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 present fairly the state of affairs of the municipality at the end of the financial year and the results of its operations and cash flows for the period then ended. The Accounting Officer is of the opinion, based on the information and explanations provided by management, that the internal control system provides reasonable assurance that the financial data can be relied upon for the preparation of the annual financial statements.
Although the Accounting Officer is primarily responsible for the municipality's financial affairs, he is supported by the municipality's external auditors. N3 - The variance in other own income is mainly due to the implementation of the new system of traffic fines by TMT. N4 - The variance is due to incorrect budgeting in relation to the provision for impairment of trade and other receivables.
Presentation of Annual Financial Statements
Presentation currency
Going concern assumption
Significant judgements and sources of estimation uncertainty
Significant judgements and sources of estimation uncertainty (continued) Impairment testing
Significant judgements and sources of estimation uncertainty (continued) Water inventory
Biological assets that form part of an agricultural activity
Investment property
Investment property (continued) Fair value
Property, plant and equipment Initial Recognition
Property, plant and equipment (continued)
Infrastructure assets are treated in the same way as all other assets of the municipality in terms of asset management policy. The carrying amount of an item of property, plant and equipment is derecognised on disposal, or when no future economic benefits or service potential are expected from its use or disposal. The gain or loss resulting from derecognition of an item of property, plant and equipment is included in surplus or deficit when the item is derecognised.
Gains or losses are calculated as the difference between the carrying amount of an asset (cost less accumulated depreciation and accumulated impairment losses) and the proceeds of sale are recognized in the statement of financial results as a gain or loss on the sale of property, plant and equipment. The entity has an obligation to dismantle, remove and restore property, plant and equipment. The cost of an item of property, plant and equipment includes the initial estimate of the cost of dismantling and removing the asset and restoring it to its location, the liability incurred by an entity either when the asset is acquired or as a result of having been used for a period of time for purposes other than producing inventories during that period.
Intangible assets Initial Recognition
If the related asset is measured using the cost model: a) subject to (b), changes in the liability are added to, or deducted from, the cost of the related asset in the current period;. If it is such an indication, the asset is tested for impairment by estimating its recoverable amount or recoverable service amount, and any impairment loss is recognized in accordance with the accounting policy on impairment of cash-generating assets and/or impairment of non-cash-generating assets.
Intangible assets (continued)
Heritage assets
Heritage assets (continued)
Financial instruments
Financial instruments (continued)
Financial assets at amortized cost are initially measured at fair value plus transaction costs directly attributable to the acquisition or issue of the financial asset. Financial assets measured at fair value are initially measured at fair value plus directly attributable transaction costs. Financial liabilities measured at fair value are measured at fair value, with any resulting gain or loss recognized in the statement of financial results.
Any other financial liabilities are classified as "Other financial liabilities" (all liabilities, loans and received loans are classified as other liabilities) and are initially measured at fair value, excluding transaction costs. Interest expenses are recognized in the income statement using the effective interest rate. Changes in the book value of the value adjustment account are recognized in the statement of financial operations.
Leases
A provision for impairment of receivables is established when there is objective evidence that the municipality will not be able to collect all amounts due under the original terms of the receivables. The amount of the provision is the difference between the carrying amount of the financial asset and the present value of estimated future cash flows, discounted at the original effective interest rate. The municipality derecognizes financial assets only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity, except when the municipality approves the write-off of financial assets for non-recoverability.
If the municipality does not transfer or retain substantially all the risks and rewards of ownership and continues to exercise control over the transferred asset, the municipality recognizes its retained interest in the asset and an associated liability for amounts it may have to pay. If the municipality retains substantially all the risks and rewards of ownership of a transferred financial asset, the municipality continues to recognize the financial asset and also recognizes a collateralized loan for the proceeds received. The municipality recognizes the difference between the carrying amount of the financial liability (or portion of a financial liability) that has matured or been transferred to another party and the consideration paid, including any noncash assets transferred or liabilities assumed, in the statement of financial performance.
Leases (continued) The Municipality as Lessee
Inventories
Inventories (continued) Initial Recognition
Impairment of cash-generating assets
Impairment of cash-generating assets (continued)
Impairment of non-cash-generating assets
Employee benefits Short-term employee benefits
Employee benefits (continued) Defined contribution plans
Employee benefits (continued) Defined benefit plans
Provisions and contingencies Provisions
Commitments
Commitments (continued)
Revenue from exchange transactions General
Revenue from exchange transactions (continued) Rendering of services
Revenue from exchange transactions (continued)
Revenue from non-exchange transactions
Revenue from non-exchange transactions (continued)
Borrowing costs
Comparative figures Prior year comparatives
Unauthorised expenditure
Fruitless and wasteful expenditure
Irregular expenditure
Related parties
Events after reporting date
Accumulated Surplus
Non-current Assets held for sale Initial Recognition
Grants-in-aid
Value added tax
Treatment of administration and other overhead expenses
Changes in accounting policies that are affected by management have been applied retrospectively in accordance with the requirements of GRAP 3, except to the extent that it is impossible to determine the specific effects of the period or the cumulative effect of the policy change. Details of changes in estimates are disclosed in the notes to the annual financial statements where applicable. The correction of errors is applied retrospectively to the period in which the error occurred in accordance with the requirements of GRAP 3, except to the extent that it is impossible to determine the specific effects of the period or the cumulative effect of the error.
See Note 36 to the Financial Statements for details of corrections of errors recorded during the reporting period.
Notes to the Annual Financial Statements
New standards and interpretations
- Standards and interpretations issued, but not yet effective 3.2 Standards and interpretations not yet effective or relevant
Segment Reporting
- New standards and interpretations (continued)
- Biological assets that form part of an agricultural activity
- Investment property
- Property, plant and equipment
- Property, plant and equipment (continued) Reconciliation of property, plant and equipment - 2016
- Property, plant and equipment (continued) Reconciliation of property, plant and equipment - 2015
- Other financial assets Designated at fair value
- Consumer Deposits
- Employee benefit obligations
- Inventories
- Cash and cash equivalents Cash and cash equivalents consist of
- Accumulated surplus
- Finance lease obligation Minimum lease payments due
- Other financial liabilities At amortised cost
- Payables from exchange transactions
- Service charges
- Other income
- Investment revenue Dividend revenue
- Transfers and subsidies Other subsidies
- Government grants and subsidies (continued)
- Public contributions and donations
- Depreciation and amortisation
- Finance costs
- Contracted services
The effective date of the standard has not yet been set by the Minister of Finance. All the municipality's biological assets are held under free interests and no biological assets are pledged as security for any liabilities of the municipality. No impairment losses were recognized on Investment Property of the municipality at the reporting date.
The fair value of Investments was determined after consideration of the market value of the shares in OVK. The municipality's management is of the opinion that the accounting value of Receivables approximates their fair value. The municipality is registered on the basis of payment, therefore incoming and outgoing VAT is indicated based on the municipality's cash flow.
After completion of the audit, the municipality was assured that all input VAT claimed for the periods that were withheld (July 2014 to June 2015) would be paid to the municipality. No restrictions have been imposed on the municipality regarding the use of its cash and cash equivalents. The Centlec Payable relates to the amounts owed to Centlec in terms of services rendered on behalf of the Municipality.
No interest is charged for the first 30 days from the date of receipt of the invoice. Interest is then charged in accordance with the credit policies for the various individual creditors with whom the municipality deals. The councillor, who holds the posts of mayor/chairman of the municipality, serves full-time.
During August 2012, the municipality noticed that the graves were used outside the boundaries of a municipal cemetery in Zastron. A notice of motion has been issued to the Municipality regarding R19 708 982 owed to the SALA Pension Fund. A notice of motion has been issued against the Municipality in respect of R7 535 749 owed to the SAMWU Provident Fund.
Managers' Consumer Accounts
- Prior period errors
- Prior period errors (continued) Accumulated Surplus
- Prior period errors (continued)
- Comparative figures
- Risk management Financial risk management
- Risk management (continued) Credit risk
- Risk management (continued) Trade and Other Receivables
- Risk management (continued) Interest rate risk
- Going concern
- Events after the reporting date
- Unauthorised expenditure
- Fruitless and wasteful expenditure
- Irregular expenditure
- Additional disclosure in terms of Municipal Finance Management Act Contributions to organised local government
- Additional disclosure in terms of Municipal Finance Management Act (continued) Pension and Medical Aid Deductions
- Additional disclosure in terms of Municipal Finance Management Act (continued)
- Multi-employer Retirement Benefit Information
- Budget differences
- Budget differences (continued) Statement of Financial Position
The decrease in the asset is due to the reversal of items on which VAT was wrongly claimed by the Municipality. The Municipality obtained an actuarial valuation in terms of the current year and previous year. The Accounting Officer has overall responsibility for establishing and overseeing the municipality's risk management framework.
The corporate treasury function reports quarterly to the municipal risk management committee, an independent body that monitors risks and the policies implemented to reduce risk exposure. The municipality's liquidity risk is the result of available funds to cover future obligations. Credit risk refers to the risk that the counterparty will not fulfill its contractual obligations, which will result in a financial loss for the municipality.
The municipality's maximum exposure to credit risk is represented by the carrying value of each financial asset in the Statement of Financial Position, without regard to the value of any security obtained. The municipality's activities mainly expose it to the financial risks of changes in interest rates. The municipality's activities do not expose it to the financial risks of foreign exchange and therefore have no formal policy to hedge volatility in the foreign market.
The diversification of the portfolio takes place within the limits set by the municipality. Certain important financial ratios, such as liquidity, cost recovery, accounts receivable. collection rates and payment terms of creditors will be closely monitored and necessary corrective actions will be taken. v) The council's cash management was under pressure during the 2015/16 financial period due to R7.1 million being withheld from Equitable's receivable. There is insufficient information available to use defined benefit administration for the pension and pension funds for the following reasons:-. i) The assets of each fund are held in a single portfolio and are not notionally allocated to any of the participating employers. ii) One annual statement is prepared for each fund and not one annual statement for each participating employer. iii).
The municipality's only obligation in relation to pension benefit plans is to make specified contributions. The contract started in March 2016 and has brought a significant increase in revenues and receivables from traffic fines registered by the Municipality. A8 - Changes in payables from exchange transactions are mainly affected by the Municipality experiencing severe cash flow constraints.
Prior Year Current Year
