Table Of ContentPlanning by Reviewed Performed by Final review
Mogale City Local Municipality
(Registration number GT 481)
Annual Financial Statements
for the year ended 30 June 2019
Mogale City Local Municipality
(Registration number GT 481)
Annual Financial Statements for the year ended 30 June 2019
General Information
Legal form of entity Municipality in terms of section 1 of the Local Government: Municipal
Structure Act (Act 117 of 1998) read with section 155 (1) of the
Constitution of the Republic of South Africa (Act 108 of 1996)
Nature of business Local government (Municipality). The principal activities of the city are
to: provide democratic and accountable government to the local
municipalities, ensure sustainable service delivery to communities,
promote social and economic development, promote a safe and
healthy environment and encourage the involvement of communities
and community organisations in the matters of local government.
Legislation governing the municipality's operations Municipal Finance Management Act (Act 56 of 2003)
Municipal Systems Act (Act 32 of 2000)
Municipal Structures Act (Act 117 of 1998)
Constitution of the Republic of South Africa (Act 108 of 1998)
Municipal Property Rates Act (Act 6 of 2004)
Division of Revenue Act (Act 1 0f 2007) and various other acts and
regulations
Municipal Budget and Reporting Regulations
Members of Council
Executive Mayor Cllr P.N. Lipudi
Speaker Cllr N.C. Mangole
Chief Whip Cllr S.I. Dube
Municipal Public Accounts Committee Cllr B.E. Nkosi
Members of Mayoral Committee MMC LED and Rural Development: Cllr P.T. Molapo
MMC Finance: Cllr N.M. Sedumedi
MMC Utility Management Services: Cllr M. Khuzwayo
MMC Public Works, Roads and Transport: Cllr M.B. Mdlane
MMC Corporate Support Services & Strategic Planning: Cllr T.P.
Moeketsi
MMC Intergrated Environmental Management: Cllr M.F. Chohledi
MMC Health and Social Development: Cllr N.E. Cindi
MMC Sports, Recreation, Arts, Culture and Heritage: Cllr C.M.
Ntlatlane-Nzwane
MMC Community Safety: Cllr L.G. Resha
MMC Human Settlement; A.K. Setswalo-Moja
Councillors Cllr Mathapelo L. Agondo
Cllr Farouk Bhayat
Cllr Shabier A. Dabhelia
Cllr Doreen S. David
Cllr Molebatsi J. Jim
Cllr Gilbert K. Gaselebelwe
Cllr Velile Khumalo
Cllr Mathibe P.J. Madumo
Cllr Isaac Mangole
Cllr Pelesi J. Makokwe
Cllr Lerato Modise
Cllr Godfrey I. Moilwanyane
Cllr Rabatho J. Mokotla
Cllr Benard V. Molefe
Cllr Azwindini G. Mutele
Cllr Mlungisi Ndamase
Cllr Batsheba N. Ngakane
Cllr William Ngwako
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Mogale City Local Municipality
(Registration number GT 481)
Annual Financial Statements for the year ended 30 June 2019
General Information
Cllr Tshepo I. Nzwane
Cllr Mavhungu O. Ramadi
Cllr Molefi J.Selibo
Cllr Susan Silaule
Cllr Meshack D. Sithole
Cllr Komityi Mapetla
Cllr Kelebogile Ngwenya
Cllr John Koboekae
Cllr Judas Makgopa
Cllr Rakwena B. Seemela
Cllr Maria L. Khoza
Cllr Livingstone Mruquli
Cllr Goitsemodimo A. Tsele
Cllr Wonderful Segolodi
Cllr Bobie S. Tlapu
Cllr Andries S. Eksteen
Cllr Sharon Govinsamy
Cllr Tyrone M. Gray
Cllr Jacobus J Holtzhausen
Cllr Moralo O. Sam
Cllr Jacques S. Hoon
Cllr Botshe A. Kubayi
Cllr Johannes N. Kotze
Cllr Christo A. Kotze
Cllr Ntombikayise T. Lebe
Cllr Kagiso E. Lekagane
Cllr Aletta van Loggerenberg
Cllr Edwina Mahne
Cllr Lawrence B. Shabalala
Cllr Lesego L. Lekoto
Cllr Jade Miller
Cllr Ernest Modise
Cllr Margaret Mohube
Cllr Themba E. Mokoena
Cllr Louis W. Moleba
Cllr Maria C.G. Naude
Cllr Lynette E. Du Toit
Cllr Jaqueline L. Pannalll
Cllr Pheasant C.O. Reid
Cllr Zillah Wehinger-Maguire
Cllr Chris J van der Westhuizen
Cllr Lynette W Zwankhuizen
Cllr Tjaart Steenkamp
Cllr Helena H. Kruger
Cllr S.D. Letsie
Cllr Oupa S.S. Moralo
In the course of the reporting period, the following Cllr Cynthia P. Zagagana
councillors ceased to be political office-bearers
Cllr Victor Mahlari
Cllr Nomalizo Kufa
Cllr Annette Fourie
Cllr Lynnette C. Pannall
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Mogale City Local Municipality
(Registration number GT 481)
Annual Financial Statements for the year ended 30 June 2019
General Information
Cllr M. Holenstein
Cllr Brandon May
Cllr A. De Lange
Grading of local authority High Capacity (Grade 5)
Accounting Officer Mr M.P. Raedani
Chief Finance Officer Ms D.S. Diale
Registered office Civic Centre
Cnr Commissioner & Market Street
Krugersdorp
Business address Civic Centre
Cnr Commissioner & Market Street
Krugersdorp
1740
Postal address P.O Box 94
Krugersdorp
Telephone number 011 951 2000
Auditors Auditor - General South Africa (AGSA)
Registered Auditors
Audit Committee members Mr Bashir Ahmed (Chair) (From July 2018 – June 2019)
Mr Luvuyo Malinga (From July 2018 – June 2019)
Mr Todani Nemadzhilili (From July 2018 – June 2019)
Mr Luyanda Mangquka (From July 2018 - June 2019)
Mr Peter Pekalski (Contract Terminated by Mutual Agreement)
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Mogale City Local Municipality
(Registration number GT 481)
Annual Financial Statements for the year ended 30 June 2019
Index
The reports and statements set out below comprise the annual financial statements presented to the provincial legislature:
Page
Accounting Officer's Responsibilities and Approval 6
Statement of Financial Position 7
Statement of Financial Performance 8
Statement of Changes in Net Assets 9
Cash Flow Statement 10
Statement of Comparison of Budget and Actual Amounts 11 - 14
Appropriation Statement 15 - 17
Accounting Policies 18
Notes to the Annual Financial Statements 38 - 95
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Mogale City Local Municipality
(Registration number GT 481)
Annual Financial Statements for the year ended 30 June 2019
Index
MCLM Mogale City Local Municipality
COIDA Compensation for Occupational Injuries and Diseases Act
DoE Department of Energy
DBSA Development Bank of South Africa
WSIG Water Services Infrastructure Grant
GRAP Generally Recognised Accounting Practice
FMG Finance Management Grant
HDA Housing Development Agency
IAS International Accounting Standards
NERSA National Electricity Regulator of South Africa
NDPG Neighbourhood Development Grant
mSCOA Municipal Standard Chart of Accounts
MPAC Municipal Public Accounts Committe
MMC Member of Mayoral Committee
MFMA Municipal Finance Management Act
MIG Municipal Infrastructure Grant (Previously CMIP)
WRDM West Rand District Municipality
MWIG Municpal Water Infrastructure Grant
HIV Human Immunodeficiency Virus
AIDS Acquired Immunodeficiency Syndrome
VAT Value Added Tax
SRAC Sports, Recreation,Arts and Culture
HSDG Human Settlement Development Grant
INEP Intergrated National Electrification Programme
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Mogale City Local Municipality
(Registration number GT 481)
Annual Financial Statements for the year ended 30 June 2019
Accounting Officer's Responsibilities and Approval
The Accounting Officeris required by the Municipal Finance Management Act (Act 56 of 2003), to maintain adequate
accounting records and is responsible for the content and integrity of the annual financial statements and related financial
information included in this report. It is the responsibility of the Accounting Officer to ensure that the annual financial
statements fairly present the state of affairs of the municipality as at the end of the financial year and the results of its
operations and cash flows for the period then ended. The external auditors are engaged to express an independent opinion on
the annual financial statements and are given unrestricted access to all financial records and related data.
The annual financial statements have been prepared in accordance with Standards of Generally Recognised Accounting
Practice (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board.
The annual financial statements are based upon appropriate accounting policies consistently applied and supported by
reasonable and prudent judgements and estimates.
The Accounting Officeracknowledges that heis ultimately responsible for the system of internal financial control established by
the municipality and places considerable importance on maintaining a strong control environment. To enable the Accounting
Officer to meet these responsibilities, the Accounting Standards sets standards for internal control aimed at reducing the risk of
error or deficit in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly
defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk.
These controls are monitored throughout the municipality and all employees are required to maintain the highest ethical
standards in ensuring the municipality’s business is conducted in a manner that in all reasonable circumstances is above
reproach. The focus of risk management in the municipality is on identifying, assessing, managing and monitoring all known
forms of risk across the municipality. While operating risk cannot be fully eliminated, the municipality endeavours to minimise it
by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within
predetermined procedures and constraints.
The Accounting Officeris of the opinion, based on the information and explanations given by management, that the system of
internal control provides reasonable assurance that the financial records may be relied on for the preparation of the annual
financial statements. However, any system of internal financial control can provide only reasonable, and not absolute,
assurance against material misstatement or deficit.
The Accounting Officerhas reviewed the municipality’s cash flow forecast for the year to 30 June 2020 and, in the light of this
review and the current financial position, heis satisfied that the municipality has access to adequate resources to continue in
operational existence for the foreseeable future.
The annual financial statements are prepared on the basis that the municipality is a going concern and that the municipality
has neither the intention nor the need to liquidate or curtail materially the scale of the municipality.
Although the Accounting Officer is primarily responsible for the financial affairs of the municipality, he is supported by the
municipality's internal auditors.
I certify that the salaries, Allowances and benefits of councillors as disclosed in note 35 to these annual financial statements
are within the upper limits of the framework envisaged in section 219 of the Constitution of the Republic of South Africa, read
with the Remuneration of Public Office Bearers Act, Act 20 of 1998 and the Minister of Provincial and Local Government's
determination in accordance with the Act.
The External Auditors are responsible for independently reviewing and reporting on the municipality's annual financial
statements.
The annual financial statements set out on pages 7 to 95, which have been prepared on the going concern basis, were
approved and signed by the Accounting Officer on 31 August 2019.
Accounting Officer
M.P. Raedani
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Mogale City Local Municipality
(Registration number GT 481)
Annual Financial Statements for the year ended 30 June 2019
Statement of Financial Position as at 30 June 2019
Figures in Rand Note(s) 2019 2018
Restated*
Assets
Current Assets
Inventories 2 19 493 283 19 652 405
Receivables from non-exchange transactions 3 154 441 628 200 054 094
Receivables from exchange transactions 4 231 762 977 174 940 828
Cash and cash equivalents 5 60 674 095 40 374 841
Operating lease asset 6 121 517 144 537
VAT receivable 7 35 709 835 33 815 391
502 203 335 468 982 096
Non-Current Assets
Investment property 8 676 421 944 658 806 614
Property, plant and equipment 9 5 762 113 965 5 593 306 792
Intangible assets 10 2 586 331 4 837 228
Heritage assets 11 2 494 741 2 466 041
Financial assets 12 762 842 683 884
6 444 379 823 6 260 100 559
Total Assets 6 946 583 158 6 729 082 655
Liabilities
Current Liabilities
Operating lease liability 6 245 808 -
Employee benefit obligations 13 13 220 246 13 872 474
Finance lease obligations 14 16 772 867 13 989 050
Unspent conditional grants and receipts 15 138 829 24 344 310
Provisions 16 6 231 356 4 660 371
Payables from non-exchange transactions 17 76 627 038 89 785 923
Payables from exchange transactions 18 802 116 063 727 614 857
Financial liabilities 19 34 809 261 34 665 632
Sundry deposits 20 11 996 801 12 146 360
Consumer deposits 21 57 696 053 55 761 432
1 019 854 322 976 840 409
Non-Current Liabilities
Employee benefit obligations 13 239 055 805 231 783 872
Finance lease obligations 14 34 628 782 2 760 880
Provisions 16 78 870 952 73 921 882
Financial liabilities 19 285 363 559 320 431 059
637 919 098 628 897 693
Total Liabilities 1 657 773 420 1 605 738 102
Net Assets 5 288 809 738 5 123 344 553
Social Responsibility 23 871 526 18 903 126
Accumulated surplus 5 264 938 212 5 104 441 426
Total Net Assets 5 288 809 738 5 123 344 552
* See Note 47
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Mogale City Local Municipality
(Registration number GT 481)
Annual Financial Statements for the year ended 30 June 2019
Statement of Financial Performance
Figures in Rand Note(s) 2019 2018
Restated*
Revenue
Revenue from exchange transactions
Service charges 24 1 537 183 011 1 417 610 092
Rental of facilities and equipment 25 8 740 918 7 575 256
Income from agency services 26 26 305 329 25 621 528
Licences and permits 32 073 20 961
Operational revenue 27 58 577 607 74 786 711
Interest received - Outstanding debtors 28 54 189 936 39 130 115
Interest received - Investment 29 5 100 186 8 524 831
Dividends received 29 24 361 22 643
Total revenue from exchange transactions 1 690 153 421 1 573 292 137
Revenue from non-exchange transactions
Property rates 30 561 316 872 485 138 272
Transfers & subsidies 31 737 955 222 625 291 774
Fines, Penalties and Forfeits 32 56 335 142 71 897 687
Fair value adjustments investment property 33 19 764 089 226 293 618
Total revenue from non-exchange transactions 1 375 371 325 1 408 621 351
Total revenue 3 065 524 746 2 981 913 488
Expenditure
Employee related costs 34 (779 708 634) (726 044 406)
Remuneration of councillors 35 (34 389 973) (33 340 576)
Depreciation and amortisation 36 (240 526 049) (270 537 363)
(Impairment loss)/Reversal of impairments 37 (27 697 815) (4 725 301)
Finance costs 38 (48 036 302) (52 959 596)
Debt Impairment 39 (246 656 906) (218 236 064)
Collection costs 40 (45 258 182) (44 982 634)
Bulk purchases 41 (981 788 596) (855 924 183)
Contracted services 42 (317 564 334) (316 506 661)
Transfers and Subsidies 43 (2 771 239) (1 525 116)
Operational costs 44 (179 947 305) (225 002 549)
Total expenditure (2 904 345 335)(2 749 784 449)
Surplus for the year 161 179 411 232 129 039
* See Note 47
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