Mr LJ Mahlangu - Municipal Demarcation Board

20. RECONCILIATION OF SURPLUS FOR THE YEAR TO NET CASH
FLOWS FROM OPERATING ACTIVITIES
2012
R’000
2011
R’000
Surplus for the year
Adjusted for:
3,304 1,902
- Depreciation on property, plant and equipment 890 716
- Amortisation of intangible assets 119 86
- Loss/ (Gain) on sale of property, plant and equipment 1 -15
- Movement in operating lease 38 245
Operating cash flows before working capital changes 4,352 2,934
Working capital changes 432 (2,402)
- Increase in inventory (4) (114)
- Decrease in receivables 31 172
- Decrease in payables 405 (2,460)
Cash generated from operations 4,784 532
21. OPERATING LEASE COMMITMENTS
The Board as lessee
At the reporting date the Board had outstanding commitments under non-cancelable operating leases,
which fall due as follows
Up to 1 year 2,500 2,273
1 to 5 years 2,980 5,480
More than 5 years 0 0
5,480 7,753
Operating lease arrangements
• The MDB leases the building from Wagbro Properties CC for a period of 5 years, effective from 01
May 2009. The lease payment is R190, 832.61 per month with an annual escalation of 10%. No
contingent rent is payable. The lease agreement is renewable for 5 years. The request thereof has
to be submitted within six months of the expiry date of the lease.
• The lease allows for purchase of premises after the second lease agreement.
• When the operating lease is terminated before the lease period has expired, any payment required
to be made to the lessor by way of penalty is recognised as an expense in the period in which
termination takes place.
MUNICIPAL DEMARCATION BOARD - Annual Report 2012 66