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MAC3702 ASSIGNMENT 2 SEMESTER 2 LATEST A+ 2023 100%

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MAC3702 ASSIGNMENT 2 SEMESTER 2 LATEST A+ 2023 100%

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  • October 8, 2023
  • 15
  • 2023/2024
  • Exam (elaborations)
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QUESTION 1

Draft a report to the Portfolio Committee on Energy in the National Assembly, in which
you present a risk assessment and an analysis of financial and non-financial
information of Eish-com.

a. The risk assessment should include the following information, for each point
raised:
i Identification of business risk involved;
ii The consequences/impact on the business; and
iii The mitigation of the identified business risk

To: Portfolio Committee on Energy in the National Assembly

From: MAC3702 Students

Date: 05 September 2022

Subject: Risk assessment and an analysis of financial and non - financial
information of Eish-com

(i) Risk Identification (ii) The consequences / (iii) Mitigation
impact on the business

Metros, municipalities and The company will not have Improve debt collection
government departments the cash flow to sustain
Charge interest on
sometimes fail to pay or operations
overdue accounts Offer
delay payment
discounts for early
payment

Defaulting entities may
be forced to use prepaid
electricity

There high carbon Environmental damage and Turn to alternative
emissions due to the coal health risks to employees sources of power such
powered stations and the public which can as nuclear Ensuring all
lead to litigations safety precautions are
undertaken Buying

, involving huge sums machinery that limit the
carbon emissions

NERSA might not approve This will affect profitability Lobby politicians to put
the required increases and cash flows of the entity pressure on NERSA to
approve sustainable
increases

Negotiating with NERSA
on time and having long
term agreements which
enhance planning

Currency risk if the rand The capital repayments Hedging
deteriorates against foreign and interest obligations on
Reducing foreign debt
currencies foreign denominated debt
will increase in Rand terms Including clauses in
agreements that limit the
damage, for example
agreeing with the loan
provider on a maximum
rate in case of rate
fluctuations

Ageing infrastructure may Reduced electricity Replacing aged
fail to work as expected generation resulting in infrastructure
increased load shedding Maintenance of
infrastructure

Strategy risk as New leadership may not be Constitution that limits
implemented strategies having the capabilities to interference in the
may fail due to the ever execute the strategies appointment and firing of
changing leadership implemented by previous top management
management. Continuous
Appointing capable
changes may lead to lack
management with
of continuity
required qualifications,

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