1. BUDGET
(2009 / / 12)

2. Revenue

3. Insurance Accounting - Annual Financial Statements
Fair presentation of financial statements
The Housing Consumers Protection Measures Act (Act No. 95 of 1998).
The Public Finance Management Act (Act No. 1 of 1999).
Standards of Generally Accepted Accounting Practice; and
South African Statements of Generally Accepted Accounting Practice.
International Financial Reporting Standard (IFRS 4)
9/19/2018

4. Conventional Accounting – Management Reporting
Fair presentation of financial statements
The Housing Consumers Protection Measures Act (Act No. 95 of 1998).
The Public Finance Management Act (Act No. 1 of 1999).
Standards of Generally Accepted Accounting Practice; and
South African Statements of Generally Accepted Accounting Practice.
9/19/2018

5. Technical Liabilities

6. Enrolment fee structure
Revenue Assumptions
Non-Subsidy
Registration fees
R 750 (Inc) per builder
Annual fee
R 600 (Inc) per builder
Manuals
R 100 (Inc) per set
Enrolment fee structure
0 – R500k
1,3% (a)
R501k – R1 mill
(a) + 1% of difference (b)
R1 mill – R 2 mill
(b) % of difference (c)
R 2 mill – R 5 mil
(c) +0,5% of difference
Above R 5 mill
Maximum of R
Late Enrolment Fee
R 592 (Excl) per enrolment

7. Enrolment Distribution
Non-Subsidy
Province
Number of Units
Gauteng
27 806
KwaZulu-Natal
3 488
Eastern Cape
3 376
Western Cape
7 974
Limpopo
3 834
Northern Cape
1 561
Free State
1 556
North West
3 758
Mpumalanga
2 544
TOTAL:
55 897

8. Budget Revenue 2010/11 Non-Subsidy Units R’ Millions Registrations
4 096
2,7
Renewals
13 079
6,9
Late Enrolments
2 795
1,2
Home Enrolments
55 897
448,3
Technical and Other -
9,9
Builder Grading Discount
(10.9)
Total:
458,1

9. Revenue Variance R’ Million
Non-Subsidy
Estimated
2008/2009
Budget
2009/2010
Variance
Registrations/renewals
12,6
12,1
(0,5)
Home Enrolments
372,3
448,3
76,0
Technical
52,4
6,1
(46,3)
Grading
(11,0)
Subsidy
23,0
51.5
28,5
Project Enrolments
29,0
98,9
69,9
Other
0.2
2.1
1,9
Total:
490,0
608,5
(118,5)

10. Revenue Assumptions Subsidy Housing
Subsidy Enrolments
1,0 % Project enrolment
0,75% Home enrolment fee

11. Enrolment Distribution
Subsidy Housing
Province
Number of Enrolments
Projects
Gauteng
28 125
45 000
KwaZulu-Natal
10 000
20 000
Eastern Cape
15 000
25 000
Western Cape
6 000
Limpopo
6 644
Northern Cape
2 500
4 000
Free State
18 000
North West
13 000
17 000
Mpumalanga
2 000
TOTAL:

12. Revenue Subsidy Subsidy Project Enrolment Subsidy Home Enrolment
Subsidy Housing
Units
R’ Millions
Subsidy Project Enrolment
51,5
Subsidy Home Enrolment
98,9
Sub Total:
150,4

13. Revenue Variance R’ Million
Non-Subsidy
Estimated
2008/2009
Budget
2009/2010
Variance
Registrations/renewals
12,6
12,1
(0,5)
Home Enrolments
372,3
448,3
76,0
Technical
52,4
6,1
(46,3)
Grading
(11,0)
Subsidy
23,0
51.5
28,5
Project Enrolments
29,0
98,9
69,9
Other
0.2
2.1
1,9
Total:
490,0
608,5
(118,5)

14. Revenue Variance R’ Million
Non-Subsidy
Budget
2008/2009
2009/2010
Variance
Registrations/renewals
12,7
12,1
( 0,6)
Home Enrolments
561,3
448,3
(113)
Other
2,0
2,1
0,1
Subsidy
Home Enrolments
27,7
51,5
23,8
Project Enrolments
45,8
98,9
53,1
Other – technical invoices - Grading
5,0
(7,2)
6,1
(11,0)
1,1
(3,8)
Total:
647,3
608,5
(38,8)

15. Revenue Trend

16. Expenditure

17. Operation Expenditure
Assumptions
Accreditation Costs
Based on number of new applications and number of annual renewals.
Full credit check done on all new applications.
Full credit check done on 50% of renewals.
Cost per check R
Inspection fees
Enrolment value # Inspections Assumed
Less than R500 k
R500k – R1 mill
R1 mill – R2 mill
> R2 mill

18. Inspection Non Subsidy
Assumptions
Province
Number of Inspections
Inspection Fees
R’ Million
Gauteng
17,4
KwaZulu-Natal
18 484
7,8
Eastern Cape
17 893
5,2
Western Cape
34 050
7,4
Polokwane
17 585
10,2
Northern Cape
6 619
2,1
Free State
7 282
2,6
North West
16 861
15,1
Mpumalanga
11 602
4,0
TOTAL:
71,8

19. Inspection Subsidy Assumptions
Province
Number of Inspections
Inspection Fees
R’ Million
Gauteng
28 125
14,0
KwaZulu-Natal
10 000
5,0
Eastern Cape
15 000
7,5
Western Cape
6 000
3,0
Polokwane
6 644
3,3
Northern Cape
2 500
1,3
Free State
18 000
9,0
North West
13 000
6,5
Mpumalanga
2 000
1,0
TOTAL:
50,6

20. Major Expenditure Variances
R’ Million
Expenditure
Actual
2008/2009
Budget
2009/2010
Variance
R’ Million
Operating
Inspections - Non Subsidy 82 76
(6)
Inspections - Subsidy - 51
Fixed
417
408
(9)
Major variances
Special Projects / Ministerial
150 27
(134)
Employment
140
189 49
Consulting 8 15 7
Emerging Contractor Training 17 36 19
Traveling 18
(10)

21. Major Expenditure Variances R’ Million
Budget
2008/2009
2009/2010
Variance
Operating
Inspections – Non Subsidy 96 72
(24)
Inspections - Subsidy - 51
Other operating expense 10 9
(1)
Fixed
505
408
(97)
Major variances
Special Projects/ Ministerial
161 27
(134)
Employment
181
189 8
Emerging Contractor Training 17 36 19
Other expenses 4 6

22. Emerging Contractor Training
Fixed Expenditure
Emerging Contractor Training
Course
R’ Millions
Construction Management
2,6
Finance for Non Financial Managers
1,2
Construction Project Management
2,3
Plumbing
2,4
Painting
3,5
Plasters
3,6
Brick Laying
6,2
Roofing
14,8
TOTAL:
36,6

23. Income and Expenditure
Strategic Additional
Income and Expenditure
Inspection Fees (Subsidy)
 R 51,0 m
48 Internal subsidy inspectors
Motor Vehicles (Mobile Offices)
R 2,4 m

24. Expenditure
9/19/2018

25. Summary Income Statement R’ Million
Description
2007/8
Actual
2008/09
Provisional
2009/10
Budget
2010/11
2011/12
Total Revenue
647
396
608
651
697
Change in unearned premium/ unexpired risk provision
(51)
237
Operating costs
(64)
(116)
(132)
(141)
(151)
Gross Margin
532
490
476
510
546
Fixed Costs
(225)
(417)
(408)
(431)
(457)
Operating Surplus/(Loss)
307 73 68 79 89
Interest Revenue
177
241
217
232
248
Surplus after interest
484
314
285
311
337

26. Capital Budget R’ Million
Computer Equipment R 7,5 Million
Furniture R 2,7 Million
Equipment R 1,2 Million
Innovation Hub R 5,0 Million
Motor Vehicles R 3,9 Million
Total: R 20,3 Million

27. Summary Balance Sheet R’ Million
Description
2007/8
Actual
2008/09
Provisional
2009/10
Budget
2010/11
2011/12
Non-current assets
2,521
2,860
2,929
3,244
3,586
Current Assets 86
192 6 7
ASSETS
2,607
3,052
2,935
3,251
3,593
Reserves
1,440
1,970
1,888
2,199
2,535
Current Liabilities
233 72 77 83
Technical Liabilities
975
849
Equity and Liabilities

28. Cash Flow
9/19/2018

29. Cash Inflows / Outflows Excluding R25 Million recall in March 2009
9/19/2018

30. Actuarial
9/19/2018

31. Actuarial Provisions
9/19/2018

32. Enrolment Fee Adequacy
Based on apportionment of budgeted expenses for 2009/10 as well as volumes of new
enrolments, it is our opinion that the enrolment fees charged shall NOT be adequate for
expenses and claims for both non-subsidy and subsidy houses. The utilisation of the
enrolment fee by initial expenses per enrolment is very high, attributable to assumed lower
number of enrolments (2008/09 enrolments) than prior years as well as sticky expenses not
responding to lower new business volumes.
9/19/2018

33. Enrolment Fee Adequacy
9/19/2018