[PPT] - SHAREBLOCK LIMITED AGM AGM 11 11 th th August August 2012 2012 PowerPoint Presentation

SLIDE 1

HERMANUSDOORNS SHAREBLOCK LIMITED

AGM AGM 11 11th

th August

August 2012 2012

SLIDE 2

AGM - 2012 11th August 2012 11th August 2012 2

AGENDA

 Welcome

Special welcome to all new shareholders

 Attendance Register  Notice Convening the Meeting and Quorum

Appointment of Referee and assistant to administer and count

votes

 Apologies and Proxies  MD’s Report

SLIDE 3

AGM - 2012 11th August 2012 11th August 2012 3

AGENDA … cont

 Presentation of Financial Statements  Ordinary Business

Resolutions 1,2,3 and 4

 Special Business

Special Resolution 1

 Capital Fund Utilisation  Update on Business Plan  General  Closure  Lunch – directly after the meeting

SLIDE 4

AGM - 2012 11th August 2012 11th August 2012 4

Matters from last AGM

 Card System and voting rights

Card colours – only two

Paid by 31st March Not paid by 31st March

No exception
Farm access WILL be denied to shareholders if

they are not FULLY paid up on ALL monies due to the Company

 WILL be enforced  Zero Tolerance

SLIDE 5

AGM - 2012 11th August 2012 5

MD’s Report

SLIDE 6

AGM - 2012 11th August 2012 11th August 2012 6

Late Levies

 Late levies

At 31 March Debtors were R 564k

last year they were R 488 k

As at 31 July they were still R 210k

Last year they were R262 k

 UNACCEPTABLE

23 people - 25% dont pay on time!!!!!
Sadly – Its often the same people

 Cost of late payments = R 4,000/month  Reaction

Shareholders claim that they are “victimised”

when action is taken against them

SLIDE 7

AGM - 2012 11th August 2012 11th August 2012

MD’s Report

Corporate Governance

Continues to be a Board focus
Procedures in place

Audit Committee Development of a Approvals framework Segregation of Duties Continued implementation of procedures Performance Evaluation Process implemented Improved communications

7

SLIDE 8

AGM - 2012 11th August 2012 11th August 2012 8

MD’s Report

 A key focus of our medium term strategy remains on Fauna and Flora

Bush clearing

Good results achieved and further recommendations submitted by consultant (Fritz) Under consideration of the Board

Rehabilitation of “ Borrow Pits”
Modification of many roads to prevent storm damage
Membership of the “Waterberg Nature Conservancy”
Game number control through capture
Baboon control

 Selective shooting

Sand usage

 Taking advice on this from Fritz

SLIDE 9

AGM - 2012 11th August 2012 11th August 2012 9

MD’s Report

 Infrastructure improvement

Road upgrading remains an ongoing priority

 Significant progress in this regard

Concrete strip up the mountain continuing but funded by the

shareholder - E Grobelaar

Upgrade of sub-standard electrical cable in the mountain
Improved Water system of reservoirs – still on hold
Secured Generator for emergency

 Assistance from Nic van As

Continued (annual) veld assessment – done by Fritz van

Oudtshoorn

 Following his recommendation  To be repeated each year

SLIDE 10

AGM - 2012 11th August 2012 11th August 2012 10

Game Capture

 Game Capture the preferred method of game control  Culling no longer taking place except for humane reasons and the “Pot” for the AGM  Revenue to be ploughed back into Fauna and Flaura – mainly into bush clearing  2011/12 net receipts from Game capture were R82k

Last year R 65k

 Further game capture will occur this year

To address the Kudu over crowding
Dependent on rainfall

SLIDE 11

AGM - 2012 11th August 2012 11th August 2012

Game Count

11

Description Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Impala 125 160 190 110 129 125 115 120 135 140 Blesbok 30 50 35 25 22 9 9 9 9 8 Water Buck 13 16 20 21 30 25 30 25 25 27 Kudu 65 80 100 90 101 100 100 115 135 145 Giraffe 2 2 5 6 8 12 13 15 11 10 Bosbok 20 40 45 40 39 40 40 40 40 40 Warthog 25 25 40 40 42 40 40 40 40 40 Blouwildebees 24 33 38 40 45 30 35 30 33 30 Zebra 9 9 10 9 10 13 15 17 17 19 Gemsbok 9 7 7 6 6 5 5 6 7 7 Steenbok 11 12 15 16 16 16 16 16 16 16 Rooihartebees 19 19 23 21 24 28 30 25 27 27 Klipspringer 14 14 15 20 20 20 20 20 20 20 Mount Reedbuck 10 10 10 10 10 10 10 Eland 5 5 7 8 Nyala 1 6 6 7

SLIDE 12

AGM - 2012 11th August 2012 11th August 2012 12

Rainfall History

161 161

200 400 600 800 1000 1200

1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2004/05 2006/7 2007/08 2008/09 2009/10 2010/11 2011/12

Millimetres

Rainfall Anaylsis

Cummulative Annual 10 Year Avg 5 ear Average 3 Year Avg

SLIDE 13

AGM - 2012 11th August 2012 11th August 2012

Staff management

 Management of the staff rests SOLELY with the Board and its management structure  All staff report directly to the farm manager who in in turn reports directly to the Board  Shareholders MUST NOT deal with any staff members directly and MUST deal through the established channels  Staff Quarters are “Out of Bounds” to shareholders

13

SLIDE 14

AGM - 2012 11th August 2012 11th August 2012

Staff management

Workmans’ Compensation

Believed we were exempt
No longer the case – we must comply

Fully registered Process of getting up to date – complete by year end

ALL contractors on site must be covered.

We will evict contractors unless this can be proven

14

SLIDE 15

AGM - 2012 11th August 2012 11th August 2012

Unaccompanied Visitors

Discussed often in order to protect privacy and the shareholders assets Visitors MAY NOT visit the farm without a shareholder present A continual problem We will evict these visitors at great embarrassment to the particular shareholder

15

SLIDE 16

AGM - 2012 11th August 2012 11th August 2012 16

Security

 An increasing problem in the area

Farm attacks
Death in front of the farm

 Board request

Install radios (fixed or mobile)

 Fire Assist  Intruder alert

Link into the farm alarm

 Response to Alarms

Response by Farm Manager a problem from various aspects
Police will be notified as will the shareholder concerned

 Board is currently investigating a revamped security system

Gate control – better access control
Night patrols
Signing in procedures

SLIDE 17

AGM - 2012 11th August 2012 11th August 2012

Shareholder Interference

Last Year - early

Reported to the Dept of Labour, Lephahale

Municipality and the Building council

Not sure who reported this but definitely NOT the farm Directors nor Management Cost the Company R 136,000 to comply Question – Why not approach the Board??

17

SLIDE 18

AGM - 2012 11th August 2012 11th August 2012

Shareholder Interference

Last Year - Late

We changed the bank accounts to FNB
Received a letter incorrectly addressed to

me where shareholder stated:

“hulle maak my gat vol is jy seker die plaas bestuurder kry nie weer die geld nie”

An initial denial ultimately resulted in a

lengthy apology received from the shareholder

18

SLIDE 19

AGM - 2012 11th August 2012 11th August 2012

Shareholder Interference

This year

Again, an anonymous shareholder reported

us to Lephahlale municipality for non- compliance on building plans

Many visits and a requirement to submit

plans for most of the dwellings

Accusations that the “farm manager”

reported this to the municipality

Board cant find any evidence of this despite numerous calls and visits to the municipality

19

SLIDE 20

AGM - 2012 11th August 2012 11th August 2012

Shareholder Interference

Another letter was incorrectly sent to the board wherein a shareholder

states: “Hierdie botteltjie gif van my het hulle aangevat tot Oom Daantjie in die

kalwerhok. Tot Lepalale se baas het so groot geskrik, hy sal sorg dat Andre vir
ns a brief vir verskoning stuur! Want sien sy het toe mos uitgevind dis die

*&#*&% Andre Cochrane wat ‘n klag teen ons gaan le het” ALMAL wat hom Grief gee. Ons het a klomp goed vir John Hills gegee (maar hy weet nie wat

ns alreeds gedoen het nie). Maar jy moet ook ASB navraag doen oor hierdie

saak.

Board requested a meeting with the sender and recipient of this letter

and offered to meet in Pretoria – their place of residence – to better understand the situation.

Response: “It is inconvenient for us to meet the Board in Pretoria so please

meet at the farm” Further they stated “that this smacked of a Secret Meeting” and requested that we call a General Meeting

The Board took exception, not only to the tone but the implied

allegations and wrote an appropriate letter to the relevant shareholder and indicated to him that we have no alternative but to inform the Shareholder body.

To date, we have not received any response

20

SLIDE 21

AGM - 2012 11th August 2012 11th August 2012

The Offending Shareholders

Willie Vos Wynand Mulder

21

SLIDE 22

AGM - 2012 11th August 2012 11th August 2012

Shareholder Interference

Appeal to Shareholders

Having private correspondence between

shareholders about Company matters serves little purpose, undermines the Board, wastes time and money, and is often based

n unsubstantiated rumour.
Please, work through the Board on all

shareholder matters

To avoid such situations in future and

wasting the Board’s time and the shareholders’ money

22

SLIDE 23

AGM - 2012 11th August 2012 11th August 2012

New Companies Act

 A key focus of this years’ results  Worked in conjunction with the Auditors, Board and Audit Committee (Attie Du Plessis and Willie Botha)

Ensured full compliance
Produced a set of accounts that contains both the

new format and the old format

MOI to replace old Articles - draft circulated but

considered too cumbersome and will retabled in more readable format at next AGM

 A Vote of thanks to the Audit Committee and especially Willie for his valuable help and guidance

23

SLIDE 24

AGM - 2012 11th August 2012 24

The Key Trend Lines

SLIDE 25

AGM - 2012 11th August 2012 25

Levy Income

200 200 400 400 600 600 800 800 1000 1000 1200 1200 1400 1400 1600 1600

Ran Rands (R'00 ds (R'000) 0)

Le Levy vy In Inco come me

SLIDE 26

AGM - 2012 11th August 2012 26

Levy Structure

2 2 00 000 4 4 00 000 6 6 00 000 8 8 00 000 10 10 000 000 12 12 00 000 14 14 00 000 16 16 00 000

Ran Rands per Ann ds per Annum um

Le Levy vy Str Struc uctur ture

SLIDE 27

AGM - 2012 11th August 2012 27

Levy Income - Budgeted

200 200 400 400 600 600 800 800 1000 1000 1200 1200 1400 1400 1600 1600 1800 1800

Ran Rands (R'00 ds (R'000) 0)

Le Levy vy In Inco come me

SLIDE 28

AGM - 2012 11th August 2012 28

Investment Income

5 10 10 15 15 20 20 25 25 30 30 35 35 40 40 45 45

Rands Rands (R'000) (R'000)

In Investmen estment t In Inco come me

SLIDE 29

AGM - 2012 11th August 2012 29

Growth in Equity

0.0 0.0 1.0 1.0 2.0 2.0 3.0 3.0 4.0 4.0 5.0 5.0 6.0 6.0 7.0 7.0 8.0 8.0 9.0 9.0

Rands Rands (Millions (Millions)

Ca Capital and R pital and Reser eserves es

SLIDE 30

AGM - 2012 11th August 2012 30

Total Debt

200 200 400 400 600 600 800 800 1 1 00 000 1 1 20 200 1 1 40 400 1 1 60 600 1 1 80 800 2 2 00 000

Ran Rands (R'000 ds (R'000)

Tota

tal

l De Debt bt

SLIDE 31

AGM - 2012 11th August 2012 31

Share Price

50 50 00 000 10 100 0 00 000 15 150 0 00 000 20 200 0 00 000 25 250 0 00 000 30 300 0 00 000 35 350 0 00 000 40 400 0 00 000 45 450 0 00 000

Rands Rands (R'000) (R'000)

Sh Shar are e Pric Price

SLIDE 32

AGM - 2012 11th August 2012 11th August 2012 32

Late Levies

 Late levies

At 31 March Debtors were R 564k

last year they were R 488 k

As at 31 July they were still R 210k

Last year they were R262 k

 UNACCEPTABLE

Sadly – Its often the same people

 Cost of late payments = R 4,000/month  Reaction

Shareholders claim that they are “victimised”

when action is taken against them

SLIDE 33

AGM - 2012 11th August 2012 11th August 2012

Payment Defaulters

A continuous problem Will adopt a “Zero Tolerance” approach

Legal action
Auction of assets to recover outstanding

payments

Inclusive of Services Offered
This a Real life Situation – not theory

33

SLIDE 34

AGM - 2012 11th August 2012 11th August 2012

Reaction to Hard Line

Handed Over a few shareholders Claim of “victimisation” Board will continue with this policy irrespective of shareholder complaints

34

SLIDE 35

AGM - 2012 11th August 2012 11th August 2012

Eskom Line

 Successful in having the route changed

Vote of thanks to John Hill

 Still crosses old “small camp” and runs on northern side – across the road

Potential compensation
Used entire farm as basis for valuation to

increase size of potential compensation

Still under review.

If successful will proceeds will be allocated to Capital reserve

35

SLIDE 36

AGM - 2012 11th August 2012 11th August 2012

Eskom Line

36

SLIDE 37

AGM - 2012 11th August 2012 11th August 2012 37

Shareholder Survey

Shareholder Survey

Thank you for participation
Response was only 30%!
Key findings highlighted

SLIDE 38

AGM - 2012 11th August 2012 11th August 2012

Questionnaire feedback

38

SLIDE 39

AGM - 2012 11th August 2012 11th August 2012

Key Outcomes

39

SLIDE 40

AGM - 2012 11th August 2012 11th August 2012

Key Outcomes

40 No of Visits Length Of Stay Farm Atmosphere In favour Of syndicates

SLIDE 41

AGM - 2012 11th August 2012 11th August 2012

Key Outcomes

41 Length Of Stay Board and Farm Management Farm Board

SLIDE 42

AGM - 2012 11th August 2012 11th August 2012

Take outs - Suggestions

42

 Tuckshop should have wider selection on weekends  Rehab borrow pits ( 2 )  Minimise use of concrete on roads  Stricter monitoring of builds  Stricter debtors control ( 2 )  MD respond to mails  Notice to be given earlier  Know very little what is happening on farm  Better Communication  Stricter action against non-payment

f levies

 Rubble on eastern side to be removed or scraped into erosion holes  Main Entrance ( 2 )  Pool area could be used more intensively

 Introduction of rare game species  Detailed layout of power and water reticulations on farm - drawings  Farm to be devided into zones ( for identification )  Route markers  Should also do building work  Certain sections of website to be password protected for shareholders

nly
Members
Discussion Forum

To Do

SLIDE 43

AGM - 2012 11th August 2012 11th August 2012

Status Report

43

 Hunting permitted during weekends  Title deeds rather than shares  Allow members to put something

nto the agenda at the meeting

and not only before  Levies disproportionate to the minimum services supplied on the farm  Road to houses on west side deeper into farm away from road  Change levy base to m2 of house  Sectional Title

Convert to Sectional Title ( 2 )

 Diesel on the farm available to buy

Not Feasible Work in Progress

 Syndicates

Implement syndicates
Reason for syndicates is to keep

costs down

Syndicates create a "Time Share"

character  Revised structure for suggestions & transparecy in suggestions

Formal

 Check cleaning done properly  Confirm cleaning requests  Removal of all unsightly materials - Wrecks, building materials, evidence of building construction ( 2 )  More ideas to upgrade farm - eg full- time restaurant & pub over holidays  Storage of building material in designated hidden area

SLIDE 44

AGM - 2012 11th August 2012 11th August 2012 44

MD’s Report

 Year Ended Feb 2012

All in all a pretty good year
Concern over the number of shares on the market

Attributable to prevailing economic conditions and the structure

f ownership

Trying to address this at this years GM

Continuous improvement of the Balance Sheet
Continued focus on cost containment

Salaries and Wages – concerted effort to optimise this Diesel usage – already cut by 35% Electricity usage

 Linked to water usage – installing meters in future

Application of an appropriate levy to sustain the business
Metering of water will be implemented in future

SLIDE 45

AGM - 2012 11th August 2012 11th August 2012 45

MD’s Report … Conclusion

 Special thanks to

Andre and his staff for

 Lunch  Fantastic condition of the farm

Sampie for the upgrade of the entrance
Sydney Gericke for his valuable input into the Syndicate debate

 Thank you to

The shareholders
The auditors
The Audit committee
The Non Exec
My fellow directors

 Reminder for Next year AGM

Date set in March
Reminder to be sent June

 And I look forward to another great year

SLIDE 46

AGM - 2012 11th August 2012 46

Ordinary Business

SLIDE 47

AGM - 2012 11th August 2012 11th August 2012 47

Voting Procedure

All done by Poll One share – one vote Counting independently done

2 volunteers
Board
Corresponding totals accepted

SLIDE 48

AGM - 2012 11th August 2012 48

Ordinary Business

SLIDE 49

AGM - 2012 11th August 2012 11th August 2012 49

Ordinary Business

Ordinary Resolution 1

Resolved as ordinary resolution

#1 to approve the minutes of the Annual General Meeting Held on 3rd September 2011

SLIDE 50

AGM - 2012 11th August 2012 50

Annual Financial Statements

SLIDE 51

AGM - 2012 11th August 2012 11th August 2012

New Financials

 Changes made to the reporting of AFS in respect of Shareblocks

Willie Botha to address the meeting

 Essentially

Assets are all now expensed but Liabilities are not
Attie to give brief overview of the changes

 New format has been compiled by Auditors and ratified by Audit Committee

Willie Botha
Attie Du Plessis

 Will use the old format for comparison – Refer pgs 26 onwards only

51

SLIDE 52

AGM - 2012 11th August 2012 52

Assets

Property Up by 3.5% Assets Up by 4.7%

SLIDE 53

AGM - 2012 11th August 2012 11th August 2012 53

Equity and Liabilities

Up by 4.7% Up by 1.8%

SLIDE 54

AGM - 2012 11th August 2012 11th August 2012

Income Statement - 2011

54

* Excludes costs covered in general overheads

SLIDE 55

AGM - 2012 11th August 2012

Income Statement - 2012

55

* Excludes costs covered in general overheads

Up by 10.7% Down by 37% Down by 3% Up by 202%

SLIDE 56

AGM - 2012 11th August 2012 11th August 2012 56

Levies Received in Advance

Period As at 29 Feb ‘12

1 March 2012 to 29 Feb 2013 1,544,527 1 March 2009 to 28 Feb 2014 50,366 1 March 2010 to 29 Feb 2015 50,256 1 March 2010 to 28 Feb 2015 172,760 TOTAL – Normal Levy 1,817,909 Capital Levy – 1 March 2010 to 28 Feb 2011 164,500 TOTAL 1,982,409

SLIDE 57

AGM - 2012 11th August 2012 11th August 2012

Use of Capital Fund

Detail Changes Balance Balance - 1 Mar 2008 297,807 Levies - 2009 147,780 455,587 Back Actor (250,000) 195,587 Levies - 2010 152,237 347,824 Bakkie (212,234) 135,490 Balance at year 2010 135,490 New Levy – Feb 2010/11 139,500 274,990 Purchase of Equipment (38,000) 236,990 Land Improvements (48,656) 188,334 Balance at Feb 2011 188,334 New Levy – Feb 2010/11 167,500 355,834 Compliance to Municipal Standards (136,200 219,634 Purchase of Generator (171,443) 48,191 Balance at Feb 2012 48,191 New Levy – Feb ‘12/’13 164,500 212,691 Balance 212,691 57

SLIDE 58

AGM - 2012 11th August 2012

Detail 2014 Budget 2013 Budget 2012 Actual 2011 Actual 2010 Actual 2009 Actual 2008 Actual Levies 1 870 222 1 714 810 1 583 709 1 374 347 1 260 869 1 101 537 850 525 Other Income 417 600 395 000 419 148 335 698 337 347 299 309 241 885 Investment 8 000 15 000 15 230 26 237 29 543 30 520 30 688 Game 40 000 40 000 81 600 40 380

226 603

67 588 Other 5 000 5 000 3 158 10 000 7 543 1 018 72 983 Municipal 246 400 220 000 193 967 131 213 107 202 40 919 66 691 Shop and Pub 5 000 5 000 245 1 553 2 648 249 3 935 Cleaning 78 200 70 000 69 566 57 412 21 097 Alarm 35 000 30 000 28 354 25 776 20 082 Building & maint

10 000

27 028 43 127 39 587 TOTAL 2 287 822 2 109 810 2 002 857 1 710 045 1 598 216 1 400 846 1 092 410

Income Evolution

58

SLIDE 59

AGM - 2012 11th August 2012

2014 Budget

2014 (B) vs 2013(FC)

2013 Budget (Current)

2013 (B) vs 2012

2012 Actual

2012 vs 2011

2011 Actual

2011 vs 2011

2011 Actual

2011 vs 2010

2010 Actual

2010 vs 2009

2009 Actual Income 2 287 822

8.4%

2 109 810

5.3%

2 003 434

12.7% 1 777 689 4.0% 1 710 045 11.2% 1 598 216 23.1% 1 298 626

Standard Levy 1 693 972

9.3%

1 550 310

9.5%

1 416 209

9.6% 1 292 127 4.6% 1 234 847 16.6% 1 108 632 29.8%

853 817 Capital Levy 176 250

7.1%

164 500

1.8%

167 500

20.1%

139 500

0.0%

139 500

8.4%

152 237

4.6%

145 500 Interest 8 000

46.7%

15 000

2.1%

15 320

41.6%

26 237

0.0%

26 237

11.2%

29 543

3.2%

30 520 Other Income 163 200

2.0%

160 000

22.8%

207 280

9.9%

188 612

5.8%

178 248

6.0%

200 602 227 870 Recoveries 246 400

12.0%

220 000

11.6%

197 125

50.2%

131 213

0.0%

131 213

22.4%

107 202

162.0%

40 919 Operational Expenses 2 118 572

4.5%

2 026 659

8.8%

1 863 145

9.3% 1 705 214

1.8% 1 736 831

12.3% 1 518 073 19.4% 1 271 123

Admin and Auditing 158 980

5.0%

151 410

9.0%

138 908

4.6%

132 823

1.9%

135 460

15.7%

114 797

40.8%

81 538 Depreciation 90 000

10.0%

100 000

0.8%

99 216

29.7%

141 165

41.2%

240 000

40.7%

237 910

32.7%

179 296 Employee Costs 930 327

6.0%

877 667

8.0%

812 655

26.4%

642 973

2.0%

630 625

22.3%

525 521

17.9%

445 833 Motor Vehicle Expenses 195 000

2.5%

200 000

5.0%

210 421

15.3%

182 545

11.8%

206 929

3.0%

188 117

9.0%

172 554 Repairs and Maintenance 190 000

5.0%

200 000

6.2%

188 398

20.2%

235 945

20.6%

195 683

32.6%

177 894

23.1%

144 544 Utilities 424 264

16.0%

365 745

25.0%

292 596

18.4%

247 061

10.2%

224 295

37.7%

179 436

24.3%

144 320 Other 130 000

1.4%

131 837

9.0%

120 951

1.4%

122 702

18.2%

103 838

30.0%

94 398

8.4%

103 038 Surplus (Deficit) 169 250

103.5%

83 151

40.7%

140 289

93.6%

72 475

370.6%

(26 785)

9.6%

80 143

191.4%

27 503 Levy (Non-Res) 16 356

7.5%

15 219

9.8%

13 860

9.7%

12 632

0.0%

12 632

8.7%

11 623

25.0%

9 298 Detail

59

Income and Expenses Analysis

SLIDE 60

AGM - 2012 11th August 2012 11th August 2012

2014 Budget

2014 (B) vs 2013(FC)

2013 Budget (Current)

2013 (B) vs 2012

2012 Actual

2012 vs 2011

2011 Actual Income 2 287 822

8.4%

2 109 810

5.3%

2 003 434

12.7%

1 777 689 Standard Levy 1 693 972

9.3%

1 550 310

9.5%

1 416 209

9.6%

1 292 127 Capital Levy 176 250

7.1%

164 500

1.8%

167 500

20.1%

139 500 Interest 8 000

46.7%

15 000

2.1%

15 320

41.6%

26 237 Other Income 163 200

2.0%

160 000

22.8%

207 280

9.9%

188 612 Recoveries 246 400

12.0%

220 000

11.6%

197 125

50.2%

131 213 Operational Expenses 2 118 572

4.5%

2 026 659

8.8%

1 863 145

9.3%

1 705 214 Admin and Auditing 158 980

5.0%

151 410

9.0%

138 908

4.6%

132 823 Depreciation 90 000

10.0%

100 000

0.8%

99 216

29.7%

141 165 Employee Costs 930 327

6.0%

877 667

8.0%

812 655

26.4%

642 973 Motor Vehicle Expenses 195 000

2.5%

200 000

5.0%

210 421

15.3%

182 545 Repairs and Maintenance 190 000

5.0%

200 000

6.2%

188 398

20.2%

235 945 Utilities 424 264

16.0%

365 745

25.0%

292 596

18.4%

247 061 Other 130 000

1.4%

131 837

9.0%

120 951

1.4%

122 702 Surplus (Deficit) 169 250

103.5%

83 151

40.7%

140 289

93.6%

72 475 Levy (Non-Res) 16 356

7.5%

15 219

9.8%

13 860

9.7%

12 632 Detail

60

Income and Expenses Analysis

SLIDE 61

AGM - 2012 11th August 2012 11th August 2012 2014 Budget

2014 (B) vs 2013(FC)

2013 Budget (Current)

2013 (B) vs 2012

2012 Actual

2012 vs 2011

2011 Actual Income 2 287 822

8.4%

2 109 810

5.3%

2 003 434

12.7%

1 777 689 Standard Levy 1 693 972

9.3%

1 550 310

9.5%

1 416 209

9.6%

1 292 127 Capital Levy 176 250

7.1%

164 500

1.8%

167 500

20.1%

139 500 Interest 8 000

46.7%

15 000

2.1%

15 320

41.6%

26 237 Other Income 163 200

2.0%

160 000

22.8%

207 280

9.9%

188 612 Recoveries 246 400

12.0%

220 000

11.6%

197 125

50.2%

131 213 Operational Expenses 2 118 572

4.5%

2 026 659

8.8%

1 863 145

9.3%

1 705 214 Admin and Auditing 158 980

5.0%

151 410

9.0%

138 908

4.6%

132 823 Depreciation 90 000

10.0%

100 000

0.8%

99 216

29.7%

141 165 Employee Costs 930 327

6.0%

877 667

8.0%

812 655

26.4%

642 973 Motor Vehicle Expenses 195 000

2.5%

200 000

5.0%

210 421

15.3%

182 545 Repairs and Maintenance 190 000

5.0%

200 000

6.2%

188 398

20.2%

235 945 Utilities 424 264

16.0%

365 745

25.0%

292 596

18.4%

247 061 Other 130 000

1.4%

131 837

9.0%

120 951

1.4%

122 702 Surplus (Deficit) 169 250

103.5%

83 151

40.7%

140 289

93.6%

72 475 Levy (Non-Res) 16 356

7.5%

15 219

9.8%

13 860

9.7%

12 632 Detail 61

Income and Expenses Analysis

SLIDE 62

AGM - 2012 11th August 2012 11th August 2012

2014 Budget

2014 (B) vs 2013(FC)

2013 Budget (Current)

2013 (B) vs 2012

2012 Actual

2012 vs 2011

2011 Actual Income 2 287 822

8.4%

2 109 810

5.3%

2 003 434

12.7%

1 777 689 Standard Levy 1 693 972

9.3%

1 550 310

9.5%

1 416 209

9.6%

1 292 127 Capital Levy 176 250

7.1%

164 500

1.8%

167 500

20.1%

139 500 Interest 8 000

46.7%

15 000

2.1%

15 320

41.6%

26 237 Other Income 163 200

2.0%

160 000

22.8%

207 280

9.9%

188 612 Recoveries 246 400

12.0%

220 000

11.6%

197 125

50.2%

131 213 Operational Expenses 2 118 572

4.5%

2 026 659

8.8%

1 863 145

9.3%

1 705 214 Admin and Auditing 158 980

5.0%

151 410

9.0%

138 908

4.6%

132 823 Depreciation 90 000

10.0%

100 000

0.8%

99 216

29.7%

141 165 Employee Costs 930 327

6.0%

877 667

8.0%

812 655

26.4%

642 973 Motor Vehicle Expenses 195 000

2.5%

200 000

5.0%

210 421

15.3%

182 545 Repairs and Maintenance 190 000

5.0%

200 000

6.2%

188 398

20.2%

235 945 Utilities 424 264

16.0%

365 745

25.0%

292 596

18.4%

247 061 Other 130 000

1.4%

131 837

9.0%

120 951

1.4%

122 702 Surplus (Deficit) 169 250

103.5%

83 151

40.7%

140 289

93.6%

72 475 Levy (Non-Res) 16 356

7.5%

15 219

9.8%

13 860

9.7%

12 632 Detail

62

Income and Expenses Analysis

SLIDE 63

AGM - 2012 11th August 2012 11th August 2012

Electricity

A continual challenge Currently R1.40 / Kwh Further increases anticipated over the next year Costs are still not fully absorbed In discussions with Eskom for a more favourable rate

Pass on to shareholders

63

SLIDE 64

AGM - 2012 11th August 2012 11th August 2012

NOTE:

All these services are required to be paid in advance.
Deposits will be held against which costs are deducted – topped up every

three months via invoice from the Office

Should deposit be depleted the Services will be suspended

Service Unit Price 2011/12 Estimated 2012/13

Cleaning - House Per clean R 120.00 R 135.00 Cleaning - Yard Per Clean R 120.00 R 135.00 Alarm Reaction Per annum R 1 775.00 R 1 925.00 Laundry Per load R 120.00 R 135.00

64

Price list for added services

(Effective 1 March 2012 – 28 Feb 2013)

SLIDE 65

AGM - 2012 11th August 2012 11th August 2012

2013/14 Projected Levy Structure Rands Rands % Incr

ver

2012/13 2 026 659 2 118 572 4.5% Added Revenue Services 113 200 Utilities 246 400 Interest 15 000 Game 40 000 Other 10 000 Building 424 600 Adjusted Levy Calculation 1 693 972 9.3% Levy per shareholder (Non Res) 16 356 7.5% Capital Levy per annum 1 875 7.1% 18 231 7.4% Forecast Expenses - 2012/13 Budgeted Expenses - 2013/14 Total Levy

65

Anticipated Levy – 2013/14

SLIDE 66

AGM - 2012 11th August 2012 11th August 2012 66

Anticipated Levy – 2013/14

Combining Levy Structure for Future

2012/13 Current levy 16 969.30 Normal 15 219.30 Capital 1 750.00 2012/13 Total Levy 18 230.82 7.4% Normal 16 355.82 Capital 1 875.00 ONLY ONE LEVY TO BE RAISED NEXT YEAR

SLIDE 67

AGM - 2012 11th August 2012 11th August 2012 67

Ordinary Business

Ordinary Resolution 2

Resolved as ordinary resolution #2 to

receive and adopt the Company’s annual financial statements for the year ended 29th February 2012, together with the reports of the directors and auditors.

SLIDE 68

AGM - 2012 11th August 2012 11th August 2012 68

Ordinary Business

Ordinary Resolution 3

Resolved as ordinary resolution #3

to re-appoint Russel James and Company (Previously Core Chartered Accountants (SA)) as the auditors until the conclusion of the next Annual General Meeting.

SLIDE 69

AGM - 2012 11th August 2012 11th August 2012 69

Ordinary Business

Ordinary Resolution 4

Background

As part of the New Company’s act the company must adopt a Memorandum of Incorporation (MOI) to replace the Articles

f Association
Pended to next AGM

As a result of the complexity of this, the Board withdrew this resolution to make the MOI more comprehensible and understandable

SLIDE 70

AGM - 2012 11th August 2012 11th August 2012 70

Special Business

Special Resolution 1

To amend the Articles of

Association (MOI) to allow Syndicates under special conditions

Adopt a levy structure for these

syndicates

Control the registration of

Syndicates

SLIDE 71

AGM - 2012 11th August 2012 11th August 2012 71

Special Resolution 1

Background

Previous Ordinary Resolution (2006)

prohibited the registration of any more syndicates

Some shareholders felt that this was
nerous:

Restricted the sale of shares as the affordability (Capital requirement) limited marketability of the shares Created complications transfer to children in the event of the death of the shareholder

SLIDE 72

AGM - 2012 11th August 2012 11th August 2012 72

Special Resolution 1

 Proposals were tabled at 2011 AGM

Rejected

 Board tasked to recommend an amendment to address this – at the last AGM  Significant research

Input from many shareholders

Thank you, especially Sydney Gericke

Examined other similar shareblock structures

Many and varied restrictions and limitations were found all with pro’s and con’s

Sought legal advise

The articles Previous resolution

Intense debate at the Board

SLIDE 73

AGM - 2012 11th August 2012 11th August 2012 73

Special Resolution 1

 Recommendation

To maintain the status quo of existing syndicates – NO

CHANGE in both legal ownership or levy structure

Protect the “Inheritance” for all shareholders
To allow for Estate Planning via Family Trusts
To allow NEW syndicates under certain conditions
To have a levy structure that supports this but provides

a viable financial and sustainable model

Creates additional revenue without adding costs to the existing financial structure

To place limitations on the use of legal structures other

than that of “Natural Persons” to hold shares – or parts thereof.

To assist in generating income for the farm

SLIDE 74

AGM - 2012 11th August 2012 11th August 2012 74

Special Resolution 1

 Consideration

To allow easy transfer to children – or other

nominated beneficiaries in the event of the death

f the shareholder
To Increase the marketability of shares as the

capital cost could be shared

To create an income model that sustains the farm

without creating additional infrastructural requirements

Addresses shareholder concerns of transferability
f shares
Respond to questionnaire that generally supported

syndicates

SLIDE 75

AGM - 2012 11th August 2012 11th August 2012

 4 Scenarios

As Is – the status Quo
Inheritance
Family Trusts
Syndicates

75

SLIDE 76

AGM - 2012 11th August 2012 11th August 2012

The Principles

The following principles were considered

Protect existing ownership options (Part a)
Ease of transfer for Inheritance (Part b)
Allowable alternative ownerships

 Family Trusts (Part c) Other Syndicates (Part d)

Conversion fees to generate income and

discourage large syndicates

76

SLIDE 77

AGM - 2012 11th August 2012 11th August 2012 77

Protecting Existing Ownership Structures (Part a)

 Leave existing syndicates as is

Legal standing
Levy structure
Must prove the exact nature of legal structure

each February to avoid a change to levy

Syndicate Size Levy as % of Non Res Levy Levy per member as % of Non Res

1 100.0% 100.0% 2 133.3% 66.7% 3 166.7% 55.6% 4 200.0% 50.0%

SLIDE 78

AGM - 2012 11th August 2012 11th August 2012

Inheritance (Part b)

 To allow easy transfer to beneficiaries as a result of the death of a shareholder  Principles

Share registered in the names of the beneficiaries

in the estate (Process to be determined)

Total levy determined by the number of

beneficiaries as per Table B

Vote remains ONE irrespective of beneficiaries and
ne beneficiary must be appointed as the Voting

Beneficiary

No Conversion Fee

78

SLIDE 79

AGM - 2012 11th August 2012 11th August 2012

Inheritance – Table B

79

Purchase Price R 100 000 0% 6.666667 No

f

Beneficiaries Conversion Fee Levy %

f

Non Res Levy Per Beneficiary Family Levy Individual Member Levy 1 R 0 100.0% 100.0% R 17 350.00 R 17 350.00 2 R 0 115.0% 57.5% R 19 952.50 R 9 976.25 3 R 0 130.0% 43.3% R 22 555.00 R 7 518.33 4 R 0 145.0% 36.3% R 25 157.50 R 6 289.38 5 R 0 160.0% 32.0% R 27 760.00 R 5 552.00 6 R 0 175.0% 29.2% R 30 362.50 R 5 060.42 7 R 0 190.0% 27.1% R 32 965.00 R 4 709.29 8 R 0 205.0% 25.6% R 35 567.50 R 4 445.94 9 R 0 220.0% 24.4% R 38 170.00 R 4 241.11 10 R 0 235.0% 23.5% R 40 772.50 R 4 077.25

Table B : Inheritance (Existing Shareholders Only)

Note: Based on 2012/13 Levy Structure

SLIDE 80

AGM - 2012 11th August 2012 11th August 2012

Inheritance Examples

80

No. Of

Beneficiaries Conversion Fee Levy Total Levy Per Beneficiary

1 R 0.00 R 17 350.00 R 17 350.00 2 R 0.00 R 19 952.50 R 9 976.25 3 R 0.00 R 22 555.00 R 7 518.33 4 R 0.00 R 25 157.50 R 6 289.38 5 R 0.00 R 27 760.00 R 5 552.00 6 R 0.00 R 30 362.50 R 5 060.42 7 R 0.00 R 32 965.00 R 4 709.29 8 R 0.00 R 35 567.50 R 4 445.94 9 R 0.00 R 38 170.00 R 4 241.11 10 R 0.00 R 40 772.50 R 4 077.25

SLIDE 81

AGM - 2012 11th August 2012 11th August 2012

Family Trusts (Part c)

81

 To allow the formation of Family Trusts to facilitate estate planning  Principles

Only applicable to Family Members – Blood relatives
A Conversion fee is payable and determined by the

number of beneficiaries as per Table C. Low conversion fee on Trusts with fewer than 4 beneficiaries

Levy determined by the number of Beneficiaries (Table

C)

Audited certification of Trustees and Beneficiaries must

be lodged with the Company in February of each year

An increase in number of beneficiaries will attract fees

as per Table C

SLIDE 82

AGM - 2012 11th August 2012 11th August 2012

Family Trusts – Table C

82

R 100 000 0.5% 10 No

f

Beneficiaries Conversion Fee % Conversion Fee Levy %

f

Non Res Levy Per Beneficiary Trust Levy Individual Member Levy 1 0.5% R 500 100.0% 100.0% 17 350.00 17 350.00 2 1.0% R 1 000 110.0% 55.0% 19 085.00 9 542.50 3 1.5% R 1 500 120.0% 40.0% 20 820.00 6 940.00 4 2.0% R 2 000 130.0% 32.5% 22 555.00 5 638.75 5 5.0% R 10 000 166.7% 33.3% 28 916.67 5 783.33 6 6.0% R 15 000 183.3% 30.6% 31 808.33 5 301.39 7 7.0% R 21 000 200.0% 28.6% 34 700.00 4 957.14 8 8.0% R 28 000 216.7% 27.1% 37 591.67 4 698.96 9 9.0% R 36 000 233.3% 25.9% 40 483.33 4 498.15 10 10.0% R 45 000 250.0% 25.0% 43 375.00 4 337.50

Table C : Family Trust Levy Structure

Note: Based on 2012/13 Levy Structure Purchase Price

SLIDE 83

AGM - 2012 11th August 2012 11th August 2012

Family Trusts - Examples

83

Purchase Price

No. Of

Beneficiaries Conversion Fee Levy Total Levy Per Beneficiary

2 R 3 000.00 R 19 085.00 R 9 542.50 3 R 4 500.00 R 20 820.00 R 6 940.00 4 R 6 000.00 R 22 555.00 R 5 638.75 5 R 15 000.00 R 28 916.67 R 5 783.33 6 R 18 000.00 R 31 808.33 R 5 301.39 2 R 8 000.00 R 19 085.00 R 9 542.50 3 R 12 000.00 R 20 820.00 R 6 940.00 4 R 16 000.00 R 22 555.00 R 5 638.75 5 R 40 000.00 R 28 916.67 R 5 783.33 6 R 48 000.00 R 31 808.33 R 5 301.39 2 R 13 000.00 R 19 085.00 R 9 542.50 3 R 19 500.00 R 20 820.00 R 6 940.00 4 R 26 000.00 R 22 555.00 R 5 638.75 5 R 65 000.00 R 28 916.67 R 5 783.33 6 R 78 000.00 R 31 808.33 R 5 301.39 R 300 000.00 R 800 000.00 R 1 300 000.00

SLIDE 84

AGM - 2012 11th August 2012 11th August 2012 84

Other Syndicates – (Part d)

 To allow the transfer of shares to Syndicates – Multiple

wnership

 Principles

Restricted to a maximum of 4 per syndicate
Conversion Fee and Levy determined by the number of syndicate

members as per Table D

Company Ownership

 Audited confirmation of shareholders to be submitted each February  Increase in shareholders (to a max of 4) will attract further Conversion Fees and additional levies  Levies levied on the Company

Joint ownership

 Increase in shareholders (to a max of 4) will attract further Conversion Fees and additional levies  Levies will levied in Individual capacity

Syndicate entitled to only one Vote and must nominate a Voting

Spokesperson

Any increase in shareholders/members will attract conversion fees

SLIDE 85

AGM - 2012 11th August 2012 11th August 2012

Other Syndicates – Table D

85

R 100 000 5% Members/ Shareholders Conversion Fee % Conversion Fee Levy %of Non Res Levy Per Member Syndicate Levy Individual Member Levy 1 5.0% R 5 000 100% 100% R 17 350.00 R 17 350.00 2 10.0% R 10 000 200% 100% R 34 700.00 R 17 350.00 3 15.0% R 15 000 300% 100% R 52 050.00 R 17 350.00 4 20.0% R 20 000 400% 100% R 69 400.00 R 17 350.00

Table D : Syndicate /Company Levy Structure

Note: Based on 2012/13 Levy Structure Purchase Price

SLIDE 86

AGM - 2012 11th August 2012 11th August 2012

Other Syndicates - Examples

86

Purchase Price

No. Of

Members Conversion Fee Levy Total Levy Per Beneficiary

1 R 15 000.00 R 17 350.00 R 17 350.00 2 R 30 000.00 R 34 700.00 R 17 350.00 3 R 45 000.00 R 52 050.00 R 17 350.00 4 R 60 000.00 R 69 400.00 R 17 350.00 1 R 40 000.00 R 17 350.00 R 17 350.00 2 R 80 000.00 R 34 700.00 R 17 350.00 3 R 120 000.00 R 52 050.00 R 17 350.00 4 R 160 000.00 R 69 400.00 R 17 350.00 1 R 65 000.00 R 17 350.00 R 17 350.00 2 R 130 000.00 R 34 700.00 R 17 350.00 3 R 195 000.00 R 52 050.00 R 17 350.00 4 R 260 000.00 R 69 400.00 R 17 350.00 R 300 000 R 800 000 R 1 300 000

SLIDE 87

AGM - 2012 11th August 2012 11th August 2012

Other Syndicates – Table D a

87

Purchase Price R 100 000 5% Members/ Shareholders Conversion Fee Levy %of Non Res Levy Per Member Syndicate Levy Individual Member Levy 1 R 0 100% 100% R 17 350 R 17 350 2 R 5 000 180% 90% R 31 230 R 15 615 3 R 10 000 270% 90% R 46 845 R 15 615 4 R 15 000 360% 90% R 62 460 R 15 615

TableD : Syndicate /Company Levy Structure (Alternative)

Note: Based on 2012/13 Levy Structure

SLIDE 88

AGM - 2012 11th August 2012 11th August 2012

Purchase Price

No. Of

Members Conversion Fee Levy Total Levy Per Beneficiary

1 R 15 000.00 R 17 350.00 R 17 350.00 2 R 30 000.00 R 31 230.00 R 15 615.00 3 R 45 000.00 R 46 845.00 R 15 615.00 4 R 60 000.00 R 62 460.00 R 15 615.00 1 R 40 000.00 R 17 350.00 R 17 350.00 2 R 80 000.00 R 31 230.00 R 15 615.00 3 R 120 000.00 R 46 845.00 R 15 615.00 4 R 160 000.00 R 62 460.00 R 15 615.00 1 R 65 000.00 R 17 350.00 R 17 350.00 2 R 130 000.00 R 31 230.00 R 15 615.00 3 R 195 000.00 R 46 845.00 R 15 615.00 4 R 260 000.00 R 62 460.00 R 15 615.00 R 300 000 R 800 000 R 1 300 000

Other Syndicates – Eg a

88

Relief in Levy Structure

SLIDE 89

AGM - 2012 11th August 2012 11th August 2012 89

Special Resolution 1

The FINAL proposal

To be Voted in Sections

Part a – Protecting the Status Quo Part b - Inheritance Part c – Family Trusts Part d - Syndicates

SLIDE 90

AGM - 2012 11th August 2012 11th August 2012 90

Retirement and Re-election

 As per the Articles of Association, no Directors are due for re-election this year as the current number of directors does not excede 4

SLIDE 91

AGM - 2012 11th August 2012 91

Medium / Long Term Plans

SLIDE 92

AGM - 2012 11th August 2012 11th August 2012 92

Long Term Plans

Financial stability of the Company remains a core objective

Levy structure now more in line with

budgeted expenses but covers only

perational expenses

Requirement under new act is “to levy appropriately to cover ALL expenses”

Additional income

Supports funding Trend line is negative

Capital levy incorporated in new levy

SLIDE 93

AGM - 2012 11th August 2012 11th August 2012 93

Medium to Long Term Plans

Further Development of Mountain

Improved Road infrastructure Fire prevention and fighting

New Dam in Breekloof river

On completion of excavation of sand for roads,

this will be turned into a Dam – “Kudu Dam”

“Porcupine Dam” upgrade

Sealing of the dam
Create permanent water

SLIDE 94

AGM - 2012 11th August 2012 11th August 2012 94

Medium to Long Term Plans

Continuous upgrade of all roads Implement structured vehicle policy

Improve state of all vehicles
Replace before excessive repairs are required

Focus on Continual cost containment

Key performance measurement of the

Board

Reservoir construction – already discussed in previous AGM

SLIDE 95

AGM - 2012 11th August 2012 11th August 2012 95

Long Term Plans

 Fauna and Flora Issues

A key focus of the Board
Continued veld management

Sekelbos removal

 Consultant says “fantastic” results

Advising of Bulk Grazers to thin out thick sections

Soil erosion minimalisation
Sand pit management

Better way to utilise the farm resources in eco friendly manner Seeking advise from consultant Fritz on an annula basis

SLIDE 96

AGM - 2012 11th August 2012 11th August 2012 96

Long Term Plans

 Continual upgrading of Farm Assets

Fencing – continuous upgrading and ultimate

complete electrification Continuous

Upgrading of roads to improve drainage and

reduce water damage Continuous

Replacement of damaged electrical cables due

to ligtning Continuous

Upgrading of certain water lines

Continuous

SLIDE 97

AGM - 2012 11th August 2012 97

General

SLIDE 98

AGM - 2012 11th August 2012 11th August 2012 98

General Issues

ALL POSTED ON THE WEB

Building Procedures
Procedures for Selling Shares
Speeding
Cleaning Services
Security
Communications
Shareholder responsibilities
Legal issues

SLIDE 99

AGM - 2012 11th August 2012 11th August 2012 99

General Issues

Speeding remains a concern

SLIDE 100

AGM - 2012 11th August 2012 11th August 2012 100