DC8 Z F Mgcawu AFS 2014-15 audited

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ZF MGCAWU DISTRICT
MUNICIPALITY

ANNUAL FINANCIAL STATEMENTS
for the year ended
30 June 2015
ZF MGCAWU DISTRICT MUNICIPALITY
ANNUAL FINANCIAL STATEMENTS
for the year ended 30 June 2015

INDEX

NO CONTENTS PAGE

1 General Information and Approval of Annual Financial Statements 3
2 Members of the Council 5
3 Foreword 7
4 Audit Report 8
5 Report of the Chief Financial Officer 12
6 Statement of Financial Position 17
7 Statement of Financial Performance 18
8 Statement of Changes in Net Assets 19
9 Cash Flow Statement 20

10 Statement of Comparison of Budget and Actual Amounts 21
11 Accounting Policies 36

12 Notes to the Annual Financial Statements 56
Appendixes:
13 A Schedule of External Loans 94
14 B Analysis of Property, Plant and Equipment 95
15 C Segmental Analysis of Capital Assets 96
16 D Segmental Statement of Financial Performance 97
17 E (1) Reconciliation of budgeted financial performance by 98
standard classification

18 E (2) Reconciliation of budgeted financial performance by 99
municipal vote

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ZF MGCAWU DISTRICT MUNICIPALITY
ANNUAL FINANCIAL STATEMENTS
for the year ended 30 June 2015

INDEX (continued)

NO CONTENTS PAGE

19 E (3) Reconciliation of budgeted financial performance 100
20 E (4) Reconciliation of budgeted capital expenditure 101

21 E (5) Reconciliation of budgeted cash flows 102
22 F Disclosure of Grants and Subsidies in terms of the Municipal
Finance Management Act 103

23 G Statement of remuneration of management 104

24 H Ratio Analysis 106

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ZF MGCAWU DISTRICT MUNICIPALITY
ANNUAL FINANCIAL STATEMENTS
for the year ended 30 June 2015

GENERAL INFORMATION

EXECUTIVE MAYOR
G. van Staden

SPEAKER
Z.S. Mjila (Deceased: 12/06/2015)

MEMBERS OF THE MAYORAL COMMITTEE
Executive Mayor: G. van Staden

Councillors: B. Sinxeve
P. Wetbooi
P.M.Mgcera
G.H. Mothibi

GRADING OF THE LOCAL AUTHORITY
Grade 3

AUDITORS
External – Auditor General of South Africa (AGSA)
Internal – Internal Audit Unit

PRIMARY BANKER
ABSA

REGISTERED OFFICE
c/o Upington 26 Avenue & Dr Nelson Mandela Drive
Upington
8801

Private Bag X6039
Upington
8800

Telephone: [phone] E-Mail: [email protected]
Facsimile: [phone] Website: http://www.zfm-dm.co.za

MUNICIPAL MANAGER
E. Ntoba

ACTING CHIEF FINANCIAL OFFICER
A. Kitching

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ZF MGCAWU DISTRICT MUNICIPALITY
ANNUAL FINANCIAL STATEMENTS
for the year ended 30 June 2015

MEMBERS OF THE COUNCIL

COUNCILLORS PROPORTIONAL COUNCILLORS

G. van Staden ANC Commencement: 03/06/2011
Commencement: 03/06/2011
Z.S. Mjila ANC
Deceased: 12/06/2015
B. Sinxeve ANC Commencement: 03/06/2011
G. H. Mothibi ANC Commencement: 03/06/2011
P.M. Mgcera ANC Commencement: 03/06/2011
A. M. van Wyk DA Commencement: 12/11/2014
C. Tieties DA Commencement: 03/06/2011
P.M. Kotze DA Commencement: 03/06/2011
P. Wetbooi ANC Commencement: 03/06/2011
K. Dodds ANC Commencement: 03/06/2011
M. Oliphant ANC Commencement: 03/06/2011
M. Mabilo TCF Commencement: 03/06/2011
J. Assegaai DA Commencement: 03/06/2011
D.Z Ntlanganiso ANC Commencement: 01/02/2013
S.P. May ANC Commencement: 03/06/2011
E. Mnyaka ANC Commencement: 03/06/2011
J. Thomas COPE Commencement: 01/07/2012
A. de Bruin COPE Commencement: 01/06/2014
A. Isaacs ANC Commencement: 03/06/2011
B. Bock ANC Commencement: 03/06/2011
J. Joseph DA Commencement: 20/08/2013

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ZF MGCAWU DISTRICT MUNICIPALITY
ANNUAL FINANCIAL STATEMENTS
for the year ended 30 June 2015
REPORT OF THE CHIEF FINANCIAL OFFICER
1. INTRODUCTION
It gives me great pleasure to present the financial position of ZF Mgcawu District Municipality at 30 June 2015 and the results of its operations
and cash flows for the year then ended.
These Annual Financial Statements have been prepared in accordance with Generally Recognised Accounting Practice (GRAP), issued by the
Accounting Standards Board (ASB) in accordance with Section 122(3) of the Municipal Finance Management Act, (Act No 56 of 2003). The
standards and pronouncements that form the GRAP Reporting Framework is set out in Directive 5 issued by the ASB on 11 March 2009.
The Statement of Financial Position at 30 June 2015 indicates a decrease in Net Assets, a decrease in Non-current Liabilities and an
increase in Current Liabilities.
The decrease in Net Assets is ascribed primarily to the decrease in Accumulated Surplus as a result of the deficit generated on the operating
account.
The decrease in Non-current Liabilities is primarily as a result of the decrease in Long-term Liabilities. The increase in Current Liabilities is
primarily as a result of the increase in Payables from Exchange Transactions and Unspent Conditional Grants and Receipts.
2. KEY FINANCIAL INDICATORS
Thefollowingindicators areself-explanatory. Thepercentages of expenditurecategories arewell withinacceptable normsandindicategood
governance of the funds of the Municipality.
Financial Statement Ratios:
INDICATOR 2015 2014
Surplus / (Deficit) before Appropriations ( 5 063 827) (8 807 347)
Surplus / (Deficit) at the end of the Year ( 8 350 180) (3 286 353)
Expenditure Categories as a percentage of Total Expenses:
Employee Related Costs 66.12% 55.95%
Remuneration of Councillors 5.45% 4.84%
Collection Costs 0.00% 0.00%
Depreciation and Amortisation 1.70% 1.71%
Impairment Losses 1.07% 2.13%
Repairs and Maintenance 0.96% 0.98%
Interest Paid 0.21% 0.35%
Bulk Purchases 0.00% 0.00%
Contracted Services 0.05% 0.13%
Grants and Subsidies Paid 6.85% 5.87%
General Expenses 17.40% 16.84%
Loss on Disposal of Property, Plant and Equipment 0.19% 11.22%
3. OPERATING RESULTS
Details of the operating results per segmental classification of expenditure are included in Appendix "D".
4. FINANCING OF CAPITAL EXPENDITURE
TheexpenditureonAssetsduringtheyearamountedtoR780160(2013/14:R1736716). FulldetailsofAssetsaredisclosedintheAnnual
Financial Statement Notes 5, 6 and Appendices "B, C and E (4)".
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ZF MGCAWU DISTRICT MUNICIPALITY
ANNUAL FINANCIAL STATEMENTS
for the year ended 30 June 2015
REPORT OF THE CHIEF FINANCIAL OFFICER
The capital expenditure of R780 160 was financed as follows:
Actual Actual Percentage Budgeted Variance actual/
DETAILS 2014/15 2013/14 Variance 2014/15 budgeted
R R % R %
Grants and Subsidies 780 160 1 736 716 (55.08) 1 203 500 (35.18)
780 160 1 736 716 (55.08) 1 203 500 (35.18)
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Source of funding as a percentage of Total Capital Expenditure:
DETAILS 2015 2014
Grants and Subsidies 100.00% 100.00%
100.00% 100.00%
Capital Assets are funded to a great extent from grants and subsidies as the Municipality does not have the financial resources to finance
capital expenditure from its own funds.
5. RECONCILIATION OF BUDGET TO ACTUAL
5.1 Operating Budget:
DETAILS 2015 2014
Variance per Category:
Budgeted surplus before appropriations 2 018 333 2 013 389
Revenue variances ( 4 901 290) (3 936 553)
Expenditure variances:
Employee Related Costs ( 2 593 652) (836 026)
Remuneration of Councillors (99 162) 59 175
Depreciation and Amortisation ( 135 998) (153 327)
Impairment Losses ( 628 727) (40 000)
Repairs and Maintenance (48 859) 66 874
Interest Paid 6 095 10 100
Contracted Services 2 385 (125)
Grants and Subsidies Paid 1 034 619 163 302
General Expenses 391 053 543 650
Loss on disposal of Property, Plant and Equipment ( 108 623) (6 697 806)
Actual surplus / (deficit) before appropriations ( 5 063 827) (8 807 347)
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