Interfront Annual Report 2022

PART E: FINANCIAL INFORMATION 109 24. Risk Management (continued) International Frontier Technologies SOC Ltd Trading as Interfront Financial Statements for the year ended 31 March 2022 Foreign exchange risk The entity provides services to one international customer and is exposed to foreign exchange risk arising from currency exposures, primarily with respect to the EURO. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities. The entity does not curently hedge foreign exchange fluctuations. Foreign currency exposure at statement of financial position date Current assets 2022 2021 Receivables from exchange transactions 74 167 72 333 Exchange rates used for conversion of foreign items were: EURO 16.17 17.38 25. Going Concern The financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be 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. A major portion of revenue is currently attributable to a single customer, the Shareholder. This is expected to continue in the near future. 26. Events After The Reporting Date Interfront entered into an agreement for the transfer of 43 employees from Shandon Business Solutions in accordance with Section 197 of the Labour Relations Act No. 66 of 1995. The effective date of the transfer was 1 April 2022. A recruitment fee of R4,835,814 is payable in terms of the agreement. The agreement enables SARS, through its subsidiary Interfront, to bring continued development and support of the eFiling and Mobi-applications in-house, therefore reducing the risk of reliance on external service providers. 27. Reconciliation between Budget and Statement of Financial Performance SARS as principal of its wholly owned subsidiary, incorporates Interfront in its parlimentary and ultimate statutory accountability processes. Interfront is included inter alia in the SARS strategic plan, budget, monthly and annual reporting, as well as the consolidated annual financial statements. Interfront functions primarily as a service provider supporting customs modernisation. Within these overall objectives, Interfront is governed by its Board under close scrutiny of SARS. Interfront is thus excluded from the detailed reporting requirements based on paragraph 3 GRAP 24.