HDA Annual Report

ANNUAL REPORT 2023/24

Notes to the Annual Financial Statements

Restated 2023

Figures in R’000

2024

31. Financial risk management (continued)

The HDA has invested any surplus cash in a short term money market account. The interest rates on this account fluctuates in line with movements in current money market rates. Credit Risk Credit risk consists mainly of cash deposits, cash and cash equivalents, derivative financial instruments and trade debtors. The HDA deposits cash only with major banks with high quality credit standing and limits exposure to any other counter party. The HDA receives grant funding from the government through the Department of Human Settlements, therefore, its exposure to credit risk is minimal. Receivables The receivables are exposed to a low risk and amounts overdue are owing by other government institutions.

The maturity analysis of payables at reporting date were as follows:

Payables Not past due

150 860

701 199

Past due 60 days Past due 90 days

-

-

2 257

2 415

Finance lease obligations Projected repayment - less than 1 year

351

-

Projected repayment - 31 March 2024

1 459

-

Market Risk Market risk is the risk that the fair value of 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. The entity is only exposed to interest rate risk. See cash and cash equivalents below. Interest Rate Risk Interest rate risk results from the cash flow and financial performance uncertainty arising from interest rate fluctuations. Financial assets and liabilities affected by interest rate fluctuations include bank and cash deposits. This is a risk that fair value or future cash flows from financial instruments will fluctuate as a result of changes in the market interest rates. Values in the financial instruments may change, thus resulting in both potential gains and losses. The HDA’s activities do not expose it to significant market interest rate risks. Therefore, there are no procedures in place to mitigate these risks.

Cash in the bank account is kept at a minimum in order to maximise interest earned on cash.

155