EC141 Elundini AFS 2019-20 unaudited

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ELUNDINI LOCAL MUNICIPALITY
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR
ENDED 30 JUNE 2020
(UNAUDITED)
ELUNDINI LOCAL MUNICIPALITY
INDEX
Content Page
General Information 2 - 3
Approval of the Financial Statements 4
Statement of Financial Position 5
Statement of Financial Performance 6
Statement of Changes In Net Assets 7
Cash Flow Statement 8
Statement of comparison of budget and actual amounts 9
Accounting Policies and Significant Judgements and Estimates 10 - 34
Notes to the Financial Statements 35 - 74
APPENDICES - Unaudited
A Schedule of External Loans 75
B Disclosure of Grants and Subsidies 76
C National Treasury Appropriation Statements 77 - 83
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ELUNDINI LOCAL MUNICIPALITY
GENERAL INFORMATION
Nature of Business Elundini Local Municipality is a local municipality performing the functions as set out in theConstitution.
(Act no 108 of 1996).
Legal Form South African Category B Municipality (Local Municipality) as defined by the Municipal Structures Act. (Act
no 117 of 1998)
Executive Committee
Mayor NR Yelani-Lengs
Councillor MPS Leteba Portfolio head: Corporate Services
Councillor ML Naketsana Portfolio head: Community Services
Councillor AM Mqamelo Portfolio head: Financial Services
Councillor TV May Portfolio head: Technical Services
Councillor N Nkalitshana Portfolio head: Planning and Economic Development
Speaker VV Hokwana
Chief Finance Officer (CFO) J Mdeni
Municipal Manager K Gashi
Registered Office No 1 Sellar Street
Maclear
5480
Bankers First National Bank, Maclear
Standard Bank, Maclear
Municipal Grading Grade 3
Auditors Office of the Auditor General - South Africa Registered Auditors
Attorneys Mgxaji Attorneys Gwabeni Inc
Clark Laing Inc Fikile Ntayiya & Associates
Magqabi Seth Zitha Attorneys Joubert Galpin & Searle Inc
Vuba Attorneys
Other Directors
Director: Corporate Services S Matubatuba
Director: Infrastructure Planning and Development S Sako
Director: Planning and Economic Development NC Eddie
Director: Community Services L Kokose
Section 79 Chairpersons
Members Interest and Ethics Committee LC Booka
Municipal Public Accounts Committee M Marubelela
Rules Committee S Mdoda
Budget Steering Committee NR Lengs
Mandate Committee KA Mgijima
Audit Committee
Chairperson Mr T de Beer
Member Ms F Hluyo Mushohwe
Member Ms NL Mnconywa (from 27 Septembe 2019)
Member Mr MJ Sikhosana (from 27 Septembe 2019)
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ELUNDINI LOCAL MUNICIPALITY
GENERAL INFORMATION
Councillors of Elundini Local Municipality
Ward 1 F W Ngayeka Proportional M Tsoananyana
Ward 2 T J Pikinini Proportional K P Mahleleba
Ward 3 Z Mampintsha Proportional L Pili
Ward 4 K A Mgijima Proportional B Msuthwana
Ward 5 S J T Magadla Proportional G Moni
Ward 6 S Mdoda Proportional L B Magqashela
Ward 7 G Sotsu Proportional N A Sonti (served from 3 March 2020)
Ward 8 D J Mbombo Proportional N L Motema
Ward 9 M Marubelela Proportional N N Ndabangaye
Ward 10 M Telile Proportional X P Majikijela
Ward 11 L Lubanga Proportional NR Yelani-Lengs
Ward 12 BJ Tshoba Proportional VV Hokwana
Ward 13 L S Ndumndum Proportional MPS Leteba
Ward 14 N G Ntaopane Proportional ML Naketsana
Ward 15 L C Booka Proportional AM Mqamelo
Ward 16 Z L Thwethiso Proportional TV May
Ward 17 V Ntuthu Proportional N Nkalitshana
RELEVANT LEGISLATION
Municipal Finance Management Act, 2003 (Act 56 of 2003)
Division of Revenue Act
The Income Tax Act
Value Added Tax Act
Municipal Structures Act, 1998 (Act 117 of 1998)
Municipal Systems Act, 2000 (Act 32 of 2000) as Amended
Municipal Planning and Performance Management Regulations
Water Services Act, 1997 (Act 108 of 1997)
Housing Act, 1997 (Act 107 of 1997)
Municipal Property Rates Act, 2004 (Act 6 of 2004)
Electricity Act, 1987 (Act 41 of 1987)
Skills Development Levies Act, 1999 (Act 9 of 1999)
Employment Equity Act, 1998 (Act 55 of 1998)
Unemployment Insurance Act, 1966 (Act 30 of 1966)
Basic Conditions of Employment Act, 1997 (Act 75 of 1997)
Supply Chain Management Regulations, 2005
Collective Agreements
Infrastructure Grants
SALGBC Leave Regulations
Municipal Budget and Reporting Regulations
National Environmental Management Act, 2008 (Act 62 of 2008)
Preferential Procurement Policy Framework Act, 2000 (Act 5 of 2000)
Occupational Health and Safety Act, 1993 (Act 85 of 1993)
Public Office Bearers Act
mSCOA Regulation
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ELUNDINI LOCAL MUNICIPALITY
APPROVAL OF FINANCIAL STATEMENTS
APPROVAL OF ACCOUNTING OFFICER
I am responsible for the preparation of these annual financial statements for the year ended 30 June 2020, which are set out on pages 1 to 83 in
terms of Section 126 (1) of the Municipal Finance Management Act and which I have signed on behalf of the Municipality. The annual financial
statements have been prepared in accordance with GRAP.
As per the Government Gazette no 43582 dated 5 August 2020, National Treasury has granted municipalities and municipal entities a two-month
extension regarding the submission of financial statements. The Municipality has taken advantage of this exemption.
I acknowledge that I am ultimately responsible for the system of internal financial control and that the system of internal control provides
reasonable assurance that the financial records can be relied on.
IhavereviewedtheMunicipality’scashflowforecastfortheyearto30June2021andamsatisfiedthattheMunicipalitycancontinueinoperational
existence for the foreseeable future.
The external auditors are responsible for independently reviewing and reporting on the Municipality’s financial statements.
I certify that the remuneration of Councillors and in-kind benefits are within the upper limits of the framework envisaged in Section 219 of the
Constitution, read with the Remuneration of Public Officer Bearers Act and the annual determinations of the Minister of Cooperative Governance
and Traditional Affairs in accordance with this Act.
K Gashi Date
Municipal Manager
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ELUNDINI LOCAL MUNICIPALITY
STATEMENT OF FINANCIAL POSITION AT 30 JUNE 2020
2020 2019
R R
Notes (Actual) (Restated)
ASSETS
Current Assets 1 14 489 833 1 07 556 963
Inventory 2 - 177 988
Receivables from Exchange Transactions 3 10 417 823 9 014 577
Receivables from Non-exchange Transactions 4 11 132 574 10 688 384
Taxes 5 7 685 597 10 551 103
Cash and Cash Equivalents 6 85 253 839 77 124 912
Non-Current Assets 5 14 150 704 4 75 759 167
Property, Plant and Equipment 7 4 62 717 321 4 23 350 277
Investment Property 8 45 586 567 46 067 087
Intangible Assets 9 4 776 9 552
Capitalised Restoration Cost (PPE) 10 5 842 040 6 332 251
Total Assets 6 28 640 538 5 83 316 130
Current Liabilities 68 810 358 60 715 328
Consumer Deposits 11 384 549 385 799
Current Employee Benefits 12 13 348 866 10 047 191
Payables from exchange transactions 13 53 538 131 49 005 050
Unspent conditional grants and receipts 14 846 294 1 212 783
Finance Leases (Current Portion) 15 288 280 64 506
Current Provisions 16 404 239 -
Non-Current Liabilities 25 949 269 23 435 614
Non-Current employee benefits 12 6 302 000 5 628 201
Finance Leases 15 417 214 93 031
Non-Current Provisions 17 19 230 056 17 714 382
Total Liabilities 94 759 627 84 150 942
NET ASSETS 5 33 880 910 4 99 165 189
COMMUNITY WEALTH
Accumulated Surplus 18 5 33 880 910 4 99 165 189
TOTAL COMMUNITY WEALTH 5 33 880 910 4 99 165 189
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ELUNDINI LOCAL MUNICIPALITY
STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDING 30 JUNE 2020
2020 2019
R R
Notes (Actual) (Restated)
REVENUE
REVENUE FROM EXCHANGE TRANSACTIONS 56 062 259 5 2 599 582
Operating Activities 56 062 259 5 2 599 582
Service Charges 19 38 453 919 3 3 282 595
Rental of Facilities and Equipment 20 6 242 510 8 234 698
Investment Revenue 21 8 510 748 7 485 702
Licences and Permits 22 2 085 255 2 796 071
Other Income 23 769 827 800 516
REVENUE FROM NON-EXCHANGE TRANSACTIONS 270 688 919 258 332 597
Taxation Revenue 23 914 655 2 3 203 124
Property Rates 24 23 914 655 2 3 203 124
Transfer Revenue 243 418 500 233 476 415
Government Grants and subsidies 25 243 418 500 233 476 415
Other Revenue 3 355 765 1 653 058
Actuarial Gains 26 222 783 -
Fines, Penalties and Forfeits 27 3 132 982 1 166 204
Greenest Town Award - 200 000
Insurance Refunds - 286 855
TOTAL REVENUE 326 751 178 310 932 180
EXPENDITURE
Employee Related Costs 28 108 319 910 9 8 392 701
Remuneration of Councillors 29 12 561 744 1 2 027 751
Debt Impairment 30 19 233 190 1 0 084 909
Depreciation and Amortisation 31 30 067 445 2 8 740 039
Impairment Loss 32 - 5 363 757
Finance Cost 33 1 589 556 1 489 181
Bulk Purchases 34 22 234 942 2 0 820 704
Sale of goods/Inventory 35 483 240 962 569
Contracted Services 36 59 623 273 6 5 625 197
Transfers and Subsidies 37 3 615 491 2 428 156
General Expenses 38 33 355 921 3 6 203 549
Actuarial Losses 26 - 812 532
Loss on disposal Non-Monetary Assets 39 950 744 1 198 704
TOTAL EXPENDITURE 292 035 455 284 149 749
SURPLUS FOR THE YEAR 34 715 722 2 6 782 431
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ELUNDINI LOCAL MUNICIPALITY
STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDING 30 JUNE 2020
ACCUMULATED
SURPLUS TOTAL
R R
Balance on 1 July 2018 - Previously Reported 4 66 033 584 4 66 033 584
Prior Period Adjustments - Refer to note 40 6 349 174 6 349 174
Restated Balance on 1 July 2018 4 72 382 759 4 72 382 759
Net Surplus for the year 26 782 431 26 782 431
Restated Balance on 30 June 2019 4 99 165 189 4 99 165 189
Net Surplus for the period 34 715 720 34 715 720
Balance on 30 June 2020 5 33 880 910 5 33 880 910
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ELUNDINI LOCAL MUNICIPALITY
CASH FLOW STATEMENT FOR THE YEAR ENDING 30 JUNE 2020
2020 2019
R R
Notes (Actual) (Restated)
CASH FLOW FROM OPERATING ACTIVITIES
Receipts
Property rates 17 107 507 27 461 017
Service charges and interest on outstanding debtors 31 962 191 27 672 620
Other revenue 6 690 888 10 001 788
Government - operating 1 81 440 000 1 71 427 000
Government - capital 62 461 918 64 786 076
SARS VAT Refunds 18 224 598 17 110 968
Interest on investments 5 418 776 5 515 291
Payments
Suppliers and Employees (243 122 238) (239 922 602)
Finance charges (141 365) (51 249)
Transfers and Grants (3 615 491) (2 428 156)
NET CASH FROM OPERATING ACTIVITIES 41 76 426 784 81 572 752
CASH FLOW FROM INVESTING ACTIVITIES
Receipts
Proceeds from sale of Property, Plant and Equipment 328 607 -
Payments
Purchase of Property, Plant and Equipment (68 470 169) (63 511 647)
NET CASH USED IN INVESTING ACTIVITIES (68 141 562) (63 511 647)
CASH FLOW FROM FINANCING ACTIVITIES
Receipts
Increase/(Decrease) in Consumer Deposits (1 251) 7 15
Payments
Finance leases repaid (155 044) (207 710)
NET CASH USED IN FINANCING ACTIVITIES (156 295) (206 995)
NET INCREASE IN CASH HELD 8 128 927 17 854 110
Cash and Cash Equivalents at the beginning of the year 77 124 912 59 270 802
Cash and Cash Equivalents at the end of the year 85 253 839 77 124 912
NET INCREASE IN CASH HELD 8 128 927 17 854 110
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ELUNDINI LOCAL MUNICIPALITY
STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS FOR THE YEAR ENDING 30 JUNE 2020
ACTUAL
ORIGINAL FINAL VS
BUDGET ADJUSTMENTS BUDGET ACTUAL FINAL BUDGET
R R R R R
STATEMENT OF FINANCIAL POSITION
Current assets 196 716 029 (58 808 620) 137 907 409 114 489 833 (23 417 576)
Non-current assets 433 842 000 36 913 000 470 755 000 514 150 704 43 395 704
Current liabilities 52 310 170 18 348 142 70 658 312 68 810 358 (1 847 954)
Non-current liabilities 16 484 147 (4 017 704) 12 466 443 25 949 269 13 482 826
Total Community Wealth 561 763 712 (36 226 058) 525 537 654 533 880 910 8 343 256
STATEMENT OF FINANCIAL PERFORMANCE
REVENUE
Property rates 29 932 191 (191) 29 932 000 23 914 655 (6 017 345)
Service Charges 41 851 558 (4 420 174) 37 431 384 38 453 919 1 022 535
Investment revenue 2 567 933 1 932 067 4 500 000 5 418 776 918 776
Transfers recognised - operational 159 791 400 21 595 600 181 387 000 183 589 235 2 202 235
Other own revenue 44 271 922 15 536 578 59 808 500 15 545 329 (44 263 171)
Total Revenue (excluding capital transfers) 278 415 004 34 643 880 313 058 884 266 921 913 (46 136 971)
EXPENDITURE
Employee costs 100 011 631 4 825 369 104 837 000 108 319 910 3 482 910
Remuneration of councillors 12 736 297 (297) 12 736 000 12 561 744 (174 256)
Debt impairment 1 773 280 (280) 1 773 000 19 233 190 17 460 190
Depreciation and asset impairment 34 498 069 (69) 34 498 000 30 067 445 (4 430 555)
Finance charges 56 000 - 56 000 1 589 556 1 533 556
Bulk purchases 30 756 515 485 30 757 000 22 234 942 (8 522 058)
Other Materials 1 704 564 178 436 1 883 000 483 240 (1 399 760)
Contracted Services 47 294 757 25 099 243 72 394 000 59 623 273 (12 770 727)
Transfers and grants - - - 3 615 491 3 615 491
Other expenditure 54 731 411 (1 319 411) 53 412 000 33 355 921 (20 056 079)
Loss on disposal of PPE - - - 950 744 950 744
Total Expenditure 283 562 524 28 783 476 312 346 000 292 035 455 (20 310 545)
Surplus/(Deficit) (5 147 520) 5 860 404 712 884 (25 113 542) (25 826 426)
Transfers recognised - capital 78 305 600 (13 399 600) 64 906 000 59 829 264 (5 076 736)
NET SURPLUS FOR THE YEAR 73 158 080 (7 539 196) 65 618 884 34 715 722 (30 903 162)
CASH FLOW STATEMENT
Net Cash Flow from Operating Activities 104 701 010 108 250 042 212 951 052 76 426 784 (136 524 268)
Net Cash Flow from Investing Activities (102 622 000) 15 026 876 (87 595 124) (68 141 562) 19 453 562
Net Cash Flow from Financing Activities - - - (156 295) (156 295)
Net increase in cash and cash equivalents 2 079 010 123 276 918 125 355 928 8 128 927 ( 117 227 001)
Refer to note 43.2 for explanations of material variances between the original and final budget.
Refer to note 43.2 for explanations of material variances between the final budget and actual amounts.
Material variances are considered to be any variances greater than R3 million.
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