Page 352 - Department of Social Development Annual Report 2021

PART E: FINANCIAL INFORMATION

SOCIAL RELIEF FUND

Notes To The Financial Statements Of The Social Relief Fund For The Year Ended
31 March 2021.

7. Risk Management

7.1.1 Market Risk
Market risk is the risk that changes in market prices. Interest rates will affect the Social Relief Fund. The objective of
market risk management is to manage and control market risk exposure within acceptable parameters while optimizing
return. The Social Relief Fund does not manage this risk aggressively as the investments of funds are determined by the
Minister of Social Development and the Minister of Finance. Within these parameters, funds are invested with reputable
financial institutions.

7.1.2 Credit Risk
Credit risk is the risk of financial loss to the Social Relief Fund if a financial institution to a financial instrument fails to
meet its contractual obligations.
The Social Relief Fund exposure to credit risk is influenced only by the individual characteristics of the financial
institutions where funds are deposited or invested. Reputable financial institutions are used for investing and cash
handling purposes.

2020/21 2019/20
R’000 R’000
Financial Assets
Cost 41 741 38 990
Additions during the year 1 598 2 751
Closing Balance 43,339 41 741

7.1.3 Liquidity risk
Liquidity risk is the risk that Social Relief Fund will not be able to meet its financial obligations as they fall due. The Social
Relief Fund’s approach to managing liquidity is to ensure that investment terms chosen will ensure that it will always have
sufficient liquidity to meet its liabilities when due.

2020/21 2019/20
R’000 R’000

Cash and Cash Equivalents
Cash and Balances with Banks 21 19
Investments 43 336 41 741
Total 43 357 41 760

352 DEPARTMENT OF SOCIAL DEVELOPMENT ANNUAL REPORT 2020/21