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NotestotheConsolidatedFinancialStatements

(continued)

RCS GROUP CONSOLIDATED FINANCIAL STATEMENTS

2015

50

for the period ended 31 December 2015

30.

Risk management (continued)

Capital management (continued)

(c) concentration risks on asset classes, market sectors or particular customers should be considered and certainmaximumexposure levels

froma line of business and group perspective will be determined,

(d) review the strategic portfolio of businesses and ensure that capital is allocated to achieve required returns whilst maintaining a balanced

portfolio with no line of business attracting an inappropriate amount of the capital,

(e) the length of track record that the business has in terms of using andmanaging a particular asset class and portfolios within that asset

class, and

(f) reviewandbenchmarkingagainstlocalandinternationalpeersinthefinancialservices,nonbankingandbankingsectorswhereapplicable.

TheALCOreviewscapitaladequacyonaquarterlybasis.Theboardwillreviewthecapitalpolicyonanannualbasisandmakeanyamendments

to the requirements prior tomaking afinal dividenddeclaration. The shareholder ismade aware that thedividendpolicy is subject to sufficient

capital beingmaintained to achieve an adequate capital maintenance policy.

Any proposed reduction of the overall capital adequacy levels will be discussed and motivated with the rating agencies and certain of the

main banking relationships to ensure that a reduction inminimumcapital would not have adverse consequences on the funding profile of the

business.

Fair values of financial instruments

The fair values together with the carrying amounts, net gains and losses recognised in the statement of comprehensive income, total interest

income and total interest expense of each class of financial instrument are as follows:

Net (expense) /

gains recognised

in statement of

Total interest

Carrying

comprehensive

income /

value

Fair value

income

(expense)

Impairment

R’000

R’000

R’000

R’000

R’000

31 December 2015

Assets

Cash and cash equivalents

551 918

551 918

Card and loan receivables

5 961 948

5 961 948

1 060 127

(350 576)

Other receivables

3 117

3 117

6 516 983

6 516 983

1 060 127

(350 576)

Liabilities

Funding

(4 082 400)

(4 082 400)

(235 420)

Trade and other payables

(438 739)

(438 739)

(4 521 139)

(4 521 139)

(235 420)