2014 ANNUAL REPORT. BANTRY COURT SHARE BLOCK LIMITED (Registration No. 1926/002856/06)

Transcription

1 2014 ANNUAL REPORT (Registration No. 1926/002856/06)

2 annual report 2014 Contents» Company Information» Notice of Annual General Meeting» Schedule of Insurances» Minutes of 2014 Annual General Meeting» Chairman s Report» Audit Committee Report» Audited Annual Financial Statements» Supplementary information» Owner Information Update» Form of Proxy Registration No. 1926/002856/06 Registered Office Tannery Park 23 Belmont Road Rondebosch 7700 Directors J W Maree (Chairman) I Sacker D S Cameron E L Reppert E M Strickland Managing Agent Ovland Management Services (Proprietary) Limited PO Box 155 Rondebosch 7701 Transfer Secretaries Ovland Management Services (Proprietary) Limited Tannery Park 23 Belmont Road Rondebosch 7700 PO Box 155 Rondebosch 7701 Bankers First National Bank Great Westerford 240 Main Road Rondebosch 7700 Auditors Mazars PO Box 134 Century City 7446 Mazars House Rialto Road Grand Moorings Precinct Century City 7441

3 notice of annual general meeting Notice is hereby given that the twenty-seventh Annual General Meeting of Shareholders of Bantry Court Share Block Limited will be held at the Ambassador Hotel, Victoria Road, Bantry Bay on Monday, 29 June 2015 at 17h30. AGENDA 1. Welcome 2. Notice of Meeting 10. Insurance: To receive and approve the schedule of insurance for the ensuing year. 11. Approval of Directors Remuneration: Proposed remuneration for the ensuing year is R (past year R ). 12. General By order of the Board 3. Attendance, proxies and apologies 4. Establishment of Quorum 5. Presentation of Chairman s Report 6. Presentation of Audited Annual Financial Statements, together with the Directors Report, the Auditors Report and the Audit Committee Report, in respect of the year ended 31 December Appointment of Auditors for the year ending 31 December F J Jenkings Ovland Management Services (Proprietary) Limited Secretaries Cape Town 1 June Election of Directors: All the directors retire annually in terms of the Articles of Association, but, being eligible, offer themselves for re-election. Election of Directors to be considered with other nominations submitted, if any. 9. Appointment of Audit Committee: Three Directors of the Company to be appointed to the Audit Committee.

4 EXPLANATORY NOTES OF THE MEETING NOTICE AND AGENDA 1. Record Date: The record date set by the Board in terms of Section 59(1) of the Companies Act, which is the date on which the Company s share register is closed for the purpose of determining which members are entitled to receive this Notice, and to participate in and vote at this Annual General Meeting, is 1 June Proxies: In terms of Section 58 of the Companies Act, each member of the Company, entitled to attend and vote at this Annual General Meeting, is entitled to appoint a proxy to attend, speak and vote in the place of the member. A proxy need not be a member of the company. The proxy form, included with the Annual Report, must be completed and received at the registered office of the Company at least 48 (forty-eight) hours before the scheduled commencement of the meeting. 4. Chairman: The Chairman of the Board will preside at the Annual General Meeting. If the Chairman is absent, or unwilling to preside, one of the Directors present will chair the Annual General Meeting. 5. Quorum: A quorum for an Annual General Meeting is three members present in person or by proxy. 6. Voting: 6.1 Ordinary Resolution: 50% (fifty percent) of the votes cast on an ordinary resolution by members present or represented and voting at the Annual General Meeting in favour of the resolution, are required for it to be adopted. 6.2 Special Resolution: 75% (seventy-five percent) of the votes cast on a special resolution by members present or represented and voting at the Annual General Meeting in favour of the resolution, are required for it to be adopted. 3. Identification: In terms of the Companies Act, the participants at the meeting Members or their Proxy must provide satisfactory identification before being entitled to attend or participate in the meeting, and the person presiding at the Annual General Meeting must be reasonably satisfied that the right of a person to participate and vote has been reasonably verified, before they will be permitted to participate or vote. Forms of identification include a valid identity document, driver s licence or passport. 7. Directors: In terms of the Company s Memorandum and Articles of Association, all Directors retire each year at the Annual General Meeting. Retiring Directors are eligible for re-election. 8. Remuneration of Directors: In accordance with Section 66(9) of the Companies Act, any remuneration of the Directors must be approved by the members at the Annual General Meeting by means of a Special Resolution.

5 schedule of insurances New policy with effect 1 January 2015 Class of insurance Sum insured limit* CORPORATE PLAN & FIRE - BUILDINGS Buildings R Escalation (6%) R Inflation (11.5%) R Plant, Machinery & Contents R OFFICE CONTENTS R BUSINESS INTERRUPTION (12 month indemnity) Gross Revenue R AICOW R MONEY R BUSINESS ALL RISKS R GLASS R ELECTRONIC EQUIPMENT R LIABILITIES Public Liability R Top Up Liability R MOTOR R SASRIA riot and strike (as per master policy) FIRE R PLANT, MACHINERY & CONTENTS R MONEY R MOTOR R *Mazars did not verify this information

6 minutes of 2014 ANNUAL GENERAL MEETING Minutes of the Annual General Meeting of shareholders held at the Winchester Mansions Hotel, 221 Beach Road, Sea Point at 17h30 on 30 June PRESENT: I Sacker (Chairman) D S Cameron E L Reppert E Strickland J W Maree 13 shareholders representing 23 weeks in person 198 shareholders representing 470 weeks represented by proxy APOLOGIES: Apologies were received from 9 shareholders. IN ATTENDANCE: F J Jenkings [representing Ovland Management Services (Proprietary) Limited] The Chairman welcomed the shareholders to the meeting and announced that, as a quorum was present, the meeting was duly constituted. It was unanimously agreed to take the notice of meeting as read. The Annual Financial Statements, Report of the Directors and Report of the Auditors for the year ended 31 December 2013 were tabled. On a motion from the Chairman, the meeting unanimously agreed to take these as read. The Chairman opened the meeting for questions. Mr. Cameron indicated that he felt it was the appropriate time to commend the management and staff on the way they maintain the resort, while containing costs. No questions were raised in respect of the financial statements. Mr. Cameron then seconded the motion by the Chairman that the Annual Financial Statements, the Report of the Auditors and all the acts taken by the directors during the year ended 31 December 2013, be approved. The motion was unanimously carried. The Chairman then requested Mr. Jenkings of Ovland Management Services (Proprietary) Ltd, the company s secretary, to deal with the appointment of directors. Mr. Jenkings advised that, in terms of the Company s Articles of Association, all the directors retire annually at the Annual General Meeting. All the existing directors had made themselves available for re-election and had been duly nominated to serve again. In addition Mr. A N Ridl had been nominated as a director, by the Club Leisure Group. On a motion from Mr. Jenkings, seconded by Ms. A Andrews, the meeting unanimously agreed to vote for the directorate by way of a show of hands. The voting was recorded as follows: Mr. I Sacker 20 votes Mr. E L Reppert 15 votes Mr. D S Cameron 16 votes Mr. E Strickland 16 votes Mr. J W Maree 16 votes Mr. A N Ridl 0 votes Mr. Jenkings accordingly announced that Messrs Sacker, Reppert, Cameron, Strickland and Maree would constitute the Board of Directors for the forthcoming year. Mr. Jenkings advised the meeting that the 2008 Company s Act requires shareholders to approve directors remuneration for the ensuing year. It was proposed that the directors remuneration for the ensuing year be fixed at R The motion was seconded by Mr. Strickland. Mr. Ridl indicated that in his opinion the remuneration was excessive in relation to the size of the resort, and the fact that the company is also paying a managing agent. VOASA (the timeshare regulatory body) recommended

7 that for a resort of this size, directors fees should be set at no more than R3 000 per meeting, and that there should be no more than four meetings per year. Mr. Jenkings outlined the current structure where the local directors meet monthly, while the out of town directors attend four meetings per annum. After discussion and at the request of Mr. Ridl, it was agreed that the question of directors emoluments would be reviewed before the next AGM. The matter was put to a vote and the motion was carried by 10 votes to five. On a motion by Mr. Jenkings, seconded by Mrs. M Andrews, it was resolved that Messrs. E Strickland and J Maree be appointed as the Audit Committee for the ensuing year. The Chairman tabled the schedule of insurances for 2014 and asked if there were any questions relating to the insurance schedule. As there were no questions, on a motion by the Chairman, seconded by Mr. Strickland, it was resolved that the schedule of insurance values for 2014, as determined by management in collaboration with the company s brokers and as set out in the notice convening the meeting, be and was hereby approved. On a motion from the Chairman, seconded by Ms. A Andrews, it was resolved that Mazars continue as auditors of the company for the ensuing year. Mr. Charilaou then enquired whether there were any plans to provide toilet facilities near the pool deck. Mr. Jenkings advised that, as a result of numerous requests from owners, the matter is being addressed in conjunction with the owner of unit 3. Once plans and costs have been finalised, shareholders would be advised. Mr. Cameron then asked for a vote of thanks to the Chairman for his dedication to the resort and his input on all matters affecting the resort. Mr. Sacker expressed his thanks to his co-directors for their continued support and service to the resort, and to the managing agents for the work that they put in. There being no further business, the Chairman thanked the members for their attendance and declared the meeting closed at 17h50. Members were invited to join the board for refreshments. Confirmed I Sacker CHAIRMAN There being no further statutory business, the Chairman invited comments from the floor. Mr. Gunning, acknowledging that the resort has been affected by nearby construction work for a number of years, felt that standards had been allowed to slip. He felt particularly that the pool deck and the parking garage were in need of attention and asked whether these would be attended to once construction was completed. Mr. Jenkings responded that the pool deck was already being attended to and that management would be looking at all other areas in due course. Mr. Charilaou asked when owners could expect the construction to be completed. Mr. Daly advised that it was anticipated that all work would be finished by the end of July 2014.

8 chairman s report FOR THE YEAR ENDED 31 DECEMBER 2014 It gives me pleasure to present this, my first, Chairman s Report in respect of the activities at Bantry Bay for the year ended 31 December After the 2014 Annual General Meeting, Mr I Sacker, who has tirelessly served the Company as Chairman for many years, indicated that, while he would remain a director, he felt that he would like to stand down as Chairman. I would like to take this opportunity, together with my fellow directors, of thanking him on behalf of all the owners at Bantry Bay, for the many years of unstinting service as Chairman. We look forward to many more years of service as a member of the Board. In accordance with the refurbishment programme for the resort, the balustrades and patio doors on the third floor were upgraded and we will be upgrading the fourth floor during the 2015 maintenance weeks. In conjunction with the door upgrades, the lighting and fabrics in the third floor units were all replaced. The remainder of the units will be attended to in line with our five year refurbishment programme. At the 2014 Annual General Meeting it was suggested that the fourth and fifth floor landings be enclosed to protect owners from the elements while waiting for lifts. The Board approved this upgrade and the work was completed in July. Owners and guests have certainly appreciated this improvement. During the year a new staff rest room was created on the fifth floor as well as a new computer room/lounge. This ensures more privacy when using the computer facility and the room is also available to owners who wish to hold small meetings at the resort. The recycling facility continues to be well utilised and I would encourage owners who are not yet using this facility to start doing so to reduce the waste that has to be dumped in our landfills. The attached financial statements set out the results of the Company in detail and as in the past we have included unaudited supplementary schedules giving more detail in respect of certain items which are aggregated by the auditors and reflecting the position of the Company based on its actual assets and liabilities, as these are now excluded in terms of current accounting practices. The financial statements continue to show a healthy position with net current assets reflecting a healthy balance of R (2013: R ) with net cash resources of R (2013: R ). At these levels we are comfortable that we have sufficient reserves to meet any unexpected contingency. The fact that this was achieved, while in no measure reducing the standards of the resort bears testimony to the tight control over expenses exercised by both the management at the resort and our managing agent, Ovland Management Services. We all owe a debt of gratitude to them for the outstanding work they are doing to maintain the resort at the high standard demanded by the Board, within the budget constraints placed on them. It is pleasing to note that the high standard at the resort is recognised by our peers and the resort was once again awarded RCI Gold Crown status at the last RCI Oscars award function. This speaks volumes about the quality of the resort. At the 2014 Annual General Meeting a shareholder, representing one of the points clubs, raised objections to the remuneration paid to the directors. When it was pointed out that the local directors attend monthly meetings with management between the quarterly Board meetings, the point was made that most resorts have four directors meetings per annum, and the managing agent is left to manage the resort in conjunction with the on site management. Although the directors remuneration for the ensuing year was approved at the meeting, the Board agreed to review the way the resort is being run and report back at the 2015 Annual General Meeting. The matter has been discussed at length and, while both the Board and managing agent are cognisant of the need to save costs, the existing system

9 has worked well for nearly 30 years and the concern is that standards may drop. As an interim measure it has been agreed that, instead of monthly meetings with management, there will in future be only one meeting per quarter between board meetings. The proposal is that local directors remuneration be reduced accordingly and the out of town directors have agreed to take no increase in remuneration for the coming year. Shareholders will be asked to vote on these proposals at the forthcoming Annual General Meeting. In addition our managing agent agreed not to increase their remuneration for this year. My fellow directors and I always welcome constructive criticism, as that is the only way that we can gauge the levels of satisfaction or otherwise among the owners. While comments on the guest questionnaires are brought to our attention, we seldom get any other feedback from shareholders. If you have any criticism or comments, please feel free to contact me, or the Resort s managing agent. I would encourage those shareholders who are able to do so, to attend the Annual General Meeting, notice of which is included in this document. If you are unable to attend the meeting personally, I encourage you to send your proxy timeously to ensure that your wishes are reflected in the voting at the meeting. My personal thanks go to the members of the Board for their unselfish and unstinting support and contribution to the past year. J Maree CHAIRMAN Cape Town 1 June 2015

10 audit committee report FOR THE YEAR ENDED 31 DECEMBER 2014 As required by the Companies Act No. 71 of 2008 an Audit Committee was elected at the 2014 Annual General Meeting. The Audit Committee was charged with the duties as set out in the Act. The members of the Audit Committee are: E Strickland J Maree Members of the Audit Committee have at all times acted in an independent manner. The Audit Committee has discharged its functions and attended inter alia to the following matters: Reviewed the Annual Financial Statements for the year ended 31 December Reviewed the external audit report on the Annual Financial Statements. Evaluated the effectiveness of financial risk management, controls and the governance process. Approved the engagement terms of the external auditor. The Audit Committee has confirmed the independence of the external auditor. J Maree CHAIRMAN

11 ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014

12 General Information Country of incorporation and domicile Nature of business and principal activities Directors Registered office Bankers Auditors Secretary South Africa Share block company I Sacker E L Reppert D S Cameron E M Strickland J W Maree Tannery Park 23 Belmont Road Rondebosch 7700 First National Bank, a division of FirstRand Bank Limited Mazars Registered Auditor Ovland Management Services Proprietary Limited Company registration number 1926/002856/06 Level of assurance Preparer These annual financial statements have been audited in compliance with the applicable requirements of the Companies Act 71 of The annual financial statements were independently compiled by: Ruan van der Burgh Chartered Accountant (SA) Published 15 May

13 Index The reports and statements set out below comprise the annual financial statements presented to the shareholders: Index Page Certificate of Company Secretary 3 Independent Auditor's Report 4-5 Directors' Responsibilities and Approval 6 Directors' Report 7-8 Statement of Financial Position 9 Statement of Profit or Loss and Other Comprehensive Income 10 Statement of Changes in Equity 11 Statement of Cash Flows 12 Accounting Policies Notes to the Annual Financial Statements The following supplementary information does not form part of the annual financial statements and is unaudited: Detailed Income Statement 29 2

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18 Directors' Report The directors submit their report for the year ended 31 December Nature of business The company is a share block company and operates principally in South Africa. There have been no material changes to the nature of the company's business from the prior year. 2. Review of financial results and activities The annual financial statements have been prepared in accordance with International Financial Reporting Standards and the requirements of the Companies Act 71 of The accounting policies have been applied consistently compared to the prior year. Full details of the financial position, results of operations and cash flows of the company are set out in these annual financial statements. 3. Authorised and issued share capital There have been no changes to the authorised or issued share capital during the year under review. 4. Dividends No dividends were declared or paid to the shareholders during the year under review. 5. Directors The directors of the company during the year and at the date of this report are as follows: I Sacker E L Reppert D S Cameron E M Strickland J W Maree 6. Special resolutions No special resolutions, the nature of which might be significant to the shareholders in their appreciation of the state of affairs of the company, were made by the company during the period covered by this report. 7. Events after the reporting period The directors are not aware of any material reportable event which occurred after the reporting date and up to the date of this report. 8. Going concern The directors believe that the company has adequate financial resources to continue in operation for the foreseeable future and accordingly the annual financial statements have been prepared on a going concern basis. The directors have satisfied themselves that the company is in a sound financial position and that it has access to sufficient borrowing facilities to meet its foreseeable cash requirements. The directors are not aware of any new material changes that may adversely impact the company. 9. Auditors Mazars will continue in office in accordance with section 90 of the Companies Act 71 of

19 Directors' Report 10. Secretary The company's secretary is Ovland Management Services Proprietary Limited. Business address Tannery Park 23 Belmont Road Rondebosch

20 Statement of Financial Position Figures in Rand Notes Assets Non-Current Assets Investment property Current Assets Inventories 3 289, ,305 Loans to shareholders 4 4,830,468 4,830,468 Trade and other receivables 5 242, ,196 Cash and cash equivalents 6 5,339,237 4,541,379 10,702,151 9,817,348 Total Assets 10,702,152 9,817,349 Equity and Liabilities Equity Share capital 7 1,734 1,734 Retained income 1,436,747 1,028,812 Liabilities 1,438,481 1,030,546 Current Liabilities Loans from shareholders 4 4,830,468 4,830,468 Current tax payable 13,582 25,073 Trade and other payables 8 4,419,621 3,931,262 9,263,671 8,786,803 Total Equity and Liabilities 10,702,152 9,817,349 9

21 Statement of Profit or Loss and Other Comprehensive Income Figures in Rand Notes Revenue 9 8,371,471 7,460,179 Other income 182, ,036 Operating expenses (8,433,897) (7,903,786) Operating profit (loss) ,888 (270,571) Investment revenue , ,674 Profit before taxation 499,457 28,103 Taxation 12 (91,522) (69,084) Profit (loss) for the year 407,935 (40,981) Other comprehensive income - - Total comprehensive income (loss) for the year 407,935 (40,981) 10

22 Statement of Changes in Equity Figures in Rand Share capital Retained income Total equity Balance at 01 January ,734 1,069,793 1,071,527 Loss for the year - (40,981) (40,981) Balance at 01 January ,734 1,028,812 1,030,546 Profit for the year - 407, ,935 Balance at 31 December ,734 1,436,747 1,438,481 Note 7 11

23 Statement of Cash Flows Figures in Rand Notes Cash flows from operating activities Cash generated from operations ,302 82,472 Interest income 379, ,674 Tax paid 15 (103,013) (32,686) Net cash from operating activities 797, ,460 Total cash movement for the year 797, ,460 Cash at the beginning of the year 4,541,379 4,192,919 Total cash at end of the year 6 5,339,237 4,541,379 12

24 Accounting Policies 1. Presentation of Annual Financial Statements The annual financial statements have been prepared in accordance with International Financial Reporting Standards, and the Companies Act 71 of The annual financial statements have been prepared on the historical cost basis, except for the measurement of certain financial instruments at fair value, and incorporate the principal 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 the annual financial statements and related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the annual financial statements. Significant judgements include: Impairment of financial assets The company assesses its trade receivables and loans receivables for impairment on an ongoing basis. In determining whether an impairment loss should be recorded in profit or loss, the company makes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flows of that financial asset. Taxation Judgement is required in determining the provision for income taxes due to the complexity of legislation. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The company recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. The company recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred income tax assets requires the company to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the company to realise the net deferred tax assets recorded at the end of the reporting period could be impacted. Operating lease commitments The company has entered into various lease agreements relating to certain of its office equipment. The directors have determined, based on all available information, that the lessor retains the significant risks and rewards of ownership of the equipment and, consequently, the leases have been accounted for as operating leases. 13

25 Accounting Policies 1.2 Investment property Investment property is recognised as an asset when, and only when, it is probable that the future economic benefits that are associated with the investment property will flow to the enterprise, and the cost of the investment property can be measured reliably. Investment property is initially recognised at cost, including transaction costs. Fair value A gain or loss arising from a change in fair value is included in net profit or loss for the period in which it arises. The company carries investment property at a nominal value as the investment property has no economical value to the company. 1.3 Financial instruments Classification The company classifies financial assets and financial liabilities into the following categories: Loans and receivables Financial liabilities measured at amortised cost Classification depends on the purpose for which the financial instruments were obtained / incurred and takes place at initial recognition. Classification is re-assessed on an annual basis. Initial recognition and measurement Financial instruments are recognised initially when the company becomes a party to the contractual provisions of the instruments. The company classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement. Financial instruments are measured initially at fair value, including transaction costs for those that are not at fair value through profit or loss. Subsequent measurement Loans and receivables are subsequently measured at amortised cost, using the effective interest rate method, less accumulated impairment losses. Financial liabilities at amortised cost are subsequently measured at amortised cost, using the effective interest rate method. Derecognition Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the company has transferred substantially all risks and rewards of ownership. Financial liabilities are derecognised when the obligation is discharged, cancelled or expires. 14

26 Accounting Policies 1.3 Financial instruments (continued) Impairment of financial assets At each reporting date the company assesses all financial assets to determine whether there is objective evidence that a financial asset or group of financial assets has been impaired. For amounts due to the company, significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy and default of payments are all considered indicators of impairment. Impairment losses are recognised in profit or loss. Reversals of impairment losses are recognised in profit or loss. Where financial assets are impaired through use of an allowance account, the amount of the loss is recognised in profit or loss within operating expenses. When such assets are written off, the write off is made against the relevant allowance account. Subsequent recoveries of amounts previously written off are credited against operating expenses. Loans to (from) shareholders Loans to shareholders are classified as loans and receivables. Loans from shareholders are classified as financial liabilities measured at amortised cost. Trade and other receivables Trade and other receivables are classified as loans and receivables. Trade receivables are measured at initial recognition at fair value, plus any transaction costs using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the asset s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in profit or loss within operating expenses. When a trade receivable is uncollectable, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against operating expenses in profit or loss. Trade and other payables Trade payables are initially measured at fair value, less any transaction costs and are subsequently measured at amortised cost, using the effective interest rate method. Trade and other payables are classified as financial liabilities at amortised cost. Cash and cash equivalents Cash and cash equivalents comprise cash on hand and bank balances. These are initially recorded at fair value plus any transaction costs and subsequently measured at fair value. 15

27 Accounting Policies 1.4 Tax Tax expenses Current taxes are recognised as income or an expense and included in profit or loss for the period, except to the extent that the tax arises from: a transaction or event which is recognised, in the same or a different period, to other comprehensive income, or Current tax is charged or credited to other comprehensive income if the tax relates to items that are credited or charged, in the same or a different period, to other comprehensive income. 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 prior periods 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 end of the reporting period. Deferred tax assets and liabilities No deferred taxation is provided. 1.5 Leases A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. Operating leases lessee Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease liability. This liability is not discounted. Any contingent rents are expensed in the period they are incurred. 1.6 Inventories Inventories are measured at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. The cost of inventories comprises of all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The cost of inventories is assigned using the first-in, first-out (FIFO) formula. The same cost formula is used for all inventories having a similar nature and use to the entity. When inventories are sold, the carrying amount of those inventories are recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value, are recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs. 16

28 Accounting Policies 1.7 Impairment of non-financial assets The company assesses at each reporting period end whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is determined. An asset s recoverable amount is the higher of an asset s or cash-generating unit s fair value less costs to sell and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or company's of assets. When the carrying amount of an asset or cash-generating unit s exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss. An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in profit or loss. An entity assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for assets that may no longer exist or may have decreased. If any such indication exists, the recoverable amounts of those assets are estimated. The increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods. A reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation other than goodwill is recognised immediately in profit or loss. 1.8 Share capital and equity An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Ordinary shares are classified as equity. 1.9 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. The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs. The expected cost of profit sharing and bonus payments is recognised as an expense when there is a legal or constructive obligation to make such payments as a result of past performance. 17

29 Accounting Policies 1.10 Revenue Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for goods and services provided in the normal course of business, net of trade discounts and volume rebates, and value added tax. Revenue from levies charged in the timeshare scheme is recognised when all the following conditions have been satisfied: the amount of revenue can be measured reliably; it is probable that the economic benefits associated with the transaction will flow to the company; and the costs incurred or to be incurred in respect of the transaction can be measured reliably. When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue shall be recognised only to the extent of the expenses recognised that are recoverable. Interest is recognised, in profit or loss, using the effective interest rate method Borrowing costs Borrowing costs are recognised as an expense in the period in which it is incurred Related parties Individuals or entities are related parties if any one party has the ability, directly or indirectly, to control or jointly control the other party or exercise significant influence over the other party in making financial and/or operating decisions. 18

30 Notes to the Annual Financial Statements Figures in Rand Investment property Nominal value Accumulated depreciation Carrying value Nominal value Accumulated depreciation Carrying value Investment property Details of property Bantry Court The property consists of 36 units in the building known as Bantry Court situated at 44A Victoria Road, Bantry Bay, Cape Town. - Purchase price: 3,527,869 3,527,869 - Additions since purchase 356, ,703 - Change in accounting policy (3,884,571) (3,884,571) The investment property has no economic value to Bantry Bay Court Share Block Limited and is therefore carried at a nominal value. Consequently no valuation has been performed and no further disclosure regarding the fair value (in terms of IFRS 13: Fair value measurement) has been deemed necessary. 3. Inventories 1 1 Consumables 289, ,305 Inventories to the value of R 118,450 (2013: R Nil) have been written off during the year and included in the statement of comprehensive income. 4. Loans to (from) shareholders Loans from shareholders (4,830,468) (4,830,468) The loans are unsecured and interest free, in terms of Article 10 of the Articles of Association, the loans are only repayable if authorised by a Special Resolution or if the company is wound up. The terms of repayment are therefore not fixed. The loans are recorded at cost as there is uncertainty as to the timing of future cash flows. Loans to shareholders The loans are unsecured and interest free. 4,830,468 4,830, Current assets 4,830,468 4,830,468 Current liabilities (4,830,468) (4,830,468)

31 Notes to the Annual Financial Statements Figures in Rand Loans to (from) shareholders (continued) Credit quality of loans to shareholders The loans to shareholders are effectively off-set by the loans from shareholders. The credit quality is therefore directly related to these loans being the same monetary amounts and effectively yielding a zero net balance. Fair value of loans to and from shareholders The loans are interest free and have no fixed terms of repayment. Accordingly, the loans are recorded at cost as the fair value of the loans could not be ascertained as the future cash flows could not be reliably determined. Credit risk of loans to shareholders The credit risk is directly related to the loans receivable and loans payable being the same monetary amounts and effectively yielding a zero net balance. Credit risk is therefore negligible. 5. Trade and other receivables Prepayments 11,855 11,699 Sundry debtors 12,309 19,126 Trade receivables 120,575 65,773 Value added tax 98,105 87,598 Credit quality of trade and other receivables The credit quality of trade and other receivables that are neither past due nor impaired are evaluated by management on an ongoing basis. In assessing the credit quality of customers, management takes into account their financial position, past experience and other factors. Fair value of trade and other receivables Trade and other receivables are carried at amortised cost, with the fair value being approximated by such cost. Trade and other receivables past due but not impaired Trade and other receivables which are less than 3 months past due are not considered to be impaired. At 31 December 2014, trade and other receivables amounting to R 105,546 (2013: R 55,446) were past due but not impaired. The ageing of amounts past due but not impaired is as follows: 242, ,196 1 month past due 1,959 1,021 2 months past due 1,926 1,190 3 months past due 101,661 53, ,546 55,446 20

32 Notes to the Annual Financial Statements Figures in Rand Trade and other receivables (continued) Credit risk The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned above. The company does not hold any collateral as security. 6. Cash and cash equivalents Cash and cash equivalents consist of: Bank balances 5,339,237 4,541,379 Fair value of cash and cash equivalents Due to the short-term nature of cash and cash equivalents, the carrying amount is deemed to approximate fair value. Credit quality of cash and cash equivalents Bank balances are held with reputable financial institutions of high credit standing. 7. Share capital Authorised 8,670 Ordinary shares of R 0.20 each 1,734 1,734 Issued 8,670 Ordinary shares of R 0.20 each 1,734 1, Trade and other payables Accrued expenses 410, ,143 Amounts received in advance 3,736,448 3,411,174 Other payables 36,529 - Payroll accruals 35,755 - Trade payables 200, ,945 Fair value of trade and other payables Trade and other payables are carried at amortised cost, with the fair value being approximated by such cost. 9. Revenue 4,419,621 3,931,262 Levy income 8,371,471 7,460,179 21

33 Notes to the Annual Financial Statements Figures in Rand Operating profit (loss) Operating profit (loss) for the year is stated after accounting for the following: Operating lease charges Premises Contractual amounts 76,500 65,625 Equipment Contractual amounts 208, , , ,813 Profit (loss) on sale of property, plant and equipment 1,405 (4,399) Loss on derecognition of property, plant and equipment (488,657) (327,054) Employee costs (2,049,290) (1,883,650) 11. Investment revenue Interest revenue Bank 274, ,006 Levy interest 105,081 79, Taxation Major components of the tax expense 379, ,674 Current Local income tax - current period 91,522 69,084 Reconciliation of the tax expense Reconciliation between applicable tax rate and average effective tax rate. Applicable tax rate % % Exemption - Section 10(1)e (9.68)% % 13. Auditor's remuneration % % Fees 74,900 60, Cash generated from operations Profit before taxation 499,457 28,103 Adjustments for: Interest received (379,569) (298,674) Changes in working capital: Inventories (28,297) (54,845) Trade and other receivables (58,648) 34,583 Trade and other payables 488, , ,302 82,472

34 Notes to the Annual Financial Statements Figures in Rand Tax paid Balance at beginning of the year (25,073) 11,325 Current tax for the year recognised in profit or loss (91,522) (69,084) Balance at end of the year 13,582 25, Commitments Operating leases as lessee (expense) (103,013) (32,686) Minimum lease payments due - within one year 208, ,872 - in second to fifth year inclusive 356, ,908 Operating lease payments represent rentals payable by the company for certain of its equipment. Leases are negotiated for an average term of seven years and rentals are fixed for an average of three years. 17. Related parties ` Relationships 564, ,780 Shareholders Other Members of key management As per the share register of the Shareblock The Body Corporate of Bantry Court I Sacker E L Reppert D S Cameron E M Strickland J W Maree Related party balances Loan accounts - Owing (to) by related parties Shareholders' loans (4,830,468) (4,830,468) Shareholders' loans 4,830,468 4,830,468 The Body Corporate of Bantry Court (36,529) 1,074 Related party transactions Compensation to directors Directors' emoluments 273, ,752 23

35 Notes to the Annual Financial Statements Figures in Rand 18. Directors' emoluments Executive 2014 Emoluments Total For services as directors 273, , Emoluments Total For services as directors 253, , Risk management Capital risk management The company's objectives when managing capital are to safeguard the company's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The capital structure of the company consists of borrowings disclosed in note 4, cash and cash equivalents disclosed in note 6 and equity as disclosed in the statement of financial position. There are no externally imposed capital requirements. There have been no changes to what the entity manages as capital, the strategy for capital maintenance or externally imposed capital requirements from the previous year. Interest rate risk The company s interest rate risk arises from cash and cash equivalents, which bear interest at variable rates and expose the company to cash flow interest rate risk. At 31 December 2014, if interest rates on Rand-denominated bank balances had been 1% higher/lower with all other variables held constant, the before tax effect on profit for the year would have been R 53,393 (2013: R 45,414) lower/higher. 24

36 Notes to the Annual Financial Statements Figures in Rand 19. Risk management (continued) Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities. Management maintains flexibility in funding by maintaining availability under committed credit lines. The company s risk to liquidity is a result of the funds available to cover future commitments. The company manages liquidity risk through an ongoing review of future commitments and credit facilities. The table below analyses the company s financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. At 31 December 2014 Less than 1 year Loans from shareholders 4,830,468 Trade and other payables 647,418 At 31 December 2013 Less than 1 year Loans from shareholders 4,830,468 Trade and other payables 520,089 Credit risk Credit risk consists mainly of cash at bank and trade receivables. All cash reserves are held with First National Bank Limited, resulting in a concentration of credit risk. This is mitigated by the high credit standing of First National Bank Limited. Trade receivables comprise a widespread customer base. Management evaluated credit risk relating to customers on an ongoing basis. No credit limits were exceeded during the reporting period, and management does not expect any losses from non-performance by these counterparties. 25

37 Notes to the Annual Financial Statements Figures in Rand 20. Financial assets by category The accounting policies for financial instruments have been applied to the line items below: 2014 Loans and Total receivables Loans to shareholders 4,830,468 4,830,468 Trade and other receivables 132, ,884 Cash and cash equivalents 5,339,237 5,339, ,302,589 10,302,589 Loans and Total receivables Loans to shareholders 4,830,468 4,830,468 Trade and other receivables 84,899 84,899 Cash and cash equivalents 4,541,379 4,541, Financial liabilities by category The accounting policies for financial instruments have been applied to the line items below: ,456,746 9,456,746 Financial Total liabilities at amortised cost Loans from shareholders 4,830,468 4,830,468 Trade and other payables 647, , ,477,886 5,477,886 Financial Total liabilities at amortised cost Loans from shareholders 4,830,468 4,830,468 Trade and other payables 520, ,089 5,350,557 5,350,557 26

38 Notes to the Annual Financial Statements 22. New Standards and Interpretations 22.1 Standards and interpretations effective and adopted in the current year In the current year, the company has adopted the following standards and interpretations that are effective for the current financial year and that are relevant to its operations: No such standards were relevant during the current financial year and therefore none were adopted Standards and interpretations not yet effective The company has chosen not to early adopt the following standards and interpretations, which have been published and are mandatory for the company s accounting periods beginning on or after 01 January 2015 or later periods: IFRS 9 Financial Instruments This new standard is the first phase of a three phase project to replace IAS 39 Financial Instruments: Recognition and Measurement. To date, the standard includes chapters for classification, measurement and derecognition of financial assets and liabilities. The following are main changes from IAS 39: Financial assets will be categorised as those subsequently measured at fair value or at amortised cost. Financial assets at amortised cost are those financial assets where the business model for managing the assets is to hold the assets to collect contractual cash flows (where the contractual cash flows represent payments of principal and interest only). All other financial assets are to be subsequently measured at fair value. Voluntary reclassification of financial assets is prohibited. Financial assets shall be reclassified if the entity changes its business model for the management of financial assets. In such circumstances, reclassification takes place prospectively from the beginning of the first reporting period after the date of change of the business model. Investments in equity instruments may be measured at fair value through other comprehensive income. When such an election is made, it may not subsequently be revoked, and gains or losses accumulated in equity are not recycled to profit or loss on derecognition of the investment. The election may be made per individual investment. IFRS 9 does not allow for investments in equity instruments to be measured at cost. The classification categories for financial liabilities remains unchanged. However, where a financial liability is designated as at fair value through profit or loss, the change in fair value attributable to changes in the liabilities credit risk shall be presented in other comprehensive income. This excludes situations where such presentation will create or enlarge an accounting mismatch, in which case, the full fair value adjustment shall be recognised in profit or loss. The effective date has not yet been established as the project is currently incomplete. The IASB has communicated that the effective date will not be before years beginning on or after 01 January IFRS 9 may be early adopted. The company expects to adopt the standard for the first time when it becomes effective. The impact of this standard is currently being assessed. 27

39 Notes to the Annual Financial Statements 22. New Standards and Interpretations (continued) Amendment to IAS 24: Related Party Disclosures: Annual improvements project The definition of a related party has been amended to include an entity, or any member of a group of which it is a part, which provides key management personnel services to the reporting entity or to the parent of the reporting entity ("management entity"). Disclosure is required of payments made to the management entity for these services but not of payments made by the management entity to its directors or employees. The effective date of the amendment is for years beginning on or after 01 July The company expects to adopt the amendment for the first time in the 2015 annual financial statements. The impact of this amendment is currently being assessed. IFRS 15 Revenue from Contracts with Customers IFRS 15 supersedes IAS 11 Construction contracts; IAS 18 Revenue; IFRIC 13 Customer Loyalty Programs; IFRIC 15 Agreements for the construction of Real Estate; IFRIC 18 Transfers of Assets from Customers and SIC 31 Revenue - Barter Transactions Involving Advertising Services. The core principle of IFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognises revenue in accordance with that core principle by applying the following steps: Identify the contract(s) with a customer Identify the performance obligations in the contract Determine the transaction price Allocate the transaction price to the performance obligations in the contract Recognise revenue when (or as) the entity satisfies a performance obligation. IFRS 15 also includes extensive new disclosure requirements. The effective date of the standard is for years beginning on or after 01 January The company expects to adopt the standard for the first time in the 2017 annual financial statements. The impact of this standard is currently being assessed. 28

40 Detailed Income Statement Figures in Rand Revenue Levy income 8,371,471 7,460,179 Other income (Including interest) Profit on disposal of assets 1,405 - Interest received 379, ,674 Other income 2,825 1,049 Recoveries 178, , , ,710 Operating expenses Administration and management fees 378, ,912 Assessment rates & municipal charges 391, ,576 Auditor's remuneration 74,900 60,000 Bad debts 14,389 10,713 Bank charges 21,684 19,225 Cleaning 1,216,419 1,112,910 Commission paid 84,449 78,929 Employee costs 2,049,290 1,883,650 Guest supplies 176, ,029 General expenses 9,697 - Insurance 95,219 85,006 Laundry 259, ,029 Lease rentals on operating lease 76,500 65,625 Legal expenses - 7,892 Loss on derecognition of property, plant and equipment 488, ,054 Loss on sale of assets and liabilities - 4,399 Motor vehicle expenses 43,754 39,539 Parking 143, ,734 Postage 3,189 2,910 Printing and stationery 64,239 66,705 Recycling cost 32,000 30,000 Repairs and maintenance 1,600,125 1,807,387 Replacement costs 53,265 24,125 Security 338, ,456 Staff welfare 28,607 18,809 Subscriptions 34,412 32,702 Sundry expenses 135, ,657 Telephone and fax 63,857 61,997 Television subscriptions 104,377 93,358 Towels and linen 51,940 16,158 Travel 18,600 10,800 Utilities 382, ,500 8,433,897 7,903,786 Profit before taxation 499,457 28,103 Taxation (91,522) (69,084) Profit (loss) for the year 407,935 (40,981) 29 The supplementary information presented does not form part of the annual financial statements and is unaudited

41 supplementary information FOR THE YEAR ENDED 31 DECEMBER 2014 The following information does not form part of the audited Annual Financial Statements and is unaudited TRADITIONAL BALANCE SHEET Assets Non-Current Assets Investment property Property, plant and equipment Current Assets Inventories Trade and other receivables Cash and cash equivalents Total Assets Equity and Liabilities Equity Share capital Retained income Liabilities Non-Current Liability Loans from shareholders Current Liabilities Current tax payable Trade and other payables Total Liabilities Total Equity and Liabilities

42 TRADITIONAL INCOME STATEMENT Revenue Levy Income Other Income Gains on disposal of assets Interest received Recoveries Other income Operating expenses Administration and management fees Assessment rates Auditors remuneration Bad debts Bank charges Cleaning Credit card commission Depreciation Employee costs Guest supplies Insurance Laundry Lease rentals on operating lease Legal fees Loss on disposal of assets Motor vehicle expenses Parking Postage Printing and stationery Recycling costs Repairs and maintenance Replacement costs Security Staff welfare Subscriptions Sundry expenses Telephone and fax Television subscription Towels and linen Travel Utilities Profit/(Loss) before taxation ( ) Taxation Profit/(Loss) for the year ( ) Accumulated profit brought forward Accumulated profit carried forward The above supplementary information is unaudited.

43 EXPENSE ANALYSIS Employee costs Staff salaries Directors' remuneration Medical aid Workmen's compensation Printing & stationery Printing Stationery Repairs & maintenance Building maintenance Computer maintenance Elevator maintenance Office equipment maintenance Pest control Pool maintenance Telephone maintenance Television & radio maintenance Staff welfare Staff training Staff awards Uniforms Sundry expenses Autopagers Body corporate levies Fire and evacuation equipment Refreshments & AGM costs Sundry Utilities Electricity Refuse removal Sewerage Water The above supplementary information is unaudited.

44 OWNER INFORMATION UPDATE Please complete and return the form below to ensure that the information we have on file is correct and up to-date, alternatively us at Name: Apartment/s: Week/s : Postal address: Postal code: Home telephone: Code) Work telephone: Code) Fax number: (Code) Cellular phone: address: RCI Membership number: Facilitating electronic transactions declaration ( communication) Name of owner: E mail address: I hereby accept that information may be sent to the above address in the form of a data message. I understand it is my responsibility to advise the resort of any change to the above address. Signature of owner:

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