Assessment Area Balance Sheet Assessment Last Assessed: 14th Jan 2022 at 11:09 am Responsible Party: Detailed Assessment - Balance Sheet Detailed Assessment - Balance Sheet How strong is the Community Scheme financially e.g. capital, statutory and general reserves and cash resources? * VERY STRONG financially. Has a strong balance sheet (capital and reserves) and significant cash holdings. Members of the Community Scheme are an immediate source of capital if needed. STRONG financially. Strong capital and reserves with good cash holdings. FAIRLY strong financially. Has modest reserves and limited cash resources but can still comfortably meet normal obligations. NOT VERY STRONG financially. Has enough capital and cash-flow to operate on a routine basis, but will battle to fund or meet any unexpected liabilities. WEAK financially. Minimal reserves, very modest cash holdings and very tight cash flow. VERY WEAK financially. Doesn't have a strong balance sheet (capital and reserves) and often experiences cash-flow pressure. Sometimes unable to meet obligations when they are due. Has the Community Scheme made any use of Credit or Loan facilities which bear interest and/or fixed terms of repayment e.g. Levy/debtor finance funding/arrangements, loans to fund capital expenditure/major maintenance/outstanding levies and/or operational cash shortfalls? * Yes, consistently/has become a permanent and an essential component of our funding. Yes due to cash flow problems became essential for survival. Yes, but to a limited extent. We are in the process of exiting this type of funding/repaying the debt. No, not to date but we are being forced to finalise an arrangement due to cash flow problems. No, not to date but we are seriously considering this option. No, we have made a policy decision not to avail of any debt or loan funding. Where debt has been availed of by the Community Scheme, has this received the required approval of owners/lessees or shareholders in a Special General Meeting and has the Community Scheme and/or the lender complied with the prevailing rules of the Community Scheme and regulatory requirements e.g. Sectional Title Schemes Management Act/ Community Schemes Services Ombud Act and the National Credit Act? * Yes in all respects Yes to some degree - SGM process and/or scheme rules not fully complied with No, not really - in breach of prevailing regulatory requirements No - totally irregular Don't know/Can't establish Has any security been provided for this debt resulting in the impairment of the balance sheet e.g. cession of debtors, notarial bonds, other collateral? * Yes Don't know/Can't establish No Have loans or debt always been serviced and/or repaid on time and as per loan terms? * Yes, consistently. Yes, with a few minor delays. Yes, but with a few delays. No, there are often delays. No. There always delays and/or extensions and/or revised terms needed. We are actually in default in respect of our debt/loans. How comfortable is the Community Scheme/Developer/Operator with the overall level of debt, in particular debt arising from Levy Finance Agreements? * Very comfortable - debt is well managed, comfortably serviced, fully accounted for and always repaid on time. Quite comfortable. We manage our balance sheet carefully and are very aware of the need to have adequate liquidity and are generally confident that our debt levels won't create any liquidity or solvency issues. Fairly comfortable. We generally manage our debt fairly well, but have at times felt a little under pressure (a little over indebted) Not very comfortable. While we monitor our debt position, there are times when we feel pressure to service debt and/ or fear being unable to repay debt maturities and/or fear being responsible for uncollectable debts. Very uncomfortable and vulnerable. We could face a big impairment and/or cash flow impact if we were to cancel the funding and/or be responsible for collecting long outstanding debts. In the case of shareblock schemes or retirement villages with life rights, did the developers/founders make use of debt or bond finance to fund the development? * Yes, heavily geared with floating interest rates. Yes, reasonable level of debt with fixed term rates Yes, low level of short term debt. No. While a bond has been registered it has not been drawn down. No, not at all/we are debt free. Does the Community Scheme have any contingent liabilities e.g. guarantees issued, lease obligations, claims outstanding, legal obligations, pending litigation? * No Yes Don't know/Can't establish Are the assets of the Community Scheme fairly valued, adequately secured, protected and insured? * Yes - the assets are regularly valued, well protected and insured. Yes to a degree – adequate insurance is held but the Body Corporate needs to manage/protect its assets better. No – this has not been consistently attended to. If you are human, leave this field blank. Submit