South African Local Government Association
Schedule 3A public entity i.t.o. the Public Finance Management Act, 1999 and recognised i.t.o. the
Organised Local Government Act, 1997
Annual Financial Statements for the year ended 31 March 2017
Notes to the Annual Financial Statements
Figures in Rand
2.
Investment property
Investment property
2017
Valuation Carrying value
8 290 000
8 290 000
2016
Valuation Carrying value
8 253 000
8 253 000
Reconciliation of investment property - 2017
Opening
balance
Investment property
8 253 000
Fair value
adjustment
gain/(loss)
37 000
Total
8 290 000
Reconciliation of investment property - 2016
Opening
balance
Investment property
6 600 000
Fair value
adjustment
gain/(loss)
1 653 000
Total
8 253 000
Details of property
a) Stand 3278, Johannesburg, Gauteng
b) Stand 750, Kimberley, Northern Cape
c) Portion 654 of the farm Albinia no. 957, FT KwaZulu-Natal
Details of valuation
The effective date of the revaluations was 31 March 2017. Revaluations were performed by an
independent valuer, Mr. William John Hewitt NDPV, C.I.E.A., F.I.V. (SA), Appraiser of Mills Fitchet (TVL)
cc. Mills Fitchet (TVL) cc are not connected to SALGA and have recent experience in location and
category of the investment property being valued.
The valuation was based on open market value for existing use. For the purpose of determining the
market value of the investment properties the capitalisation of the “Net Annual Income”, generally
considered to determine the market value of an income producing property such as shopping centres,
offices and industrial or commercial properties where the building has an earning potential.
Amounts recognised in surplus and deficit for the year.
The only rental income received from letting a portion of the investment property relates to the
Hillcrest property in KwaZulu-Natal, where a portion of the land is let to Mobile Telephone Networks
(MTN) for a cellular phone mast erected on the land. Such leasing of the property is incidental and
insignificant relative to the potential of the property. There is no rental income earned on other
investment property; they are held for capital appreciation.
There are no restrictions on the realisation of investment property or the remittance of revenue and
proceeds of disposal. There are also no contractual obligations to purchase, construct or develop
investment property or for repairs, maintenance or enhancements.
None of the investment property has been pledged as security for any loan.
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