1. BUDGET PRESENTATION 11 JUNE 2008 PNS MAKGATHE-CEO NHBRC
2007/8 Financial Year
BUDGET PRESENTATION 11 JUNE 2008 PNS MAKGATHE-CEO NHBRC
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2. VISION OF NHBRC
To be a world class organization which protects housing consumers and regulates the home building industry.
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3. MISSION OF NHBRC
Provide excellent customer care and service to all stakeholders in the homebuilding industry;
Benchmark the NHBRC’s technical standards against national and international norms;
Build the capacity home builders, with particular focus on the uplifting of historically disadvantaged individuals;
Promote quality and innovative construction in the homebuilding industry;
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4. MISSION CONT… Grow and sustain the warranty fund;
Capacitate housing consumers about their rights, duties and obligations; and
Promote and maintain ethical standards in the homebuilding industry.
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5. VALUE STATEMENTS Customer service excellence Good corporate governance
Learning and caring organization
Accountability, responsibility and transparency
Commitment and moral integrity
Trust and loyalty
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6. MOTTO
QUALITY IS OUR PRIORITY
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7. STRATEGY
To improve visibility in the market and enhance interaction with homebuilders and housing consumers.
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8. OUR COMMITMENT CUSTOMERS ARE IN OUR HEARTS AND QUALITY IS OUR PRIORITY
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9. Objects of Council To regulate the home building industry.
To provide protection to housing consumers in respect of the failure of home builders to comply with their obligations in terms of the Act.
To establish and promote ethical and technical standards in the home building industry.
To improve structural quality in the interest of housing consumers and the home building industry.
To represent the interests of housing consumers by providing warranty protection against defects in new homes.
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10. Objects of Council
To promote housing consumer rights and to provide housing consumer information.
To communicate with and to assist home builders to register in terms of the Act.
To assist home builders, through training and inspections, to achieve and maintain satisfactory technical standards of home building
To regulate insurers as contemplated in section 23(9)(a) of the Act; and
In particular, to achieve the stated object of this section in the subsidy housing sector.
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11. CONSUMER PROTECTION PROCESS
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13. Corporate Governance
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24. 9/18/2018

25. VALUABLE FINAL PRODUCTS
VFP
Target 2007/8
Actual 2007/8
Actual 2006/7
Registration
4790
4820
4595
Renewals
12320
12390
11033
Enrolments
76740
76969
78568
Late Enrolments
3830
4132
4583
Inspections
337490
650834
638294
Complaints
2824
2607
1241
Conciliations
1306
883
318
Suspensions
610
645
541
Deregistrations
Withdrawals 83
435
Training
3170
4512
1837
9/18/2018

26. Subsidy Enrolment Target 2007/8 Actual 2007/8 Actual 2006/7
Project Enrolment
102850
63848
66643
Home Enrolment
130530
30678
53837
9/18/2018

27. 9/18/2018

28. TRAINING 2007/8 PROVINCE TARGET ACTUAL Eastern Cape Free State Gauteng
500
429
Free State
270
392
Gauteng
480
1061
Kwazulu Natal
600
534
Limpopo
300
813
Mpumalanga
157
Northern Cape
120
235
North West
635
Western Cape
256
TOTAL
3170
4512
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31. 9/18/2018

32. FORENSIC AUDITS PROVINCE UNITS AMOUNT('R") EC 16951 295460626.8 FS 815 GP
7203
KZN LP
7358 MP NW
6297 NC
101 WC
2027
TOTAL
40752
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33. 9/18/2018

34. 9/18/2018

35. GRADING SYSTEM 9/18/2018 Selling Price Grade A Grade B Grades C & U
Grade D
(i) less than R500,000
0.9% of selling price
1.2% of selling price
1.3% of selling price
1.5% of selling price
(ii) greater than or equal to R500,000 and less than R1,000,000
R4, % of amount exceeding R500,000
R6, % of amount exceeding R500,000
R6, % of amount exceeding R500,000
R7, % of amount exceeding R500,000
(iii) greater than or equal to R1,000,000 and less than R2,000, 000
R7, % of amount exceeding R1,000,000
R10, % of amount exceeding R1,000,000
R11, % of amount exceeding R1,000,000
R13, % of amount exceeding R1,000,000
(iv) greater than or equal to R2,000,000 and less than R5,000,000
R13, % of amount exceeding R2,000,000 up to R5,000,000
R17, % of amount exceeding R2,000,000 up to R5,000,000
R19, % of amount exceeding R2,000,000 up to R5,000,000
R21, % of amount exceeding R2,000,000 up to R5,000,000
(v) greater than or equal to R5,000,000
R25,950
R31,300
R34,000
R39,350
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36. compared to budget for the
Actual performance
compared to budget for the
year ended 31 March 2008
9/18/2018

37. Summary Income Statement R’ Million
Description
2007/8
Actual
Budget
Variance
Favourable/
(unfavourable)
Total Revenue
576
644
(68)
Unearned premium /unexpired risk provision
(260)
Operating Cost
(60)
(40)
(20)
Outstanding claims provision
290
Gross Margin
546
604
(58)
Fixed Costs
(261)
(353) 92
Operating Surplus/(Loss)
285
251 34
Interest Revenue
177 89 88
Surplus after interest
462
340
122
9/18/2018

38. Revenue Variance R’ Million
Non-Subsidy
Actual
2007/2008
Budget
Variance
Registrations/renewals
12,4
12,6
(0,2)
Home Enrolments
540,0
555,8
(15,8)
Late Enrolments
1,9
1,8
0,1
Subsidy
In Project Enrolments
7,6
23,3
(15,7)
3,8
29,5
(25,7)
Other – prior year technical invoices - Provisions
10,3
21,0
(10,7)
Total:
576
644
(68)
9/18/2018

39. Major Expenditure Variances R’ Million
Actual
2007/200/
Budget
2007/2008
Variance > R3 million
Operating (Inspections) 60 40
(20)
Fixed
261
353 92
Major variances
Consulting 6 10 4
Technical (Audits) 13 20 7
Depreciation (ERP system) 27 21
Employment (Inspectorate)
131
169 38
Marketing 18 11
Premises (Gauteng) 17
Travel (Employment costs)
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40. Reserves
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41. Enrolment fee adequacy
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42. Solvency
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43. Insurance provisions Non Subsidy Subsidy Total Unearned Premium
850,173,362
20,276,454
870,449,816
Outstanding Claims
44,997,442
2,268553
47,265,995
Unexpired Risk
56,837,956
895,170,804
79,382,963
974,553,767
9/18/2018

44. Emerging Contractor Reserve
Reserves R’ Million
Emerging Contractor Reserve
Investments
Opening reserve
16,1
1943
Transfer to Reserves
37,0
535
Utilised
(15,9)
(41)
Closing Reserve
37,2
2437
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45. BUDGETS
( 2008/9-2010/11)
9/18/2018

46. 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 546 (Inc) per enrolment
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47. Revenue Assumptions Subsidy Housing
Subsidy Enrolments
1% Project enrolment
0,75% Home enrolment fee
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48. Revenue Registrations Renewals Late Enrolments Home Enrolments
Non-Subsidy
Units
R’ Millions
Registrations
5 296
6,5
Renewals
11 534
6,1
Late Enrolments
3 982
2,0
Home Enrolments
76 145
561,4
Technical and Other -
5,0
Builder Grading Discount
(7,2)
Total:
573,8
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49. Revenue Subsidy Project Enrolment Subsidy Home Enrolment Sub Total:
Subsidy Housing
Units
R’ Millions
Subsidy Project Enrolment
45,8
Subsidy Home Enrolment
27,6
Sub Total:
73,4
9/18/2018

50. Enrolment Distribution Non Subsidy
Province
Number of Units
Gauteng
37 791
KwaZulu-Natal
5 985
Eastern Cape
5 624
Western Cape
15 200
Polokwane
2 484
Northern Cape
0 551
Free State
1 710
North West
2 991
Mpumalanga
3 810
TOTAL:
76 146
9/18/2018

51. Enrolment Distribution Subsidy Housing
Province
Number of Enrolments
Projects
Gauteng
35 200
44 000
KwaZulu-Natal
11 000
16 500
Eastern Cape
12 100
Western Cape
4 200
Polokwane
6 050
Northern Cape
1 900
2 500
Free State
8 800
14 300
North West
18 000
17 390
Mpumalanga
2 750
TOTAL:
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52. 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 R350.00
Inspection fees
Enrolment value # Inspections
Less than R500 k 4
R500k – R1 mill
R1 mill – R2 mill
> R2 mill 8
9/18/2018

53. Inspection Assumptions
Province
Number of Inspections
Inspection Fees
R’ Million
Gauteng
22,9
KwaZulu-Natal
31 873
10,9
Eastern Cape
52 813
9,8
Western Cape
96 945
19,3
Polokwane
13 025
7,9
Northern Cape
3 795
1,6
Free State
11 182
3,5
North West
16 104
13,6
Mpumalanga
19 945
6,9
TOTAL:
96,4
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54. Fixed Expenditure Satellite Offices R’ Million TOTAL: 18,1
Gauteng - Tshwane
3,7
KwaZulu-Natal – New Castle
2,4
KwaZulu-Natal – Port Shepstone
Eastern Cape – East London
1,9
Polokwane - Tzaneen
1,1
Polokwane - Bela Bela
1,2
Free State - Betlehem
1,0
North West - Klerksdorp
1,7
Mpumalanga - Witbank
2,7
TOTAL:
18,1
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55. Fixed Expenditure Marketing R’ Million TOTAL: 10,0 Annual Report 0,4
Advertising
2,8
National Awards
0,9
Print Media
Promotions
1,3
Provincial - Awards
1,5
Provincial - Exhibitions
2,0
Provincial – Road Shows
0,7
TOTAL:
10,0
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56. Fixed Expenditure Special Projects R’ Millions TOTAL: 161,4
Chairperson’s Projects
3,4
Innovations
150,0
Youth Training (350)
7,5
Contact Centres
0,5
TOTAL:
161,4
9/18/2018

57. Summary Income Statement R’ Million (before Actuarial)
Description
2007/8
Actual
2008/9
Budget
2009/10
2010/11
Revenue
576
647
683
721
Operating cost 60
101
107
115
Gross Margin
516
546
606
Fixed Costs
261
509
382
413
Operating Surplus/(Loss)
255 37
194
193
Interest Revenue
177
163
175
189
Surplus after interest
432
200
369
9/18/2018

58. Revenue Variance R’ Million
Non-Subsidy
Actual
2007/2008
Budget
2008/2009
Variance
Registrations/renewals
12,4
12,6
0,2
Home Enrolments
540,0
561.4
21,4
Late Enrolments
1,9
2,0
0,1
Subsidy
In Principal Enrolments
7,6
27,7
20,1
3,8
45,8
42,0
Other – technical invoices - Grading
10,3
5,0
(7,2)
(5,3)
Total:
576
647,3
(71,3)
9/18/2018

59. Major Expenditure Variances R’ Million
Actual
2007/2008
Budget
2008/2009
Variance R’million
Operating (Inspections) 60
101 41
Fixed
261
509
248
Major variances
Premises (Satellite/Gauteng/Innovation hub) 13 23 10
Employment( Satellite/ Engineers)
131
181 50
Depreciation (ERP system) 6 34 28
Special projects 2
162
160
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60. Summary Balance Sheet R’ Million
Description
Actual 2007/8
2008/9
Budget
2009/10
2010/11
2011/12
Non-current assets
2527
2,428
2,797
3,179
3,586
Current Assets 94 59 62 65 69
ASSETS
2621
2,487
2,859
3,244
3,655
Reserves
1417
1,520
1,888
2,270
2,676
Current Liabilities
201 53 57 60
Technical Liabilities
1003
914
Equity and Liabilities
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61. Fixed Expenditure Emerging Contractor Training
Course
R’ Millions
Construction Management
3,5
Finance for Non Financial Managers
1,5
Construction Project Management
3,1
Plumbing
Painting
4,7
Plasters
4,8
Brick Laying
8,3
Roofing
18,9
TOTAL:
47,9
Reserve
30,5
Budget
17,4
9/18/2018

62. Capital Budget Computer Equipment R 7,2 Million
Software R 12,0 Million
Furniture R 3,5 Million
Equipment R 0,3 Million
Innovation Hub R 10,5 Million
Motor Vehicles R 0,4 Million
Total: R 33,9 Million
9/18/2018