BANKSETA AR 31 AUGUST

ANNUAL FINANCIAL STATEMENTS NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2022

20.

FINANCIAL INSTRUMENTS (CONTINUED)

20.6 Exposure to credit risk The carrying amounts of financial assets that represent the maximum exposure to credit risk are as follows and approximates the fair value:

20.7 Credit quality The credit quality of the financial assets are sound. Cash and cash equivalents are mainly fixed deposits at the well-established financial institutions approved by National Treasury. No security is held for these items Receivables from exchange transactions is mainly the interest due on these fixed deposits which is capitalised on the first business day of the following month and deposits on office accommodations with reputable well established companies. Receivables from non-exchange companies arise from reversals from SARS on SDL received and in most cases is recoverable from future SDL receipts.

2021/22

2020/21

R’000

R’000

Cash and cash equivalents

1 212 576

1 062 015

3 501 *

Receivables from exchange transactions

1 321

1 213 897

1 065 516

* Prior year accounts receivables figure restated to exclude prepayments. See note 20.9.

The following methods and assumptions are used to determine the fair value of each class of financial instrument:

Cash and cash equivalents Cash and cash equivalents comprise cash held by the SETA and short-term bank deposits with an original maturity of three months or less. The carrying amount of these assets approximates their fair value. Receivables The carrying amount of accounts receivable is net of allowance for any doubtful debt, estimated by the Accounting Authority based on prior experience. The carrying amount of these assets approximates their fair value. Payables The carrying amount of account and other payables approximates fair value due to the relatively short term maturity of these financial liabilities.

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PART E: FINANCIAL INFORMATION | BANKSETA ANNUAL REPORT 2021/22