SANBONANI HOLIDAY SPA SHARE BLOCK LIMITED

Transcription

1 SANBONANI HOLIDAY SPA SHARE BLOCK LIMITED REGISTRATION NO. 87/004734/06 Annual Report for the year ended 31 st December 2014

2 SANBONANI HOLIDAY SPA SHARE BLOCK LIMITED REGISTRATION NO. 87/004734/06 A ANNUAL REPORT 2014 C O N T E N T S 1. General information A 2. Notice of the Annual General Meeting B 3. Minutes of the 2013 Annual General Meeting held on the 13 th June 2014 C 4. Chairman s report / Audit and Risk Committee Report D 5. Financial statements for the year ended 31 st December 2014 E 6. Loan Obligation Schedule F 7. Levy Budget Financial Year 2015 G 8. Proxy H 9. Nomination form I 10. Insured Values Buildings/Contents J 11. Timeshare Calendar 2016 K Page GENERAL INFORMATION DIRECTORS : H M Harri S M Rothbart V C Calaca H J Nel C C Venter B A Holford POSTAL ADDRESS : P O Box 433 Hazyview 1242 Tel : Fax : andre@sanbonanitimeshare.co.za PHYSICAL ADDRESS : Stormvoёl Avenue Hazyview 1242 AUDITORS : PricewaterhouseCoopers Nelspruit REGISTERED OFFICE : Sanbonani Resort Portion 5 Perry s Farm Stormvoёl Avenue Hazyview 1242 BANKERS : ABSA Bank Limited Protea Park Johannesburg

3 SANBONANI HOLIDAY SPA SHARE BLOCK LIMTED REGISTRATION NO. 87/004734/06 B Registered Address : Sanbonani Resort, Stormvoёl Street, Hazyview, 1242 P O Box 433, Hazyview, 1242 Tel : Fax : NOTICE OF ANNUAL GENERAL MEETING ( ) NOTICE IS HEREBY GIVEN of the Annual General Meeting of shareholders of Sanbonani Holiday Spa Share Block Limited. DATE : Wednesday 24 th June 2015 (21 clear days notice) TIME : 14h00 VENUE : Sanbonani Hotel, Stormvoёl Street, Hazyview A G E N D A 1. Present / Apologies / Proxies 2. To confirm the Notice of the Meeting 3. To establish a Quorum 4. To adopt the Minutes of the 2013 Annual General Meeting held on 13 th June To receive a report by the Chairman of the Board of Directors 6. To receive and adopt the annual financial statements for the year ended 31 st December Auditors : 7.1 To re-appoint Pricewaterhouse Coopers as the auditors to the Company for the financial year To approve the auditors remuneration 8. To approve the insured value of the property (as attached) 9. To elect Directors to the Board for the ensuing two years. The following Directors retire at the Annual General Meeting, but being eligible, are available for re-election :- Mr S M Rothbart Mr V C Calaca Mr H Harri 10. Sectional Title for Sanbonani 11. Water Park 12. General Items for discussion under any agenda item must be forwarded in writing to the Secretary at the Company s registered office by no later than 08h00 on Friday 19 th June BY ORDER OF THE BOARD Secretary : Mr A Janse van Rensburg 28 th May 2015 Note: A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend, speak and vote in his/her stead. A proxy need not be a member of the Company. Proxy forms, duly completed, should be returned so as to reach the registered office of the Company for the attention of the Company Secretary, no later than 08h00 on Friday, 19 th June A proxy form is enclosed for this purpose.

4 MINUTES OF THE 2013 ANNUAL GENERAL MEETING OF THE SHAREHOLDERS OF SANBONANI HOLIDAY SPA SHAREBLOCK LIMITED HELD AT SANBONANI RESORT S CONFERENCE ROOM ON 13 JUNE 2014 AT 15H00 PRESENT: MR H.M. HARRI (Chairman) MR S.M ROTHBART (Director) MR B.A. HOLFORD (Director) MR V.C. CALACA (Director) MS H.J. NEL (Director) MR A.J. VAN RENSBURG (Company Secretary) MR P.J. CRONJE (Auditor - PricewaterhouseCoopers Inc.) MS CAROL ANN WRIGHT (Club Leisure) MR D.C. FELDMAN (David) (Club Leisure) MR J.J. JORDAAN (Johann) (Club Leisure) MR A VISSER (EBC Trust (No 41-B) MS H.D. CALACA (Sanbonani Hotel Management) MR S. JOHNSON (On-Site Manager) C APOLOGIES: RCI MR C.F. VAN DEN BERG MR S.J. LAMONT (Stuart) MR A.N. RIDL (Tony) (Resigned as Director) (Club Leisure) (Club Leisure) PROXIES: Mr H.M. HARRI (79,648 Shares %) MR V.C. CALACA (280 Shares %) MR S.M. ROTHBART (90 Shares 0.053%) MR A.J. VAN RENSBURG (60 Shares 0.035%) MR CAROL ANN WRIGHT/MR S.J.LAMONT (43960 Shares %) MR J.J. JORDAAN / MR A.N. RIDL (2350 Shares 1.396%) MR D.C. FELDMAN (1,960 Shares 1.164%) All the proxies have been received. (Annexure A) QUORUM: ESTABLISHED AND CONFIRMED 1. Opening and Welcome: The Chairman welcomed everyone and thanked them for attending the AGM. 2. To Confirm Notice of the Meeting: The Chairman asked if it can be accepted that proper Notice of the Meeting was given and that the details of the pack were received in time. Mr Visser from EBC Trust replied that he didn t receive it. Mr van Rensburg confirmed that an was sent to Mr Visser at andre@medaid-ebc.co.za on 18 May 2014 and a link was sent on 19 May 2014 enabling all shareholders to download the documentation. A non-delivery was not received back for that address. The rest of the parties present confirmed that it can be accepted that a minimum of 21 days clear notice was given. (Annexure B). 3. To Establish a Quorum: A quorum was established and confirmed. 4. To Adopt the Minutes of the 2012 Annual General Meeting held on 23 rd August 2013: The Chairman asked if there were any comments on the Minutes and Mr Visser replied that his comment on the water park was not recorded. The Chairman apologised and confirmed the correction would be made. Mr Rothbart proposed and Mr Calaca confirmed that the Minutes be accepted with the correction. (Annexure C) 5. To receive the Report of the Chairman of the Board of Directors: The Chairman asked if the report could be accepted. Mr Visser objected to the comment in the report that stated that EBC Trust is an ongoing problem. Mr Visser's objection was noted. The Report was received by the rest of the attendees present and was adopted. (Annexure D). Mr Feldman referred to the Chairman s report dealing with the water park, and that a legal opinion was sought in this regard. Mr Feldman wanted to know who the Board got the legal opinion from and on what basis. The Chairman requested that they should leave the water park and sectionalisation to the end of the meeting as it would be an item later on as per the Agenda point 10 and To receive and adopt the Annual Financial Statements for the year ended 31 st December 2013: (Annexure E - G) The Chairman asked if there were any questions or comments on the Financials. Mr Feldman said that the Hotel was 1

5 paying approximately R a year for rental for the entire Hotel and the Company was paying R rental for the laundry, the storage facilities etc. it seems disproportionate. The Chairman replied that Mr Ridl already received the specific items included in rental for the last three years, and that it is not just for the laundry, but for a lot of other items as well, including all the equipment, it also includes the fully furnished staff quarters. The Chairman said that the debate had been going on for years but there was never a complaint or an enquiry when it was run by RAS, it was done exactly in the same manner. Mr Feldman wanted to know what levies were paid and Mr van Rensburg explained that these levies were calculated on certain common expenses, a summary was also given to Mr Ridl regularly. Mr Feldman asked if Mr van Rensburg can give an indication of how much it is. The Chairman responded that it is 6.91% as per the agreement signed by Mr Ridl and Mr Lamont. The levy for 2013 was R Mr Rothbart said that last year Mr Lamont made some comments about the risk that the Company and the Board of Directors were taking by paying these rentals and not receiving rentals. The Board took Senior and Junior Counsel's opinion on the subject and the response to Mr Lamont's comments was simply that Mr Lamont was wrong. That his allegation that the Judge made an order to that effect was completely misplaced and that the Company has carried on in the same manner for some years during the course of both Mr Lamont and Mr Ridl's tenure as Director and Managing Agent. Mr Rothbart asked that Mr Feldman should take the message to Mr Lamont that his comment was simply incorrect. The Chairman asked the parties present if they could receive the financial statements as prepared by PWC as a true reflection of the Company s financial affairs for the year ending 31 st December It was proposed and accepted by Mr Visser and Mr Holford. 7. Auditors: 7.1 The re-appointment of PricewaterhouseCoopers as the Auditors to the Company for the financial year The Chairman asked the parties present to accept and adopt that PricewaterhouseCoopers be re-appointed as the Company s Auditors for the 2014 financial year. Mr Rothbart proposed and it was confirmed by Mr Holford. 7.2 To approve the Auditors remuneration for the 2014 financial year: The Chairman asked if the attendees can accept and adopt the Remuneration of the Auditors. Mr Rothbart proposed and it was confirmed by Mr Calaca. 8. To approve the insured value of the property. (Annexure J) The valuation was attached. The Chairman commented for interest sake that Mbombela Municipality valued the whole Resort at somewhere around a R100 million. Mr Visser proposed and it was confirmed by Mr Holford. 9. To elect Directors to the Board for the ensuing two years. (Annexure I) The following Directors retire at the Annual General Meeting, but being eligible, are available for re-election: Ms H.J. Nel Mr C.F. van den Berg The Chairman informed all parties present that Mr C.F. van den Berg resigned as a Director due to his other commitments in Nigeria. The Chairman asked if there were any other nominations. Mr Van Rensburg replied he had received the following nominations: Mr S.J. Lamont Mr A.N. Ridl Ms C.A. Wright Mr J.J. Jordaan Mr S.M. Rothbart Mr V.C. Calaca Mr H.M. Harri Ms H.J. Nel Mr B.A. Holford Mr C.C. Venter The Chairman mentioned all the nominees were known except Mr B.A. Holford and Mr C.C. Venter. He explained that Mr B.A. Holford was appointed during the year as a Director. Mr Holford introduced himself to the meeting, with a brief description of his qualifications and experience. Mr van Rensburg was asked to give some background on the CV that was received from Mr Venter. Mr van Rensburg explained that Mr Venter, an owner at Sanbonani, is a retired CA from Cape Town who had been nominated. The CV was circulated. Mr Rothbart seconded Mr Venter's nomination as a Director based on his CV, 2

6 noting that, as was the case with Mr Holford, Mr Venter is completely independent. The Chairman asked if there was any objection to his nomination. Ms Wright objected on behalf of the Club Leisure Group. Ms Wright had a look at the Company's Articles of Association and she noted with regard to the election of Directors and with reference to Section 12 of the Shareblock Control Act that the minority shareholding, where there are more than 10 members other than the Shareblock developer are entitled to appoint two Directors to the Board. Ms Wright stated that she is aware that there are currently five Board members appointed, but the Articles provide for the maximum of seven and she is proposing that minority shareholders have a right of representation on the Board. The Chairman replied that they have minority shareholders on the Board, they are all minority shareholders. Mr Feldman replied that they are all individual shareholders, they are all connected to the Developer and they are all related parties as such. Mr Holford replied that he takes exception to the statement that says that they are all connected to the Developer. Mr Holford stated this was not correct and he was invited to join the Company; he actually worked with Mr Stuart Lamont many years ago so he knows Mr Lamont and he knows Mr Ridl and there is certainly no situation that he is connected in any way to Mr Hans Harri, he was asked to join the Company as an independent Director and to Chair the Audit Committee and that's where he sits, so he would ask that Mr Feldman withdraw that comment. Mr Feldman acknowledged this as far as Mr Holford is concerned, but the others are certainly connected. Ms Calaca commented that if they elected Mr Venter on to the Board then it will be 2 independent non-related parties. The Chairman proposed that in this case Mr Venter be accepted to the Board and he will also be part of the Audit Committee. The Chairman will vote from Sanbonani Development s side, as well as his own personal view to vote for Mr Venter to be appointed. Unfortunately he is from Cape Town, but he is a fully qualified Auditor and that is what the Company needs. Mr Feldman asked if the Developer is entitled to vote for independent appointments, he doesn't think so. Mr Holford commented that everybody is entitled to vote and Mr Rothbart agreed and saw no reason why he can't. Mr Rothbart asked Ms Wright to inform the Board if the Developer has the right to vote. Mr Rothbart also mentioned that Ms Wright must also remember where they stand, that this Company has been beset with litigation for many years now, at the instance of two large minority shareholders. The Chairman, who happens to be the representative of the Developer, has made it clear that when litigation ceases he would welcome two Directors nominated by that group, and that position remains, so when the litigation is complete they should re-address it, in the meantime the Company does comply with that. Mr Rothbart also commented that Mr Feldman may believe that Mr Rothbart is in some way connected to Mr Harri in relation to this Company, he is wrong Mr Rothbart is also independent. Mr Feldman pointed out that Section 12 says that if the minority shareholders exceed 10 in number they have the right to appoint at least two of the Directors of the Shareblock Company, so that is the 10 excluding the Developer, the Developer can't nominate. Mr Calaca said that this point was raised by Mr Ridl a number of years ago. The definition of Developer in that clause is the Developer which has more than 50% of the shares. Mr Feldman asked Mr Calaca if he is suggesting that there is no Developer. Mr Calaca replied that there is a difference the Shareblock Developer having the right to develop on behalf of the Shareblock, and the definition of the Developer in that clause. Mr Rothbart commented that Mr Calaca is not saying that there is no Developer he is saying that the definition of the Developer in that clause means one thing. Mr Feldman said that there is no definition for the Developer in that clause. Mr Rothbart asked Mr Feldman if he understands what Mr Calaca is trying to explain is that the Developer referred to in that clause is within the Act defined as a Developer with more than 50% shares.. Mr Feldman disagreed and said that the Shareblock Developer, being Sanbonani Development and its related parties, are not entitled to nominate or vote for the independent shareholders. Mr Rothbart replied that that clause doesn't say so. Mr Feldman said that the situation could be solved quite simply by the appointment of 2 members in addition to Mr Holford and Mr Venter. Mr Rothbart replied that when the litigation is over it will be done. The Chairman said that he has always maintained that those two seats have been kept open for them. Mr Feldman stated that it is not in the power of the Chairman or the Developer to maintain that. The Chairman asked if there was any objection to Mr Venter being appointed. There being none, Mr Holford seconded the nomination. Mr Rothbart said that should indicate to those unconnected shareholders attending, that the Board of Directors have no objection to the procedure, they invite interested persons to become members of the Board, and that he speaks for the Chairman and for himself, but until the litigation is complete with Mr Lamont and Mr Ridl and their associated parties, they would not be comfortable to have them currently on board. The Chairman confirmed that Mr Venter would be appointed accordingly and asked Mr van Rensburg to advise him and send the necessary forms to him to complete. Mr van Rensburg was also asked to advise him that the Board of Directors would like to see him serving on the Audit Committee as well. 10. Sectional Title for Sanbonani (See attached proposal) (Annexure L) The Chairman replied that a similar resolution as for the water park might be required for sectionalisation. Mr Rothbart commented that here again they don't have an answer from the clubs as to their opinion and they know historically they have already reneged on it once, but there is nothing to stop the Board pursuing sectionalisation in a sense of preparing for it and then submitting it to the Company for a resolution - if it fails, it fails. Mr Feldman commented that in that case he thinks that they do need a special resolution. 3

7 Mr Rothbart agreed and said that is what Messrs Ridl and Lamont told them last time but when they did it they voted against it. Mr Feldman commented that as he recollects there were differences in the requirements for a participation quota and the idea of how the property would be divided. Mr Rothbart commented that they omitted to mention the differences when they agreed to sectionalisation. The Chairman asked Mr Feldman if in principle sectionalisation would be acceptable to the clubs or not. Mr Feldman said that Mr Lamont had already said at the previous AGM that in principle it's a good idea, however there were questions. Mr Rothbart replied that that was the scheme that Mr Lamont prepared. Mr Feldman agreed in principle it is a good idea. Mr Rothbart added that the value of sectionalisation would be a substantial factor in diminishing the municipal rates. Ms Wright added from an information point of view that they are experiencing this in Durban as well, the re-rating of time-share establishments to commercial and litigation is about to begin, a declaratory order has been requested in respect of a Resort, so this seems to be a general municipal trend to identify accommodation which might give more revenue to the municipality. Ms Wright commented that they have an appeal that actually supports multiple-use categorisation. Mr Rothbart asked if it was an appeal court decision. Ms Wright confirmed that it was a Gauteng appeal court decision; it supported and dealt with multiple-use. Mr Rothbart asked if he could have their records. The Chairman confirmed that Ms Wright and Mr Feldman in principle supported sectionalisation as long as the structure, the payments and percentages are right. The Chairman asked if they can therefore agree that the Board be mandated to take this forward and present it to the shareholders again. It was agreed by Mr Visser and Mr Feldman. 11. The Water Park (Attachment K) Resolution attached (Attachment B1) The Chairman asked if all present here were agreeing that they should have a water park, or if there were any objections. No response was given. The Chairman stated then the only thing to do is for the Board to obtain professional advice and proceed accordingly, either as Mr Lamont suggested at the last meeting, or an alternative way. Mr Feldman replied that the Chairman stated in his report that the auditors have already considered this. Mr Feldman asked if the Auditor could explain on what basis and how this is going to be funded. Mr Feldman explained that it is the funding that is the fundamental problem with the water park. Mr Rothbart said the dispute is whether they may take the funding from what is known as the reserves, or whether they are obliged to declare a special levy. Mr Feldman replied that that is not the dispute, the dispute is that your special levy is part of the general levy fund, and in order to fund a capital improvement, you have to have a resolution of at least 75% of all parties other than the Developer. Mr Rothbart asked if it was in order to take the money out of the reserve fund, Mr Feldman replied that no, you can't take the reserve fund for capital improvements. Mr Rothbart asked Mr Feldman if he knew that the reserve fund is not even defined in the Act, Mr Feldman agreed. Mr Rothbart continued that there is a whole question of what that fund means and which fund you can't touch and which fund you can. Mr Feldman replied that the reserve fund has been accumulated over many years and you cannot now change that and say it is no longer levy money. Mr Rothbart replied that it is not entirely correct, some of it you can because you may have lumped other stuff into that fund incorrectly, and Mr Feldman commented that once you put other stuff into your levy funds, it is levies. Mr Rothbart disagreed and said that it is an accounting principle, the first issue is that there is sufficient in that fund that upon analysis would enable the Board to utilise the differential, to erect the water-slides. Mr Rothbart explained to Mr Feldman that it is of moneys that do not emanate directly from levies. The second issue is that Mr Feldman says if you want to put up the water-slide the Board has to seek a special resolution to impose a special levy, Mr Rothbart asked if that is correct, then he asked where that money will come from. Mr Feldman replied that if you want to increase your loan obligation, which is what you do when you are lending money, Mr Rothbart disagreed and said increasing a loan obligation is a different story, they can go and borrow the money to put up the water-slide. Mr Feldman replied if you are going to levy it from your shareholders you have to say to them that you want to put up a capital improvement, you can't levy it to them as an ongoing expense, as a running expense. Mr Rothbart replied if it is an ongoing expense he doesn't have to ask their permission, Mr Feldman agreed to that statement. Mr Feldman replied that you have to get a resolution passed in terms of section 14 to increase the Company s loan obligation because your shareholders loan accounts are going to be increased by the value of that capital improvement, it has got to form part of the equity of the Company and it has got to affect their loan accounts. Mr Rothbart replied that obviously if money is raised for capital it forms part of their loan obligation, or the Company s loan obligation to them, he understands that what Mr Feldman is suggesting is that 75% of shareholders can impose that obligation on the Developer. The Chairman intervened and said that they were getting nowhere so they should just leave it, that he flew all the way to Durban, to have a look at it, but the Clubs don't come up with a clear answer, so the matter should be left as unresolved. Ms Calaca suggested that before they leave the water park let them just ask, if they do get the things in place as they suggested or whether they do it by a different means would the clubs object to a water park. Mr Feldman made the suggestion, he doesn't know what the meetings with Mr Ridl entailed, but he would recommend to them that if the two sides get together and can get an agreement as to what Section 14 means and what the rights are and how to go about it and establish in everybody's mind that this or that is the correct way, then follow that way and the clubs 4

8 will go with it. The Chairman will accept that. Mr Feldman continued saying if the attitude that the Directors or the Developer or the people that support the Developer, ride roughshod over it they will object. Mr Rothbart commented that this was a snide comment and asked Mr Holford if he heard it, he confirmed that he did. Mr Rothbart stated that Mr Feldman can expect the following, this Board, this Chairman and his acolytes, if you would like that word, excluding Mr Holford, because it is not fair to refer to him in such way, will not do anything illegal in order to erect a water park. If it was as easy as that, they could have followed the suggestion made last year which while made in good faith, would not possibly have been a legal way of going around it and calling it a repair to the swimming pool, so you can accept that whatever has to be done in order to achieve the acquiring of the funds for the purposes of erecting a water park facility that everybody seems to be happy with, it will be done in the most proper and correct manner. If, as a result of our investigations, we are satisfied that it can be done without the need for a special resolution we will tell the shareholders and the shareholders can obviously interject the Directors if they feel that they can, if it requires a special resolution the Board will do it in the correct manner. Mr Feldman replied that the shareholder will be funding it one way or another. Mr Rothbart replied that there is a big difference between taking the money out of pocket or utilising what is in effect surplus funds that are not really required in the running of the business on a daily basis, but that is a matter of interpretation and it depends on which side of the fence you sit, so you may rest assured nothing will be done that is not legal. 12. General The Chairman asked if there were matters under General to be discussed. Mr Calaca asked to come back to the issue of the Developer and the point Mr Feldman raised. Mr Calaca just looked up the Shareblock Control Act, the definition of the Shareblock Developer, means any person by whom, or on whose behalf, or for whose benefits more than 50% of the shares of a Shareblock Company are held or controlled. By definition Mr Harri is not the Developer, he holds the development rights as a Development Company, but in terms of that clause in the Shareblock Control Act, restricting the right to vote on appointment of Directors, does not apply MOI - Memorandum of Incorporation Mr Rothbart commented that Mr Ridl had been promising the Company a copy of an MOI that he says that the groups have developed. Ms Wright mentioned that she thinks there is a draft. Mr Rothbart asked if Ms Wright could let Mr van Rensburg have that draft, if it is a vanilla document it gives the Company the opportunity when they have to submit that to the shareholders that it will be accepted. The difficulty here is that they have a most unusual and difficult set of Memo and Articles which they will have to work from in order to go forward, so the Company would like to get as much common ground as possible. Ms Wright will make sure to follow up on it and revert Total Revamp on Chalets The Chairman informed the shareholders that a total revamp on one of the chalets is in progress, they had inspections today and yesterday of what has been done. Proper showers have been installed, they revamped one of the rooms already and re-designed the interiors so that has been approved in principle by the Board. The Board will put it on the website. Mr Feldman asked if the Board is going to invite everyone around to have a look at it. The Chairman explained that most of it is done but it is not yet finished, but the shareholders are welcome to have a look. They however have still been debating colours, they've been discussing certain finishes on the couches etc., they have done one bathroom with one type of shower and the other another type of shower. The one shower was installed in the second bathroom and the other was installed in the main bathroom. They are welcome to have a look, they will also see what problems arose that will be addressed. It is Chalet No 23, the glass section of the shower is not in yet. The painting has been done so it gives you an idea of what the Board intends to do to uplift the chalets. 13. Closing: There being no further matters to discuss the meeting was closed. The Chairman thanked everyone for attending. 14. Acceptance of Minutes of the Meeting held on the 13 th June 2014: These Minutes were received and adopted by the Board of Directors on DATE at. VENUE (MR H.M. HARRI) CHAIRMAN OF THE ANNUAL GENERAL MEETING SANBONANI HOLIDAY SPA SHAREBLOCK LTD. 5

9 SANBONANI HOLIDAY SPA SHAREBLOCK LIMITED CHAIRMAN S REPORT TO THE ANNUAL GENERAL MEETING FOR THE YEAR ENDED 31 st DECEMBER 2014 D I am pleased to inform you all that the undertaking given at the last AGM, that any AGM thereafter would be concluded as soon as possible in the following financial year, due to the fact that our financial year ends at the 31 st December of each year, has been kept. During last year s meeting you were advised that the Audit Committee had been established and it has been operating during 2014 and the report of the Audit and Risk Committee is attached to the Chairman s Report. The ongoing dispute between the Clubs, Sanbonani Holiday Spa Share Block and Sanbonani Development and its associated companies has still not been finalised. I am sure any questions raised by shareholders in this regard can be answered by Mr S Rothbart an attorney and a Director of your Board. He will be at the AGM but if you want to contact him with any queries, please do so via André van Rensburg, our Financial Manager at the Resort. The dispute with Mbombela Municipality with regard to rates and taxes is still ongoing and various meetings have been attended by one of our on-site Directors, Mr V Calaca who has been representing our interests. Your Board has recently given approval to involve Counsel to represent us, in conjunction with an attorney who is acting for Mr Johan Rupert with regard to the rating of Leopard Creek, Gary Duke. A report in this regard will be made to the shareholders by Mr Calaca, while Mr Rothbart is in contact with Mr Duke and will report back to the Board as and when matters so require. Due to the commitment of your Directors, Resort management and staff in the continuous progress on the upkeep and improvement of Sanbonani Lowveld Resort, we are proud to announce that Sanbonani has received its Gold Crown status again. I am pleased to be able to advise that the problems and litigation with regard to Chalet 41B (EBC Trust) has been resolved and the total chalet (which was surrendered to the Resort in lieu of monies owing) has been sold to Leisure Options Pty Ltd in recoupment thereof. This is really in the interest of the Company as from now on it will again receive the levy payments for this chalet. The chalet has also now been upgraded to bring it into line with the standard of all other chalets. A further achievement is that the sale of the parati weeks has been quite successful and at present only 13 remain unsold. However, even though weeks have been sold, the original owners are still liable for the outstanding debt up to the time of sale and a process is in place to pursue those recoveries. Unhappily there is a malaise in the industry and people have literally abandoned their time share weeks rather than pay levies particularly with emigration and advanced age. We are however taking steps to combat this and to recover wherever possible. One of the consequences is that turnarounds i.e. parati sales, will take place regularly so that new shareholders will come on board and levies will be paid. The re-upholstering of the couches and the purchase of new scatter cushions has been completed. As previously advised the new floor tiling to replace carpets in the bedrooms and passages is still underway. The main bathroom in all chalets was converted by replacing the bath with a full shower in response to many requests from shareholders and in line with current trends. This revamp should be completed to all chalets before the end of June 2015, including the repainting to give a whole new look to each unit. We have also started changing patio chairs and hope to have received the last delivery for remaining chalets before the school holidays. Sourcing the products and furniture ourselves has resulted in huge savings as no commissions are paid to managing agents to do this. We are also still planning to have the section over the braai s on the patios enclosed, so that outdoor entertainment can still be enjoyed even in inclement weather.

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11 AUDIT AND RISK COMMITTEE In terms of Section 8 of the Companies Act 71 of 2008, Sanbonani Holiday Spa Shareblock Limited can be regarded as a public company and in terms of Secion 94 of the Act it would be required to appoint an Audit Committee. The first Audit Committee of the company was appointed by the board in March 2014 and the first meeting was held on the 25 th March The current committee consist of the following persons: - Messrs: BA Holford (Chairman) SM Rothbart C Venter Two of the members are chartered accountants with considerable commercial experience and one member is a practising lawyer. During the year under review the committee met on two occasions, namely 18 August 2014 and 17 March August 2014 At the meeting on the 18 th August 2014 the committee considered the budget for the 2015 year for submission to the board for approval. A number of issues were raised which required revision and management were requested to revise the necessary matters raised and revert back to the audit committee with the revised budgets. The matter of risk assessment was also raised and it was proposed that approval be obtained from the board to revise the mandate of the audit committee to include risk assessment and to call the committee Audit and Risk Committee. Mr Venter was tasked with the responsibility of meeting with the auditors to obtain the information necessary to compile a Risk Assessment and Governance Document. 27 March 2015 The revised budget which had been referred back for amendments at the previous Committee meeting was approved for submission to the board of directors. The Auditors had submitted a comprehensive audit strategy document relating to the forthcoming audit together with a costing of the audit fees. It was agreed by the committee that the document was very comprehensive and met with the criteria of the audit committee and would ensure that the corporate governance requirements would be met. After considering the audit fees, the committee was of the opinion that the audit strategy be approved together with the proposed audit fees. With regard to risk matters, Mr Venter indicated that he had had a meeting with Mr Cronje of PricewaterhouseCoopers and that he had compiled a list of risk areas which needed consideration. He was particularly concerned about conflicts of interests and it was felt that a corporate governance charter should be drafted which would deal with this matter. Mr Rothbart recommended that the committee and the board be guided by the principles of King III. Matters of concern which could cause possible risks to the company were then identified and listed. Land claims were identified as the time period for submission was re-opened until It appears that there are some claims submitted opposite the river near Sabi River Sun and it was agreed that this matter would be carefully observed in the future. The ongoing litigation with the points clubs was also raise by Mr Rothbart. Mr Holford advised the meeting that the points clubs were currently being investigated by the Consumer Protection Council and he understood, from a conversation held with them on a similar matter, that the Hawks were currently investigating the legality of this.

12 The possibility of Hippo attacks was also raised and it was pointed out that a tourist was killed by a Hippo at the Kruger Park Lodge. Mr van Rensburg, the financial manager, was tasked with the responsibility of checking to ensure that the company s insurance policies provide adequate cover. The Annual financial statements for the year ended 31 December 2014 were tabled and the auditor, Mr Cronje, was requested to take the committee through them. This was done in a very detailed manner and after answering all the questions put to him, the committee approved the annual financial statements for submission to the board for final approval.

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47 SANBONANI HOLIDAY SPA SHARE BLOCK LIMITED LOAN OBLIGATION SCHEDULE "F" TOTAL TOTAL LOAN NO WEEKS SHARES SHARES OBLIGATION R TIMESHARE CHALETS 2-bed bed PRIVATE CHALETS 2-bed (Chalets 42 & 55) UNSOLD CHALETS 2-bed (chalets 35A/B & 36A/B) bed (chalets 38A & 38B) MAINTENANCE 1860 HOTEL ACCOMMODATION Suites Rooms STAFF ACCOMMODATION S1, S2, S3 & S COMMON FACILITIES Laundry, linen store, manager s chalet workshop (F57) Bowling green (CF58) Tennis courts (CF59) Central complex (CF60) COMMON PROPERTY Land (CP62 & CP63) 3000 PHASE 10 CHALETS S27, S28, S29, S30, S32, S33, S34, S TOTAL

48

49 Refurbishments Replacements Salaries Provident Fund Secretarial & statutory 0 0 Service Contracts-Cleaning Service Contracts-Reception Security Signage Staff refreshments Staff training Subscriptions Telephone/Postage/Courier Television Traveling Uniforms & safety ware Water Surplus/(deficit) Taxation 0 0 Surplus/(Deficit) after Taxation Transfer to Replacement Reserve Transfer from Replacement Reserve Surplus/(Deficit) for the period Surplus/(Deficit) at the beginning of the year(estimated Surplus/(Deficit) at end of Period

50 H SANBONANI HOLIDAY SPA SHARE BLOCK LIMITED REGISTRATION NO. 87/004734/06 PROXY FORM I/We... of Chalet. Module. being a member / members of the abovementioned Company, herewith nominate Mr / Mrs as my / our Proxy at the Annual General Meeting of the Company to be held on the 24 th June 2015 and / or any adjournment thereof, as follows : ITEM IN FAVOUR AGAINST ABSTAIN Signed at this day of Signature A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend, speak and vote in his/her stead. The proxy need not be a member of the Company. Unless otherwise instructed, the proxy will vote as he/she thinks fit. Proxy forms, duly completed should be returned so as to reach the Registered Office of the Company (see Annexure A ) for the attention of the Company Secretary, no later than 08h00 on Friday 19 th June 2015.

51 SANBONANI HOLIDAY SPA SHARE BLOCK LIMITED REGISTRATION NO. 87/004734/06 I NOMINATION FORM I/We... of Chalet. Module. being a member / members of the abovementioned Company, herewith nominate the following persons as Directors at the Annual General Meeting of the Company to be held on the 24 th June 2015 and / or any adjournment thereof, as follows : 1 NAMES OF PROPOSED DIRECTORS Signed at this day of Signature NOTES : Article 13.1 : The number of Directors shall be not less than 2 nor more than 7. Article 13.6 : Article 13.7 : Directors in office shall be deemed to have retired after a maximum of two (2) consecutive years in office but are eligible to offer themselves for re-election for a further term, provided that the incumbent Board shall be deemed to have commenced their term of office with effect from the date of passing of this resolution. Neither a Director nor an alternate Director shall be required to hold any shares in the Company to qualify him/her as such.

52 J Sanbonani Resort- Insured Values Buildings/Contents Description Value 1 Land & Buildings( See Valuation) R Contents-2 Bedroom R Contents-3 Bedroom R Fire (Exl Chalet Contents) R Office Contents R Theft R Money R Fidelity R Business All Risk R Accidental Damage R Public Liability R Employers Liability R Computer Equipment/Electronic R Motor R

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54 2016 SANBONANI TIMESHARE CALENDAR GAUTENG, FREE STATE K KWAZULU NATAL RCI WEEK MPUMULANGA EAST CAPE/ CODE WEEK MODULE ARRIVE DEPART N'WEST/LIMPOPO N. CAPE / W. CAPE Peak 3 1 P11 01-Jan 08-Jan Peak 1 2 P12 08-Jan 15-Jan Peak 1 3 F01 15-Jan 22-Jan Red 4 F02 22-Jan 29-Jan White 5 F03 29-Jan 05-Feb White 6 F04 05-Feb 12-Feb White 7 F05 12-Feb 19-Feb White 8 F06 19-Feb 26-Feb White 9 F07 26-Feb 04-Mar White 10 F08 04-Mar 11-Mar Red 11 P13 11-Mar 18-Mar Peak 3 12 P01 18-Mar 25-Mar Peak 3 13 P02 25-Mar 01-Apr Red 14 P14 01-Apr 08-Apr Red 15 F09 08-Apr 15-Apr Red 16 F10 15-Apr 22-Apr Red 17 F11 22-Apr 29-Apr Red 18 F12 29-Apr 06-May White 19 F13 06-May 13-May White 20 F14 13-May 20-May White 21 F15 20-May 27-May White 22 F16 27-May 03-Jun White 23 F17 03-Jun 10-Jun Red 24 F18 10-Jun 17-Jun Red 25 P15 17-Jun 24-Jun Peak 3 26 P03 24-Jun 01-Jul Peak 3 27 P04 01-Jul 08-Jul Peak 3 28 P05 08-Jul 15-Jul Red 29 P16 15-Jul 22-Jul Red 30 F19 22-Jul 29-Jul Red 31 F20 29-Jul 05-Aug Red 32 F21 05-Aug 12-Aug Red 33 F22 12-Aug 19-Aug Red 34 F23 19-Aug 26-Aug Red 35 F24 26-Aug 02-Sep Red 36 F25 02-Sep 09-Sep Red 37 F26 09-Sep 16-Sep Red 38 F27 16-Sep 23-Sep Red 39 F28 23-Sep 30-Sep Peak 3 40 P06 30-Sep 07-Oct Red 41 P07 07-Oct 14-Oct Red 42 F29 14-Oct 21-Oct Red 43 F30 21-Oct 28-Oct Red 44 F31 28-Oct 04-Nov Red 45 F32 04-Nov 11-Nov Red 46 F33 11-Nov 18-Nov Red 47 F34 18-Nov 25-Nov Red 48 F35 25-Nov 02-Dec Red 49 F36 02-Dec 09-Dec Peak 3 50 P08 09-Dec 16-Dec Peak 3 51 P09 16-Dec 23-Dec Peak 4 52 P10 23-Dec 30-Dec Peak 4 1 P11 30-Dec 06-Jan Peak 1 2 P12 06-Jan 13-Jan 3 F01 13-Jan 20-Jan