< PreviousANNUAL REPORT 2022 – 2023 Preserving and advancing the highest international standards for the profession of architecture ANNUAL REPORT 2022 – 2023 108 NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 15. OPERATING SURPLUS Figures in Rand20232022 Operating surplus is arrived at after taking into account the following items: Income Profit on sale of property, plant and equipment–8,723 – 8,723 Expenditure Loss on sale of property, plant and equipment(14,936)– Depreciation and amortisation Owned assets Land and buildings(320,392)(320,246) Motor vehicles–– Furniture and fittings(64,492)(67,979) Office equipment(18,908)(13,561) IT equipment(306,595)(718,274) (710,387)(1,120,060) Right of use assets IT Equipment(88,975)(86,105) (88,975)(86,105) Intangible assets Amortisation(88,609)(302,822) (88,609)(302,822) Auditors’ remuneration Audit fees -External(282,500)(268,047) -Internal(333,553)(473,094) (616,053)(741,141) 16. FINANCE INCOME Figures in Rand20232022 Finance income1,826,324867,313 1,826,324867,313 17. FINANCE COSTS Figures in Rand20232022 Finance cost9,24521,950 9,24521,950 South African Council for the Architectural Profession PART E FINANCIAL INFORMATION 109 NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 18. NET CASH GENERATED BY OPERATIONS Figures in Rand20232022 Surplus for the year(382,679)2,219,702 Adjustments for: Finance costs9,24521,950 Depreciation and amortisation of assets887,9711,508,987 Finance income(1,826,324)(867,313) Loss / profit on disposal of property, plant and equipment 14,936(8,723) Operating cash flow before working capital change(1,296,951)2,874,603 19. TAXATION The South African Council for the Architectural Profession`s receipts and accruals are exempt from Income tax in terms of the provision of section 10(1)(cA)(i) of the Income Tax Act, 1962(No.58 of 1962) 20. RELATED PARTY TRANSACTIONS Relationship Members of key management Adv Toto Fiduli - Registrar Mr Maduwele Segobola - Senior Manager: Finance Executive authority Department of Public Works and Infrastructure Governing bodyThe Council Relationship governed by law Council for the Building Environment Related party balances Figures in Rand20232022 Related party transactions Included in operation expenses Council for the Building Environment - levies Ʌ 539,21738,894 Ʌ The increase in CBE levies for the current financial year was due to a reversal accrual of 2020/21 levies in the 2021/22 financial year as CBE had granted a 100% discount on the levies subject to the receipt of the annual declaration as well as the verification of the declaration by their internal auditors. SACAP declared more levies in the current financial year due to a reported increase in number of active members as at 31 March 2023 compared to the previous financial years. Key Management Figures in RandRelationshipTransactions20232022 Adv Toto Fiduli RegistrarSalary1,839,2961,563,506 Performance Bonus99,439109,445 1,938,7351,672,951 Maduwele Segobola CA(SA)Senior Finance ManagerSalary1,557,4101,304,160 Performance Bonus82,94578,250 1,640,3551,382,410ANNUAL REPORT 2022 – 2023 Preserving and advancing the highest international standards for the profession of architecture ANNUAL REPORT 2022 – 2023 110 NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 20. RELATED PARTY TRANSACTIONS continued Non - Executive - council and audit and risk committee members COUNCIL AND OTHER COMMITTEES EXCL AUDIT AND RISK COMMITTEE AUDIT AND RISK COMMITTEETOTAL 202320222023202220232022 Figures in RandHonorariumHonorariumHonorarium Mr NC Nduku - President378,066428,860––378,066428,860 Ms LR Shongwe née Lerotholi - Vice-President301,516341,154––301,516341,154 Ms N Daki309,222299,376––309,222299,376 Dr S Dlamini190,506174,960––190,506174,960 Mr V Phailane387,292394,920––387,292394,920 Mr K Bingham253,183231,411––253,183231,411 Mr MA Mohidien327,857284,033––327,857284,033 Mr RG Nicholls57,433127,23076,73372,390134,166199,620 Mr L Nematswerani174,627193,32676,73372,390251,360265,716 Mr T Poho––140,120173,736140,120173,736 Ms N Oliphant - Chairperson––103,245156,366103,245156,366 Mrs Z Tshabalala––63,387108,58563,387108,585 2,379,7012,475,270460,218583,4672,839,9203,058,737 Council members that are Architectural professionals Figures in Rand20232022 NamesCategoryFeesFees Mr V PhailanePr Arch3,6333,460 Ms LR Shongwe née LerotholiPr Arch3,6333,460 Mr NC NdukuPr Arch3,6333,460 Ms N DakiPAT3,6333,460 Dr S DlaminiPSAT3,6333,460 Mr K BinghamPr Arch3,6333,460 Mr MA MohidienPAD3,6333,460 25,43124,220South African Council for the Architectural Profession PART E FINANCIAL INFORMATION 111 NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 21. FINANCIAL INSTRUMENTS 21.1 Financial assets by category Figures in Rand 31 March 2023 Loans and Receivables Total Current financial assets Trade and other receivables (refer note 9)841,008841,008 Cash and cash equivalents (refer note 10)25,640,18125,640,181 31 March 2022 Loans and Receivables Total Non-current financial assets Investments (refer note 8)1,022,2341,022,234 Current financial assets Trade and other receivables (refer note 9)661,013 661,013 Cash and cash equivalents (refer note 10)22,526,81422,526,814 21.2 Financial liabilities by category Figures in Rand 31 March 2023 Financial Liabilities at Amortised Costs Total Non-current financial liabilities Current financial liabilities Trade and other payables (refer note 12)5,314,9835,314,983 Current potion of finance lease liability (refer note 11)84,741 84,741 31 March 2022Amortised cost Total Non-current financial liabilities Finance lease liabilities (refer note 11)84,74184,741 Current financial liabilities Trade and other payables (refer note 12)3,733,3133,733,313 Current potion of finance lease liability (refer note 11)86,46786,467ANNUAL REPORT 2022 – 2023 Preserving and advancing the highest international standards for the profession of architecture ANNUAL REPORT 2022 – 2023 112 NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 22. RISK MANAGEMENT 22.1 Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Council. Credit risk consists mainly of cash deposits, investments and trade and other receivables. The Council only deposits cash with major banks with high quality credit standing and limit exposure to any one counter-party. Receivables comprise of fees owed by registered persons in terms of the Architectural Profession Act, No. 44 of 2000. Receivables comprises of a wide spread registered person`s base. Receivables are monitored for impairment on an ongoing basis. Non-payment by registered persons results in de-registration, in which event outstanding fees are provided for as credit losses. The carrying amount of cash deposits, investments and trade and other receivables recognised in the financial statements, which is net of impairment losses, represents the Council’s maximum exposure to credit risk. To measure the expected credit losses, receivables have been assessed based on the invoice due date. Figures in Rand20232022 Financial assets (refer note 8)–1,022,234 Trade and other receivable (refer note 9)841,008661,013 Banks (refer note 10)25,035,02521,888,742 22.2 Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash and availability of funding through an adequate amount of cash available to perform its duties. The Council’s risk to liquidity is a result of the funds available to cover future commitments. The Council manages liquidity risk through ongoing review of the future commitment and credit facilities. Cash flow forecasts are prepared and adequate utilised borrowing facilities are monitored. Summary quantitative data Figures in Rand Less than 1 year Between 1 and 5 years Total 31 March 2023 Trade and other payables (refer note 12)5,314,981–5,314,981 Finance lease liabilities (refer note 11)84,741–84,741 31 March 2022 Trade and other payables (refer note 12)3,733,313–3,733,313 Finance lease liabilities (refer note 11)86,46784,741171,208South African Council for the Architectural Profession PART E FINANCIAL INFORMATION 113 NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 22. RISK MANAGEMENT continued 22.3 Interest rate risk The Council has significant interest-bearing assets that causes its income and operating cash flows to be substantially dependent on the changes in the market interest rates. In order to manage the cash flow interest rate risk, the Council will repay the corresponding borrowings when it has surplus funds. Figures in Rand Balances 31 March 2023 Decrease in basis points -100 bp Increase in basis points +100 bp Banks - Council Ʌ 23,925,03721,532,53324,164,287 Banks - Canberra Accord 605,156 599,104 611,208 Sub-total (Council and Canberra) 24,530,193 24,284,891 24,775,495 Banks - Education Fund * 1,109,988 1,098,888 1,121,088 Total Cash and Cash equivalent 25,640,181 25,383,779 25,896,583 22.4 Capital risk management The objective of the Council when managing capital is to safeguard its ability to continue as a going concern. The capital structure of the Council consists of cash and cash equivalents disclosed in the note 10 and accumulated funds as disclosed in the statement of financial position. 22.5 Financial risk management The council’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The council’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the organisation’s financial performance. The council approved and monitor risk management policies.ANNUAL REPORT 2022 – 2023 Preserving and advancing the highest international standards for the profession of architecture ANNUAL REPORT 2022 – 2023 114 DETAILED INCOME STATEMENTS Figures in Rand20232022 Gross Revenue Annual Fees31,253,60329,734,230 Administration Fees928,1221,422,934 Canberra Accord Membership fees780,573687,698 Exam Fees and CPD2,680,4862,624,351 Registration and re-registration Fees2,151,0922,374,696 Renewals963,4561,247,261 RPL226,811290,145 Upgrades1,009,8321,124,442 39,993,97539,505,757 Other Income Finance income1,826,324867,313 Professional Misconduct Fines431,200472,500 Recoveries728,780249,063 2,986,3041,588,876 42,980,27941,094,633South African Council for the Architectural Profession PART E FINANCIAL INFORMATION 115 DETAILED INCOME STATEMENTS Figures in Rand20232022 Expenditure Advertising335,737159,615 Amortisation - Intangible assets88,609302,822 Annual Report115,700122,388 Auditors Remuneration282,500268,047 Bank charges98,76991,881 Body Corporate Rates703,492703,892 CBE Levies539,21738,894 Computer expenses494,073619,893 Consulting fees1,353,289317,085 Corporate Identity76,317148,315 Database & Document Management40,97750,756 Depreciation - Tangible assets799,3621,206,165 Electricity and water570,888552,549 Employee benefits4,136,5343,399,371 Entertainment263,907240,494 Expected credit loss2,979,1494,006,250 Finance costs9,24521,950 General expenses786,682852,190 Honorarium4,153,8693,896,902 Insurance335,806303,093 Internal Audit Fees333,553473,094 Lease rental on operating lease113,007163,815 Legal Fees582,248604,640 Motor vehicle expense83,42922,221 Outreach, Roadshow & Exhibitions135,675464,525 Performance bonuses544,179639,420 Postage53,90144,482 Printing and stationery42,75143,207 Recruitment12,02811,115 Relief grants for VA's–450,000 Repairs and maintenance43,87917,980 Salaries19,608,84616,016,482 Students Grants440,000400,000 Subscriptions330,480111,249 Telephone and fax519,001418,975 Training238,550131,283 Travel - local531,41165,964 Tribunals805,6231,085,746 Validation CAA reps485,421148,471 Website maintenance294,854259,710 43,362,95838,874,931 Surplus for the year(382,679)2,219,70251 Wessel Road, Right Wing Rivonia, Sandton 2128 South Africa PO Box 1500 Rivonia 2128 Tel: + 27 11 479 5000 Fax: + 27 11 479 5100 ISBN: 978-0-621-51486-5 South African Council for the Architectural Profession Preserving and advancing the highest international standards for the profession of architectureNext >