Questions and Answers

Should you have a question scroll to the bottom of this page and fill in the form detailing your question and we will endeavour to answer it.

During the St Francis Property Owners (SFPO) Non Profit Company (NPC) Annual General Meeting late last year, there were some questions that arose from the floor.

We have been asked to respond to the following questions by Roy Smith.

Question 1

  1. CORRECTION/CLARIFICATION/ENHANCEMENT 1

The Report reads: ‘Our mission is to help restore the value of our properties, by restoring St Francis Bay as a premier property investment destination’. This mission statement is incorrect. The correct mission statement can be found in the Business Plan approved by Council on 23 May 2018 which reads: ‘Our mission is to restore our infrastructure to a standard required to support a world class lifestyle destination’.

I am comfortable if the heading changes to Goal and reads: ‘Our goal is to help restore the value of our properties in St Francis Village and Canals as a premier property investment destination’

Answer 1

There are many definitions of Vision, Mission, Values, Goals and Objectives. If one subscribes to the following definition of the difference between the Mission and the Goals for a company:

“the difference between the two is that the ‘mission’ is the overall purpose of the organization, while the ‘goals’ are the things that should be achieved to attain the overall purpose of the company

then we are happy to make this distinction.

However, the “mission statement” in the business plan we submitted (as part of the SRA application) to the Municipality came from the St Francis Vision 2030 document and of course also applies to the greater St Francis area which was the scope of the Vision 2030 for St Francis. The “mission statement” included in the Annual Report talks directly to the interests of the property owners in the SRA demarcated area, and is the feedback we have received from many property owners as their primary personal interest in the SRA.

While we can adopt a business school approach to everything we do, we have to reach a broad group of property owners with information that is easily understood. Yes there might be contradictions in terminology, but we want to keep our communications interesting, relevant and understandable. 

Question 2

CORRECTION/CLARIFICATION/ENHANCEMENT 2: ACCOMPLISHMENTS IN YEAR 1 – CCTV CAMERAS

The extract below from the report refers:

Year 1’s expenditure was only R 1,127,387. The total cost over 10 years will be R 13, 158, 803. The saving is R 5,84,197 i.e. 31%

Answer 2

Our forecasted estimated savings are c 32% and different to your calculation of 31% as a result of rounding.

Question 3

CORRECTION/CLARIFICATION/ENHANCEMENT 3 – ST FRANCIS BAY ENTRANCE PROJECT

The story line in the executive summary does not seem to add up.

3.1.  In paragraph 2 Accomplishments in Year 1 – Roads, the following is recorded:

The entrance to St Francis Bay actual project cost of R 2,001,44 is the baseline.

3.2.  You reported that the Village Entrance Expenditure was R 1,629,298

3.3.  Balance = Actual Cost – Expenditure: R 2,001,144 – R 1,629,298 = R 371 846.

3.4.  If The Links contributed R305,951 then there is a shortfall of R 65 895. The last line in the revenue table in the Annual Report refers. It is reported that the Links have committed R340,150 to the Village Entrance project. Does this mean they will still be contributing a further R34,199 in 2019/2020?

3.5.  The same revenue table above refers. I found it very confusing that The Links’ Commitment to Village Entrance was reported as a revenue stream. I initially thought it was included in the revenue total. What I understand from this table is that The Links will during 2019/2020 transfer R 340,150 to the NPC and the NPC will then settle the full account. At the meeting I heard someone (Gert Vorster?) say no, The Links paid their contribution directly to the Contractor.

3.6.  I am of the opinion that this should be clarified.

Answer 3

The AGM report back reconciles back to the 30 June 2019 audited annual financial statements of the NPC (“Financial Statements”). As at 30 June 2019 the project was not completed (cost incurred to date was c R 1,63m as the cost of the George Road car park of c R 9k must be excluded). Additional cost to completion in the new financial (as per the monthly management accounts) of c R 473k has been incurred, which brings the total cost to c R 2,1m. Further, the contribution from the Links is c R 340k, which was received in cash during the new financial year. The net cost of the project is thus c R 1,76m.

Question 4

CORRECTION/CLARIFICATION/ENHANCEMENT 4 – DONATIONS/REVENUE

4.1. In the executive summary you report that donations amount to R242,682 but in the AFS it amounts to R 337 607. As a reader of your executive summary there would appear to be a discrepancy.

 

AFS

   

Donations

R 337 607

Donation – General

 

Donation – Spit

R 236 092

Donation – George

R 8 590

Donation – Pathway

R 92 925

Exec Summary

R 242 682

R 242 682

Links Commitment

4.2. If a reader adds the figures in the Revenue in Year 1 table (excluding The Links’ Commitment) it would appear as if there is a discrepancy.

Answer 4

The donation for the Sea Vista pathway of c R 92k was excluded as the NPC is facilitating the construction and you will notice there was an equal and opposite expense of c R 92k, thus a zero impact on the Financial Statements.

Question 5

CORRECTION/CLARIFICATION/ENHANCEMENT 5 – EXPENDITURE IN YEAR 1

The extract Expenditure in Year 1’ below refers. You only reported on part of the total expenditure by excluding cost of operations i.e. R588,883. It is reasonable to assume that a person reading the table may conclude that Operating Expenditure was only R 3.1 m rather than R 3,9 m.

.

AFS

Operating Expenses

R 3 814 235

Accounting Fees

R 38 820

Exec Summary

R 3 225 352

Advertising R 0

 

Auditors renumeration

R 36 166

Bank charges

R 6 276

Communication to members

R 2 421

Computer expenses

R 2 338

Employee costs

R 185 385

Entertainment

R0

Equipment hire

R 450

General expenses

R 751

Insurance

R 26 756

Kouga Admin Fee

R 188 745

Printing and Stationary

R 2 140

Project Anne Avenue

R0

Project – CCTV rental and surveillance

R 1 127 387

Project – Pathway

R 92 925

Project – River and beach

R 460 077

Project – Roads survey and design

R 1 637 888

Project Spit emergency

R0

SARS expenditure

R 5 710

Staff welfare

R0

Venue Hire

R0

Legal Contingency

R0

R 1 127 387

R 460 077 R 1 637 888

Operating Contingency R 0

Answer 5

The AGM report back section was specific and intentionally only project focused and the Financial Statements, as well as the monthly management accounts clearly set out the total operating expenditure, which includes the various project expenditure.

Question 6

CORRECTION/CLARIFICATION/ENHANCEMENT 6 – KOUGA EXPENDITURE

I remain of the view that the Kouga Municipal Expenditure of R 1,4 under the heading Financial Highlights is inappropriate. It appears as a line item on your executive summary but nowhere in the AFS. In my opinion it should have been dealt with under a different heading.

Answer 6

We remain and are comfortable with the disclosure at the AGM as well as the accompanying narrative.

Question 7

CORRECTION/CLARIFICATION/ENHANCEMENT 7 – CASH FLOW

A point of clarification in the statement of cash flow. I could not reconcile the R7,173,283 Cash Receipt from Customers. It maybe my lack of understanding but is this not the sum of levies and donations?

Answer 7

We set out following an income statement and cash flow reconciliation. Also note you are including donations and interest in your analysis of c R 7,1m, which is incorrect.

Question 8

CORRECTION/CLARIFICATION/ENHANCEMENT 8 – BUDGET

The budget on the last page is confusing. It shows that Kouga Municipal Income is R 0,0 but the KM Contribution is R 3,0 m which is added to SAR Levy to get a total revenue of R10,04 m

8.1.  The Council Minutes of 23 May 2018 1 b) below refers – ‘the contribution of R 3,0 m reflected under budget must be removed’ – yet it is in the 2019/2020 budget just as a different line item.

8.2.  I assume that this an error and that the budget will be corrected? Therefore, my question at the AGM: What is the correct budget?

Answer 8

The budget is agreed annually with Kouga after receiving approval from our members at the AGM on the coming years projects.

The budget is however an internal tool, to measure ourselves with regards to levies receipted vs expected. This is to ensure that we are in line with tendered project costs and that we manage operational costs (which are also presented at the AGM) prudently.

We report monthly to Kouga in this regard and our financial results are published on our website –  https://stfrancispropertyowners.co.za/sra-meetings-finance/

Contact Us

+27 42 294 0594

info@sfpo..co.za

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