Page 277 - SAMRC Annual Report 2024-2025

FINANCIAL INFORMATION

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025
SIGNIFICANT ACCOUNTING POLICIES

(CONTINUED)

1.8 Financial instruments (continued)

A financial asset is:
• cash;
• a contractual right to:
– receive cash or another financial asset from another entity; or
– exchange financial assets or financial liabilities with another entity under conditions that are
potentially favourable to the entity.
A financial liability is any liability that is a contractual obligation to:
• deliver cash or another financial asset to another entity; or
• exchange financial assets or financial liabilities under conditions that are potentially unfavourable to
the entity.

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates.
Liquidity risk is the risk encountered by an entity in the event of difficulty in meeting obligations associated
with financial liabilities that are settled by delivering cash or another financial asset.
Loan commitment is a firm commitment to provide credit under pre-specified terms and conditions.

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and
other price risk.

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market prices (other than those arising from interest rate risk or currency risk),
whether those changes are caused by factors specific to the individual financial instrument or its issuer,
or factors affecting all similar financial instruments traded in the market.
A financial asset is past due when a counterparty has failed to make a payment when contractually due.

Transaction costs are incremental costs that are directly attributable to the acquisition, issue or disposal
of a financial asset or financial liability. An incremental cost is one that would not have been incurred if
the entity had not acquired, issued or disposed of the financial instrument.
Financial instruments at amortised cost are non-derivative financial assets or non-derivative financial
liabilities that have fixed or determinable payments, excluding those instruments that:
• the entity designates at fair value at initial recognition; or
• are held for trading.

Financial instruments at cost are investments in residual interests that do not have a quoted market price
in an active market, and whose fair value cannot be reliably measured.

Financial instruments at fair value comprise financial assets or financial liabilities that are:
• derivatives;
• combined instruments that are designated at fair value;
• instruments held for trading. A financial instrument is held for trading if:
– it is acquired or incurred principally for the purpose of selling or repurchasing it in the near-term; or
– on initial recognition it is part of a portfolio of identified financial instruments that are managed
together and for which there is evidence of a recent actual pattern of short term profit-taking;
– non-derivative financial assets or financial liabilities with fixed or determinable payments that are
designated at fair value at initial recognition; and
– financial instruments that do not meet the definition of financial instruments at amortised cost or
financial instruments at cost.

SAMRC ANNUAL REPOR T 2025-26 275