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Availability of the Annual Financial Statements for the year ended 30 June2018 - BIJHB
CITY OF JOHANNESBURG METROPOLITAN MUNICIPALITY
(a municipality as described in section 2 of the Local Government Municipal Systems Act,
2000, duly established in terms of Notice No. 6766, promulgated in the Provincial Gazette
Extraordinary of 1 October 2000 in terms of section 12(1) read with section 14(2) of the Local
Government : Municipal Structures Act, 1998, as amended)
Issuer Bond Code: BIJHB
AVAILABILITY OF THE ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED JUNE
2018
In terms of section 7.4 of the Debt Listings Requirements of the JSE Limited, investors are
advised that the City of Johannesburg Metropolitan Municipality annual financial results
for the year ended 30 June 2018 are available for viewing and downloading at
https://joburg.org.za/documents_/Documents/Annual%20Reports/20172018/CoJ%20Annual%20Repo
rt%202017-18%20_22%20January%202019.pdf
The annual financial statements of the issuer have been audited by The Auditor-General of
South Africa, who have issued an unqualified audit opinion.
The City of Johannesburg’s 2016/17 comparative figures were restated due to material errors
that were identified and reclassification of amounts which were previously disclosed.
Presented below are those items contained in the statement of financial position and
statement of financial performance that have been affected by prior-year adjustments.
PRIOR-YEAR ADJUSTMENTS
STATEMENT OF FINANCIAL POSITION
GROUP
Description As previously Reclassification Correction of Restated (R’000)
Reported (R’000) Error (R’000)
(R’000)
Receivables from 1,580,567 14,616 1,595,183
exchange
transactions
Consumer Debtors 6,015,670 (1,532,598) 4,483,072
Property, plant and 65,406,305 (645,932) 64,760,373
equipment
Intangible assets 886,245 (62,801) 823,444
Deferred Tax Asset 1,335,971 (630,583) 705,388
Current Tax payable (569,096) 52,346 (516,750)
Trade and other (12,255,562) 113,439 (12,142,123)
payable
VAT payable (548,108) 289,431 (258,677)
Deferred Tax (2,604,144) 134,162 (2,469,982)
Liability
Provisions (876,922) (58,601) (935,523)
Other balance sheet (14,198,780) (81,980) (14,280,760)
items not listed
Accumulated (44,172,146) 2,408,501 (41,763,645)
surpluses
CJMM
Description As previously Reclassification Correction of Restated
Reported Error
CJMM - Trade and 4,935,242 88,636 5,023,878
other receivable
CJMM – Provisions (53,664) (58,600) (112,264)
CJMM – Other 59,140 15,204 74,344
Financial assets
CJMM - Receivables 1,025,512 110,545 1,136,057
from non-exchange
transactions
CJMM - Property, 39,192,762 (401,911) 38,790,851
plant and equipment
CJMM - Intangible 312,527 5,217 317,744
assets
CJMM - Trade and (10,189,296) 245,256 (9,944,040)
other payables
CJMM - Other (6,172,602) 300 (6,172,302)
CJMM - (29,109,621) (4,647) (29,114,268)
Accumulated
Surplus
STATEMENT OF FINANCIAL PERFORMANCE
GROUP
Description As previously Reclassification Correction of Restated
Reported Error
Rendering of 25,092,442 (411,229) 24,681,213
services
City Cleaning levy 129,476 (129,476)
Debt impairment (3,723,735) (168,859) (3,892,594)
Depreciation and (2,905,690) (93,134) (2,998,824)
amortisation
Lease rentals and (1,228,385) (1,228,385)
operating lease
General expenditure (6,882,070) (1,092,940) 175,566 (7,799,444)
Fair value (377,220) 377,220
adjustment
License and permits 3,648 (3,648)
Contracted services (2,321,325) 2,321,325
Government grants 9,301,934 162,740 9,464,674
and subsidies
Other revenue 1,199,849 3,648 (469,927) 733,570
Finance costs (2,404,844) (16,971) (2,421,815)
Other financial (15,281,647) (178,129) (15,459,776)
performance items
Surplus (deficit) for 1,830,818 (752,199) 1,078,619
the year
CJMM
Description As previously Reclassification Correction of Restated
reported error
CJMM – Finance 1,374,052 403 1,374,455
Income
CJMM – License 3,648 (3,648)
and permits
CJMM – Other 684,890 3,648 4,594 693,132
Revenue
CJMM – Depreciation (1,757,823) (124,686) (1,882,509)
CJMM – Debt (788,672) (222,721) (1,011,393)
Impairment
CJMM – Finance (2,449,399) (14,976) (2,464,375)
Costs
CJMM - Contracted (1,495,303) 1,495,303 1,495,303
services
CJMM – Grants and 8,986,924 107,131 9,094,055
subsidies
CJMM – General (2,911,422) (1,495,303) (42,256) (4,448,981)
Expenses
(Deficit) Surplus 1,646,895 (292,511) 1,354,384
for the year
1. Consumer Debtors
During the year the entity has recalculated the electricity and water sales accrual for the 2015, 2016
and 2017 financial years. This has resulted in a decrease of in the consumer debtor balance. The
identified error has been corrected in the respective financial period and comparative amounts restated.
2. Receivables from exchange transactions. The error in receivables from exchange transaction relates
to an indicator of impairment that was not evaluated in the previous year (Pikitup).
2. Property, Plant and Equipment
This error is partly due to assets which were completed in the previous financial year but only capitalised
in the current year. This resulted in the understatement of depreciation and overstatement of PPE. The
accounting of the transfer of function between MTC and the City of Johannesburg Metropolitan
Municipality and the valuation of the broadband asset was completed as at 30 June 2018. The
corresponding figure was restated to factor in changes in fair value as at 01 September 2015.
3. Provision
The restatement resulted from the adjustment of the interest relating to consumer accounts which were
affected by the outcome of the Connaught court case. The interest was not accounted for in the prior
year.
4. Rendering of services
Accrual for revenue was recalculated in relation to 2017 financial years.
Reclassifications Contracted services
Reclassification of contracted services was as a results of compliance with GRAP standard. ASB
recommends that expenses should be disclosed by nature; hence it necessitated the reclassification
of contracted services to its respective nature.
Johannesburg
31 January 2019
Debt Sponsor
Absa Bank Limited (acting through its Corporate and Investment banking division)
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