Notes to the group annual financial statements | Note 13
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13. Financial risk management

The group’s activities expose it to a variety of financial risks, specifically interest rate risk, credit risk and liquidity risk. The group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the group’s financial performance. Risk management is carried out under policies approved by the board of directors.

The group’s interest rate risk arises primarily from its long-term borrowings issued at a variable interest rate. Based on simulations performed, the impact on profit or loss before tax of a 100 basis-point increase in the prime interest rate would be a decrease or increase of R4,36m (2014: R4,28m).