BANKSETA AR 31 AUGUST

ANNUAL FINANCIAL STATEMENTS NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2022

28.

GOING CONCERN (CONTINUED)

28.1 Covid-19 related uncertainties impact on going concern The Covid pandemic that began in 2020 is ongoing. South Africa lifted all restrictions in July 2022. However, the threat of new Covid waves is still present. Should a new wave materialise, the government may adjust the Alert level and re-impose restrictions on business operations. This will in turn further negatively impact economic conditions and stakeholders profitability, which in turn impacts employment within the banking and alternative banking sector and SDL revenue to the BANKSETA. BANKSETA acknowledges the uncertainty this presents and the potential threat to BANKSETA’s revenue. However, BANKSETA management is of the view that the governments plans for vaccinations and the Covid health protocols already in place should reduce the likelihood for the need for severe Covid related business restrictions within the next 12 months that would impact the sector. 28.2 BUSA matter in respect of mandatory grant percentage In 2019, the court struck down the Minister’s reduction of the mandatory grants percentage from 50% to 20%. BUSA took this matter to court and the Minister’s action was invalidated. No new mandatory percentage has been pronounced. The Minister has taken a conciliatory approach to the matter and is currently engaging with BUSA. No developments on this matter can be reported as at year end. The BANKSETA has disclosed a contingent liability in regards to the matter in note 17, the timing and amount of this liability can not be reasonably estimated. Should the BANKSETA have to revert to the previous 50% mandatory rant percentage backdated to the court date, it would be over committed. However due to the timing of the discretionary grants payments the BANKSETA would be able to still pay liabilities as they fell due and would continue as a going concern. 28.3 Contributions towards Covid related alleviation skills development programmes In 2020/21 DHET conducted a study to determine the level of funds SETAs can contribute to Covid alleviation initiatives within skills development. In January 2021 an amount of R240 million was approved by the Board and communicated to DHET. DHET reverted shortly before year-end giving instruction of 4 skills development programmes that SETAs should direct such funds towards. Unfortunately, due to the short time lines BANKSETA could not put together the necessary discretionary funding window facility or tender to start these skills development programs before year end. The BANKSETA has committed to fund these projects with the 2021/22 surpluses approved by National Treasury in October 2021. The amounts are therefore included in discretionary grant commitments as at 31 March 2022. 28.4 Surplus retention and approval The BANKSETA has a surplus of R1 059 402 000 (2020/21: 964 769 000) as of 31 March 2022 as disclosed in note 17.1. The BANKSETA has applied to National Treasury to retain and utilise to fund the discretionary grants commitments. Should the BANKSETA forfeit this surplus to the fiscus, it is expected to still continue as a going concern, but would need to curtail some of the planned 2021/22 discretionary grant projects in order to cover the existing discretionary grant commitments at year end. The BANKSETA has adjusted its delivery methods and operations to be able to switch between hybrid operations if the need arises.

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PART E: FINANCIAL INFORMATION | BANKSETA ANNUAL REPORT 2021/22