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EZULWINI SURPLUS DROPS BY 16%

16/09/2022 07:01:00 Mhlengi Magongo

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MBABANE – The performance of town councils is essential for the development of the said council, which in turn uplifts businesses in the location.

A majority of businesses are still in the process of recovering from the effects of COVID-19, which enormously affected business revenues. When business revenues declined in Eswatini, the income of town councils contracted due to the decrease in profits. Ezulwini Municipal Council (EMC) surplus contracted by E2 112 810 in the current reporting period, it decreased from E13 022 191 in 2021 to E10 909 381 in 2022. This was outlined in the EMC Financial Statements for the 2021/2022 period.

The increase in surplus was generated by the decline in revenues as they contracted to E22 548 697 in 2022 from E24 327 921 in 2021. Staff operating costs hiked by over E400 000 as they increased from E8 397 560 in 2021 to E8 880 651 in 2022. The increase further contributed to the decline in council’s surplus. A noticeable increase of over 101 per cent was observed from the finance income for the council in the current reporting period. The finance income hiked to E1 809 843 in 2022 from E576 255 in 2021.

Increase

However, the above mentioned increase contributed about 9.8 per cent to the overall surplus which was largely affected by the decrease in revenues, despite the decline in the council’s direct cost. The strengths of the council’s performance was derived from financial assets held at fair value as they increased to E15 064 263 in 2022 from in E14 203 565 in 2021. A noticeable performance was also observed from cash generated operations which increased to E10 415 038 in 2022 from E6 070 243 2021. As well as interest received increased to E949 145 2022 from E576 255 in 2021.

Prepared

EMC said the financial statements had been prepared in accordance with the International Financial Reporting Standards for Small and Medium Sized Entities (IFRS for SMEs) and Section 33 of the Urban Government Financial Regulations Act of 1969. “The financial statements have been prepared under the historical cost convention as modified by the revaluation of land and buildings and financial assets and financial liabilities held-for-trading,” said Phutfuma Shongwe, the Acting Town Clerk and Chief Executive Officer (CEO).

Classifies

Shongwe said the Council classifies its investments in debt and equity securities into the following categories: trading, held-to-maturity and available-for-sale. He said the classification was dependent on the purpose for which the investments were acquired. “Management determines the classification of its investments at the time of the purchase and re-evaluates such designation on a regular basis,” said the CEO. He added that investments that were acquired principally for the purpose of generating a surplus from short-term fluctuations in price were classified as trading investments and included in current assets; for the purpose of these financial statements short-term is defined as three months.