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
5.
2016
1 023 522 1 039 482
2 362 857 -
43 472
(4 548 045)
(747 727) 45 192
(2 597 172)
(1 331 364)
(5 252 300) (3 883 344)
Deposits (continued)
Non-current assets
Rental deposits held by lessors
Current assets
Rental deposits held by lessors and held at attorney’s trust account
6.
2017
Operating lease asset/(liability) (accrual)
Current assets
Non-current liabilities
Current liabilities
The operating lease asset arose as a result of straight-lining the operating lease receipts in accordance
with GRAP 13.
SALGA leases a portion of its property in KwaZulu-Natal to a cellular phone operator for a cellular
phone mast. The lease period on integration of SALGA KwaZulu-Natal into the SALGA fold was 96
months. The annual escalation is 8% and the remaining lease period is 36 months.
The operating lease liability arose due to the straight-lining of operating lease payments in accordance
with GRAP 13. Refer to note 31 for details on the non-cancellable operating lease rentals payable in
future.
SALGA leases premises with a lease period ranging from 36 to 60 months. The average annual
escalation is 9% and the average remaining lease term is 26 months.
All leases, except for those in Gauteng, have extension options included in the contracts. Four of
the lease contracts (national office, KwaZulu-Natal, Northern Cape and North West) have extension
options that are subject to negotiation between SALGA and the lessors at the end of the current
contracts. SALGA normally enters into negotiations to extend lease contracts at least six months
before the termination of the lease. The national office lease has an option to purchase. The purchase
price shall be based on market value at the time of exercising the option.
7.
Employee benefit obligations
Defined benefit plan
The plan is a post-employment medical benefit plan.
Post-employment medical aid plan
When the then Western Cape Local Government Organisation (WECLOGO) was incorporated into
SALGA, to form a unitary organisation WECLOGO had former employees for whom it contributed
towards a medical aid post-employment benefit. One of the conditions of the unitary structure was
that conditions of service of any employee in the employ of the provincial associations would not
be affected on amalgamation in line with section 197 of the Labour Relations Act. The WECLOGO
members were incorporated into SALGA as of 1 February 2005 and SALGA inherited the post-
employment medical benefit scheme of the two remaining pensioners.
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