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City of Johannesburg Metropolitan Municipality - Group Annual Financial Statements for the year ended 30 June 2013
CITY OF JOHANNESBURG METROPOLITAN MUNICIPALITY
GROUP ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013
Overview
The City of Johannesburg is a significant role player in the economy of Gauteng and of
South Africa as a whole. Whilst the City’s budgets and strategies are focused on addressing
Johannesburg’s developmental challenges, it remains vulnerable to the impact of the global,
regional and national economies.
The City made significant progress during the year, both operationally and financially,
despite a challenging operational and economic environment. A clear financial strategy,
coupled with advanced planning, reliable monitoring and reporting mechanisms, as well as
prompt decisive actions by the political leadership enabled the City to strengthen its financial
platform for sustainable performance going forward
Highlights
-Surplus R3.4bn
-Net Assets up 13.00%
-Cash & cash equivalents up 143%
Financial Performance
Revenue composition has remained relatively unchanged from the previous year, with
service charges and property rates accounting for approximately 70% of the total revenue
generated. Government grants for the current year contributed 20% to total revenue, which
is lower than the previous year’s 22% contribution.
In 2012/13, the City’s high value cost drivers were bulk purchases, employee-related costs
and contracted services. Bulk purchases are throughput costs for the City, and are
recovered through revenue generated from water and electricity
Despite the challenging economic climate, the City generated a healthy net surplus of R3.4
billion, which is a 26% decline from the previous year’s R4.6 billion. The decrease is largely
due to a 30% increase in impairment charge. The achievement of a surplus is in line with its
Growth and Development Strategy and augurs well towards achieving financial sustainability
and resilience.
Financial Position
Net Assets position has improved by 13% to R30.4 billion. The increase in net assets is a
result of the surplus reported in the statement of financial performance. Non-current liabilities
increased by a modest 2%, while current liabilities increased by 1% when compared to the
previous year. The City’s total assets increased by 7%, which is mainly due to a rise in trade
receivables as well as a significant increase in cash and cash equivalents as at year end.
Cash Position
The cash and cash equivalents increased by 143% to R5.4 billion reflecting the results of an
improved liquidity management approach adopted by the City. The surplus achieved in the
current year also contributed to the significant increase in cash and cash equivalents.
The Annual Report is available on the City of Joburg website www.joburg.org.za
Statement of Financial Performance
GROUP
Figures in Rand thousand Note(s) 2013 2012
Revenue from exchange transactions
Income from agency services 219 256 206 288
Interest received 561 710 433 721
Licences and permits 958 803
Other income 34 1 416 135 1 717 560
Rental facilities and equipment 220 480 195 134
Reversal of impairment 35 - -
Sale of housing stock 6 973 14 693
Service charges 36 19 220 098 18 135 473
Total revenue from exchange transactions 21 645 610 20 703 672
Revenue from non-exchange transactions
Taxation revenue
Property rates 37 6 034 946 5 412 614
Transfer revenue
Fines 320 336 435 336
Government grants 38 6 823 877 7 540 386
Public contributions, Donated and contributed property, plant and equipment 2 842 148 404
Total revenue from non-exchange transactions 13 182 001 13 536 740
Total revenue 34 827 611 34 240 412
Expenditure
Employee related costs 39 -7 450 682 -6 876 153
Remuneration of councillors 40 -110 411 -98 291
Depreciation and amortisation 41 -1 997 802 -1 789 827
Impairment losses 42 -20 858 -10 013
Finance costs -1 477 487 -1 598 227
Allowance for impairment of current receivables 43 -2 850 709 -2 191 637
Repairs and maintenance -690 616 -479 033
Bulk purchases 44 -11 113 587 -10 159 070
Contracted services 45 -1 882 488 -1 978 748
Grants and subsidies paid 46 -153 955 -132 957
Cost of housing sold -9 856 -21 408
General Expenses 47 -3 715 386 -4 054 881
Total expenditure -31 473 837 -29 390 245
Operating surplus 3 353 774 4 850 167
(Loss)/gain on disposal assets -1 743 55 153
Fair value adjustments 48 159 931 91 759
Share of (deficit)./surplus of associate accounted for under the equity method 2 226 -70
160 414 146 842
Surplus before taxation 3 514 188 4 997 009
Taxationt 75 732 382 328
Surplus for the year 3 438 456 4 614 681
Attributable to:
Owners of the controlling entity 3 438 456 4 614 681
Statement of financial Position as at 30 June 2013
GROUP
Figures in Rand thousand Note(s) 2013 2012
ASSETS
Current Assets
Inventories 3 354 468 322 774
Loans to Municipal Entities 4 - -
Other financial assets 5 38 851 263 170
Current tax receivable 9 187 2 343
Finance lease receivables 6 - -
Trade and other receivables 7 846 366 933 770
Receivables from non-exchange transactions 8 8 421 55 206
VAT receivable 9 154 008 121 433
Consumer debtors 10 4 488 971 4 386 591
Other financial assets at fair value 11 2 578 265 3 925 853
Cash and cash equivalents 12 5 400 918 2 219 904
13 879 455 12 231 044
Non-Current Assets
Zoo animals 13 16 872 17 878
Investment property 14 1 271 254 1 304 565
Property, plant and equipment 15 41 131 710 38 961 948
Intangible assets 16 492 541 682 900
Heritage assets 17 553 870 548 733
Investments in Municipal Entities 18 - -
Investment in joint ventures 19 31 691 31 575
Investment in associates 20 15 847 13 737
Loans to Municipal Entities 4 - -
Other financial assets 5 284 317 429 209
Deferred tax 21 24 094 20 744
Finance lease receivables 6 - -
Consumer debtors 10 36 483 45 391
Other financial assets at fair value 11 2 436 147 2 069 544
46 294 826 44 126 224
Total Assets 60 174 281 56 357 268
GROUP
Figures in Rand thousand Note(s) 2013 2012
Liabilities
Current Liabilities
Loans and borrowings 23 625 164 1 523 336
Current tax payable 3 131 4 657
Finance lease obligation 24 35 506 37 724
Trade and other payables 25 8 808 261 6 990 683
VAT payable 9 526 705 695 484
Obligations arising from conditional grants and receipts 26 1 410 169 807 011
Provisions 27 63 16 691
Deferred income 29 11 384 12 102
Financial liabilities at fair value 11&30 1 968 096 3 189 632
Consumer deposits 31 6 313 5 887
13 394 792 13 283 207
Non-Current Liabilities
Project Funds payable 32 5 640 10 026
Loans and borrowings 23 11 399 462 11 277 553
Finance lease obligation 24 336 515 368 875
Retirement benefit obligation 28 1 865 790 1 789 466
Deferred tax 21 1 118 049 996 792
Provisions 27 548 890 615 255
Deferred income 29 88 462 98 380
Financial liabilities at fair value 11&30 531 061 453 443
Consumer deposits 31 465 108 457 494
Total Liabilities 16 358 977 16 067 284
Net Assets 29 753 769 29 350 491
NET ASSETS 30 420 512 27 006 777
Reserves
Hedging reserve -54 928 -94 065
Accumulated surplus 30 475 440 27 100 842
Total Net Assets 30 420 512 27 006 777
Cash Flow Statement
GROUP
Figures in Rand thousand Note(s) 2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts
Sale of goods and services 27 582 024 26 266 305
Grants 6 823 877 7 540 386
Interest income 405 433 309 013
34 811 334 34 115 704
Payments
Employee costs -7 450 682 -6 876 153
Suppliers) -17 154 465 -23 300 075
Finance costs -1 477 487 -1 598 227
Taxes on surpluses -75 732 -382 328
-26 158 366 -32 156 783
Net cash flows from operating activities 49 8 652 968 1 958 921
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment 15 -4 143 456 -3 677 328
Proceeds from sale of property, plant and equipment 15 246 057 301 072
Purchase of investment property 14 -234 -31 598
Purchase of other intangible assets 16 -80 489 -30 814
Purchases of heritage assets 17 -1 238 -
Non-current assets held for sale - 3 233
Investments made - -672 852
Investments redeemed 108 430 175 558
Purchase of zoo animals 13 -766 -39
(Increase)/decrease in non-current receivables -10 331 -19 403
Net cash flows from investing activities -3 882 027 -3 952 171
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of borrowings -1 020 184 -376 074
Proceeds from borrowings 703 000 1 000 208
Repayment of provisions - -115 054
Movement in consumer deposits 8 038 11 560
Finance lease payments -34 574 -381 505
Finance lease receipts - -
Project funds -4 386 -5 692
Repayment of post-retirement benefits -137 040 -139 765
Financial liabilities at fair value -1 104 781 3 524 877
Net cash flows from financing activities -1 589 927 3 518 555
Net increase/(decrease) in cash and cash equivalents 3 181 014 1 525 305
Cash and cash equivalents at the beginning of the year 2 219 904 694 599
Cash and cash equivalents at the end of the year 12 5 400 918 2 219 904
Dated: 1 July 2014
SBSA (Debt Sponsor) Zoya Sisulu (011) 721 6032
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