NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDING 30 JUNE 2019
Within 1 Year Between 2 to 5 years After 5 years Total 30 JUNE 2019
Annuity Loans 11 673 958 43 024 667 44 911 852 99 610 477 Payables from exchange transactions 11 420 805 - - 11 420 805
Total 23 094 763 43 024 667 44 911 852 111 031 282
30 JUNE 2018
Annuity Loans 11 514 728 40 987 162 47 980 158 100 482 048 Payables from exchange transactions 17 291 431 - - 17 291 431
Total 28 806 159 40 987 162 47 980 158 117 773 479
49.5 Other price risk (Market Risk)
The Municipality is not exposed to any other price risk.
South Africa is currently in an upward interest rate cycle and management does not foresee a decrease in the next 12 months.
Liquidity risk is the risk encountered by the Municipality in the event of difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.
Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
Liquidity risk is mitigated by approving cash funded budgets at all times to ensure commitments can be settled once due over the long term. The Municipality also monitors its cash balances on a daily basis to ensure cash resources are available to settle short term obligations.
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.
Figures in Rand 2019 2018
BERGRIVIER LOCAL MUNICIPALITY
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDING 30 JUNE 2019
50 FINANCIAL INSTRUMENTS
The Municipality recognised the following financial instruments at amortised cost:
Financial Assets
Cash and Cash Equivalents 71 438 105 77 935 964
Receivables from Exchange transactions 53 367 672 40 390 717
Long-term Receivables 618 484 1 608 558
Total 125 424 261 119 935 239
Financial Liabilities
Payables from exchange transactions 11 420 805 17 291 431
Long-Term Liabilities 58 193 471 56 362 960
Total 69 614 276 73 654 391
51 STATUTORY RECEIVABLES
Taxes 1 839 119 -
Receivables from Non-Exchange Transactions 23 793 014 24 478 637
Rates 22 161 785 21 950 686
Fines 966 100 769 631
Unpaid Grants 140 694 113 815
Department of Human Settlements - 1 436 010
Wittewater Infrastructure Project 271 458 208 494
Goedverwacht Infrastructure Project 252 977 -
Total 25 632 133 24 478 637
52 EVENTS AFTER REPORTING DATE
52.1
52.2
52.3
52.4
In accordance with the principles of GRAP 108, Statutory Receivables of the Municipality are classified as follows:
The amounts above are disclosed after any provision for impairment has been taken into account.
In terms of the services concession agreement, the local municipalities determine a tariff, in consultation with the WCDM, that allows the WCDM to recover the costs the WCDM incurs in the provision of the bulk water services. The local municipalities also pay the WCDM an administrative fee of 10% of the operational costs which is also included in the tariff above. The calculation of the 2017/18 and 2018/19 surplus/deficit and its split between the local municipalities was finalised and agreed on 23 August 2019 and is regarded as an adjusting event after the reporting date. The Statement of Financial Position and Statement of Financial Performance have been adjusted to include the surplus amounting to R1 053 580.
Bulk Purchases for water as per note 35 has accordingly been adjusted to take into account the surplus amount of R1 053 580.
The Municipality suffered a loss of R4 170 410 as a result of theft by an employee of the Municipality. The employee signed an admission of guilt and resigned on 3 September 2019.
Claims to recover the monies have been submitted to both the said employee's pension fund and the Municipality's insurance broker. A criminal case was also opened with SAPS.
Allegations of fraudulent transactions on the issuing of free units of prepaid electricity to the approximate of 560 000 units was identified. The employee resigned on 25 November 2019.
Claims to recover the money will be submitted to his pension fund. A criminal case was also opened with SAPS.
Riots were experienced in the town of Velddrif during the month of October 2019 of which municipal property was damaged. The damages are estimated at R574 500.
Figures in Rand 2019 2018
BERGRIVIER LOCAL MUNICIPALITY
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDING 30 JUNE 2019
53 IN-KIND DONATIONS AND ASSISTANCE
The Municipality received donations as disclosed in note 23.
54 PRIVATE PUBLIC PARTNERSHIPS (PPP's)
The Municipality did not enter into any PPP's in the current and prior year.
55 CONTINGENT LIABILITIES
56 RELATED PARTIES
56.1 Related Party Transactions
Rates Service Charges Other Outstanding Balance
2019 Councillors
A Small 383 6 357 4 536 AJ De Vries 12 786 4 608 27 1 449 AJ Du Plooy 1 354 7 124 48 716
J Daniels 6 050 9 312 1 090
J Swart 4 215 4 884 13 1 349 MA Wessels - 13 158 3 553 RM van Rooy - - - - SIJ Smit 4 767 53 176 758 8 191
SM Crafford 7 671 4 689 192
SR Claassen 327 1 764 523
BJ Claasen - - - - J Botha 9 890 7 736 233 1 408 D De Bruin 1 232 3 709 721 664 SS Lesch - - - - Total 48 675 116 517 1 806 16 671 Municipal Manager and Section 57 Employees
Adv H Linde 13 231 10 039 2 1 783
DA Josephus 8 108 8 786 1 376
JWA Kotzee 14 568 8 764 - 3 076 H Krohn 10 692 21 596 994 (2 396) M Wüst - - - - GJ Goliath - - - - Total 46 599 49 184 995 3 839 All rates, service charges and other charges in respect of related parties are in accordance with
approved tariffs that were advertised to the public. No impairment charge have been recognised in respect of amounts owed by related parties.
The Municipality is not currently engaged in litigation which could result in damages/costs being awarded against Council if claimants are successful in their actions.
Figures in Rand 2019 2018
BERGRIVIER LOCAL MUNICIPALITY
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDING 30 JUNE 2019
56 RELATED PARTIES (CONTINUED) 2018
Councillors
A Small 279 5 952 48 1 062 AJ De Vries 10 917 4 317 46 1 272 AJ Du Plooy 1 003 6 107 154 3 711 EB Manuel - - - - J Daniels 5 681 7 705 11 1 056 J Swart 6 573 7 246 20 1 368 MA Wessels - 15 181 - 975 RM van Rooy - - - - SIJ Smit 4 456 48 566 340 7 260 SM Crafford 5 932 4 621 - (1 295) SR Claassen 1 114 4 919 - 505 BJ Claasen - - - - SS Lesch - - - - Total 35 955 104 614 619 15 914 Municipal Manager and Section 57 Employees
Adv H Linde 12 922 14 095 - 2 054 DA Josephus 6 684 6 280 - 1 330 JWA Kotzee 1 170 7 999 - 1 124 H Krohn 9 358 29 658 1 504 12 391 GJ Goliath - - - - Total 30 134 58 033 1 504 16 898
56.2 Related Party Loans
56.3 Compensation of management personnel
Remuneration of management personnel are disclosed in notes 30 and 31.
56.4 Other related party transactions
56.5 Other transactions in terms of Section 45 of the Municipal Supply Chain Regulations.
Company Name Related Party Family member in service of the state Amount Amount
Siphenkhosi Protection Service C Claasen Spouse (Bergrivier Municipality) - 147 758 Shop at Sandys T Wessels Daughter (Bergrivier Municipality) 23 130 22 450 IOMU trading A Appollis Spouse (Correctional Services) 580 729 330 959 Ettiene Vermaak J Vermaak Spouse (Karl Bremer Hospital) 19 861 27 107 Cederberg Conservation Service B Du Plessis Spouse (Cape Nature) 18 038 - Die Naaldwerk Kamer W de Jager Spouse (Bergrivier Municipality) 4 900 -
Total 646 658 528 274
The following awards were made where immediate family members are in the service of the State:
The Municipality did not enter into any transactions where Councillors or Management had an interest.
There are no loans outstanding to any related party. Since 1 July 2004 loans to councillors and senior management employees are not permitted.
Figures in Rand 2019 2018
BERGRIVIER LOCAL MUNICIPALITY
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDING 30 JUNE 2019
56 CONTINGENT ASSET
The Municipality is not aware of any contigent assets.
57 FINANCIAL SUSTAINABILITY
Financial Indicators
The current ratio increased to 4.12:1 from 3.61:1 in the prior year.
58 B-BBEE PERFORMANCE
Information on compliance with the B-BBEE Act is included in the annual report under the section titled B-BBEE Compliance Performance Information.
Cash and Cash Equivalents have decreased during the year due to the Municipality settling outstanding creditors at year-end.
Management is of the opinion that the Municipality will continue to operate as a going concern and perform it's functions as set out in the Constitution.
The Municipality have budgeted for a surplus of R15 962 721 for the 2019/2020 financial year and surpluses of R4 405 604 and R5 666 262 for the 2020/2021 and 2021/2022 years respectively.