Interfront Annual Report 2022

PART E: FINANCIAL INFORMATION 110 International Frontier Technologies SOC Ltd Trading as Interfront Financial Statements for the year ended 31 March 2022 28. Irregular Expenditure 2022 2021 Opening balance as previously reported - 1 402 552 Opening balance as restated - 1 402 552 Irregular expenditure condoned and to be removed - (1 402 552) Closing balance - - Amount condoned The irregular expenditure related to findings by internal auditors during their audit of November 2019. The internal auditors claimed National Treasury approval needed to be obtained for deviating from a competitive bidding process for staff parking amounting to R1,201,768 over a seven year period. Interfront believed that the procurement fell within the definition of a sole supplier and followed the related procurement process. A secondly instance was raised on placement fees that were paid to recruitment agencies where the Service Level Agreements had expired, amounting to R200 784. At the time the CV’s were received there was no valid Service Level Agreement in place. However, after concluding the interview and once the candidate passed the technical evaluation, the agreement was renewed before any appointments were made. The alleged irregular expenditure was condoned by the Board on 10 June 2021 as there was no indication of fraud, malicious intent or financial losses. 29. Change in Estimate Property, Plant and Equipment Management assesses the useful lives of property, plant and equipment and intangible assets annually. In the current period, the estimated useful lives of the below asset classes were revised. The revision had the following impact on depreciation charges for the current period: - Asset class Prior estimate Current estimate Change in estimate Depreciation Depreciation Leasehold improvements 10 years 12 years (472 203) 525 531 94 787 Furniture & fittings 5 to 10 years 5 to 15 years (149 111) 180 363 123 170 Security equipment 10 years 12 years (2 752) 1 780 1 978 IT equipment 3 to 10 years 3 to 12 years (1 735 870) 2 540 275 1 088 324 IT software 3 to 5 years 3 to 12 years (690) 893 483 555 (2 360 626) 4 141 432 1 308 814 30. Prior-Year Adjustments Presented below are those items contained in the Statement of Financial Position, Statement of Financial Performance and Cash Flow Statement that have been affected by prior-year adjustments: