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AFRICAN DAWN ANNUAL REPORT 14

Notes to the Financial Statements Group Company 2012 2011 2012 2011 R '000 R '000R '000 R '000 34. Risk management Risk management The risks that the Group faces are centrally managed at head office, in close co-operation with the board of directors, who are ultimately responsible for the management of risk. The Board has established a Risk Committee, which is responsible in aiding the board to identify risk, analyse the identified risks, set appropriate risk limits, identify and implement controls to mitigate the risks to acceptable limits. Risks management is further aided by recording risks on a risk register and nominations of sub committees to manage specific risks, such as the monthly credit committee to aid in management of credit risk. Significant risks that the group’s exposed to: • Liquidity risk (a financial risk) • Interest rate risk (a financial risk) • Credit risk (a financial risk) • Market risk • Capital adequacy risk Liquidity risk Liquidity risk is the risk that the Group might be unable to meet its repayment obligations arising from its liabilities and operational payables. The Group conservatively manages its liquidity needs by monitoring known scheduled debt repayments, expected receipts per settlement agreements, forecasted capital advances as well as forecast cash inflows and outflows due in day-to-day business. The management of liquidity enables the Group to maintain sufficient cash reserves and funding from committed facilities. Liquidity needs are monitored in various time frames, short term (based on a day-to-day and week-to-week basis) on a rolling 12 months projection and long term (needs for a semi annual and annual lookout period) on a forecasted model. Net cash requirements are compared to available borrowing facilities in order to determine headroom or any shortfalls. This analysis shows that available cash are expected to be sufficient over the outlook period. The Group’s objective for the period was to be cash conscious and conservative, to repay outstanding debt per settlement agreements and use excess cash for growth. The Group considers expected cash flows from financial assets in assessing and managing liquidity risk, in particular its cash resources and trade receivables. The Group’s existing cash resources and trade receivables significantly exceed the current cash outflow requirements. Cash flows from trade and other receivables included collections per agreed settlement agreements relating to debt being collected and contractual amounts due within six months from short term unsecured finance. The Group liquidity limits require the holding of cash and available reserves, the statement of financial position has a surplus cash balance at 28 February 2014, largely due to the remaining cash from convertible bonds and collections of assets in the normal course of business. The table below analyses the Group’s liabilities into relevant maturity buckets based on the remaining contractual period at reporting date. The payment of tax liability is still based on indicators and no formal committed repayment due to settlement agreement awaiting final assessment from SARS. The analysis is based on the earliest date on which the Group can be required to pay and is not necessarily the date at which the Group is expected to pay. The analysis of cash flows will not agree directly with the balances on the statement of financial position and therefore the analysis of the discounts have been provided for each maturity period. AFRICAN DAWN 6 9 ANNUAL REPORT 2014


AFRICAN DAWN ANNUAL REPORT 14
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