Annual Report - JD Group

Notes to the Group annual financial statements continued
50
2004 2003
Rm Rm
20. Commitments
Capital expenditure
Authorised and contracted 14 11
Authorised but not yet contracted 109 90
123 101
This expenditure will be financed from internal
sources and existing borrowing facilities.
Operating lease commitments (predominantly premises)
Due within one year 367 422
Due thereafter 782 1 119
21. Foreign assets
Total assets subject to exchange control of a foreign country amount to R52 million (2003: R84 million).
1 149 1 541
22. Financial risk management
Senior executives meet on a regular basis to analyse interest rate exposures and evaluate treasury management strategies against revised
economic forecasts. Compliance with Group policies and exposure limits are reviewed at quarterly meetings of the board. The directors
believe, to the best of their knowledge, that there are no undisclosed financial risks.
22.1 Interest rate management
As part of the process of managing the Group’s fixed and floating rate borrowings mix, the interest rate characteristics of new
borrowings and the refinancing of existing borrowings are positioned according to expected movements in interest rates.
In order to hedge specific exposures in the interest rate repricing profile of existing borrowings and anticipated peak additional
borrowings, the Company and its subsidiaries make use of interest rate derivatives, only as approved in terms of Group policy limits.
At 31 August 2004, the Group had entered into derivative instruments exchanging variable for fixed interest rates. The value of
borrowings hedged by interest rate derivatives and the fair values of these contracts as recorded, were as follows:
Notional Fair
amount Commencement Maturity value
Rm date date Rm
217 1 September 2004 1 October 2004 27,5
233 30 May 2003 31 May 2005 (5,9)
115 1 July 2003 1 July 2005 (1,6)
58 10 September 2003 1 July 2005 (0,2)
19,8