18. |
Financial risk management |
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The Company manages its risk on a Group-wide basis. Refer to note 2 in the consolidated financial statements. |
18.1 |
Market risk |
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Foreign exchange risk |
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There are no significant concentrations of foreign exchange risk. |
18.2 |
Credit risk |
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Credit risk arises from the risk that the financial asset counterparty may default or not meet its obligations timeously. The maximum exposure to the credit risk is represented by the carrying value of all the financial assets and the maximum amount the Company could have to pay if the guarantees are called on (note 15). |
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The potential concentration of credit risk could arise in loan to associates, loans to subsidiaries, receivables and prepayments and trade receivables. No financial assets were past due for the current or the comparative period under review. No terms relating to financial assets have been renegotiated resulting in assets not being past due. |
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Loans to subsidiaries |
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These loans are unsecured and have no fixed terms of repayment. |
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Loans |
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Credit risk relating to these loans consist of loans to BEE companies, which is secured by a guarantee from Lonmin Plc. |
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Trade and trade receivables |
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Trade and other receivables consists mainly of guarantee fees receivable from financial institutions with high credit ratings. |
18.3 |
Liquidity risk |
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Prudent liquidity risk management implies maintaining sufficient cash and cash equivalents and the availability of funding for its expected future cash flow. Impala Platinum Holdings Limited’s cash requirements are met by Impala Platinum Limited. |
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Trade and other payables are all due within a 12-month period. Guarantees are further analysed in note 15. |
18.4 |
Cash flow interest rate risk |
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The Company is not exposed to significant interest-bearing liabilities resulting in cash flow interest rate risk. |