Page 81 - Playhouse Annual Report 2021:22

Notes to the Annual Financial Statements (continued)
Annual Financial Statements for the year ended 31 March 2022
March
March
2022
2021
R
R
27. IMPACT OF COVID-19 AND GOING CONCERN
The Playhouse Company resumed operations in middle July 2020 by filming productions presented on the theatre stage and recordings done in the state of the arts recording studio in line with the protocols issued by the Minister of Sports, Arts and Culture on 3 July 2020. The recorded events were steamed using various online platforms to showcase the productions and this increased the number of audiences in attendence.
The Playhouse Company continued to stage productions and accepted patrons in the theatre venues based on the capacity restrictions in the updated COVID-19 regulations.
The Playhouse Company performed a detailed asset verification and assessment of the property, plant and equipment towards the end of the financial year. Property, plant and equipment identified as either broken, impaired or obsolete were written off. The remaining property, plant and equipment were in good condition and not impacted by the lockdown regulations implemented in South Africa. Scheduled repairs and maintenance were done throughout the year and completed as per the plan.
The current assets comprising inventories and trade and other receivables are not material in nature, making up about 1% of the total assets. They were not impacted by the lockdown regulations implemented in South Africa.
The cash and cash equivalents comprised of cash in the bank and cash invested with the major banks. Whilst the interest rate increased marginally during the Covid pandemic period, the cash and cash equivalents were not impacted.
The trade and other payables are not material in nature, making up about 2% of the total net assets and liabilities. They were not impacted by the lockdown regulations implemented in South Africa.
The pandemic required management to exercise significant judgement in the going concern assessment, through the preparation of forecasts, due to the COVID-19 pandemic regulations.
The going concern assumption is evaluated based on information available up to the date on which the AFS are approved by Council. While there is widespread uncertainty regarding the extent of the financial impact of the COVID-19 global pandemic, the National Department of Sport, Arts and Culture issued The Playhouse Company a 3 year funding commitment for operational and capital expenditure.
Management is not aware of any other material event which occurred after the reporting date and up to the date of this report, the knowledge of which would affect the users of these statements to make proper evaluations and decisions.
Management is satisfied that the impact of the COVID-19 pandemic and lock-down restrictions has been adequately considered in preparing the annual financial statements.
28. NON-ADJUSTING EVENTS AFTER THE REPORTING DATE: FLOODS IN KWAZULU-NATAL
On 11 April 2022, KwaZulu-Natal (KZN) province received in excess of 300mm of rainfall over a 24-hour period. The KwaZulu-Natal authorities indicated that homes, businesses, roads, bridges as well as electricity and water infrastructure had been damaged or destroyed. On Wednesday 13 April, the KwaZulu-Natal floods were declared a provincial disaster.
The Playhouse Company buildings were assessed and some damage occurred but this did not result in an impairment of any of the buildings or assets. The remedial actions required are to waterproof and seal some of the affected roof areas in the 3 buildings and the estimated cost is R1.15 million. Management will cover this cost from the repairs and maintenance budget.
Management is satisfied that the impact of the floods affecting the conditions of the assets and business continuity has been adequately considered in preparing the annual financial statements.
29. RECONCILIATION BETWEEN BUDGET AND STATEMENT OF FINANCIAL PERFORMANCE
Net deficit per the statement of financial performance Adjusted for:
Increase in capital works grant from DSAC
Decrease in grant received
Increase in sponsorship for the staging of productions Increase in production income
Increase in liquor bar and sundry income
Increase in finance income
Increase (Decrease) in production expenditure
Decrease in compensation to employees as certain positions not filled
Increase (Decrease) Increase in consumables, electricity and cleaning
Increase (Decrease) in council expenses
(Decrease) Increase in telephone expenses
Increase (Decrease) in repairs and maintenance
Decrease in other operating expenses
Depreciation
Capital expenditure budgeted but not processed to statement of financial performance Net deficit per approved budget (including capex)
(16 632 446)
10 183 307 728 000 (150 000) (33 358) (20 895) (115 688) (653 361) (1 789 165) (2 638 955) (361 103) 46 741 (1 330 647) (1 830 271) 9 764 781 (56 364 000) (61 197 060)
(10 096 148)
9 025 053
-
(2 800 000)
(1 282 710)
(64 392)
(127 097)
698 699
(2 002 053)
462 886
197 396
(25 321)
1 056 870
(794 793)
9 086 314
(51 449 186)
(48 114 482)
Annual Report 2021/2022 79