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Availability of the Annual Financial Statements for the year ended 30 June 2023 - BIEM
CITY OF EKURHULENI METROPOLITAN MUNICIPALITY
Established in the Republic of South Africa in terms of section 12(1) of the Local Government: Municipal
Structures Act, 117 of 1998, read with Notice No 6768 of 2000 published in Provincial Gazette
Extraordinary No 141 dated 1 October 2000)
Company code: BIEM
("Ekurhuleni" or the "Issuer")
AVAILABILITY OF THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023
In terms of sections 6.15 and 6.17 of the Debt Listings Requirements of the JSE Limited, noteholders are advised
that the City of Ekurhuleni Metropolitan Municipality's annual financial statements for the year ended
30 June 2023 are available on Ekurhuleni's website for downloading at:
https://www.ekurhuleni.gov.za/about-the-city/annual-reports/
The following reports covering Ekurhuleni's financial year ended 30 June 2023 have been published on the
Issuer's website:
1. A-F (15-2024) Resolution;
2. A-F (15-2024) Annexure A-Ekurhuleni Annual Report 16 February 2024;
3. A-F (15-2024) Annexure B— CoE Audited Consolidated Financial Statements;
4. A-F (15-2024) Annexure C– CoE signed audit report 2022-23 – Consolidation; and
5. A-F (15-2024) -Annual Report Item 30 June 2023 (003)
The annual financial statements of the issuer have been audited by The Auditor General of South Africa, who
have issued an unqualified audit opinion.
Restatements
The City of Ekurhuleni's corresponding figures for 30 June 2022 were restated as a result of an error in the
financial statements of the group at, and for the year ended, 30 June 2023.
• Land was reclassified from Investment property and land register to Land inventory register, as a result
of incorrect categorisation of the land for human settlement developments.
• PPE increased due to corrections of completed projects previously partially capitalised as results of
limited information available at year-end and other price adjustments costs incurred after the completion
of the construction phase or where there were disputes regarding contract variations, furthermore,
information/documents on donated assets were only provided to the City in the current year in order to
determine fair values of assets donated and update the City' records. Donated assets results in increase
in gross values of assets and increase in equity, while corrections of completed projects do not have
impact on assets gross values but result in additional accumulated depreciation for prior period.
• The increase in amount payable and other receivables relates to claims from the Gauteng human
settlement department for refund of the construction costs paid by province on behalf of CoE, which is
funded by grants income. Assets constructed were previously recognised as part of developers'
created/donated assets.
• Derecognition of ERWAT customer invoices identified to be invalid.
• VAT payable incorrectly stated in ERWAT's books.
• Derecognition of Intervention income and Interest due to invalidity of Invoices.
• Reclassification or correction of interest paid on overdraft previously reported as part of bank charges
in general expenses and other allowances in general to councillors remunerations. Reallocation of
insurance previously expensed instead of recognition as a prepayment.
• Impairment loss reduced due to a reversal of a property deemed to have been disposed but was leased
to the City's entity.
• The related parties transactions related to ERWAT's inclusion of non-related party transactions.
Reclassification between interest revenue and
• finance cost on interest on overdraft
Please refer to note number 54 (Prior period errors) in the Notes to the Annual Financial Statements for
further details.
Emphasis of matters
The Auditor General opinion has not been modified in respect of these matters.
1. Restatement of corresponding figures
• As disclosed in note 54 to the consolidated and separate financial statements, the corresponding
figures for 30 June 2022 were restated as a result of an error in the financial statements of the
group at, and for the year then ended, 30 June 2023.
2. Material losses impairments – consumer debtors
• As disclosed in note 14 to the consolidated and separate financial statements, the consumer
debtor's balance has been impaired. The allowance for impairment of consumer debtors amounts
to R16 586 465 329 (2022: R20 505 208 907) which represents 68% (2022: 73%) of total consumer
debtors. The contribution to the allowance for debt impairment was R7 976 253 520
(2022: R4 848 693 063).
• As disclosed in note 13 to the consolidated and separate financial statements, the traffic fines
debtors' balance has been impaired. The allowance for impairment of traffic fines debtors amounts
to R2 197 709 912 (2022: R1 750 211 617) which represents 82% (2022: 81%) of total traffic fines
debtors.
• As disclosed in note 13 to the consolidated and separate financial statements, the property rates
debtors' balance has been impaired. The allowance for impairment of property rates debtors
amounts to R2 661 866 720 (2022: R3 481 258 920) which represents 61% (2022: 81%) of total
property rates debtors.
3. Material losses
• As disclosed in note 37 to the consolidated and separate financial statements, material electricity
losses of R2 333 616 165 (2022: R2 400 497 279) was incurred, which represents 16% (2022: 17%)
of total electricity purchased. Technical losses amounted to R638 775 862 (2022: R622 851 521)
and non-technical losses amounted to R1 694 840 303 (2022: R1 777 645 758).
4. Material uncertainties
• With reference to note 42 to the financial statements, the group is the defendant in various claims.
The ultimate outcome of the matters could not be determined and no provision for any liability that
may result was made in the consolidated and separate financial statements.
13 March 2024
Debt Sponsor
Absa Bank Limited (acting through its Corporate and Investment Banking Division)
Date: 13-03-2024 02:48:00
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