SAMSA Annual Report 2015 - 2016

CHAPTER 06 ANNUAL FINANCIAL STATEMENTS ANNUAL FINANCIAL STATEMENTS CHAPTER 06
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2016 FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2016
The Authority has developed and implemented the following actions and these measures are being continuously reviewed to
enhance their effectiveness.
2016
R ‘000
2015
R ‘000
• A cost optimisation programme has been developed and implemented. The effectiveness of the programme has been
evidenced by the reduction of expenditures in the 2015/16 financial year.
• The Authority continues to impement its finance strategy to turnaround the financial situation of the organisation. The
development of a clear financial strategy was meant to establish the guiding principles in all financial decisions of the
Authority and it will continue to be re-evaluated whenever the organisation undergoes changes in its financial circumstances.
• In order for the tariff structure to be corrected, the Minister of Transport (with the concurrence of the Minister of Finance) has
approved tariff adjustments for the Authority which will be implemented from the 20th of June 2016 (after the required
gazetting period).
• In the above, Rate Base refers to the net value of the Authority’s investment in infrastructure and its other long term or
continuing outlays of (or holding of) funds needed for operations, e.g. working capital.
• The Authority’s funding models were proven to be no longer fit for purpose and as a consequence SAMSA, led by the
Department of Transport implemented an initiative to develop a new funding model for the organisation. The process of
appointing a service provider to assist in the development of the new funding models has now reached an advanced stage
and it is being funded by the Department. A joint DOT/SAMSA project committee was created to run the project. The
process has the full support of the Department of Transport and National Treasury.
Assumptions
• SAMSA was established through an Act of Parliament and cannot be liquidated without an Act of Parliament. There is no
process currently underway to repeal the SAMSA Act (Act 5 of 1998).
• The Minister of Transport (with the concurrence of the Minister of Finance) has approved the new proposed tariffs for the
Authority which will result in a significant improvement of the Authority’s financial performance and position.
• The new funding models which are being developed for the Authority will bring stability and a degree of certainty in the tariff
approval process for the Authority. This will result in the timeous adjustment of levies in line with the SAMSA Levies Act of
1998.
• Apart from the SA Agulhas and AIS activities, the Authority has and will be able to meet its financial obligations. Payment
plans for SA Agulhas and AIS commitments have been finalised and agreed with the service providers.
38. RECONCILIATION BETWEEN BUDGET AND STATEMENT OF FINANCIAL
PERFORMANCE
Reconciliation of budget surplus/deficit with the surplus/deficit in the statement of financial performance:
Net deficit per the statement of financial performance (29 089) (81 470)
Adjusted for:
Fair value adjustments 58 (138)
Increase/(decrease) in provisions (1 284) 12 028
Under/over spending of expenditure 44 086 17 169
Under/over recovery of income (14 522) 49 241
Actuarial gains and losses 751 3 170
Net surplus per approved budget - -
39. BUDGET VARIANCES
Material differences between budget and actual amounts
The material budget variances are explained in Appendix 1 to the annual financial statements.
Based on the above analysis, despite the fact that SAMSA will continue to face cash flow constraints until the new tariffs adjustment
receive concurrence from the Minister of Finance, the Authority will be able to meet its obligations during the next 12 months.
36. EVENTS AFTER THE REPORTING DATE
The Minister of Transport (with the concurrence of the Minister of Finance) approved new tariff adjustments for the Authority. The new
tariffs were implemented from 20 June 2016. The SAMSA CEO, Commander Tsietsi Mokhele, who had served the organisation since
January 2008 resigned from this position on 30 June 2016.
37. CURRENT COMMITMENTS
At the end of the financial year, the Authority had current commitments of R16.4 million (2013/14: R49.6 million) for which contracts
had been signed for. The Authority will be able to honour these contractual commitments.
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