DC1 West Coast AFS 2019-20 unaudited

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WEST COAST DISTRICT MUNICIPALITY
ANNUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
West Coast District Municipality
Annual Financial Statements for the year ended 30 June 2020
General Information
Mayoral committee Ald J H Cleophas (Executive Mayor)
Cllr R W Strydom (Deputy Executive Mayor)
Cllr R E Swarts (Speaker)
Cllr J A Engelbrecht
Ald F J Schippers
Ald B J Stanley
Cllr V D McQuire
Councillors Cllr S A Gxabalashe
Cllr G Stephan
Cllr B F Zass
Cllr J Alexander
Cllr J J Hoop
Cllr J de Jongh
Cllr M Carosini
Cllr G Kordom
Cllr R V Pretorius
Ald S I J Smit
Cllr J C Botha
Cllr E B Mankay
Ald E Nackerdien
Cllr M Schrader
Cllr B J Penxa
Cllr C H Papers
Ald E Plaatjies
Grading of local authority Grade 4
Credit Rating Long Term : A
Short Term : A1
Registered office 58 Long Street
Moorreesburg
7310
Postal address P O Box 242
Moorreesburg
7310
Bankers First National Bank
62001436014
Auditors Auditor General of SA
Registered Auditors
Telephone 022 - 433 8400
Fax [phone]
Accounting Officer Mr D C Joubert
Chief Financial Officer (CFO) Dr J C P Tesselaar

West Coast District Municipality
Annual Financial Statements for the year ended 30 June 2020
Statement of Financial Position as at 30 June 2020
Figures in Rand Note(s) 2020 2019
Restated
Assets
Current Assets
Cash and cash equivalents 6 331 721 107 306 612 607
Trade receivables from exchange transactions 5 11 892 444 11 720 717
Other receivables from exchange transactions 4 23 604 196 21 098 046
Inventories 3 8 619 031 7 684 114
Employee benefit - road receivable 15 1 418 380 1 295 557
Current portion of asset receivable - local municipalities 52 8 381 730 14 728 192
VAT receivable 11 10 218 238 715 765
395 855 126 363 854 998
Non-Current Assets
Investment property 7 4 477 286 4 505 862
Property, plant and equipment 8 81 118 991 78 270 800
Intangible assets 9 1 369 611 2 721 842
Employee benefit - road receivable 15 17 462 776 18 965 822
Asset receivable - local municipalities 52 4 742 012 11 066 453
109 170 676 115 530 779
Total Assets 505 025 802 479 385 777
Liabilities
Current Liabilities
Trade payables from exchange transactions 10 26 852 505 18 883 555
Unspent conditional grants and subsidies 12&20 1 367 061 1 291 586
Employee benefits 13 10 527 699 10 103 753
Distribution provision 50 50 105 740 32 331 767
Current portion of long-term liabilities 14&28 8 381 730 14 728 192
97 234 735 77 338 853
Non-Current Liabilities
Medical aid benefits 15 58 542 802 66 074 747
Long service awards 16 8 320 792 7 739 359
Long-term liabilities 14 4 742 012 12 881 730
71 605 606 86 695 836
Total Liabilities 168 840 341 164 034 689
Net Assets 336 185 461 315 351 088
Accumulated surplus 17 336 185 461 315 351 088
West Coast District Municipality
Annual Financial Statements for the year ended 30 June 2020
Statement of Financial Performance
Figures in Rand Note(s) 2020 2019
Restated
Revenue
Revenue from exchange transactions
Service concession revenue 18 82 449 591 80 294 718
Roads agency services 42 11 931 627 10 836 892
Other revenue 19 4 807 218 4 929 966
Fees earned 48 303 407 446 183
Resort income 7 3 923 329 4 252 735
Finance income 44 25 901 775 27 904 480
Total revenue from exchange transactions 129 316 947 128 664 974
Revenue from non-exchange transactions
Other revenue 19 10 125 312 904 774
Actuarial gains recognised - employee benefits 15&43 10 873 961 4 825 375
Government grants & subsidies 20 100 483 627 96 845 798
Gain on disposal of assets 8 - 42 338
Total revenue from non-exchange transactions 121 482 900 102 618 285
Total revenue 250 799 847 231 283 259
Expenditure
Employee related costs 21 (134 162 388) (124 074 386)
Remuneration of councillors 22 (6 724 574) (6 139 696)
Depreciation and amortisation 7&8&9 (9 401 281) (8 754 952)
Finance costs 23 (2 202 936) (3 663 215)
Materials and supplies 47 (9 905 286) (9 025 682)
Allowance for impairment 45 (604 560) (226 942)
Bulk purchases 24 (8 758 774) (8 351 000)
Transfers and subsidies 49 (2 131 673) (196 857)
General expenses 25 (56 040 155) (53 711 274)
Total expenditure (229 931 627) (214 144 004)
Loss on the disposal of assets 8 (33 847) -
(Deficit) surplus for the year 20 834 373 17 139 255
West Coast District Municipality
Annual Financial Statements for the year ended 30 June 2020
Statement of Changes in Net Assets
Accumulated Total net
Figures in Rand surplus assets
Restated* Balance at 01 July 2018 297 755 063 297 755 063
Changes in net assets
Correction of error (Refer to note 26) 456 770 456 770
(Deficit) surplus for the year 17 139 255 17 139 255
Restated* Balance at 01 July 2019 315 351 088 315 351 088
Changes in net assets
(Deficit) / surplus for the year 20 834 373 20 834 373
Balance at 30 June 2020 336 185 461 336 185 461
West Coast District Municipality
Annual Financial Statements for the year ended 30 June 2020
Cash Flow Statement
Figures in Rand Note(s) 2020 2019
Restated
Cash flows from operating activities
Receipts
Cash receipts from rate payers, government and other 228 049 727 191 327 589
Road services 128 064 503 123 859 995
Interest income 25 901 775 27 904 480
382 016 005 343 092 064
Payments
Employee costs (197 804 775) (176 736 593)
Suppliers (131 511 282) (103 588 016)
Finance costs (2 202 935) (3 663 215)
(331 518 992) (283 987 824)
Net cash flows from operating activities 27 50 497 013 59 104 240
Cash flows from investing activities
Purchase of property, plant and equipment 8 (10 932 079) (9 420 650)
Proceeds from sale of property, plant and equipment 8 29 747 200 713
Net cash flows from investing activities (10 902 332) (9 219 937)
Cash flows from financing activities
Movement in long - term liability 14 (14 486 181) (13 079 773)
Net increase/(decrease) in cash and cash equivalents 25 108 500 36 804 530
Cash and cash equivalents at the beginning of the year 306 612 607 269 808 077
Cash and cash equivalents at the end of the year 6 331 721 107 306 612 607
West Coast District Municipality
Statement of Comparison of Budget and Actual Information as at 30 June 2020
Description 2019/2020 2018/2019
Original Budget Budget Final Shifting of funds V irement Final Budget Actual Outcome Unauthorised Variance Actual Outcome Actual Outcome Reported Expenditure Balance to be Restated
Adjustments (i.t.o. adjustments (i.t.o. s31 of the (i.t.o. Council expenditure as % of Final as % of Original unauthorised authorised in recovered Audited
R thousands s28 anMdF sM3A1) of the budget MFMA) approved policy) Budget Budget expenditure ter3m2s o of fM sFeMctAion Outcome
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Financial Performance
Property rates – – – – – – – – – 0.00 0.00 – – – –
Service concession revenue 101 336 1 0 000 111 336 – – 111 336 82 450 – (28 886) 74.05 81.36 – – – 80 295
Investment revenue 21 837 ( 1 011) 20 826 – – 20 826 25 902 – 5 076 124.37 118.61 – – – 27 904
Transfers recognised - operational 99 174 9 45 100 119 – – 100 119 100 484 – 365 100.36 101.32 – – – 94 128
Other own revenue 154 283 1 7 440 171 723 – – 171 723 172 615 – 892 100.52 111.88 – – – 155 359
376 631 2 7 374 404 004 – – 404 004 381 450 – (22 554) 94.42 101.28 – – – 357 686
Total Revenue (excluding capital transfers and contributions)
Employee costs 193 795 ( 370) 193 425 – – 193 425 188 165 – (5 260) 97.28 97.09 – – – 176 181
Remuneration of councillors 6 760 – 6 760 – – 6 760 6 725 – (35) 99.48 99.48 – – – 6 140
Debt impairment 900 ( 150) 750 – – 750 605 – (145) 80.61 67.17 – – – 227
Depreciation & asset impairment 9 272 1 815 11 087 – – 11 087 9 401 – (1 686) 84.80 101.40 – – – 8 755
Finance charges 173 3 218 3 391 – – 3 391 2 203 – (1 188) 64.96 1271.17 – – – 3 663
Materials and bulk purchases 64 403 4 037 68 439 – – 68 439 41 625 – (26 814) 60.82 64.63 – – – 48 819
Transfers and grants 1 200 3 523 4 723 – – 4 723 3 707 – (1 016) 0.00 0.00 – – – 2 234
Other expenditure 99 537 2 4 457 123 994 – – 123 994 108 185 – (15 809) 87.25 108.69 – – – 97 245
Total Expenditure 376 039 3 6 530 412 569 – – 412 569 360 616 – (51 954) 87.41 95.90 – – – 343 265
Surplus/(Deficit) 591 ( 9 156) (8 565) – – (8 565) 20 834 – 29 399 -243.25 3524.21 – – – 14 421
Transfers recognised - capital – 1 297 1 297 – – 1 297 – – (1 297) 0 (3) – – – 2 718
Contributions recognised - capital & contributed assets – – – – – – – – – 0.00 0.00 – – – –
Surplus/(Deficit) after capital transfers & contributions 591 ( 7 859) (7 268) – – (7 268) 20 834 – 28 102 -286.66 3524.21 – – – 17 139
Share of surplus/ (deficit) of associate – – – – – – – – – – 0.00 – – – –
Surplus/(Deficit) for the year 591 ( 7 859) (7 268) – – (7 268) 20 834 – 28 102 -286.66 3524.21 – – – 17 139
Capital expenditure & funds sources
Capital expenditure 3 355 7 071 10 426 – – 13 428 10 932 – (2 496) 81.41 325.88 – – – 8 106
Transfers recognised - capital – 1 297 1 297 – – 1 297 – – (1 297) 0.00 0.00 – – – 477
Public contributions & donations – – – – – – – 0.00 0.00 – – – –
Borrowing – – – – – – – – – 0.00 0.00 – – – –
Internally generated funds 9 427 2 704 12 131 – – 12 131 10 932 – (1 199) 90.12 115.97 – – – 8 943
Total sources of capital funds 9 427 4 001 13 428 – – 13 428 10 932 – (2 496) 81.41 115.97 – – – 9 421
Cash flows
Net cash from (used) operating 15 615 ( 5 708) 9 906 – – 9 906 50 497 – 40 591 509.75 323.39 – – – 59 104
Net cash from (used) investing 4 845 ( 4 001) 843 – – 843 (10 902) – (11 746) -1292.99 -225.04 – – – (9 220)
Net cash from (used) financing (14 271) – (14 271) – – (14 271) (14 486) – (215) 0.00 0.00 – – – (13 080)
Cash/cash equivalents at the year end 262 294 4 0 797 303 091 – – 303 091 331 721 – 28 630 109.45 126.47 – – – 3 0 6 631037
Financial Position
Cash 262 294 4 0 797 303 091 – – 303 091 331 721 28 630 109.45 126.47 – – – 306 613
Consumer debtors 6 691 – 6 691 – – 6 691 11 892 – 5 201 177.73 177.73 – – – 11 721
Other debtors – – – – – – 33 822 – 33 822 0.00 0.00 – – – 21 814
Current portion of long-term receivables 1 196 – 1 196 – – 1 196 1 418 – 222 118.55 118.55 – – – 1 296
Inventory 6 338 – 6 338 – – 6 338 8 619 – 2 281 135.98 135.98 – – – 7 684
Current portion of asset receivable - local municipalities – – – – – – 8 382 – 8 382 0.00 0.00 – – – 14 728
Total current assets 276 520 4 0 797 317 317 – – 317 317 395 855 – 78 538 – – – – – 363 855
Long-term receivable 19 362 – 19 362 – – 19 362 17 463 – (1 899) 90.19 90.19 – – – 18 966
Distribution receivable – – – – – – – – – 0.00 0.00 – – – –
Investment property 4 472 – 4 472 – – 4 472 4 477 – 5 100.12 100.12 – – – 4 506
Property, plant and equipment 77 199 3 756 80 956 – – 80 956 81 119 – 163 100.20 105.08 – – – 78 271
Intangible assets 15 724 ( 14 572) 1 152 – – 1 152 1 370 – 218 118.93 8.71 – – – 2 722
Asset receivable - local municipalities – – – – – – 4 742 – 4 742 0.00 0.00 – – – 11 066
Total non-current assets 116 757 ( 10 816) 105 941 – – 105 941 109 171 – 3 229 – – – – – 115 531
TOTAL ASSETS 393 277 2 9 981 423 258 – – 423 258 505 026 – 81 768 – – – 479 386
LIABILITIES
Borrowings 4 500 – 4 500 – – 4 500 8 382 3 882 0.00 0.00 – – – 14 728
Trade and other payables 12 451 ( 49) 12 402 – – 12 402 28 220 – 15 818 227.54 226.65 – – – 20 175
Provisions 9 970 5 48 10 518 – – 10 518 60 633 – 50 116 576.50 608.17 – – – 42 436
Total current liabilities 26 921 4 99 27 420 – – 27 420 97 235 – 69 815 354.62 361.19 – – – 77 339
Borrowings 8 382 – 8 382 – – 8 382 4 742 (3 640) 0.00 0.00 – – – 12 882
Provisions 79 745 – 79 745 – – 79 745 66 864 – (12 882) 83.85 83.85 – – – 73 814
Total non-current liabilities 88 127 – 88 127 – – 88 127 71 606 – (16 521) 81.25 81.25 – – – 86 696
TOTAL LIABILITIES 115 048 4 99 115 546 – – 115 546 168 840 – 53 294 146.12 146.76 – – – 164 035
NET ASSETS 278 229 307 712 307 712 336 185 – 28 474 109.25 120.83 – – – 315 351
Accumulated Surplus / (Deficit) 278 229 – 307 712 – – 307 712 336 185 28 474 109.25 120.83 – – – 315 351
TOTAL COMMUNITY WEALTH / EQUITY 278 229 – 307 712 – – 307 712 336 185 – 28 474 109.25 120.83 – – – 315 351
GRAP 24 paragraph 16 states the management should provide reasons for the movement from original budget to the adjustment budget. Management adjusted its capital and operating budgets due to the following:
Operating Budget : The actual revenue and expenditure is a summary of both the Statement of Financial Performance and note 53. The budget approved by Council included all road agency revenue and expenditure.
Capital Budget : The capital expenditure are low due to the COVID 19 national lock-down.
West Coast District Municipality
Annual Financial Statements for the year ended 30 June 2020
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.
In the absence of an issued and effective Standard of GRAP, accounting policies for material transactions, events or
conditions were developed in accordance with paragraphs 8, 10 and 11 of GRAP 3 as read with Directive 5.
Assets, liabilities, revenues and expenses were not offset, except where offsetting is either required or permitted by a
Standard of GRAP.
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 Presentation currency
These annual financial statements are presented in South African Rand, which is the functional currency of the municipality.
All financial information has been rounded to the nearest Rand.
1.2 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.
1.3 Transfer of functions between entities not under common control
The acquisition method
The municipality accounts for each transfer of functions between entities not under common control by applying the
acquisition method.
Applying the acquisition method requires:
(a) identifying the acquirer;
(b) determining the acquisition date;
(c) recognising and measuring the identifiable assets acquired, the liabilities assumed and any non-controlling interest in
the acquiree; and
(d) recognising the difference between (c) and the consideration transferred to the seller.
Identifying the acquirer
For each transfer of functions between entities not under common control, one of the combining entities is identified as the
acquirer.
The terms and conditions of a transfer of functions undertaken between entities not under common control are set out in a
binding arrangement.
Determining the acquirer includes a consideration of, amongst other things, which of the combining entities initiated the
transaction or event, the relative size of the combining entities, as well as whether the assets or revenue of one of the
entities involved in the transaction or event significantly exceed those of the other entities. If no acquirer can be identified,
the transaction or event is accounted for in terms of the Standard of GRAP on Mergers.
Determining the acquisition date
The acquirer identifies the acquisition date, which is the date on which it obtains control of the acquiree.
All relevant facts and circumstances are considered in identifying the transfer date.
West Coast District Municipality
Annual Financial Statements for the year ended 30 June 2020
Accounting Policies
1.3 Transfer of functions between entities not under common control (continued)
Recognising and measuring the identifiable assets acquired, the liabilities assumed and any non-controlling
interest in the acquiree
Recognition principle
As of the acquisition date, the municipality as acquirer recognises, the identifiable assets acquired, the liabilities assumed
and any non-controlling interest in the acquiree.
Recognition conditions:
To qualify for recognition as part of applying the acquisition method, the identifiable assets acquired and liabilities assumed
must meet the definitions of assets and liabilities in the Framework for the Preparation and Presentation of Financial
Statements and the recognition criteria in the applicable Standards of GRAP at the acquisition date.
In addition, to qualify for recognition as part of applying the acquisition method, the identifiable assets acquired and
liabilities assumed must be part of what the municipality as acquirer and the acquiree (or its former owners) agreed in the
binding arrangement rather than the result of separate transactions.
Operating leases:
The municipality as acquirer recognises no assets or liabilities related to an operating lease in which the acquiree is the
lessee.
The municipality as acquirer determines whether the terms of each operating lease in which the acquiree is the lessee are
favourable or unfavourable. The municipality as acquirer recognises an intangible asset if the terms of an operating lease
are favourable relative to market terms and a liability if the terms are unfavourable relative to market terms.
An identifiable intangible asset may be associated with an operating lease, which may be evidenced by market participants‘
willingness to pay a price for the lease even if it is at market terms.
Intangible assets:
The municipality as acquirer separately recognises the identifiable intangible assets acquired in a transfer of functions. An
intangible asset is identifiable if it meets either the separability criterion or the contractual-legal right criterion.
Classifying or designating identifiable assets acquired and liabilities assumed in a transfer of functions:
At the acquisition date, the municipality as acquirer classifies or designates the identifiable assets acquired and liabilities
assumed as necessary to apply other Standards of GRAP subsequent to the acquisition date. The municipality as acquirer
makes those classifications or designations on the basis of the terms of the binding arrangement, economic conditions, its
operating or accounting policies and other relevant conditions as they exist at the acquisition date.
Measurement principle
The municipality as acquirer measures the identifiable assets acquired and the liabilities assumed at their acquisition-date
fair values.
Non-controlling interest in an acquiree:
For each transfer of functions, the municipality as acquirer measures at the acquisition date components of non-controlling
interests in the acquiree that are present ownership interests and entitle their holders to a proportionate share of the entity‘s
net assets in the event of liquidation at either:
 fair value; or
 the present ownership instruments‘ proportionate share in the recognised amounts of the acquiree‘s identifiable
net assets.
Assets with uncertain cash flows (valuation allowances):
The municipality as acquirer does not recognise a separate valuation allowance as of the acquisition date for assets
acquired in a transfer of functions that are measured at their acquisition-date fair values because the effects of uncertainty
about future cash flows are included in the fair value measure.