Skip to main content

Full text of "MP324 Nkomazi AFS 2018-19 Audited"

See other formats


Audited 

By 


2019 - 12 - 0 8 

Auditor General South Africa 

Mpumalanga Business Unit j 



A/%zmta&& Afeueielpai&Gf 


Nkomazi Local Municipality 
Annual Financial Statements 
for the year ended 30 June 2019 











Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

General Information 


Legal form of entity 


Local municipality 


Nature of business and principal activities 

Mayoral committee 

Executive Mayor 
Speaker 
Chief whip 

Other mayoral committee members 


Councillors 


Audited 

By 

2019 "t2“ 0 8 

Auditor General South Africa 
Mpumalanga Business ^!l_. 


Providing municipal services 


Mkhatshwa JM 
Mashele SJ 
Ngcane EZ 

Mabuza S (MMC - Budget and Treasury) 

Hlophe NC (MMC - Planning and Development) 
Mahlalela SS (MMC - Corporate Services) 

Mkhatshwa TM (MMC - Community and Social Services) 
Mziako PM (MMC - Infrastructure) 

Chambale IM (Deceased) 

Dikiza GK 
Khoza DM 
Khoza MR 
Dlamini-Zitha SP 
Lubisi MT 
Lubisi NF 
Luphoko PC 
Lusibane FN 
Mabuza VE 
Madlopha TA 
Magagula BS 
Magagula PP 
Magagula FK . 

Magagula CT' 

Mahlalela MM 
Malaza BB 
Manzini NE 
Maphanga NP 
Masilela TE 
Masuku SH 
Mathonsi SS 
Mavuso DD 
Mazibuko DG 
Mkhatshwa IP 
Mkhatshwa SL 
Mkhonto BE 
Mkhonto DG 
Mndawe SO 
Mogibe GN 
Moosa VC 
Motha CM 
Mtetwa JM 
Mthombo TM 
Ndlovu PF 
Ngomane FN 
Ngomane LP 
Ngomane MP 


1 








Nkomazi Local 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 will be 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) and the MFMA, 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. 

The accounting officer acknowledges that he is 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 the accounting 
officer to meet these responsibilities, the accounting officer sets standards for internal control aimed at reducing the risk of 
error or deficit 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 risk management in 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. 

The accounting officer is 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 deficit. 

The accounting officer has reviewed the municipality’s cash flow forecast for the year to 30 June 2020 and, in the light of this 
review and the current financial position, he is satisfied that the municipality has or has access to adequate resources to 
continue in operational existence for the foreseeable future. 

The accounting officer is responsible for the preparation of these annual financial statements, which are set out on the attached 
pages, in terms of Section 126(1) of the Municipal Finance Management Act and which I have signed on behalf of the 
Municipality. 

I certify that the salaries, allowances and benefits of Councillors as disclosed in the notes of the attached unaudited 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 Cooperative Governance and Traditional Affairs determination 
in accordance with this Act. 


The annual financial statements set out on pages 6 to 74, 
approved by the accounting officer on 31 August 2019. 


Ngwenya M D 
Accounting officer 


which have been prepared on the going concern basis, were 


Audited 

By 

2019 -12- 8 8 

A Mn 1 it ° r ? eneralSouth/ 'f r ica 
_MpumcWar, ga Business Unit 


5 










Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Index 


Acronyms 


COID 

Compensation for Occupational Injuries and Diseases 

CRR 

Capital Replacement Reserve 

DBSA 

Development Bank of Southern Africa 

ASB 

Accounting Standards Board 

GRAP 

Generally Recognised Accounting Practice 

AFS 

Annual financial statements 

IAS 

International Accounting Standard 

SOFP 

Statement of Financial Position 

SOCINA 

Statement of Changes in Net Assets 

IPSAS 

International Public Sector Accounting Standards 

ME's 

Municipal Entities 

PPE 

Property, plant and equipment 

MFMA 

Municipal Finance Management Act 

MIG 

Municipal Infrastructure Grant (Previously CMIP) 

CIGFARO 

Chartered Institute of Government Finance, Audit & Risk Officers 

mSCOA 

Municipal Standard Chart of Accounts 

AP 

Accounting Policy 


Audited 

By 

19 -12- G 8 


Auditor General South Africa 
Mpumalanga Business Unit 


4 









Nkomazi Local 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 municipal council: 

Page 

Accounting Officer's Responsibilities and Approval 
Accounting Officer's Report 
Statement of Financial Position 
Statement of Financial Performance 
Statement of Changes in Net Assets 


Audited 

By 


Notes 

Statement of Comparison of Budget and Actual Amounts 
Appropriation Statement 
Accounting Policies 

Notes to the Annual Financial Statements 


- 12 - 8 8 

Auditor General South Africa 
Mpumalanga Business Unit | 


5 

6 

7 

8 

9 

10 

11 -14 
15-14 
15-37 
38-74 


The following supplementary information does not form part of the annual financial statements and is unaudited: 
Appendixes: 

Appendix B: Analysis of Property, Plant and Equipment 
Appendix D: Segmental Statement of Financial Performance 
Appendix E(1): Actual versus Budget (Revenue and Expenditure) 

Appendix E(2): Actual versus Budget (Acquisition of Property, Plant and Equipment) 


Appendix F: Disclosure of Grants and Subsidies in terms of the Municipal Finance 
Management Act 

Appendix G(1): Budgeted Financial Performance (revenue and expenditure by standard 
classification) 

Appendix G(2): Budgeted Financial Performance (revenue and expenditure by municipal vote) 
Appendix G(3): Budgeted Financial Performance (revenue and expenditure) 

Appendix G(4): Budgeted Capital Expenditure by vote, standard classification and funding 
Appendix G(5): Budgeted Cash Flows 


75-75 

77 

78 

79 

80 


81 

83 

84 
86 
88 


3 








Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

General Information 


Audited 

By 

2019 - 12 - 0 3 

Auditor General South Africa 
Mp umalanga Business Unit J 


Grading of local authority 
Accounting Officer 
Chief Finance Officer (CFO) 
Business address 


Postal address 

Bankers 

Auditors 

Dermarcation code 


Ngomane GB 
Nkala KP 
Nkalanga ML 
Nkosi JM 
Nkosi TS 
Nyambi VT 
Preddy MMS 
Shabangu JC 
Shisane TC 
Shongwe BC 
Shongwe MD 
Shongwe NF 
Shungube Zl 
Sibiya GP 
Siboza JT 
Sindane MJ 
Thumbathi NP 
Tiwane BM 
Vuma LT 

4 

Ngwenya M D 

Thobela T S 

9 Park Street 
Civic centre 
Malalane 
1320 

Private Bag XI01 

Malelane 

1320 

Standard Bank 
Nelspruit 

The Auditor General 
MP324 


2 














Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Accounting Officer's Report 


The accounting officer submits his report for the year ended 30 June 2019. 

1. Review of activities 
Main business and operations 

The municipality is a medium capacity municipality, engaged in providing municipal services. It delivers basic services 
such as water, electricity and refuse removal services to the Malelane, Komatipoort, Marloth Park and Hectorspruit 
region. The municipality provides free water and refuse removal services to rural areas within the local sphere of 
Nkomazi. 

The operating results and state of affairs of the municipality are fully set out in the attached annual financial statements and 
do not in our opinion require any further comment. 

surplus of the municipality was R 240 871 305 (2018: surplus R 242 573 421). 

2. Going concern 

We draw attention to the fact that at 30 June 2019, the municipality had an accumulated surplus (deficit) of R 2 268 846 756 
and that the municipality’s total assets exceed its liabilities by R 2 268 846 756. 

The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This 
basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of 
liabilities, contingent obligations and commitments will occur in the ordinary course of business. 

3. Subsequent events 

The accounting officer is not aware of any other matter or circumstance arising since the end of the financial year which 
requires adjustment or disclosure in the unaudited annual financial statements, except for two events. The municipality entered 
into agreement with Department of Community Safety, Security and Liason to transfer the function of Licencing department 
back to the province . The municipality erroneously paid salaries on the 14th of October 2019 which is 10 days before the 
normal payment date of the 25th of each month. 

4. Accounting policies 

The annual financial statements have been prepared in accordance with the prescribed Standards of Generally Recognised 
Accounting Practices (GRAP) issued by the Accounting Standards Board, in accordance with Section 122(3) of the MFMA. The 
impact on the results of the municipality in adopting the above policies is reflected in note 1 to the financial statement. 

5. Accounting Officer 

The accounting officer of the municipality during the year and to the date of this report is as follows:s 


6. Auditors 


Name 

Ngwenya M D 


Nationality 

SA 



Audited 

By 

2019 -12- s s 


The Auditor General will continue in office for the next financial period. 


6 









Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 


Statement of Financial Position as at 30 June 2019 






Note(s) 

2019 

R 

2018 

Restated* 

R 

Assets 







Current Assets 







Operating lease asset 




7 

49 531 

21 428 

Inventories 




9 

5 253 221 

2 896 715 

Receivables from exchange transactions 



10 

1 024 622 

991 463 

Receivables from non-exchange transactions 



11 

62 692 970 

60 108 592 

VAT receivable 




12 

55 918 048 

47 117717 

Consumer debtors 




13 

31 889 028 

26 966 728 

Cash and cash equivalents 




14 

205 822 074 

206 594 311 






362 649 494 

344 696 954 

Non-Current Assets 







Investment property 




3 

14 883 187 

15 281 327 

Property, plant and equipment 




4 

2 090 413 038 

1 911 388 737 

Intangible assets 




5 

1 034 008 

1 289 654 

Heritage assets 




6 

1 621 944 

1 621 944 

Operating lease asset 




7 

11 956 

36 264 

Receivables from exchange transactions 



10 

18 853 794 

17 084 643 






2 126 817 927 

1 946 702 569 

Total Assets 





2 489 467 421 

2 291 399 523 

Liabilities 







Current Liabilities 







Operating lease liability 




7 

- 

42 080 

Finance lease obligation 




15 

2 194 378 

2 134 881 

Unspent conditional grants and receipts 



16 

888 056 

29 229 510 

Provisions 




17 

33 337 167 

29 826 589 

Payables from exchange transactions 



18 

120 825 613 

139 727 369 






157 245 214 

200 960 429 

Non-Current Liabilities 







Operating lease liability 




7 

246 576 

71 566 

Employee benefit obligation 




8 

37 542 000 

35 942 000 

Finance lease obligation 




15 

529 993 

1 807 430 

Provisions 




17 

25 056 882 

24 642 648 






63 375 451 

62 463 644 

Total Liabilities 

- — 

a i iH itpd 


220 620 665 

263 424 073 

Net Assets 


MUUl LCW 


2 268 846 756 

2 027 975 450 

Accumulated surplus 



oy 


2 268 846 756 2 027 975 450 



2019 

-12- 8 8 





Auditor General South Africa 





Mpumalanga Business Unit 

] 




* See Note 49 


7 


























Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 


Statement of Financial Performance 






2019 

2018 

Restated* 




Note(s) 

R 

R 

Revenue 






Revenue from exchange transactions 





Service charges 



19 

144 568 061 

128 845 439 

Rental of facilities and equipment 



20 

4 974 158 

3 040 464 

Interest received (trading) 



21 

7 305 613 

11 391 004 

Agency services 



22 

13 068 155 

12 587 776 

Licences and permits 



23 

27 419 

36 103 

Recoveries 



25 

209 144 

498 604 

Other income 



25 

5 453 988 

5 569 622 

Interest received - external 



26 

27 648 707 

19 851 644 

Gain on disposal of assets 




1 889 080 

- 

Actuarial gains 




1 949 000 

- 

Total revenue from exchange transactions 



207 093 325 

181 820 656 

Revenue from non-exchange transactions 





Taxation revenue 

Property rates 



27 

94 404 808 

105 503 008 

Transfer revenue 

Fines, Penalties and Forfeits 



24 

14 565 676 

5 411 836 

Government grants & subsidies 



28 

821 172 599 

737 311 077 

Public contributions and donations 



29 

3 491 815 

69 475 264 

Total revenue from non-exchange transactions 



933 634 898 

917 701 185 

Total revenue 



21 

1 140 728 223 1 099 521 841 

Expenditure 

Employee related costs 



30 

(406 073 563) 

(366 204 189) 

Remuneration of councillors 



31 

(33 643 902) 

(27 512 748) 

Depreciation and amortisation 



32 

(66 137 553) 

(61 407 560) 

Impairment loss 



33 

(8 727 960) 

(32 162 218) 

Finance costs 



36 

(823 627) 

(2 049 834) 

Lease rentals on operating lease 



34 

(6 514 756) 

(7 990 731) 

Debt Impairment 



37 

(20 637 535) 

(26 079 111) 

Bulk purchases 



38 

(83 318 535) 

(77 968 710) 

Contracted services 



39 

(146 287 392) 

(130 859 976) 

Transfers and Subsidies 



35 

(1 054 758) 

(11 527 520) 

Loss on disposal of assets 




- 

(893 191) 

Actuarial losses 




- 

(232 000) 

Operational expenditure 


Audited 

By 

41 

(126 637 337) 

(112 060 632) 

Total expenditure 



(899 856 918) 

(856 948 420) 

Surplus for the year 



240 871 305 

242 573 421 



2019 -12- 8 8 





Auditor General South Africa 





Mpumalanga Business Unit 

1 










See Note 49 


8 




















Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Statement of Changes in Net Assets 


Balance at 01 July 2017 

Changes in net assets 
Surplus for the year 

Total changes 

Opening balance as previously reported 

Adjustments 

Correction of errors 

Restated* Balance at 01 July 2018 as restated* 

Changes in net assets 
Surplus for the year 

Total changes 

Balance at 30 June 2019 

Note(s) 


Accumulated Total net 
surplus assets 

R_R 

1 785 402 029 1 785 402 029 

242 573 421 242 573 421 

242 573 421 242 573 421 

2 032 952 142 2 032 952 142 

(4 976 691) (4 976 691) 

2 027 975 451 2 027 975 451 

240 871 305 240 871 305 

240 871 305 240 871 305 

2 268 846 756 2 268 846 756 

49 



* See Note 49 


9 











Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 


Notes 



Note(s) 

2019 

R 

2018 

Restated* 

R 

Cash flows from operating activities 




Receipts 

Sale of goods and services 


277 039 103 

351 672 559 

Grants 


821 172 599 

737 311 077 

Interest income 


27 648 707 

1 125 860 409 

19 851 644 

1 108 835 280 

Payments 

Employee costs 


(437 966 601) 

(393 716 937) 

Suppliers 


(436 756 166) 

(453 705 578) 

Finance costs 


(823 627) 

(875 546 394) 

(2 049 834) 

(849 472 349) 

Net cash flows from operating activities 

43 

250 314 015 

259 362 931 

Cash flows from investing activities 

Purchase of property, plant and equipment 

4 

(249 752 272) 

(169 540 031) 

Purchase of other intangible assets 

5 

(116 040) 

(226 337) 

Net cash flows from investing activities 


(249 868 312) 

(169 766 368) 

Cash flows from financing activities 

Repayment of other financial liabilities 


_ 

(1 540 955) 

Finance lease payments 


(1 217 940) 

(2 129 557) 

Net cash flows from financing activities 


(1 217 940) 

(3 670 512) 

Net increase/(decrease) in cash and cash equivalents 


(772 237) 

85 926 051 

Cash and cash equivalents at the beginning of the year 


206 594 311 

120 668 260 

Cash and cash equivalents at the end of the year 

14 

205 822 074 

206 594 311 


Audited 

BV i 

2019 -12- 0 8 

Auditor General South Africa 
Mpumalanga Business Unit j 


See Note 49 


10 





















Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 


Statement of Comparison of Budget and Actual Amounts 


Budget on Accrual Basis 


A . . >J ! A 

] 

1 


Approved Adj ustments 

Finaf Budget Actual amounts 

Difference 

Reference 


budget 


By on comparable 

between final 






basis 

budget and 







actual 



R 

R 

2019 R"iZ- 9 S r 

R 


Statement of Financial Performance 

Auditor General South Africa 



Revenue 


Mpumalanga Business Unit 



Revenue from exchange 







transactions 







Service charges 

138 655 823 11 170 203 

149 826 026 

144 568 061 

(5 257 965) 

Note 59 

Rental of facilities and equipment 

3 210 166 

1 478 215 

4 688 381 

4 974 158 

285 777 


Interest received (trading) 

13 108 714 

(5 711 583) 

7 397 131 

7 305 613 

(91 518) 


Agency services 

11 692 085 

(2 965 135) 

8 726 950 

13 068 155 

4 341 205 

Note 59 

Licences and permits 

34 840 

- 

34 840 

27 419 

(7 421) 

Note 59 

Recoveries 

294 066 

- 

294 066 

209 144 

(84 922) 

Note 59 

Other income 

3 781 834 

(162 568) 

3 619 266 

5 453 988 

1 834 722 

Note 59 

Interest received - external 

12 427 975 10 340 879 

22 768 854 

27 648 707 

4 879 853 

Note 59 

Total revenue from exchange 

183 205 503 14 150 011 

197 355 514 

203 255 245 

5 899 731 


transactions 







Revenue from non-exchange 







transactions 







Taxation revenue 







Property rates 

114 723 093 

(2 186 144) 

112 536 949 

94 404 808 

(18 132 141) 

Note 59 

Transfer revenue 







Government grants & subsidies 

788 322 522 38 640 178 

826 962 700 

821 172 599 

(5 790 101) 

Note 59 

Public contributions and 

- 

- 

- 

3 491 815 

3 491 815 


donations 







Fines, Penalties and Forfeits 

28 774 113 

(448 385) 

28 325 728 

14 565 676 

(13 760 052) 

Note 59 

Total revenue from non¬ 

931 819 728 

36 005 649 

967 825 377 

933 634 898 

(34 190 479) 


exchange transactions 







Total revenue 

1 115 025 231 i 

50 155 660 

1 165 180 891 ' 

1 136 890 143 

(28 290 748) 


Expenditure 







Personnel 

(358 810 803) 

1 232 595 

(357 578 208) 

(406 073 563) 

(48 495 355) 

Note 59 

Remuneration of councillors 

(24 290 797) 

- 

(24 290 797) 

(33 643 902) 

(9 353 105) 

Note 59 

Depreciation and amortisation 

(61 197 763) 

- 

(61 197 763) 

(66 137 553) 

(4 939 790) 


Impairment loss/ Reversal of 

- 

- 

- 

(8 727 960) 

(8 727 960) 


impairments 







Finance costs 

(692 458) 

- 

(692 458) 

(823 627) 

(131 169) 

Note 59 

Lease rentals on operating lease 

(9 975 617) 

- 

(9 975 617) 

(6 514 756) 

3 460 861 

Note 59 

Debt Impairment 

(22 199 697) 

- 

(22 199 697) 

(20 637 535) 

1 562 162 


Bulk purchases 

(67 344 737) 

- 

(67 344 737) 

(83 318 535) 

(15 973 798) 

Note 59 

Contracted Services 

(111 183 940) 

(2 726 335) 

(113 910 275) 

(146 287 392) 

(32 377 117) 

Note 59 

Transfers and Subsidies 

(16 659 690) 

1 367 661 

(15 292 029) 

(1 054 758) 

14 237 271 

Note 59 

General Expenses 

(174 702 170) 

161 824 

(174 540 346) 

(126 637 337) 

47 903 009 

Note 59 

Total expenditure 

(847 057 672) 

35 745 

(847 021 927) 

(899 856 918) 

(52 834 991) 


Operating surplus 

267 967 559 

50 191 405 

318 158 964 

237 033 225 

(81 125 739) 


Gain on disposal of assets 

- 

- 

- 

1 889 080 

1 889 080 


Actuarial gains 

- 

- 

- 

1 949 000 

1 949 000 



- 

- 

- 

3 838 080 

3 838 080 


Surplus before taxation 

267 967 559 

50 191 405 

318 158 964 

240 871 305 

(77 287 659) 



11 























Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Statement of Comparison of Budget and Actual Amounts 


Budget on Accrual Basis 


Approved 

budget 

R 

Adjustments 

R 

Final Budget Actual amounts Difference Reference 

on comparable between final 
basis budget and 

actual 

R R R 


Actual Amount on Comparable 

267 967 559 

50 191 405 

318 158 964 240 871 305 

(77 287 659) 


Basis as Presented in the 
Budget and Actual 
Comparative Statement 


Audited 

By 

2019 -12- 0 8 

Auditor General South Africa 
I Mpumala nga Business Unit 


12 
















Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 


Statement of Comparison of Budget and Actual Amounts 

Budget on Accrual Basis 


A 

pproved Adjustments Final Budget 1 

budget Audited i 

By 

R R R 

\ctual amounts 
Dn comparable 
basis 

R 

Difference 
between final 
budget and 
actual 

R 

Reference 




2019 -M- 

0 8 




Statement of Financial Position 







Assets 


Auditor General South Africa 




Current Assets 


Mpumalanga Business Unit 




Inventories 

4 039 289 

- 

4 039 289 

5 253 221 

1 213 932 


Operating lease asset 


23 917 

- 

23 917 

49 531 

25 614 


Receivables from exchange 


_ 

_ 

- 

1 024 622 

1 024 622 

Note 59 

transactions 








VAT receivable 

43 226 662 

- 

43 226 662 

55 918 048 

12 691 386 


Consumer debtors 

41 999 578 

- 

41 999 578 

94 581 998 

52 582 420 

Note 59 

Cash and cash equivalents 

177 352 706 

- 

177 352 706 

205 822 074 

28 469 368 

Note 59 


266 642 152 

- 

266 642 152 

362 649 494 

96 007 342 


Non-Current Assets 








Investment property 

44 274 194 

(15 320 213) 

28 953 981 

14 883 187 

(14 070 794) 


Property, plant and equipment 

2 188 861 025 

45 383 231 

2 234 244 256 2 090 413 038 

(143 831 218) 


Intangible assets 

2 307 356 

70 000 

2 377 356 

1 034 008 

(1 343 348) 

Note 59 

Heritage assets 

3 264 580 

- 

3 264 580 

1 621 944 

(1 642 636) 

Note 59 

Receivables from exchange 

20 844 639 

- 

20 844 639 

18 853 794 

(1 990 845) 

Note 59 

transactions 








Operating lease asset 


61 210 

- 

61 210 

11 956 

(49 254) 

Note 59 


2 259 613 004 

30 133 018 2 289 746 022 2 126 817 927 

(162 928 095) 


Total Assets 

2 526 255 156 

30 133 018 

2 556 388 174 2 489 467 421 

(66 920 753) 


Liabilities 








Current Liabilities 








Finance lease obligation 


- 

- 

- 

2 194 378 

2194 378 

Note 59 

Payables from exchange 

91 831 607 

30 133 018 

121 964 625 

120 825 612 

(1 139 013) 


transactions 








Unspent conditional grants and 


- 

- 

- 

888 056 

888 056 

Note 59 

receipts 








Provisions 

36 883 881 

- 

36 883 881 

33 337 167 

(3 546 714) 

Note 59 


128 715 488 

30133 018 

158 848 506 

157 245 213 

(1 603 293) 


Non-Current Liabilities 








Other financial liabilities 

4 147 311 

- 

4 147 311 

_ 

(4 147 311) 

Note 59 

Finance lease obligation 


- 

- 

- 

529 993 

529 993 

Note 59 

Operating lease liability 


- 

- 

- 

246 576 

246 576 

Note 59 

Employee benefit obligation 


- 

- 

- 

37 542 000 

37 542 000 

Note 59 

Provisions 

58 915 527 


58 915 527 

25 056 882 

(33 858 645) 

Note 59 


63 062 838 

- 

63 062 838 

63 375 451 

312 613 


Total Liabilities 

191 778 326 

30 133 018 

221 911 344 

220 620 664 

(1 290 680) 


Net Assets 

2 334 476 830 

- 

2 334 476 830 2 268 846 757 

(65 630 073) 



13 

























Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Statement of Comparison of Budget and Actual Amounts 


Budget on Accrual Basis 


Approved 

Adjustments 

Final Budget Actual amounts 

Difference Reference 

budget 



on comparable between final 




basis 

budget and 





actual 

R 

R 

R 

R 

R 


Net Assets 

Net Assets Attributable to 
Owners of Controlling Entity 

R6S6rV6S 

Accumulated surplus 2 334 476 830 - 2 334 476 830 2 268 846 757 (65 630 073) 


Audited 

By 

2019 - 12 - 0 3 

Auditor General South Africa 
Mpumalanga Business Unit | 


14 

















Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Accounting Policies 


1. Presentation of Annual Financial Statements 

The annual financial statements have been prepared in accordance with the Standards of Generally Recognised Accounting 
Practice (GRAP), issued by the Accounting Standards Board in accordance with Section 122(3) of the Municipal Finance 
Management Act (Act 56 of 2003). 

These annual financial statements have been prepared on an accrual basis of accounting and are in accordance with historical 
cost convention as the basis of measurement, unless specified otherwise. They are presented in South African Rand, rounded 
off to the nearest tenth. 

A summary of the significant accounting policies, which have been consistently applied in the preparation of these annual 
financial statements, are disclosed below. 

These accounting policies are consistent with the previous period. 

1.1 Going concern assumption 

These annual financial statements have been prepared based on the expectation that the municipality will continue to 
operate as a going concern for at least the next 12 months. 

1.2 Significant judgements and sources of estimation uncertainty 

In preparing the annual financial statements, management is required to make estimates and assumptions that affect the 
amounts represented in the annual financial statements and related disclosures. Use of available information and the 
application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates 
which may be material to the annual financial statements. Significant judgements include: 

Trade receivables / Held to maturity investments and/or loans and receivables 

The municipality assesses its trade receivables, held to maturity investments and loans and receivables for impairment at the 
end of each reporting period. In determining whether an impairment loss should be recorded in surplus or deficit, the surplus 
makes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flows 
from a financial asset. 

The impairment for trade receivables, held to maturity investments and loans and receivables is calculated on a portfolio basis, 
based on historical loss ratios, adjusted for national and industry-specific economic conditions and other indicators present at 
the reporting date that correlate with defaults on the portfolio. These annual loss ratios are applied to loan balances in the 
portfolio and scaled to the estimated loss emergence period. 

Allowance for slow moving, damaged and obsolete stock 

An allowance for stock to write stock down to the lower of cost or net realisable value. Management have made estimates of 
the selling price and direct cost to sell on certain inventory items. 




Auditor General South Africa 
Mpumalang a Business \im j 


2019 ->2" 0 3 


Audited 

By 



15 








Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Accounting Policies 


1.2 Significant judgements and sources of estimation uncertainty (continued) 

Fair value estimation 

The fair value of financial instruments traded in active markets (such as trading and available-for-sale securities) is based on 
quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the 
municipality is the current bid price. 

The fair value of financial instruments that are not traded in an active market (for example, over-the counter derivatives) is 
determined by using valuation techniques. The municipality uses a variety of methods and makes assumptions that are based 
on market conditions existing at the end of each reporting period. Quoted market prices or dealer quotes for similar instruments 
are used for long-term debt. Other techniques, such as estimated discounted cash flows, are used to determine fair value for 
the remaining financial instruments. The fair value of interest rate swaps is calculated as the present value of the estimated 
future cash flows. The fair value of forward foreign exchange contracts is determined using quoted forward exchange rates at 
the end of the reporting period. 

The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values. 
The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the 
current market interest rate that is available to the municipality for similar financial instruments. 

The carrying amount of available-for-sale financial assets would be an estimated R - lower or R - higher were the discounted 
rate used in the discount cash flow analysis to differ by 10% from management's estimates. 


Impairment testing 

The recoverable service amounts of non-cash generating units and individual assets have been determined based on the 
higher of value-in-use calculations and fair values less costs to sell. These calculations require the use of estimates and 
assumptions. It is reasonably possible that the assumptions may change which may then impact our estimations and may then 
require a material adjustment to the carrying value of tangible assets. 


The municipality reviews and tests the carrying value of assets when events or changes in circumstances suggest that the 
carrying amount may not be recoverable. Assets are grouped at the lowest level for which identifiable cash flows are largely 
independent of cash flows of other assets and liabilities. If there are indications that impairment may have occurred, estimates 
are prepared of expected future cash flows for each group of assets. Expected future cash flows used to determine the value in 
use of tangible assets are inherently uncertain and could materially change over are significantly affected by a 

number of factors including, together with economic factors such as inflation interest. 

B v 

Provisions 

Provisions were raised and management determined an estimate based on th^Jinformatibniayailable. Additonal disclosure of 
these estimates of provisions are included in note 17 - Provisions. 

Useful lives of PPE and other assets >outh Africa 

Mpumalanga Business Unit 

The municipality’s management determines the estimated useful lives and related depreciation charges for PPE and other 
assets. This estimate is based on industry norm. Management will increase the depreciation charge where useful lives are less 
than previously estimated useful lives. 


Post retirement benefits 

The present value of the post retirement obligation depends on a number of factors that are determined on an actuarial basis 
using a number of assumptions. The assumptions used in determining the net cost (income) include the discount rate. Any 
changes in these assumptions will impact on the carrying amount of post retirement obligations. 

The municipality determines the appropriate discount rate at the end of each year. This is the interest rate that should be used 
to determine the present value of estimated future cash outflows expected to be required to settle the pension obligations. In 
determining the appropriate discount rate, the municipality considers the interest rates of high-quality corporate bonds that are 
denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the 
related pension liability. 

Other key assumptions for pension obligations are based on current market conditions. Additional information is disclosed in 
Note 8. 


16 






Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Accounting Policies 


1.2 Significant judgements and sources of estimation uncertainty (continued) 

Effective interest rate 

The municipality used an appropriate interest rate, taking into account guidance provided in the accounting standards, and 
applying professional judgement to the specific circumstances, to discount future cash flows. Appropriate adjustments have 
been made to compensate for the effect of deferred settlement terms that materially impact on the fair value of financial 
instruments, revenue and expenses at initial recognition. The adjustments requires a degree of estimation around the discount 
rates and periods used. 

Allowance for doubtful debts 


On debtors an impairment loss is recognised in surplus and deficit when there is objective evidence that it is impaired. The 
impairment is measured as the difference between the debtors carrying amount and the present value of estimated future cash 
flows discounted at the effective interest rate, computed at initial recognition. 


1.3 Investment property 


Investment property is property (land or a building - or part of a building - or both) held to earn rentals or for capital appreciation 
or both, rather than for: 

• use in the production or supply of goods or services or for 

• administrative purposes, or 

• sale in the ordinary course of operations. 


Owner-occupied property is property held for use in the production or supply of goods o^ services or for administrative 
purposes - Audited 

Investment property is recognised as an asset when, it is probable^at the future economic benefits or service potential that 
are associated with the investment property will flow to the municipality, and the cost or fair value of the investment property 
can be measured reliably. 

0M9 -\r Q o 

Investment property is initially recognised at cost. Transaction costs are included in the initial measurement. 

through a nont-exchange trah^ctlSVi, its^ cost is its fair value as at the date of 

| Mpu ma' a —- 1 

Costs include costs incurred initially and costs ihcurred subsequently to add to, or to replace a part of, or service a property. If a 
replacement part is recognised in the carrying amount of the investment property, the carrying amount of the replaced part is 
derecognised. 


Where investment property is acquired 
acquisition. 


Cost model 

Investment property is carried at cost less accumulated depreciation and any accumulated impairment losses. 

Depreciation is provided to write down the cost, less estimated residual value over the useful life of the property, which is as 
follows: 


Item Useful life 

Property - land indefinite 

Property - buildings 10-30 years 

Investment property is derecognised on disposal or when the investment property is permanently withdrawn from use and no 
future economic benefits or service potential are expected from its disposal. 

Gains or losses arising from the retirement or disposal of investment property is the difference between the net disposal 
proceeds and the carrying amount of the asset and is recognised in surplus or deficit in the period of retirement or disposal. 

1.4 Property, plant and equipment 

Property, plant and equipment are tangible non-current assets (including infrastructure assets) that are held for use in the 
production or supply of goods or services, rental to others, or for administrative purposes, and are expected to be used during 
more than one period. 


17 




Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Accounting Policies 


1.4 Property, plant and equipment (continued) 

The cost of an item of property, plant and equipment is recognised as an asset when: 

• it is probable that future economic benefits or service potential associated with the item will flow to the 
municipality; and 

• the cost of the item can be measured reliably. 

Property, plant and equipment is initially measured at cost. 

The cost of an item of property, plant and equipment is the purchase price and other costs attributable to bring the asset to the 
location and condition necessary for it to be capable of operating in the manner intended by management. Trade discounts and 
rebates are deducted in arriving at the cost. 

Where an asset is acquired through a non-exchange transaction, its cost is its fair value as at date of acquisition. 

Where an item of property, plant and equipment is acquired in exchange for a non-monetary asset or monetary assets, or a 
combination of monetary and non-monetary assets, the asset acquired is initially measured at fair value (the cost). If the 
acquired item's fair value was not determinable, it's deemed cost is the carrying amount of the asset(s) given up. 

When significant components of an item of property, plant and equipment have different useful lives, they are accounted for as 
separate items (major components) of property, plant and equipment. 


Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred 
subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of 
property, plant and equipment, the carrying amount of the replaced part is derecognised. 


The initial estimate of the costs of dismantling and removing the item and restoring the it is located is 

included in the cost of property, plant and equipment, where the entity obligated to incur such expenditure, and w 
obligation arises as a result of acquiring the asset or using it for purposes other than the production of inventories. 

Recognition of costs in the carrying amount of an item of property, plant and equipment,ceases when^he item is in 
and condition necessary for it to be capable of operating in the manner ntended by management. 0 


Items such as spare parts, standby equipment and servicing equipment are recognised when they meet the definitibn of 
property, plant and equipment 

Unit 

Major inspection costs which are a condition of continuing use of an item of property, plant and equipment and which meet the 
recognition criteria above are included as a replacement in the cost of the item of property, plant and equipment. Any remaining 
inspection costs from the previous inspection are derecognised. 


also 

here the 


the location 


Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses. 

Property, plant and equipment are depreciated on the straight line basis over their expected useful lives to their estimated 
residual value. 


The useful lives of items of property, plant and equipment have been assessed as follows: 


Item Depreciation method Average useful life 


Land 

N/A 

Indefinite 

Buildings 

Straight line 

5 -30 years 

Landfil site land 

Straight line 

10-30 years 

Plant and machinery 

Straight line 

2-15 years 

Furniture and fixtures 

Straight line 

3-10 years 

Motor vehicles 

Straight line 

4-15 years 

IT equipment 

Straight line 

3-10 years 

Infrastructure 

Straight line 


- Roads and storm water 

Straight line 

3-100 years 

- Electricity 

Straight line 

3-80 years 

- Water 

Straight line 

10-100 years 

- Sewerage 

Straight line 

10-60 years 

- Solid waste disposal 

Straight line 

5 - 55 years 


18 










Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Accounting Policies 


1.4 Property, plant and equipment (continued) 

The depreciable amount of an asset is allocated on a systematic basis over its useful life. 

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is 
depreciated separately. 

The depreciation method used reflects the pattern in which the asset’s future economic benefits or service potential are 
expected to be consumed by the municipality. The depreciation method applied to an asset is reviewed at least at each 
reporting date and, if there has been a significant change in the expected pattern of consumption of the future economic 
benefits or service potential embodied in the asset, the method is changed to reflect the changed pattern. Such a change is 
accounted for as a change in an accounting estimate. 

The municipality assesses at each reporting date whether there is any indication that the municipality expectations about the 
residual value and the useful life of an asset have changed since the preceding reporting date. If any such indication exists, the 
municipality revises the expected useful life and/or residual value accordingly. The change is accounted for as a change in an 
accounting estimate. 

The depreciation charge for each period is recognised in surplus or deficit unless it is included in the carrying amount of 
another asset. 


Items of property, plant and equipment are derecognised when the asset is disposed of or when there are no further economic 
benefits or service potential expected from the use of the asset. 


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 disposal proceeds, if any, and the carrying.amount of the item. 

IS I 


i part of the ordinary course of 


Assets which the municipality holds for rentals to others and sub&equehtfy routinely sell a! 

activities, are transferred to inventories when (he rentals end and the assets are available-for-sale. Proceeds from sales of 
these assets are recognised as revenue. All cash flows on these assets are included in cash flows from operating activities in 


the notes. 




The municipality discloses relevant information 
financial statements (see note 4). 


Game 


relating to a 



m a*) m r> Q 

under construction or development, in the notes to the 


Auditor General South Africa 
Mpumalanga Business Unit^ 


The municipality recognises game asset as an asset if it is probable that future economic benefits or service potential 
associated with the asset will flow to the municipality, and the cost or fair value of the asset can be measured reliably. 

Game assets is initially measured at cost 

Where game asset is acquired at no cost, or for a nominal cost, its cost is its fair value as at date of acquisition or game count. 

Subsequent to initial recognition game assets are measured at cost less accumuated impairment losses. 

The municipality derecognises game asset on disposal, or when no future economic benefits or service potential are expected 
from its use or disposal. 

The gain or loss arising from the derecognition of game asset is determined as the difference between the net disposal 
proceeds, if any, and the carrying amount of the game asset. Such difference is recognised in surplus or deficit when the game 
asset is derecognised. 


19 












Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Accounting Policies 


1.5 Intangible assets 

An asset is identifiable if it either: 

• is separable, i.e. is capable of being separated or divided from an entity and sold, transferred, licensed, rented or 
exchanged, either individually or together with a related contract, identifiable assets or liability, regardless of 
whether the entity intends to do so; or 

• arises from binding arrangements (including rights from contracts), regardless of whether those rights are 
transferable or separable from the municipality or from other rights and obligations. 

An intangible asset is recognised when: 

• it is probable that the expected future economic benefits or service potential that are attributable to the asset will 
flow to the municipality; and 

• the cost or fair value of the asset can be measured reliably. 

The municipality assesses the probability of expected future economic benefits or service potential using reasonable and 
supportable assumptions that represent management’s best estimate of the set of economic conditions that will exist over the 
useful life of the asset. 

Where an intangible asset is acquired through a non-exchange transaction, its initial cost at the date of acquisition is measured 
at its fair value as at that date. 


Expenditure on research (or on the research phase of an internal project) is recognised as an expense when it is incurred. 


An intangible asset arising from development (or from the development phase of an internal project) is recognised 
• it is technically feasible to complete the asset so that it will be available for use or sale. 


there is an intention to complete and use or sell it, 
there is an ability to use or sell it. 
it will generate probable future economic benefits or service 


potential. 


By 


there are available technical, financial and other resources to complete theJdbveldpment and to use or sell the 
asset. 

the expenditure attributable to the asset during its developn^ej^g^|)g^^s^^lgibl^ , ^ 

Intangible assets are carried at cost less any accumulated amortisation and pny* * jrnp&rnnent Iqsses. ess (j n j[ i 


when: 


An intangible asset is regarded as having an indefinite useful life when, based on all relevant factors, there is no foreseeable 
limit to the period over which the asset is expected to generate net cash inflows or service potential. Amortisation is not 
provided for these intangible assets, but they are tested for impairment annually and whenever there is an indication that the 
asset may be impaired. For all other intangible assets amortisation is provided on a straight line basis over their useful life. 


The amortisation period and the amortisation method for intangible assets are reviewed at each reporting date. 


Reassessing the useful life of an intangible asset with a finite useful life after it was classified as indefinite is an indicator that 
the asset may be impaired. As a result the asset is tested for impairment and the remaining carrying amount is amortised over 
its useful life. 


Internally generated brands, mastheads, publishing titles, customer lists and items similar in substance are not recognised as 
intangible assets. 

Internally generated goodwill is not recognised as an intangible asset. 

Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows: 


Item Depreciation method Average useful life 

Computer software, other Straight line 2 - 5 years 

Intangible assets are derecognised: 

• on disposal; or 

• when no future economic benefits or service potential are expected from its use or disposal. 

The gain or loss arising from the derecognition of an intangible assets is included in surplus or deficit when the asset is 
derecognised (unless the Standard of GRAP on leases requires otherwise on a sale and leaseback). 


20 











Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Accounting Policies 


1.6 Heritage assets 

Heritage assets are assets that have a cultural, environmental, historical, natural, scientific, technological or artistic significance 
and are held indefinitely for the benefit of present and future generations. 

Recognition 

The municipality recognises a heritage asset as an asset if it is probable that future economic benefits or service potential 
associated with the asset will flow to the municipality, and the cost or fair value of the asset can be measured reliably. 

Initial measurement 

Heritage assets are measured at cost. 

Where a heritage asset is acquired through a non-exchange transaction, its cost is measured at its fair value as at the date of 
acquisition. 

Subsequent measurement 


After recognition as an asset, a class of heritage assets is carried at its cost less any accumulated impairment losses. 


Impairment 

The municipality assess at each reporting date whether tlteVtf Wdn indication that it may be impaired. If any such indication 
exists, the municipality estimates the recoverable amount or th,e recoverable service amount of the heritage asset. 


Transfers 

Transfers from heritage assets are only made when the^ai 


Transfers to heritage assets are only made when 

' /\U J 

Derecognition 


5 8 1 

y particular asset no longer meets the definition of a heritage asset. 

. south Afncal 

I the asset meets the definition of a heritage asset. 

d f i-mea Business 
Mpumal <aJ^> _—--—" 


The municipality derecognises heritage asset on disposal, or when no future economic benefits or service potential are 
expected from its use or disposal. 


The gain or loss arising from the derecognition of a heritage asset is included in surplus or deficit when the item is 
derecognised (unless the Standard of GRAP on leases requires otherwise on a sale and leaseback). 

1.7 Financial instruments 


A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or a residual 
interest of another entity. 

The amortised cost of a financial asset or financial liability is the amount at which the financial asset or financial liability is 
measured at initial recognition minus principal repayments, plus or minus the cumulative amortisation using the effective 
interest method of any difference between that initial amount and the maturity amount, and minus any reduction (directly or 
through the use of an allowance account) for impairment or uncollectibility. 

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge 
an obligation. 

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. 

Derecognition is the removal of a previously recognised financial asset or financial liability from an entity’s statement of 
financial position. 


21 




Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Accounting Policies 


1.7 Financial instruments (continued) 

The effective interest method is a method of calculating the amortised cost of a financial asset or a financial liability (or group of 
financial assets or financial liabilities) and of allocating the interest income or interest expense over the relevant period. The 
effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of 
the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial 
liability. When calculating the effective interest rate, an entity shall estimate cash flows considering all contractual terms of the 
financial instrument (for example, prepayment, call and similar options) but shall not consider future credit losses. The 
calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective 
interest rate (see the Standard of GRAP on Revenue from Exchange Transactions), transaction costs, and all other premiums 
or discounts. There is a presumption that the cash flows and the expected life of a group of similar financial instruments can be 
estimated reliably. However, in those rare cases when it is not possible to reliably estimate the cash flows or the expected life 
of a financial instrument (or group of financial instruments), the entity shall use the contractual cash flows over the full 
contractual term of the financial instrument (or group of financial instruments). 


Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable willing parties in 
an arm’s length transaction. 

A financial asset is: 

• cash; 

• a residual interest of another entity; or 

• a contractual right to: 

receive cash or another financial asset from another entity; or 

exchange financial assets or financial liabilities with another entity under conditions that are potentially 
favourable to the entity. 


A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a 
loss it incurs because a specified debtor fails to make payment when dije in accordance with the original or modified terms of a 
debt instrument. Audited 

A financial liability is any liability that is a contractual obligation to: By 

deliver cash or another financial asset to another entity; or 
exchange financial assets or financial liabilities under 


Interest rate risk is the risk that the fair value or future cash flows of a 
market interest rates. 


Liquidity risk is the risk encountered by an entity in the event of difficul 
liabilities that are settled by delivering cash or another financial asset. 


conditions that are potentially unfavourable to the entity. 

I TO - 12 - 0 S 

nancial instrument will fluctuate because of changes in 

Auditor General South Africa 

:y in meeting obligations associated with financial 


Loan commitment is a firm commitment to provide credit under pre-specified terms and conditions. 


Loans payable are financial liabilities, other than short-term payables on normal credit terms. 

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in 
market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk. 

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. 


A financial asset is past due when a counterparty has failed to make a payment when contractually due. 

Transaction costs are incremental costs that are directly attributable to the acquisition, issue or disposal of a financial asset or 
financial liability. An incremental cost is one that would not have been incurred if the entity had not acquired, issued or 
disposed of the financial instrument. 

Financial instruments at amortised cost are non-derivative financial assets or non-derivative financial liabilities that have fixed 
or determinable payments, excluding those instruments that: 

• the entity designates at fair value at initial recognition; or 

• are held for trading. 


22 











Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Accounting Policies 


1.7 Financial instruments (continued) 

Classification 

The entity has the following types of financial assets (classes and category) as reflected on the face of the statement of 
financial position or in the notes thereto: 


Class Category 

Receivables from exchange transactions Financial asset measured at amortised cost 

Receivables from non-exchange transactions Financial asset measured at amortised cost 

Cash and cash equivalents Financial asset measured at cost 

The entity has the following types of financial liabilities (classes and category) as reflected on the face of the statement of 
financial position or in the notes thereto: 


Class . ... -— 7 . - 7 Category 

Trade and other payables from exchange transaction Financial liability measured at amortised cost 


Initial recognition 

The entity recognises a financial asset 4r a financial 
party to the contractual provisions of the instrument. 


0Y 




its statement of financial position when the entity becomes a 


^8«a)a> outh 


The entity recognises financial assets using trade date ^ununy. 

I M malanga BuslnessUnrt 

Initial measurement of financial assets and financial liabilities 


The entity measures a financial asset and financial liability initially at its fair value plus transaction costs that are directly 
attributable to the acquisition or issue of the financial asset or financial liability. 


The entity first assesses whether the substance of a concessionary loan is in fact a loan. On initial recognition, the entity 
analyses a concessionary loan into its component parts and accounts for each component separately. The entity accounts for 
that part of a concessionary loan that is: 

• a social benefit in accordance with the Framework for the Preparation and Presentation of Financial Statements, 
where it is the issuer of the loan; or 

• non-exchange revenue, in accordance with the Standard of GRAP on Revenue from Non-exchange Transactions 
(Taxes and Transfers), where it is the recipient of the loan. 


23 




Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Accounting Policies 


1.7 Financial instruments (continued) 

Subsequent measurement of financial assets and financial liabilities 

The entity measures all financial assets and financial liabilities after initial recognition using the following categories: 

• Financial instruments at amortised cost. 

All financial assets measured at amortised cost, or cost, are subject to an impairment review. 

Reclassification 

The entity does not reclassify a financial instrument while it is issued or held unless it is: 

• combined instrument that is required to be measured at fair value; or 

• an investment in a residual interest that meets the requirements for reclassification. 

Gains and losses 

For financial assets and financial liabilities measured at amortised cost or cost, a gain or loss is recognised in surplus or deficit 
when the financial asset or financial liability is derecognised or impaired, or through the amortisation process. 

Impairment and uncollectibility of financial assets 

The entity assess at the end of each reporting period whether there is any objective evidence that a financial asset or group of 
financial assets is impaired. 

Financial assets measured at amortised cost: 

If there is objective evidence that an impairment loss on financial assets measured at amortised cost has been incurred, the 
amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated 
future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original 
effective interest rate. The carrying amount of the asset is reduced directly OR through the use of an allowance account. The 
amount of the loss is recognised in surplus or deficit. 

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an 
event occurring after the impairment was recognised, the previously recognised impairment loss is reversed directly OR by 
adjusting an allowance account. The reversal does not result in a carrying amount of the financial asset that exceeds what the 
amortised cost would have been had the impairment not been recognised at the date the impairment is reversed. The amount 
of the reversal is recognised in surplus or deficit. 


Audited 

By 

2019 - 12 - 0 8 

Auditor General South Africa 
Mpumalanga Business Unit j 


24 













Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Accounting Policies 


1.7 Financial instruments (continued) 

Derecognition 

Financial assets 


Audited 

0y 


2019 - 12 - 0 8 


The entity derecognises financial assets using trade date accounting. 

The entity derecognises a financial asset only when: 

• the contractual rights to the cash flows from the financial asset expire, are settled waived; 

• the entity transfers to another party substantially all of tni^SK^ntfi^eW^rfis of 'iwnefship of the 


financial asset; or 


the entity, despite having retained some significant risks;^pd^eyyar^s^f ownership,of th^ financial asset, has 
transferred control of the asset to another party and the other party has the practical ability to sell the asset in its 
entirety to an unrelated third party, and is able to exercise that ability unilaterally and without needing to impose 
additional restrictions on the transfer. In this case, the entity : 
derecognise the asset; and 

recognise separately any rights and obligations created or retained in the transfer. 


The carrying amounts of the transferred asset are allocated between the rights or obligations retained and those transferred on 
the basis of their relative fair values at the transfer date. Newly created rights and obligations are measured at their fair values 
at that date. Any difference between the consideration received and the amounts recognised and derecognised is recognised 
in surplus or deficit in the period of the transfer. 


If the entity transfers a financial asset in a transfer that qualifies for derecognition in its entirety and retains the right to service 
the financial asset for a fee, it recognise either a servicing asset or a servicing liability for that servicing contract. If the fee to be 
received is not expected to compensate the entity adequately for performing the servicing, a servicing liability for the servicing 
obligation is recognised at its fair value. If the fee to be received is expected to be more than adequate compensation for the 
servicing, a servicing asset is recognised for the servicing right at an amount determined on the basis of an allocation of the 
carrying amount of the larger financial asset. 

If, as a result of a transfer, a financial asset is derecognised in its entirety but the transfer results in the entity obtaining a new 
financial asset or assuming a new financial liability, or a servicing liability, the entity recognise the new financial asset, financial 
liability or servicing liability at fair value. 


On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the 
consideration received is recognised in surplus or deficit. 

If the transferred asset is part of a larger financial asset and the part transferred qualifies for derecognition in its entirety, the 
previous carrying amount of the larger financial asset is allocated between the part that continues to be recognised and the part 
that is derecognised, based on the relative fair values of those parts, on the date of the transfer. For this purpose, a retained 
servicing asset is treated as a part that continues to be recognised. The difference between the carrying amount allocated to 
the part derecognised and the sum of the consideration received for the part derecognised is recognised in surplus or deficit. 

If a transfer does not result in derecognition because the entity has retained substantially all the risks and rewards of ownership 
of the transferred asset, the entity continue to recognise the transferred asset in its entirety and recognise a financial liability for 
the consideration received. In subsequent periods, the entity recognises any revenue on the transferred asset and any expense 
incurred on the financial liability. Neither the asset, and the associated liability nor the revenue, and the associated expenses 
are offset. 


Financial liabilities 


The entity removes a financial liability (or a part of a financial liability) from its statement of financial position when it is 
extinguished — i.e. when the obligation specified in the contract is discharged, cancelled, expires or waived. 

An exchange between an existing borrower and lender of debt instruments with substantially different terms is accounted for as 
having extinguished the original financial liability and a new financial liability is recognised. Similarly, a substantial modification 
of the terms of an existing financial liability or a part of it is accounted for as having extinguished the original financial liability 
and having recognised a new financial liability. 


25 







Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Accounting Policies 


1.7 Financial instruments (continued) 

The difference between the carrying amount of a financial liability (or part of a financial liability) extinguished or transferred to 
another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in 
surplus or deficit. Any liabilities that are waived, forgiven or assumed by another entity by way of a non-exchange transaction 
are accounted for in accordance with the Standard of GRAP on Revenue from Non-exchange Transactions (Taxes and 
Transfers). 

1.8 Leases 

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is 
classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership. 

When a lease includes both land and buildings elements, the entity assesses the classification of each element separately. 

Finance leases - lessee 

Finance leases are recognised as assets and liabilities in the statement of financial position at amounts equal to the fair value 
of the leased property or, if lower, the present value of the minimum lease payments. The corresponding liability to the lessor is 
included in the statement of financial position as a finance lease obligation. 

The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the lease. 

Minimum lease payments are apportioned between the finance charge and reduction of the outstanding liability. The finance 
charge is allocated to each period during the lease term so as to produce a constant periodic rate of on the remaining balance 
of the liability. 

Any contingent rents are expensed in the period in which they are incurred. 

Operating leases - lessor 

Operating lease revenue is recognised as revenue on a straight-line basis over the lease term. 

Initial direct costs incurred in negotiating and arranging operating leases are added to the carrying amount of the leased asset 
and recognised as an expense over the lease term on the same basis as the lease revenue. 


The aggregate cost of incentives is recognised as a reduction of rental 
Income for leases is disclosed under revenue in statement of financial 
Operating leases - lessee 

Operating lease payments are recognised as an expense on a straight 
the amounts recognised as an expense and the contractual payments 

1.9 Inventories 

Inventories are initially measured at cost except where inventories are acquired through a non-exchange transaction, then their 
costs are their fair value as at the date of acquisition. 

Subsequently inventories are measured at the lower of cost and net realisable value. 

Inventories are measured at the lower of cost and current replacement cost where they are held for; 

• distribution at no charge or for a nominal charge; or 

• consumption in the production process of goods to be distributed at no charge or for a nominal charge. 

Net realisable value is the estimated selling price in the ordinary course of operations less the estimated costs of completion 
and the estimated costs necessary to make the sale, exchange or distribution. 

Current replacement cost is the cost the municipality incurs to acquire the asset on the reporting date. 

The cost of inventories comprises of all costs of purchase, costs of conversion and other costs incurred in bringing the 
inventories to their present location and condition. 


evenue over the Iea 3 ?jtpf ( rr} pn a straight-line basis. 


performance. 


By 


between 


are 


2019 -12- G 8 

ie basis over the lease term. The difference I 
recpgnippd a^ap operating lease asset or liability. 

Mpumalanga Business Unit 


26 














Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Accounting Policies 


1.9 Inventories (continued) 

The cost of inventories of items that are not ordinarily interchangeable and goods or services produced and segregated for 
specific projects is assigned using specific identification of the individual costs. 

The cost of water inventories is assigned using the weighted average cost formula. The first in, first out (FIFO) cost formula is 
used for all other inventories having a similar nature and use to the municipality. 

When inventories are sold, the carrying amounts of those inventories are recognised as an expense in the period in which the 
related revenue is recognised. If there is no related revenue, the expenses are recognised when the goods are distributed, or 
related services are rendered. The amount of any write-down of inventories to net realisable value or current replacement cost 
and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any 
reversal of any write-down of inventories, arising from an increase in net realisable value or current replacement cost, are 
recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs. 

1.10 Impairment of cash-generating assets 

Cash-generating assets are assets used with the objective of generating a commercial return. Commercial return means that 
positive cash flows are expected to be significantly higher than the cost of the asset. 

Impairment is a loss in the future economic benefits or service potential of an asset, over and above the systematic recognition 
of the loss of the asset’s future economic benefits or service potential through depreciation (amortisation). 

Carrying amount is the amount at which an asset is recognised in the statement of financial position after deducting any 
accumulated depreciation and accumulated impairment losses thereon. 

A cash-generating unit is the smallest identifiable group of assets used with the objective of generating a commercial return 
that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of 
assets. 


Costs of disposal are incremental costs directly attributable to the disposal of an asset, excluding finance costs and income tax 
expense. 


Depreciation (Amortisation) is the systematic allocation of the depreciable amount of an asset over its useful life. 

Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm's length transaction between 
knowledgeable, willing parties, less the costs of disposal. 

Recoverable amount of an asset or a cash-generating unit is the higher its fair value less costs to sell and its value in use. 

[ ^ by 1 

Useful life is either: 

• the period of time over which an asset is expected to be used by the municipality; or * . o 

• the number of production or similar units expected to be obtained from the a^et by the municipality. 


Identification 

When the carrying amount of a cash-generating asset exceeds its recover 


Auditor General South Africa 

able amount, it is impaired. ! ness Unit 


The municipality assesses at each reporting date whether there is any indication that a cash-generating asset may be 
impaired. If any such indication exists, the municipality estimates the recoverable amount of the asset. 


Discount rate 


The discount rate is a pre-tax rate that reflects current market assessments of the time value of money, represented by the 
current risk-free rate of interest and the risks specific to the asset for which the future cash flow estimates have not been 
adjusted. 

Recognition and measurement (individual asset) 

If the recoverable amount of a cash-generating asset is less than its carrying amount, the carrying amount of the asset is 
reduced to its recoverable amount. This reduction is an impairment loss. 

An impairment loss is recognised immediately in surplus or deficit. 


27 










Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Accounting Policies 


1.10 Impairment of cash-generating assets (continued) 

Reversal of impairment loss 

The municipality assess at each reporting date whether there is any indication that an impairment loss recognised in prior 
periods for a cash-generating asset may no longer exist or may have decreased. If any such indication exists, the entity 
estimates the recoverable amount of that asset. 

A reversal of an impairment loss for a cash-generating asset is recognised immediately in surplus or deficit. 

1.11 Impairment of non-cash-generating assets 

Cash-generating assets are assets used with the objective of generating a commercial return. Commercial return means that 
positive cash flows are expected to be significantly higher than the cost of the asset. 

Non-cash-generating assets are assets other than cash-generating assets. 

Impairment is a loss in the future economic benefits or service potential of an asset, over and above the systematic recognition 
of the loss of the asset’s future economic benefits or service potential through depreciation (amortisation). 

Carrying amount is the amount at which an asset is recognised in the statement of financial position after deducting any 
accumulated depreciation and accumulated impairment losses thereon. 

A cash-generating unit is the smallest identifiable group of assets managed with the objective of generating a commercial 
return that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or 
groups of assets. 

Costs of disposal are incremental costs directly attributable to the disposal of an asset, excluding finance costs and income tax 
expense. 

Depreciation (Amortisation) is the systematic allocation of the depreciable amount of an asset over its useful life. 

Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm’s length transaction between 
knowledgeable, willing parties, less the costs of disposal. 

Recoverable service amount is the higher of a non-cash-generating asset’s fair value less costs to sell and its value in use. 


Useful life is either: 

• the period of time over which an asset is expected to be used by the municipality; or 

• the number of production or similar units expected to be obtained from the asset by the municipality. 

Identification I Audited 


When the carrying amount of a non-cash-generating asset exceeds its recoverable service Amount, it is impaired. 

The municipality assesses at each reporting date whether there is any indication thert.^non-cash-generating asset may be 
impaired. If any such indication exists, the municipality estimates the recoverable service amount of the asset. 


Recognition and measurement 


Auditor General South Africa 


If the recoverable service amount of a non-cash-generating asset is less|t^niit^pafrying arrtount, the carrying amount of the 
asset is reduced to its recoverable service amount. This reduction is an impairment loss. 


An impairment loss is recognised immediately in surplus or deficit. 

Reversal of an impairment loss 

The municipality assess at each reporting date whether there is any indication that an impairment loss recognised in prior 
periods for a non-cash-generating asset may no longer exist or may have decreased. If any such indication exists, the 
municipality estimates the recoverable service amount of that asset. 

A reversal of an impairment loss for a non-cash-generating asset is recognised immediately in surplus or deficit. 


28 












Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Accounting Policies 


1.12 Employee benefits 


Employee benefits are all forms of consideration given by an entity in exchange for service rendered by employees. 

A qualifying insurance policy is an insurance policy issued by an insurer that is not a rented party (as defined in the Standard 
of GRAP on Related Party Disclosures) of the reporting entity, if the proceeds of the policy pan be used only to pay or fund 
employee benefits under a defined benefit plan and are not available to the reporting entity’s own creditors (even in liquidation) 
and cannot be paid to the reporting entity, unless either: 

• the proceeds represent surplus assets that are not needed for the polic2S49n^fetall the delated employee benefit 
obligations; or 

• the proceeds are returned to the reporting entity to reimburse it for employee benefits already paid. 

Auditor eneraT South ATrira 

Termination benefits are employee benefits payable as a result of either: maianga Business Unit 

• an entity’s decision to terminate an employee’s employment before the riormai retirement date; or 

• an employee’s decision to accept voluntary redundancy in exchange for those benefits. 


Other long-term employee benefits are employee benefits (other than post-employment benefits and termination benefits) that 
are not due to be settled within twelve months after the end of the period in which the employees render the related service. 


A constructive obligation is an obligation that derives from an entity’s actions where by an established pattern of past practice, 
published policies or a sufficiently specific current statement, the entity has indicated to other parties that it will accept certain 
responsibilities and as a result, the entity has created a valid expectation on the part of those other parties that it will discharge 
those responsibilities. 


Short-term employee benefits 


Short-term employee benefits are employee benefits (other than termination benefits) that are due to be settled within twelve 
months after the end of the period in which the employees render the related service. 

Short-term employee benefits include items such as: 

• wages, salaries and social security contributions; 

• short-term compensated absences (such as paid annual leave and paid sick leave) where the compensation for the 
absences is due to be settled within twelve months after the end of the reporting period in which the employees 
render the related employee service; 

• bonus, incentive and performance related payments payable within twelve months after the end of the reporting 
period in which the employees render the related service; and 

• non-monetary benefits (for example, medical care, and free or subsidised goods or services such as housing, cars 
and cellphones) for current employees. 

When an employee has rendered service to the entity during a reporting period, the entity recognise the undiscounted amount 
of short-term employee benefits expected to be paid in exchange for that service: 

• as a liability (accrued expense), after deducting any amount already paid. If the amount already paid exceeds the 
undiscounted amount of the benefits, the entity recognise that excess as an asset (prepaid expense) to the extent 
that the prepayment will lead to, for example, a reduction in future payments or a cash refund; and 

• as an expense, unless another Standard requires or permits the inclusion of the benefits in the cost of an asset. 

The expected cost of compensated absences is recognised as an expense as the employees render services that increase 
their entitlement or, in the case of non-accumulating absences, when the absence occurs. The entity measure the expected 
cost of accumulating compensated absences as the additional amount that the entity expects to pay as a result of the unused 
entitlement that has accumulated at the reporting date. 

The entity recognise the expected cost of bonus, incentive and performance related payments when the entity has a present 
legal or constructive obligation to make such payments as a result of past events and a reliable estimate of the obligation can 
be made. A present obligation exists when the entity has no realistic alternative but to make the payments. 

Post-employment benefits 


Post-employment benefits are employee benefits (other than termination benefits) which are payable after the completion of 
employment. 


Post-employment benefit plans are formal or informal arrangements under which an entity provides post-employment benefits 
for one or more employees. 


29 








Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Accounting Policies 


1.12 Employee benefits (continued) 


Post-employment benefits: Defined benefit plans 


Defined benefit plans are post-employment benefit plans other than defined contribution plans. 


Actuarial gains and losses comprise experience adjustments (the effects of differences between the previous actuarial 
assumptions and what has actually occurred) and the effects of changes in actuarial assumptions. In measuring its defined 
benefit liability the entity recognise actuarial gains and losses in surplus or deficit in the reporting period in which they occur. 


Assets held by a long-term employee benefit fund are assets (other than non-transferable financial instruments issued by the 
reporting entity) that are held by an entity (a fund) that is legally separate from the reporting entity and exists solely to pay or 
fund employee benefits and are available to be used only to pay or fund employee benefits, are not available to the reporting 
entity’s own creditors (even in liquidation), and cannot be returned to the reporting entity, unless lather: 

• the remaining assets of the fund are sufficient to meet all the related employee benefit obligations of the plan or the 

reporting entity; or By 

• the assets are returned to the reporting entity to reimburse it for employee benefits already paid. 

Current service cost is the increase in the present value of the defined benefit obligation resulting from employee service in the 
current period. 


Interest cost is the increase during a period in the present value of a definec 
benefits are one period closer to settlement. 


benefit obligation which arises because th< 

Mpumalanga Business Unit 


Past service cost is the change in the present value of the defined benefit obligation for employee service in prior periods, 
resulting in the current period from the introduction of, or changes to, post-employment benefits or other long-term employee 
benefits. Past service cost may be either positive (when benefits are introduced or changed so that the present value of the 
defined benefit obligation increases) or negative (when existing benefits are changed so that the present value of the defined 
benefit obligation decreases). In measuring its defined benefit liability the entity recognise past service cost as an expense in 
the reporting period in which the plan is amended. 


Plan assets comprise assets held by a long-term employee benefit fund and qualifying insurance policies. 


The present value of a defined benefit obligation is the present value, without deducting any plan assets, of expected future 
payments required to settle the obligation resulting from employee service in the current and prior periods. 

The entity account not only for its legal obligation under the formal terms of a defined benefit plan, but also for any constructive 
obligation that arises from the entity’s informal practices. Informal practices give rise to a constructive obligation where the 
entity has no realistic alternative but to pay employee benefits. An example of a constructive obligation is where a change in 
the entity’s informal practices would cause unacceptable damage to its relationship with employees. 


The amount recognised as a defined benefit liability is the net total of the following amounts: 

• the present value of the defined benefit obligation at the reporting date; 

• minus the fair value at the reporting date of plan assets (if any) out of which the obligations are to be settled directly; 

• plus any liability that may arise as a result of a minimum funding requirement 

The amount determined as a defined benefit liability may be negative (an asset). The entity measure the resulting asset at the 
lower of: 

• the amount determined above; and 

• the present value of any economic benefits available in the form of refunds from the plan or reductions in future 
contributions to the plan. The present value of these economic benefits is determined using a discount rate which 
reflects the time value of money. 


Any adjustments arising from the limit above is recognised in surplus or deficit. 

The entity determine the present value of defined benefit obligations and the fair value of any plan assets with sufficient 
regularity such that the amounts recognised in the annual financial statements do not differ materially from the amounts that 
would be determined at the reporting date. 

The entity recognises the net total of the following amounts in surplus or deficit, except to the extent that another Standard 
requires or permits their inclusion in the cost of an asset: 

• current service cost; 

• interest cost; 


30 








Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Accounting Policies 


1.12 Employee benefits (continued) 

• the expected return on any plan assets and on any reimbursement rights; 

• actuarial gains and losses; 

• past service cost; 

• the effect of any curtailments or settlements; and 

• the effect of applying the limit on a defined benefit asset (negative defined benefit liability). 

The entity uses the Projected Unit Credit Method to determine the present value of its defined benefit obligations and the 
related current service cost and, where applicable, past service cost. The Projected Unit Credit Method (sometimes known as 
the accrued benefit method pro-rated on service or as the benefit/years of service method) sees each period of service as 
giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. 

In determining the present value of its defined benefit obligations and the related current service cost and, where applicable, 
past service cost, an entity shall attribute benefit to periods of service under the plan’s benefit formula. However, if an 
employee’s service in later years will lead to a materially higher level of benefit than in earlier years, an entity shall attribute 
benefit on a straight-line basis from: 

• the date when service by the employee first leads to benefits under the plan (whether or not the benefits are 
conditional on further service); until 

• the date when further service by the employee will lead to no material amount of further benefits under the plan, 
other than from further salary increases. 


Actuarial valuations are conducted on an annual basis by independent actuaries separately for each plan. The results of the 
valuation are updated for any material transactions and other material changes in circumstances (including changes in market 
prices and interest rates) up to the reporting date. 


The entity recognises gains or losses on the curtailment or settlement of a defined benefit plan when the curtailment or 
settlement occurs. The gain or loss on a curtailment or settlement comprises: .» Ued 

• any resulting change in the present value of the defined benefit obligatiori^rici 

• any resulting change in the fair value of the plan assets. by 


Actuarial assumptions 

Actuarial assumptions are unbiased and mutually compatible 


1 20ft -ft' Q ® 

1 ^ ^raLSouth Mrica \ 

Financial assumptions are based on market expectations, at the reporting date,, for the period over which the obligations are to 
be settled. 1 Business urn _ i 

1 Mp uma dnc> -_—-- 

The rate used to discount post-employment benefit obligations (both funded and unfunded) reflect the time value of money. 
The currency and term of the financial instrument selected to reflect the time value of money is consistent with the currency 
and estimated term of the post-employment benefit obligations. 


Post-employment benefit obligations are measured on a basis that reflects: 

• estimated future salary increases; 

• the benefits set out in the terms of the plan (or resulting from any constructive obligation that goes beyond those 
terms) at the reporting date; and 

• estimated future changes in the level of any state benefits that affect the benefits payable under a defined benefit 
plan, if, and only if, either: 

• those changes were enacted before the reporting date; or 

• past history, or other reliable evidence, indicates that those state benefits will change in some predictable manner, 
for example, in line with future changes in general price levels or general salary levels. 

Assumptions about medical costs take account of estimated future changes in the cost of medical services, resulting from both 
inflation and specific changes in medical costs. 


31 





Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Accounting Policies 


1.12 Employee benefits (continued) 

Other post retirement obligations 

The municipality has an obligation to provide long-term service allowance benefits to all of its employees. 

The municipality’s liability is based on an actuarial valuation. The Projected Unit Credit Method is used to value the liabilities. 
Actuarial gains and losses on the long-term service awards are recognised in the statement of financial performance. 

The amount recognised as a liability for other long-term employee benefits is the net total of the following amounts: 

• the present value of the defined benefit obligation at the reporting date; 

• minus the fair value at the reporting date of plan assets (if any) out of which the obligations are to be settled directly. 

The municipality shall recognise the net total of the following amounts as expense or revenue, except to the extent that another 
Standard requires or permits their inclusion in the cost of an asset: 

• current service cost; 

• interest cost; 

• the expected return on any plan assets and on any reimbursement right recognised as an asset; 

• actuarial gains and losses, which shall all be recognised immediately; 

• past service cost, which shall all be recognised immediately; and 

• the effect of any curtailments or settlements. 


1.13 Provisions and contingencies 

Provisions are recognised when: 

• the municipality has a present obligation as a result of a past event; 

• it is probable that an outflow of resources embodying economic benefits or service potential will be required to 
settle the obligation; and 

• a reliable estimate can be made of the obligation. 

The amount of a provision is the best estimate of the expenditure expected to be required to settle the present obligation at the 
reporting date. 

Where the effect of time value of money is material, the amount of a provision is the present value of the expenditures 
expected to be required to settle the obligation. 

Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the 
reimbursement is recognised when, and only when, it is virtually certain that reimbursement will be received if the municipality 
settles the obligation. The reimbursement is treated as a separate asset. The amount recognised for the reimbursement does 
not exceed the amount of the provision. 

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. Provisions are reversed if it is 
no longer probable that an outflow of resources embodying economic benefits or service potential will be required, to settle the 
obligation. 

Where discounting is used, the carrying amount of a provision increases in each period to reflect the passage of time. This 
increase is recognised as an interest expense. 


A provision is used only for expenditures for which the provision was originally recognised. 
Provisions are not recognised for future operating surplus (deficit). 


If an entity has a contract that is onerous, the present obligation (net of recoveries) under the contract^ recognised and 
measured as a provision. 

Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed i#8$^ 46. 

Auditor General South Africa 
Mpumalanga Business Unit 


Audited 


32 












Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Accounting Policies 


1.13 Provisions and contingencies (continued) 

Decommissioning, restoration and similar liability 

Changes in the measurement of an existing decommissioning, restoration and similar liability that result from changes in the 
estimated timing or amount of the outflow of resources embodying economic benefits or service potential required to settle the 
obligation, or a change in the discount rate, is accounted for as follows: 

If the related asset is measured using the cost model: 

• changes in the liability is added to, or deducted from, the cost of the related asset in the current period. 

• the amount deducted from the cost of the asset does not exceed its carrying amount. If a decrease in the liability 
exceeds the carrying amount of the asset, the excess is recognised immediately in surplus or deficit. 

• if the adjustment results in an addition to the cost of an asset, the entity consider whether this is an indication that 
the new carrying amount of the asset may not be fully recoverable. If there is such an indication, the entity test the 
asset for impairment by estimating its recoverable amount or recoverable service amount, and account for any 
impairment loss, in accordance with the accounting policy on impairment of assets as described in accounting policy 
1.10 and 1.11. 

• changes in the liability alter the revaluation surplus or deficit previously recognised on that asset, so that: 

a decrease in the liability is credited directly to revaluation surplus in net assets, except that it is recognised in 
surplus or deficit to the extent that it reverses a revaluation deficit on the asset that was previously recognised in 
surplus or deficit; and 

an increase in the liability is recognised in surplus or deficit, except that it is debited directly to revaluation 
surplus in net assets to the extent of any credit balance existing in the revaluation surplus in respect of that asset; 

The adjusted depreciable amount of the asset is depreciated over its useful life. Therefore, once the related asset has reached 
the end of its useful life, all subsequent changes in the liability is recognised in surplus or deficit as they occur. This applies 
under both the cost model and the revaluation model. 


The periodic unwinding of the discount is recognised in surplus or deficit as a finance cost as it occurs.' 1 

1.14 Commitments 1 Audited 

Items are classified as commitments when an entity has committed itself to future transactions that will normally result in the 
outflow of cash. 

1 oplQ 0 8 

Disclosures are required in respect of unrecognised contractual commitments. 

Commitments for which disclosure is necessary to achieve a fair pre&entafiqg should tie di^iifo^ecl' in a note to the financial 
statements, if both the following criteria are met: M p , y ipeSS Unit ( 

• Contracts should be non-cancellable or only cancellable at significant cb& '(tor example, contracts for computer or 
building maintenance services); and 

• Contracts should relate to something other than the routine, steady, state business of the entity - therefore salary 
commitments relating to employment contracts or social security benefit commitments are excluded. 

1.15 Revenue from exchange transactions 


Revenue is the gross inflow of economic benefits or service potential during the reporting period when those inflows result in an 
increase in net assets, other than increases relating to contributions from owners. 

An exchange transaction is one in which the municipality receives assets or services, or has liabilities extinguished, and directly 
gives approximately equal value (primarily in the form of goods, services or use of assets) to the other party in exchange. 

Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in 
an arm’s length transaction. 


Measurement 

Revenue is measured at the fair value of the consideration received or receivable, net of trade discounts and volume rebates. 




Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Accounting Policies 


1.15 Revenue from exchange transactions (continued) 

Sale of goods 

Revenue from the sale of goods is recognised when all the following conditions have been satisfied: 

• the municipality has transferred to the purchaser the significant risks and rewards of ownership of the goods; 

• the municipality retains neither continuing managerial involvement to the degree usually associated with 
ownership nor effective control over the goods sold; 

• the amount of revenue can be measured reliably; 

• it is probable that the economic benefits or service potential associated with the transaction will flow to the 
municipality; and 

• the costs incurred or to be incurred in respect of the transaction can be measured reliably. 


Rendering of services 

When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with 
the transaction is recognised by reference to the stage of completion of the transaction at the reporting date. The outcome 
of a transaction can be estimated reliably when all the following conditions are satisfied: 

• the amount of revenue can be measured reliably; 

• it is probable that the economic benefits or service potential associated with the transaction will flow to the 
municipality; 

• the stage of completion of the transaction at the reporting date can be measured reliably; and 

• the costs incurred for the transaction and the costs to complete the transaction can be measured reliably. 

When services are performed by an indeterminate number of acts over a specified time frame, revenue is recognised on a 
straight line basis over the specified time frame unless there is evidence that some other method better represents the stage of 
completion. When a specific act is much more significant than any other acts, the recognition of revenue is postponed until the 
significant act is executed. 

When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue is recognised 
only to the extent of the expenses recognised that are recoverable. 

Service revenue is recognised by reference to the stage of completion of the transaction at the reporting date. Stage of 
completion is determined by services performed to date as a percentage of total services to be performed. 


Interest, royalties and dividends 

Revenue arising from the use by others of entity assets yielding interest, royaltjes and dividend^6r^Mar distributions is 
recognised when: 

• It is probable that the economic benefits or service potential associated with the transaction will flow to the 
municipality, and 

• The amount of the revenue can be measured reliably. 


Interest is recognised, in surplus or deficit, using the effective interest rate method. 

Auditor General South Africa 

1.16 Revenue from non-exchange transactions 


2019 -12- 0 8 

General Soutl 
Mpumalanga Business Unit 


Revenue comprises gross inflows of economic benefits or service potential received and receivable by an municipality, which 
represents an increase in net assets, other than increases relating to contributions from owners. 


Conditions on transferred assets are stipulations that specify that the future economic benefits or service potential embodied in 
the asset is required to be consumed by the recipient as specified or future economic benefits or service potential must be 
returned to the transferor. 


Fines are economic benefits or service potential received or receivable by entities, as determined by a court or other law 
enforcement body, as a consequence of the breach of laws or regulations. 

Non-exchange transactions are transactions that are not exchange transactions. In a non-exchange transaction, an 
municipality either receives value from another municipality without directly giving approximately equal value in exchange, or 
gives value to another municipality without directly receiving approximately equal value in exchange. 


34 









Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Accounting Policies 


1.16 Revenue from non-exchange transactions (continued) 

Recognition 

An inflow of resources from a non-exchange transaction recognised as an asset is recognised as revenue, except to the extent 
that a liability is also recognised in respect of the same inflow. 

Revenue received from conditional grants, donations and funding are recognised as revenue to the extent that the municipality 
has complied with any criteria, conditions or obligations embodied in the agreement. To the extent that the criteria, conditions 
or obligations have not been met, a liability is recognised. 

Measurement 


Revenue from a non-exchange transaction is measured at the amount of the increase in net assets recognised by the 
municipality. 

When, as a result of a non-exchange transaction, the municipality recognises an asset, it also recognises revenue equivalent 
to the amount of the asset measured at its fair value as at the date of acquisition, unless it is also required to recognise a 
liability. Where a liability is required to be recognised it will be measured as the best estimate of the amount required to settle 
the obligation at the reporting date, and the amount of the increase in net assets, if any, recognised as revenue. When a 
liability is subsequently reduced, because the taxable event occurs or a condition is satisfied, the amount of the reduction in the 
liability is recognised as revenue. 

Taxes 

The municipality recognises an asset in respect of taxes when the taxable event occurs and the asset recognition criteria are 
met. 


Resources arising from taxes satisfy the definition of an asset when the municipality controls the resources as a result of a past 
event (the taxable event) and expects to receive future economic benefits or service potential from those resources. Resources 
arising from taxes satisfy the criteria for recognition as an asset when it is probable that the inflow of resources will occur and 
their fair value can be reliably measured. The degree of probability attached to the inflow of resources is determined on the 
basis of evidence available at the time of initial recognition, which includes, but is not limited to, disclosure of the taxable event 
by the taxpayer. 

The taxable event for property tax is the passing of the date on which the tax is levied, or the period for which the tax is levied, if 
the tax is levied on a periodic basis. 


Taxation revenue is determined at a gross amount. It is not reduced for expenses paid through the tax system. 


Transfers 


Apart from Services in kind, which are not recognised, the municipality recognises an asset in respect of transfers when the 
transferred resources meet the definition of an asset and satisfy the criteria for recognition as an asset. 


The municipality recognises an asset in respect of transfers when the transferred resources meet the definition of an asset and 
satisfy the criteria for recognition as an asset. 


Transferred assets are measured at their fair value as at the date of acquisition. 

Fines 

Fines are recognised as revenue when the receivable meets the definition of an a 
as an asset. 


2019 '12' Q 8 

Auditor General South Africa | 

sset and satisfies the criterid for recognition 


Assets arising from fines are measured at the best estimate of the inflow of resources to the municipality. 

Gifts and donations, including goods in-kind 

Gifts and donations, including goods in kind, are recognised as assets and revenue when it is probable that the future 
economic benefits or service potential will flow to the municipality and the fair value of the assets can be measured reliably. 


35 






Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Accounting Policies 


1.17 Investment income 

Investment income is recognised on a time-proportion basis using the effective interest method. 

1.18 Offsetting 

Assets, liabilities, revenue and expenses have not been offset except when offsetting is required or permitted by a Standard of 
GRAP 


1.19 Comparative figures 

Where necessary, comparative figures have been reclassified to conform to changes in presentation in the current year. 

1.20 Unauthorised expenditure 


Unauthorised expenditure means: 

• overspending of a vote or a main division within a vote; and 

• expenditure not in accordance with the purpose of a vote or, in the case of a main division, not in accordance with 
the purpose of the main division. 

All expenditure relating to unauthorised expenditure is recognised as an expense in the statement of financial performance in 
the year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, and 
where recovered, it is subsequently accounted for as revenue in the statement of financial performance. 

1.21 Fruitless and wasteful expenditure 

Fruitless expenditure means expenditure which was made in vain and would have been avoided had reasonable care been 
exercised. 


All expenditure relating to fruitless and wasteful expenditure is recognised as an expense in the statement of financial 
performance in the year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the 
expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance. 

1.22 Irregular expenditure 


Irregular expenditure is expenditure that is contrary to the Municipal Finance Management Act (Act No.56 of 2003), the 
Municipal Systems Act (Act No.32 of 2000), and the Public Office Bearers Act (Act No. 20 of 1998) or is in contravention of the 
economic entity’s supply chain management policy. Irregular expenditure excludes unauthorised expenditure. Irregular 
expenditure is accounted for as expenditure in the Statement of Financial Performance and where recovered, it is subsequently 
accounted for as revenue in the Statement of Financial Performance. Audited 


1.23 Budget information 


By 


Municipality are typically subject to budgetary limits in the form of appropriations or budget authorisations (or equivalent), which 
is given effect through authorising legislation, appropriation or similar. 


General purpose financial reporting by municipality shall provide information 
accordance with the legally adopted budget. 


on whether resources were obtained and used in 

Mpumalanga Business Unit 

The approved budget is prepared on a accrual basis and presented by ecoriomic'classification linked to performance outcome 
objectives. 


The approved budget covers the fiscal period from 2017/07/01 to 2021/06/30. 

The budget for the economic entity includes all the entities approved budgets under its control. 

The annual financial statements and the budget are on the same basis of accounting therefore a comparison with the budgeted 
amounts for the reporting period have been included in the Statement of comparison of budget and actual amounts. 


1.24 Related parties 

A related party is a person or an entity with the ability to control or jointly control the other party, or exercise significant influence 
over the other party, or vice versa, or an entity that is subject to common control, or joint control. 


36 












Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Accounting Policies 


1.24 Related parties (continued) 

Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. 

Joint control is the agreed sharing of control over an activity by a binding arrangement, and exists only when the strategic 
financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control (the 
venturers). 

Related party transaction is a transfer of resources, services or obligations between the reporting entity and a related party, 
regardless of whether a price is charged. 

Significant influence is the power to participate in the financial and operating policy decisions of an entity, but is not control over 
those policies. 

Management are those persons responsible for planning, directing and controlling the activities of the municipality, including 
those charged with the governance of the municipality in accordance with legislation, in instances where they are required to 
perform such functions. 


Close members of the family of a person are considered to be those family members who may be expected to influence, or be 
influenced by, that management in their dealings with the municipality. 

The municipality is exempt from disclosure requirements in relation to related party transactions if that transaction occurs within 
normal supplier and/or client/recipient relationships on terms and conditions no more or less favourable than those which it is 
reasonable to expect the municipality to have adopted if dealing with that individual entity or person in the same circumstances 
and terms and conditions are within the normal operating parameters established by that reporting entity's legal mandate. 

Where the municipality is exempt from the disclosures in accordance with the above, the municipality discloses narrative 
information about the nature of the transactions and the related outstanding balances, to enable users of the entity’s financial 
statements to understand the effect of related party transactions on its annual financial statements. 

1.25 Events after reporting date 

Events after reporting date are those events, both favourable and unfavourable, that occur between the reporting date and the 
date when the financial statements are authorised for issue. Two types of events can be identified: 

• those that provide evidence of conditions that existed at the reporting date (adjusting events after the reporting date); 
and 

• those that are indicative of conditions that arose after the reporting date (non-adjusting events after the reporting 
date). 


The municipality will adjust the amount recognised in the financial statements to reflect adjusting events after the reporting date 
once the event occurred. 


The municipality will disclose the nature of the event and an estimate df its financial effect ! 6f'a statement that such estimate 
cannot be made in respect of all material non-adjusting events, where non-disclosure could influence the economic decisions 
of users taken on the basis of the financial statements. 


1.26 Value Added Tax 


1.27 Use of estimates 


2019 -12- 0 8 


The municipality accounts for Value Added Tax on payment basis. 

Auditor General South Africa 
Mpumalanga Business Unit 

The preparation of annual financial statements in conformity with Standards of GRAP requires the use of certain critical 
accounting estimates. It also requires management to exercise its judgement in the process of applying the municipality’s 
accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and 
estimates are significant to the annual financial statements are disclosed in the relevant sections of the annual financial 
statements. Although these estimates are based on management’s best knowledge of current events and actions they 
may undertake in the future, actual results ultimately may differ from those estimates. 


37 











Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 


2019 2018 

R R 


2. New standards and interpretations 

2.1 Standards and interpretations effective and adopted in the current year 

In the current year, the municipality has adopted the following standards and interpretations that are effective for the current 
financial year and that are relevant to its operations: 


Standard/ Interpretation: 

Effective date: 

Expected impact: 

• 

GRAP 103 (as amended 2016): Heritage assets 

Years beginning on or 
after 

01 April 2018 


• 

GRAP 12 (as amended 2016): Inventories 

01 April 2018 

No material impact 

• 

GRAP 16 (as amended 2016): Investment Property 

01 April 2018 

No material impact 

• 

GRAP 17 (as amended 2016): Property, Plant and 

01 April 2018 

No material impact 

• 

Equipment 

GRAP 21 (as amended 2016): Impairment of non-cash¬ 

01 April 2018 

No material impact 

• 

generating assets 

GRAP 26 (as amended 2016): Impairment of cash¬ 

01 April 2018 

No material impact 


generating assets 




2.2 Standards and interpretations issued, but not yet effective 

The municipality has not applied the following standards and interpretations, which have been published and are mandatory 
for the municipality’s accounting periods beginning on or after 01 July 2019 or later periods: 


Standard/ Interpretation: 

Effective date: 

Years beginning on or 
after 

Expected impact: 

• 

GRAP 20: Related parties 

01 April 2019 

Unlikely there will be a 
material impact 

• 

GRAP 32: Service Concession Arrangements: Grantor 

01 April 2019 

Unlikely there will be a 
material impact 

• 

GRAP 108: Statutory Receivables 

01 April 2019 

Unlikely there will be a 
material impact 

• 

GRAP 109: Accounting by Principals and Agents 

01 April 2019 

Unlikely there will be a 
material impact 

• 

IGRAP 17: Service Concession Arrangements where a 
Grantor Controls a Significant Residual Interest in an Asset 

01 April 2019 

Unlikely there will be a 
material impact 

• 

IGRAP 18: Interpretation of the Standard of GRAP on 
Recognition and Derecognition of Land 

01 April 2019 

Unlikely there will be a 
material impact 

• 

IGRAP 19: Liabilities to Pay Levies 

01 April 2019 

Unlikely there will be a 
material impact 


2.3 Standards and interpretations not yet effective or relevant 


The following standards and interpretations have been publisheb and are mandatory for the municipality’s accounting 
periods beginning or) 


or after 01 July 2019 or later periods but are not relevant to its operations: 

Standard/ Interpretation: 

2019 -12- 0 8 

GRAP 18 (as amended 2016): Segment Reporting 

Auditor General South Africa 
Mpumalanga Business Unit j 


Effective date: 

Years beginning on or 
after 

01 April 2019 


Expected impact: 


Unlikely there will be a 
material impact 


38 














Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 


2019 2018 

R R 


3. Investment property 




2019 


2018 


Cost/ 

Valuation 

Accumulated Carrying value 
depreciation 
and 

accumulated 

impairment 

Cost/ 

Valuation 

Accumulated Carrying value 
depreciation 
and 

accumulated 

impairment 

Investment property 

19 846 001 

(4 962 814) 14 883 187 

19 846 001 

(4 564 674) 15 281 327 


Reconciliation of investment property - 2019 


Opening Impairments Depreciation Total 
balance 

Investment property 15 281 327 (299 147) (98 993) 14 883 187 


Reconciliation of investment property - 2018 

Opening Opening Impairments Depreciation Total 

balance balance 

adjustment 

Investment property 44 362 146 (13 672 654) (15 280 166) (127 999) 15 281 327 


Pledged as security 

No investment property assets were pledged as security. 

Impairment of assets 
Investment property impaired 

Investment property - Cost - 15 280 166 

Other disclosure 

There were no operating costs incurred related to the investment property. 



Audited 

By 


2019 - 12 - 0 8 

Auditor General South Africa 

..i .. ^ P.11c \ n o c *s Unit 


39 

















Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 

Figures in Rand_ 


00 

o 

(N 


CD 

0)(D(NN(DCO(DOCOCDO)00 

h- 

D 

(d^co^coooojoocnjoid 

co 

CO 

Tt^T-0)COCT>OCOCNCDCDr^CO 

s 

> 

r^ooooocO'i-r^oocNCDh-cjoco 

CO 

O) 

T-T-CvJCDCOCNLOCDT-CNCDOOr^- 

CO 

c 

OOv-CD'T-CDNtOLOh-CDCOLOCn 

CO 

>» 

inN^OMDNCDCMCOOOONCM 

V 

l_ 

CO ID r- T- 00 ^ O CM 

T- 

co 

T- t— CO 00 CO 

<D 

O 


T“ 




"O “Q 

(VJCONCOCOOOOLO 1 LO N" N" 1 

CO 

m /i \ f 

r^ocoT-cocov-io co oo n 

CD 

U-J o CD C 

~\Z ■— -*— 1 /i\ 

CNIOOr-r^CDOOCO^T O N (D 

CO 

-S to T, - E 

oocor^CNjcD^cvjo ^ cnj v- 

Tt 

D O ? - J 2 

^■O>O)COC0^T-N OCOIO 

to 

£ © co E i 

T-^COCNICOOOh-CN 00 CN h- 

lO 

^ o —^ D_ 

CDCNjcDr^ior^^-co cn o 

T- 

O D- C) c 

CN LO v— *' CN CN CD V “'CN N" 

CN 

O 0) o t 


to 

< "D CO — 

'— 



t-o)0)o^(dioi/)oot-co^o 

to 


^j-v-tDcocNr^-T-r^o^-T-r^LO 

CO 

c 

NinCMCDON^OCMCD^COCO 


.52 

LOCDUOCOOCOCDCDCNJCOOOCO 

CO 

to to 

0t-CMCMCNJ(DCD(D^-COCO^N 

Tj- 

O D 

CDCDCO^fOOCNr^-OOr^-CNCDCOCD 

CD 

O to 

^CDt-CDv-LON-LOCOOt-OOCN 

CN 

> 

CD O CO ^T-OCO t-CO^CN 

CO 


t cm r- n- o co 

Tt 



CN 

CD 

CMMDC0CMCM0)0)N^^0)CD 

00 

D 

o oo O 00 O) CO 00 CO CO O) CO \r 

CO 

cp 

0)iniONN^(M(DCMir)000 

o 

> 

c\jif)CNj^c3)^o)T-T-cooincM 

CO 

CD 

CMinCDCOCOCNN^OlOlOlOCD 

v 

C 

NO)SCMMn(Dlf)(DSCNj0O) 



CNJCNCNjCOCDCDLOOLOOOCDOxf- 

o 

L. 

L. 

co LO CN coco 

CD 

co 

t- r- co oo n- 

o 

O 


CN 




—- 

0)l0^(0lf)C\|L0N 1 O CM O 1 

to 

m E a) ¥ 

CD^h-CDCDv-CDOO v- CN 00 

00 


NOCDNCMOOCO T- T- -r- 

CO 

■2 to T, - F 

C\JO>N'CNmr''-CDh- O T- o 

o 

n u n C 

M'CMDOCMCMlOM - 00 CN CN 

to 

£ Q) cO ^ TO 

CMt-COOOOOOM' m - ld n 

CO 

o R o 

CMCOCNNOOCD^-IO T- (N N 

to 

o * ■ o 


CD 

O CD O t 

CO CD ^ CN ^ CM ° ^CN,^ 

to 

< "O CO 




r-CNOM'NM'M'CDN^-CODCD 

CO 


M’lOlOSSOCONOOM’T-DTf 

CN 

c 

MOCMM-OinCMOCMCDCMCMO 


•— o 

LO^NNlOT-C^Or-COT-inCM 

CO 

tt to 

CDOOlOCOCDincOOOOCONNO) 

CO 

O D 

CDOr-ON^CDO)(DCMNCOO) 

o 

O TO 

N-CDLOt-tJ-CDOIDLOOt-OON- 

CO 

> 

CD^-COt-LOt-t-cO t-CON-N- 

CO 


t- CN t- N" T- N - 

CO 



CN 


O 


Audited 

By 

2019 -12- 0 8 


Auditor General South Africa 
Mpumalanga Business Unit 


C 

< 1 > 

E 

Q. 

‘5 

a- 

o 

■O 

c 

w 

+■» 

c 

ra 


<D 

CL 

o 


(/) 32 
O) £ 

c ro 

D ^ r 


^ 0) 

© 3 

i* 

o 1 ^ 

CO T3 

6 § 

£ 

D 


0) 

to 


o 

if) 

o 

•c w 

■W TJ 

0) o 
lu q: 


(D 

©to 
g> © 

2 <: 

IsS 

I 

(/)(/)> 


0) 
</) 
0) 

CD 

o 

L- 

Q. 

i i i C 
0) 0) 0) - 

5 3 3 o 

o o o > 

bse| 

© to 1/> 17) -2 

E 2 CO 2 CL 


ODD 

E o o 
.9-2 2 

—5 -4—> -4—> 

^r- if) if) 

ST co co 

© >i- 
















o 

CM 

0 

c 

D 

—i 

O 

CO 

■O 
^ <D 

4-» C 

— <1) 

H5 re 

a?, 

o £ 

§s 

■! 
ro § 

« 5 

O (/) 

•— o 

N S 
OJ 2 

E E 

o § 


</> 

4-» 

c 

a> 

E 

<D 

4-* 

OS 

4-1 

C/) 

"J5 

■ ■■ 

o 

c 

CO 

c 


a* 

3 

C 

C 

< 

o 


(0 

a> 


T3 

<1) 

3 

C 

‘«3 

c 

o 

«4-> 

c 

<D 

E 

Q. 

5 

o - 

a> 

XJ 

c 

re 

4-» 

c 

re 

Q. 


£ .2 


O 

c 

o 

o 

<D 

DC 


re 

o 


re 


f\JMfiCOCM(MO)O)NT-x-O)0 
^■OCOOOOO)COCOOOCOO)CO^ 
O)lOLOSN^fNj0C\JinOOO 
CMin(NM-CDM-a>'<— T— OOOLOCM 
CNlO0COCO(NN^OlOiniOO) 
NO)NfMMr)(Oin(DNCM0O) 
CMCMCMCOCOCOLOOLOCOOSOM- 


CO LO T- 


r- CD CD 
CM CD T- 

tn o ^ 


CM 


00 CO 
CO 




00 


p (A^fSCM 

E $ cd h- 
•5 8 ° 10 ^ 

Q. CO CO 


c 

o 

re 

o 

2 

CL 

0 

Q 


CD 00 CO h- M" CO CM 

r^. r- to lo ^ co 

T- M- O CD T- CD CD 

in LO O 00 LT) N CD 

lO CM N 00 00 ^ N 

O in JOr- OCMr 

1^ CM CM CM CO CM 


LD 

00 

LD 


1 LD 00 LO 
N 00 O 

o co ^r 

CD 00 CO 
t"- CO 00 
t^CM^ CO 
" ^ LO 

co 


re 

re 

o 

Q. 

re 



•CM 1 1 

• • 1 CO 1 

1 1 03 CO 


CD 

co 

T- M" 


00 

M- 

CM CO 

Q_ 

r^ 

03 

CM 03 


X - 

M - 

03 LO 

§ 

CO 

CO 

M- x~ 


T— 

03 

00 03 


CO 

00 

CD 00 



v 





___ 


1 M" 1 1 

■ i i i l 

1 1 CO o 


00 


CO co 

*o 

CO 


CM 00 


m- 


CO o 

> 

X 


03 M- 

‘0 

CD 


T- T— 

o 

0 

T— 


LO h«- 

If: 



CO CO 


CD 

CD 

co 

m- 

CM 




i 

T— 

o 

M" 

CO 

00 

03 

CO 

00 

1 

O 

00 

1 


re 



M - 

03 


LO 

CM 

CO 

CO 



O 

5 


00 



CO 

03 

00 

O 

r- 

00 

M- 

M* 


00 

00 


CO 

o 



X— 

X - 

CO 

LO 

h- 

03 

03 

CO 


o 

o 


n- 




M" 

CO 

x— 

M- 

00 

CO 

CD 



M- 

CO 


Tf 




oo 

00 

CD 

03 

x— 

00 

M- 

5 



CO 



TD 



LO 

CO 

x— 

CM 

x— 

CM 

03 

X— 



CO 


CO 

< 



CO 



v- 



00 




o 


LO 














T_ 


CM 



03 

CO 

CM 

h- 

CO 

00 

CO 

O 

00 

CO 

03 

o 

o 

r^- 



CO 

T— 

CO 

X— 

00 

o 

03 

CM 

o 

o 

CM 

o 

LO 

co 

CD 

0 

M- 


X— 

03 

CO 

03 

O 

CO 

CM 

CO 

CO 

N- 

CO 

N- 

C 

o 

r^- 

03 

00 

O 

CO 

x— 


00 

CM 

03 

r^- 

00 

CO 

CO 

‘c 

c 

x— 

X— 

CM 

03 

00 

CM 

LO 

03 


CM 

<D 

oo 

h- 

00 

0 

re 

00 

T— 

CO 

T— 

03 

M- 

O 

LO 


03 

CO 

LO 

03 

CO 

CL 

re 

LO 

h- 

x— 

CM 

LO 


CO 

CM 

co 

00 

03 

r^- 

CM 

T- 

O 

JO 

CO 

LO 

x— 




00 

M- 




o 

CM 

T“ 



V- 

x— 






CO 




00 

CO 

03 


o 

CM 


c 

o 

E 

Q. 

3 

O’ 

<D 

~o 

c 

re 

4-» 

c 

re 


o 

a. 

o 


^ re 
^ 0 
® 3 

•is 


o 

03 

E 

CD 32 
CD £ 
C 03 

73 c 

^ 3 JS 


03 _ 

_J CO Q_ li- 


CD 

re 

£ 

E 

c 

o 

CD 

fl 

c 0 

r; 73 

_0 O 

lu oc: 

I I 

- 0) 0) 

0 3 D 

E o t) 
.9-2 2 

re re 

® 2 5 E 

i+_ 03 


a) 

©re 

2 i 

il 

0 o 

CO CO 

I I 
0 0 

3 3 

*8 t> 

3 3 

L_ l_ 
-*-> -4—< 

CD CD 
2 £ 
c c 


Audited 

8y 

2019 -12- 0 3 

Auditor General South Africa 

Mpumalanga Business Unit 


CD 

CD 

t_ 0 

& 03 

re o 

> CL 
i C 


re cl 

03 

£ O 















Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 

Figures in Rand 


■o 

CD 


o 

o 


CD 

E 

Q. 

3 

u- 

0) 

■O 

c 

0 

4-* 

c 

co 


£ I 


O 

c 

o 

o 

CD 

01 


<g 

o 


c 

CD 

E c/) 
h: W 
CO o 

Q. 

E 


O)(DCMS0OO(DOCO(DO)OO 

CDx-COx-COOO>CMOOCMOLO 

^Nt-O)COO)O0C\I(D(DNCO 

NO)OOOCOt-NOOCSIO)NCOCO 

T-T-CMO)COCMinO)T-(N(DCON 

coT-coirO)^oinNO)coino) 

lf)N^CMinN(DCMCOOOO)NCM 


CO LO 


CNl 1 
LO 

o 

CM 

CO 

CO 


CO Tl- 

co 


O CM 
00 CO 



1 ?W0O O N 

CO h- 

1 N 0 t- i 

00 

n 

'I- O CD 

M- 

h- CO 

M- CO LO 

r^. 


CD x- LO 

M" T- 

00 M- 

CD CM M- 

T“ 

0 

O O N 

CD CD CO CM 

LO 00 LO 

CO 

'0 

M- x- M- 

x- LO 

CO CD 

CO LO 00 

Tf 

0 

CD CO LO 

O 00 

00 T~ 

CM M- 

CD 

L. 

0 

LO CM ^ 

CM CM 

CM^x- 

^ ^ CM 

O 

0 

'—''—' 



CO 

CO 

Q 











,__ 



M- 

1 1 1 

• 1 1 CM 1 

1 1 co co 

CO 


O 


00 

CO 0 

XT’ 

?8 g 

C C .g 

CD 


M- 

00 x- 

T— 

CO 


xt 

CM x- 

0 

00 


CO 

LO T- 

CO 

0 45 0 

h- 


CO 

O T- 

0 

CL 0 3 
O -Q T}' 

CO 


LO 

00 h- 

CO 

T— 


CO 

M- 00 


0 













1 

CO 1 1 

1 • LO CM 1 

1 1 y- 

1 

O 


0 

h- Xf 

M’ CO 


n 


h- 

CD CD 

CD LO 



0 

x- M- 

CM O 


0 


LO 

x- CO 

00 x- 




CD 

CD CD 

CM x- 


C > 


00 

CO CD 

LO 00 


0 


v —' 


cd cm 


h- 








• CO 

1 1 

• 1 v- O 

1 M" 

1 M - 

CD 

CD 


CM 


CO 00 

LO 

00 


00 

!2 -p 

O 


O CO 

CO 

CM 

CO 

h» 

,s> a; 

CM 


LO CM 

CD 

O 

CO 

CM 

0 •— 

CD 


T- 00 

CO 

O 

LO 

h- 

c 0 

xfr 


00 T- 

CM 

CM 

LO 

co 

2 CD 

CO 


00 co 

r— 

LO CM 

<D 


CO 


CO 0 


LO 

CD 

CD 




T— 











v —" ( 




N ^ 



^ 




1 1 

00 CM 

• 00 O 1 

1 

1 M" 

1 

CO 



CO x- 

0 CO 

O 

CO 


00 

42 


N- CM 

T- CO 

h- 

CO 



0 

(/) 


x- LO 

X- in 

O 

CO 



0 


O t- 

CM 00 

CO 

co 



CL 


r- s —' 

v —' T— 

3, 

CO 


tj- 

0 



LO 


' ^ 


to 

b 









1 CD O) sj- N Ln CM 

10 ' 

r- cd 

> 

Ai 


M- 

00 CO 

CM CD 00 N 

0 

x^ CD 


CO 

0 

O 

T— v- 

M- co 0 00 

CD 

00 0 


0 

O 

1^ 

O T- 

h- CO 00 X- 

T — 

xj r- 


0 


t— 

CD 00 

x- CO LO x^ 


CO CO 


x* 


LO 

LO *- 

CO CO CO CM 

CO 

X— X— 


LO 

U 

M- 

x— 

X— LO M- 


X— 


CD 

< 

CM 


CM 


T— 


to 






X - 




00 c 


o 

CM 


c 

0 

E 

Q. 

'5 

O’ 

CD 

■U 

c 

f0 

4-» 

c 

CD 


CD 

Q. 

2 

a 

H— 

o 

c 

o 


c £ 
CD 45 

CL 03 

O A 


NC 0 C 0 C 0 CNJ(Dt- 1 /)^O)C 0 N^- 

t-LOt-CMCOCOCOCDOCDtJ-Ot- 

COCNOOLOM-l^v-CMOx-OlOCM 

lO(MO)(\|iniDlfiNT-(DT-(DO 

t-O^NC 0 C 0 \ 1 - 0 )C 010 ( 0 NC 0 

G)OMncoc3)(X)(Dcoco^ir)Ln 

in^CvJ(\|NCOCOOCONO)T-T}- 
CO 00 V- T- lOr- (\1 S 

X- CM h- M- 


CD 
03 
<: 

E 

k_ 

2 
0 

~o 
> c 
CD 

- 45 

a> 
uu a: 


^ 0 
CD 

® I 
•|* 
O **“ 
CD *0 

E £ 


£ £ 
o 

CD 

o 


a) 

© 00 

2 § 

11 
CD O 
CO (/) 


</) "2 
CD C 
C CD 


15 U "p 
—I CQ Q_ LL 


Q) 0 
3 


CM 1 1 

CM 

LO 

IT) 

O 

O 

CM 

CM 

00 

OO 

00 

OO 

CO 

CO 

T— 

T— 

1 CO x- 

xf 

X- LO 

CO 

CM O 

CM 

CD CO 

CM 

xt CO 

00 

CD CD 

LO 

CM x- 



Audited 
By 

2019 -12- o 8 

ditor General South Africa 
pumalangn Business Unit 


0 

0 

«- CD 

a & 

0 o 

> CL 
' C 


3 

o 

CD 

0 


3 

O 

CD 

0 

0) 

CD 

-o 

0 

D) 

*D 

0 

CL 

2 

% 

c 

CD 

E 

g. 

■3 

cr 

0 

TJ 

c 

0 

-*-> 

c 

0 

Q. 


I- C 


O 

SB’S 

i 

0 

•E 

0 

E 

E E E 


*D 

0 

Q. 

0 

©000 

"0 

4 ;^ 

U) 

2 

0 

E ro 0 0 

'0 

~o 

CL 


0 ^ 4 = 4 = 

0 

0 

O 

_c 

(DC cc 

0 

CL 

2 


42 

0 

0 

(A 

0 


C 

0 


0 

a 

E 


■3 

c 

0 

a 

E 

4 -) 

c 

0 

E 

a 

3 

a* 

0 

■D 

C 

0 

4-» 

c 

0 

CL 


0 

0 

§ 


§ 

£ ii 

0 L_ -f-J 

n n -n w 

2 g^l 

0 _I CQ _E 


0 

0 


a 

o 

a 

H- 

o 

42 

0 

0 


CM 

'sr 













Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 


2019 2018 

R R 


4. Property, plant and equipment (continued) 


Reconciliation of Work-in-Progress 2019 



Included within 

Included within 

Total 

Opening balance 

Infrastructure 
304 522 961 

buildings 

18 450 403 

322 973 364 

Additions/capital expenditure 

157 841 653 

31 317 892 

189 159 545 

Transferred to completed items 

(65 196 266) 

(1 944 583) 

(67 140 850) 


397 168 348 

47 823 712 

444 992 059 

Reconciliation of Work-in-Progress 2018 


Included within 

Included within 

Total 

Opening balance 

Infrastructure 
416 431 787 

buildings 

58 098 424 

474 530 211 

Additions/capital expenditure 

119 159 858 

8 950 703 

128 110 561 

Transferred to completed items 

(231 068 698) 

(48 598 724) 

(279 667 422) 


304 522 947 

18 450 403 

322 973 350 


Expenditure incurred to repair and maintain property, plant and equipment 

Expenditure incurred to repair and maintain property, plant and equipment 
included in Statement of Financial Performance 

Contracted services 
Inventory 
General expenses 

21 105 271 27 830 990 


9 669 631 26 023 801 

8 705 181 1 159 784 

2 730 459 647 405 


A register containing the information required by section 63 of the Municipal Finance Management Act is available for 
inspection at the registered office of the municipality. 



43 











Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 


Notes to the Annual Financial Statements 





2019 

2018 




R 

R 

5. Intangible assets 


2019 


2018 


Cost / 

Accumulated Carrying value 

Cost/ 

Accumulated 

Carrying value 

Valuation 

amortisation 

Valuation amortisation 



and 


and 



accumulated 


accumulated 



impairment 


impairment 


Computer software, other 2 368 538 

{1 334 530) 1 034 008 

2 252 498 (962 844) 

1 289 654 

Reconciliation of intangible assets - 2019 

Opening 

balance 

Additions 

Amortisation 

Total 

Computer software, other 

1 289 654 

116 040 

(371 686) 

1 034 008 

Reconciliation of intangible assets - 2018 

Opening Additions 

balance 

Disposals 

Amortisation 

Total 

Computer software, other 

1 402 371 226 337 

(2 673) (336 381) 

1 289 654 

Pledged as security 





No intangible assets were pledged as security 





6. Heritage assets 






2019 


2018 


Cost/ 

Accumulated Carrying value 

Cost/ 

Accumulated 

Carrying value 

Valuation 

impairment 

Valuation impairment 



losses 


losses 


Historical monuments 1 621 944 

1 621 944 

1 621 944 

1 621 944 

Reconciliation of heritage assets 2019 



Onpninn 

Total 

[ 

Audited 

By 


v/pci iii ly 

balance 

Historical monuments 


1 621 944 1 621 944 





Reconciliation of heritage assets 2018 

2019 -12- 0 8 


Opening 

balance 

Total 

Historical monuments 

Auditor General South Africa 

1 621 944 1 621 944 

Pledged as security 

No heritage assets were pledged as security] 

Mpumalanga Business Unit 

J 







44 























Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 


2019 2018 

R R 


7. Operating lease asset (accrual) 


Non-current assets ii 956 36 264 

Current assets 49 531 21 428 

Non-current liabilities (246 576) (71 566) 

Current liabilities . (42 080) 


(185 089) (55 954) 


8. Employee benefit obligations 
Defined benefit plan 

The municipality offers employees and continuation members the opportunity of belonging to one of several medical aid 
schemes, most of which offer a range of options pertaining to levels of cover. Upon retirement, an employee may continue 
membership of the medical aid scheme. 

In-service members that qualify for post employment medical aid benefit are entitled to a subsidy of 60% of the contribution 
payable. All current continuation members receive a 60% subsidy. 

An actuarial valuation has been performed of the municipality's liability in respect of benefits to eligible retirees and retired 
employees of the municipality. 

Changes in the present value of the defined benefit obligation are as follows: 

Opening balance 13 335 000 12 254 000 

Contributions by plan participants (331 000 ) (186 000 ) 

Net expense recognised in the statement of financial performance 1 849 000 1 317 000 

14 903 000 13 385 000 


Net expense recognised in the statement of financial performance 


Current service cost 
Interest cost 
Actuarial (gains) losses 


Calculation of actuarial gains and losses 

P 

Actuarial (gains) losses 

Key assumptions used 

Assumptions used at the reporting date: 

Discount rates used 
Consumer price inflation 
Health care cost inflation 
Net discount rate 




Audited 

by 


2019 ->?•’ rj s 

WjpumalangB^-- 


372 000 

382 000 

1 294 000 

1 209 000 

183 000 

(274 000) 

1 849 000 

1 317 000 

183 000 

(274 000) 


10.67 % 

9.79 % 

6.97 % 

6.14 % 

8.47 % 

7.64 % 

2.03 % 

2.00 % 


45 












Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 


2019 2018 

R R 


8. Employee benefit obligations (continued) 

Long service awards 

Long service benefits are awarded in the form of a number of leave days awarded once an employee has completed a 
certain number of years in service. The valuation was performed in line with GRAP 25 Employee benefits. 


Opening balance 

22 557 000 

19 537 000 

Current service cost 

2 403 000 

2 113 000 

Interest cost 

1 972 000 

1 702 000 

Acturial (gains) / losses 

(2 132 000) 

506 000 

Expected benefits payments 

(2 161 000) 

(1 301 000) 


22 639 000 22 557 000 


Key assumptions used 


Assumptions used at the reporting date: 

Discount rates used 
Consumer price inflation 
Salary increase rate 
Net discount rate 
Normal retirement age 

9. Inventories 


Consumable stores 
Water for distribution 



Audited 


10 . 


Receivables from exchange transactions 


By 


Deposits 
Sundry debtors 
Interest receivable 


Non-current assets 
Current assets 


2019 -12“ 0 8 

Auditor General South Africa 
Mpumalanga Business Umt_J 


11. Receivables from non-exchange transactions 

Allowance for impairment - Fines 
Traffic fines 

Consumer debtors - Property rates 
Allowance for impairment - Property rates 


8.50 

% 

9.18 

% 

4.64 

% 

5.73 

% 

5.64 

% 

6.73 

% 

2.71 

% 

2.30 

% 


63 


63 


4 687 485 

2 507 178 

565 736 

389 537 

5 253 221 

2 896 715 


18 853 794 

17 084 643 

742 122 

742 122 

282 500 

249 341 

19 878 416 

18 076 106 

18 853 794 

17 084 643 

1 024 622 

991 463 

19 878 416 

18 076 106 


(97 750 265) 
100 326 705 
64 873 606 
(4 757 076) 

(82 156 462) 
86 777 322 
59 975 660 
(4 487 928) 

62 692 970 

60 108 592 


Receivables from non-exchange transactions pledged as security 

No receivables from non-exchange were pledged as security 


46 


























Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 


2019 2018 

R R 


11. Receivables from non-exchange transactions (continued) 

Credit quality of receivables from non-exchange transactions 

The credit quality of other receivables from non-exchange transactions that are neither past nor due nor impaired can be 
assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates: 

Receivables from non-exchange transactions past due but not impaired 

Other receivables from non-exchange transactions which are less than 1 month past due are not considered to be impaired. 

At 30 June 2019, R 6 519 866 (2018: R 6 377 616) were past due but not impaired. 

The ageing of amounts past due but not impaired is as follows: 

1 month past due 6 519 866 6 377 616 

Receivables from non-exchange transactions impaired 

As of 30 June 2019, other receivables from non-exchange transactions of R 58 353 740 (2018: R 53 598 044) were 
impaired and provided for. 

The amount of the provision was R (4 757 076) as of 30 June 2019 (2018: R (4 487 928)). 

The ageing of these debtors is as follows: 


3 819 941 3 674 433 

54 533 799 49 923 611 

Reconciliation of provision for impairment of receivables from non-exchange transactions 


1 to 2 months 
Over 2 months 


Opening balance 
Provision for impairment 
Amounts written off as uncollectible 


Net rates 

Current (0-30 days) 
31-60 days 
61-90 days 
90+ days 


Net traffic fines 

30+ days 



12. VAT receivable 


VAT 


(4 487 928) (52 618 296) 

(269 148) 4 474 160 


- 

43 656 208 

(4 757 076) 

(4 487 928) 

6 519 866 

3 508 535 

2 823 129 

47 265 000 

6 377 616 

3 366 761 

2 921 688 

42 821 667 

60 116 530 

55 487 732 

2 576 440 

4 620 860 

55 918 048 

47 117717 


VAT is payable on the payment basis. Only once payment is received from debtors, the VAT portion of the receipt is paid 
over to SARS with input VAT only claimed when payment is made to creditors. 


47 











Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 


Notes to the Annual Financial Statements 




2019 

2018 



R 

R 

13. Consumer debtors 




Gross balances 

Electricity 


14 123 327 

11 524 775 

Water 


9 703 400 

7 559 037 

Waste water 


2 300 485 

1 834 733 

Refuse 


2 124 902 

1 943 352 

Other 


6 160 324 

6 285 939 



34 412 438 

29 147 836 

Less: Allowance for impairment 

Electricity 


(1 035 641) 

(862 389) 

Water 


(711 535) 

(565 636) 

Waste water 


(168 691) 

(137 292) 

Refuse 


(155 816) 

(145 419) 

Other 


(451 727) 

(470 372) 



(2 523 410) 

(2 181 108) 

Net balance 

Electricity 


13 087 686 

10 662 386 

Water 


8 991 865 

6 993 401 

Waste water 


2 131 794 

1 697 441 

Refuse 


1 969 086 

1 797 933 

Other 


5 708 597 

5 815 567 



31 889 028 

26 966 728 

Electricity 

Current (0 -30 days) 


7 304 417 

5 344 952 

31 - 60 days 


1 293 779 

1 368 908 

61 - 90 days 


351 900 

456 182 

91-120 days 


4 137 590 

3 492 344 

1 

Audited 

13 087 686 

10 662 386 


By 



Water 

Current (0 -30 days) 

2 489 289 

1 626 824 

2019 -12- 0 8 

31 -60 days 

575 105 

456 040 

61 - 90 days 

361 667 

262 596 

91 -120 days 

Auditor General South Africa 
Mpumalanga Business Unit 

5 565 804 

4 647 941 


8 991 865 

6 993 401 


1 


Waste water 

Current (0 -30 days) 


432 122 

403 867 

31 - 60 days 


141 872 

131 457 

61 - 90 days 


95 243 

89 548 

91 -120 days 


1 462 557 

1 072 569 



2131 794 

1 697 441 

Refuse 

Current (0 -30 days) 


537 670 

494 988 

31 - 60 days 


165 120 

170 762 

61 - 90 days 


111 787 

116 420 

91 -120 days 


1 154 509 

1 015 763 



1 969 086 

1 797 933 


48 




























Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 


2019 2018 

R R 


13. Consumer debtors (continued) 


Other 

Current (0 -30 days) 
31 - 60 days 
61 - 90 days 
91 -120 days 


Reconciliation of allowance for impairment 

Balance at beginning of the year 
Contributions to allowance 
Debt impairment written off against allowance 


Audited 

By 

2019 -tt- 0 8 

Editor General South Africa 

Mpumalanga BusiwssUnu.. 


1 792 774 1 722 293 

165 611 264 156 

120 063 203 557 

3 630 149 3 625 561 

5 708 597 5 815 567 


(2 181 108) (9 361 020) 

(342 302) 2 181 108 

4 998 804 


(2 523 410) (2 181 108) 


Consumer debtors pledged as security 
No consumer debtors were pledged as securit 
Credit quality of consumer debtors 

The credit quality of consumer debtors that are neither past nor due nor impaired can be assessed by reference to external 
credit ratings (if available) or to historical information about counterparty default rates: 

Consumer debtors past due but not impaired 

Consumer debtors which are less than 1 month past due are not considered to be impaired. At 30 June 2019, R 12 556 271 
(2018: R 9 592 925) were past due but not impaired. 

The ageing of amounts past due but not impaired is as follows: 

1 month past due 12 556 271 9 592 925 

Consumer debtors impaired 

As of 30 June 2019, consumer debtors of R 21 856 167 (2018: R 19 554 912) were impaired and provided for. 

The amount of the provision was R (2 523 408) as of 30 June 2019 (2018: R (2 181 108)). 

The ageing of these debtors is as follows: 

1 to 2 months 2 687 261 2 724 767 

Over2 months 19 168 906 16 830 145 

14. Cash and cash equivalents 

Cash and cash equivalents consist of: 

Cash on hand 
Bank balances 
Short-term deposits 

205 822 074 206 594 311 


2 000 2 000 
200 820 074 201 592 311 

5 000 000 5 000 000 


49 













Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 


2019 2018 

R R 


14. Cash and cash equivalents (continued) 

Shortterm deposits 

The credit quality of cash at bank and short term deposits, excluding cash on hand that are neither past due nor impaired can 
be assessed by reference to external credit ratings (if available) or historical information about counterparty default rates: 

Shortterm deposits consists of: 

ABSA account no 2068718251 5 000 000 5 000 000 

The municipality had the following bank accounts 


Account number / description Bank statement balances Cash book balances 

30 June 2019 30 June 2018 30 June 2017 30 June 2019 30 June 2018 30 June 2017 


STANDARD BANK - Current 
account - 032610335 

198 392 777 

214 041 863 

11 462 

184 855 065 

192 888 046 

- 

STANDARD BANK-Call 
account - 0318510316 

793 829 

1 424 100 

- 

797 976 

1 424 100 

" 

ABSA BANK, Current 
account - 1650 000 087 

10 178 961 

6 795 400 

113 557 378 

15 061 347 

7 192 539 

115 648 089 

ABSA BANK, MIG Transfers - 
4080254392 

3 093 

60 971 

100 

102 573 

84 513 

6410 

ABSA BANK, MIG Fund - 
4077034870 

11 

10 

9 

1 845 

1 845 

1 845 

ABSA BANK, Bereavement 

Fund-4078501159 

- 

268 

76 

268 

268 


ABSA BANK-Liquidity 
plus - 9309577050 

2 086 

2 086 

1 000 

1 000 

1 000 

1 000 

Total 

209 370 757 

222 324 698 

113 570 025 

200 820 074 

201 592 311 

115 657 344 


15. Finance lease obligation 

Minimum lease payments due 

- within one year 

- in second to fifth year inclusive 

less: future finance charges 

Present value of minimum lease payments 

Non-current liabilities 
Current liabilities 


Aui 

RY 

2019 - 12 - 0 § 


Auditor General South Africa 
|^pum^nja^^ n _!:J 


2 661 232 

2 693 935 

649 935 

1 952 212 

3 311 167 

4 646 147 

(586 796) 

(703 836) 

2 724 371 

3 942 311 

529 993 

1 807 430 

2 194 378 

2 134 881 

2 724 371 

3 942 311 


The lease term is 2 & 3 years and the effective borrowing rate is 34.56% & 18.83% . Interest rates are fixed at the contract 
date. Obligations under finance leases are secured by the lessor's title to the leased asset. 


Defaults and breaches 

There were no default on principal and interest repayments. None of the terms and conditions were re-negotiated. 





















Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 


2019 2018 

R R 


16. Unspent conditional grants and receipts 
Unspent conditional grants and receipts comprises of: 


Unspent conditional grants and receipts 

Municipal Infrastructure Grant 
Integrated National Electrification Grant 
Water Service Infrastructure Grant 


Movement during the year 


Balance at the beginning of the year 
Additions during the year 
Income recognition during the year 


17. Provisions 

Reconciliation of provisions - 2019 


Audited 

By 

20t3 8 8 


rpneral South Afn ca 
Auditor Genera‘ Untt 

Mpunnal anga _-—— 


627 647 28 997 692 

260 409 16 202 

215616 


888 056 29 229 510 


29 229 510 
290 230 145 
(318 571 599) 


14 204 188 
283 396 400 
(268 371 078) 


888 056 29 229 510 


Landfill Site 
Performance Bonus 
Accumulated Leave 


Reconciliation of provisions - 2018 


Landfill Site 
Performance Bonus 
Accumulated Leave 


Non-current liabilities 
Current liabilities 


Opening 

Increase / 

Interest charge 

Total 


Balance 

(reduction) in 




provisions 




24 642 648 

(1 350 085) 

1 764 319 

25 056 

882 

374 056 

40 370 

- 

414 

426 

29 452 533 

3 470 208 

- 

32 922 

741 

54 469 237 

2 160 493 

1 764 319 

58 394 049 


Opening 

Increase / Interest charge 

Total 

Balance 

(reduction) in 



provisions 


31 050 857 

(9 054 099) 2 645 890 

24 642 648 

231 000 

143 056 

374 056 

24 669 795 

4 782 738 

29 452 533 

55 951 652 

(4 128 305) 2 645 890 

54 469 237 


25 056 882 
33 337 167 

24 642 648 
29 826 589 

58 394 049 

54 469 237 


Landfill site provision has been provided after a specialist consultancy in environmental accounting, was appointed by the 
municipality to assist with the valuation of the required provision for the Hectorspruit, Marloth Park, Komatipoort, 
Kamaqhekeza and Steenbok landfill for the reporting period to reflect best reliable estimate. 


Performance bonuses are payable to eligible employees provided that the employee has met the targets as required in their 
performance contracts. 


Employees are obliged to take at least 16 working days of his/her 24 annual leave days of which at least 10 working days 
shall be taken consecutively in respect of every completed year service and before the next year of service. The eight days 
may be accumulated to a maximum of 48 days. 


51 
















Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 


Notes to the Annual Financial Statements 




2019 

R 

2018 

R 

18. Payables from exchange transactions 



Trade payables 


40 068 227 

60 084 947 

Debtors with credit balances 


11 452 796 

12 408 278 

Salary suspense accounts - Third parties 


8 116901 

6 166 069 

Prepayments-prepaid electricity 


509 631 

447 745 

Other Creditors 


49 791 

49 204 

Staff bonus accrual 


9 585 780 

9 172 259 

Surety 


2 515 064 

2 515 064 

Retentions 


44 043 047 

44 687 350 

Consumer deposits 


4 484 376 

4 196 453 



120 825 613 

139 727 369 

19. Service charges 








Sale of electricity 1 Audited 

107 090 400 

96 277 093 

Sale of water 

By 

23 874 067 

20 303 494 

Refuse removal 

8 214 041 

7 278 617 

Sewerage and sanitation charges 


5 389 553 

4 986 235 


2019 -12- 0 8 

144 568 061 

128 845 439 

20. Rental of facilities and equipment 

Auditor General South Africa 



Facilities and equipment 

Rpntfll nf farilitip^ 

Mpumalanga Business 

4 974 158 

3 040 464 

r\ci i Lai ui i wL/ii iuco 

21. Revenue 




Service charges 


144 568 061 

128 845 439 

Rental of facilities and equipment 


4 974 158 

3 040 464 

Interest received (trading) 


7 305 613 

11 391 004 

Agency services 


13 068 155 

12 587 776 

Licences and permits 


27 419 

36 103 

Recoveries 


209 144 

498 604 

Operational revenue 


5 453 988 

5 569 622 

Interest received (external) 


27 648 707 

19 851 644 

Property rates 


94 404 808 

105 503 008 

Government grants & subsidies 


821 172 599 

737 311 077 

Public contributions and donations 


3 491 815 

69 475 264 

Fines, Penalties and Forfeits 


14 565 676 

5 411 836 



1 136 890 143 

1 099 521 841 

The amount included in revenue arising from exchanges of goods or services 



are as follows: 




Service charges 


144 568 061 

128 845 439 

Rental of facilities and equipment 


4 974 158 

3 040 464 

Interest received (trading) 


7 305 613 

11 391 004 

Agency services 


13 068 155 

12 587 776 

Licences and permits 


27 419 

36 103 

Recoveries 


209 144 

498 604 

Operational revenue 


5 453 988 

5 569 622 

Interest received (external) 


27 648 707 

19 851 644 



203 255 245 

181 820 656 


52 























Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 


21. Revenue (continued) 

The amount included in revenue arising from non-exchange transactions is as 
follows: 

Taxation revenue 

Property rates 
Transfer revenue 
Government grants & subsidies 
Public contributions and donations 
Fines, Penalties and Forfeits 


22. Agency services 
Vehicle Registration and Licenses 


23. Licences and permits 


Trading 

24. Fines, Penalties and Forfeits 

Illegal Connections Fines 
Law Enforcement Fines 
Overdue Books Fines 


25. Recoveries and other income 


Audited 

BY 

im -ft- 0 8 

Auditor General South Africa | 

Mpuma langa Busine ss Unr; j 


Recoveries 
Other income 


26. Interest received - external 

Interest revenue 

Bank 

Investment 


2019 

R 

2018 

R 

94 404 808 

105 503 008 

821 172 599 
3491 815 
14 565 676 

737 311 077 
69 475 264 

5 411 836 

933 634 898 

917 701 185 

13 068 155 

12 587 776 

27 419 

36 103 

36 167 
14 529 250 
259 

402 580 

5 008 800 
456 

14 565 676 

5 411 836 

209 144 

5 453 988 

498 604 

5 569 622 

5 663 132 

6 068 226 


5 031 261 

5 280 732 

22 617 446 

14 570 912 

27 648 707 

19 851 644 


53 


















Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 


Notes to the Annual Financial Statements 



2019 

R 

2018 

R 

27. Property rates 



Rates received 

Residential 

32 705 904 

40 952 600 

Business 

20 941 076 

28 002 090 

Government 

34 490 628 

31 204 993 

Agricultural 

5 367 058 

5 168 505 

Other 

900 142 

174 820 


94 404 808 

105 503 008 

Valuations 

Residential 

5 964 973 100 

3 808 803 900 

Business 

1 494 600 000 

1 163 161 372 

Government 

1 976 546 000 

1 746 254 600 

Agriculture 

3 839 004 001 

2 451 781 600 

Other 

1 489 052 254 

871 919 000 


14 764 175 355 

10 041 920 472 


Audited 

By 


2019 -12- Q 8 


Auditor General South Africa 
Mpumalanga Business Unit 


54 

















Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 


2019 2018 

R R 


28. Government grants and subsidies 


Operating grants 


Equitable share 
Municipal Infrastructure Grant 
Financial Management Grant 
LG SETA Grant 

Integrated National Electrification Grant 
Water service infrastructure grant 
Expanded Public Works Programme 


1 Audited 

I f?v 

2013 -12- 0 8 


516 

214 

894 

482 

052 

348 

235 

033 

353 

204 

859 

308 

1 

770 

000 

1 

700 

000 


264 

145 

3 

665 

400 

4 

739 

591 

4 

983 

798 

56 

442 

616 

32 

876 

223 

6 

708 

000 

7 

174 

000 

821 

172 

599 

737 

311 

077 


Equitable Share 

In terms of the Constitution, this grant is 


Auditor General South Africa 


Jy 


Aoumalanga Busines 


s Unit 


used to subsidise the provision of basic services to indigent community members. 


Municipal Infrastructure Grant 


Balance unspent at beginning of year 
Current-year receipts 
Conditions met - transferred to revenue 
Transfer out - Roll over not approved 


28 997 692 

220 261 000 233 857 000 

(235 033 353) (204 859 308) 
(13 597 692) 

627 647 28 997 692 


The grant is intended to provide capital finance for basic municipal infrastructure for poor households, micro 
enterprises and social institutions, to provide for new, rehabilitation and upgrading of municipal infrastructure and to 
eradicate the bucket sanitation system mainly in urban townships. 

Expanded Public Works Programme 

Current-year receipts 6 708 000 7 174 000 

Conditions met - transferred to revenue (6 708 000) (7 174 000) 


This grant is intended to incentivise municipalities to expand work creation efforts through the use of labour intensive 
delivery methods in different areas in compliance with the EPWP guidelines 

Financial Management Grant 

Current-year receipts 1 770 000 1 700 000 

Conditions met - transferred to revenue (1 770 000) (1 700 000) 


This grant is intended to promote and support reforms in financial management by building capacity in municipalities 
to implement the Municipal Finance Management Act (MFMA). 

LG SETA Grant 

Current-year receipts 264 145 3 665 400 

Conditions met - transferred to revenue (264 145) (3 665 400) 


This grant is intended to provide support training for the unemployed. 


55 



















Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 

" " 2019 2018 

R R 


28. Government grants and subsidies (continued) 

Integrated National Electrification Grant 

16 202 

5 000 000 5 000 000 

(4 739 591) (4 983 798) 

(16 202) 

260 409 16 202 


Balance unspent at beginning of year 
Current-year receipts 
Conditions met - transferred to revenue 
Transfer out - Roll over not approved 


This grant is intended to address the electrification backlog of occupied residential dwellings, and the installation of 
bulk infrastructure and rehabilitation and refurbishment of electricity infrastructure in order to improve quality of supply. 


Water Service Infrastrucure Grant 


Balance unspent at beginning of year 
Current-year receipts 
Conditions met - transferred to revenue 
Tansfer out - Rollover not approved 


215616 
56 227 000 
(56 227 000) 
(215 616) 


1 091 840 
32 000 000 
(32 876 224) 


215 616 


To facilitate the planning and implementation of various water and sanitation projects to accelerate backlog reduction 
and improve the sustainability of services in prioritised district municipalities, especially in rural municipalities. 

Municipal Water Infrastructure Grant 

13 112 348 
- (13 112 348) 


Balance unspent at beginning of year 
Other 


This grant is intended to facilitate the planning, acceleration and implementation of various projects that will ensure 
water supply to communities identified as not receiving a basic water supply service. 


Audited 

By 

2019 -12- 0 8 

Auditor General South Africa 
Mpumalanga Business Unit 


56 
















Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 


2019 2018 

R R 


28. Government grants and subsidies (continued) 
Government grants and subsidies per vote 


2019 


Municipal Infrastructure Grant 
Financial Management Grant 
LG SETA Grant 

Intergrated National Electrification 
Grant 

Water Services Infrastructure Grant 
Expanded Public Works Programme 


2018 


Municipal Infrastructure Grant 
Financial Management Grant 
LG SETA Grant 

Intergrated National Electrification 
Grant 

Water Services Infrastructure Grant 
Expanded Public Works Programme 


Executive & 

Budget & 

Corporate 

Infrastructure 

Total 

Council 

Treasury 

Services 

Development 



Office 




- 

- 

- 

234 349 882 

234 349 882 

- 

1 770 000 

- 

- 

1 770 000 

- 

- 

264 145 

- 

264 145 

- 

- 

- 

4 739 591 

4 739 591 

- 

_ 

_ 

56 442 616 

56 442 616 

6 708 000 

- 

- 

- 

6 708 000 

6 708 000 

1 770 000 

264 145 

295 532 089 

304 274 234 

Executive & 

Budget & 

Corporate 

Infrastructur 

Total 

Council 

Treasury 

Services 

e Developme 



Office 


nt 


- 

- 

- 

204 859 308 

204 859 308 

- 

1 700 000 

- 

- 

1 700 000 

- 

- 

3 665 400 

- 

3 665 400 

- 

- 

- 

4 983 798 

4 983 798 

- 

_ 

_ 

32 876 223 

32 876 223 

7 174 000 

- 

- 

- 

7 174 000 

7 174 000 

1 700 000 

3 665 400 

242 719 329 

255 258 729 


29. Public contributions and donations 



3 491 815 69 475 264 


57 












Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 


Notes to the Annual Financial Statements 



2019 

R 

2018 

R 

30. Employee related costs 

Basic 

217 

656 077 

199 656 867 

Bonus 

17 

362 673 

16 090 073 

Medical aid 

17 

571 002 

16 308 756 

UIF 

1 

855 940 

1 773 609 

Other payroll levies 


146 914 

138 561 

Pension fund contributions 

41 

954 111 

39 154 237 

Travel, motor car, accommodation, subsistence and other allowances 33 

284 615 

27 823 567 

Overtime payments 

46 

959 386 

34 871 887 

Long-service awards 

4 

412 757 

4 659 015 

Housing benefits and allowances 

5 

582 593 

4 898 906 

Temporary employees 

2 

156 816 

6 747 771 

Standby allowance 

6 

882 090 

6 573 170 


395 824 974 

358 696 419 

Remuneration of municipal manager 

Annual Remuneration 

1 031 374 

980 000 

Travel and other allowances 


178 893 

200 679 

Contributions to UIF, Medical and Pension Funds 


246 047 

228 154 


1 456 314 

1 408 833 

Remuneration of chief financial officer 

Annual Remuneration 


845 862 

622 941 

Travel and other allowances 


223 660 

205 369 

Contributions to UIF, Medical and Pension Funds 

|‘ *-- ----- 

127 220 

91 843 


Audited i 

196 742 

920 153 

Remuneration of deputy chief financial officer 

Annual Remuneration 

By 

200 -12- 0 8 | 

865 814 

780 359 

Acting alowance 


- 

40 458 

Travel and other allowances 

Auditor General South Africa 

304 134 

267 441 

Contributions to UIF, Medical and Pension Funds 

209 315 

195 619 


ivipumalanga Business Unit jl 

379 263 

1 283 877 

Remuneration of deputy director technical services 

Annual Remuneration 


924 461 

761 400 

Acting allowance 


2 920 

7 156 

Travel and other allowances 


360 371 

289 195 

Contributions to UIF, Medical and Pension Funds 


227 704 

212 896 


1 515 456 

1 270 647 

Remuneration of acting director corporate services 

Acting allowance 


6 692 

52 524 


58 


























Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 


2019 2018 

R R 


30. Employee related costs (continued) 
Remuneration of director technical services 


Annual Remuneration 


926 815 

751 147 

Travel and other allowances 


306 496 

232 134 

Contributions to UIF, Medical and Pension Funds 


178 129 

144 258 



1 411 440 

1 127 539 

Remuneration of director planning and development 



Annual Remuneration 


869 274 

593 071 

Travel and other allowances 


268 160 

141 970 

Contributions to UIF, Medical and Pension Funds 


154 836 

97 294 



1 292 270 

832 335 

Remuneration of acting director planning and development 



Acting allowance 


2 920 

32 124 

Remuneration of director community services 




Annual Remuneration 


673 218 

281 856 

Travel and other allowances 


260 529 

79 250 

Contributions to UIF, Medical and Pension Funds 

.. . ----- 

121 408 

90 952 

Leave pay 

Audited 


127 680 


By 

1 055 155 

579 738 

Remuneration of director corporate services 

2019 -12- 0 8 



Annual Remuneration 


623 541 


Travel and other allowances 

Auditor General South Africa 

173 187 

_ 

Contributions to UIF, Medical and Pension Funds 


135 609 



Mpumalanga Business Unit 

: 

932 337 

- 


31. Remuneration of councillors 


Executive Mayor 

905 149 

862 775 

Chief Whip 

832 426 

776 884 

Mayoral Committee Members 

4 153 031 

3 697 751 

Speaker 

788 462 

804 041 

Councillors 

11 091 281 

9 731 984 

Councillors' pension contribution 

2 011 338 

1 734 715 

Councillors' Allowances 

13 862 215 

9 904 598 


33 643 902 

27 512 748 

Executive Mayor 

Remuneration 

533 982 

516 603 

Travel and other allowances 

255 668 

237 247 

Contributions to UIF, Medical and Pension Fund 

115 499 

108 925 


905 149 

862 775 


59 



























Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 


Notes to the Annual Financial Statements 



2019 

R 

2018 

R 

31. Remuneration of councillors (continued) 



Speaker 

Remuneration 

Travel and other allowances 

Contributions to UIF, Medical and Pension Fund 

427 019 

279 013 

82 430 

421 338 

324 278 

58 425 


788 462 

804 041 

Chief Whip 

Remuneration 

Travel and other allowances 

Contributions to UIF, Medical and Pension Fund 

401 807 

370 348 

60 271 

366 070 

321 750 

89 064 


832 426 

776 884 

Members of mayoral committee 

Remuneration 

Travel and other allowances 

Contributions to UIF, Medical and Pension Fund 

1 973 488 

1 789 748 

389 795 

1 959 647 

1 348 309 

389 795 


4 153 031 

3 697 751 

32. Depreciation and amortisation 



Property, plant and equipment 

Investment property 

Intangible assets 

65 666 874 
98 993 
371 686 

60 943 181 
127 998 
336 381 


66 137 553 

61 407 560 



60 



















Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 


2019 2018 

R R 


33. Impairment loss 
Impairments 

Property, plant and equipment 

The events and circumstances that led to the recognition of the impairment of assets 
was evidence of damage and significant drop in market value. The recoverable amount 
or [recoverable service amount] of the asset was based on its fair value less costs to 
sell. 

Investment property 

The events and circumstances that led to the recognition of the impairment of assets 
was significant drop in market value. The recoverable amount or [recoverable service 
amount] of the asset was based on its fair value less costs to sell 

8 727 960 32 162 218 


8 428 813 16 882 052 


299 147 15 280 166 


The main classes of assets affected by impairment losses are: 

Buildings 

Infrastructure - Water 
PPE - Land 

Investment property - Land 

Fair value less cost to sell 

Fair value less costs to sell is based on the best information available to reflect the amount that an entity could obtain, at 
reporting date, from the disposal of the asset in an arm’s length transaction between knowledgeable, willing parties, after 
deducting the costs of disposal. In determining this amount, an entity could consider the outcome of recent transactions for 
similar assets within the same industry. Fair value less costs to sell does not reflect a forced sale, unless management is 
compelled to sell immediately. 


1 

34. Lease rentals on operating lease 

Premises 

Contractual amounts 

Plant and equipment 

Contractual amounts 

Lease rental on waste disposal site 
Contractual amounts 

Audited 

By 

2019 -12- 0 8 

Auditor General South Africa 
Mpumalanga Business U ni * 

4 200 637 

704 831 

j 

1 609 288 

5 115 063 

884 953 

1 990 715 


6 514 756 

7 990 731 



35. Transfers and subsidies 




Other subsidies 

Electrical assets 

Other transfers 


1 054 758 

5 185 360 

6 342 160 



1 054 758 

11 527 520 

36. Finance costs 




Non-current borrowings 

Finance leases 

Interest paid 


592 645 
230 982 

168 550 

1 019 308 
861 976 



823 627 

2 049 834 


61 





















Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 


2019 

2018 

R 

R 


37. Debt impairment 




Contributions to debt impairment provision 


16 205 251 

14 238 881 

Bad debts written off 


4 432 284 

11 840 230 



20 637 535 

26 079 111 

38. Bulk purchases 




Electricity - Eskom 


82 114 514 

76 326 224 

Water 


1 204 021 

1 642 486 



83 318 535 

77 968 710 

39. Contracted services 




Outsourced Services 




Alien Vegetation Control 

Animal Care 


109 500 

107 304 

Audited 

89 869 

82 300 

Burial Services 

16 000 

29 350 

Business and Advisory 

By 

3 756 575 

3 380 028 

Catering Services 

2 591 051 

1 039 348 

Hygiene Services 

2019 -12- 0 8 

136 063 

163 884 

Litter Picking and Street Cleaning 

- 

32 007 

Mini Dumping Sites 

14 109 171 

7 721 954 

Security Services 

Sewerage Services 

Auditor General South Africa 

30 410 005 
50 700 

28 915 076 
36 400 

Traffic Fines Management 

Mpumalanga Business Unit j 


6 310 

Consultants and Professional Services 

Business and Advisory 


20 489 079 

19 633 916 

Infrastructure and Planning 


1 993 028 

2 577 424 

Laboratory Services 


450 228 

442 047 

Legal Cost 


16 219 221 

10 248 173 

Contractors 

Artists and Performers 


289 641 

51 400 

Electrical 


4 147 728 

326 164 

Employee Wellness 


118 080 

100 195 

Interior Decorator 


483 702 

285 927 

Maintenance of Buildings and Other Assets 


3 306 138 

1 728 864 

Maintenance of Equipment 


6 922 651 

7 104 424 

Medical Services 


224 100 

64 900 

Plants, Flowers and Other Decorations 


173 355 

- 

Tracing Agents and Debt Collectors 


6 930 717 

5 756 627 

Traffic and Street Lights 


277 445 

92 970 

Transportation 


21 148 844 

21 884 049 

Sewerage Services 


11 512 400 

18 905 035 

Stage and Sound Crew 


332 101 

143 900 



146 287 392 

130 859 976 

40. Loss on disposal of assets 




Gains or losses arising from derecognition of assets 

- 

893 191 






62 
























Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 


Notes to the Annual Financial Statements 




2019 

R 

2018 

R 

41. Operational expenditure 




Advertising 


1 428 703 

1 226 494 

Auditors remuneration 


4 260 840 

3 416 949 

Bank charges 


1 057 564 

1 151 767 

Commission paid 


_ 

242 356 

Entertainment 


145 252 

154 634 

Insurance 


1 428 137 

1 147 791 

IT expenses 


4 161 657 

4 177 706 

Levies 


6 824 483 

6 334 841 

Postage and courier 


187 153 

176 650 

Printing and stationery 


808 

304 850 

Uniform and protective clothing 


4 917 799 

3 085 501 

Subscriptions and membership fees 

Audited 

7 567 

15 602 

Telephone and fax 


3 146 213 

732 203 

Travel and accomodation - local 


5 556 332 

4 496 109 

Utilities 


58 168 501 

50 174 815 

Inventory - consumables 

?nw -I?- n 8 

31 050 904 

32 623 557 

Ward committees 


2 177 000 

1 279 500 

Other expenses 


2 118 424 

1 319 307 


Auditor General South Africa 

126 637 337 

112 060 632 


Mpumalanga Business Unit 



42. Auditors' remuneration 

L ---- »■ ' .. .. 1 ' -- 

.1 


Fees 


4 260 840 

3 416 949 

43. Net cash flow from operating activities 



Surplus 


240 871 305 

242 573 421 

Adjustments for: 




Depreciation and amortisation 


66 137 553 

61 407 560 

Loss on disposal of assets 


(1 889 080) 

893 191 

Impairment deficit 


8 727 960 

32 162 218 

Debt impairment 


20 637 535 

26 079 111 

Movements in operating lease assets and accruals 

129 135 

(59 553) 

Movements in retirement benefit assets and liabilities 

1 600 000 

4 151 000 

Movements in provisions 


3 924 812 

(1 482 415) 

Other non-cash items (Transfers received 

- Assets) 

(1 478 636) 

(69 372 788) 

Other non-cash items (Transfers made - Assets) 

_ 

5 185 360 

Other non-cash items (Game animals additions) 

_ 

341 905 

Changes in working capital: 




Inventories 


(2 356 506) 

895 267 

Receivables from exchange transactions 


(1 802 310) 

(759 419) 

Consumer debtors 


(25 559 835) 

(39 185 712) 

Other receivables from non-exchange transactions 

(2 584 378) 

25 758 710 

Payables from exchange transactions 


(18 901 755) 

(38 421 140) 

VAT 


(8 800 331) 

(5 829 107) 

Unspent conditional grants and receipts 


(28 341 454) 

15 025 322 



250 314 015 

259 362 931 


63 

















Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 

: _ 2019 2018 

R R 


44. Financial instruments disclosure 
Categories of financial instruments 
2019 

Financial assets 


Trade and other receivables from exchange transactions 

Other receivables from non-exchange transactions 

Cash and cash equivalents 

At amortised 
cost 

32 913 650 
62 692 970 

At cost 

205 822 074 

Total 

32 913 650 
62 692 970 
205 822 074 


95 606 620 

205 822 074 

301 428 694 

Financial liabilities 




Trade and other payables from exchange transactions 


At amortised 
cost 

120 825 612 

Total 

120 825 612 

2018 




Financial assets 




Trade and other receivables from exchange transactions 

Other receivables from non-exchange transactions 

Cash and cash equivalents 

At amortised 
cost 

27 958 191 
60 108 592 

At cost 

206 594 311 

Total 

27 958 191 
60 108 592 
206 594 311 


88 066 783 

206 594 311 

294 661 094 


Financial liabilities 

At amortised Total 
cost 

Trade and other payables from exchange transactions 139 727 369 139 727 369 

-1 

Audited 

By 

2019 -12- o 8 

Auditor General South Africa 
Mpu malanga Business Unit J 


64 


















Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 


Notes to the Annual Financial Statements 



2019 

R 

2018 

R 

45. Commitments 



Authorised expenditure 



Already contracted for but not provided for 

• Property, plant and equipment 

• Infrastructure 

• Other services 

36 148 352 
245 176 848 
22 100 808 

10 468 358 
182 203 196 
33 078 051 


303 426 008 

225 749 605 

Total capital commitments 

Already contracted for but not provided for 

303 426 008 

140 779 962 

Operating leases - as lessee (expense) 



Minimum lease payments due 

- within one year 

- in second to fifth year inclusive 

3 885 118 

4 178 196 

1 708 197 

1 156 110 


8 063 314 

2 864 307 

Operating lease payments represent rentals payable by the municipality for certain 
negotiated for an average term of seven years and rentals are fixed for an average 
payable. 

of its office properties. Leases are 
of three years. No contingent rent is 

Operating leases - as lessor (income) 



Minimum lease payments due 

- within one year 

- in second to fifth year inclusive 

128 223 

2 383 

152 438 
130 606 


130 606 

283 044 


Operating lease payments represent rentals receivable by the municipality for certain of its properties. Leases are 
negotiated for up to maximum term of 9 years 11 months and rental escalates between 0% to 10% per annum. No 
contingent rent is receivable. 


Audited 

By 

2019 -12- 0 8 

Auditor General South Africa 
Mpumalanga Business Unit 


65 


















Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 

2019 2018 

R R 


46. Contingencies 
Contingent liabilities 

A Lubbe - Claim of R109 626.64 against unfair dismissal 
IMATU O.B.O L Lubisi - Claim of R120 270 for travel allowance 


Tarfix - Claim for retention money amounting to R2 679 068.48 

SM Shabangu - challenge against alleged unfair dismissal and anticipated costs claim of R1 020 000 

Silinda Mokoena & Associates (Valuer) case no 64255/09 claims R1 264 063 for work done on the valuation roll for the 
municipality 

Valor IT - Claim of R5 034 960 for breach of contract 


Matsamo cultural park - Claim of R5 418 000 for suffered damages caused by fire due to alleged negligence following 
failure of the fire trucks to arrive on time 


Maximum profit recovery - Claim for a breach of contract on VAT fjr an amount of R6 000 000 
Telkom SA Limited - Claim for damages for an amount of R59 346.17 

SL Mkhatshwa - The case relates to the alleged unfair labour practice, however the potential amount of the liability is 
uncertain as it was not determined when the claim was instituted. 


JS Nkosi - The case relates to the alleged unfair labour practice, however the potential amount of the liability is uncertain as 
it was not determined when the claim was instituted. 

SANRAL SOC - SANRAL sought an interdict to prevent the Lebombo Border Dry Port from developing a property without 
first obtaining the zoning. The Municipality was cited as the as the authority responsible for issuing of the said zoning. The 
potential amount of the liability is uncertain as it was not determined when the claim was instituted. 


L Siboza - The case relates to the alleged unfair dismissal, however the potential amount of the liability is uncertain as it 
was not determined when the claim was instituted. 


BB Khoza - Claim for salary of R174 000 that was stopped after the employee was found to have misappropriated funds of 
the municipality. 

SS Thabethe - Claim for R400 000 for alleged unlawful arrest and assault by municipal traffic officer 

M Baloyi - Claim for R200 000 for alleged unlawful arrest and assault by municipal traffic officer 

Gaenssler & 3 others - The relates the taking over of Marloth park holiday resort and the ownership of game animals. 


Contingent assets 

The municipality lodged a counter claim of R10 855 225.17 against Silinda Mokoena & Associates (Valuer) case no 
64255/09, because the valuation roll was incorrect and the Valuer failed to make corrections as requested by the 
municipality. The municipality lodged its claim because it is losing possible revenue due to the incorrectness of the 
valuation roll. 

Valor IT - Claim for recovery of amount paid to Valor IT to the value of R6 300 000 for breach of contract. 

BB Khoza - Claim for recovery of misappropiation of funds by the employee to the value of R1 000 000. 

Leopard creek share block Ltd - The case relates to a dispute of the value the property in the municipal valuation roll. 


66 










Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 


2019 2018 

R R 


47. Related parties 

Relationships 

Post employment benefit plan for employees of municipality Refer to note on employee benefit obligations 

Members of key management Refer to note on compensation to Municipal Manager, 

Chief Financial Officer, Executive Directors, Mayoral 
Committee and Other Councillors 

48. Change in estimate 
Property, plant and equipment 

The estimated useful life of assets in certain classes of Property, Plant and Equipment, Investment property and Intangible 
assets were assessed during the current financial year. In the current financial year management have extended their 
estimated useful lives.. The effect of this revision has decreased the depreciation charges for the current and future periods 
by R 2 575 267 

The impact on Property, plant and equipment due to the extension of their useful lives is R 2 534 956 
The impact on Investment property due to the extension of their useful lives is R 29 005 
The impact on Intangible assets due to the extension of their useful lives is R 11 306 


Audited 

By 

2013 -12- 0 8 

Auditor General South Africa 
Mpumalanga Business Unit j 


67 










Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 

2019 2018 

R R 


49. Prior period errors 

Prior year adjustment to commitments disclosure amount due to non inclusion ofcontractual agreements with Rand Water 
and Ehlanzeni District Municipality on various projects 

Correction of disclosure amount of future minimum lease payments due, that was incorrectly calculated 

Correction of prior year completed projects that were still under work in progress in the fixed asset register and accounting 
for the prior year accumulated depreciation. 

Recognition of transactions relating to prior year which were received late, after submission of financial statements. 
Correction of inventory writte-off that was deleted and was not authorized and as result did not update the general ledger. 
Correction of prior year amount of retention for infrastructure asset that was incorrectly accounted. 

Transfer of cost and accumulated impairment of properties due to incorrect classification. Disposal of cost and accumulated 
impairment of properties which are privately and were still in the asset register. 

Accrual of overtime and travel claims that was incorrectly recognised in wrong financial period. 

The correction of the error(s) results in adjustments as follows: 


Statement of financial position 

Accumulated surplus 
Input VAT 

Trade payables from exchange transactions 
Infrastructure - Water: cost 
Inventories 

Infrastructure - Roads: Accumulated depreciation 
Infrastructure - Water: Accumulated depreciation 
Infrastructure - Roads: cost 
Infrastructure - Water: cost 
Work in progress - completed 
PPE Land - cost additions 
PPE Land - cost transfer in 
PPE Land - Disposal 
Investment Land - cost additions 
Investment Land - cost transfer out 
Investment Land - Disposal 
PPE Land - accumulated impairment transfer in 
Investment Land - accumulated impairment transfer out 
PPE Land - accumulated impairment disposal 
Investment Land - accumulated impairment disposal 
Payables from exchange transaction - Salary suspense 


r~ 


A udited 

By 

2019 -12- 5 a 

Auditor General South Africa 

_Mpumala„ g a Business Unit 


4 

976 

691 


(30 

367) 


228 

073 

(217 

391) 


(20 

458) 

(i 

241 

711) 

(i 

549 

068) 

36 

576 

192 

49 

819 

295 

(87 

111 

106) 

24 

883 

454 

5 

454 

000 

(1 

287 

330) 


200 

000 

(24 

883 

454) 

(1 

916 

100) 

(12 

349 

900) 

12 

349 

900 


83 

680 


577 

000 

(4 

541 

400) 


Notes 


Commitments - Operating leases - as lessee 

within one year 

in second to fifth year inclusive 


Commitments 
PPE & Other 
Infrastructure 


- 

924 888 

- 

1 156 110 

- 

2 080 998 


- 

2 424 532 

- 

82 545 111 

- 

84 969 643 


68 













Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 


2019 2018 

R R 


50. Comparative figures 

Certain comparative figures have been reclassified. 

The comparative figures have been reclassified to conform to presentation of expenditure by nature as required by GRAP 1. 
The effects of the reclassification are as follows: 

Statement of financial position - extract 

Current assets - Receivables from exchange transaction 
Non-current assets - Receivables from exchange transaction 

18 076 106 - 18 076 106 


Comparative Reclassificatio After 

figures n reclassification 

previously 
reported 

18 076 106 (17 084 643) 991 463 

17 084 643 17 084 643 


51. Risk management 
Liquidity risk 

The municipality’s risk to liquidity is a result of the funds available to cover future commitments. The municipality manages 
liquidity risk through an ongoing review of future commitments and credit facilities. 


Between 1 and Between 2 and Over 5 years 
2 years 5 years 

529 993 

246 576 

Between 1 and Between 2 and Over 5 years 
2 years 5 years 

1 807 430 

71 566 

Credit risk 


At 30 June 2019 

Finance lease obligations 
Trade and other payables 
Operating lease liability 

At 30 June 2018 

Finance lease obligations 
Trade and other payables 
Operating lease liability 


Audited 

By 


Less than 1 
year 

2 194 378 
120 825 612 


- 12 - 


0 8 


Less than 11 
year 


Auditor General South 
M pu ma! a nga B usi n ?§ 


42 080 


Credit risk consists mainly of cash deposits, cash equivalents and consumer debtors. The municipality only deposits cash 
with major banks with high quality credit standing and limits exposure to any one counter-party. Credit Risk related to 
consumer debtors is managed in accordance with the Councils credit control and debt collection policy. The Council's credit 
exposure is spread over a large number and wide variety of consumers, and is not concentrated in any particular sector or 
geographical area. Adequate provision has been made for anticipated impairment of consumer debtors. 

Financial assets exposed to credit risk at year end were as follows: 


Financial instrument 
Cash and cash equivalents 
Receivable from non-exchange transactions 
Receivable from exchange transactions 
Consumer debtors - exchange transactions 


2019 


2018 


205 822 

074 

206 594 

311 

62 692 

970 

60 108 

592 

19 878 

416 

18 076 

106 

31 889 

028 

26 966 

728 


52. Going concern 


The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This 
basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of 
liabilities, contingent obligations and commitments will occur in the ordinary course of business. 


69 













Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 

2019 2018 

R R 


53. Events after the reporting date 

The municipality entered into agreement with Department of Community Safety, Security and Liason to transfer the function 
of Licencing department back to the province. 

This agreement has a finacial effect as the municipality will loose revenue from Agency Services. 


The municipality has erroneously paid salaries to the value of R13 670 665.55 on the 14th of October 2019, while the 
intention was to pay travel claims. Subsequent to the error, on the 25th of October 2019, the erroneously paid salaries of 
the 14th of October 2019 were recovered from the council of three, all 5 mayoral committee members, municipal public 
accounts committee chairperson, other honourable councillors, municipal manager, all 5 directors, all 33 task 17 managers 
& other employees which have signed the acknowledgement of debt forms. On the 25th of November 2019, the municipality 
managed to recover monies from the other honourable councillors and employees which have subsequently signed 
acknowledgement of debt forms. As at 29 November 2019, the organised labour (Unions) is consulting with the remaining 
employees to arrange affordable terms of repayment. 

54. Unauthorised expenditure 


Opening balance as previously reported 

Opening balance as restated 

Add: Unauthorised expenditure - current 
Less: Amount written off - prior period 

Closing balance 


Audited 

By 


3 190 504 

152 788 826 

3 190 504 

152 788 826 

24 068 382 

3 190 504 

- 

(152 788 826) 

27 258 886 

3 190 504 


Unauthorised expenditure is as a result of overspending of the budget of the municipality which caused the operational 
expenditure or capital expenditure incurred during the financial year to exceed the amount appropriated in the budget.The 
unauthorised expenditure of R27 258 886 is awaiting fpf,^qth9fi^atip|r|. f . j - :} ; i, /, 

Fruitless and wasteful expenditure Mpumalanga Business ijnif 


55 


Opening balance as previously reported 

861 974 

3 377 176 

Opening balance as restated 

Add: Fruitless and wasteful expenditure - current 

Less: Amount written off - prior period 

861 974 

230 982 

3 377 176 

861 976 
(3 377 178) 

Closing balance 

1 092 956 

861 974 

Fruitless and wasteful expenditure is as a result of interest charged by suppliers due to late payments and late submission of 
SARS returns. Fruitless and wasteful expenditure of R1 092 956 is awaiting for authorisation. The fruitless and wasteful 
expenditure is irrecoverable. 

56. Irregular expenditure 



Irregular expenditure - Opening balance 

497 668 201 

439 123 737 

Opening balance as restated 

Add: Irregular Expenditure - current year 

Add: Irregular Expenditure - current year but identified in prior period 

Add: Irregular expenditure - incurred in prior year but identified in current year 

497 668 201 

81 289 028 
23 275 840 
45 825 955 

439 123 737 

33 176 400 
25 368 064 

Closing balance 

648 059 024 

497 668 201 


70 
























Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 


2019 2018 

R R 


56. Irregular expenditure (continued) 

Amounts recommended to be written-off 

Irregular expenditure is as a result of expenditure incurred by the municipality that is not in accordance with, a requirement of 
the supply chain management policy. Irregular expenditure of R439 123 737 has been recommended by council to be written- 
off as irrecoverable after investigations and is awaiting to be submitted to National Treasury to be condoned. The prior year 
irregular expenditure which has not been recommended by council is still under investigation. The municipality will also 
investigate irregular expenditure incurred in the current year. The full extent of irregularity would only be known at the 
conclusion of these investigations. The amount disclosed above may change based on the outcome of these investigations. 


57. Additional disclosure in terms of Municipal Finance Management Act 
Contributions to organised local government 


Current year subscription / fee 
Amount paid - current year 


Non-compliance with applicable legislation 

MFMA: Section 65(e) and Section 99(2)(b) 

Audit fees 


Current year subscription / fee 
Amount paid - current year 


PAYE 

Opening balance 

Current year subscription / fee 

Amount paid - current year 


UIF 

Opening balance 

Current year subscription / fee 

Amount paid - current year 


r~". Audited 

I Bv 1 

1 2019 - 12 - 0 8 1 
Auditor General South Africa 1 

Mpumalanga Business Un n j 


SDL 

Opening balance 

Current year subscription / fee 

Amount paid - current year 


229 625 

208 601 

(229 625) 

(208 601) 

_ 



4 260 840 

3 416 949 

(4 260 840) 

(3 416 949) 

u 

m 


- 

3 249 633 

53 716 584 

45 153 130 

(53 716 584) 

(48 402 763) 

_ 

_ 


- 

280 792 

3 870 358 

3 683 865 

(3 870 358) 

(3 964 657) 

_ 

m 


- 

198 399 

3 088 292 

2 733 430 

(3 088 292) 

(2 931 829) 

- 

- 


71 

















Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 


57. Additional disclosure in terms of Municipal Finance Management Act (continued) 

Pension and Medical Aid Deductions 

Current year subscription / fee 
Amount paid - current year 


VAT 

VAT receivable 

VAT output payables and VAT input receivables are shown in note . 

All VAT returns have been submitted by the due date throughout the year. 
Councillors' arrear consumer accounts 
There are no councillors that had arrear accou 


Aud it pr] 

nts outstanding for more than 90 days at 3( 


Deviations 


Deviations - opening balance 
Deviations - current year 
Deviations - noted by council 


2019 -12- 0 8 

Auditor General South Africa 
Mpumalan ga Business Unit j 


Awards to close family members of persons in the service of the state 

Current year expenditure 


2019 

R 

2018 

R 

90 284 811 

83 338 756 

(90 284 811) 

(83 338 756) 

- 

- 

55 918 048 

47 117717 

ro 

o 

CD 

2 510 288 

567 209 

2 223 035 

3 155 982 

(4 394 049) 

(1 212 903) 

339 274 

2 510 288 

395 999 

49 886 


Procurement services were made to Agreemeth Business Enterprise and My Angel Country Lodge, whose directors are 
close family members of persons in service of the state. 

58. Distribution losses 


Water 

Year 

Kilo litres 
pumped 

Kilo litres sold 

Loss in kilo 
litres 

Loss in 
percentage 


30 June 2019 

31 404 659 

31 094 058 

310 602 

1% 


30 June 2018 

31 753 296 

31 217 120 

536 176 

2% 


Electricity 

Year 

Units 

purchased 

Units sold 

Loss in units 

Loss in 
percentage 


30 June 2019 

87 986 876 

75 629 598 

12 357 278 

14% 


30 June 2018 

81 046 226 

71 365 717 

9 680 510 

12% 


Water distribution loss calculated value amounts to R 250 830 (2018: R4 482 427) 
Electricity distribution loss calculated value amounts to R 9 946 018 (2018: R6 041 606) 


72 






















Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 


2019 2018 

R R 


59. Budget differences 

Material differences between budget and actual amounts 

Management has decided to provide reasons for the variances that are more than 10%, however there some exceptional 
cases where management has decided to provide reasons for the variances that are less than 10%. 

Revenue and expenditure 


Service charges - The insignificant variation of 3% from the targeted revenue is as a result of distribution losses incurred 
from the sale of electricity 


Agency services - This is due to an increase in demand for Drivers Licenses 

Auwifeu 

Licenses and permits - This is due to more applications of hawkers license and permits received during the year than 
anticipated 


Recoveries - This class of revenue is coriti 
received 


ntingent in nature and during the budget adjustment the actual income was not yet 


cation print and incidental cash surplus 


Other income - R1.9 million more revenue received from sale of entrah ! de fees, (iubli 

Interest received - external - The significant variance is attributed to interest earned from investments made during the 
financial year under review totaling to R1.9 billion and interest earned from favourable bank balances throughout the 
financial year 


Government grants and subsidies - the underperformance of 1% is due to the roll-over that was not approved by National 
Treasury and latter deducted from equitable share during the financial year under review 

Property rates - underperformed by 18.1 million or 16% due to the on going objections on the general valuation roll 
implemented from the 1 st of July 2018. An appeal board in terms of section 56 of the Property Rates Act, no 6 of 2004 was 
established and proceedings for the related objections are still on progress. 

Fines, Penalties and Forfeits - This is due to less traffic and illegal connection fines issued during the financial year under 
review than anticipated. 

Employee costs - The variance is due to Bargaining Council annual salary increases effected from the 1 st of July 2018. 
Overtime worked by employees as a result of frequent breakdowns due to aging infrastructure and increase in Subsistence 
and travelling claims resulted in a significant variance. 

Councilors' remuneration - variance was as a result of implementation of the Government Gazette relating to the 
Councilors upper limits as determined by the Minister of COGTA issued in December 2018 and was effective from 01 Julv 
2018 


Finance costs - the interest charged assumptions for late payment of invoices was not factored into the budget amounts as 
well as the interest portion of the landfill sites 

Lease rentals on operating lease - The rental agreement with Ginalex was coming to an end during the year under review 
hence the budget was based on the higher rental fees, however there were no significant changes in the new rental 
agreement entered into with Ginalex. 

Bulk purchases — Additions in infrastructure assets as a result of newly completed projects necessitated extra consumption 
of bulk electricity. 

Contracted Services - Extension of scope to Gilija security services due to additional Community and infrastructure assets 
constructed which required security services. The difference was also as a result of increases in terms of PSIRA rates as 
agreed with the security companies 

Transfers and subsidies - The budget included the transfer of electrified households at the completion of the project 
whereas the actual does not 


73 








Nkomazi Local Municipality 

Annual Financial Statements for the year ended 30 June 2019 

Notes to the Annual Financial Statements 

2019 2018 

R R 


59. Budget differences (continued) 

General expenses - Implementation of cost containment measures on general operational costs yielded positive results as 
the municipality managed to save approximately 28% of the budgeted fee. 

Assets and liabilities 

Cash and cash equivalent - The variance is due to unspent conditional grant and the increase in cash received from 
investments made. 

Receivable from exchange transactions - Current: The municipality did not plan to have accrued interest by year end. The 
assumption was that the municipality would have redeemed all investments and the related interest as at 30 June 2019 

Receivable from exchange transactions - Non-current: The variance was due to the fact that less new electricity 
connections were done which means there was less deposits paid to Eskom for new electricity accounts. Budgeted 
connection charges are R3,9 million and the actual connections done are R448 thousand, thus the demand for new 
connections to be made by Eskom was less than anticipated 

Consumer debtors - The actual collection rate for traffic fines and consumer debtors was less than anticipated 

Property, plant and equipment - The estimated capital budget for Property, Plant and equipment was inclusive of grant 
allocations which are vat inclusive and actuals which are vat exclusive. The variance of 7% is also due to capital projects 
that were not yet completed as at year end 

Intangible assets - Acquisitions were less than what was budgeted for and the variance also results from the different VAT 
treatments when budgeting and on actual spending 

Heritage assets - This item was over budgeted for as the municipality anticipated to invest in heritage facilities in order to 
attract tourists 

Operating lease assets - The municipality had planned to lease more machines as additional office space was created in 
the planning and development. 

Provision - This is an estimated figure and the budget is based on the prior year actuals which is subject to extensive 
assumptions depending on the management expert used to determine the actual value. 

Other financial Liabilities - There was no long-term loan entered into. 


Finance lease obligation - The municipality entered into a new lease agreement with Vodacom 

Unspent conditional grant - This line item does not require to be budgeted for hence there is 100% 

Employee benefit obligation - The municipality omitted this line item during the budget preparation 
balance for 2017/18 financial year 

oy 


2019 -12- 0 8 

Auditor General South Africa 
Mpumalanga Business Unit 


variance 

as it had an audited 


74 













Nkomazi Local Municipality 
Nkomazi Local Municipality 
Appendix B 


<T> 


C 

o 

.2 
o 
0) 

© a 
cm o 
<D "O 

3 <D 

© .2 

CO D 

05 | 

</> O 
03 O 

-C 

a> 

E 

a 

’5 

O’ 

a> 

"a 

c 

03 

-4-» 

c 

aj 

a 


o 

a 

o 


° £ 

.2 ■» 

03 (g 
> 
<D 

</> 
O 

o 


c 

< 


o 


o % 

C«TJ 

w s s 

o m 


«i an 

w e a: 

g O 


a > jS « 

cl re CH 

o 00 


o>« 

C « T3 

g | g 
£ w a: 
o co 


£ 11 
u > o : 
a* O 

£ E 


*7 « 

ef] 


2 o 


O) 4> 

.E u -o 
c = c 
o jH 

X m (V 


loinm 

(D O) s 

m cm N- 

CO 00 Tf 
0(00 
ON O 


N* m oo 

r O (O 
co cm cn 
o « <n 
CO co 

O N. — 
UJ O) M- 
O rf r 
t- CM 


CM O 
i CD -M" 
00 i * 
N» CO 

JoS 


S § L 


2 

CL {/) 
? £ 2 


CD 


3<: 


to t- a> co t 

0(00)T-(J)(0 

Tf (O CO CO O (O 


M" N- CO N- CM CO 
co oo m Tj- cj> 

CT> 00 CM 


N O m ff) r 

oo eo u> n. cm 
o n o Tt in 
CM r- r* ID CM 
O '—' CM N» CM 


sfejess , 

N' O CO 00 CO 1 


NOCNCON 
00 TJ- CM CM CM 
CM O i- O CO 
O CO N- CM CM 


CO 5 - Tt r- CO CO 
CO Tj 00 00 T- U) 
00 CO CM CM CM CO 
<M M O) ifl r M 
T- CO CO CO Nf 

M CM (fl CM N ( 

cn o o r- t- i 

Or r OCO( 

CO t- r- ' 


s s 


, CO 00 O r 
00 O 00 CO 
CD CO O M- 

co m co 

CO \f r- O 
CM CD CO 
CM CO 


CO r- lO CM CO N- 
CO 3 5 M- T* C§ 
CM CO O) 00 O Tf 

sajeEss 

OON-OO^-t- 
O) t- O CD CO CD 
CO V - CD CO 


a) g 

V) CL 


m joo % c 

| 1 § £ 2 if 

a: to lu 5 co > 


Page 75 

















c 

o 

0 

o» 8 

O Q. 
CM Q 
0 "D 

E= 

3 0> 
^ 15 
o -2 

CO 3 

+■» E 

<0 o 

0 o 

c < 
0 

E 

a 

‘5 

O’ 

0 

"D 

C 

0 

+-> 

C 

J2 

a 

£ 

0 

a 

o 

k. 

a 

o c 
« 

« <5 
>* 3 

J 5 

< 8 . 

a 

U) 

o 

o 



I 

5 

cn 

CO ON O CM h- 
O O 0) 00 00 

N N ■>? N CN 

h~ 

CD 

CD 

CM 

in 

* 

8 

fe 

O 

CD 

CO 

o> 

CD 

CO 

CD 

885 

CD CD CD 

h~ N- CD 

CD O OO 
oS O CD 

CO 

5 

c 4) T3 

rl s 

c\i 

(D 

T- 

(M 

id 

nn^ino 

{Mwmsio 

8 

o 

CM 

o 

o 

3 

o 

CO 

o 

3 

00 

8 

00 

CD 00 r- 
O CO CM 
co m cd 

8 8 8 

O O CO 

o> 

CO 

o 



co cn co co in 

m 

in 

NT 

00 

o 

■*“ 

r* 

CO 

CM 

00 

CM 

OCDr 

CM O 

CO h~ 

in r CO 
in cm 

co 






CM 





T~ 


CM 




oo'^rTuT 

37 

CO 

o 

o 

CD 

CD 

JcTST 

57 o'In' 

57 


• 

• 

h. in o cm 1 

CD 

CD 

in 

m 

m 

in 

8 o ' 

co in in 

o 

^' O T3 
.= C “ 



cm cm u> 

f: 

CM 

CM 

3 

8 

o 

CD 

o 

CD 

h* 00 

T- CM 

f:88 

8 

« « re 



00 CM o o 

CD 

Nf 

CO 

co 

in 

m 

O N* 

cn co in 


o wX 




1^ 

in 


v 

r>- 

r-~ 

CD 00 

h- h- 


o to 



— CM '—CM 

CD, 

8 





^2. 


2. 






s 







I 

w 

1 

• 

■ •III 

1 

CM 


1 



CM O 


CM 






CM 

00 

in 





5 8 

CD CD 


8 

in 

o> c 

l z 










Nr 



« 













f 



lO r- v U) , 

O t- <£) 

CN 

K 

CM 

CD 

CD 

CD 

8 

to 

00 

CD 

co 

CD 

CD 

co - 

CD 

CD 

in" m' 
88 • 

CM CD* CO 
1^- CO CD 
CM CD CD 

I 




O lO lO CO 

N OJ 00 CO 

m m o *- 

CD 

CD 

CO 

SE 

w 

co 

00 

CD. 

00 

2. 

CD Nf 
oo OO 

CD CD 

CD v- 00 
CO N- CD 
CO co —• 

co 

5 

1 1 



CM CM CM, 


s 





CO O) 


8 

CL 













Q 













a. 













5? 

• 

• 

. 

' 

• 

' 

' 

' 

' 



' 

?t= 













?f fi 













2 o 


























Disposal 

Rand 














. 


tn'cn'oo'co' 
v- CO CD co , 
N- r- CO CD ' 

6 

CO 

CO 

o 

r^ 

I 

1 

<o 

E; 

m 

8S 

CD CO 

co oo m 

57 

CM 

.£« T3 

5 § re 



CM h- T- CO 

co m m- co 

CM CD CO 00 

co 

o 

CD 


CM 

CD 

2- 

CN 

CD 

£. 

5) 

Nt 

§ 

OO O 

co in 

CO CM r 
O CD CD 
CD CD M’ 

CM 

in 

CD 

Q.« X 

o co 




o 

cd 

CD 

O 



h' 

h» 

T- 

CD CD 

CD r- 
—CO 

O '~'h~ 
CO, 

1 






— 





'— 



O) O 

.E c c 
w « £ 

o> 

cn 

OtONNS 
MOOSCO 
n CM U) O CM 

CD 

CD 

in 

in 

co 

co 

N 

CO 

in 

r^. 

CO 

in 

m 

m 

in 

in 

m 

OW^IDMft 

oo to n cd co in 
oo cn cd u> in in 


cm 

id 

cm 

ID 

fs-h-T-inr- 

ro m m id o 

Or OSiO 

CM 

o 

in 

co 

CD 

CO 

co 

CD 

CO 

I 

in 

CO 10 r- CM co in 
CM CD CM r CD 3 
00 CD CD O CO Nt 

CD 

co 

CM 

£ « X 

O CO 


T- 

t- in id rt u> 
r (O r m 

co 

CM 

CD 

in 

CD 

CM 

CM 

CD 

Nf 

3 

CD Nt T- CO CM CD 

CD CO CM Nt 

CO T- r- 

CO 

o 

r*. 






CM 





CM 


CM 

|e 
■S e| 

' 

' 

iiiii 


' 








u > <2 













£ E 













6 




ST 

8 

1 






oT 

, o> , , 

CO 

57 

CD 

CO 

Disposals 

Rand 



CM 

8 

s 






■Nf 

CM, 

a 

a 













isfers-Wl 

mnpleted 

Rand 











III! 


2 o 













H 













V> 

, 

, 

828 , , 
CO NT CM 

co 

6 

CO 

h- 

O 

. 

. 

. 

■ 

- ■ 


CO 

h- 

o 

O TJ 

‘.C C 

10 10 



COr r 

CD M - 00 

M"r S 

CM 

CM 






CM 

T- 

n 

§ * 



T- 

CM 

CM 






CM 

CM 

o 



CM 00 00 CO 00 

CD 

M- 

o 

o 



ir ^ 

CD O 


U) 

• 

1 

id N m m n 
^ m M- O M 

T“ 

O 


§ 

3 

o 

' 

• 

8 o 

, T~ Tf . 

O O 


1 1 

•— flj 



£8832 

r- CD M' CD CD 

yz 

o 

« 

m 

CD 

CD 



si 

feS 

CD 

CD 

CD 

3 “ 



t- CM Nr 

CD 

o 

m 





m in 
CO CD 

CD 

o 

in 

< 





CN 

i 




T ~ 


CM 


1 

1 

O CO in Tt 00 
CO CD S CM O 
i CD CM K O CN 

i CO 

I S 


£ 

CD 

1 M 

s 

■ 5 

m 

: 8 

> in 
i w 
i w 

i CD r- 

i CO CD 

i ID CD 

■5 co m 

■g - O CD IT 

cd cd Tf in 

; 8 

1 CO 

,E “u 
EEc 

fl) ^ W 

cn 

(0 

1 CN 

cc 

co cn co o c\ 

1 CM CN CD CM r 

i TtCOCMOON 

! 1 

I 

1 CN 

IT 

• CN 

! ffi 

1 CN 

! 3 

1 M 

i m 

, CM CO r- 5 CM IT 

CO CD CM NT in M 

CD CM CD LO CM M 

1 CD 
NT 

S.w a: 
o co 



O) r in r W 

CO r M 

1 T- 

o 

C£ 

» CN 

1 CN 

' ^ 

) CD 

: 88 

r r CM (£ 
O M 

» in 

3 






CN 

1 






CM 


{ § 

S c 

t/> o 

IS E 

8> 8 

« ■£ 

*C 2 

« 1 

X X 


2 c 
m 


5 * I £ E 

SlffS 


II s " 

if Q. L 


2 E 

O (0 

5 O 


■S' 

I 


2? 

1 

«/> 

£ 

I 

E 

o 


3 J S) « M Q. 
•Q 3 <g ti) — 
■O tj ra W 4> m 

C T (1) « n J! 
§ e o>fl)5E 

7S T3 m .-? « c K 


5 
’€ 
J2 S. 

<D o 
O W v_ 
(/>(/)(/> Q- 


Page 76 




















































Segmental Statement of Financial Performance for the year ended 
Prior Year Current Year 



^ ^ ^ ^ 



N O r- N 0 0 

U) 


M-O0O00 

00 


O T- 00 00 CD CO 

r^. 

</) +2 

O) h- 00 M- x- O) 

T— 

,2 o 

LO CD CD CD 00 

CD 

CL»C *“ 

CO CO X- in CD N 

O 

C <D CD 

3no: 

(0 

O CD CO Xf If) ID 

CO 

r^m cnj^ cd^ cm 

Tf 

CM 


h- CD CO M- M" 00 

CD 

CD 

M- CD CM CD N O 

CO 

l- 

3 

O N CO 0 T- CD 


CD -o 

■i Tl p 

SCDCMOr-M- 

CO 

0M-CD0CMM- 

CO 

c S 

< s.* 

OO00N0 
N 0 CO CM CM O 

CO 

CM 

h- cnj oo cd 

CD 

X 

t“ x- 00 

00 

LU 



CD 

O CD M" N- 00 CD 

xfr 

E 

Q 

O CD N CO O 0 

CM 

O 00 CD 00 CM CM 

CM 

o 1-1 

00 0 CO LO CD M" 

CO 

c ? 

O M- CD 00 LO CO 

CM 

c 

_ CD 

CD ££ 

N M- 0 O) N t- 

h- 

CO CM r- CD CD 

o 

□ 

CO O 00 


4-» 

CO X- CD 

X— 

o 



< 


XT* 


£ 


o 

c 

3 

5 


a> 

o 

c ^ 

| CO 
a. [ro 
a> w o 

S .§« 

^ ^ C 

■d <d ro <D 
c CO >, ^ 

ro Q) p^ t5 
5>15 c ° 


0) 

o 

m 

- o 

Ir 

O W 
f \ CD 

u a> 

?»- 
CD "O 
CD £ 
> ™ 

3 0? 
O D> 
CD *0 
X 3 
LU CO 


CD v \J- 00 O) O 
LOLDLOt-Ot- 

O) t O ^ 00 
COCNf^COCO^r 
(D lO S CO CO 00 

o xj- t- in o cn 
co oo o) in o 
in oo x- in 0 m 

'—x- ww> —CM 


c o |t5 
c e- E n> 
ro o o 
0.OO£ 



CD N N CM S 0 

o 

CD 

in O O) ID K CM 

CM 

c 

CD CD ID CD M- 00 


Actual 

Expenditi 

Rand 

I s - O) xfr I s -. X- CD 

00 

CO x— O x— CM M" 

Tt 

CM xj- O CM x- CD 

O) 

in in O CM O CO 

CO 

CD O CM CD CD M- 
CM x- CO 

IT) 

00 

CD 

O 00 CO m- 00 00 

x— 

E 

A 

o m M - co cd co 

XJ- 

o co in cm o cd 

00 

w 

o 1-1 

xf(MNx- 0 x- 

V 

c ? 

cm oo co co 

CM 

_ c 

_ CD 

(D a: 

3 

*-* 

O 

< 

X- 00 00 CD O CT) 

m 

I s - CO N 0 xf 

CD 0 ) 0 ) 

co in 

O) 

o> 

o 

v- 


Page 77 











Nkomazi Local Municipality 
Appendix E(1) 

June 2019 


Actual versus Budget(Revenue and Expenditure) for the year ended 30 June 

2019 


Current year 

Current year 



2019 

2019 



Act. Bal. 

Adjusted 

Variance 

Explanation of Significant Variances 


budget 


greater than 10% versus Budget 

Rand 

Rand 

Rand 

Var 


Revenue 






Property rates 

94 404 808 

112 536 949 

(18 132 141) 

(16.1) 


Service charges 

144 568 061 

149 826 026 

(5 257 965) 

(3.5) 


Rental of facilities and 

4 974 158 

4 688 381 

285 777 

6.1 


equipment 






Interest received (trading) 

7 305 613 

7 397 131 

(91 518) 

(1.2) 


Agency services 

13 068 155 

8 726 950 

4 341 205 

49.7 


Licences and permits 

27 419 

34 840 

(7 421) 

(21.3) 


Public contributions and 

3 491 815 

- 

3 491 815 

- 


donations 






Fines, penalties and 

14 565 676 

28 325 728 

(13 760 052) 

(48.6) 


forfeits 






Government grants and 

821 172 599 

826 962 700 

(5 790 101) 

(0.7) 


subsidies 






Recoveries 

209 144 

294 066 

(84 922) 

(28.9) 


Other income 

5 453 988 

3 619 266 

1 834 722 

50.7 


Interest received - 

27 648 707 

22 768 854 

4 879 853 

21.4 


external 






Gain on disposal of 

1 889 080 

- 

1 889 080 

- 


assets 






Actuarial gains 

1 949 000 

- 

1 949 000 

- 



1 140 728 223 

1 165 180 891 

(24 452 668) 

(2.1) 


Expenses 






Personnel 

(406 073 559) 

(357 578 208) 

(48 495 351) 

13.6 


Remuneration of 

(33 643 902) 

(24 290 797) 

(9 353 105) 

38.5 


councillors 






Depreciation 

(64 813 640) 

(61 197 763) 

(3 615 877) 

5.9 


Amortisation 

- 

- 

- 

- 


Impairments 

(8 727 960) 

- 

(8 727 960) 

- 


Finance costs 

(823 627) 

(692 458) 

(131 169) 

18.9 


Debt Impairment 

(20 637 535) 

(22 199 697) 

1 562 162 

(7.0) 


Lease rentals on 

(6 514 756) 

(9 975 617) 

3 460 861 

(34.7) 


operating lease 






Bulk purchases 

(83 318 535) 

(67 344 737) 

(15 973 798) 

23.7 


Contracted Services 

(146 287 393) 

(113 910 275) 

(32 377 118) 

28.4 


Transfers and Subsidies 

(1 054 758) 

(15 292 029) 

14 237 271 

(93.1) 


General Expenses 

(127 961 247) 

(174 540 346) 

46 579 099 

(26.7) 



(899 856 912) 

(847 021 927) 

(52 834 985) 

6.2 


Other revenue and costs 






Gain or loss on disposal 

- 

- 

- 

- 


of assets and liabilities 

_ 

_ 

_ 

_ 


Net surplus/ (deficit) for 

240 871 311 

318 158 964 

(77 287 653) (24.3) 


the year 







Page 78 













Actual versus Budget (Acquisition of Property, Plant and Equipment) as 

at 30 June 2019 


« ts 

.s o) 

JtZ T3 
C 3 
O-Q 

E 

V 

.2 a> 
X ° 
? c 
n -- 
a re 
x > 
LU 


to 

U) 

•a 

D 

CQ 

■D 

to 

V) 
> 
to 


6 






CO O CD CM in o 

CM 


O r- CO CD CO CM 

CM 

SS 

r- ^ 






CO O CM O CD 03 

in 


00 LO O O 00 CD 



O) N N O ID Lf) 

CM 


Nt-COO 0)00 

00 

w 

T- CO LO CO 00 CD 

CM 

C 

M 

O T- CM LO 

cx> 

w 

Q/ 

T- T- CO CM 

r- 


w T- LO 

h- 


(OOMONS 

CM 


O O CM 00 CM ^ 

<7> 


N O ID CO CO ID 



(000(0 00 0 

m 

"U 

Tf cm o t- 


c 

(13 

O^-iDt-COt- 

h» 

tk 

T- T- CM CO 



t- m in 

CM 


CM 

CO 


O O O O 00 CM 

o 


o o o o o m 

CO 

73 

OOOOM-t- 

LO 

c 

0 0 0 0^-00 

CM 

nj 

o co o un oo cd 

CO 


CM CM M- O O) 

00 


x- t- in cd 

<r> 


X- 00 CM 

K 


CM 

CM 


M- O CD LO T- oo 



oincMco^^f 

Tj- 


CD CM CM CO O CD 

in 


00 CO 00 O) *— 

K 

u 

CD M- 00 CD T- T— 


C 

CD CM CD oo in 

T" 

2 

o M" in 

oo 

T- oo o 

in 


CM 

CM 


05 

a 

o 

c 

3 


co rr 
o 

O llT 

X 

si? 

2 <3 


C 
<D 

Q_ W 

^ "m 


C 

</) (1) 
8 “ 


03 

CL 

O 

c 


c 

o s 

o3 -Q 

S - 


8|5g| 

a) > *d w ro 

h 0 T3 o(J 0 

^ m ^ 3 
0 € -K 

■ 2 

® O - * <0 


(U 


O CD CL 

0 T3 g- 
X 3 O 

LU CQ O 


II 

C P (0 

w O »*= 

dO£ 


E 

Q. 
O 
a) <d 


Page 79 






Nkomazi Local Municipality 
Appendix F 


a> 


o 

c 


V) 

o 

<7> 

n 

3 

(0 

■o 

c 

TO 

i2 

c 

2 1; 
^>< 

■ . 

0 C 
d) 0) O) 

3 §5 

o 8 

.<2 TO 

a s 


c 

3 



£ 


E 

< 


o 

00 



















Nkomazi Local Municipality 
Appendix G1 

Budgeted Financial Performance (revenue and expenditure by standard classification) 
for the year ended 30 June 2019 


o 

CSJ 

00 

o 

CM 


■o _ <D 

ro — o 

S ii 

ft) 3 3 

a: < o 


O ft) 


00 

o 

<N 

0? 

O 

CM 


c ° 

la 


fl> = 5 

.2 2 o S « 

1 -2 I § s 

4) O E.°5 

w 1 S> 

,■2 £ 

lli 

111 

agx 


I gili 

« E r -o 

< 

3 O 

o 


3 g c O) 

| it = 

^ U O til 

O 


g (5 E « S sL -o 

g 3 o £ E oi c 

Iegif 
g<| 


•c 2 

If 

S s 
11 


II 


l- o CL a. 


osg. 

CD 

c w 


£ 

!c - 
CO 3 


= < 

3? 


S: -o ^ 5 
£ C«5 


■- -s 1 

ii. w : 


5 o 

£< 


ft) 4) „ 

■g’l” 

! W W ~ U. 

m .= o' 5 S 

5 +J </> 


E 

£ 


« « 
,E CD 
WO 
*C 3 
O “ 


rOrrOOOnil) 
0)00)S®NOO) 
Ifl O ® ID ID O) O II) 
sniooniNT-u) 
NMnOXO —'00 © 
Nr-iniflio O CO 
CO D- X- fv. CM ION 


) M 'J i- fl 'J 

I O) (O O O N 

) n in in n in 

v> co co <o 

<g CO h- 


^ £ S? £ S 


SOSOrffir^ 

CD o CD Tt O) CO &i 


N « ® o m id 
. msinor 5 
CD S- O CD CO cn 
00 CM 00 CO O h- 
r- x- — CD xf 
(OWN h~ ID 

O N CO CO x» 


00 CM cn CO CM O O 
CDCMCOOOx-OO 




io io o> 00 

CMxfUDOOcOOCDCM 



8885828S 

NONri-(Onn 

OOOCMCOt-COt-O 

^OnMCDO^lO 

K IDOxf xf CO 

s s- 


OOOftMJHOXf 

ooooocniOv-T-T- 

SONMNinx-M 


V> h- 00 CM 00 X 
MOOMO 

u> v> co 


xf in r- O S M O - 
-inpcortinnxi 


xfrNffiOOH 


CO o 


N O CO CO (D N 
00 CD x- CO Tf CO 
CD CM CM h- CO CD 


CO CO r- o N CO 
CD CD 00 00 X- X- 
COCOx-OCD-xtCDCD 


53SSU 



OOOxfNOioOxf 
COOWOinrx-r 
SONWCMCOx-xf 
O)® x-»0)S(MN 
x-Ot— xfoOCOx- 

cnswNWx—<oo) 


ID xf CM ID M ( 
M S xf CD CO l 
CO CM O x— CD ' 


xtoxjMmmxfxt 
COOCOCOCDOOOOCO 
CD O CD X- C * - 


OOON-rt-xJ-CDxJ-cO 

cocot-osno® 

CDCOOOOOx— X— OOCO 


iSo^h 


O N CO Xf N 
CM CO io O X- 

8 Z"- 


xf CO N X- ® 


00 00 CM O T- CO 
, »0 ^ Xf CD CD CM 
xf ® N xf CD N 
CM © CO l-» x- 


NCOO)il»CMO)COx- 

iocococnooxtx-cp 
CDCOCOxr*TTtf)x— 3) 
C0«0)0>CM0)0)S 
x-x-t-iniDx-NO) 
h~ CO O X- CO CD CO 



Page 81 






































o 

CN| 

00 

T™ 

o 

CN4 


* § 


c 

o 

05 

O 

|5 

'35 

</> 

j5 

o 

“O 

l. 

05 

"O 

c 

05 

4-» 

</) 

> 

JO 

(1) 

3 

T5 

C 

(1) 

a 

x 

o 

"D 

C 

05 

0 

3 

C 

CD 

> 

CD 


So, 

So 


05 

Q- 

O 

E 

3 


05 

O T- 

o o 

„ X 

m ^ 
C C 

E CD 
o a 

^ Q. 

Z < 


00 

T— 

o 

<N 

5> 

o 

CV| 


.2 -o 
' 0 


CM 

_ o 
o c 
t 3 

<D “) 

a. o 

— CO 
05 

O w 

E 13 
5 C 

C <l) 

u- J= 

_ 05 
^ 0 

0 > 
+■» 

0 0 
U)-C 
-D + J 

m £ 


■ so 

4» 5 3 

Q£ < O 


.3 Tg "S H «* 

lligi 


"S £ 

•g W 3 

f§S 

§.6 g 

° 2 Q. 

a: g * 

5 * 


<» CD CD 

E r -o 

SO = 


< o ^ 

DO 

O 


1 s S 8. 

< o o CQ 

O 


s« E £i &-o 

3 3 O C E O, c 

rc o - g,« 1 « 

= < = S'|.3“ : 


.£ 3 


*3 c 
3 « 

5 g- 

= CD 


« E 

3 O 


c 1 ■g — 

5 2 > >» 

e<52| 


o>r- ~ < 

c '“'•t S 

£ 

«2» 


w -o 
c 5 o 

s S£s; 

II So; 

CO .2, o to • 
TJ+l « 
< ;£. 


.E o> 
if 
c 5 

O m 


> x- x- CO Xf in CO 
(fflOOWrS 
) CM U) 00 N N S 


rWS 


CM xf Tt M O) O) « 
^x-xtcooonxt 
00 O O) (O CM O) O) U) 


co'xrr-'-x-toxrcoT- 

CN CM in CM - 




to 


CO 


mscocooioMO 
SOOIOCMCOCMOO 
(DNMCOmOOO) 
U>0>CMCOOCMOCM 
OSCMCDN'rxfCM 
OOCMOO® in '-'CM 
lOOOWC^ CM 


CD O) 00 m (Ox- (O CM 
NOx-ftNCOCOO 
(OONNMx-xfOO 
h'CMCOCDCOCDCDh' 
xfOOOOCMCONO 
NOOOOlinOON 


OiNCOCOOlDMO U) 

NOOOICMCOCMCO ,00 

WNMWfflOOO) to 

cm n o cm o cm <n 


o ^ 
o o cm do to m 


co o o m x 


0 00 U> CD X— CD CM 
) i- O N (O CO o 
> N N M T- M CO 


Nojoocmcos 

xfTj-cOCDCM'xrCMin 


' r r- CD CO x- ' 


£ £ £ 3? £ £ £ ;£ 5? £ 

COOCONMOICOS® (O 
(DCMx— X— X— X— OCMCDCO 
r a, r r r r T- 


OOXDCOOMOSCMN 
»C3)COCM«in(OCMOO 
m X- T- T- T- T- 


Sr-St-N(ON<OSM 
mC0r-O«xf(Din0)N 
NxfOCMrr-xfcOincn 
CO CO r- (D xt CO CO N CO CO 
miOOIOSCMNr-Or 

cd r^m m n xt m co cm co 
**■ o CM T- co cm in u> 


Ox^COCOxtO)tDCO»C 

Sx-T-rx-T-i-CM®C 

T- 00 r T- T- V T- 


CO O) N T- CD T- CM CM r; t- 

MMNMOOlONxfM 

'rCMCOrOSOxf^xt 

xfi-r®S»00)®(0 

MMCOrMOinOCDO, 

(O^OOCOx-xtOOCOCO 


to 


CM t- 
CD O) 
0> CO 

co o> 

00 O) 

h» c- 

CO CM 


CM X 


o2m 

CD 0) CM 
N NO 
CO CD O 

mom 

'“'co CM 


,e 


m m xf w m m cdcdcd 

M CM O r M CO ,10 0)0) 
CO O 00 N M CO CD CM CM 
x- CM CM 

5 £ £ 


CM CO x- 00 h- O 
(OMSOOIO 

o xt o> cd cn co 


- CO 


scocomscooNcoo, 
m t-cmoono (Jico ® 
wonnortococoo® 


ininoix-inidi-osr 
incococoromiooo 
cm co m com cmt-o> 


'tfh-coxrcoiv.cocococo 

(OmxfCDSCMNCOCOO, 

COCOinCDxr-OCMinxttO 

inCMONMCOOCMCOCO 

h-CDx-000)0)CDinCO 

MCOxMONx-CONmN 


t x- cd co m 


CM CM CM 
a, n- r-- 
COCOCOCMCOinOOOCOCD 

SSSJESSfeSSS 

fv-r-x— x-COCMOOCOCOCO 
cm m x- oo m xj- 

CO X- X- 


-COCDOCDx-inxfCMCM 

-xjcoooh-oococo 
-cDr^cDxrtMcococo 
-x-h.r^o>coxtcoco 
o cm co co m m m m 


xrh-COxttf>h-lOCO 
COt3>xJ-a,^CMC-CO 
oocomoox-cocMin 
WCMOCMCOCOOCM 
MDrOOOXJICO 
COCOxJ-COCMx— CON 
xf O) xf OCMSO) 
<o co cn h- co x- 


CD CD 

co at 

xf CD 

co co 
in oo 
in cm 


CO 


CM 


CO O CD CD O O 
CO O x- oo o o 
O O h- CD O O 
N- CO CO CO O O 
CM CM O) xf CM CM 
CO CO x- Xj xj 


T-NxfOinNCD(D(DM 
OOCMCONCMSCOQxt 
co cocomr rncMmxf r 
eomcDcDcocoocMcocD 

xtopx-'M'COh-cDcoinxt 
iniDCMCDNKCDNmin 
CM CD CM CD X- c- CD O CO 

CDCDCD CD CO x- x- 00 


OOCMCDCOOCOOOCOCO 
lOMOOOxt Nxf COCO 
x-CDCDOCDx— inxjCMCM 
Sx-xt«DOOSO<D<OCO 
xth-CDh-CDxfCMCOeOCO 
CDr-x-h.h'CDCDxfCOCO 
cd in cm co cd m cd in m 

CO xr CM CO X- X— xj 


x- O O X- O O 
COOMDOO_ 
1 CO O CO CD O O O 
O O x- h- X- O _ 
X- O CD CD in CD CD 


NOCDXf OCOx-OCO CO 
CDOincOOx-CDxtcOCO 
mCDCDCOCDCOx-'M'CMCM 
(D Xf M CD CO 00 00 O CO CO 
x— CPCDOOCDCOCOCDCDCD 
COOr-COCDCDCDCDCMCM 


i _ s = ^ 


S *5 
U) c 
0 
O s 


: a, co j 


" ^ y 


8 v> 

D_ «> 


a> 

E 

CD _ 

♦; cd V- 

i gi 

% E to E 
®FSi. 


• ^ TO 

!.f> 


o . 
a> & 


V — 3 5 s « 

i S E i ® o s 

| flj E E O X> TO 

= -P O O Q. 3 <J) 

l£oowq.i 




) OL X tr% t 0 C 

1 t m r ® c® E S, 

I 8 8 S 

oc2c-5^-5££ 

CCUJI-UJ55500 


* It 


1 I 


Page 82 














s 

o 

> 

15 

a 

o 

c 

3 

E 

> 

A 

Q) 

L. 

3 

+■* 

'-u 

c 

CD 

a 

X 

CD 

T3 

C 

05 

CD 

3 

C 

CD 

> 

CD 


* E 


05 

a 

o 

c 

3 


05 

O 

o 


N 

05 

E 

o 


CM 

0 

X 

c 

CD 

a 

a 

< 


t 

CD 

D- 

15 

o 

c 

05 

C 


o 

CM 

00 

O 

CM 


00 

T“ 

o 

CM 

35 

r— 

O 

CM 


a> 

o 

CM 

a> 

c 

3 


o 

CO 

T5 

CD 

"U 

c 

CD 


£ "S E 

re ct: O 

f *5 

<U 5 3 

m < o 


2 £! 


4> .E o 

■o «2 12 e- s 

S o § .2 g 

g-£2 o 

fig s 

„g£ 

Ilf 

||1 

si* 


g a* 

II 


£ *0 


3 O 

o 


g JI 

| il£ 2 2 

< o o m 
S 
o 

*_ w 

° ^ C ^ 

« re E <2 2 « t> 

2 3 o ,E E 2> c 

re o 2 g, t> ]5 " 


re re 


* s: 

fi 3 

f i 

o -a 
2 c 
1 £ 
re g- 

c S 


II 


ill! 

£ . a. o 
:r o a. a 
> +J re 


SSJU 

cn.t: ~ < 


£ CM ^ 

CD 3 w 


.E f- -D 

“■.is 


if 

O O 
E r: 


xT C j 

< «l 


T5 S 

2 >* 
<i> a> 
o.c 

ir 

m2 


8SS5S5 

O CO CM 00 O CD 
■M-CMr-CMlOx- 
h- h~ CO CM CO CO 
r- 00 CO 00 O CD 


g SS £ £ £ £ 

O 00 CO N- CM CD 
OOHMSOlO 



c^ia 


N^CDIDS 
CO CM S- CD CD 
CO O CO 


o *- o o) h» in 

ONOt-DO) 

oroooincoi- 

00 CM 00 CO O n 
OCONOIOS 

scooiouno 

CD CM N- n CM 



O r- O) O) I s - in 

O h- O r- O) CD 
OCDOOIDCOt- 

00 CM 00 CD O 
O CO N m Ol N 

scooiromo 

CO CM S- n CM 


t- W) CM t- CO 
. t-t-OCJICM 
CO CM O O O 
CD 00 CO r- 00 

cm s- cd co co 

on O CO 


O CO CO CO n CM 

00 CD O CO T- CO 

O O O O CM 00 

N- 00 CO CD CD n 

CD 00 CD CD CO 

co t- n 

CO T- CD 



CM CO 
0) Cl) Cl) 

SIS 


> 2 2 2 


If 

g £ 

a. a 

x a 

m re 


co to cm o o co 


CO CO 
. CD CD 
' n CD 


CO CD 
i ^ CD 
' O CO 


CO CO 
, CD CD 

n co 


88 85 

CM 00 (DO 

£8 


£ £ £ £ S? £ 

00 00 (0 CD CO CO 


e? ^ ^ ^ ^ ^ 

O)N3SMC0 

CD 00 n CD T- T- 


00 t- CD CM co CO 
OCMrlDOCD 

locooooon 

t- to o t- cd n 
t-IOi-MCDi- 
K O CO CD T- 00 
h>CMt-T-r- 
CM CM t- CM n 


SO) O (M ^ 3 

8S8881 


- 00 h- CD co 

- S- 00 CD CO 

r co cd t- n 
■) o n cm o 

- co CM CM CO 

- CM 00 co to 


to s CO S O) to 
CO T- s 00 (D CO 

concocDr-n 
00 CO O n CM o 

h- T- CO CM CM CO 
S- ■<- CM 00 LO CO 
N CO o CO T- 00 
h- O to CO CD T- 


(0 0)00000 
00 1— O O O h- 
t- CM o O O K 


o 

_g 

O ->v W 

C C' a> 

3 3 0 

o > 

0^,4) 

«8l:W 

VoqS 
> ?: re 
3 a> o 

S ^e- 

X 3 o 

LU £D O 


• CM CO 

a> a> a> 

III 


Ip 

e“ ® 

-ns i 

> V) * > 

0*2 5* 

™fl £ 

8 5 5 3 

c E w ^ 

ra 0-2 V 
x 

n in co 

<D <D CD 

Sss 


222222 2 B- 


Page 83 

























Nkomazi Local Municipality 
Appendix G3 

Budgeted Financial Performance (revenue and expenditure) 
for the year ended 30 June 2019 


o 

CM 

00 

r- 

o 

CM 


CO 

O 

CM 

S> 

o 

CM 


■o _ (D 

£! re E 
re o 

SI 1 

4) 5 3 

a: < o 


52 


£ 

3 TJ 


5 5 ° o < 

■O </>(/> 5 

si ill 

a. x: a; *5 2 

A S 


"O </> 3 

2 -C £ 

k fil 
2 £ c 


w re 

— ™ c t; 

2 1 

«8°5 

3 © 

||I| 

2 itl 

< o o CQ 


*_ V) 

° 4> ^ c 

elSll.96 

illl|I 2 


•Si 

o XJ 


"ro E 


S I?- 

lllf 
2 .0.0 
IT O CL Q. 

> re 


D)._: <- < 

!c c m S 
w5*> 

l. 


E .§J 


»•? 

■£ £ re 

5i r CO ** 

■O ^ W O 

mld«5 
•o v> 


I i 


oococncoN'CnTfincncococoio 

OOlO)(Or(0^0(OONW«) 
OO’ifNID'sf (DO®rSOn 
(OSM{DCOOr-x-r-<DNSW 
OS.OWN3mO)T-fO®MID 
COCMCOOCMOCOCOTf IONO 
CM o CO 

"■{o 



CMCOOOt-COCOCNCO'«-0>CMCOOO 

MOOOoinNininNrO)®^ 

Q 


si 

Q 


T-M3(Ot-N(OOOCMT-U)(DOin 
3inc6(Ot-S«)r-in(\ioo)OT- 
T-(00)i-i-S(Dl()03(NfflOCD 
<V|r3rMIOO)rOSrOOr 
WCOCM03CONO)(D^3NCOO) 
r- CM CM ID CO CM 00 '-'N. CO CO CD 

eo in■’t co -o- cm co co 



comrv.oiT-coN.coco 

OOMOW3IOOrN 

®010000r-S(0(0 

0(JlS01rS30(0 
rfocococMOCOcoin 
TfUSCOlfiOOM-NK^ 
CD O CM CM t- 



O) 00 T 

3 3 u 

CD 00 C 
CD N C 
CO N C 


r t- co o o oo cm 

) CO CM ^3 CO t— CO 

) x- n- oo a> co co 


- Tt lO 00 Tj- CM N- 00 


00 00 CO 

5 






0)CQrtf)(Mr3T-®00 
Tt'^lON-inOOLOCOCM'M-CO 
CDOOOO>t-COOOt-KOOCD 
CO N- C 

co K c 

CO CM C 

CMT-TflOCO^rCMN-CO 


00 CM 

T- co 

CO CO 


0 00 CO 

3 


3M0CM0)10 0)C010 CO 00 CD 

3CMO®COt-NCD« . CO N- 00 

»-t-0103CM®U)(0 't-t-IO 
toio® 3NCOOt-CO in CO CM 

roNO)CO(ON3<”3 CO T- CO 

T-OOOOcnOO'Sj-CON-'^ (J)Or 


Mr-(p(0(0®U)3«OU)00 
0)(M3 0 )CO(ONtt- 3®30 
OSO(0®r-<J)Sf®030) 


TfCOCMiON-COCMCOOO 


) CD CO t 
® 3 C 


> 

off 


ll 


.. a> a> 

0) S’ E* 

2 r £ 
>« ° 
f 8 8 

§•'£'£ 
2 re re 
Q. C/5 CO 


p re 

a> 9> c E 
2 o E | 
61*1 
1 a 

< I M ® 
MW ,® 1 

re a> *£ T) 

g) o>.-= 0) 
re CO ro L 

sz jr h- re 
o o»- o 
CD 0) _ 

O O (5 g 
C £ C <j> 

I s •« 
<0(0 0: .E 


.E 2 

11 

<2 o 

§5 .5 

re c <o 
® re tn 
■K 


ill! 

re Jr re c 

>> re 8! <J 
s 2 w »- 2 
55 E c re -q 

J o>2 £ 3 
j < h- O CL 


o> c 

c o 

13 

3 I 

V8 

3 TJ 
C C 

re n> 
re C 
re 
re 52 


I 


Page 84 






















Nkomazi Local Municipality 
Appendix G3 

Budgeted Financial Performance (revenue and expenditure) 
for the year ended 30 June 2019 


O 

CM 

CO 

o 

CM 


00 

o 

CM 

0? 

T— 

o 

CM 


IS E 

( 0 .t o 

111 

O' < o 


<D ft> 

c ° 

1 s 

IV >- 

CO 

a> £ o 

2 S o pj < 

■D .}2 W c 5 

s.sip 

3* V) 3 
2 •£ £ 

^ O -T 3 

III 

ft: 2 x 




75 w c Q) 
3 2 ’5) O) 

“Erg 
< o m 
S o 


c 


<0 tJ 
o .£ O) 
E il tj 
“ Oi. 3 
^ o oCQ 


TO 

i 


g 75 1 $ ! 
fi 3Qllfe 

= <§ S , = m o: 

> 

ii 

Is 

3 O 
C * 


ro E 

is 

*g 


= 1 “-S 

IJli 

£.q.o 

CT O Q. CL 

> «0 


'£ c <o 2 

</> 3 CD 


C ^ 
_ 4) OJ 

SIS 
11 .Is 


2 ? * 
71® js 

OQ .5, o o 2 
54 B 
< 55 , 


MOlrCOOONIDOlO 
T-^fT-KcOT-coiocgco 
T*h-T-r^-r»r^ooN-ioio 
r-Oi O) CJ> (O <0 O) S S O) (O 
OOx-S(CID(DO)Kcv|COO) 
in in o m m cd--~ — 


0 m cm m co 00 
- p- cm 00 


• WOl 


i-lDCOrlOrOrOOS 
COCOh-COO)lO(OOCOTfO) 
ONIOCOOW^OOCOt- 

x-gjr^tof^coioh-cMcoco 
«-COO)OOinTfN(D(Mi- 
V) 00 (O CM CO h- h^CO IT) rf s 
•M I- CD 00 CO 00 '■'oo <0 c 
T- '-'CO CM T- (i 


»-(0<0rWr-0)r-0)oP 
COCON(DO)IO(00»V“ 
ONlOCOOCM^COcSi- 
i-CT)Nir>NcomNNtoio 
i-n®OOlfiTt 0(0(Mr Tt 
mcococMcoh-Kcom'tfr- eo 
->* r- o> 00 to 00 to(oo^ 

J- CO CM *- CD 




COOCOCOO)M(ONNt -0 
t - CO CD t— CM CM CD ^ 

t- T~ — 


OOinCMCOCDCOT-KT-CO 
(00(00(0 0)(MrMM 
M-t-T-M-T-r^COT-CMCO 


COU)Oi-(D(OCOO)t-MIO 

CsICDCDOCDM-COCOKOOm 

NS00Ni-Mt-0OM(OU) 

U88SSSiR8!S8§ 

OCM^-OCOx-COOOCDCOCM 
gjm^io »o 50 ,^ ■m-m m 


(OOiOt-lOlOCMCOMO 

CM(OS(D(OCOt-SMO 

CMM’COCDCMT-OOOOinh- 

COCOCOCOCOCOCMCMOOO 


300 )SCMMNi-C 

'0)0>0>0)Nf0)CMf' 

) O) r- r- (O CO S r t 


> CD CO 

US 


T- h- 

T- O) 

CM f'- 
00 O 
f'- CD 
IO CM 


NCOCONT-lfiffiCO 

O>(OU)COO)NCM00 

(DSMSWCMOCO 

OSNMSt-OO) 

CDCDCD^CDCMb-CM 

T-T-(£)COh-T-T-CD 


00 in x- 5 

■ 

o co co in 

CO CD CO 
T- CO 1 - 


CO N 0 N If N Tj- c 
OOCDNCMMincOOCM 
t-0)0)0)0)tocomN 
CO CM 1- 1- (O CO M T-(O CM 
00 CM x- N V r- (D to 

in CM CM CO <0 -M T- T- M- 



CD O 

1 o 


-U 

^ O o CO ^ W 


8| 2° 
- ^ 8 . 




° 3 

e E 
£ <D 
LU Od 


u. to r- (0 w ! 

• g § § 2.^1$ ? ° 

QQilCQOOl-OJj 


e z? 3 

2 o w 

1 s s 

S Q 

q. w 

5 I i 

« I 1 


~ <u ti 

•S £ ia 

SI 


Q <* 

II 

fl 

wS 



Page 85 







































Nkomazi Local Municipality 
Appendix G4 

Budgeted Capital Expenditure by vote, standard classification and funding 
for the year ended 30 June 2019 

2019/2018 2018/2017 


in 

111 

2<o 


2> .5 O 

3?oS< 

5 « S2 r s 

s§i!fe 

_ "8 £! 

1-zB 

8-3 « 

* 2 K 

i « 

W w 

•= " C % 

5 1-cf 


ins 

| it I 

^ o oCQ 


o V c 

S « 6 £ 2 

" 3 O ,E t c 

•C<? “3^ 


w 5 
11 
11 
3 * 


73 E 


= i « s: 

iJll 

£ . O. O 
o o. a 
> 4-; n 


0)2 *= < 

ins 


— C* <D 

Si ® 
= Si 


g. g CO 5 < 

■o ^ ^ oS 

3 <5 . _ t 

m 3 o n 5 

■o *3 V) 

< 


CD lO 

K to 
xf e- 
CD 00 
lO to 

CN V) 


h- x- 
CO O 

to eg 


o m 

Tf CO 

eg oo 




o oo 

T- to 
CD XT 
CO CD 


h- OO 
lO CD 

X* to 




o o 
o o 
xr xr 

CT> CD 
00 (D 
CD tO 

00 oo 
eg oo 


o o 
o o 
xr -o 
CD CD 
00 CD 
CD tO 


as 

cd eg 

Ss 

h- 00 
<D h- 


oo eg 
o to 

xr x- 

eg oo 

OO r- 
eg eg 
h- (D 


<u 3 

11 

11 

<u * 

S-u 


o s 


t/> *£ I 

a> £ A 


3 

m 2 15 

<3 5 

o° S 

</) ofl g. 

09 S! 2 

il ?. 
11 ? 
OS £ 

to <o i 

2 £ a.73 

S3 


N CO O OO O) CD 
CD r^- to xr co x— 
eg 00 to xr oo x- 

x- cm h- xr — ^ 


23 


eg K eg xt a> to 


to oo to oo xj- to 

(ON(OtOt-S 
CM K CM xr CD in 
O ON r a) 

CM 00 00 O to 

OOOOOh-T- 
h- r- 00 x* to 


££2 


i ££ 


£ c> O'" o'* 

00 N CO 00 V> OO 
OMJ) Op OO 


SCONOflO 
r rrlO^CO 

o to to O v to 

x- CM t- xf t- 
*— '-''—CM 


00 Xj- to h- tD CM 
xfCMxf lOMO 
Or-Wtoxfxf 

SSSSSfe 

h- CO X— CO O OO 


% U C 


Xj- CD O to X- CM 
CD 00 X- 00 XJ- OO 
CD CM CM 00 O 00 
x- x- h- CO 00 CD 
tD O) xf CD CM tO 
ONO CM 00 


JOMDNN 

jocMooeg — 
- o to oo eg 


CD x 


lO 


- CO L 


cpOMONN 
O O CM 00 CM Xf 
SOWCOCMt- 
COOCDCOCDx- 
XJ-X-CNXJ-CDM; 

CD x* to x- CO VO 

x- X- 00 Xf 

x- CM CM 


lO S 


CD CO K x- 
CM CD x- CD 

X— xf h>- 


o o o o o o 
o o o o o o 
o o o o eg o 
o to o in in to 
cm cm M o N N 

X- X- X- 00 00 
X- CM x- 


I i 



X- CM CO Xf in CD 2 

a>a>a>a)0>a> ‘q. 73 

:>>>>:>:> oS 


£ 

CL 

m 

O 


Page 86 























±i 


CS 

Q. 

o 

c 

3 


03 

O 

O 


N 

03 

E 

o 


tj- 

O 

x 

c 

Q) 

a 

o. 

< 


CD (D 
O) -C 
T3 *- 

m£ 


O 

JNJ 

00 

T" 

o 

CM 


U) 

c 

'-U 

c 

3 

* 4 — 

"O 

c 

03 

c 

o 

'43 

03 

O 

|i= 

CO 

CO 

03 


03 

T3 

C 

03 

CO 

CD 

o 

> 

n <r> 

2! o 

3 ™ 
±i CD 
“O C 
C 3 
CD “> 

X ° 
UJ «> 

_ "U 

03 <i> 

~G 

a c 
03 a> 
O J= 
■u 2 

O > 


00 

V 

o 

CM 

3? 

o 

CM 


il e 

03 .ti O 

f il 

a: < o 


.2 4) 
ro *- 
CD 

4> .E *5 

2 3 opJ< 

TJ U V) e 1 

f£S» 5 


S » 


re E 
3 O 

tss 


£ =S_ 

£ . 0.0 
coaa 
> ♦; re 



Tf h- 
CO CD oo 

o cm o 


oo cm 
o o oo t- 
xf CO 03 co 

N O (D O) 


00 CM O^Nt 
00 O | Kd)«C 
~ N CM CO 0 


O h- 
CO h* 


r- in r- in CO 
CO CO x- to o 
CO CM O) CM CM 


CO CO CO CM T 


oo o o) cm co 

"—•cm n '—'co ■—• 


r m x- m » 
00 CO x- (O © 
CO CM O) CM CM 
ID O CM h- xt 
ID CM CM 00 ID 
-) x- co CO 


fc.*- 


T- CM CM CM CT) T- CO 

t- oo o cm t- co m 
CO CO OO ID CD CM O 
N- 00 O CD CM CO 


888§s£88ss 

x- > x- CM 

Q T- 


T-COCOOT-COCO^OpO 

ooro^eoNooco^co 

X- CM > 


O OO CO CO CD ^ CD h« CM 

n co ^ , r in sm t- Tf 

0030 CO (O ID m N r 

CM h- ID xf 00 00 CO CO t* 

t-t-O CD h~ xf co CO xf 


h s w o co O) o 

> S 0.U> 0,0.0 




*>> 

o Q 


OOOONMCMCDl 
O CM h- CO OO CD 00 
O CO xf CM xf 00 00 
O CD ID ID O O CO 






O) CM CD ID ID h- C 
00 00 CM t 
CM CM cr - 
co O) c 


] S 3 5 o c 

> CO id 00 O f 


CD xf 00 ^ CO ID 
, xt 00 CO xf oo r- 
v x- ID M CM O 
O CO CM CM T- CO 
ID CD CD 00 CO O 
CD CD O t- o> 


i CD O CD O O ID 
(MOCMOOr 
xf CM t- CD ID ^ 

(fl N T- T- (D <3 

00 00 h- CM r- 

ID CO x— CO 

CO CM x- CM 


ID CM CO 00 CD 00 xf t 
00 ID S O r S r 
Mr-MCDlDCMx- 
CO CD CO X- CD CD CD 
CD CD x- ID CD x- CO 
COCDOx-xfxf 
ID x- (O xf m CO 


, _ .OMO 

CO K O x- O X- o 
CO CM CO S O N O 
xfSCMWOxfr- 
X- CO X- ID xf m N 
CM 00 O CO 


CM 


ID 


M CD N 
CO O CM 
CM h» lO 
O CO CD 
00 xf (O 

O CD X- 
CO CM 


CO Xf |X» 

CO CD CM 
CM CM ID 
O CD CD 
cm m n 


o o o 
o o o 
o o o 
© o o 

(O O '" 
OO CM 
CM x- x- 


(MOCMOOS 
CD O CD O O ID 
NOCMOOr 

2^883 

oo oo r-. CM r* 


5858 . 8 

co o oo o h- 

M S O r ID 
CM CD CM o xf 
xf x- xf CM t- 


_ O O O CD 
xfOMOOM 
CD CD O ID ID 00 
- CO CD 


8 58 


ID CM O O O O O 

8fc8?858 

rtCMCOSONO 
xfh-CMWOxfr- 
v- CO x- (D xf U) N 
X- x- CM 00 O CO 


id n- o co co o t 

00 O O ID .IDO' 

co xf o n ' (oo 

CO MT CM CM CM O 

CD CD x- CD ID xf 

O ID CO CM 


OIDONOSOx 
8 8 8 £ 8 ® 8 
OCDOMOxfO 
lO O xf (D O CD N 
O 00 X- o x* X- X* 


o £ 


E — i= 

TJ O l/l 
re c g 

■D o £ 


Is 

tA C 
0) 
o S> 


2 

■5 


5 E'-i 


; 0) (D <1> 


I " 

V) 


££'*- % 
c := TJ 


b 

0) ^ 


I 


II 


C 9- c fc ^ 2 2 


” J 5j W E $ ? 5 r w< ^ C x- # x y "O fn 

o E op^oCgu 0 ) Lu o c 

ooocxnofu fei? o c o d § re 


l/> O m re 
» w E E 


» re ; _ . 

'^Ee 

. _ L E E 1 

;OOOq.o«oiu^:oci;c-5-?:*'33 03 

. o o o w a. x uj w q. a: uj 1-uj 5 > o o j- u. 


00 00 
88 
CM ID 
CD CO 
00 h- 
CD XT 


CD N. 

to K 

O xf 
h- O 
ID CD 
ID ID 
h- ID 


ID 

SS 

CD ID 
x# CD 

M CM 


55 

CD 00 
CD ID 
3 O) 
x* CM 


88 
CD CO 
r>. fx- 


8 8 
ID O 
O CM 

35 


■ 


■o 5 

c» <= 

■IS 

O) re 
11 
i! 


Page 87 































Page 88 


> o S' o z 

L Si <2.8 s 

5 ! P. 5 5 

s 8 q 

V* 

-r ^ 

2 |1 

I |l 

— <0 -J 

<* 3 « 

3 «■ fit 

cr ; g 

5 5? 


a « 

i! o 

3. w 


S. o 

- w 

5 2 


a s 

<! o 

Ilf 

3 

5 2 

vi ^ 

a s S 

0 ) zr Q) 
ijj Q) ^ 

31 

| 

Q.c 3 °- 

o 

9 $ § 

0) -g 

3 

c 

i £ 


3 3^ 

n> <t> ^ 
3 3 W 

7 7 “> 

8-8 | 

-g. (o o 

a £ sT 


o ro 
^ w 
CD -vl 


ro o 
o> v« 

O K» 


ro m ro 

j 

O) ID Ol 03 03 A (O 
Ol-iUN|(0 WCJl 
uo cn <J> 1 cn 

O) O W CD O f N) 

cd cn co S oo S co 
O^OISIOOS 


o — 4 co -tk co ro 

/ O CD O 00 C0 
J W (Jl O 0)^ 
CD CD CD O O CD -» 

—o co ro o ro ro 
D^O 00 OM ro 

”5 ro cn ro 
■u ro CD £ CO 
~-4 cn ~-j oo ro 


cn 

fo'o> CD c 
co co co J 
to ro co c 

04^(0(000)00 
ro cn co —^ oo —^ cn 
co oo A cn ro oo co 


—, -o to cn ro 

-Nrocn.fc.co 
^ -o cn -^i oo ro 
ro d) cnooro.fc.ro 

CO CO CD N CO -N CD 

ro ro co co S co 
o n. co co o CD oo 
ro cn co -* oo -a cn 
co oo -N cn to oo co 


oo ro cn ro 
-o ro co to oo 
cn -si cn cn ro 


cd ro -o oo -o oo 
io n o -vi ro ro 
S(0>rsK)o 


w ro—i 
k oo ro co 
> 0000)00 
— cn ro cr 
S04 
o -> ro -sj -vj oo o 
ro 0) cn CD CO CO CD 

co co cn ro cn cn co 




. _ p. ro -U 'si cd oo 
-o co n ro cn cn —» 
cn oo cn cn cn cn cn 


OJ o 

C 3. 
O.CO 
<Q 3 


'?• > 
w r* a 
5 2 ? c’ CD 
5 o « a a 

y |l 


= |a 

| S3 

« O - 


it 

3 a 



ro 

o 

CO 

ro 

o 

00 


Nkomazi Local Municipality 

Appendix G5 

Budgeted Cash Flows 

for the year ended 30 June 2019