CGE ANNUAL REPORT

2022/23 ANNUAL REPORT

Financial Statements for the year ended 31 March 2023

Notes to the Financial Statements for the year ended 31 March 2023

Figures in Rand

2023

2022

23.

Risk management

Financial risk management In ordinary course of operations, an entity’s activities expose it to a variety of financial risks: cash flow interest rate risk, credit risk and liquidity risk. It is therefore a policy of CGE to disclose information that enables the user of its financial statements to evaluate the nature and extent of risk arising from financial instruments to which the CGE is exposed on the reporting date. CGE’s overall risk management approach involves the work done by the Internal Audit who report to the Audit and Risk Committee on risks, internal control, financial management and compliance matters. The CGE’s risk to liquidity is a result of the funds available to cover future commitments. The CGE manages the liquidity risk through an on-going review of future commitments and the cash flows arising from allocations by National Treasury. The financial liabilities maturity analysis of the CGE, for the reporting period shows contractual cash outflows on an undiscounted basis as below. The balances due within 12 months equal their carrying balances as the impact of discounting is not significant. The CGE’s exposure to the interest rate is limited, as the CGE has no significant interest-bearing liabilities. Furthermore, other than cash held in the bank account, the CGE has no significant interest-bearing assets, the entity’s income and operating cash flows are substantially independent of changes in market interest rates.

At 31 March 2023

Less than 1 year

Outflow

9 436 421

At 31 March 2022

Less than 1 year

Outflow

9 257 827

Credit risk and Interest rate risk Credit and interest rate risks consists mainly of cash deposits, cash equivalents and other receivables. The CGE only deposits cash with major banks and limits exposure to any other counter party. The credit quality of the bankers was downgraded to BB in March 2020 using Fitch Ratings and in November 2022 the rating remains unchanged.The risk of default on receivables from non-exchange transactions is very low . The CGE’s general exposure to credit risk is very minimal.

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