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RUSTENBURG LOCAL MUNICIPALITY
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008
MUNICIPALITY GROUP
Restated
2007 2008 2008 2007
R R R R
1 HOUSING DEVELOPMENT FUND
63,771,481 16,379,068 Housing Development Fund 16,379,068 63,771,481
59,058,090 11,098,657 Unappropriated Surplus 11,098,657 59,058,090
4,713,390 5,280,411 Loans extinguished by Government on 1 April 1998 (Old Housing Development Fund) 5,280,411 4,713,390
The Housing Development Fund is represented by the following assets and liabilities
55,513,999 20,995,560 Bank Account 20,995,560 55,513,999
- (469,447) Unspecified income related to Housing (469,447) -
2,015,769 4,863,974 Debtors - VAT claimable 4,863,974 2,015,769
(2,205,405) (15,500,068) Creditors-housing (15,500,068) (2,205,405)
(169,053) (84,903) Other (84,903) (169,053)
(2,869,834) (5,479,074) Housing - retention (5,479,074) (2,869,834)
151,085 151,085 Adjustments to VAT pay over 151,085 151,085
6,621,529 6,621,529 Amount to be carried from Primary Account to ring fence housing 6,621,529 6,621,529
59,058,090 11,098,657 Total Housing Development Fund Assets and Liabilities 11,098,657 59,058,090
2 LONG-TERM LIABILITIES
Other long-term loans
50,000,000 50,000,000 - INCA Loan 50,000,000 50,000,000
18,883,046 18,237,943 - ABSA Loan - First draw down 18,237,943 18,883,046
19,477,991 18,910,316 - ABSA Loan - Second draw down 18,910,316 19,477,991
20,000,000 19,502,675 - ABSA Loan - Third and final draw down 19,502,675 20,000,000
Rustenburg Water Services Trust (RWST) liabilities
- - - ABSA loan - Capital and capitalized interest(2007: Only capital) 262,902,020 223,998,119
- - - ABSA loan: Capitalized interest - 45,736,081
108,361,037 106,650,934 Sub-total 369,552,954 378,095,237
1,710,103 51,998,434 Less : Current portion transferred to current liabilities 60,094,601 8,398,039
- 50,000,000 - INCA loan - Redeemable in April 2009 50,000,000 -
645,103 748,788 - ABSA Loan - First draw down - 30 June 2005 748,788 645,103
567,675 663,525 - ABSA Loan - Second draw down - 30 June 2006 663,525 567,675
497,325 586,120 - ABSA Loan - Third and final draw down - 30 June 2007 586,120 497,325
- - - ABSA Loan (RWST) 8,096,167 6,687,936
106,650,935 54,652,501 Total External Loans 309,458,354 369,697,199
Refer to Appendix A for more detail on long-term liabilities
INCA Loan
Bears interest at 16.5% per annum and will be fully redeemed with a redemption
fund investment made at INCA specifically for this purpose. The loan will be re-
deemed on 23 April 2009. Refer to note on investments on the current value of
the redemption fund. Agreement have already been reached with INCA that a new loan of
R50 million will be granted to the municipality.
ABSA Loan
Bears respectively interest from first draw down at 11.92%, 12.02% and 12.14%
and is repayable within 15 years from drawdown.
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RUSTENBURG LOCAL MUNICIPALITY
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008
MUNICIPALITY GROUP
Restated
2007 2008 2008 2007
R R R R
ABSA Loan: Entity
The loan is secured by:
• a general notarial bond over the movable assets of the Trust.
• cession of the Rustenburg Lease Agreement
• the Debt Service Reserve Account, the Contingency Reserve Account and
the Industrial Contingency Reserve Account.
The loan bears interest at a rate, 12.8044% NACM and is repayable
over a period of 15 years.
3 NON-CURRENT PROVISIONS
3,000,000 3,000,000 Provision for long-service 3,000,000 3,000,000
3,000,000 3,000,000 Total Non-Current Provisions 3,000,000 3,000,000
The long-service award is payable after every 5 years of continuous service.
The provision is an estimate of the long-service based on historical staff turnover.
The movement in the provision for long-service awards are reconciled as follows:
4,159,153 4,233,376 Balance at beginning of year 4,233,376 4,159,153
74,224 - Contributions to provision - 74,224
- (256,137) Expenditure incurred/leave taken (256,137) -
(1,233,376) (977,239) Transfer to current provisions (977,239) (1,233,376)
3,000,000 3,000,000 Balance at end of year 3,000,000 3,000,000
4 CONSUMER DEPOSITS
18,589,226 19,659,723 Electricity and Water 19,659,723 18,589,226
No interest are paid on consumer deposits received.
28,097,117 30,706,801 Guarantees held in lieu of Electricity and Water Deposits 30,706,801 28,097,117
5 PROVISIONS
1,233,376 977,239 Current portion of long-service provision (see note 3 above) 977,239 1,233,376
1,233,376 977,239 Total Provisions 977,239 1,233,376
The movement in the current portion of long-service provisions are reconciled as follows:
1,159,152 1,233,377 Balance at beginning of year 1,233,376 1,159,152
74,224 - Transfer from non-current - 74,224
- - Contributions to provision - -
- (256,137) Expenditure incurred / leave taken (256,137) -
1,233,376 977,239 Balance at end of year 977,238 1,233,376
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RUSTENBURG LOCAL MUNICIPALITY
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008
MUNICIPALITY GROUP
Restated
2007 2008 2008 2007
R R R R
6 CREDITORS
79,642,002 85,247,873 Trade creditors 87,212,498 76,848,028
8,906,913 14,857,656 Payments received in advance 14,857,656 8,906,913
9,253,170 16,351,690 Retentions 16,351,690 9,253,170
16,579,145 19,232,720 Staff leave 19,232,720 16,579,145
12,036,941 12,412,205 Unspecified income/unallocated grants 12,412,205 12,036,941
9,091,364 8,102,335 Other creditors 8,102,335 9,091,364
135,509,535 156,204,479 Total Creditors 158,169,104 132,715,561
7 UNSPENT CONDITIONAL GRANTS AND RECEIPTS
7.1 Conditional Grants from other spheres of Government
8,264,726 44,161,004 MIG Grants 44,161,004 8,264,726
4,678,970 3,751,950 Bojanala Platinum District Municipality 3,751,950 4,678,970
3,462,676 3,462,676 Finance Management Grant 3,462,676 3,462,676
2,578,876 31,292,786 Public Transport Infrastructure 31,292,786 2,578,876
- 3,500,000 Other conditional grants - Upgrading of fire stations 3,500,000 -
5,488,645 2,835,854 DASA - Tlhabane Library Grant 2,835,854 5,488,645
130,205 Umsobomvu Youth Fund 130,205
4,057,991 48,362,926 FIFA 2010 World Cup - See also note 16.3 48,362,926 4,057,991
111,275 257,825 MSIP Grant 257,825 111,275
159,035 IMMIS Grant 159,035
100,000 19,933 DWAF Greening Strategy 19,933 100,000
1,200,000 1,986,498 Magalies Water 1,986,498 1,200,000
1,123,426 1,123,427 SEED funding 1,123,427 1,123,426
497,580 497,580 DWAF - Water Services Development Plan 497,580 497,580
675,810 622,357 DME - Boitekong 622,357 675,810
114,103 IDP Grant 114,103
7.2 Other Conditional Receipts
1,058,224 774,128 Public contributions 774,128 1,058,224
33,701,542 142,648,944 Total Conditional Grants and Receipts 142,648,944 33,701,542
See Note 19 for reconciliation of grants from other spheres of government.
These amounts are not yet invested in a ring-fenced investment until utilized.
8 VAT
36,345,351 38,244,328 Net VAT payable 38,467,804 37,011,233
VAT is payable on the receipts basis. Only once payment is received from debtors is
VAT paid over to SARS.
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