Annual General Meeting Meeting Agenda August 26, 2015 18h00 Meeting: Val de Vie Lifestyle Home Owners’ Association Special General Meeting Where: Ballroom – Pavilion Date & Time: 26 August 2015, 18h00 Chairman: Morne Bosch Invited: Members of the Val de Vie Lifestyle Estate Home Owners’ Association Number Item 1. Welcoming 2. Quorum/Manner of Proceedings 3. Election of member trustees 4. Chairman’s Report 5. Consideration of Financial Statements for 2015 6. Presentation of 2016 Budget 7. Proclamation of vote 8. Closure Please take note that the final Agenda may vary from the attached Agenda at the discretion of the Trustees.
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Annual General Meeting Meeting Agenda - Val de VieAnnual General Meeting Meeting Agenda August 26, 2015 18h00 Meeting: Val de Vie Lifestyle Home Owners’ Association Special General
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Annual General Meeting
Meeting Agenda August 26, 2015
18h00
Meeting: Val de Vie Lifestyle Home Owners’ Association Special General Meeting
Where: Ballroom – Pavilion
Date & Time: 26 August 2015, 18h00
Chairman: Morne Bosch
Invited:
Members of the Val de Vie Lifestyle Estate Home Owners’ Association
Number Item
1. Welcoming
2. Quorum/Manner of Proceedings
3. Election of member trustees
4. Chairman’s Report
5. Consideration of Financial Statements for 2015
6. Presentation of 2016 Budget
7. Proclamation of vote
8. Closure
Please take note that the final Agenda may vary from the attached Agenda at the discretion of the Trustees.
Manner of Proceedings
The following will take place on the evening of 26 August 2015:
1. Statutory Proceedings for the 2015 Annual General Meeting for which the
following will apply:
Welcoming;
Quorum/Manner of Proceedings
Election of member trustees;
Chairman’s Report;
Consideration of the audited financial statements for 2015;
Presentation of the 2016 Budget;
Proclamation of vote;
Closure.
Kindly note that the following rules will apply during the 2015 Annual General Meeting of
the Val de Vie Lifestyle Estate Home Owners’ Association.
Only members whose accounts are fully paid will be able to attend the meeting and cast
votes as set per the Constitution, either in person or by proxy.
Members whose accounts are fully paid will receive a voting card for each property they
own.
It is each member’s duty to ensure that their accounts are fully paid up to date. The
VAL DE VIE WINELANDS LIFESTYLE ESTATE HOMEOWNERS' ASSOCIATION ("VAL DE VIE HOMEOWNERS' ASSOCIATION")Annual financial statementsfor the year ended 28 February 2015
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VAL DE VIE HOMEOWNERS' ASSOCIATIONAnnual Financial Statements for the year ended 28 February 2015
General Information
Country of incorporation and domicile South Africa
Trustees M Bosch
L Cronje
S Rossouw
R Swart
M Venter
A Gildenhuys
R Neethling
R Terblanche
C van der Venter
Auditors PricewaterhouseCoopers Incorporated
Managing Agent Elements Management (Pty) Ltd
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VAL DE VIE HOMEOWNERS' ASSOCIATIONAnnual Financial Statements for the year ended 28 February 2015
Index
The reports and statements set out below comprise the annual financial statements presented by the trustees:
Page
Independent Auditor's Report 3 - 4
Statement of Financial Position 5
Statement of Comprehensive Income 6
Statement of Changes in Equity 7
Accounting Policies 8 - 10
Notes to the Annual Financial Statements 11 - 13
The following supplementary information does not form part of the annual financial statements and is unaudited:
Detailed Income Statement 14 - 16
Tax Computation 17
Trustees responsibilities
The trustees are required to maintain adequate accounting records and are responsible for the content and integrityof the annual financial statements and related financial information included in this report. It is their responsibility toensure that the annual financial statements fairly present the state of affairs of the association as at the end of thefinancial year and the results of its operations for the year then ended, in conformity with the basis of accounting asset out in Note 1 to the financial statements. The external auditors are engaged to express an independent opinionon the annual financial statements.
The annual financial statements and additional schedules set out on pages 5 to 17, which have been prepared onthe going concern basis, were approved by the board on ________________ and were signed on its behalf by:
Trustee Trustee
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Independent Auditor's Report
To the trustee of VAL DE VIE HOMEOWNERS' ASSOCIATION
3
Independent Auditor's Report
PricewaterhouseCoopers Incorporated
31 May 2012
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VAL DE VIE HOMEOWNERS' ASSOCIATIONAnnual Financial Statements for the year ended 28 February 2015
Statement of Financial Position
2015 2014Notes R R
Assets
Current Assets
Investments 3 17,353,919 12,159,570
Trade and other receivables 4 3,244,492 4,146,912
Cash and cash equivalents 5 550,706 1,522,160
21,149,117 17,828,642
Non-Current Assets
Property, plant and equipment 2 14,624,193 12,782,258
Total Assets 35,773,310 30,610,900
Equity and Liabilities
Liabilities
Current Liabilities
Trade and other payables 6 6,989,535 6,397,731
Owners' funds and reserves
Infrastructure and maintenance 7 4,115,547 4,888,023
Accumulated surplus 24,668,228 19,325,146
28,783,775 24,213,169
Total Equity and Liabilities 35,773,310 30,610,900
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VAL DE VIE HOMEOWNERS' ASSOCIATIONAnnual Financial Statements for the year ended 28 February 2015
Statement of Comprehensive Income
2015 2014Notes R R
Revenue 8 21,551,414 23,286,081
Other income 9 2,128,619 1,923,463
Operating expenses (19,109,427) (18,463,067)
Operating surplus 4,570,606 6,746,477
Transfer from/(to) infrastructure and maintenance reserve 772,476 (1,371,493)
Net surplus for the year 5,343,082 5,374,984
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VAL DE VIE HOMEOWNERS' ASSOCIATIONAnnual Financial Statements for the year ended 28 February 2015
Statement of Changes in Equity
Infrastruc-ture and
maintenancereserve
Accumulatedsurplus
Total equity
R R R
Balance at 01 March 2013 3,516,530 13,950,162 17,466,692Changes in equityTotal comprehensive income for the year - 5,374,984 5,374,984Transfer to infrastructure and maintenance reserve 1,371,493 - 1,371,493
Total changes 1,371,493 5,374,984 6,746,477
Balance at 01 March 2014 4,888,023 19,325,146 24,213,169Changes in equityTotal comprehensive income for the year - 5,343,082 5,343,082Transfer to infrastructure and maintenance reserve (772,476) - (772,476)
Total changes (772,476) 5,343,082 4,570,606
Balance at 28 February 2015 4,115,547 24,668,228 28,783,775
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VAL DE VIE HOMEOWNERS' ASSOCIATIONAnnual 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 accounting policies as set out below.The annual financial statements have been prepared on the historical cost basis. They are presented in SouthAfrican Rands.
These accounting policies are consistent with the previous period.
1.1 Property, plant and equipment
All property, plant and equipment is stated at historical cost less depreciation except certain items carried over fromthe developer at no cost. Historical cost includes expenditure that is directly attributable to the acquisition of theitems.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,only when it is probable that future economic benefits associated with the item will flow to the party and the cost ofthe item can be measured reliably. All other repairs and maintenance are charged to the income statement duringthe financial period in which they are incurred.
Depreciation is provided using the straight-line method to write down the cost, less estimated residual value overthe useful life of the property, plant and equipment.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These areincluded in the income statement.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount isgreater than its estimated recoverable amount .
Software is classified as Property, Plant and Equipment.
1.2 Financial instruments
Financial instruments at cost
Equity instruments that are not publicly traded and whose fair value cannot otherwise be measured reliably aremeasured at cost less impairment. This includes equity instruments held in unlisted investments.
All financial assets whose fair value cannot otherwise be measured reliably, and which do not meet the criteria tobe designated as an instruments measured at amortised cost, are measured at cost less impairments.
Trade and other receivables
Trade receivables are recognised and carried at cost. A provision for impairment of trade receivables isestablished when there is objective evidence that the party will not be able to collect all amounts due accordingto the original terms of receivables. A provision for outstanding levies are only made if, in the opinion of theTrustees, the amounts could not be recovered through restriction of the transfer of the erven.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, demand deposits and other short-term highly liquidinvestments with original maturities of three months or less. Bank overdrafts are shown as current liabilities onthe statement of financial position.
Trade and other payables
Trade payables are recognised initially at the transaction price and subsequently measured at amortised costusing the effective interest method.
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VAL DE VIE HOMEOWNERS' ASSOCIATIONAnnual Financial Statements for the year ended 28 February 2015
Accounting Policies
1.3 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 paidin respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as anasset.
Tax expenses
Current tax is charged or credited directly to equity if the tax relates to items that are credited or charged, in thesame or a different period, directly to equity.
1.4 Impairment of assets
The homeowners' association assesses at each reporting period date whether there is any indication that an assetmay be impaired. If any such indication exists, the homeowners' association estimates the recoverable amount ofthe asset.
If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individualasset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of thecash-generating unit to which the asset belongs is determined.
If an impairment loss subsequently reverses, the carrying amount of the asset (or group of related assets) isincreased to the revised estimate of its recoverable amount, but not in excess of the amount that would have beendetermined had no impairment loss been recognised for the asset (or group of assets) in prior years. A reversal ofimpairment is recognised immediately in profit or loss.
1.5 Provisions and contingencies
Provisions are recognised when:� the association has an obligation at the reporting period date as a result of a past event;� it is probable that the association will be required to transfer economic benefits in settlement; and� the amount of the obligation can be estimated reliably.
Provisions are not recognised for future operating losses.
Provisions are measured at the present value of the amount expected to be required to settle the obligation using apre-tax rate that reflects current market assessments of the time value of money and the risks specific to theobligation. The increase in the provision due to the passage of time is recognised as interest expense.
1.6 Revenue
Revenue is measured at the fair value of the consideration received or receivable and represents the amountsreceivable for goods and services provided in the normal course of business, net of trade discounts and volumerebates, and Value Added Tax.
Levies
Levies are recognised as it becomes payable.
Interest
Interest is recognised, in surplus or deficit, using the effective interest rate method.
Rental income and expense
Rental income and expense is recognised as per the terms of the contract.
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VAL DE VIE HOMEOWNERS' ASSOCIATIONAnnual Financial Statements for the year ended 28 February 2015
Accounting Policies
1.6 Revenue (continued)
Developer transfers of property
These transfers, as per the Constitution, is transferred at no cost and no revenue or gain is recognised by theassociation in this regard.
Direct recoveries of costs
These items for example legal fees and water cost recoveries are set off to costs and not treated as revenue orother income by the association.
1.7 Significant judgements and sources of estimation uncertainty
In preparing the annual financial statements, management is required to make estimates and assumptions thataffect the amounts represented in the annual financial statements and related disclosures. Use of availableinformation and the application of judgement is inherent in the formation of estimates. Actual results in the futurecould differ from these estimates which may be material to the annual financial statements. Significant judgementsinclude:
Valuation of debtors
All outstanding debtors (including interest raised on outstanding levies) at year end is regarded as recoverable dueto the fact that no erf can be transferred to a new buyer before all outstanding levy fees have been fully paid.
Allocation of expenses
General estate expenses incurred by the developer, are proportionally allocated to the Homeowners' Associationbased on management’s judgement, after review and approval by the Trustees. If the allocation method and orpercentage changes from year to year, specific Trustee approval is required.
Value Added Tax
The company remains registered for VAT following an amendment in the VAT Act that levies are exempt.
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VAL DE VIE HOMEOWNERS' ASSOCIATIONAnnual Financial Statements for the year ended 28 February 2015
Total 17,913,550 (3,289,357) 14,624,193 14,413,434 (1,631,176) 12,782,258
Reconciliation of property, plant and equipment - 2015
Openingbalance
Additions Depreciation Total
Land and buildings 238,122 765,814 (93,939) 909,997Plant and machinery 258,228 358,500 (40,601) 576,127Furniture and fixtures 698,470 - (64,592) 633,878Motor vehicles 108,958 246,013 (71,550) 283,421IT equipment 24,349 18,085 (26,863) 15,571Computer software 142,002 21,700 (20,793) 142,909Roads and pathways 2,903,421 - (279,256) 2,624,165Security - Infrastructure 8,159,793 337,593 (919,809) 7,577,577Other property, plant and equipment 248,915 1,752,411 (140,778) 1,860,548
12,782,258 3,500,116 (1,658,181) 14,624,193
Reconciliation of property, plant and equipment - 2014
Openingbalance
Additions Depreciation Total
Land and buildings - 252,879 (14,757) 238,122Plant and machinery 288,114 12,719 (42,605) 258,228Furniture and fixtures 621,402 134,057 (56,989) 698,470Motor vehicles - 121,249 (12,291) 108,958IT equipment 47,028 9,028 (31,707) 24,349Computer software 128,674 37,275 (23,947) 142,002Roads and path ways 2,825,416 356,205 (278,200) 2,903,421Security - Infrastructure 8,074,892 871,142 (786,241) 8,159,793Other property, plant and equipment - 264,294 (15,379) 248,915
11,985,526 2,058,848 (1,262,116) 12,782,258
In accordance with clause 11.4 of the HOA Constitution, certain property, plant and equipment are carried over fromthe Developer to the Home Owners Association at no cost. At year-end this included a total of 33 (2014: 28) erven.
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VAL DE VIE HOMEOWNERS' ASSOCIATIONAnnual Financial Statements for the year ended 28 February 2015
Notes to the Annual Financial Statements
2015 2014R R
2. Property, plant and equipment (continued)
The infrastructure assets of the Homeowners' Association (including assets carried over from the Developer to theHomeowners' Association at no cost) were independently valued at current replacement cost by a professionalqualified engineering firm (Aurecon SA (Pty) Ltd) during 2011 at a value of approximately R180 000 000.
The following assets were included:
- Water and sewerage- Irrigation- Roads and paved areas- Buildings and boundary wall- Security infrastructure- Communications infrastructure
The value of R180 000 000 has been adjusted for inflation and annual additions for insurance cover purposes.
As per trustee policy, a new valuation is conducted every three to five years.
3. Investments
Momentum Money Market Fund 2,004,261 1,893,880Prudential Money Market Fund 62,332 59,006Coronation Money Market Fund 4,736,593 4,128,027Glacier Absolute Return Fund 10,550,733 6,078,657
17,353,919 12,159,570
As stipulated in clause 35.2 of the Homeowners' Association Constitution, the Trustees are mandated to set upreserve accounts for funds that are held over and above one year’s working capital requirements. These reservesmay be invested in absolute return funds with an explicit target of no more than CPI + 5% with any financialinstitution as approved by the Trustees from time to time.
A cession exists over the Momentum Money Market Fund account for R276,000 or any re-investment, renewal orreplacement thereof relating to municipal deposits.
Infrastructure and maintenance reserve 4,115,547 4,888,023
Allocations are made to the Infrastructure and maintenance reserve in accordance with an asset management plan,conducted by the engineering firm Aurecon SA (Pty) Ltd. The high-level plan covers a 20 year horizon, focusing onprojected capital renewal and annual operation and maintenance requirements.
8. Revenue
Levies: Normal 15,205,052 13,472,776Levies: Extraordinary 4,214,112 7,964,465Levies: Road 2,132,250 1,848,840
21,551,414 23,286,081
9. Other income
Clearance certificates 171,197 172,368Fines and penalties - estate 52,744 76,305Insurance claims received - 357,416Interest received: Investment and cash balances 1,308,550 625,637Interest received: Overdue accounts 392,388 494,553Notices: Overdue accounts 20,400 20,900Rental income 127,753 105,470Estate agents registration fees 44,000 64,000Sundry income 11,587 6,814
2,128,619 1,923,463
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VAL DE VIE HOMEOWNERS' ASSOCIATIONAnnual Financial Statements for the year ended 28 February 2015
Net surplus/(deficit) from HOA operations 1,176,396 98,033 -79% -49% 461,136 5,533,627 191,674 2,300,092
Notes:
1 - New levy of R2 995 VAT incl. Annual increase of 6.02%
- 523 normal levies beginning of year, estimate of 9 stands to transfer = 532 by the end of year
2 - All new building sites applied to 3rd year extraordinary levy stands
- Refer to note 4 below for building stats
3 - New road levy of R2 450 VAT incl. Annual increase of 6.52%
- 70 new building sites beginning of year, estimate average of 64 sites per month
- Estimate total building activity at end of year - 482 houses (of which 65 are active sites)
4 Consist mainly of the following income sources:
Interest on Overdue Accounts 331,702
Interest on Cash Balances 1,171,083
5 Refer to "Expense analysis" - page 2
Important to note that 2015 year-to-date actuals (up to 2014/12) are not a true reflection of the year-end monthly average, as some annual costs will only be incurred in January and February
Variance % 2015 YTD Actuals
Dec-14
2015 Budget2016 Budget
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VAL DE VIE HOMEOWNERS' ASSOCIATIONFinancial Budgetfor Period Ending February 2016
Expense analysis
2015 YTD 2015
ExpensesNormal
levyTotal Monthly
Actuals Budget NotesExpenses
Normal
levyTotal Monthly Expenses
Normal
levyTotal Monthly
Total expenses (2016 largest to smallest) 21,782,417 1,815,201 21% 11% 1 17,981,573 1,498,464 19,614,622 1,634,552
If maintenance excluded 1,422,677 1,295,043 1,337,105
Effective year-on-year increase:
- 2015 YTD actuals 10%
- 2015 Budget 6%
Notes (specifically 2016 figures)
1 Important to note that 2015 year-to-date actuals (up to 2014/12) are not a true reflection of the year-end monthly average, as some annual costs will only be incurred in January and February
2015 YTD variance should be in line with inflation once annual expenses have been incurred
2 Inflationary increased budgeted for - landscaping contracts
Consumable budget not fully utilised 2014/12 YTD - additional purchases in Jan / Feb 2015
3 Increased security contract fee due to increase in number of residents (additional guards) and specialised equipment (additional technician)
Labour component to increase by 8%
4 2015 actual maintenance spent was lower than budgeted for. Increased number of scheduled maintenance items for 2016 as well as capital replacement (in line with 20 year Aurecon plan).
Higher than expected building activity to date - damages to roads etc. lead to increase in scheduled & reactive maintenance
5 Management Fee escalated by 6% (scope of services remains unchanged - inflationary increase)
6 Large increase in provision for depreciation
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9 Reduced number of active building sites
Larger % of monthly electricity costs allocated to lifestyle centre (based on actual historical consumption)
"2015 Actuals" figures distorded due to municipal water overrecovery
15% increase in electricity as indicated by Drakenstein
Year-on-year increase of 13% vs 2015 YTD actuals if water overrecovery adjusted to R10 000 per month
Water overrecovery due to effect of Municipal sliding scale water usage calculations: due to the overall Val de Vie usage, the HOA can utilise all free water units. However, not all Homeowners are allocated free
units if usage is less than a specified minimum consumption for a specific month. The HOA therefore receives more free units from Drakenstein than free units allocated to Homeowners.
2016 budget
% of total
Variance % 2015 Budget
% of total
2015 YTD Actuals (2014/12)
% of total
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VAL DE VIE HOMEOWNERS' ASSOCIATIONFinancial Budgetfor Period Ending February 2016
Capital expenses budgetI&M
Replacement/ Reserve
Improvement Fund TOTAL
LANDSCAPE 350,000 - 350,000
Upgrade of landscaping areas 300,000 - 300,000
Polo Fields Re-sowing of polo fields 50,000 - 50,000
SECURITY 674,133 - 674,133
General 102,500 - 102,500 Energizers - stinger bs120 Reach end of lifespan 80,000 - 80,000
Gate motors Strain on motors due to excessive opening & closing 22,500 - 22,500
Access points to the estate - main & L'Hugenote gate 94,233 - 94,233
Spike motors Replacement of gearboxes 6,500 - 6,500
Booms - knuckles & poles Reach end of lifespan 12,600 - 12,600
Biometric readers Reach end of lifespan 54,000 - 54,000
PT guest unit upgrade Additional entry at L'Hugenote gate 6,133 - 6,133
Loop detectors Reach end of lifespan 15,000 - 15,000