Aero Club Treasurer's Report year ended 31 December 2017By Hanke Fourie Main focus points The Aero Club of South Africa's financials statements project a healthy company for the year ending December 2017. We have however financial challenges. 31 December 2017 31 December 2016 Membership fees:..........................R 1,757,305.......................................R 1,488,996 SRSA Funding:.............................R 450,000...........................................R 600,000 Income As seen above, the revenue is up compared to the previous year due to an increase in membership fee per member for the year and because of the increase of membership numbers. The annual member subscription fee was R460,00 inclusive of VAT. For 2016 the membership fee was R 425,00 inclusive of VAT. This translates to 8.23 % compared to the previous year. The R 460,00 included a R25,00 per member contribution towards the centenary fund. The annual subscription fee was inclusive of VAT was R 460,00 in 2017; R425,00 in 2016; R395 in 2015, R 350 in 2014. Year...........Total..............Fee Exc.......Members. 2017..............R1,757,305............R403,51................4,355 2016..............R1,488,996............R372,81................3,994 2015..............R1,504,200............R346.49................4,341 The R 450,000 was received after December 2016 from the Department of Sport and Recreation, of which R 350,000 was received for specific transformation and development projects. This must be used on the projects of pilot training or awareness. The great news is that we have R450,000 for the benefit of our sport, without our members having to contribute which makes these training or awareness projects possible. Our contribution for the year was R120,000 which we pay as a contractors fee to Daniel Ralefeta to facilitate this the program. We have used R 100,000 of the R450,000 allotment to contribute towards administrative expenses at the Aero Club and we have decided to utilize it to pay a portion of FAI annual subscription fees. The costs of the FAI license are budgeted at R160,000 at the current exchange rates. Investment income on the funds in the bank was R 81, 292 compared with the previous year of R 68,326 for the year. The interest rate has stayed the same for most of the two year in comparison. Expenses Salaries and wages are the biggest expense at R 781,330 for the calendar year compared to R 680,651 for the 2016 year. The Aero Club has three full time staff members employed. The annual FAI subscription is paid in Swiss Francs. The amount has stayed the same over the last number of years, but the weakening in the Rand was the real implication for the Aero Club's financials. FAI Membership Fees 2017..........R 158,149...........SFr 11,220...........R 14.09 / 1 SFr 2016..........R 178,458...........SFr 11,220...........R 15.93 / 1 SFr 2015..........R 154,333...........SFr 11,220...........R 13,75 / 1 SFr 2014..........R 140,426...........SFr 11,220...........R 12,51 / 1 SFr 2013..........R 121,956...........SFr 11,220...........R 10.86 / 1 SFr 2012..........R 102,464...........SFr 11,000...........R 9.31 / 1 SFr Our AeroPay system (operated by Blue Box) was in use from 1 November 2015. So far it seems the members are happy with the system. We do have some issues that we have recently during training discovered and we are addressing the concerns to get better value from this system. The system allows the income into our bank accounts and we do the payments. We have full control over our funds and no third party handles our funds. The Aero Club made an R 30,000 contribution towards the Airweek in March 2017 as well as R 75,000 towards the Awards function in November 2017. We will highlight more on these costs, when we discuss the annual financial statements of the Aero Club of SA Events. Bear in mind as an expense we also have R 95,506 (R25 per member recovery per year income) and in 2016 (R 94,132) that is transferred to the balance sheet to provide for the centenary celebrations. When you add this back, the Aero Club is in the green. We had expenses of R 73,011 for the strategic session and the compilation of the memorandum of incorporation (MOI). We planned only R 40,000 for this line item. For legal costs we also did not plan when we complied the budget. The legal expenses was to test the legality of MOGAS ARO application, as well as defending costs of a case where Aero Club was named as a defendant in the Glen Dell matter. Because of these extraordinary expenses in 2017, the shortfall of R 88,710 is understandable for the year. Balance sheet Cash and cash equivalents increased from R 1,692,205 to R 1,695,571 by the end of December 2017. Our retained income decreased from R 804,285 at the end of December 2016 to R 715,575 at the end of December 2017. The decreased is the effect of the shortfall recognized in the income statement. The trade and other payables are mainly the fees received in advance by the end of December 2017 which is recorded as fees in 2018. The loans receivable and loans payable by the end of December is the membership fees due to the sections that was received during December 2017. The Capital Funds and Provisions is mainly the Centenary contributions over the last few years. The Aero Club Events of SA (Pty) Limited This company is a private company wholly owned by the Aero Club of SA. This entity was formed to handle all the events of Aero Club. As most of our events are just recovery of costs, this entity is not registered for VAT as we are below the threshold. We can therefore recover costs of functions from members taking part in events, at lower levels. During the year under review Aero Club Events (Pty) Limited handled the Awards Function, the 2017 Air Week, act as custodian for the Safety Campaign but also the airshow in Umtata. Summarized in the table below, the lines in the income statement are categorized together.  Income statement Air Week The Air Week hosted by the Aero Club was held at Parys - Free State for the second year in a row. We had the R 30,000 contribution from the Aero Club, Sponsorship of R 30,000 from the SACAA and R 30,000 under the Awareness budget of The Aero Club of SA Development. With the selling of stands and food ect, the income was R 96,515. With the Aero Club's R 30,000 contribution the next costs was R 35,959 in the two companies. 2017 Awards function that was held at the Swartkops Air Force Museum Year..............Cost.................Income...........Net cost.........Venue 2017 Contribution of.............R75,000.........R10,504 2017...........R157,704..........R72,200...........R85,504........Zwartkops AFB 2016...........R166,234..........R79,450...........R86,784........Zwartkops AFB 2015...........R149,374..........R 66,700..........R82,674........Zwartkops AFB 2014...........R113,304..........R 47,040..........R66,264........Zwartkops AFB 2013...........R133,209..........R 62,645..........R70,564........Zwartkops AFB In 2017 was 230 members and guests, in 2016 was 260 members and guest and in 2015 240 members and guests in attendance. Admin Income The company had administrative income of R 34,508 (2016 R93,373) for the year, and interest of R 6,323 (2016 R5,979). Airshow (Umtata) & International Civil Aviation Day 2017 (Langebaan) The funds were paid by SACAA to Aero Club to facilitate the day and pay the vendors, without for the vendors having to register with the CAA. The event at Umtata did happen - but due to bad weather for part of the day, not all the participants could fly or fly in. The funds for these vendors therefore is due back to the CAA to the amount of R 123,000. The ICAD day in 2017 was also not supported by the Aero Club in the past year, as the Air Force handled the logistics which the Aero Club normally did. The lack of income for this year, was largely influenced by the last two events that did not happen as before. Summary The net shortfall for the year was R 17,541 for the year compared to a shortfall of R 50,266 in 2016. Balance sheet Cash in the bank and call accounts is R 244,608 which includes R 123,000 held and are due to the SACAA and R 183,533 held on behalf of the Safety Campaign. The equity is R 123,922 negative. This happened as we had losses every year since inception of this company. The Aero Club could have made the loses good every year, but as this entity is tax liable should we make profits, this means losses are recorded in the years and will be used against any profits we make in future. Our share capital is only R100 and with the loss, the company is technically insolvent. In the past the loan account from the Aero Club was larger than the loss (see 2016 year) and the Aero Club could subordinate it's loan (meaning we pay back all creditors first) should we liquidate the company. Close to the year end Aero Club Events paid back a R 102,500 leaving only R30,000 due. The Aero Club. As there was not enough of the loan left, Aero Club had to make a note in its financial statements and Aero Club of SA Events the same note * in short that Aero Club will stand in for any shortfall. There is no risk, as the directors of the Aero Club are the same directors of the Aero Club Events. We do not want the Aero Club to stand in for this and will resolve this this coming year of make profits ! The safety campaigns affairs are also conducted via the Aero club of Events. This does not influence our Income, but the income and expenses of this activity is handled in the balance sheet. What is left over is kept for the next year's budget.  The Aero Club of SA Development NPC With the funds of SRSA of R 450,000 (2016) the sections or clubs had funds to plan exciting projects. From pilot training to aviation awareness are planned across various sections that have applied for funding. This is another great feather in the cap for Aero Club what Aero Club can do for you as a member and a section. This is where the contention on the financial statements is. The ones highlighted was not spend in the year under review, as well as some of the sections felt there was not enough consultation before funds were handed to clubs. A new procedure is in place to make sure all are consulted in future.  Income statement The Aero Club of SA Development NPC will always be a break even position. The cash in the bank account pay for expenses running the company and for specific projects. The funds are seen as trust funds and can only be used according to the project budget we received the funds for. Balance sheet Cash and call accounts R 452,499 Summary The Aero Club of South Africa's financial year was productive and thanks you for each member supporting the initiatives. Your time effort and financial contribution made it all possible. I express my sincere thanks to the staff at the Aero Club Alan Evan-Hanes (General Manager), Sandra Strydom (Administrator) and Chandre Steenkamp (Receptionist) who assisted in producing these results. |
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