CFSL - Annual report 2018

EXPLANATORY NOTES 30 SEPTEMBER 2018 4. FINANCIAL RISK MANAGEMENT (CONT’D) 4.1 Financial risk factors (cont’d) (d) Credit risk (Cont’d) The ageing analysis of financial assets past due but not impaired is as follows: GROUP Less than 30 days 31 to 60 days 61 to 90 days More than 90 days Total 30 September 2018 MUR m MUR m MUR m MUR m MUR m Net investment in leases and other credit agreements 1,104.8 353.3 134.2 294.7 1,887.0 Loans and advances 366.5 98.5 97.0 141.4 703.4 Other assets - - - 0.6 0.6 1,471.3 451.8 231.2 436.7 2,591.0 GROUP Less than 30 days 31 to 60 days 61 to 90 days More than 90 days Total 30 September 2017 MUR m MUR m MUR m MUR m MUR m Net investment in leases and other credit agreements 846.1 311.3 145.9 353.3 1,656.6 Loans and advances 258.4 120.7 48.3 157.1 584.5 Other assets 1.4 - - - 1.4 1,105.9 432.0 194.2 510.4 2,242.5 The maximum exposure to credit risk at the reporting date equals the carrying amount of the respective financial assets and is as follows: Group Company Sep-18 Sep-17 Sep-18 Sep-17 MUR m MUR m MUR m MUR m Bank balances and cash 526.1 505.4 107.9 113.5 Deposits with banks 1,026.0 2,727.2 524.5 2,244.4 Net investment in leases and other credit agreements 7,637.7 6,609.7 - - Loans and advances 2,865.6 2,367.6 1,105.5 2,272.8 Investments in financial assets 1,597.7 8.0 1,597.7 - Other assets 605.5 497.5 373.0 368.4 14,258.6 12,715.4 3,708.6 4,999.1 The Group held collaterals on finance lease which include heavy equipments, vehicles and other equipments. The fair value of collaterals of impaired lease facilities is estimated at MUR 159m (2017: MUR 108m). The fair value of the collaterals received in respect of the corporate loans, consisting principally of properties were MUR 382.6m (2017: MUR 277.6m). The Group may recover amounts not settled by the debtors from the customers for factoring facilities with recourse while the non-recourse factoring facilities are insured. Other credit agreements and loans with exposure of MUR 6,641m (2017: MUR 5,563m) are mitigated by insurance covers. The exposure in respect of credit cards is not backed by collaterals. (e) Liquidity risk Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk arises because of the possibility that the Group might be unable to meet its payment obligations when they fall due as a result of mismatches in the timing of the cash flows under both normal and stress circumstances. Such scenarios could occur when funding needed for illiquid asset positions is not available to the Group on acceptable terms. To limit this risk, management has arranged for diversified funding sources including deposits from customers and keeping committed credit facilities with banks. The Group also maintains a certain level of cash and deposits with banks to cater for its liquidity needs. 90 CIM FINANCIAL SERVICES LTD ANNUAL REPORT 2018