Page 13 - UniZulu Annual Report 2020

Table 2: Going Concern Assessment
EVENTS OR CONDITIONS
ASSESSMENTS
Financial
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Net asset or net current asset position (liquidity – short term)
As at 31 December 2020, UNIZULU has accumulated funds of R2.2 billion and a net current asset position of R1.9 billion. Compared to the prior year, the net current asset position has improved significantly while the accumulated council-controlled funds are R914 million
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Fixed-term borrowings approaching maturity without realistic prospects of renewal or repayment; or excessive reliance on short-term borrowings to finance long-term assets (liquidity – long term)
UNIZULU only has one amortising loan with the Development Bank of South Africa with a carrying value of R19.3 million and has sufficient funds to meet the repayments
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Negative operating cash flows indicated by historical or prospective financial statements (solvency)
Positive cash flows after operating and investing activities have been generated. The positive net operating cash flows before investing activities totalled R610 million (2019: R347 million). After investing and financing activities, the net cash flow generated was R420 million (2019: R272 million)
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Substantial operating losses or significant deterioration in the value of assets used to generate cash flows (solvency)
UNIZULU is currently in a net asset position of R2.2 billion. A surplus of R158.1 million was generated for the year ended 31 December 2020. The asset base has been reviewed for impairments and adjusted for impairments where necessary. Student debt that was provided for impairment in previous years to the value of R10.9 million has been written off during the financial year
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Adverse key financial ratios
Most key ratios reflect positively with personnel costs as a percentage of income (excluding investment income) below the 62% benchmark
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Inability to pay creditors on due dates
UNIZULU has adequate funds to pay creditors timeously and cash and short-term financial assets exceed current liabilities comfortably
Operating Sustainability
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Loss of key management without replacement
The executive team had minimal vacancies during 2020, which is a significant improvement compared to the recent past
Other
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Non-compliance statutory requirements
No significant issues of non-compliance exist
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Pending legal or regulatory proceedings against the Entity that may, if successful, result in claims that are unlikely to be satisfied.
Existing claims against UNIZULU are considered immaterial and are adequately provided for and disclosed in the annual financial statements
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Changes in legislation or government policy expected to adversely affect the Entity
The #FeesMustFall campaign and subsequent announcement of funding for poor and working-class students have changed the funding landscape of higher education in South Africa. UNIZULU should benefit from increased funding due to its historical disadvantaged status
There are no events or conditions beyond the period of assessment that may cast significant doubt on UNIZULU’s ability to continue as a going concern. Based on the considerations and assessment above, Council has no reason to believe that the University will not be able to continue with its core business in the foreseeable future.
11 UNIVERSITY OF ZULULAND ANNUAL REPORT 2020