Table Of ContentPlanning by Reviewed Performed by Final review
Stellenbosch Municipality
Annual Financial Statements
for the year ended 30 June 2019
Auditor-General of South Africa
Stellenbosch Municipality
Annual Financial Statements for the year ended 30 June 2019
General Information
Mayoral committee
Executive Mayor G van Deventer
Deputy Executive Mayor N Jindela
Speaker M Pietersen
Executive Councillors P Biscombe
J De Villiers
A Frazenburg
E Groenewald
X Mdemka
S Peters
W Petersen
P Crawley
Q Smit
Councillors F Adams
F Badenhorst
N Bakubaku Vos
F Bangani-Menziwa
G Cele
J Serdyn
A Crombie
M De Wet
R Du Toit
A Florence
E Fredericks
T Gosa
J Hamilton
A Hanekom
D Hendrickse
J Hendriks
L Horsband
M Johnson
Mananga-Gugushe
C Manuel
M Mc Ombring
R Nalumango
N Olayi
M Oliphant
D Joubert
W Pietersen
S Schafer
N Sinkinya
P Sitshoti
L Stander
E Vermeulen
Accounting Officer G Mettler
Chief Finance Officer (CFO) K Carolus
Registered office Plein Street
Stellenbosch
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Stellenbosch Municipality
Annual Financial Statements for the year ended 30 June 2019
General Information
7600
Business address Plein Street
Stellenbosch
7600
Postal address P O Box 17
Stellenbosch
7599
Bankers ABSA
NEDBANK
Auditors Auditor-General of South Africa
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Stellenbosch Municipality
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 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 - 13
Accounting Policies 14 - 41
Notes to the Annual Financial Statements 42 - 123
Abbreviations
CRR Capital Replacement Reserve
GRAP Generally Recognised Accounting Practice
IAS International Accounting Standards
MEC Member of the Executive Council
MFMA Municipal Finance Management Act
VAT Value added Tax
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Stellenbosch Municipality
Annual Financial Statements for the year ended 30 June 2019
Accounting Officer's Responsibilities and Approval
The accounting officer is 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 were 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.
I acknowledge that I am ultimately responsible for the system of internal financial control established by the municipality and
place considerable importance on maintaining a strong control environment. To enable me to meet these responsibilities, I set
standards for internal control aimed at reducing the risk of error or loss 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 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.
I am 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 loss.
I am responsible for the preparation of these financial statements in terms of Section 126(1) of the Municipal Finance
Management Act, 2003 (Act 56 of 2003) and signed the Annual Financial Statements on behalf of the Municipality.
I certify that the salaries, allowances and benefits of Councillors as disclosed in note 34 and 35 of these 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 Bearers Act and the Minister of Provincial and Local Government’s determination in accordance
with this Act.
The annual financial statements have been prepared on the going concern basis, is hereby approved.
Accounting Officer
Geraldine Mettler
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Stellenbosch Municipality
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 *Restated
2018
Assets
Current Assets
Cash and cash equivalents 3 169 490 533 20 683 383
Short term investments 4 398 163 664 505 617 672
Receivables from exchange transactions 5 161 402 873 170 499 812
Receivables from non-exchange transactions 6 65 966 659 57 937 486
Other receivables from exchange transactions 7 10 155 967 6 209 038
Inventories 8 52 307 942 41 690 312
VAT receivable 9 47 420 470 54 272 329
Long term receivables 15 1 630 959 1 600 207
906 539 067 858 510 239
Non-Current Assets
Property, plant and equipment 10 5 057 061 065 4 750 605 846
Investment property 11 420 777 174 421 147 702
Intangible assets 12 6 534 960 3 009 333
Biological assets that form part of an agricultural activity 13 6 321 448 6 321 448
Heritage assets 14 774 002 774 002
Long term receivable 15 3 024 999 2 158 458
5 494 493 648 5 184 016 789
Total Assets 6 401 032 715 6 042 527 028
Liabilities
Current Liabilities
Consumer deposits 16 17 077 912 15 673 925
Employee benefit obligation 17 55 599 752 49 603 946
Operating lease liability 18 971 080 1 079 160
Other financial liabilities 19 25 869 707 14 501 990
Provisions 20 642 909 -
Payables from exchange transactions 21 269 021 019 243 315 870
Unspent conditional grants and receipts 22 148 233 956 100 324 080
517 416 335 424 498 971
Non-Current Liabilities
Other financial liabilities 19 292 930 440 158 800 148
Employee benefit obligation 17 201 830 792 217 470 757
Provisions 20 101 701 567 79 165 186
596 462 799 455 436 091
Total Liabilities 1 113 879 134 879 935 062
Net Assets 5 287 153 581 5 162 591 966
Accumulated surplus 23 5 287 153 581 5 162 591 948
* See Note 63
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Stellenbosch Municipality
Annual Financial Statements for the year ended 30 June 2019
Statement of Financial Performance
Figures in Rand Note(s) 2019 *Restated
2018
Revenue
Revenue from exchange transactions
Service charges 24 817 760 063 862 001 445
Rental of facilities and equipment 25 14 524 336 14 992 251
Interest earned - outstanding receivables 8 024 881 6 848 597
Agency services 27 2 833 175 2 521 016
Licences and permits 28 6 610 962 6 757 407
Other income 29 26 705 321 25 125 344
Investment revenue 30 44 271 827 55 109 631
Gain on disposal of assets and liabilities - 335 771
Gain on biological assets and agricultural produce 51 591 91 149
Reversal of inventory losses 6 218 654 -
Total revenue from exchange transactions 927 000 810 973 782 611
Revenue from non-exchange transactions
Taxation revenue
Property rates 31 332 957 900 309 988 786
Transfer revenue
Government grants & subsidies 32 234 134 499 211 189 788
Fines, penalties and forfeits 33 118 046 132 114 767 168
Total revenue from non-exchange transactions 685 138 531 635 945 742
Total revenue 1 612 139 341 1 609 728 353
Expenditure
Employee related costs 34 (461 114 130) (441 294 811)
Remuneration of councillors 35 (18 272 420) (17 307 558)
Contribution to/from provisions 37 (6 025 885) (996 043)
Contribution to employee benefits 38 (1 273 639) (11 727 667)
Depreciation and amortisation 39 (174 958 815) (157 549 555)
Reversal of impairments (1 705 912) (6 386 273)
Finance costs 40 (23 207 266) (18 775 322)
Lease rentals on operating lease 41 (2 933 062) (8 085 133)
Debt Impairment 42 (105 207 214) (47 970 580)
Contribution to allowance for doubtful debt 43 (21 952 121) (72 459 662)
Bulk purchases 44 (380 670 630) (329 679 492)
Contracted services 45 (151 817 580) (125 083 457)
Transfers and Subsidies 46 (8 990 039) (6 261 185)
Loss on disposal of assets and liabilities (5 111 906) -
Fair value adjustments (350 833) (795 806)
Inventories losses/write-downs (2 157 273) (643 179)
General Expenses 47 (121 828 999) (118 936 974)
Total expenditure (1 487 577 724)(1 363 952 697)
Surplus for the year 124 561 617 245 775 656
* See Note 63
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Stellenbosch Municipality
Annual Financial Statements for the year ended 30 June 2019
Statement of Changes in Net Assets
Accumulated Total net
Figures in Rand surplus assets
Opening balance as previously reported 4 930 628 374 4 930 628 374
Adjustments
Prior year adjustments (13 812 082) (13 812 082)
Balance at 01 July 2017 as restated* 4 916 816 292 4 916 816 292
Changes in net assets
Surplus for the year 245 775 656 245 775 656
Total changes 245 775 656 245 775 656
Restated* Balance at 01 July 2018 5 162 591 964 5 162 591 964
Changes in net assets
Surplus for the year 124 561 617 124 561 617
Total changes 124 561 617 124 561 617
Balance at 30 June 2019 5 287 153 581 5 287 153 581
Refer to note 23.
* See Note 63
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Stellenbosch Municipality
Annual Financial Statements for the year ended 30 June 2019
Cash Flow Statement
Figures in Rand Note(s) 2019 *Restated
2018
Cash flows from operating activities
Receipts
Sale of goods and services 1 204 431 992 1 179 108 887
Grants 282 044 375 237 075 284
Interest income 44 271 827 55 109 631
1 530 748 194 1 471 293 802
Payments
Employee costs (490 304 348) (470 493 590)
Suppliers (630 046 091) (632 107 109)
Finance costs (23 207 266) (18 775 322)
(1 143 557 705)(1 121 376 021)
Net cash flows from operating activities 49 387 190 489 349 917 781
Cash flows from investing activities
Purchase of property, plant and equipment 10 (487 925 719) (432 960 732)
Proceeds from sale of property, plant and equipment 10 1 916 743 998 250
Purchase of other intangible assets 12 (5 377 971) (664 395)
Purchases of heritage assets 14 - (50 000)
Proceeds from sale of biological assets that form part of an agricultural activity 13 51 591 408 708
Movement in investments 107 454 008 69 800 642
Net cash flows from investing activities (383 881 348) (362 467 527)
Cash flows from financing activities
Movement in other financial liabilities 145 498 009 (13 083 929)
Net cash flows from financing activities 145 498 009 (13 083 929)
Net increase/(decrease) in cash and cash equivalents 148 807 150 (25 633 675)
Cash and cash equivalents at the beginning of the year 20 683 383 46 317 058
Cash and cash equivalents at the end of the year 3 169 490 533 20 683 383
* See Note 63
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