DISCUSSION OF FINANCIAL STATEMENTS

JANUARY, 2008

JOHN LIST, CFO

For the month of January, 2008 your POA had an operating net profit of $74,618. The net income after depreciation was $26,854. This is $32,567 less than budgeted.

It is our practice to reserve a portion of your dues assessments for payment of capital improvements on the common property. This year we have allocated 25% of dues income to such items as road repaving, rebuilding Tennis World at East Rec, security cameras at the pools, beautification of Gex Road and replacement of worn out equipment. Incidentally, the Mississippi State Forestry Commission will be paying $15,000 towards the cost of planting trees along Gex Road.

Following Katrina we understood the problems some members had with dues payments. The level of accounts receivable for unpaid dues assessments has now reached a level that is not acceptable. In order to be fair to those who meet their obligations, we have begun legal action to enforce our property lien on those few who have ignored our collection efforts. In some cases we have found that the property has already been lost to tax sale. In these cases we are looking to the purchaser for payment.

Our auditors finished their annual review of our accounting records this month and were pleased with our controls and procedures.