. The current portion in the prior year relates to Grant Pattison s loan, which was transferred to current upon his resignation.

16 Share options granted under the Massmart Holdings Limited Employee Share Trust At December 2015, executives and senior employees have options of 7,673,705 (December 2014: 8,773,054) ordinary shares of which 2,289,364 (December 2014: 4,303,031) are unvested. Share options granted under the Employee Share Incentive Scheme carry no rights to dividends and no voting rights. Additional information of the Employee Share Incentive Scheme can be found in note 29 of the Group Annual Financial Statements. The share-based payment reserve relates to the executive directors, refer to note 36 in the Group Financial Statements, for details of the Directors interest in the Company s shares. During the current financial year, 0.9 million shares (0.4% of average shares in issue) were bought in the market by the Massmart Holdings Limited Executive Share Trust at an average price of R totalling R135.5 million. During the prior financial year, 0.6 million shares (0.3% of average shares in issue) were bought in the market were by the Massmart Holdings Limited Executive Share Trust at an average price of R totalling R73.7 million. The Directors have the authority, until the next annual general meeting, to issue the ordinary shares of the Company up to a maximum of 5% of the shares already issued.

17 10. Issued capital Share capital Share premium Rm December 2015 December 2014 December 2015 December 2014 Authorised 500,000,000 (December 2014: 500,000,000) ordinary shares of 1 cent each ,000,000 (December 2014: 20,000,000) non-redeemable cumulative non-participating preference shares of 1 cent each ,000,000 (December 2014: 18,000,000) A convertible redeemable non-cumulative participating preference shares of 1 cent each ,000,000 (December 2014: 4,000,000) B convertible redeemable non-cumulative participating preference shares of 1 cent each Issued 217,136,334 (December 2014: 217,118,072) ordinary shares of 1 cent each ,840,483 (December 2014: 2,858,745) B convertible redeemable non-cumulative participating preference shares of 1 cent each Ordinary shares Number of Share capital Share premium shares Rm Rm Balance at December ,109, Shares issued in terms of the Massmart Black Scarce Skills Trust 9, Ordinary shares issued December ,118, Treasury shares (194,765) - (9.9) Ordinary shares issued excluding treasury shares December ,923, Balance at December ,118, Shares issued in terms of the Massmart Black Scarce Skills Trust 18, ,136, Treasury shares (575,563) - (58.3) Ordinary shares issued excluding treasury shares December ,560, Ordinary shares, which have a par value of 1 cent, carry one vote per share and carry the right to dividends. B convertible redeemable non-cumulative participating preference shares Balance at December ` Net shares issued in terms of the Massmart BEE transaction 2,867, Shares converted to ordinary shares (9,028) - - Balance at December ,858, Net shares issued in terms of the Massmart BEE transaction 2,858, Shares converted to ordinary shares (18,262) - - Balance at December ,840, B convertible redeemable non-cumulative participating preference shares, which have a par value of 1 cent, are held in the Massmart Black Scarce Skills Trust. These shares carry one vote per share, which are cast by the trustees, and do not carry the right to dividends. On election of the beneficiary, the shares will convert to ordinary shares on a one-for-one basis and will rank pari passu with all ordinary shares then in issue.

18 Share options granted under the Massmart Holdings Limited Employee Share Trust At December 2015, executives and senior employees have options of 7,673,705 (December 2014: 8,773,054) ordinary shares of which 2,289,364 (December 2014: 4,303,031) are unvested. Share options granted under the Employee Share Incentive Scheme carry no rights to dividends and no voting rights. Additional information of the Employee Share Incentive Scheme can be found in note 29 of the Group Annual Financial Statements. The share-based payment reserve relates to the executive directors, refer to note 36 in the Group Financial Statements, for details of the Directors interest in the Company s shares. During the current financial year, 0.9 million shares (0.4% of average shares in issue) were bought in the market by the Massmart Holdings Limited Executive Share Trust at an average price of R totalling R135.5 million. During the prior financial year, 0.6 million shares (0.3% of average shares in issue) were bought in the market were by the Massmart Holdings Limited Executive Share Trust at an average price of R totalling R73.7 million. The Directors have the authority, until the next annual general meeting, to issue the ordinary shares of the Company up to a maximum of 5% of the shares already issued.

19 11. Other reserves Rm December 2015 December 2014 Balance at the beginning of the year Treasury shares 1.4 (0.3) Share-based payment expense Revaluation of listed investments (0.1) Reconciliation of the treasury share reserve Balance at the beginning of the year (0.1) 0.2 Movement on treasury shares 1.4 (0.3) 1.3 (0.1) Reconciliation of the share-based payment reserve Balance at the beginning of the year Share-based payment expense related to Massmart Holdings Limited Employee Share Trust Reconciliation of the available-for-sale investment Balance at the beginning of the year Revaluation of listed investments to market value (0.1) The Group introduced a new Employee Share Incentive Scheme in the 2013 financial year. The share-based payment reserve arises on the granting of share options, referred to as the Employee Share Option Scheme, and retention share grants and performance share awards, referrred to as the Employee Share Incentive Plan, to employees under the Employee Share Incentive Schemes of the Group. Details of the Employee Share Incentive Schemes can be found in note 29 in the Group Financial Statements. The share-based payment valuation of the Employee Share Option Scheme was performed by Alexander Forbes. The share-based payment valuation of the Employee Share Incentive Plan was performed using a valuation system acquired by the Group with the necessary model inputs having been determined by management. Management derived these inputs through consultation with various financial institutions, and they are representative of the market data available for Massmart Holdings Limited s share at the reporting date.

20 12. Cross-suretyships and promissory notes Rm December 2015 December 2014 Cross-suretyships under banking and other financial facilities 10, , , ,003.1 Banking facilities incorporate, amongst others, letters of credit, forward exchange contracts and electronic fund transfers. These facilities have been secured by cross-suretyships between Group companies. First National Bank has provided shared facilities amounting to R1.3 billion (December 2014: R0.7 billion) to the Company and fellow Group companies. ABSA Bank has provided shared facilities amounting to R3.8 billion (December 2014: R3.2 billion) to the Company and fellow Group companies. Nedbank has provided shared facilities amounting to R2.5 billion (December 2014: R2.0 billion) to the Company and fellow Group companies. Gross cross-suretyships to the value of R0.6 billion (December 2014: R0.6 billion) have been lodged as security by and between the Company and fellow Group companies with Walmart. Gross cross-suretyships to the value of R1.3 billion (December 2014: R1.1 billion) have been lodged as security by and between the Company and fellow Group companies with Standard Bank. Gross cross-suretyships to the value of R0.5 billion (December 2014: R0.5 billion) have been lodged as security by and between the Company and fellow Group companies with Investec. Gross cross-suretyships to the value of R0.6 billion (December 2014: R0.6 billion) have been lodged as security by and between the Company and fellow Group companies with Ivuzi Investments (RF) Ltd. Gross cross-suretyships to the value of R0.4 billion have been lodged as security by and between the Company and fellow Group companies with Citibank. At the reporting date the Massmart Group was net cash positive.

21 13. Notes to the statement of cash flows December 2015 December 2014 Rm 52 weeks 52 weeks 13.1 Cash outflow from trading activities Profit before taxation ,322.5 Adjustment for: Depreciation Finance costs Finance income (3.2) (6.6) Dividends received (726.3) (1,319.8) Share-based payment expense Treasury share acquisitions (25.0) (6.3) Other non-cash movements (31.9) (3.6) (25.6) (10.9) 13.2 Working capital movements (Decrease)/increase in trade and other payables (2.9) 2.7 (Increase)/decrease in trade and other receivables (12.8) 7.3 (15.7) Dividends paid Shareholder for dividends Dividends declared to shareholders (914.1) (914.0) (905.6) (914.0) 13.4 Taxation paid Amounts owing at the beginning of the year (6.6) (7.1) Amounts charged to the Income Statement (3.7) (1.5) Deferred taxation 0.8 (1.1) Amounts owing at the end of the year (5.4) (3.1) 13.5 Other investing activities Other financial assets Net acquisition of treasury shares Share trust losses (23.6) (27.4) Other non-cash movements includes the share premium on shares issued in the period, other reserve movements and the fair value adjustment on the listed investments.

22 14. Related parties Rm Dividends received Management and administration fees Interest received Dividends paid Interest paid December 2015 Income Statement transactions between related parties are as follows - Massbuild Proprietary Limited Masscash Holdings Proprietary Limited Game Discount World (Mozambique) Masstores Proprietary Limited Massmart Management & Finance Company Proprietary Limited Massmart Black Scarce Skills Trust Main Street 830 Proprietary Limited December 2014 Income Statement transactions between related parties are as follows - Massbuild Proprietary Limited Masscash Holdings Proprietary Limited Game Discount World (Mozambique) Masstores Proprietary Limited Massmart Management & Finance Company Proprietary Limited Main Street 830 Proprietary Limited , Additional information can be found in note 1 for dividends and management fees received in the Company Financial Statements. Additional information can be found in note 3 for interest received and paid in the Company Financial Statements. Additional information can be found in note 5 for loans to and from related parties in the Company Financial Statements. Additional information can be found in note 34, note 35 and note 36 in the Group Financial Statements with regards to Directors emoluments and interest of directors in the Company s Share Incentive Schemes respectively.

23 15. Fair Value Fair value hierarchy The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments identified below. The table below reflects Financial instruments carried at fair value and those Financial instruments that have carrying amounts that differ from their fair values, in the Statement of Financial Position: Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities Level 2: other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data Financial instruments in the Statement of Financial Position Rm Total Carrying Amount Total Fair Value Level 1 Level 2 Level 3 December 2015 Financial Assets Loans and receivables Employee share trust loans Availablefor- sale financial instruments - Investment in listed shares There were no transfers between the fair value categories during the December 2015 financial year. The financial assets and financial liabilities have been presented based on an analysis of their respective natures, characteristics and risks. The carry value of the financial instruments disclosed as current assets and current liabilities equate to their fair value due to their short term nature. Financial instruments in the Statement of Financial Position Rm Total Carrying Amount Total Fair Value Level 1 Level 2 Level 3 December 2014 Financial Assets Loans and receivables Employee share trust loans Availablefor- sale financial instruments - Investment in listed shares There were no transfers between the fair value categories during the December 2014 financial year. The financial assets and financial liabilities have been presented based on an analysis of their respective natures, characteristics and risks. The carry value of the financial instruments disclosed as current assets and current liabilities equate to their fair value due to their short term nature.

24 Fair value measurement and valuation techniques for level 2 financial instruments Type of financial instrument Fair value at December 2015 (Rm) Valuation technique Significant inputs Financial Assets Loans and receivables 9.2 Employee share trust loans 9.2 DCF Market interest rate 9.2 Type of financial instrument Fair value at December 2014 (Rm) Valuation technique Significant inputs Financial Assets Loans and receivables 23.7 Employee share trust loans 23.7 DCF Market interest rate 23.7 Valuation technique Description of valuation technique Discounted cash flow (DCF) The DCF method involves the projection of a series of cash flows. To this projected cash flow series, an appropriate, market-derived discount rate is applied to establish the present value of the cash flow stream associated with the item. With regards to assets, the fair value is estimated using explicit assumptions regarding the benefits and liabilities of ownership over the asset s life including an exit or terminal value. To this end, the Company applies Method 2 of the expected present value technique in terms of IFRS 13 Fair Value Measurement.

25 16. Financial Instruments The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balances. The capital structure of the Company consists of equity attributable to equity holders of the parent, comprising share capital, share premium, other reserves and retained profit. Additional information can be found in note 10 and note 11 respectively. The targeted level of gearing is determined after consideration of the following key factors: - the needs of the Company to fund current and future capital expenditure to achieve its stated production growth target; and - the desire of the Company to maintain its gearing within levels considered to be acceptable taking into account potential business opportunities and the position of the Company in the business cycle. The targeted level of gearing was adequately managed in the current financial year. Classification of financial instruments Rm Financial instrument Liability at amortised cost Loans and receivables Availablefor-sale financial instruments Non-financial instruments December 2015 Non-current assets , Investment in ,181.2 subsidiaries - Property, plant and equipment Other financial assets Deferred taxation Current assets 1, , Trade and other receivables Amounts owing by subsidiaries 1, , Cash on hand and bank balances Total assets 1, , ,186.3 Current liabilities Trade and other payables Taxation Amounts owing to subsidiaries Total liabilities Rm Financial instrument Liability at amortised cost Loans and receivables ` Availablefor-sale financial instruments Non-financial instruments December 2014 Non-current assets , Investment in subsidiaries , Other financial assets Deferred taxation Current assets 2, , Other current financial assets Trade and other receivables Amounts owing by subsidiaries 1, , Cash on hand and bank balances Total assets 2, , ,170.9 Current liabilities Trade and other payables Taxation Amounts owing to subsidiaries Total liabilities

26 Financial risk management The Company does not trade in financial instruments, but in the ordinary course of business operations, the Company is exposed to a variety of financial risks arising from the use of financial instruments. These risks include: - market risk (comprising interest rate risk and currency risk); - liquidity risk; and - credit risk. The Company 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. The Executive Committee is responsible for risk management activities within the Company. Market risk management Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The market risks that the Company is primarily exposed to include interest rate risk and currency risk. Market risk is managed by identifying and quantifying risks on the basis of current and future expectations and ensuring that all trading occurs within defined parameters. This involves the review and implementation of methodologies to reduce risk exposure. The reporting on the state of the risk and risk practices to executive management is part of this process. The processes set up to measure, monitor and mitigate these market risks are described below. There has been no change to the Company s exposure to market risk or the manner in which it manages and measures the risk since the prior period. Interest rate risk management The Company is exposed to interest rate risk because it borrows and invests surplus funds with Massmart Management and Finance Proprietary Limited through floating rate borrowings to fund its operations. The carrying amount of the Group s financial assets and liabilities at reporting date that are subject to interest rate risk is as follows : December 2015 Subject to interest rate movement Rm Fixed Floating Non-interest bearing Total Non-current assets Other financial assets Current assets , , Trade and other receivables Amounts owing by subsidiaries - - 1, , Cash on hand and bank balances Total assets , ,931.4 Current liabilities Trade and other payables Amounts owing to subsidiaries Total liabilities December 2014 Subject to interest rate movement Rm Fixed Floating Non-interest bearing Total Non-current assets Other financial assets Current assets , , Other current financial assets Trade and other receivables Amounts owing by subsidiaries , , Cash on hand and bank balances Total assets , ,032.2 Current liabilities Trade and other payables Amounts owing to subsidiaries Total liabilities Interest rate sensitivity The Company is sensitive to the movements in the SA Prime interest rate. The rates of sensitivity represents management s assessment of the possible change in interest rates. The average interest rate for the Company for the year was 7.82 % (December 2014: 7.20%), and the variable interest paid was R0.7 million (December 2014: Nil). If the SA Prime interest rate increased or decreased by 100 basis points (December 2014: increased or decreased by 100 basis points) at year end, the profit for the year would have increased or decreased by R0.8 million respectively (December 2014: increased or decreased by R0.8million respectively).

27 Currency risk management All liabilities are South African Rand (ZAR) denominated. Foreign-denominated assets are not covered by forward exchange contracts. The carrying amount of the Group s foreign currency denominated monetary assets at reporting date is as follows : Rm ZAR Euro GBP Total December 2015 Loans and receivables Other financial assets Trade receivables Amounts owing by subsidiaries 1, ,894.4 Cash on hand and bank balances , ,931.4 December 2014 Loans and receivables Other financial assets Trade receivables Amounts owing to subsidiaries 1, ,992.3 Cash on hand and bank balances , ,032.2 Foreign currency sensitivity The Company is primarily exposed to the movements in the British Pound (GBP). The rates of sensitivity represents management s assessment of the possible change in currency rates. If the GBP increased or decreased by 10% (December 2014: increased or decreased by 10%) at year end, the profit for the year would have increased or decreased by R0.82 million respectively (December 2014: increased or decreased by R0.02 million respectively). Liquidity risk management Liquidity risk is the risk that the Company will be unable to meet a financial commitment in any location or currency. This risk is minimised through the holding of cash balances and sufficient available borrowing facilities. In addition, detailed cash flow forecasts are regularly prepared and reviewed so that the cash needs of the Company are managed according to its requirements. The following table details the Company s contractual maturity for its non-derivative financial liabilities. The table has been compiled based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company will be required to repay the liability. The cash flows include both the principal and interest payments. Rm December 2015 Financial liabilities Repayable within 1 year Repayable 1 5 years Total Trade and other payables Amounts owing to subsidiaries Total undiscounted cash flows of the Company s financial liabilities Less: Future finance charges Total financial liabilities Rm December 2014 Financial liabilities Repayable within 1 year Repayable 1 5 years Total Trade and other payables Amounts owing to subsidiaries Total undiscounted cash flows of the Company s financial liabilities Less: Future finance charges - Total financial liabilities The effect of discounting on the current financial liabilities are deemed immaterial due to their short-term nature. Credit risk management The carrying amount of the financial assets represents the Company s maximum exposure to credit risk without taking into consideration any collateral provided. All loans and receivables are considered to be of low credit risk at the end of the current and prior financial year.

28 17. Events after the reporting date The Directors are not aware of any material event which occurred after the reporting date and up to the date of this report that would impact the financial information disclosed in the Company Financial Statements in the current year.