Full annual report - African Bank - Investoreports

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Notes to the group annual financial statements continued 47. Market risk management continued 47.2 Foreign exchange rate risk management The group undertakes a limited number of transactions, in respect of the Ellerines trading requirements, that are denominated in a foreign currency. The group has a strict policy in terms of these transactions and forward cover is taken out for each transaction. These transactions are economically hedged, but IAS 39 hedge accounting is not applied. Foreign currency risk is the risk of financial loss resulting from adverse movements in foreign currency exchange rates. Currency risk in the Bank arises as a result of foreign currency denominated borrowings. The Bank’s risk objective is to protect its net earnings against the impact of adverse exchange rate movements. Hedging of currency exposures is achieved through the use of approved derivative instruments transacted with approved financial institutions. The Bank uses cross currency swaps to hedge its foreign currency risk. The principal terms of these swaps are substantially similar to those of the hedged items with regard to maturity dates, interest reset dates, nominal values, and amortisation profile. Where possible, the company designates these derivatives as effective cash flow hedges. This accounting treatment results in an economically represented income statement but does not create accounting volatility within equity. 296 Sensitivity analysis based on 10% increase in exchange rates IFRS 7 requires that a sensitivity analysis be provided for changes in exchange rates. The sensitivity analysis has been determined based on the exposure to exchange rates for both derivatives and non-derivative instruments (foreign trade creditors) at the balance sheet date. The analysis is prepared assuming the amount at the balance sheet date was outstanding for the whole year. Given the policy applied by management a 10% sensitivity adjustment is applied so as to ensure compliance with the strategy and that there are no open exchange rate exposures.
R million Carrying value at year end Amount exposed to market risk Index to which interest rate is linked >annual financial statements Income statement impact Equity impact Pretax Post tax Pretax Post tax 47. Market risk management continued 47.2 Foreign exchange rate risk management continued Market risk management Foreign exchange rate risk management 2012 Financial assets Cross currency swaps 565 5 357 USD – – 536 386 Cross currency swaps 30 1 263 CHF – – 126 91 Forward exchange contracts 68 68 USD/EUR 7 5 – – Total financial assets 663 6 688 7 5 662 477 Financial liabilities Foreign denominated bonds 5 830 5 830 USD – – 583 420 Foreign denominated bonds 1 329 1 329 CHF – – 133 96 Fixed deposits 293 293 USD – – 29 21 Foreign trade creditors 67 67 USD/EUR 7 5 – – Total financial liabilities 7 519 7 519 7 5 745 537 2011 Financial assets Cross currency swaps 387 2 274 USD – – 227 164 Forward exchange contracts 67 67 USD/EUR 7 5 – – Total financial assets 454 2 341 7 5 227 164 Financial liabilities Foreign denominated bonds 2 443 2 443 USD – – 244 176 Fixed deposits 284 284 USD – – 28 20 Foreign trade creditors 67 67 USD/EUR 7 5 – – Total financial liabilities 2 794 2 794 7 5 272 196 African Bank Investments Limited | Integrated Report for the year ended 30 September 2012 297
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Responsible credit with passion, co
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ABIL group - shareholders, funders,
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Contents Group profi le 2 Operating
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Operating structure >ABIL in perspe
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Our values We pledge to live by the
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‘03 ABIL achieves investment grad
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African Bank Investments Limited Fi
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African Bank Investments Limited Fi
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Shareholders’ profile Top fund ma
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2007 2006 2005 2004 2003 >ABIL in p
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2007 2006 2005 2004 2003 >ABIL in p
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Robert John (Johnny) Symmonds (53)
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Mojankunyane Florence (Mojanku) Gum
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Contents Letter to stakeholders 24
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Incwadi eya kubabambiqhaza Isingeni
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Ulwazi oluhambelanayo lungatholakal
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Umhlaba oncintisanayo Ukukhula okuk
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labele izidingongqangi ezikhulayo e
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Ukuze uthole olunye ulwazi ngemizam
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ngo-1994. Wenze ukufaka isandla oku
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usiness overview Material issue Why
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For more information on people rela
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egistered some short term gains and
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What sets us apart Quality of our p
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Active engagement with our people i
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Our customers Engagement methods St
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ABIL engaged with a wide group of l
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The most important of these are dis
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The risk base of the group is not c
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Return on equity in line with targe
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Retail unit Consolidation adjustmen
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Retail unit Consolidation adjustmen
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Share based payment reserve Other O
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Financial returns >business overvie
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Gross profit margin % 46 44 42 41 3
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were launched in October. The virtu
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Number of employees - Banking unit
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Of the credit cards issued in 2012,
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Disbursement features Disbursements
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Vintage graph - African Bank (More
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Liabilities Funding >business overv
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Capital management >business overvi
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The changes to capital adequacy on
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Contents Corporate governance repor
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Corporate governance structure Grou
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Board meetings and attendance >acco
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Conflict of interest All directors
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The office of the group compliance
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Introduction and report objectives
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■ Ensuring that there is an adequ
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Component Summary Benefits Benefits
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Exposure to existing long term ince
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The components of executive directo
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LTIPs awarded to executive director
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accountability the annual general m
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Risk management objectives >account
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Three levels of defence as applied
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Case volumes received: Year-on-year
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For more detail, see the group’s
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accountability Risk Mitigation Furt
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accountability Risk Mitigation Furt
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expectation that losses will occur
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Refer to page 74 and 76 in the inte
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ABIL - capital adequacy ratio % 25
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Liquidity and funding The group man
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deposits at highly competitive rate
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Regulatory risk South Africa’s cu
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Regulatory issue Description Risk/I
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Regulatory issue Description Risk/I
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Dear Sir/Madam In the year 2009 I e
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Scorecard information* Target score
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GRI SO1 For a detailed report on CS
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accountability Overall employee tur
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The Banking unit has increased the
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accountability Transformation and e
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Union membership 2012 47,8% 52,0% 0
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Employee turnover % 45 40 35 30 25
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Union membership % 70 60 50 40 30 2
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Transformation and employment equit
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■ C = Collect; ■ A = Advise;
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GRI PR7 GRI PR8 GRI PR9 Customer ex
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GRI PR1, PR2 >accountability condit
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GRI EC8, EC9, S01 >accountability l
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Number of projects 9% 5% ■ KwaZul
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Ilembe schools connectivity project
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For more information on CSI visit h
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accountability and measured against
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GRI EN18 Weaknesses and shortfalls
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GRI EN2 >accountability Paper savin
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GRI EN30 Community engagement >acco
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Case studies Cato Ridge Epping The
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est practice) gasses are absent and
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Findings Based on our review of the
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Description Explanation 2.7 Markets
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Description Explanation 4.8 Interna
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Description Explanation EC4 Signifi
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Description Explanation Emissions,
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Description Explanation Occupationa
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Description Explanation Freedom of
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Description Explanation Customer he
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Annual financial statements 197-320
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45.1 Operating segments 285 45.2 Se
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Dividend cover (times) Dividend cov
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Acronyms and abbreviations ABIL Afr
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Nine-year summarised group income s
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Currency adjusted group income stat
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Directors’ responsibility stateme
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Audit committee report The audit co
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Domestic Medium Term Note (DMTN) Pr
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Interest of directors of the compan
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■ Granting the general approval t
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Group income statement for the year
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Share based payment reserve Cash fl
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Notes to the group annual financial
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IFRS/IFRIC Title and details Expect
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IFRS/IFRIC Title and details Expect
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3. Critical accounting judgements a
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3.2.2 Impairment of advances >annua
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annual financial statements practic
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Business combinations >annual finan
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annual financial statements payment
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4.10.3 Subsequent measurement >annu
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annual financial statements A finan
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annual financial statements Bank or
Page 249 and 250: annual financial statements For the
Page 251 and 252: annual financial statements Ordinar
Page 253 and 254: 4.20 Cost of sales 4.19.3.4 Deliver
Page 255 and 256: annual financial statements The sha
Page 257 and 258: annual financial statements the exp
Page 259 and 260: annual financial statements R milli
Page 261 and 262: 9. Net advances continued 9.1 Credi
Page 263 and 264: 9. Net advances continued 9.1 Credi
Page 265 and 266: R million Opening balance Recognise
Page 267 and 268: R million Carrying value at the beg
Page 269 and 270: R million Balance at the beginning
Page 273 and 274: 2012 2011 Unamortised discount Net
Page 275 and 276: 2012 2011 Unamortised discount Net
Page 277 and 278: Foreign currency translation Foreig
Page 279 and 280: Interest capitalised 2012 2011 Unam
Page 281 and 282: annual financial statements 2012 20
Page 287 and 288: annual financial statements 2012 20
Page 291 and 292: annual financial statements 46. Fin
Page 293 and 294: R million Up to 1 month Greater tha
Page 299: annual financial statements Index t
Page 303 and 304: annual financial statements 49. Int
Page 305 and 306: annual financial statements 50. Lon
Page 307 and 308: 51. Analysis of financial assets an
Page 309 and 310: annual financial statements 51. Ana
Page 311 and 312: annual financial statements 55. Ret
Page 313 and 314: annual financial statements 58. Res
Page 315 and 316: Company statement of comprehensive
Page 317 and 318: Notes to the company annual financi
Page 323 and 324: Prefsure (Botswana) Limited Insuran
Page 325 and 326: Contents Shareholder information Di
Page 327 and 328: Dividend timetable >shareholder inf
Page 329 and 330: JSE statistics >shareholder informa
Page 331 and 332: Analysis of ordinary shareholders a
Page 333 and 334: Contents Annual general meeting Not
Page 335 and 336: 3. Ordinary resolution 3 - Election
Page 337 and 338: annual general meeting As the revis
Page 339 and 340: annual general meeting 9.1 immediat
Page 341 and 342: annual general meeting 11.3.3 repur
Page 343 and 344: Motivation for ordinary resolution
Page 345 and 346: annual general meeting message util
Page 347 and 348: Leonidas (Leon) Kirkinis Chief exec
Page 349 and 350: higher. Qualifying participants are
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(iv) Directors’ interests in secu
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Application form: Electronic partic
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Form of proxy African Bank Investme
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annual general meeting Summary of s
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Corporate information Board of dire
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Full annual report - African Bank - Investoreports

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