KZN225 Msunduzi Consolidated AFS 2015-16 audited

4.7 MB·

THE MSUNDUZI MUNICIPALITY AND ITS MUNICIPAL ENTITY
CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
The Msunduzi Municipality and its Municipal Entity
Consolidated Annual Financial Statements for the year ended 30 June 2016
General Information
Legal form of entity Category B Municipality in terms of section 1 of the Local
Government:Municipal Structures Act, 1998 (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 and principal activities The primary function of the Msunduzi Municipality is to provide basic
services i.e. water, electricity, sewerage and refuse to the
Pietermaritzburg jurisdiction.
The Msunduzi Municipality is controlled by the Mayor, Deputy Mayor,
the Accounting Officer, Speaker, ten Executive Committee members,
and five Deputy Municipal Managers who contribute to day-to-day
management.
Legislation governing the municipality's operations Municipal Finance Management Act, (Act 56 of 2003)
The Constitution of the Republic of South Africa ( Act 108 of 1996),
Municipal Structures Act (Act 117 of 1998)
Municipal Systems Act, (Act 32 of 2000)
Grading of local authority Category - B
Controlling entity The Msunduzi Municipality
Municipal entity Safe City Msunduzi NPC
Registered office The City Hall
260 Church Street
Pietermaritzburg
3201
Business address The City Hall
260 Church Street
Pietermaritzburg
3201
Postal address The City Hall
Private Bag x321
3200
Telephone ( 033 ) 392 2006
Facsimile [phone]
Bankers First National Bank
Auditors The Auditor General
Website www.msunduzi.gov.za
Acting Accounting Officer S Hadebe
Chief Finance Officer (CFO) N M Ngcobo
1
The Msunduzi Municipality and its Municipal Entity
Consolidated Annual Financial Statements for the year ended 30 June 2016
General Information
Executive Committee
Mayor - CJ Ndlela
Deputy Mayor - TR Zuma
Member - NP Bhengu
Member - M Inderjit
Member - WF Lambert
Member - M J Lawrence
Member - NE Majola
Member - JJ Ngubo
Member - TV Xulu
Member - M Schalkwyk
2
The Msunduzi Municipality and its Municipal Entity
Consolidated Annual Financial Statements for the year ended 30 June 2016
General Information
Councillors Speaker - B Baijoo
Chief Whip - TV Magubane
N B Ahmed
R Ahmed
R P Ashe
N Atwaru
C Bradley
S D Buthelezi
T M Buthelezi
N P Dlamini
T I Dlamini
A B Dlomo
S N Govender
N F Gumede
S C Gwala
U Haswell
V P Jaca
S P Lyne
L L Madlala
I S Madonda
T Magwaza
T S Majola
F M Makhathini
M Maphumalo
T Matiwane
A L Mbanjwa
ZF Mbatha
GR McArthur
A S Mkhize
B M Mkhize
M A Mkhize
M H Mkhize
V G M Mlete
N Msimang
C S Ndawonde
Z N Ndlovu
M D Ndlovu
T P Ndlovu
K M Ngcobo
B B Ngcobo
J M Ngcobo
L Ngcobo
M A Ngcobo
P T Ngcobo
PG Ngidi
DT Ntombela
B D Phungula
D F Ryder
P Shozi
L N Sikhakhane
J Singh
R B Singh
P Sithole
B C Sokhela
M S Sokhela
R Soobiah
M A Tarr
L J Winterbach
D P Zondi
B M Zuma
F R Zungu
N J Zungu
BE Zuma
3
The Msunduzi Municipality and its Municipality Entity
Consolidated Annual Financial Statements for the year ended 30 June 2016
Index
Page
Accounting Officer's Responsibilities and Approval 5
Statement of Financial Position 6
Statement of Financial Performance 7 - 8
Statement of Changes in Net Assets 9 - 10
Cash Flow Statement 11
Statement of Comparison of Budget and Actual Amounts 12 - 16
Appropriation Statement 17 - 26
Accounting Policies 27 - 50
Notes to Annual Financial Statements 51 - 125
Appendixes:
Appendix A: Schedule of External Loans 126
Appendix B: Analysis of Property, Plant and Equipment 127 -129
Appendix C: Segmental Analysis of Non Current Assets Classification 130
Appendix D: Actual Versus Budget (Acquisition of All Non current Assets ) 131
Appendix E:Details of Unspent Conditional Grants, Receipts and Transfers to Income 132
Appendix F: Schedule of contingent liabilities 133 - 140
Abbreviations
ASB A c Acocucnotuinngti nSgt aSntdaanrddasr dBso Barodard
COID C o Cmopmepnesantsioantio fno rf oOrc Ocucpcuaptioantioanl Ianl juInrjiuersi easn adn Ddi sDeiaeseeasses
CPI C o Cnosunmsuemr ePrr iPceri cIen dInedxex
CRR C a Cpaitpailt aRle Rpelapclaecmeemnet nRte Rseesrveerve
DBSA D e Dveevloeplompemnet nBta Bnakn okf oSfo Suothu tAhf rAicfraica
DSB D eDveevloeplompemnet nSt eSrveircveicse Bs oBaordard
FNB F ir Fsti rNsta Ntioantiaoln Bala Bnkank
GRAP G e Gneernaellrya lRlye Rcoegcnoigsneids eAdc Acocucnotuinngti nPgr aPcrtaiccetise
HDF H o Husoiunsgi nDge Dveelvoeplmopemnte Fnut nFdund
IAS I n tIenrtnearntiaotnioanl aAlc Acoccuonutinntgin Sgt aSntadnadrdasrds
IPSAS I n tIenrtnearntiaotnioanl aPlu Pbulibc liSce Scetocrt oArc Accocuonutinntgin Sgt aSntadnadrdasrds
KZN K w aKzwualuz uNlua tNalatal
ME's M u Mniucinpiacilp Eanl tEitnietsities
MFMA M u Mniucnipicailp Failn Fainacnea nMcaen Magaenmageenmt Aecntt Programme
MIG M u Mniucinpiacilp Ianlf rIansfrtarusctrtuucretu Grer aGnrta nt
NATIS N a Ntioantiaoln Tarla Tffriacf fIincf oInrmfoarmtioanti oSny sStyesmtem
NCT N a Ntaal tCalo C-oop-eorpaetirvaeti vTeim Tbimerb Terr eTer eFea rFmairnmgi n(Pg t(yP) tLyt)d Ltd
NJMPF N a tNaal Jtaoli nJto Mintu Mnicuinpiacli pPael nPseionns ioFnu nFdund
NPA N a Ntaal tPiornoaviln Pcrioavl iAndcmiali nAisdtmraitnioisntration
PAYE P a yP aAys AYso uY oEua rEnarn
RMB R a Rnadn Md eMrcehrachnat nBta Bnaknk
UIF U n eUmnepmlopymloeymnte Innts Iunrsaunrcaen cFeu nFdund
VAT V a Vluaelu Aed Addedde Tda Txaatxioantion
4
The Msunduzi Municipality and its Municipal Entity
Consolidated Annual Financial Statements for the year ended 30 June 2016
Accounting Officer's Responsibilities and Approval
Certification by the Acting City Manager
I am responsible for the preparation of these Consolidated Annual Financial Statements, which are set out on pages
1 to 140, in terms of Section 126(1) of the Municipal Finance Management Act (56 of 2003) and which I have signed on
behalf of the Municipality.
I certify that the salaries, allowances and benefits of Councillors as disclose in note 39 of these Consolidated Annual
Financial Statements are within the upper limits of the framework envisaged in Section 219 of the Constitution, read with the
Remuneration of Public Officer Bearer Act and the Minister of Provincial and Local Governments determination in
accordance with this Act.
S Hadebe Date
Acting Accounting Officer
5
The Msunduzi Municipality and its Municipal Entity
Consolidated Annual Financial Statements for the year ended 30 June 2016
Statement of Financial Position as at 30 June 2016
Economic entity Controlling entity
Figures in Rand Note(s) 2016 2015 2016 2015
Assets
Current Assets
Inventories 3 65,151,366 43,707,798 65,151,366 43,707,798
Trade receivables from non-exchange 4 370,237,096 376,560,451 370,234,596 376,557,951
transactions
VAT receivable 18 14,986 - - -
Trade and receivables from exchange 5 888,164,024 717,015,002 888,164,024 717,015,002
transactions
Short term investment 6 8,318,183 7,934,708 8,318,183 7,934,708
Cash and cash equivalents 7 971,060,564 841,152,623 969,623,953 832,933,258
2,302,946,219 1,986,370,582 2,301,492,122 1,978,148,717
Non-Current Assets
Agricultural assets 8 54,275,801 44,831,368 54,275,801 44,831,368
Investment property 9 656,408,640 647,118,664 656,408,640 647,118,664
Property, plant and equipment 10 6,925,577,531 7,037,535,477 6,919,378,396 7,037,176,980
Intangible assets 11 39,518,564 17,211,599 39,518,564 17,211,599
Heritage assets 12 233,948,936 232,025,463 233,948,936 232,025,463
Other financial assets 13 10,317,110 9,233,105 10,317,110 9,233,105
7,920,046,582 7,987,955,676 7,913,847,447 7,987,597,179
Total Assets 10,222,992,801 9,974,326,258 10,215,339,569 9,965,745,896
Liabilities
Current Liabilities
Other financial liabilities 14 67,761,975 52,012,449 67,761,975 52,012,449
Finance lease obligation 15 1,553,499 1,511,829 1,553,499 1,511,829
Payables from exchange transactions 16 530,939,299 566,136,556 530,736,604 566,104,701
VAT payable 17 55,841,372 40,430,375 55,841,372 39,492,243
Consumer deposits 19 92,378,188 87,030,551 92,378,188 87,030,551
Retirement benefit obligation 20 21,141,300 18,037,692 21,141,300 18,037,692
Unspent conditional grants and receipts 21 256,740,818 134,856,624 249,940,818 134,856,624
Provisions 22 6,690,279 6,029,351 6,690,279 6,029,351
1,033,046,730 906,045,427 1,026,044,035 905,075,440
Non-Current Liabilities
Other financial liabilities 14 568,133,347 541,301,371 568,133,347 541,301,371
Finance lease obligation 15 346,586 2,099,415 346,586 2,099,415
Retirement benefit obligation 20 625,699,203 591,899,445 625,699,203 591,899,445
Provisions 22 67,041,163 61,849,677 67,041,163 61,849,677
1,261,220,299 1,197,149,908 1,261,220,299 1,197,149,908
Total Liabilities 2,294,267,029 2,103,195,335 2,287,264,334 2,102,225,348
Net Assets 7,928,725,772 7,871,130,923 7,928,075,235 7,863,520,548
Net Assets
Share capital 26 - 100 - -
Reserves
Housing development fund 23 72,158,775 53,882,712 72,158,775 53,882,712
Revaluation reserve 24 52,129,145 52,129,145 52,129,145 52,129,145
Capital replacement reserve 25 151,935,999 151,935,999 151,935,999 151,935,999
Accumulated surplus 7,652,501,853 7,613,182,967 7,651,851,316 7,605,572,692
Total Net Assets 7,928,725,772 7,871,130,923 7,928,075,235 7,863,520,548
6
The Msunduzi Municipality and its Municipal Entity
Consolidated Annual Financial Statements for the year ended 30 June 2016
Statement of Financial Performance
Economic entity Controlling entity
Figures in Rand Note(s) 2016 2015 2016 2015
Revenue
Revenue from exchange transactions
Service charges 29 2,468,236,938 2,227,636,415 2,468,236,938 2,227,636,415
Rental received 30 20,222,252 23,477,153 20,222,252 23,477,153
Fees from agency services 31 532,141 577,908 532,141 577,908
Licences and permits 32 90,168 88,837 90,168 88,837
Other revenue 33 87,809,501 89,221,892 87,807,692 89,221,366
Interest received - trade and other 34 60,213,939 69,528,678 60,213,939 69,528,678
receivables
Interest received - external investment 34 68,434,503 51,026,699 68,242,363 50,973,175
Total revenue from exchange 2,705,539,442 2,461,557,582 2,705,345,493 2,461,503,532
transactions
Revenue from non-exchange
transactions
Taxation revenue
Property rates 35 742,052,098 686,396,237 742,052,098 686,396,237
Property rates - penalties imposed 35 20,236,112 30,207,179 20,236,112 30,207,179
Transfer revenue
Government grants and subsidies 36 769,640,097 876,063,280 769,640,097 876,063,280
Fines 37 52,657,723 108,633,588 52,657,723 108,633,588
Total revenue from non-exchange 1,584,586,030 1,701,300,284 1,584,586,030 1,701,300,284
transactions
Total revenue 28 4,290,125,472 4,162,857,866 4,289,931,523 4,162,803,816
Expenditure
Employee related costs 38 (942,483,343) (885,351,814) (938,283,004) (881,616,172)
Remuneration of councillors 39 (41,763,039) (34,657,435) (41,763,039) (34,657,435)
Conditional grant expenditure 40 (73,364,194) (135,304,171) (73,364,194) (135,304,171)
Depreciation and amortisation 41 (505,131,448) (465,408,973) (504,289,144) (464,535,534)
Impairment of assets 42 (50,002,359) (16,571,487) (50,002,359) (16,571,487)
Finance costs 43 (75,094,944) (71,169,271) (75,094,944) (71,169,271)
Debt impairment 44 (92,507,590) (222,109,923) (92,507,590) (222,109,923)
Collection costs 45 (12,528,519) (5,972,677) (12,528,519) (5,972,677)
Repairs and maintenance 46 (151,572,106) (193,369,205) (151,360,353) (193,317,455)
Bulk purchases 47 (1,799,213,567) (1,586,802,287) (1,799,213,567) (1,586,802,287)
Contracted services 48 (65,468,010) (29,698,420) (65,468,010) (29,698,420)
Grants and subsidies paid 49 (238,128) (238,128) (5,911,128) (11,572,032)
General expenses 50 (436,459,903) (479,720,747) (435,687,609) (479,018,812)
Total expenditure (4,245,827,150) (4,126,374,538) (4,245,473,460) (4,132,345,676)
Operating surplus 44,298,322 36,483,328 44,458,063 30,458,140
Gain or (loss) on disposal of assets 51 149,329 419,962 149,329 419,962
Gain or (loss) on donated assets 52 156,182 64,091 156,182 64,091
Fair value adjustment of investment 53 11,029,976 20,222,920 11,029,976 20,222,920
properties
Gain or (loss) on biological and agricultural 54 9,288,973 (1,769,662) 9,288,973 (1,769,662)
assets
Inventory write up or (write downs) 55 473,316 - 473,316 -
Gain or (loss) on sale of movable assets 56 (1,291,947) (455,457) (1,291,947) (455,457)
Gain or loss immoveable assets 57 (11,799,253) 55,240 (11,799,253) 55,240
8,006,576 18,537,094 8,006,576 18,537,094
7
The Msunduzi Municipality and its Municipal Entity
Consolidated Annual Financial Statements for the year ended 30 June 2016
Statement of Financial Performance
Economic entity Controlling entity
Figures in Rand Note(s) 2016 2015 2016 2015
Surplus for the year 52,304,898 55,020,422 52,464,639 48,995,234
8
The Msunduzi Municipality and its Municipal Entity
Consolidated Annual Financial Statements for the year ended 30 June 2016
Statement of Changes in Net Assets
Share capital Housing Revaluation Capital Total reserves Accumulated Total net
development reserve replacement surplus assets
Figures in Rand fund reserve
Economic entity
Restated opening balance at 01 July 2014 100 51,542,986 52,129,145 - 103,672,131 7,261,319,624 7,364,991,855
Effects of prior period error - - - - - 441,230,303 441,230,303
Net income (losses) recognised directly in net assets - - - - - 441,230,303 441,230,303
Restated Surplus / Defict for the year - - - - - 55,020,422 55,020,422
Total recognised income and expenses for the year - - - - - 496,250,725 496,250,725
Adjustments - - - - - (141,961,764) (141,961,764)
Transfer to HDF - 2,339,726 - - 2,339,726 (2,425,618) (85,892)
Transfer to capital replacement reserve - - - 151,935,999 151,935,999 - 151,935,999
Total changes - 2,339,726 - 151,935,999 154,275,725 351,863,343 506,139,068
Restated balance at 01 July 2015 100 53,882,712 52,129,145 151,935,999 257,947,856 7,613,182,963 7,871,130,919
Surplus / Deficit for the year - - - - - 52,304,898 52,304,898
Adjustments - - - - - 5,290,055 5,290,055
Transfer to HDF - 18,276,063 - - 18,276,063 (18,276,063) -
Total changes - 18,276,063 - - 18,276,063 39,318,890 57,594,953
Balance at 30 June 2016 - 72,158,775 52,129,145 151,935,999 276,223,919 7,652,501,853 7,928,725,772
Note(s) 26 23 24 25
9