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The Msunduzi Municipality and Its Municipality Entity Consolidated Annual Financial Statements for the Year Ended 30 June 2019

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The Msunduzi Municipality and Its Municipality Entity Consolidated Annual Financial Statements for the Year Ended 30 June 2019 THE MSUNDUZI MUNICIPALITY AND ITS MUNICIPALITY ENTITY CONSOLIDATED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 The Msunduzi Municipality and its Municipality Entity Consolidated Annual Financial Statements for the year ended 30 June 2019 General Information Legal form of entity Category B Municipality in terms of section 1 of the Local Government : Municipal Structures Act, 1998 (Act 117 of 1998) read with section 155(1) of the Constitution of the Republic of South Africa (Act 108 of 1996) and Municipal Finance Management Act No. 56 of 2003. Nature of business and principal activities The primary function of Msunduzi Local Municipality is to provide basic services i.e. water, electricity, sanitation and refuse to the Msunduzi jurisdiction. Msunduzi Local Municipality is controlled by a Mayor, Deputy Mayor, Speaker, Chief Whip, ten Executive Committee members, the Accounting Officer and five General Managers who contribute to day to day management. Grading of local authority Category - B Controlling entity Msunduzi Local Municipality Economic entity Safe City Msunduzi NPC Business address The City Hall 260 Church Street Pietermaritzburg 3201 Postal address The City Hall Private Bag X321 Pietermaritzburg 3200 Telephone (033) 392 2002 Facsimile (033) 392 2208 Legislation Municipal Finance Management Act (Act 56 of 2003) The Constitution of the Republic of South Africa ( Act 108 of 1996) Municipal Structures Act ( Act 117 of 1998) Municipal Systems Act ( Act 32 of 2000) Municipal Property Rates Act (act of 6 2004) Division of Revenue Act (Act 1 of 2007) Municipal Demarcation Act (Act 27 of 1998 Bankers First National Bank Website www.msunduzi.gov.za Accounting Officer Nelisiwe Margret Ngcobo (Acting) Auditors The Auditor General of South Africa Chief Finance Officer (CFO) Dudu Gambu (Acting) Executive Committee Mayor - Njilo Mduduzi Jerome - Refer to note 64 (Events after reporting date) 1 The Msunduzi Municipality and its Municipality Entity Consolidated Annual Financial Statements for the year ended 30 June 2019 General Information Deputy Mayor - Zuma Thobani - Refer to note 64 (Events after reporting date) Speaker - Ngubo Jabu - Refer to note 64 (Events after reporting date) Chief Whip - Magubane Truman V. - Refer to note 64 (Events after reporting date) Chairperson : Community Services portifolio - Khumalo Sphamandla Dennis - Refer to note 64 (Events after reporting date) Chairperson : Corporate services portfolio - Sithole Philisiwe - Refer to note 64 (Events after reporting date) Chairperson : Sustainable development and city enterprises portfolio - Majola Nomagugu Eunice - Refer to note 64 (Events after reporting date) Executive Committee member - Dlamini Tholakele Ignetia - Refer to note 64 (Events after reporting date) Executive Committee member - Majola Jerome Sibongiseni Executive Committee member - McArthur Glenn Robert Executive Committee member - Msimang Prudence Nokuthula - Refer to note 64 (Events after reporting date) Executive Committee member - Ntombela Dennis T. Councillors Municipal Public Accounts Committee Chairperson - Schalkwyk Mary Adkins Shawn Ahmed Najmah Banu Ahmed Rooksana Amod Michael Ismail Chetty Claudell Milany (resigned) Dlamini Ambrosia Sibongile Dlamini Godman Nkosivelile Dlamini Sandile Wellington Dlela Nomalady Eleanor Duma Prince Dumisa Gambu Nkosinathi Chasewell Goga Mohammed Salim Gwala Nelisiwe Jannet Gwala Sindisiwe Cydy (deceased) Inderjit Manilal Jugmohan Renesha (resigned) Lambert William Francis Lyne Sandra Patricia Madlala Linda Linford Madlala Siphamandla Sydney Madonda Sipho Innocent Madondo Ignatia Thandiwe Majola Terrence Sboniso Mbanjwa Nkosinathi Maxwell Mhlongo Snothi Raphael Mkhize Dorcas Sibongile Mkhize Mtuza Bhekithemba Mkhize Nkululeko Fortune Mncwango Gladness Sibongile Molefe Thabiso Patrick Mtshali Blessing Sbusiso Ndawonde Siphiwe Caiphas 2 The Msunduzi Municipality and its Municipality Entity Consolidated Annual Financial Statements for the year ended 30 June 2019 General Information Ndlovu Nelisiwe Zanele Nene Jabulani Nene S'fiso Derrick Ngcobo Jeffrey Mbuyiselwa Ngcobo Katherine Malindi Ngongoma Xolani Ellington Ngubane Sandile Duncan Ngubo Gugu Mary-Jane Ngubo Jabulisile Joyce - Speaker Ngubo Manqoba Ngubo Zinhle Regina Nhlabathi Bongumusa Cyril Niemand Rienus Ntombela Ethel Zodwa (resigned) Nontobeko Khumalo Ntshangase Ntuthuko Oumar Mehmood-Ul Hassan Phungula Dumisani Bernard Shange Sandile Cyril Singh Melika Sithole Thamsanqa Wonderboy Sivnath Rajdave Sokhela Balozile Cynthia Sokhela Mansizwa Simon Soobiah Rachel Strachan Ross Bryan Winterbach Ludwig Johann Zondi Dolo Phillip Zondi Hamilton Mlungisi Zondo Makhosazane Precious Zuma Bukelani Ephraim Zuma Michael Bhekabantu Zungu Ningi Jostinah Zungu Thandiwe Rose (resigned) 3 The Msunduzi Municipality and its Municipality Entity Consolidated Annual Financial Statements for the year ended 30 June 2019 Index Page Accounting Officer's Responsibilities and Approval 5 Statement of Financial Position 6 Statement of Financial Performance 7 Statement of Changes in Net Assets 8 - 9 Cash Flow Statement 10 Statement of Comparison of Budget and Actual Amounts 11 - 15 Accounting Policies 16 - 39 Notes to Annual Financial Statements 40 - 136 Appendixes: Appendix A: Analysis of property, plant and equipment 137 - 138 Appendix B: Analysis of property, plant and equipment 139 Appendix C: Actual versus budget (acquisition of property, plant and equipment) 140 Appendix D: Details of unspent conditional grants transfers to revenue 141 Appendix E1 : Schedule of contingent liabilities 2018/2019 142 - 152 Appendix E2: Schedule of contingent liabilities 2017/2018 153 - 164 Abbreviations ASB Accounting Accounting Standards Standards Board Board COID Compensation Compensation for for Occupational Occupational Injuries Injuries and and Diseases Dieeases CPI Consumer Consumer Price Price Index Index CRR Capital Capital Replacement Replacement Reserve Reserve DBSA Development Development Bank Bank of ofSouth South Africa Africa DSB Development Development Services Services Board Board FNB First First National National Bank Bank GRAP Generally Generally Recognised Recognised Accounting Accounting Practice Practise HDF Housing Housing Development Development Fund Fund IAS International International Accounting Accounting Standards Standards IPSAS International International Public Public Sector Sector Accounting Accounting Standards Standards KZN Kwazulu Kwazulu Natal Natal ME's Municipal Municipal Entities Entities MFMA Municipal Municipal Finance Fianance Management Management Act Programme MIG Municipal Municipal Infrastructure Infrastructure Grant Grant NATIS National National Traffic Traffic Information Information System System NCT Natal Natal Co-operative Co-operative Timber Timber Tree Tree Farming Farming (Pty) (Pty) Ltd Ltd NJMPF Natal Natal Joint Joint Municipal Municipal Pension Pension Fund Fund NPA Natal National Provincial Provincial Administration Administration PAYE Pay Pay As AsYou You Earn Earn RMB Rand Rand Merchant Merchant Bank Bank UIF Unemployment Unemployment Insurance Insurance Fund Fund VAT Value Value Added Added Taxation Taxation 4 The Msunduzi Municipality and its Municipality Entity Consolidated Annual Financial Statements for the year ended 30 June 2019 Statement of Financial Position as at 30 June 2019 Economic entity Controlling entity Figures in Rand Note(s) 2019 2018 2019 2018 Restated* Restated* Assets Current Assets Inventories 3 329 159 386 357 737 917 329 159 386 357 737 917 Short term investment 4 15 674 518 8 869 457 15 674 518 8 869 457 Receivables from exchange transactions 5 5 002 845 32 375 434 5 000 345 32 351 926 Receivables from non-exchange transactions 6 2 568 619 2 600 669 2 568 619 2 600 669 VAT receivable 7 - 25 495 - - Consumer debtors 8 454 837 531 424 770 387 454 837 531 424 770 387 Cash and cash equivalents 9 308 202 578 512 622 307 305 056 164 511 228 506 1 115 445 477 1 339 001 666 1 112 296 563 1 337 558 862 Non-Current Assets Agricultural assets 10 79 700 000 63 863 790 79 700 000 63 863 790 Heritage assets 11 272 674 007 226 909 607 272 674 007 226 909 607 Intangible assets 12 41 057 963 52 109 485 41 057 963 52 109 485 Investment property 13 816 690 000 849 500 000 816 690 000 849 500 000 Living resources 14 948 425 928 494 948 425 928 494 Property, plant and equipment 15 7 003 790 703 6 967 433 290 6 992 153 551 6 954 987 873 Other financial assets 16 2 642 997 4 664 290 2 642 997 4 664 290 8 217 504 095 8 165 408 956 8 205 866 943 8 152 963 539 Total Assets 9 332 949 572 9 504 410 622 9 318 163 506 9 490 522 401 Liabilities Current Liabilities Consumer deposits 17 107 229 302 108 809 333 107 229 302 108 809 333 Other financial liabilities 18 114 310 751 113 888 397 114 310 751 113 888 397 Payables from exchange transactions 19 935 345 680 899 859 935 935 062 364 899 588 775 Provisions 20 7 257 332 2 750 943 6 746 548 2 347 547 Employee benefit obligation 21 36 198 896 36 508 990 36 198 896 36 508 990 Unspent conditional grants and receipts 22 127 958 878 122 349 562 127 958 878 122 349 562 VAT payable 23 145 090 018 83 659 588 144 732 097 83 659 588 1 473 390 857 1 367 826 748 1 472 238 836 1 367 152 192 Non-Current Liabilities Other financial liabilities 18 366 291 537 451 226 205 366 291 537 451 226 205 Provisions 20 62 662 384 62 323 158 62 662 384 62 323 158 Employee benefit obligation 21 562 080 514 667 511 174 562 080 514 667 511 174 991 034 435 1 181 060 537 991 034 435 1 181 060 537 Total Liabilities 2 464 425 292 2 548 887 285 2 463 273 271 2
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