FINANCE
The audited Annual Financial Statements for the year ending 30th June 2017 have been approved by the Board and received by the City. They will be available at the AGM for review and discussion by the members.
Set out below is a comparison between the approved budget and actual income and expenditure for the year ending 30TH June 2017.
All figures are VAT exclusive.
Income exceeded the budgeted income by R 89544 as a result of:
1)therefund of the Bad debt provision by the City Council of R53810. The refund of the Bad debt provision is due to the ZAPO members being sufficiently disciplined payers that the actual arrears at year end were less than the bad debt provision. The City Council reimbursed ZAPO with 75% of the favourable balance. These funds will be placed in the company’s reserves.
2)interest of R35 734 earned on the replacement fund account established for the future replacement of the fence components.
Operating expenses were controlled closely being only R11031or 1% below budget. Repairs and maintenance on the fence were over budget by R14 722 due to necessary repairs on electrical boxes and implementation of cell phone access for the gates. This a very difficult area to predict accurately due to events like trees falling on the fence not being predictable. Having said that we are getting better every year and over compensate in more predictable ines of the budget to ensure the overall budget is always covered. In 2016/17 this spend was more than offset by various immaterial savings against budget across the rest of the expense lines.
Cash inflow for the year therefore was R102 003 (2016: R121 310). ZAPO will not be taxed on the profit as it is a registered PBO and was granted tax exemption status by SARS.
Capital cost of R26 111 was within budget by R 1 427 and was paid for wholly out of current operating expenditures.
The bank balance of R776 394as at 30 June 2017 includes the fence replacement sinking fund (R576 394) and operating reserves equivalent of at least 2 months future expenditure(R200000). The operating reserve willinclude the September 2017refund of the bad debt provision from the City Council of R89 127 (2015/16: R45 332).
This is a refund of the bad debt provision for the 2016/17 year. ZAPO members continue to be sufficiently disciplined payers that the actual arrears at year end were significantly less than the bad debt provision and the City Council reimbursed ZAPO with 75% of the favourable balance. These funds will be placed in the company’s reserves.