CITY OF TSHWANE METRO MUNICIPALITY - Restatement and modifications of the 2017 consolidated Annual Financial Statements (AFS) - CTMM

Restatement and modifications of the 2017 consolidated Annual Financial Statements (“AFS”) - CTMM

THE CITY OF TSHWANE METROPOLITAN MUNICIPALITY
Issuer Code: CTMM

(“The City of Tswane”)

RESTATEMENT AND MODIFICATIONS OF THE 2017 CONSOLIDATED ANNUAL
FINANCIAL STATEMENTS (“AFS”)

Holders are advised of City of Tshwane Metropolitan has
published its full year results for the financial year ended 30
June 2017 which is available on the website at the following
link:

http://www.tshwane.gov.za/sites/Departments/Financial-
Services/Financial-
Documents/Pages/Annual%20Financial%20Report.aspx

The City of Tshwane obtained a modified opinion as the group
annual financial statement of the city received unqualified
audit opinion with other matters.
The following matters have been described in the report by the
Auditor-General which will be made available on the website:

Restatement of Corresponding Figures

The corresponding figures for 30 June 2016 have been restated
as a result of errors in the consolidated and separate financial
statements of the group at, and for the year ended 30 June 2017.
These where disclosed in note 47 of the 30 June 2017 year ended
AFS.

Material uncertainties, impairment and losses

Material uncertainties with reference to Note 55 of the
consolidated and separate financial statements, the group cannot
presently be determined as the group is a defendant in various
lawsuits, therefore, no provision for any liabilities has been
made.

Material impairment with reference to note 22 of the
consolidated and separate financial statements disclosed
consumer receivables were significantly impaired as the
recoverability of these amounts were doubtful, the allowance for
impairment of consumer receivables represented 58% of consumer
debts.

Material losses disclosed in note 60 of the consolidated and
separate financial statements, electricity losses were incurred
which represented 20,58% of total electricity purchased;
Technical losses due to losses due to losses incurred during the
distribution of electricity from the source to the final
consumer. Non-technical losses were due to administrative and
technical errors, negligence, theft of electricity, tampering
with meters and connections which form part of illegal
consumption and faulty meters.

Unauthorised expenditure was incurred due to over-expenditure
as disclosed in note 48 to the consolidate and separate financial
statements; and the municipality’s current liabilities exceeded
current assets as at 30 June 2017 and the liquidity ratios were
low due to the non-achievement of the debt collection target
rate.

The Auditor-General’s opinion on other matters is not modified,
the Auditor-General did not raise an opinion thereon with
respect to unaudited disclosure notes in terms of section 125(2)
(e) of the MFMA.

The audited annual financial statement provided detailed reasons
of the nature of the restatements been disclosed in note 47 of
the 2017 AFS.

Reclassifications were disclosed under the following tables:

The Statement of financial performance expenditure items had to
be reclassified and reported under the general expenses.
The Statement of financial position reclassification was done
for the municipality between investment property, property,
plant and equipment and Intangible assets due to purification
actions performed on the fixed asset register.

Correction of errors has been done on the financial statements
presented in 2016/17 were restated in detail as per GRAP 3, to
split the impact of the restatement as it will result in a
duplication as the nature of the error has already been addressed
in full in the 2015/16 period.

Material restatements of disclosure notes were made on various
income and expenditure amounts in 2015/16 and were restated and
specified in note 47 of the 2017 AFS due to calculation errors
raised,   correction  of   errors   in  the   straight   lining
calculations.

The supporting financial statements are available in note 47 of
the 2017 Consolidated Annual Financial Statements.

24 April 2018

Debt Sponsor
The Standard Bank of South Africa Limited

For further information on the Notes issued please contact:
Natalie Di-Sante   SBSA   (011) 721 6125

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