homeowners association of pinehaven country estate … · homeowners association of pinehaven...
TRANSCRIPT
HOMEOWNERS ASSOCIATION OF PINEHAVEN COUNTRY ESTATE NPC(Registration number 2003/005340/08)
Annual financial statementsfor the year ended 28 February 2015
HOMEOWNERS ASSOCIATION OF PINEHAVEN COUNTRY ESTATE NPCANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2015
Index
The reports and statements set out below comprise the annual financial statements presented to the director:
Index Page
Directors' Responsibilities and Approval 2
Independent Auditors' Report 3
Directors' Report 4
Statement of Financial Position 5
Statement of Changes in Funds 7
Statement of Comprehensive Income 6
Statement of Cash Flows 8
Accounting Policies 9 - 10
Notes to the Annual Financial Statements 11 - 15
The following supplementary information does not form part of the annual financial statements and is unaudited:
Tax Computation 16
1
HOMEOWNERS ASSOCIATION OF PINEHAVEN COUNTRY ESTATE NPCANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2015
Directors' Report
The directors submit their report for the year ended 28 February 2015.
1. Review of activities
Main business and operations
The homeowners association is engaged to provide and maintain essential community services, amenties an activities within, and to raise levies on anequitable basis as may be required to cover all costs incurred and operates principally in South Africa.
The operating results and state of affairs of the homeowners association are fully set out in the attached annual financial statements and do not inour opinion require any further comment.
Net surplus of income over expenditure of the homeowners association was R 1,270,275 (2014: surplus R 891,665), after taxation of R 39,129(2014: R 19,716).
2. Events after the reporting period
The directors are not aware of any material event which occured after the reporting date and up to the date of this report.
3. Directors
The directors in office of the homeowners association during the year and to the date of this report are as follows:
NameA WehmeyerHD dos SantosAC SayerM OosthuizenJA BothaA van QuickelbergerP SwartO Woeke
At the last AGM held of 14 October 2014, a board of directors were proposed and elected. However, these new directors have not been registeredwith the CIPC as directors yet. The board elected at the AGM were as follows:
NameA WehmeyerHD dos SantosNM RamodibeM OosthuizenJA BothaA van QuickelbergerJ BothaMG GoosensM Wilke
4. Auditors
D Arvanitis & Co. will continue in office until the next Annual General Meeting, during which the members approve, re-appoint or propose a newauditor.
4
HOMEOWNERS ASSOCIATION OF PINEHAVEN COUNTRY ESTATE NPCANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2015
Statement of Financial PositionFigures in Rand Note(s) 2015 2014
Assets
Non-Current Assets
Property, plant and equipment 1.2&2 77,144 110,533
Current Assets
Current tax receivable 54,315 65,556
Trade and other receivables 4 1,943,350 1,785,963
CSTM debtor 3 - -
Cash and cash equivalents 5 4,487,937 3,366,363
6,485,602 5,217,882
Total Assets 6,562,746 5,328,415
Funds and Liabilities
Funds
Reserves 6 1,900,000 1,400,000
Retained income 3,140,307 2,370,032
5,040,307 3,770,032
Liabilities
Current Liabilities
Trade and other payables 7 1,522,439 1,558,383
Total Funds and Liabilities 6,562,746 5,328,415
5
HOMEOWNERS ASSOCIATION OF PINEHAVEN COUNTRY ESTATE NPCANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2015
Statement of Comprehensive IncomeFigures in Rand Note(s) 2015 2014
Revenue
Levies - Ordinary 2,763,179 2,481,569
Levies Sectional Title Units - Maintenance 32,346 30,077
Levies Sectional Title Units - Main gate 22,183 20,627
Levies Sectional Title Units - Access Control 3,072 2,856
Levies Non-development 425,000 540,000
3,245,780 3,075,129
Other income
Access cards recoveries 15 67,504 136,410
Clearance fees 23,465 30,702
Electricity recoveries 16 6,632,527 6,034,743
Fines and Penalties 54,237 78,171
Interest received 123,241 85,014
Legal fee recoveries 17 60,141 32,341
Meter reading recoveries 16 32,652 31,608
Non development levies recoveries 12,600 167,665
Plan fees 18 10,500 7,410
Security recoveries 20 185,741 167,492
Sundry recoveries 34,543 123,394
7,237,151 6,894,950
Operating expenses
Access cards 15 (41,880) (87,891)
Administration and management fees (208,436) (177,727)
Auditors' remuneration 10 (13,024) (13,200)
Bad debts (44,200) (32,203)
Bank charges (16,912) (17,751)
Computer expenses (5,339) (5,303)
Consulting fees (8,470) -
Depreciation, amortisation and impairments 2 (41,456) (38,876)
Employee costs (644,715) (471,137)
Donations - (30,000)
Insurance 21 (46,763) (31,655)
Legal expenses 17 (62,662) (33,209)
Plan fees 18 (16,407) (11,970)
Printing and stationery (21,285) (21,612)
Repairs and maintenance 19 (476,123) (687,138)
Website maintenance (5,544) (2,744)
Secretarial fees (900) (1,200)
Security 20 (1,612,827) (1,513,953)
Staff welfare (3,711) -
Subscriptions (3,303) -
Telephone and fax (14,011) (13,939)
Training (434) -
Utilities 16 (5,696,182) (5,331,683)
Venue hire and AGM expenses (7,241) (7,077)
(8,991,825) (8,530,268)
Operating surplus 1,491,106 1,439,811
Abnormal item 8 (181,702) (528,430)
Surplus before taxation 1,309,404 911,381
Taxation 9 39,129 19,716
Surplus for the year 1,270,275 891,665
6
HOMEOWNERS ASSOCIATION OF PINEHAVEN COUNTRY ESTATE NPCANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2015
Statement of Changes in FundsFigures in Rand Reserve fund Retained income Total funds
Balance at 01 March 2013 900,000 1,978,367 2,878,367Changes in fundsTotal comprehensive income for the year - 891,665 891,665Transfer between reserves 500,000 (500,000) -
Total changes 500,000 391,665 891,665
Balance at 01 March 2014 1,400,000 2,370,032 3,770,032Changes in fundsTotal comprehensive income for the year - 1,270,275 1,270,275Transfer between reserves 500,000 (500,000) -
Total changes 500,000 770,275 1,270,275
Balance at 28 February 2015 1,900,000 3,140,307 5,040,307
6
7
HOMEOWNERS ASSOCIATION OF PINEHAVEN COUNTRY ESTATE NPCANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2015
Statement of Cash FlowsFigures in Rand Note(s) 2015 2014
Cash flows from operating activities
Cash generated from operations 11 1,157,530 964,553
Tax paid 12 (27,888) (79,388)
Net cash from operating activities 1,129,642 885,165
Cash flows from investing activities
Purchase of property, plant and equipment 2 (18,240) (97,562)
Sale of property, plant and equipment 2 10,173 -
Net cash from investing activities (8,067) (97,562)
Total cash movement for the year 1,121,575 787,603
Cash at the beginning of the year 3,366,363 2,578,760
Total cash at end of the year 5 4,487,938 3,366,363
8
HOMEOWNERS ASSOCIATION OF PINEHAVEN COUNTRY ESTATE NPCANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2015
Accounting Policies
1. Presentation of Annual Financial Statements
The annual financial statements have been prepared in accordance with the International Financial Reporting Standard for Small and Medium-sizedEntities, and the Companies Act of South Africa. The annual financial statements have been prepared on the historical cost basis, and incorporate theprincipal accounting policies set out below. They are presented in South African Rands.
These accounting policies are consistent with the previous period.
1.1 Significant judgements and sources of estimation uncertainty
In preparing the annual financial statements, management is required to make estimates and assumptions that affect the amounts represented in theannual financial statements and related disclosures. Use of available information and the application of judgement is inherent in the formation ofestimates. Actual results in the future could differ from these estimates which may be material to the annual financial statements. Significantjudgements include:
Financial assets measured at cost and amortised cost
The company assesses its financial assets measured at cost and amortised cost for impairment at each reporting period date. In determining whetheran impairment loss should be recorded in the statement of comprehensive income, the company makes judgements as to whether there is observabledata indicating a measurable decrease in the estimated future cash flows from a financial asset.
The impairment for financial assets measured at cost and amortised cost is calculated on a portfolio basis, based on historical loss ratios, adjusted fornational and industry-specific economic conditions and other indicators present at the reporting period that correlate with defaults on the portfolio.These annual loss ratios are applied to loan balances in the portfolio and scaled to the estimated loss emergence period.
Taxation
Judgement is required in determining the provision for income taxes due to the complexity of legislation. There are many transactions and calculationsfor which the ultimate tax determination is uncertain during the ordinary course of business. The homeowners association recognises liabilities foranticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different fromthe amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which suchdetermination is made.
The homeowners association recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that thedeductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred income tax assets requires thehomeowners association to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are basedon forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxableincome differ significantly from estimates, the ability of the homeowners association to realise the net deferred tax assets recorded at the end of thereporting period could be impacted.
1.2 Property, plant and equipment
Property, plant and equipment are tangible items that: are held for use in the production or supply of goods or services, for rental to others or for administrative purposes; and are expected to be used during more than one period.
Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to,replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carryingamount of the replaced part is derecognised.
The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located is also included in the cost ofproperty, plant and equipment.
This includes cost incurred to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended bymanagement.
Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses.
Depreciation is provided using the straight-line method to write down the cost, less estimated residual value over the useful life of the property, plantand equipment.
Item Average useful lifePlant and equipment 4 yearsOffice Furniture 5 yearsComputer equipment 3 years
9
HOMEOWNERS ASSOCIATION OF PINEHAVEN COUNTRY ESTATE NPCANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2015
Accounting Policies
1.2 Property, plant and equipment (continued)
The residual value, depreciation method and the useful life of each asset are reviewed at each annual reporting period if there are indicators presentthat there is a change from the previous estimate.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss in the period.
1.3 Financial instruments
Financial instruments at amortised cost
Financial instruments may be designated to be measured at amortised cost less any impairment using the effective interest method. These includetrade and other receivables, loans and trade and other payables. At the end of each reporting period date, the carrying amounts of assets held in thiscategory are reviewed to determine whether there is any objective evidence of impairment. If so, an impairment loss is recognised.
1.4 Tax
Current tax assets and liabilities
Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and priorperiods exceeds the amount due for those periods, the excess is recognised as an asset.
Current tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the tax authorities,using the tax rates (and tax laws) that have been enacted or substantively enacted by the reporting period date.
Tax expenses
The Homeowers association is taxed at company rates. All levies, cost recoveries and up to R50 000 of any other income are exempt in terms of interms of Section 10(1)(e) of the Income Tax Act.
1.5 Employee benefits
Short-term employee benefits
The cost of short-term employee benefits, (those payable within 12 months after the service is rendered, such as paid vacation leave and sick leave,bonuses, and non-monetary benefits such as medical care), are recognised in the period in which the service is rendered and are not discounted.
1.6 Revenue
Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for goods and servicesprovided in the normal course of business, net of trade discounts and volume rebates, and value added tax.
Revenue comprises of all levies raised for the purpose of the homeowners association. Levies are charged on a monthly basis.
Interest is recognised, in profit or loss, using the effective interest rate method.
10
HOMEOWNERS ASSOCIATION OF PINEHAVEN COUNTRY ESTATE NPCANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2015
Notes to the Annual Financial StatementsFigures in Rand 2015 2014
2. Property, plant and equipment
2015 2014
Cost / Valuation Accumulateddepreciation
Carrying value Cost / Valuation Accumulateddepreciation
Carrying value
Plant and equipment 206,792 (140,727) 66,065 209,113 (118,402) 90,711Office equipment 11,662 (11,658) 4 10,173 (10,171) 2IT equipment 61,129 (50,055) 11,074 61,129 (41,310) 19,819Computer software 5,473 (5,472) 1 5,473 (5,472) 1
Total 285,056 (207,912) 77,144 285,888 (175,355) 110,533
Reconciliation of property, plant and equipment - 2015
Opening balance Additions Disposals Depreciation TotalPlant and machinery 90,711 6,578 - (31,224) 66,065Office equipment 2 11,662 (10,173) (1,487) 4IT equipment 19,819 - - (8,745) 11,074Computer software 1 - - - 1
110,533 18,240 (10,173) (41,456) 77,144
Reconciliation of property, plant and equipment - 2014
Opening balance Additions Depreciation TotalPlant and machinery 43,940 66,500 (19,729) 90,711Office equipment 1 1,661 (1,660) 2IT equipment 6,310 29,401 (15,892) 19,819Computer software 1,596 - (1,595) 1
51,847 97,562 (38,876) 110,533
A register containing the information required by Regulation 25(3) of the Companies Regulations, 2011 is available for inspection at the registeredoffice of the homeowners association.
3. CSTM debtor
In May 2011 Constantia Sectional Title Management (Pty) Ltd were placed under provisional liquidation and CSTM's fidelity fund certificate waswithdrawn and its trust accounts placed under curatorship. A claim subsequently has to be submitted to the EAAB of trust money due to PinehavenCountry Estate by CSTM.
An allowance for irrecoverable amount has been raised against the CSTM debtor. There is significant doubt whether the amount will be recoveredeven though the legal claim and case is ongoing.
CSTM Trust account balance as per disbursement 31,713 31,713Impairment (31,713) (31,713)
- -
4. Trade and other receivables
Electricity in arrears 478,866 649,798Levies in arrears 969,779 641,460Municipal deposits 494,705 494,705
1,943,350 1,785,963
11
HOMEOWNERS ASSOCIATION OF PINEHAVEN COUNTRY ESTATE NPCANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2015
Notes to the Annual Financial StatementsFigures in Rand 2015 2014
4. Trade and other receivables (continued)
Levies in arrears: Normal leviesCurrent 33,772 48,86630 days 710 18,98560 days 16,923 21,88390 days 10,885 19,023120 + days 87,489 27,703
149,779 136,460
Levies in arrears: Non-development leviesCurrent 35,000 45,00030 days 35,000 55,00060 days 35,000 50,00090 days 35,000 55,000120 days 680,000 300,000
820,000 505,000
Electricity in arrearsCurrent* 289,583 352,02730 days (24,827) 11,28660 days 28,351 212,71790 days 4,400 4,065120 days 181,359 69,703
478,866 649,798
*The current portion of electricity in arrears are normally received on the 7th day of the next month as per the rules of the estate.
5. Cash and cash equivalents
Cash and cash equivalents consist of:
Petty cash 2,324 881Nedbank accounts - levies and electricity 872,765 500,580Nedbank Call accounts 1,161,106 1,155,365Nedbank Investment account 2,451,742 1,709,537
4,487,937 3,366,363
6. Reserves
Balance at beginning op period 1,400,000 900,000Transfer for the year 500,000 500,000
1,900,000 1,400,000
The board has continued with the practice to build a reserve for future infra-structure maintenance and or replacement from the surplus electricityrecoveries. The reserve is represented by amounts invested in Nedbank Investment accounts.
7. Trade and other payables
Prepaid levies 10,258 24,143Accrued audit fees 12,540 13,200Accrued electricity 427,045 446,033Accrued meter reading fee 3,036 3,036Accrued other expenses 258 1,445Accrued salaries and wages (PAYE) 2,967 5,733Electricity deposits 894,578 921,478Footway deposit 118,150 98,150SARS - VAT 53,607 45,165
1,522,439 1,558,383
12
HOMEOWNERS ASSOCIATION OF PINEHAVEN COUNTRY ESTATE NPCANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2015
Notes to the Annual Financial StatementsFigures in Rand 2015 2014
8. Abnormal item
Additional maintenance costs for the yearGenerator - Electrical - (6,684)Generator - Structure - (3,600)Parks - Entrance (Garden) - (38,755)Parks - Irrigation - (54,150)Parks - Topsoil - (79,347)Parks - Trees (13,020) -Parks - Playground Equipment (22,711) -Paint - Entrance (16,321) -Security - Main gate - (6,933)Security - Access Control System - (19,495)Security - Cameras - (28,368)Security - Booms - (95,916)Security - Parking Bays - (33,368)Security - Boundary Wall (Guards) - (9,880)Security - Boundary Wall (30,398) (51,453)Security - Electric fence upgrade (96,972) -
(179,422) (427,949)
Forensic audit and consulting fees Audit fees - (2,400)
- (2,400)
Legal feesCosts (2,280) (242,115)Recoveries - 144,035
(2,280) (98,080)
Total Abnormal costsCosts (181,702) (672,465)Recoveries - 144,035
(181,702) (528,430)
9. Taxation
Major components of the tax expense
CurrentLocal income tax - current period 39,129 19,716
The income tax rate is 28% in 2015.
Provision has been made for 2015 tax as the homeowners association has taxable income. As per section 10(1)(e)(i) of the Income Tax Act, allincome from any other source up to R50 000 will be exempt and only the income in excess of R50 000 will be subject to tax.
10. Auditors' remuneration
Fees 13,024 13,200
13,024 13,200
13
HOMEOWNERS ASSOCIATION OF PINEHAVEN COUNTRY ESTATE NPCANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2015
Notes to the Annual Financial StatementsFigures in Rand 2015 2014
11. Cash generated from operations
Surplus before taxation 1,309,404 911,381Adjustments for:Depreciation and amortisation 41,456 38,876Provision for CSTM trust account - 30,033Changes in working capital:Trade and other receivables (157,387) (457,869)Trade and other payables (35,943) 442,132
1,157,530 964,553
12. Tax paid
Balance at beginning of the year 65,556 5,884Current tax for the year recognised in surplus or loss (39,129) (19,716)Balance at end of the year (54,315) (65,556)
(27,888) (79,388)
13. Related parties
`
RelationshipsBoard of directors A van Quickelberger
A WehmeyerHD dos SantosJA BothaM OosthuizenNM RamodibeJ BothaMG GoossensM Wilke
14. Directors' emoluments
No emoluments were paid to the directors during the year as it's not the policy of the homeowners association to remunerate directors for servicesrendered.
15. Access cards
Costs (41,880) (87,891)Recoveries 67,504 136,401
25,624 48,510
16. Utilities
Electricity (5,659,750) (5,291,489)Electricity recoveries 5,421,386 4,862,577Electricity - Basic 807,793 801,246Electricity recoveries - Environmental 218,466 193,545Electricity recoveries - General 184,882 177,375Meter Reading Fees (36,432) (40,194)Meter Reading recoveries 32,652 31,608
968,997 734,668
17. Legal fees
Costs (62,662) (33,209)Recoveries 60,141 32,341
(2,521) (868)
14
HOMEOWNERS ASSOCIATION OF PINEHAVEN COUNTRY ESTATE NPCANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2015
Notes to the Annual Financial StatementsFigures in Rand 2015 2014
18. Plan fees
Costs (16,407) (11,970)Recoveries 10,500 7,410
(5,907) (4,560)
19. Repairs and maintenance
Access Control (59,070) (35,331)Building - (18,806)Electrical - (2,220)Entrance (10,486) (166,834)Garden (41,448) (75,550)Gate & Fences (8,549) (84,478)General (68,067) (22,256)Lawnmower (13,543) (20,929)Parks (11,984) (22,749)Paint - (1,105)Refuse Removal (262,976) (236,880)
(476,123) (687,138)
20. Security
Costs (1,612,827) (1,513,953)Recoveries 185,741 167,492
(1,427,086) (1,346,461)
21. Insurance
Insurance Company: PSG Konsult FairlandsPolicy number: PSGBC0000733310Anniversary date: 01/02/2015A schedule of the present replacement values of all units in terms of Annexure 8 Rule 29(1)(c) will be tabled for approval at the forthcoming annualgeneral meeting.
15
Homeowners Association of Pinehaven Country Estate NPC(Registration number 2003/005340/08)Financial Statements for the year ended 28 February 2015
Tax Computation
R
Taxable income (a)Interest and penalties 177,480Other income 23,465Less: Exemption(As per section 10(1)(e)(i) of the Income Tax Act, all in come from any other source up to R50 000 will beexempt and only the income in excess of R50 000 will be subject to tax.)
(50,000)
150,945
Allowable deductions (c)Audit fees 13,024Accounting/Secretarial fees 900Administration fees 208,436Bankcharges 16,912Printing and stationery 21,285 Total income (b) - Applied rate (a/b) x Allowable deductions (c) (11,197)
(11,197)
Taxable income 139,748
Tax thereon @ 28% 39,129
Tax liability
RAmount owing/(prepaid) at the beginning of year (65,556)Amount refunded/(paid) in respect of prior year (27,888)
Amount owing/(prepaid) in respect of prior year (93,444)
Tax owing/(prepaid) for the current year
Normal taxPer calculation 39,129
Amount owing/(prepaid) at the end of year (54,315)
16The supplementary information presented does not form part of the financial statements and is unaudited