CHAPTER 16:Financial instruments

16.3FINANCIAL INSTRUMENTS

16.3.1Carrying amounts and fair value amounts of financial instruments

The tables below set out the group and company’s classification of each category of financial assets and financial liabilities.

	Group
At 31 December 2023	Financial assets at FVOCI Rm	Financial assets/ (liabilities) at FVPL Rm	Financial assets/ (liabilities) at amortised cost Rm	Derivative financial assets/ (liabilities) designated as hedging instruments Rm	Total carrying amount Rm
Financial assets
Non-current
Financial assets, consisting of:	434	3 839	341	2	4 616
– Equity: unlisted – Chifeng	434				434
– Debt: unlisted – environmental rehabilitation funds		2 422			2 422
– Debt: unlisted – portfolio investments		461			461
– Debt: unlisted – deposit facilities		956			956
– Cash flow hedge derivatives: interest rate swaps				2	2
– ESD loans			106		106
– Vendor finance loan			127		127
– Other financial assets at amortised cost			108		108

Total non-current financial assets	434	3 839	341	2	4 616
Current
Financial assets, consisting of:		22	188		210
– ESD loans			63		63
– Vendor finance loan			50		50
– Derivative financial assets		22			22
– Other financial assets at amortised cost			75		75
Trade and other receivables, consisting of:			3 877		3 877
– Trade receivables			3 829		3 829
– Other receivables			48		48
Cash and cash equivalents			19 859		19 859
Total current financial assets		22	23 924		23 946
Total financial assets	434	3 861	24 265	2	28 562
Financial liabilities
Non-current
Interest-bearing borrowings			(7 480)		(7 480)
Other payables			(42)		(42)
Financial liabilities, consisting of:				(127)	(127)
– Cash flow hedge derivatives: interest rate swaps				(127)	(127)

Total non-current financial liabilities			(7 522)	(127)	(7 649)
Current
Interest-bearing borrowings			(1 443)		(1 443)
Trade and other payables			(3 356)		(3 356)
Financial liabilities, consisting of:				(14)	(14)
– Cash flow hedge derivatives: FECs				(14)	(14)

Total current financial liabilities			(4 799)	(14)	(4 813)
Total financial liabilities			(12 321)	(141)	(12 462)

Due to the short-term nature of the current financial assets and current financial liabilities, the carrying amount is assumed to be the same as the fair value.

The carrying amounts of non-current financial instruments measured at amortised cost approximate fair value due to the nature and terms of these instruments.

	Group
At 31 December 2022	Financial assets at FVOCI Rm	Financial assets/ (liabilities) at FVPL Rm	Financial assets/ (liabilities) at amortised cost Rm	Derivative financial assets/ (liabilities) designated as hedging instruments Rm	Total carrying amount Rm
Financial assets
Non-current
Financial assets, consisting of:	474	2 607	447	11	3 539
– Equity: unlisted – Chifeng	474				474
– Debt: unlisted – environmental rehabilitation funds		2 187			2 187
– Debt: unlisted – portfolio investments		420			420
– Cash flow hedge derivatives: interest rate swaps				11	11
– ESD loans			102		102
– Vendor finance loan			173		173
– Other financial assets at amortised cost			172		172

Total non-current financial assets	474	2 607	447	11	3 539
Current
Financial assets, consisting of:		57	319		376
– ESD loans			76		76
– Vendor finance loan			121		121
– Derivative financial assets		57			57
– Other financial assets at amortised cost			122		122
Trade and other receivables, consisting of:			4 199		4 199
– Trade receivables			4 124		4 124
– Other receivables			75		75
Cash and cash equivalents			14 812		14 812
Total current financial assets		57	19 330		19 387
Total financial assets	474	2 664	19 777	11	22 926
Financial liabilities
Non-current
Interest-bearing borrowings			(8 378)		(8 378)
Other payables			(25)		(25)
Financial liabilities, consisting of:				(112)	(112)
– Cash flow hedge derivatives: interest rate swaps				(112)	(112)

Total non-current financial liabilities			(8 403)	(112)	(8 515)
Current
Interest-bearing borrowings			(715)		(715)
Trade and other payables			(3 340)		(3 340)
Financial liabilities, consisting of:		(5)			(5)
– Derivative financial liabilities		(5)			(5)

Total current financial liabilities		(5)	(4 055)		(4 060)
Total financial liabilities		(5)	(12 458)	(112)	(12 575)

Due to the short-term nature of the current financial assets and current financial liabilities, the carrying amount is assumed to be the same as the fair value.

The carrying amounts of non-current financial instruments measured at amortised cost approximate fair value due to the nature and terms of these instruments.

	Company
At 31 December 2023	Financial assets at FVPL Rm	Financial assets/ (liabilities) at amortised cost Rm	Total carrying amount Rm
Financial assets
Non-current
Financial assets, consisting of:	38	3 214	3 252
– Debt: unlisted – environmental rehabilitation funds	38		38
– ESD loans		106	106
– Vendor finance loan		127	127
– Interest-bearing loans to subsidiaries		2 981	2 981

Total non-current financial assets	38	3 214	3 252
Current
Financial assets, consisting of:		1 976	1 976
– ESD loans		63	63
– Vendor finance loan		50	50
– Interest-bearing loans to subsidiaries		1 158	1 158
– Non-interest-bearing loans to subsidiaries		575	575
– Treasury facilities with subsidiaries		130	130
Trade and other receivables, consisting of:		150	150
– Other receivables		10	10
– Indebtedness by subsidiaries		140	140
Cash and cash equivalents		17 151	17 151
Total current financial assets		19 277	19 277
Total financial assets	38	22 491	22 529
Financial liabilities
Non-current
Interest-bearing borrowings		(2 945)	(2 945)
Total non-current financial liabilities		(2 945)	(2 945)
Current
Interest-bearing borrowings		(1 153)	(1 153)
Trade and other payables		(223)	(223)
Financial liabilities, consisting of:		(15 606)	(15 606)
– Non-interest-bearing loans from subsidiaries		(769)	(769)
– Treasury facilities with subsidiaries		(14 837)	(14 837)

Total current financial liabilities		(16 982)	(16 982)
Total financial liabilities		(19 927)	(19 927)

Due to the short-term nature of the current financial assets and current financial liabilities, the carrying amount is assumed to be the same as the fair value.

The carrying amounts of non-current financial instruments measured at amortised cost approximate fair value due to the nature and terms of these instruments.

		Company
At 31 December 2022	Financial assets at FVPL Rm	Financial assets/ (liabilities) at amortised cost Rm	Total carrying amount Rm
Financial assets
Non-current
Financial assets, consisting of:	35	4 395	4 430
– Debt: unlisted - environmental rehabilitation funds	35		35
– ESD loans		102	102
– Vendor finance loan		173	173
– Interest-bearing loans to subsidiaries		4 120	4 120

Total non-current financial assets	35	4 395	4 430
Current
Financial assets, consisting of:		1 997	1 997
– ESD loans		76	76
– Vendor finance loan		121	121
– Other financial assets at amortised cost		54	54
– Interest-bearing loans to subsidiaries		511	511
– Non-interest-bearing loans to subsidiaries		676	676
– Treasury facilities with subsidiaries		559	559
Trade and other receivables, consisting of:		283	283
– Other receivables		7	7
– Indebtedness by subsidiaries		276	276
Cash and cash equivalents		13 366	13 366
Total current financial assets		15 646	15 646
Total financial assets	35	20 041	20 076
Financial liabilities
Non-current
Interest-bearing borrowings		(4 034)	(4 034)
Total non-current financial liabilities		(4 034)	(4 034)
Current
Interest-bearing borrowings		(505)	(505)
Trade and other payables		(196)	(196)
Financial liabilities, consisting of:		(12 059)	(12 059)
– Non-interest-bearing loans from subsidiaries		(85)	(85)
– Treasury facilities with subsidiaries		(11 974)	(11 974)

Total current financial liabilities		(12 760)	(12 760)
Total financial liabilities		(16 794)	(16 794)

Due to the short-term nature of the current financial assets and current financial liabilities, the carrying amount is assumed to be the same as the fair value.

The carrying amounts of non-current financial instruments measured at amortised cost approximate fair value due to the nature and terms of these instruments.

16.3.2Fair values

16.3.2.1 Fair value hierarchy

Financial assets and financial liabilities at fair value have been categorised in the following hierarchy structure, based on the inputs used in the valuation technique:

Level 1 – Quoted prices (unadjusted) in active markets for identical assets and liabilities that can be accessed at the measurement date.

Level 2 – Inputs other than quoted prices included in Level 1 that are either directly or indirectly observable.

Level 3 – Inputs that are not based on observable market data (unobservable inputs).

	Group
2023	Fair value Rm	Level 2 Rm	Level 3 Rm
Financial assets at FVOCI	434		434
Equity: unlisted – Chifeng	434		434
Financial assets at FVPL	3 839	3 839
Non–current debt: unlisted – environmental rehabilitation funds	2 422	2 422
Non–current debt: unlisted – portfolio investments	461	461
Non–current debt: unlisted – deposit facilities	956	956
Derivative financial assets designated as hedging instruments	2	2
Non–current cash flow hedge derivatives: interest rate swaps	2	2
Derivative financial assets	22	22
Current derivative financial assets	22	22
Derivative financial liabilities designated as hedging instruments	(141)	(141)
Non-current cash flow hedge derivatives: interest rate swaps	(127)	(127)
Current cash flow hedge derivatives: FECs	(14)	(14)

Net financial assets held at fair value	4 156	3 722	434

Reconciliation of Level 3 hierarchy	Chifeng Rm
At 31 December 2022	474
Movement during the year
Loss recognised in OCI (pre-tax effect)¹	(40)
At 31 December 2023	434

¹	Tax on Chifeng amounts to R8.66 million.

	Group
2022	Fair value Rm	Level 2 Rm	Level 3 Rm
Financial assets at FVOCI	474		474
Equity: unlisted – Chifeng	474		474
Financial assets at FVPL	2 607	2 607
Non-current debt: unlisted – environmental rehabilitation funds	2 187	2 187
Non-current debt: unlisted – portfolio investments	420	420
Derivative financial assets designated as hedging instruments	11	11
Non-current cash flow hedge derivatives: interest rate swaps	11	11
Derivative financial assets	57	57
Current derivative financial assets	57	57
Derivative financial liabilities designated as hedging instruments	(112)	(112)
Non-current cash flow hedge derivatives: interest rate swaps	(112)	(112)
Derivative financial liabilities	(5)	(5)
Current derivative financial liabilities	(5)	(5)

Net financial assets held at fair value	3 032	2 558	474

Reconciliation of Level 3 hierarchy	Chifeng Rm
At 31 December 2021	446
Movement during the year
Gain recognised in OCI (pre-tax effect)¹	28
At 31 December 2022	474

¹	Tax on Chifeng amounts to R17.61 million.

	Company
2023	Fair value Rm	Level 2 Rm
Financial assets at FVPL	38	38
Non-current debt: unlisted – environmental rehabilitation funds	38	38

Net financial assets held at fair value	38	38

	Company
2022	Fair value Rm	Level 2 Rm
Financial assets at FVPL	35	35
Non-current debt: unlisted – environmental rehabilitation funds	35	35

Net financial assets held at fair value	35	35

16.3.2.2 Transfers

Transfers between levels of the fair value hierarchy are recognised as at the end of the reporting period during which the transfer has occurred. There were no transfers between Level 1 and Level 2 nor between Level 2 and Level 3 of the fair value hierarchy.

16.3.2.3 Valuation process applied

The fair value computations of investments are performed by the strategic finance department, reporting to the finance director, on a six-monthly basis. The valuation reports are discussed with the chief operating decision maker and the audit committee in accordance with Exxaro’s reporting governance.

16.3.2.4 Current derivative financial instruments

Level 2 fair values for simple over-the-counter derivative financial instruments are based on market quotes. These quotes are assessed for reasonableness by discounting estimated future cash flows using the market rate for similar instruments at measurement date.

16.3.2.5 Environmental rehabilitation funds, portfolio investments and deposit facilities

Level 2 fair values for debt instruments held in the environmental rehabilitation funds, portfolio investments and deposit facilities are based on quotes provided by the financial institutions at which the funds are invested at measurement date.

16.3.2.6 Non-current cash flow hedge derivatives: interest rate swaps

Level 2 fair values for interest rate swaps are based on valuations provided by the financial institutions with whom the interest rate swaps have been entered into and take into account credit risk. The valuations are assessed for reasonability by discounting the estimated future cash flows based on observable ZAR swap curves.

16.3.2.7 Current cash flow hedge derivatives: forward exchange contracts

Level 2 fair values for hedge accounted FECs are based on valuations provided by the financial institutions with whom the FECs have been entered into, and take into account credit risk. The valuations are assessed for reasonability by discounting the estimated future cash flows based on observable ZAR/US$ forward rates.

16.3.2.8 Valuation techniques used in the determination of fair values within Level 3 of the hierarchy, as well as significant inputs used in the valuation models

Chifeng

Chifeng is classified within a Level 3 of the fair value hierarchy as there is no quoted market price or observable price available for this investment. This unlisted investment is valued as the present value of the estimated future cash flows, using a DCF model. The valuation technique is consistent to that used in previous reporting periods.

The significant observable and unobservable inputs used in the fair value measurement of the investment in Chifeng are rand/ RMB exchange rate, RMB/US$ exchange rate, zinc LME price, production volumes, operational costs and the discount rate.

At 31 December 2023	Inputs	Sensitivity of inputs and fair value measurement¹	Sensitivity analysis of a 10% increase in the inputs is demonstrated below² Rm
Observable inputs
Rand/RMB exchange rate	R2.58/RMB1	Weakening of the rand to the RMB	43
RMB/US$ exchange rate	RMB6.22 to RMB6.76/US$1	Weakening of the RMB to the US$	118
Zinc LME price (US$ per tonne in real terms)	US$2 395.67 to US$2 500	Increase in price of zinc concentrate	118
Unobservable inputs
Production volumes	447 719.5 tonnes	Increase in production volumes	25
Operational costs (US$ million per annum in real terms)	US$70.19 to US$74.43	Decrease in operations costs	(92)
Discount rate	10.54%	Decrease in the discount rate	(27)

¹	Change in observable or unobservable input which will result in an increase in the fair value measurement.
²	A 10% decrease in the respective inputs would have an equal but opposite effect on the above, on the basis that all other variables remain constant.

At 31 December 2022	Inputs	Sensitivity of inputs and fair value measurement¹	Sensitivity analysis of a 10% increase in the inputs is demonstrated below² Rm
Observable inputs
Rand/RMB exchange rate	R2.46/RMB1	Weakening of the rand to the RMB	47
RMB/US$ exchange rate	RMB6.21 to RMB6.78/US$1	Weakening of the RMB to the US$	115
Zinc LME price (US$ per tonne in real terms)	US$2 325.32 to US$3 285.23	Increase in price of zinc concentrate	115
Unobservable inputs
Production volumes	447 719.5 tonnes	Increase in production volumes	28
Operational costs (US$ million per annum in real terms)	US$69.60 to US$76.69	Decrease in operations costs	(87)
Discount rate	10.54%	Decrease in the discount rate	(25)

¹	Change in observable or unobservable input which will result in an increase in the fair value measurement.
²	A 10% decrease in the respective inputs would have an equal but opposite effect on the above, on the basis that all other variables remain constant.

Inter-relationships

Any inter-relationships between unobservable inputs is not considered to have a significant impact within the range of reasonably possible alternative assumptions for both reporting periods.

16.3.3Risk management

16.3.3.1 Financial risk management

The group’s strategic treasury function predominantly provides financial risk management services to the business, coordinates access to domestic and international financial markets, and monitors and manages the financial risks relating to the operations of the group through internal risk reports which analyse exposure by degree and magnitude of risks. These risks include market risk (including foreign currency risk, interest rate risk and price risk), credit risk and liquidity risk.

The group’s objectives, policies and processes for measuring and managing these risks are detailed below.

The group seeks to minimise the effects of these risks by using derivative financial instruments to hedge these risk exposures. The use of derivative financial instruments is governed by the group’s policies approved by the board of directors, which provide written principles on foreign exchange risk, interest rate risk, commodity price risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the internal auditors on a continuous basis and the results are reported to the audit committee.

Financial instruments, including derivative financial instruments, are not entered into nor traded for speculative purposes rather, financial instruments are entered into to manage and reduce the possible adverse impact on earnings and cash flows of changes in interest rates and foreign currency exchange rates.

Capital management

In managing its capital, the group focuses on a sound net debt position, return on shareholders’ equity (or ROCE) and the level of dividends to shareholders. The group’s policy is to cover its annual net funding requirements through long-term loan facilities with maturities spread over time. Neither the company nor any of its subsidiaries are subject to externally imposed capital requirements.

16.3.3.2 Market risk management

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, will affect profit or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.

The group’s activities expose it primarily to the financial risks of changes in the environmental rehabilitation funds, portfolio investment and deposit facilities quoted prices (see 16.3.3.2.1), foreign currency exchange rates (see 16.3.3.2.2) and interest rates (see 16.3.3.2.3). The group enters into a variety of derivative financial instruments to manage its exposure to foreign currency risks and interest rate risks, including:

Currency FECs, currency options and currency swap agreements to manage the exchange rate risk arising on the export of coal and import of capital expenditure
Interest rate swaps and interest rate forwards to manage interest rate risk on the interest-bearing borrowings.

16.3.3.2.1 Price risk management

The group’s exposure to equity price risk arises from investments held by and classified either as at FVOCI or at FVPL. Currently, the group’s exposure to equity price risk is not considered to be significant as Chifeng is seen as a non-core investment.

The group’s exposure to price risk in relation to quoted prices of the environmental rehabilitation funds, portfolio investments and deposit facilities is not considered a significant risk as the funds are invested with reputable financial institutions in accordance with a strict mandate to ensure capital preservation and growth. The funds are held for strategic purposes rather than trading purposes.

16.3.3.2.2 Foreign currency risk management

Certain transactions are denominated in foreign currencies, hence exposures to exchange rate fluctuations arise.

The currency in which transactions are entered into is mainly denominated in US dollar, euro and Australian dollar.

Exchange rate exposures are managed within approved policy parameters utilising FECs, currency options and currency swap agreements.

The group maintains a fully covered exchange rate position in respect of foreign balances (if any) and imported capital equipment resulting in these exposures being fully converted to rand. Trade-related import exposures are managed through the use of economic hedges arising from export revenue as well as through FECs. Trade-related export exposures are hedged using FECs and currency options with specific focus on short-term receivables. Any open exposure to foreign currency risk on these balances is insignificant as the turnaround time is generally less than 30 days. Foreign denominated capital purchases funded by ZAR denominated project financing arrangements are hedged using FECs.

Uncovered cash and cash equivalents as at 31 December 2023 amount to US$38.92 million (2022: US$32.89 million).

Monetary items have been translated at the closing rate at the last day of the reporting period.

The FECs which are used to hedge foreign currency exposure mostly have a maturity of less than one year from the reporting date. When necessary, FECs are rolled over at maturity.

The following significant exchange rates applied during the year:

		2023			2022
	Average spot rate R	Average achieved rate R	Closing spot rate R	Average spot rate R	Average achieved rate R	Closing spot rate R
US$	18.45	18.94	18.30	16.37	16.63	16.98
€	19.94		20.19	17.19		18.10
AU$	12.26		12.46	11.34		11.49

Hedge accounting: Cash flow hedges – forward exchange contracts

FECs are designated as hedging instruments in cash flow hedges of expected capital purchases in US dollars. Additionally, cash held in US dollar for purposes of settling the final purchase transactions are designated as part of the hedging relationship. These transactions are highly probable, and relate to the group's commitments under construction projects subject to project financing arrangements.

There is an economic relationship between the hedged items and the hedging instruments as the terms of the FECs match the terms of the expected highly probable expected transactions (ie, notional amount and expected payment date). The group has established a hedge ratio of 1:1 for the hedging relationships as the underlying risk of the FECs are identical to the hedged risk components. To test the hedge effectiveness, the group use the "dollar offset method" and compare the changes in the fair value of the hedging instruments against the changes in fair value of the hedged items attributable to the hedged risks. Hedge ineffectiveness can arise from:

i)	Existence of day one fair value of the hedging instrument
ii)	A significant change in the credit risk during the period of the hedge
iii)	Changes in the amount or timing of the payments to the contractor
iv)	The forward element inherent in each FEC and
v)	Effects of foreign currency basis spread.

The group is holding the following FECs and US$ bank balances associated with the hedging relationship:

	2023
	0 to 6 months	6 to 12 months	Total
US$ denominated cash and cash equivalents (in Rm)	151		151
FEC Notional amount (in Rm)	338	142	480
Average forward rate (ZAR/US$)	19.09	20.29	19.56

Financial performance effects of hedging recognised during the year:

		Group
For the year ended 31 December	Line item in which recognised	2023 Rm	2022 Rm
Transfer to property, plant and equipment	Assets under construction	2

Financial position effect of hedging instruments and hedging items:

	Group
At 31 December	2023 Rm	2022 Rm
Hedging instruments: Outstanding US$ buy FECs and US$ cash available to settle the transaction
Nominal amount	637
Carrying amount	137
– Current financial liability	(14)
– US$ denominated cash and cash equivalents	151
Cumulative loss in fair value used for calculating hedge ineffectiveness	(21)
Hedged items: Cash flows on US$ capital purchases
Nominal amount	637
Carrying amount in cash flow hedge reserve	19
Carrying amount in cost of hedge reserve	1
Cumulative loss in fair value used for calculating hedge ineffectiveness	(21)

Cash flow hedge reserve composition:

	Group
	Cost of hedging reserve		Cash flow hedge reserves
At 31 December	2023 Rm	2022 Rm	2023 Rm	2022 Rm
*Reserves relating to foreign currency risk exposure*	(9)		(6)
– Gross	(12)		(8)
– Deferred tax thereon	3		2
Cash flow hedge reserves relating to interest rate risk			12	64
– Gross			17	88
– Deferred tax thereon			(5)	(24)
Balance of share of movements of equity-accounted investees				5
Balance of NCI share of financial instruments revaluation reserve	2		(33)	(50)
Cash flows hedge reserve	(7)		(27)	19

Movement analysis of cash flow hedge reserves relating to foreign currency risk exposure:

	Gross
	Cost of hedge Rm	Cash flow hedge – spot foreign exchange component Rm	Tax Rm	Net Rm
At 31 December 2022
Movement during the year
Change in fair value of FEC recognised in OCI	(12)	(10)	6	(16)
Transferred to property, plant and equipment		2	(1)	1
At 31 December 2023	(12)	(8)	5	(15)

16.3.3.2.3 Interest rate risk management

Interest rate benchmark reform

The group is exposed to interest rate risk as it borrows and deposits funds at floating interest rates on the money market and extended bank borrowings. The group’s main interest rate risk arises from long-term borrowings with floating rates, which expose the group to cash flow interest rate risk. The risk is managed by undertaking controlled management of the interest structures of the investments and borrowings, maintaining an appropriate mix between fixed and floating interest rate facilities in line with the interest rate expectations. The group also uses interest rate swaps and interest rate forwards to manage the interest rate risk exposure.

When the contractual terms of the borrowings and covenants thereof require the use of hedging instruments to mitigate the risk of fluctuations of the underlying interest rate risk cash flow exposure and the impact on profit or loss of specific projects being financed, the group looks to apply hedge accounting where an effective hedge relationship is expected and to the extent that such exposure poses a real risk to the achievement of the loan covenants.

The financial institutions chosen are subject to compliance with the relevant regulatory bodies.

A fundamental reform of major interest rate benchmarks is being undertaken globally, including the replacement of some interbank offered rates (IBORs) with alternative nearly risk-free rates (referred to as ‘IBOR reform’). The group has exposures to IBORs on its financial instruments that will be replaced or reformed as part of these market-wide initiatives. The group’s main IBOR exposure at 31 December 2023 was indexed to JIBAR. The SARB indicated their intention to move away from JIBAR and to create an alternative reference rate for South Africa. The SARB has indicated their initial preference for the adoption of the South African Rand Overnight Index Average (ZARONIA) as the preferred unsecured candidate to replace JIBAR in cash and derivative instruments.

On 2 November 2022, the SARB commenced publishing ZARONIA primarily to allow market participants to observe its performance and consider the implications of adopting it as a replacement for the JIBAR. The observation period ended on 3 November 2023. Certain observation period statistics have been restated to reflect revisions that were processed post their publication. Market participants may use ZARONIA as a reference rate in financial contracts. The Market Practitioners Group has designated ZARONIA as the successor rate to replace JIBAR. There is still however uncertainty surrounding the timing and manner in which the transition would occur.

The group’s strategic treasury function monitors and manages the group’s transition to alternative rates. The group’s strategic treasury function evaluates the extent to which contracts reference IBOR cash flows, whether such contracts will need to be amended as a result of IBOR reform and how to manage communication about IBOR reform with counterparties.

Non-derivative financial liabilities

The group’s IBOR exposures to non-derivative financial liabilities as at 31 December 2023 were the secured project financing and unsecured loan facility indexed to JIBAR as well as the unsecured bond indexed to JIBAR. Refer note 12.1.3.

Derivatives

The group holds interest rate swaps for risk management purposes that are designated in cash flow hedging relationships. The interest rate swaps have floating legs that are indexed to JIBAR. Refer note 16.3.3.2.3.2.

Hedge accounting

The group’s hedged items and hedging instruments as at the reporting date are indexed to JIBAR. These benchmark rates are quoted each day and the IBOR cash flows are exchanged with counterparties as usual. Refer note 16.3.3.2.3.2.

There is uncertainty about when and how replacement may occur with respect to the relevant hedged items and hedging instruments. As a result, the group continues to apply the amendments to IFRS 9 issued in September 2019 (Phase 1) to those hedging relationships.

16.3.3.2.3.1 Loan facility and bonds

The loan facility and bonds were entered into at floating interest rates.

The interest rate repricing profile for the loan facility and bonds is summarised below for group and company:

	1 to 6 months Rm	Total borrowings Rm
At 31 December 2023
Non-current interest-bearing borrowings: loan facility and bond	(2 945)	(2 945)
Current interest-bearing borrowings: loan facility and bond	(1 153)	(1 153)
Total interest-bearing borrowings: loan facility and bond	(4 098)	(4 098)
Total borrowings (%)	100	100
At 31 December 2022
Non-current interest-bearing borrowings: loan facility and bond	(4 034)	(4 034)
Current interest-bearing borrowings: loan facility and bond	(505)	(505)
Total interest-bearing borrowings: loan facility and bond	(4 539)	(4 539)
Total borrowings (%)	100	100

Interest rate sensitivity

The following table reflects the potential impact on earnings, given an increase in interest rates of 50 basis points:

	2023 Rm	2022 Rm
Impact on earnings: loss	(20)	(22)

A decrease in interest rates of 50 basis points would have an equal but opposite effect on the amounts shown above, on the basis that all other variables remain constant.

16.3.3.2.3.2 Project financing

The group is exposed to the risk of variability in future interest payments on the project financing, attributable to fluctuations in 3-month JIBAR, during operations phase, and 1-month JIBAR during the construction phase . The designated hedged item is the group of expected floating interest rate cash flows arising from the project financing, up to the notional amount of each interest rate swap, over the term of the hedging relationship. The notional amounts per interest rate swap match up to the designated exposure being hedged.

Where all relevant criteria are met, hedge accounting is applied to remove the accounting mismatch between the hedging instrument and the hedged item. This will effectively result in recognising interest expense at a fixed interest rate for the hedged project financing.

The exposure profile is summarised as follows:

	Group
	Percentage exposure
At 31 December	2023 %	2022 %	2023 Rm	2022 Rm
Project financing nominal amount	100	100	(4 825)	(4 554)
– Linked to fixed rate	3	3	(135)	(141)
– Linked to floating rate	97	97	(4 690)	(4 413)

Project financing nominal amount linked to floating rate	97	97	(4 690)	(4 413)
Interest rate swap notional amount (swap floating rate to fixed rate)	(83)	(81)	4 002	3 691
Effective floating rate exposure on project financing	14	16	(688)	(722)

Interest rate sensitivity

The following table reflects the potential impact on earnings and equity, given an increase in interest rates of 50 basis points:

Impact	2023 Rm	2022 Rm
Increase in finance costs	3	4
Increase in equity	41	54

A decrease in interest rates of 50 basis points would have an approximate equal but opposite effect on the amounts shown above, all other variables held constant.

Hedge accounting: Cash flow hedges - interest rate swaps

Hedge effectiveness:

The group has assumed certain interest rate swaps from its business combination with Cennergi, as well as entered into new interest rate swaps for further project financing arrangements that have similar critical terms as the hedged item, such as reference rates, reset dates, payment dates, maturities and notional amounts. The group does not hedge 100% of its project financing, therefore the hedged item is identified as a proportion of the outstanding project financing up to the notional amount of the interest rate swaps. As all critical terms matched during the year, there is an economic relationship.

Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments, to ensure that an economic relationship exists between the hedged item and hedging instrument.

Hedge ineffectiveness for interest rate swaps is assessed frequently. It may occur due to:

The DVA on the interest rate swaps which is not matched by the project financing
Differences in critical terms between the interest rate swaps and project financing
Changes to amounts or timing of drawdowns during construction phase

The recognised ineffectiveness in 2023 amounted to R18 million (2022: R13 million) and is mainly as a result of the DVA. Credit valuation adjustments are not considered due to the terms of the underlying loans, which allow for set-off.

The interest rate swaps require settlement of net interest receivable or payable every six months during the operations phase, and every 1-month during construction phase. The settlement dates coincide with the dates on which interest is payable on the underlying debt.

The following tables detail the financial position and performance of the interest rate swap contracts outstanding at the end of the reporting period and their related hedged items.

Financial performance effects of hedging recognised during the year:

		Group
For the year ended 31 December	Line item in which recognised	2023 Rm	2022 Rm
Fair value losses resulting from hedge ineffectiveness	Operating expenses	(18)	(13)
Fair value gains/(losses) on settlement of underlying swap (reclassified)	Finance costs	20	(97)

Hedging instruments and hedged items

	Group
At 31 December	2023 Rm	2022 Rm
Hedged items: Cash flows on floating rate project financing linked to JIBAR
Nominal amount	4 002	3 691
Carrying amount in cash flow hedge reserve	17	88
Cumulative gain in fair value used for calculating hedge ineffectiveness	7	88
Hedging instruments: Outstanding receive floating, pay fixed contracts
Nominal amount	4 002	3 691
Carrying amount	(125)	(101)
– Non-current financial asset	2	11
– Non-current financial liability	(127)	(112)
Cumulative loss in fair value used for calculating hedge ineffectiveness	(209)	(130)

Hedging reserves

Cash flow hedge reserve composition:

	Group
At 31 December	2023 Rm	2022 Rm
Cash flow hedge reserve – interest rate swaps	12	64
– Gross	17	88
– Deferred tax thereon	(5)	(24)
*Cash flow hedge reserve – spot element of FECs*	(6)
– Gross	(8)
– Deferred tax thereon	2
Balance of share of movements of equity-accounted investees		5
Balance of NCI share of financial instruments revaluation reserve	(33)	(50)
Cash flows hedge reserve	(27)	19

Movement analysis of cash flow hedge reserve – interest rate swaps:

	Gross Rm	Tax Rm	Net Rm
At 31 December 2021	(165)	46	(119)
Movement during the year
Change in fair value of interest rate swaps recognised in OCI	156	(43)	113
Reclassified from OCI to profit or loss in finance costs	97	(27)	70
At 31 December 2022	88	(24)	64
Movement during the year
Change in fair value of interest rate swaps recognised in OCI	(51)	14	(37)
Reclassified from OCI to profit or loss in finance costs	(20)	5	(15)
At 31 December 2023	17	(5)	12

16.3.3.3 Liquidity risk management

Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due. The group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under normal and stressed conditions, without incurring unacceptable losses or risking damage to the group’s reputation.

The ultimate responsibility for liquidity risk management rests with the board of directors, which has built an appropriate liquidity risk management framework for the management of the group’s short, medium and long-term funding and liquidity management requirements.

The group manages liquidity risk by monitoring forecast cash flows in compliance with loan covenants and ensuring that adequate unutilised borrowing facilities are maintained.

Borrowing capacity is determined by the board of directors, from time to time.

	Group
	2023 Rm	2022 Rm
Amount approved	65 309	58 524
Total borrowings	(8 923)	(9 093)
Unutilised borrowing capacity	56 386	49 431

The group’s capital base and the borrowing powers of the company and the group were set at 125% of shareholders’ funds (equity attributable to owners of the parent) for both the 2023 and 2022 financial years.

Standard payment terms for the majority of trade payables is the end of the month following the month in which the goods are received or services are rendered. A number of trade payables do, however, have shorter contracted payment periods.

To avoid incurring interest on late payments, financial risk management policies and procedures are entrenched to ensure the timeous matching of orders placed with goods received notes or services acceptances and invoices.

16.3.3.3.1 Maturity profile of financial instruments

Contractual cash flows for financial instruments which are subject to floating interest rates are based on the closing floating interest rate at reporting date.

The following tables detail the contractual maturities of certain financial assets and financial liabilities:

	Group
			Maturity
At 31 December 2023	Carrying amount Rm	Contractual cash flows Rm	0 to 12 months Rm	1 to 2 years Rm	2 to 5 years Rm	More than 5 years Rm
Financial assets
ESD loans	169	169	63	49	57
Vendor finance loan	177	216	64	60	92
Other financial assets at amortised cost¹	75	78	78
Cash flow hedge derivatives: interest rate swaps	2	3	1	1	1
Derivative financial assets	22	22	22
Lease receivables	38	48	14	14	20
Trade and other receivables	3 877	3 877	3 877
Cash and cash equivalents	19 859	19 859	19 859
Total financial assets	24 219	24 272	23 978	124	170
Percentage profile (%)		100	98	1	1
Financial liabilities
Interest-bearing borrowings	(8 923)	(12 924)	(2 388)	(1 623)	(5 555)	(3 358)
– Loan facility	(3 452)	(4 183)	(852)	(743)	(2 588)
– Project financing	(4 825)	(8 062)	(857)	(880)	(2 967)	(3 358)
– Bonds	(646)	(679)	(679)
Lease liabilities	(451)	(668)	(95)	(101)	(325)	(147)
Non-current other payables	(42)	(44)		(16)	(28)
Trade and other payables	(3 356)	(3 356)	(3 356)
Cash flow hedge derivatives: interest rate swaps	(127)	(105)	(30)	(30)	(42)	(3)
Cash flow hedge derivatives: FECs	(14)	(21)	(21)
Total financial liabilities	(12 913)	(17 118)	(5 890)	(1 770)	(5 950)	(3 508)
Percentage profile (%)		100	34	10	35	21
Liquidity gap identified²	11 306	7 154	18 088	(1 646)	(5 780)	(3 508)

¹	Excludes the environmental rehabilitation funds at amortised cost of R108 million.
²	The liquidity gap identified will be funded by cash generated from operations and the undrawn facilities in place.

	Group
			Maturity
At 31 December 2022	Carrying amount Rm	Contractual cash flows Rm	0 to 12 months Rm	1 to 2 years Rm	2 to 5 years Rm	More than 5 years Rm
Financial assets
ESD loans	178	178	76	54	48
Vendor finance loan	294	350	138	62	150
Other financial assets at amortised cost¹	195	208	131	77
Cash flow hedge derivatives: interest rate swaps	11	(36)	(6)	(6)	(15)	(9)
Derivative financial assets	57	57	57
Lease receivables	46	63	14	14	35
Trade and other receivables	4 199	4 199	4 199
Cash and cash equivalents	14 812	14 812	14 812
Total financial assets	19 792	19 831	19 421	201	218	(9)
Percentage profile (%)		100	98	1	1
Financial liabilities
Interest-bearing borrowings	(9 093)	(12 853)	(1 589)	(2 141)	(5 789)	(3 334)
– Loan facility	(3 893)	(4 824)	(827)	(732)	(3 265)
– Project financing	(4 554)	(7 298)	(700)	(740)	(2 524)	(3 334)
– Bonds	(646)	(731)	(62)	(669)
Lease liabilities	(478)	(733)	(88)	(93)	(300)	(252)
Non-current other payables	(25)	(28)		(4)	(24)
Trade and other payables	(3 340)	(3 340)	(3 340)
Cash flow hedge derivatives: interest rate swaps	(112)	(233)	(66)	(62)	(91)	(14)
Derivative financial liabilities	(5)	(5)	(5)
Total financial liabilities	(13 053)	(17 192)	(5 088)	(2 300)	(6 204)	(3 600)
Percentage profile (%)		100	30	13	36	21
Liquidity gap identified²	6 739	2 639	14 333	(2 099)	(5 986)	(3 609)

¹	Excludes the environmental rehabilitation funds at amortised cost of R99 million.
²	The liquidity gap identified will be funded by cash generated from operations and the undrawn facilities in place.

	Company
			Maturity
At 31 December 2023	Carrying amount Rm	Contractual cash flows Rm	0 to 12 months Rm	1 to 2 years Rm	2 to 5 years Rm	More than 5 years Rm
Financial assets
ESD loans	169	169	63	49	57
Vendor finance loan	177	216	64	60	92
Trade and other receivables	150	150	150
Cash and cash equivalents	17 151	17 151	17 151
Non-interest-bearing loans to subsidiaries	575	575	575
Interest-bearing loans to subsidiaries	4 139	4 931	1 540	750	2 641
Treasury facilities with subsidiaries	130	130	130
Total financial assets	22 491	23 322	19 673	859	2 790
Percentage profile (%)		100	84	4	12
Financial liabilities
Interest-bearing borrowings	(4 098)	(4 862)	(1 531)	(743)	(2 588)
– Loan facility	(3 452)	(4 183)	(852)	(743)	(2 588)
– Bonds	(646)	(679)	(679)
Lease liabilities	(383)	(505)	(85)	(92)	(301)	(27)
Trade and other payables	(223)	(223)	(223)
Non-interest-bearing loans from subsidiaries¹	(769)	(769)	(769)
Treasury facilities with subsidiaries	(14 837)	(14 277)	(14 277)
Total financial liabilities	(20 310)	(20 636)	(16 885)	(835)	(2 889)	(27)
Percentage profile (%)		100	82	4	14
Liquidity gap identified	2 181	2 686	2 788	24	(99)	(27)

¹	The majority of the non-interest-bearing loans from subsidiaries are not expected to be called upon in the foreseeable future.

	Company
			Maturity
At 31 December 2022	Carrying amount Rm	Contractual cash flows Rm	0 to 12 months Rm	1 to 2 years Rm	2 to 5 years Rm	More than 5 years Rm
Financial assets
ESD loans	178	178	76	54	48
Vendor finance loan	294	350	138	62	150
Trade and other receivables	283	283	283
Cash and cash equivalents	13 366	13 366	13 366
Non-interest-bearing loans to subsidiaries	676	676	676
Interest-bearing loans to subsidiaries	4 631	5 715	898	1 410	3 273	134
Treasury facilities with subsidiaries	559	559	559
Total financial assets	19 987	21 127	15 996	1 526	3 471	134
Percentage profile (%)		100	76	7	16	1
Financial liabilities
Interest-bearing borrowings	(4 539)	(5 555)	(889)	(1 401)	(3 265)
– Loan facility	(3 893)	(4 824)	(827)	(732)	(3 265)
– Bonds	(646)	(731)	(62)	(669)
Lease liabilities	(413)	(574)	(78)	(85)	(279)	(132)
Trade and other payables	(196)	(196)	(196)
Non-interest-bearing loans from subsidiaries¹	(85)	(85)	(85)
Treasury facilities with subsidiaries	(11 974)	(11 974)	(11 974)
Total financial liabilities	(17 207)	(18 384)	(13 222)	(1 486)	(3 544)	(132)
Percentage profile (%)		100	72	8	19	1
Liquidity gap identified	2 780	2 743	2 774	40	(73)	2

¹	The majority of the non-interest-bearing loans from subsidiaries are not expected to be called upon in the foreseeable future.

16.3.3.4 Credit risk management

Credit risk relates to potential default by counterparties on cash and cash equivalents, loans, investments, trade receivables and other receivables. The group limits its counterparty exposure arising from money market and derivative instruments by only dealing with well-established financial institutions of high-credit standing. The group's exposure and credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded are spread among approved counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the board of directors annually.

Trade receivables consist of a number of customers with whom Exxaro has long-standing relationships. A high portion of term supply arrangements exists with such customers resulting in limited credit exposure which exposure is limited by performing customer creditworthiness or country risk assessments.

The group strives to enter into sales contracts with customers which stipulate the required payment terms. It is expected of each customer that these payment terms are adhered to. Where trade receivables balances become past due, the normal recovery procedures are followed to recover the debt, where applicable new payment terms may be arranged to ensure that the debt is fully recovered.

Exxaro has concentration risk as a result of its exposure to one major customer. This is, however, not considered significant as the customer adheres to the stipulated payment terms.

Exxaro establishes an allowance for non-recoverability or impairment that represents its estimate of ECLs in respect of trade receivables, other receivables, loans, cash and cash equivalents and investments. The main components of these allowances are a 12-month ECL component that results from possible default events within the 12 months after the reporting date and a lifetime ECL component that results from all possible default events over the expected life of a financial instrument.

16.3.3.4.1 Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. None of the financial assets were held as collateral for any security provided.

Detail of the trade receivables credit risk exposure:

	Group
At 31 December	2023 %	2022 %
By geographical area
RSA	77	65
Europe	9	18
Asia	8	17
Australia	4
USA	2
Total	100	100
By industry
Public utilities	54	47
Mining	5	8
Manufacturing	1	1
Merchants	28	37
Food and beverage	1	1
Steel	6	2
Cement	1	4
Other	4
Total	100	100

Detailed impairment analysis of financial assets measured at amortised cost:

	Group
At 31 December 2023	Total Rm	Performing Rm	Under- performing Rm	Non- performing Rm
ESD loans	169	169
– Non-current – gross	156	107		49
– Non-current – impairment allowances	(50)	(1)		(49)
– Current – gross	181	64		117
– Current – impairment allowances	(118)	(1)		(117)
Vendor finance loan	177	177
– Non-current – gross	127	127
– Current – gross	51	51
– Current – impairment allowance	(1)	(1)
Other financial assets at amortised cost	183	183
– Non-current – gross	108	108
– Current – gross	81	77		4
– Current – impairment allowances	(6)	(2)		(4)
Lease receivables¹	38	38
– Non-current – gross	29	29
– Non-current – impairment allowances	(1)	(1)
– Current – gross	10	10
Trade receivables	3 829	3 588	72	169
– Gross	3 850	3 608	72	170
– Impairment allowances	(21)	(20)		(1)
Other receivables	48	48
– Gross	55	48		7
– Impairment allowances	(7)			(7)
Cash and cash equivalents	19 859	19 859
Total financial assets at amortised cost	24 303	24 062	72	169

¹	Lease receivables are within the scope of the impairment requirements of IFRS 9.

	Group
At 31 December 2022	Total Rm	Performing Rm	Under- performing Rm	Non- performing Rm
ESD loans	178	178
– Non-current – gross	108	103		5
– Non-current – impairment allowances	(6)	(1)		(5)
– Current – gross	166	78		88
– Current – impairment allowances	(90)	(2)		(88)
Vendor finance loan	294	294
– Non-current – gross	173	173
– Current – gross	123	123
– Current – impairment allowances	(2)	(2)
Other financial assets at amortised cost	294	294
– Non-current – gross	175	175
– Non-current – impairment allowances	(3)	(3)
– Current – gross	130	126		4
– Current – impairment allowances	(8)	(4)		(4)
Lease receivables¹	46	46
– Non-current – gross	39	39
– Non-current – impairment allowances	(1)	(1)
– Current – gross	8	8
Trade receivables	4 124	4 056	29	39
– Gross	4 150	4 082	29	39
– Impairment allowances	(26)	(26)
Other receivables	75	67		8
– Gross	122	67		55
– Impairment allowances	(47)			(47)
Cash and cash equivalents	14 812	14 812
Total financial assets at amortised cost	19 823	19 747	29	47

¹	Lease receivables are within the scope of the impairment requirements of IFRS 9.

At 31 December 2023	Total Rm	Performing Rm	Non- performing Rm
ESD loans	169	169
– Non-current – gross	156	107	49
– Non-current – impairment allowances	(50)	(1)	(49)
– Current – gross	181	64	117
– Current – impairment allowances	(118)	(1)	(117)
Vendor finance loan	177	177
– Non-current – gross	127	127
– Current – gross	51	51
– Current – impairment allowance	(1)	(1)
Other financial assets at amortised cost
– Current – gross	4		4
– Current – impairment allowances	(4)		(4)
Other receivables	10	10
– Gross	11	10	1
– Impairment allowances	(1)		(1)
Indebtedness by subsidiaries	140	140
– Gross	140	140
Non-interest-bearing loans to subsidiaries	575	575
– Current – gross	635	582	53
– Current – impairment allowances	(60)	(7)	(53)
Interest-bearing loans to subsidiaries	4 139	4 139
– Non-current – gross	2 981	2 981
– Current – gross	1 158	1 158
Treasury facilities with subsidiaries	130	130
– Gross	397	130	267
– Impairment allowances	(267)		(267)
Cash and cash equivalents	17 151	17 151
Total financial assets at amortised cost	22 491	22 491

	Company
At 31 December 2022	Total Rm	Performing Rm	Non- performing Rm
ESD loans	178	178
– Non-current – gross	108	103	5
– Non-current – impairment allowances	(6)	(1)	(5)
– Current – gross	166	78	88
– Current – impairment allowances	(90)	(2)	(88)
Vendor finance loan	294	294
– Non-current – gross	173	173
– Current – gross	123	123
– Current – impairment allowances	(2)	(2)
Other financial assets at amortised cost	54	54
– Current – gross	60	56	4
– Current – impairment allowances	(6)	(2)	(4)
Other receivables	7	7
– Gross	8	7	1
– Impairment allowances	(1)		(1)
Indebtedness by subsidiaries	276	276
– Gross	277	277
– Impairment allowances	(1)	(1)
Non-interest-bearing loans to subsidiaries	676	676
– Current – gross	741	692	49
– Current – impairment allowances	(65)	(16)	(49)
Interest-bearing loans to subsidiaries	4 631	4 631
– Non-current – gross	4 120	4 120
– Current – gross	511	511
Treasury facilities with subsidiaries	559	559
– Gross	561	561
– Impairment allowances	(2)	(2)
Cash and cash equivalents	13 366	13 366
Total financial assets at amortised cost	20 041	20 041

16.3.3.4.2 Trade and other receivables age analysis

	Group
		Current		Past due
At 31 December 2023	Total Rm	1 to 30 days Rm	31 to 60 days Rm	61 to 90 days Rm	91 to 180 days Rm	>180 days Rm
Trade receivables	3 829	3 475	177	73	104
– Gross	3 850	3 495	178	73	104
– Impairment allowances	(21)	(20)	(1)
Other receivables	48	40	2	1		5
– Gross	55	41	2	1	1	10
– Impairment allowances	(7)	(1)			(1)	(5)

Total carrying amount of trade and other receivables	3 877	3 515	179	74	104	5

	Group
		Current		Past due
At 31 December 2022	Total Rm	1 to 30 days Rm	31 to 60 days Rm	61 to 90 days Rm	91 to 180 days Rm	>180 days Rm
Trade receivables	4 124	3 889	196	8	31
– Gross	4 150	3 913	197	8	32
– Impairment allowances	(26)	(24)	(1)		(1)
Other receivables	75	46	23		6
– Gross	122	48	24	2	45	3
– Impairment allowances	(47)	(2)	(1)	(2)	(39)	(3)

Total carrying amount of trade and other receivables	4 199	3 935	219	8	37

	Company
		Current		Past due
At 31 December 2023	Total Rm	1 to 30 days Rm	31 to 60 days Rm	61 to 90 days Rm	91 to 180 days Rm	>180 days Rm
Other receivables	10	4	2	1		3
– Gross	11	4	2	1		4
– Impairment allowances	(1)					(1)
Indebtedness by subsidiaries	140	140
– Gross	140	140

Total carrying amount of trade and other receivables	150	144	2	1		3

	Company
		Current	Past due
At 31 December 2022	Total Rm	1 to 30 days Rm	>180 days Rm
Other receivables	7	7
– Gross	8	7	1
– Impairment allowances	(1)		(1)
Indebtedness by subsidiaries	276	276
– Gross	277	277
– Impairment allowances	(1)	(1)

Total carrying amount of trade and other receivables	283	283

16.3.3.4.3 Credit quality of financial assets

The credit quality of cash and cash equivalents has been assessed by reference to external credit ratings available from Fitch, Standard & Poor’s and Global credit rating.

	Group		Company
At 31 December	2023 Rm	2022 Rm	2023 Rm	2022 Rm
Cash and cash equivalents
Fitch ratings
F1+	3 861	1 825	3 530	1 699
Standard & Poor's ratings
A-1+	13 983	10 949	11 606	9 653
A-1		24
Global credit rating
AA(za)	1 007	1 007	1 007	1 007
AA+(za)	1 008	1 007	1 008	1 007
Total cash and cash equivalents	19 859	14 812	17 151	13 366

Fitch ratings

F1 Highest credit quality

“+” denotes any exceptionally strong credit feature

Standard & Poor’s

A-1+ Highest certainty of payment

A-1 Very high certainty of payment

Global credit ratings

AA(za) Very strong financial security characteristics relative to other issuers in the same country

AA+(za) Very strong financial security characteristics relative to other issuers in the same country

16.3.3.4.4 Collateral

No collateral was held by the group as security, nor any other enhancements over the financial assets during the years ended 31 December 2023 and 2022.

Guarantees

The group did not obtain financial or non-financial assets by taking possession of collateral it holds as security or calling on guarantees during the financial years ended 31 December 2023 and 31 December 2022. The guarantees issued relate to operational liabilities (refer note 13.4.1 on contingent liabilities).

16.3.4 Loan commitments

Loan commitments have been granted to the following parties:

	Group		Company
At 31 December	2023 Rm	2022 Rm	2023 Rm	2022 Rm
Total loan commitment¹	12	96	12	96
ESD applicants²	12	96	12	96

¹	The loan commitments were undrawn for the reporting periods
²	Loans approved and awarded to successful ESD applicants.