EC109 Koukamma AFS 2015-16 audited

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KOU-KAMMA MUNICIPALITY
ANNUAL FINANCIAL STATEMENTS
for the year ended 30 June 2016
INDEX
NO CONTENTS PAGE
1 GENERAL INFORMATION AND APPROVAL OF ANNUAL FINANCIAL STATEMENTS 1
2 APPROVAL OF THE ANNUAL FINANCIAL STATEMENTS 2
3 ACCOUNTING OFFICERS RESPONSIBILITY 3
2 MEMBERS OF THE COUNCIL 4
3 STATEMENT OF FINANCIAL POSITION 5
4 STATEMENT OF FINANCIAL PERFORMANCE 6
5 STATEMENT OF CHANGES IN NET ASSETS 7
6 CASH FLOW STATEMENT 8
7 STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS 9
8 ACCOUNTING POLICIES 10
9 NOTES TO THE FINANCIAL STATEMENTS 29
KOU-KAMMA MUNICIPALITY
ANNUAL FINANCIAL STATEMENTS
for the year ended 30 June 2016
GENERAL INFORMATION
MAYOR / SPEAKER
Cllr. Vuso MS
OTHER MEMBERS OF THE COUNCIL
Cllr. Goni P Cllr. Pottie N
Cllr. Jacobs S Cllr. Rheeders C
Cllr. Jantjies B Cllr. Strydom F
Cllr. Krige R
Cllr. Mntambo N (Deceased)
Cllr. Smith K
Cllr. Nelson L
ADDRESS OF THE KOU-KAMMA LOCAL MUNICIPALITY
5 Keet Street Private Bag X11
Kareedouw Kareedouw
3170 3170
GRADING OF THE LOCAL AUTHORITY
Grade 1
EXTERNAL AUDITORS
Office of the Auditor General (East London)
69 Frere Road
Vincent
East London
PRIMARY BANKER
ABSA Bank Ltd
Accounting Officer
Nkuhlu S
1
KOU-KAMMA MUNICIPALITY
ANNUAL FINANCIAL STATEMENTS
for the year ended 30 June 2016
GENERAL INFORMATION
Municipal Manager
Nkuhlu S
Chief Financial Officer
Venter N
APPROVAL OF FINANCIAL STATEMENTS
I am responsible for the preparation of these Annual Financial Statements, which are set out on pages 13 to 87, in terms
of Section 126(1) of the Municipal Finance Management Act (Act No 56 of 2003) and which I have signed on behalf of
the municipality.
Nkuhlu S Venter N
MUNICIPAL MANAGER CHIEF FINANCIAL OFFICER
Date Date
2
KOU-KAMMA MUNICIPALITY
ANNUAL FINANCIAL STATEMENTS
for the year ended 30 June 2016
MEMBERS OF THE COUNCIL
MAYOR / SPEAKER
Cllr. Vuso MS
COUNCILLORS
Cllr. Goni P Cllr. Pottie N
Cllr. Jacobs S Cllr. Rheeders C
Cllr. Jantjies B Cllr. Strydom F
Cllr. Krige R
Cllr. Mntambo N (Deceased)
Cllr. Smith K
Cllr. Nelson L
CERTIFICATION OF REMUNERATION OF COUNCILLORS
I certifythattheremuneration of Councillors andin-kind benefitsare withinthe upperlimits of the frameworkenvisaged
in Section 219 of the Constitution of the Republic of South Africa, 1996 read with the Remuneration of Public Office
BearersActNo.20of 1998andtheMinisterofProvincialandLocalGovernment'sdeterminationinaccordancewiththis
Act.
Nkuhlu S
MUNICIPAL MANAGER
Date
4
KOU-KAMMA MUNICIPALITY
ANNUAL FINANCIAL STATEMENTS
for the year ended 30 June 2016
MEMBERS OF THE COUNCIL
4
KOU-KAMMA MUNICIPALITY
STATEMENT OF FINANCIAL POSITION AT 30 JUNE 2016
Actual
Note 2016 Restated 2015
R R
ASSETS
Current Assets 2 7 762 766 2 1 223 466
Inventories 2 3 92 424 3 18 816
Receivables from Exchange Transactions 3 1 1 039 734 8 626 940
Receivables from Non-exchange Transactions 4 15 185 597 12 036 810
Cash and Cash Equivalents 6 1 001 722 1 65 861
Operating Lease Receivables 7 1 43 289 7 5 038
Non-Current Assets 3 24 032 207 3 28 700 939
Property, Plant and Equipment 8 2 98 443 997 3 03 018 708
Intangible Assets 9 2 37 402 3 76 454
Investment Property 10 2 5 350 809 2 5 305 778
Total Assets 3 51 794 974 3 49 924 405
LIABILITIES
Current Liabilities 4 2 780 166 3 6 645 063
Consumer Deposits 11 1 04 700 1 04 700
Current Portion of Long-term Liabilities 15 2 61 359 2 71 666
Provisions 12 1 880 900 1 316 855
VAT 5 1 779 295 7 67 665
Payables from Exchange Transactions 13.1 3 3 992 552 2 8 483 078
Payables from Non Exchange Transactions 13.2 1 900 000 -
Unspent Conditional Grants and Receipts 14 2 861 360 5 701 098
Non-Current Liabilities 3 896 825 4 025 736
Employee Benefit Liabilities 15 2 622 824 2 806 695
Non-current Provisions 16 1 274 000 1 219 040
Total Liabilities 4 6 676 991 4 0 670 798
Net Assets 3 05 117 983 3 09 253 606
NET ASSETS 3 05 117 982 3 09 253 607
Accumulated Surplus 17 3 05 117 982 309 253 607
Total Net Assets 3 05 117 982 3 09 253 607
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KOU-KAMMA MUNICIPALITY
STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2016
Actual
Note 2016 Restated 2015
R R
REVENUE
Revenue from Non-exchange Transactions
Property Rates 18 16 036 635 15 487 638
Fines 1 579 946 671 554
Income for Agency Services 19 2 841 199 1 491 722
Government Grants and Subsidies Received 20 66 392 732 81 284 428
Revenue from Exchange Transactions
Service Charges 21 25 769 671 23 168 945
Rental of Facilities and Equipment 22 4 08 301 333 288
Interest Earned - External Investments 23 2 06 011 296 568
Interest Earned - Outstanding Debtors 23 7 441 378 5 554 337
Other Revenue 24 2 444 017 1 176 094
Licences and Permits 3 0 149 8 594
Gain on disposal of Property, Plant and Equipment - 2 2 896
Total Revenue 123 150 038 129 496 064
EXPENDITURE
Employee Related Costs 25 (39 820 073) (39 116 240)
Remuneration of Councillors 26 (3 000 433) (2 900 839)
Depreciation and Amortisation 27 (21 857 879) (15 340 367)
Bad debts (19 741 415) (19 637 706)
Repairs and Maintenance (1 368 292) (2 794 964)
Finance Costs 28 (995 317) (649 622)
Bulk Purchases 29 (3 198 959) (2 674 226)
Contracted Services 30 (3 839 159) (3 351 468)
Grants and Subsidies Paid 31 (15 846 078) (25 093 704)
General Expenses 32 (17 371 940) (15 751 744)
Loss on Disposal of Property, Plant and Equipment (246 118)
Total Expenditure ( 127 285 663) (127 310 880)
(DEFICIT) /SURPLUS FOR THE YEAR (4 135 625) 2 185 183
6
KOU-KAMMA MUNICIPALITY
STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED 30 JUNE 2016
Accumulated
Description
Surplus / Total
(Deficit)
R R
2015
Balance at 1 July 2014 307 068 423 307 068 423
Surplus/(Deficit) for the year 2 185 183 2 185 183
Restated balance at 30 June 2015 309 253 607 309 253 607
Note 35
-
2016
-
Balance at 1 July 2015 309 253 607 309 253 607
Surplus/(Deficit) for the year (4 135 625) 305 117 982
Balance at 30 June 2016 305 117 982 305 117 982
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KOU-KAMMA MUNICIPALITY
CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2016
Actual
Note 2016 2015
R R
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts
Sale of goods and services 2 6 006 312 35 919 556
Government Grant and Subsidies 20 6 3 552 994 9 5 740 215
Licence and permits 3 0 149 8 594
Interest Received 23 2 06 011 7 10 367
Other Receipts 5 693 517 1 146 158
Payments
Employee Related Costs 25 ( 39 062 115) ( 39 116 240)
Remuneration of Councillors 26 ( 3 000 433) ( 2 900 839)
Interest Paid 28 ( 995 317) ( 346 188)
Suppliers Paid - ( 67 793 126)
Other Payments ( 36 059 995) ( 2 845 179)
NET CASH FLOWS FROM OPERATING ACTIVITIES 33 1 6 371 124 15 995 023
CASH FLOWS UTILISED FROM INVESTING ACTIVITIES
Purchase of Property, Plant and Equipment 7 ( 17 541 365) ( 25 818 356)
Purchase of Intangible Assets 8 - ( 214 065)
Proceeds on Disposal of Property, Plant and Equipment 1 06 102 7 94 213
Movement in unspent conditional grants assets - 1 120 769
NET CASH FLOWS FROM INVESTING ACTIVITIES ( 17 435 263) ( 24 117 439)
CASH FLOWS FROM FINANCING ACTIVITIES
Short term loan 1 900 000 -
NET CASH FLOWS FROM FINANCING ACTIVITIES 1 900 000 ( 8 122 417)
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENT 6 835 860 ( 8 122 417)
Cash and Cash Equivalents at Beginning of Period 1 65 861 8 288 278
Cash and Cash Equivalents at End of Period 1 001 722 1 65 861
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KOU-KAMMA MUNICIPALITY
STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNTS
as at 30 June 2016
Budget
Actual Income Actual Outcome
Adjustments Unauthorised Variance
Description Original Budget Final Budget Actual Income Variance As % Of Final As % Of Original Notes
(i.e. s28 & s31 Of Expenditure percentage
Budget Budget
The MFMA)
R R R R R R R R
Financial Performance
Property Rates 15 741 795 - 15 741 795 16 036 635 294 840 2% 102% 102%
Service Charges 22 755 581 (332 657) 22 422 924 25 769 671 3 346 747 15% 115% 113%
Rental of Facilities and Equipment 247 735 72 971 320 706 408 301 87 595 27% 127% 165%N1
Investment Revenue 335 197 (253 358) 81 839 206 011 124 172 152% 252% 61%N2
Interest earned:outstanding debtors 5 000 000 2 012 018 7 012 018 7 441 378 429 360 6% 106% 149%
Fines 2 000 000 (600 000) 1 400 000 1 579 946 179 946 13% 113% 79%
Income for the agency fees 2 000 000 - 2 000 000 2 841 199 841 199 42% 142% 142%N3
Licences and Permits 1 169 000 148 000 1 317 000 30 149 (1 286 851) -98% 2% 3%N4
Government grants and subsidies 63 188 000 1 8 871 299 82 059 299 66 392 732 (15 666 567) -19% 81% 105%N5
Other Own Revenue 15 376 008 1 931 301 17 307 309 2 444 017 (14 863 292) -86% 14% 16%N6
Gain on disposal of asset - - 180 313 -
Total Revenue (Excluding Capital Transfers & Contributions) 127 813 316 2 1 849 574 149 843 204 1 23 150 038 - (26 693 165) -18% 82% 96%
Employee Costs 43 273 999 (2 267 151) 41 006 847 39 820 073 (1 186 774) (1 186 774) -3% 97% 92%
Remuneration Of Councillors 4 646 409 (1 725 808) 2 920 601 3 000 433 79 833 79 833 3% 103% 65%
Debt Impairment 15 387 207 3 381 500 18 768 707 19 741 415 972 708 972 708 5% 105% 128%
Depreciation & Asset Impairment 22 343 782 - 22 343 782 21 857 879 (485 903) (485 903) -2% 98% 98%
Finance Charges 196 100 211 535 407 635 995 317 587 682 587 682 144% 244% 508%N7
Materials & Bulk Purchases 3 425 233 26 151 3 451 384 3 198 959 (252 425) (252 425) -7% 93% 93%
Repairs and Maintenance 1 731 447 299 290 2 030 737 1 368 292 (662 445) (662 445) -33% 67% 79%N8
Contracted Services 3 324 821 102 791 3 427 612 3 839 159 411 547 411 547 12% 112% 115%
Transfers & Grants 17 364 789 2 957 647 20 322 436 15 846 078 (4 476 358) (4 476 358) -22% 78% 91%N9
Other Expenditures 19 519 643 (1 346 045) 18 173 598 17 371 940 (801 659) (801 659) -4% 96% 89%
Loss on disposal of asset - - 246 118 246 118 246 118
Total Expenditure 131 213 430 1 639 911 132 853 340 127 285 663 (5 567 677) (5 567 677) -4% 96% 97%
Surplus/(Deficit) (3 400 114) 2 0 209 663 16 989 863 -4 135 624.86 (21 125 488) -124% -24% 122%
Capital Expenditure 19 280 650 2 0 053 050 39 333 700 17 541 365 (21 792 335) -55% 45% 91%
Notes and Legends:
N1 The municipality budgeted for an increase in rental of halls due to newly build MPCC's, however the community was reluctant to pay the higher price for the use of the facilities.
During the mid-year process, revenue from investments were lower than anticipated at the beginning of the financial year, this was then accordingly amended during the adjustments budget
N2
process. However during the second half the investments yielded more revenue than anticipated.
N3 Fire income not budgeted for was received from the Sarah Baartman District municipality.
N4 Incorret allocation of budget
N5 Indirect grants included in the adjustments budget
N6 Anticipated revenue from fire services not received
N7 Bank charges lower than anticipated
N8 Expenditure lower than anticipated
N9 Indirect grants included in the adjustments budget
9