TPCC Annual Report 2008.indd - HeidelbergCement

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Tanzania Portland Cement Company Ltd, Annual Report 2008 The basic and diluted earnings per share are the same as there are no convertible instruments. 58 2008 2007 Profit attributable to ordinary equity holders (TZS’ 1000) 34,962,320 30,111,586 Numbers of shares 179,923,100 179,923,100 Basic earning per share (TZS) 194.32 167.36 Diluted earning per share (TZS) 194.32 167.36 38. Financial risk management objectives and policies The Company’s principal financial instruments comprise treasury loans and trade payables. The main purpose of these financial instruments is to raise finance for the Company’s operations. The Company has various financial assets such as trade receivables and cash and short-term deposits, which arise directly from its operations. The main risks arising from the Company’s financial instruments are cash flow interest rate risk, liquidity risk, foreign currency risk and credit risk. The board reviews and agrees policies for managing each of these risks which are summarised below. Treasury risk management: The Company operates a treasury function to provide competitive funding costs, invest and monitor financial risk. The Company does not use derivative financial instruments for speculative purposes. Liquidity risk: The Company does not face any liquidity risk as it has sufficient funds to cover its working capital needs for the foreseeable future. Foreign currency risk: Foreign currency risk is managed at an operational level and monitored by the Finance Division. Exposure to losses from foreign liabilities is managed through prompt payment of outstanding liabilities and forward purchase of foreign currencies. The following table demonstrates the sensitivity to possible changes in the exchange rate between the Tanzanian Shilling and foreign currencies (mainly US dollar), with all other variables held constant, of the Company’s profit before tax (due to changes in the fair value of monetary assets and liabilities). Net effect based on balance sheet as at 31 December 2008 Increase/decrease in the value of TZS vs. other currencies Effect on profit before tax TZS’000 +10% +3,800,000 -10% -3,800,000 Interest rate risk: The Company has adopted a non- speculative approach to the management of interest rate risk. Credit risk management: Potential concentration of credit risk consists principally of short term cash and trade debtors. The Company deposits short term cash surpluses only with banks of high credit standing. Trade debtors are presented
Tanzania Portland Cement Company Ltd, Annual Report 2008 net of allowance for doubtful debts. For all exports, full upfront payment is demanded. Accordingly, the Company has no significant concentration of credit risk that has not been adequately provided for. Capital management The primary objective of the Company’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value. The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years end 31 December 2008 and 31 Decem- ber 2007. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Com- pany’s policy is to keep the gearing ratio between 15% and 35%. The Company includes within net debt, interest bear- ing loans and borrowings, trade and other payables, less cash and cash equivalents, excluding discontinued operations. 59
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Tanzania Portland Cement Company Li
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Table of contents Tanzania Portland
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Kwa Wanahisa, TANZANIA PORTLAND CEM
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Maelezo mafupi ya Mwenyekiti Tanzan
Page 9 and 10: Administrative costs were affected
Page 11 and 12: kutokana na uagizaji wa klinka kuto
Page 13 and 14: Mradi wa Upanuzi Mradi wa upanuzi w
Page 15 and 16: Tanzania Portland Cement Company Lt
Page 19 and 20: Taarifa Muhimu za Kampuni Eneo la s
Page 21 and 22: Directors’ remuneration Tanzania
Page 25 and 26: Malipo kwa Wakurugenzi Tanzania Por
Page 27 and 28: Walemavu Tanzania Portland Cement C
Page 31 and 32: Balance sheet Tanzania Portland Cem
Page 33 and 34: Cash flow statement Tanzania Portla
Page 35 and 36: IFRS 8 Operating Segments Tanzania
Page 37 and 38: Revenue recognition Tanzania Portla
Page 47 and 48: IFRIC 16 Hedges of a Net Investment
Page 49 and 50: 13. Administrative expenses Tanzani
Page 51 and 52: 20. Inventories Tanzania Portland C
Page 53 and 54: 25. Other borrowings Tanzania Portl
Page 57 and 58: 29. Related party transactions Tanz
Page 59: 33. Incorporation The Company is in
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Page 68: Tanzania Portland Cement Company Lt
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