Mr LJ Mahlangu - Municipal Demarcation Board

25. STATEMENT OF COMPARISON OF BUDGET AND ACTUAL AMOUNT
FOR THE YEAR ENDED 31 MARCH 2012
APPROVED
BUDGET ACTUAL AMOUNTS DIFFERENCES
Revenue
Revenue from non-exchange transactions 38 482 38 482 -
Revenue from exchange transactions - 18 (18)
Investment income 857 623 234
Total revenue 39 339 39 123 216
Expenses
Administrative expenses 11 121 10 175 946
Employee benefits 12 549 12 061 488
Audit fees 950 797 153
Project expenses 6 221 4 943 1 278
Depreciation/Amortisation 991 1 009 (18)
Other operating expenses 7 507 6 833 674
Total expenses 39 339 35 818 3 521
Asset disposals - (1) (1)
Surplus for the year - 3 304 3 304
*The budget is prepared on accrual basis.
26. FINANCIAL RISK MANAGEMENT
The Board’s activities expose it to some form of risk. Although the exposure to financial risk is minimal,
the following are risk categories and factors considered by management in preparation of the financial
statements.
a. Credit risk
Credit risk is the risk that a party to a financial instrument will cause a financial loss for the other party
by failing to discharge an obligation. Credit risks consist mainly of cash deposits, cash equivalents and
trade receivables. The MDB only deposits cash with major banks with high quality credit standing and
limits exposure to any counter-party.
The trading activities of the Board, sale of maps, result in very limited trade receivables.
b. Interest rate risk
Interest rate risk relates to fluctuation of fair value or future cash flows of financial instruments as a
result of changes in market rates. The Board has not entered into any contractual agreement which
expose it to interest risk.
69 MUNICIPAL DEMARCATION BOARD - Annual Report 2012