RAND WATER PROVIDENT FUND ANNUAL REPORT 2022-2023

Price risk Price risk is the risk that the value and/ or future cash flows of a financial instrument will fluctuate as a result of changes in market prices. Interest rate risk Interest rate risk is the risk that the value and /or future cash flows of financial instruments will fluctuate as a result of changes in interest rates. The Board of Fund monitors exposures to interest rate risk by using quarterly investment reports. Currency risk Currency risk is the risk that the value of an instrument will fluctuate in Rands owing to changes in foreign exchange rates. The fund’s exposure to currency risk is mainly in respect of foreign investments made on behalf of members of the fund for the purpose of seeking desirable international diversification of investments. The Board of Fund monitors this aspect of the fund’s investments and limits it to SARB limits of assets. Investments Investments are valued at fair value and therefore susceptible to market fluctuations. Investments are managed with the aim of maximising the fund’s returns while limiting risk to acceptable levels within the framework of statutory requirements. Continuous monitoring takes place to ensure that appropriate assets are held where the liabilities are dependent upon the performance of specific portfolios of assets and that a suitable match of assets exists for all non–market related liabilities. The local equities had good impact on investment performance of Rand Water Provident Fund as reported for the period ended 30 June 2023. The local markets performed better within the 12-month period ending June 2023 in the midst of loadshedding and high interest rates. 13. Related party transactions The following transactions between the participating employer and the fund occurred during the period:

Related party

Relationship

Description Contributions Contributions

Transactions

Rand Water

Participating Employer

R209 420 008

Member Trustees

Members

R 713 244

Rand Water

Administrator

Admin Fee

R 12 087 067

The participating employer made contributions to the fund of R 209 420 008 (2022: R194 868 108). Of this sum, R 66 130 843 (2021: R 53 971 505) was applied to risk insurance and administration costs leaving a balance for member retirement funding of R143 141 765 (2022: R 140 946 929). The participating employer covers the staff and associated costs in respect of the Fund and is compensated by payment of an administration fee of R 12 087 067 (2022: R 11 393 522). There were no funds invested in the participating employer as at 30 June 2023. There were no amounts invested in the participating employer as of 30 June 2023.

52 Rand Water Provident Fund Annual Report | 2022-2023