Anglo American Annual Report 2012

25. FINANCIAL RISK MANAGEMENT AND DERIVATIVES continuedThe expected undiscounted cash flows of the Group’s financial liabilities (including associated derivatives), by remaining contractual maturity, based onconditions existing at the balance sheet date are as follows:2012 2011Within one year One to two years Within one year One to two yearsUS$ millionFixedinterestFloatinginterestCapitalrepaymentFixedinterestFloatinginterestCapitalrepaymentFixedinterestFloatinginterestCapitalrepaymentFixedinterestFloatinginterestCapitalrepaymentFinancial liabilities(excluding derivatives) (647) (202)(1)(6,981) (493) (163) (2,336) (549) (181) (5,962) (1) (549) (127) (2,433)Net settled derivatives (2) 619 (389) (127) 485 (253) (27) 470 (246) 2 470 (250) (140)(28) (591) (7,108) (8) (416) (2,363) (79) (427) (5,960) (79) (377) (2,573)Fixedinterest2012 2011Two to five years Greater than five years Two to five years Greater than five yearsFloatinginterestCapitalrepaymentFixedinterestFloatinginterestCapitalrepaymentFixedinterestFloatinginterestCapitalrepaymentFixedinterestFloatinginterestCapitalrepaymentUS$ millionFinancial liabilities(excluding derivatives) (1,064) (218) (5,746) (619) (67) (7,695) (798) (254) (6,551) (354) (104) (3,952)Net settled derivatives (2) 1,058 (551) (464) 616 (308) (126) 761 (305) (468) 350 (127) (219)(6) (769) (6,210) (3) (375) (7,821) (37) (559) (7,019) (4) (231) (4,171)(1)Assumes maximum cash outflow in respect of third party guarantees issued by the Group and repayment of all short term borrowings with no refinancing.(2)The expected maturities are not materially different from the contracted maturities.The Group had the following undrawn committed borrowing facilities at 31 December:US$ million 2012 2011Expiry dateWithin one year (1) 2,923 1,781Greater than one year, less than two years 569 1,268Greater than two years, less than five years 5,765 5,294Greater than five years – 769,257 8,419(1)Includes undrawn rand facilities equivalent to $1.5 billion (2011: $1.6 billion) in respect of a series of facilities with 364 day maturities which roll automatically on a daily basis, unless noticeis served.Market riskMarket risk is the risk that financial instrument fair values will fluctuate due to changes in market prices. The significant market risks to which the Group isexposed are foreign exchange risk, interest rate risk and commodity price risk.Foreign exchange riskAs a global business, the Group is exposed to many currencies principally as a result of non-US dollar operating costs and to a lesser extent, from non-USdollar revenues. The Group’s policy is generally not to hedge such exposures as hedging is not deemed appropriate given the diversified nature of the Group,though exceptions can be approved by the Group Management Committee.In addition, currency exposures exist in respect of non-US dollar approved capital expenditure projects and non-US dollar borrowings in US dollar functionalcurrency entities. The Group’s policy is that such exposures should be hedged subject to a review of the specific circumstances of the exposure.The exposure of the Group’s financial assets and liabilities (excluding intra-group loan balances) to currency risk is as follows:Financial statementsFinancialassets(excludingderivatives)Impact ofcurrencyderivatives (1)DerivativeassetsTotal financialassets –exposure tocurrency risk2012 2011Financialassets(excludingderivatives)Impact ofcurrencyderivatives (1)DerivativeassetsTotal financialassets –exposure tocurrency riskUS$ millionUS dollar 9,241 (64) 808 9,985 10,639 (186) 742 11,195Rand 3,894 64 37 3,995 5,761 186 98 6,045Brazilian real 728 – – 728 839 – – 839Sterling 123 – 1 124 467 – – 467Australian dollar 494 – – 494 383 – – 383Euro 45 – 1 46 9 – – 9Other currencies 561 – 1 562 382 – – 382Total financial assets 15,086 – 848 15,934 18,480 – 840 19,320Financialliabilities(excludingderivatives)Impact ofcurrencyderivatives (1)DerivativeliabilitiesTotal financialliabilities –exposure tocurrency risk2012 2011Financialliabilities(excludingderivatives)Impact ofcurrencyderivatives (1)DerivativeliabilitiesTotal financialliabilities –exposure tocurrency riskUS$ millionUS dollar (8,269) (8,492) (1,046) (17,807) (6,970) (5,282) (1,096) (13,348)Rand (3,287) (5) (35) (3,327) (3,595) (37) (16) (3,648)Brazilian real (1,597) 1,119 – (478) (1,608) 1,138 – (470)Sterling (913) 785 – (128) (1,181) 740 – (441)Australian dollar (422) – – (422) (564) – – (564)Euro (6,601) 6,593 – (8) (3,436) 3,428 – (8)Other currencies (1,092) – – (1,092) (473) 13 – (460)Total financial liabilities (22,181) – (1,081) (23,262) (17,827) – (1,112) (18,939)(1)Where currency derivatives are held to manage financial instrument exposures, the notional principal amount is reallocated to reflect the remaining exposure to the Group.Anglo American plc Annual Report 2012 169