The accountant is required by the Municipal Financial Management Act (Act 56 of 2003) to keep adequate accounts and is responsible for the content and integrity of the annual accounts and associated financial information included in this report. It is the accountant's responsibility to ensure that the annual accounts give a true and fair view of the municipality's affairs as of the end of the financial year and the results of its operations and cash flows for the period then ended.
Presentation of Annual Financial Statements
Significant judgements and sources of estimation uncertainty
Significant judgements and sources of estimation uncertainty (continued) Useful lives of property, plant and equipment and other assets
Going concern - assumption
Investment property
Investment property (continued)
Property, plant and equipment
Property, plant and equipment (continued)
The gain or loss arising from the derecognition of an item of property, plant and equipment is included in surplus or deficit when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net sale proceeds, if any, and the carrying amount of the item.
Intangible assets
Intangible assets (continued) Intangible assets are derecognised
Financial instruments
Financial instruments (continued) Initial recognition
Financial instruments (continued) Gains and losses
Financial instruments (continued)
Leases
Inventories
Inventories (continued)
Impairment of cash-generating assets
Impairment of cash-generating assets (continued) Recognition and measurement (individual asset)
Impairment of cash-generating assets (continued) Reversal of impairment loss
Impairment of non-cash-generating assets
Impairment of non-cash-generating assets (continued) Value in use
Impairment of non-cash-generating assets (continued) Reversal of an impairment loss
Employee benefits
Employee benefits (continued)
Current service costs are the increase in the present value of defined benefit obligations resulting from the employee's service in the current period. The municipality uses the projected credit unit method to determine the present value of its defined benefit obligations and related current service costs and, where applicable, past service costs.
Employee benefits (continued) Actuarial assumptions
Employee benefits (continued) Termination benefits
Provisions and contingencies Provisions are recognised when
Provisions and contingencies (continued)
Provisions and contingencies (continued) Levies
Revenue from exchange transactions
Revenue from exchange transactions (continued)
Revenue from non-exchange transactions
Revenue from non-exchange transactions (continued)
The taxable event for property rates is the passing of the date on which the tax is assessed or the period for which the tax is assessed if the tax is assessed periodically. Except for services in kind, which are not recognized, the municipality recognizes an asset in connection with transfers when the transferred assets meet the definition of an asset and meet the criteria for recognition as an asset. Assets from fines are measured according to the best estimate of the inflow of funds to the municipality.
Where settlement discounts or reductions in the amount payable are offered, the municipality takes into account past history in assessing the likelihood that such discounts or reductions will be obtained by debtors. When the municipality collects fines in the capacity of agent, the fine will not be income of the collecting entity. Gifts and donations, including goods in kind, are recognized as assets and income when it is probable that future economic benefits or service potential will flow to the municipality and the fair value of the assets can be measured reliably.
The portion of the loan that must be repaid, together with any interest payments, is an exchange transaction and is accounted for in accordance with the standard of GRAP on financial instruments. The off-market portion of the loan recognized as non-currency income is calculated as the difference between the proceeds received from the loan and the present value of the loan's contractual cash flows, discounted at a market-related interest rate. Where an obligation exists, the municipality recognizes revenue when it meets the conditions of the loan agreement.
Value-added tax
Comparative figures
Unauthorised expenditure
Fruitless and wasteful expenditure
Irregular expenditure
Accumulated surplus
Accumulated surplus (continued) Donations and public contributions reserve
Budget information
Events after the reporting date
Commitments
Notes to the Annual Financial Statements
New standards and interpretations
- Standards and interpretations issued, but not yet effective
- Standards and interpretations not yet effective or relevant
Call Investments Deposit
Receivables from exchange transactions Gross balances
Investment property
The valuation list for 2012/13 was used to determine the fair values ​​as it is believed to reflect the market value of the properties. A register containing the information required by section 63 of the Municipal Finance Management Act is available for inspection at the municipality's registered office. There are no restrictions on the realizability of long-term tangible invested assets or the remittance of income and disposal proceeds.
There are no contractual obligations to purchase, construct or develop investment property or for repairs, maintenance or improvements.
Property, plant and equipment
Intangible assets
Accumulated surplus
VAT receivable
Provisions
Employee benefit obligations Post retirement medical benefit plan
R R The most recent actuarial valuations of the scheme's assets and the present value of the benefit-based obligation have been carried out as of 30 June 2016 by independent actuaries and consultants. The present value of the defined benefit obligation and the associated current service cost and past service cost was measured using the Projected Unit Credit Method. There is insufficient information available to use defined benefit accounting for the pension and pension funds for the following reasons:. i) The assets of each fund are held in one portfolio and are not theoretically allocated to each of the participating employers. ii) A set of accounts is prepared for each fund and accounts are not prepared for each participating employer. iii).
The same premium percentage applies to all participating employers and differences in membership distribution between the participating employers are not taken into account. The only obligation of the municipality with regard to the pension schemes is to pay the said contributions. The total costs included in the statement of financial results represent contributions payable by the municipality to these plans at rates specified in the rules of the plans.
However, where the market for these bonds is not significant, the market interest rates on government bonds consistent with the estimated maturity of the post-retirement obligations should be used. Wage Inflation Rate: This assumption is necessary to reflect the estimated growth in the wages of the eligible employees until retirement. It should be noted that the valuation method and assumptions do not affect the final cost of the LSA - this is determined by actual experience and by the benefits delivered.
Finance lease obligation Future finance charges
All residential property owners are exempt from paying fees for the first property value of R15,000.00.
Service charges
Fines
This grant is used to set up and support the budget and treasury office and fund the appointment of finance practitioners. This grant was used to implement new financial systems, the GRAP conversion process, neighborhood participation and debt management activities. The focus of this grant is to stimulate and accelerate investment in underserved residential areas.
This grant will be used to promote local economic development at tourism hubs identified by the KZN Corridor Development Program within the Northern Municipal Planning Region. The grant was sponsored by the Department of Economic Development, Tourism and Environmental Affairs for projects intended to promote local economic development.
Other income
Remuneration of councillors
Tools of the trade as Gazette 39548: Fixing upper limit for civil servants The Deputy Mayor. Kingfisher road was being rehabilitated to lay the black top layer, also the demolition of the council chamber in the main office building to make way for the new building and office equipment which has deteriorated. The asset's recoverable amount was based on its fair value less costs to sell.
The main events and circumstances that led to the reversal of these impairment losses are as follows:.
Collection costs
Lease rentals on operating lease
Contracted services
Grants and subsidies paid Other subsidies
Reclassification of leave provisions, resulting in a line item shown separately on the balance sheet page in accordance with GRAP 1.76 in 2014. The balance sheet represents pension and health assistance contributions deducted from employee wages and Council contributions to pension and health assistance funds.
Commitments
Retirement benefit information Defined Benefit Plan
These are not treated as defined benefit plans as defined by AERP 25, but are accounted for as defined contribution plans. 31 which states that where information required for proper defined benefit plan accounting is not available in respect of multi-employer and state plans, it must be accounted for as defined contribution plans. The municipality was unsuccessful in obtaining the necessary information to support proper defined benefit plan accounting due to limitations imposed by multi-employer plan.
An interim valuation carried out on NJMP Superannuation (Defined Benefit) on 31 March 2006 showed that the surcharge of 6% was maintained for the year 30 June 2007 and at 4.5% thereafter. The latest statutory valuation of NJMP Retirement (Defined Benefit) as at 31 March 2007 reflects a fund deficit of R229.8 million in respect of members. The total contribution rate, including the total mark-up of 14%, will close the deficit by 2010.
The latest statutory valuation of the NJMP Provident Fund (Defined Contribution) as of March 3, 2007 showed that the fund was financially healthy. An amount of R9 783 633 was contributed by the council in respect of the pension funding of councilors and employees. These contributions have been expensed and are included in personnel costs for the year.
Contingencies Contingent assets
The municipality's current contributions are charged to expenses based on the costs of current services.
Key sources of estimation uncertainty and judgements
Credit risk mainly consists of liquid stocks, cash, derivative financial instruments and trade receivables. Otherwise, if there is no independent assessment, the risk control assesses the customer's credit quality, taking into account its financial position, past experience and other factors. The municipality is exposed to a number of guarantees for economic entities' overdrafts and to guarantees provided in favor of the creditors of A (Pty) Ltd.
The significant difference between approved budget and actual result is a consequence of activities in the accounting period. The annual accounts for the entire state are prepared on an accrual basis using a classification based on the nature of expenses in the income statement. The annual accounts differ from the budget, which is approved on a cash basis, and which deals only with the public sector, excluding state-owned enterprises and certain other non-market public entities and activities.
The amounts in the financial statements have been reclassified from accrual basis to cash basis and reclassified by functional classification to be on the same basis as the final approved budget. In addition, amounts in the financial statements have been adjusted for timing differences related to the revolving credits and differences in the entities involved (public enterprises) to express the actual amounts on a comparable basis to the final approved budget. The changes between the approved and final budget are due to changes in the general budget parameters.
Comparative figures
Schedule of external loans as at 30 June 2016
Unaudited Analysis of property, plant and equipment as at 30 June 2016
Analysis of property, plant and equipment as at 30 June 2015
Cost/Revaluation Accumulated Depreciation
Segmental Statement of Financial Performance for the year ended
Prior Year Current Year
