HDA Annual Report

ANNUAL REPORT 2023/24

Notes to the Annual Financial Statements

Restated 2023

Figures in R’000

2024

32. Going concern

Legislative and other factors • Compliance with all laws and regulations applicable to the Agency is currently a priority for the Board. All identified risks on compliance are continuously being dealt with and appropriate controls are being put in place to detect and act upon any compliance requirements which might arise. There is no known or reported intention by Parliament to repeal the HDA Act that may cast any real material uncertainty onto the Agency’s continued existence. Consequently, the Board does not expect any material uncertainty over the Agency’s ability to continue as going concern in the foreseeable future. The Agency was appointed during the financial year of 2020/2021 for three roles in upgrading of informal settlement programme; Implementing Agent, Programme management and Fund management. According to the addendum of the fund agreement, the agency is eligible for a 2.5% fund management fee on expenditure incurred throughout the programme. The agency did not recognise the fund management fee as revenue in the accounting records in the previous financial periods. The error has been corrected by restating each of the affected financial statement line items for the prior periods as follows: • 33. Prior period errors (A) Fund management fees

The Agency’s annual financial statements have been prepared based on accounting policies applicable to a going concern. This basis assumes that there will be funds available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business. The ability of the Agency to continue as a going concern is dependent on many factors and indicators. The Board and Management has considered, among other, the following relating to financial, operating and legislation towards the assessment of going concern: The budgets for the 2024/25 financial year indicate that the ongoing operation will be return a surplus and positive cash flows. The Agency has a positive net asset position of approximately R280 million (2023: R270 million) The Agency has positive cash balances at year end, is in a net current asset position and has a favourable current ratio of 1:1 (2023: 1,11) The Agency has secured the necessary fiscal backing as supported by the approved MTEF allocation and various signed funding agreements and implementation protocols in place to fund the HDA and to continue in operation for the foreseeable future. • • • Financial indicators •

Operational indicators •

The Entity is looking to strengthen relationships further and venture into new areas of revenue generation by engaging in its primary mandate in future.

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