South African Local Government Association
Schedule 3A public entity i.t.o. the Public Finance Management Act, 1999 and recognised i.t.o. the
Organised Local Government Act, 1997
Annual Financial Statements for the year ended 31 March 2017
Notes to the Annual Financial Statements
2017
Figures in Rand
34.
2016
Risk management (continued)
2017
Maturity analysis
Not later than one month
Later than one month and not later than three months;
Later than three months and not later than one year; and
Later than one year and not later than five years.
Trade payables
27 223 773
24 287 721
7 293 870
-
58 805 364 Other payables
-
-
15 596 065
21 847 477
37 443 542
Trade payables
21 102 880
20 672 104
10 172 218
-
51 947 202 Other payables
-
-
14 592 177
16 826 079
31 418 256
2016
Maturity analysis
Not later than one month
Later than one month and not later than three months;
Later than three months and not later than one year; and
Later than one year and not later than five years.
Values presented in the maturity analysis are undiscounted according to the terms of the instrument.
These amounts will all be settled in cash. Trade payables are considered to mature in 30 days after year
end as these suppliers require 30 days settlement terms. No changes between the current and prior
year assumptions have been made.
Credit risk
Credit risk consists mainly of cash deposits, cash equivalents, derivative financial instruments and
trade receivables. The entity only deposits cash with major banks with high quality credit standing
and limits exposure to any one counter-party.
Trade receivables comprise of municipalities which are invoiced once a year based on their budgeted
salary cost. There is no independent rating, therefore management assesses the credit quality of the
customer, taking into account its financial position, past experience and other factors. The entity
establishes an impairment that represents its estimate of incurred losses in respect of trade receivables.
Market risk
Interest rate risk
SALGA’s interest rate risks arises from market and economic factors, loans and other payables, cash
and cash equivalents and loans and other receivables. The entity’s exposure to interest rate risk is
minimal due to the following factors:
•
•
•
no interest is levied on overdue trade receivables;
interest paid on trade payables is limited as it is the policy of the entity to settle within the
credit terms, cash flow permitting in order to comply with the PFMA requirements; and
the PFMA does not allow for the entity to utilise bank overdrafts, without prior approval of the
Executive Authority and Minister of Finance.
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