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HERMANUSDOORNS
SHAREBLOCK LIMITED
AGM
11th
August 2012
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
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
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
AGM - 2012 11th
August 2012 5
MD’s Report
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
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
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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
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
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
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
AGM - 2012 11th
August 2012 11th
August 2012
12
Rainfall History
161
0
200
400
600
800
1000
120019
98/9
9
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
Mill
ime
tre
s
Rainfall Anaylsis
Cummulative Annual 10 Year Avg 5 ear Average 3 Year Avg
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
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
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
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
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
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
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
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 ons 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 ons 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
AGM - 2012 11th
August 2012 11th
August 2012
The Offending Shareholders
Willie Vos
Wynand Mulder
21
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 on 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
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
AGM - 2012 11th
August 2012 24
The Key Trend Lines
AGM - 2012 11th
August 2012 25
Levy Income
0
200
400
600
800
1000
1200
1400
1600
Ra
nd
s (R
'0
00
)
Levy Income
AGM - 2012 11th
August 2012 26
Levy Structure
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
Ra
nd
s p
er A
nnu
m
Levy Structure
AGM - 2012 11th
August 2012 27
Levy Income - Budgeted
0
200
400
600
800
1000
1200
1400
1600
1800
Ra
nd
s (R
'0
00
)
Levy Income
AGM - 2012 11th
August 2012 28
Investment Income
0
5
10
15
20
25
30
35
40
45
Ra
nd
s (R
'0
00
)
Investment Income
AGM - 2012 11th
August 2012 29
Growth in Equity
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
Ra
nd
s (M
illio
ns)
Capital and Reserves
AGM - 2012 11th
August 2012 30
Total Debt
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
Ra
nd
s (R
'0
00)
Total Debt
AGM - 2012 11th
August 2012 31
Share Price
0
50 000
100 000
150 000
200 000
250 000
300 000
350 000
400 000
450 000
Ra
nd
s (R
'0
00
)
Share Price
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
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
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
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
AGM - 2012 11th
August 2012 11th
August 2012
Eskom Line
36
AGM - 2012 11th
August 2012 11th
August 2012
37
Shareholder Survey
Shareholder Survey
Thank you for participation
Response was only 30%!
Key findings highlighted
AGM - 2012 11th
August 2012 11th
August 2012
Questionnaire feedback
38
AGM - 2012 11th
August 2012 11th
August 2012
Key Outcomes
39
AGM - 2012 11th
August 2012 11th
August 2012
Key Outcomes
40
No of
Visits
Length
Of Stay
Farm
Atmosphere
In favour
Of syndicates
AGM - 2012 11th
August 2012 11th
August 2012
Key Outcomes
41
Length
Of Stay
Board and Farm Management
Farm Board
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 of 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 only
Members
Discussion Forum
To Do
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 onto 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
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
of 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
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
AGM - 2012 11th
August 2012 46
Ordinary Business
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
AGM - 2012 11th
August 2012 48
Ordinary
Business
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
AGM - 2012 11th
August 2012 50
Annual
Financial
Statements
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
AGM - 2012 11th
August 2012 52
Assets
Property
Up by 3.5%
Assets
Up by 4.7%
AGM - 2012 11th
August 2012 11th
August 2012
53
Equity and Liabilities
Up by 4.7%
Up by 1.8%
AGM - 2012 11th
August 2012 11th
August 2012
Income Statement - 2011
54
* Excludes costs covered in
general overheads
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%
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
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
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
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
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
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
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
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
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)
AGM - 2012 11th
August 2012 11th
August 2012
2013/14 Projected Levy Structure Rands Rands
% Incr
over
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 0 424 600
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
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
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.
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.
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 of 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
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
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 onerous: 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
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
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
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 of 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 of shares
Respond to questionnaire that generally supported syndicates
AGM - 2012 11th
August 2012 11th
August 2012
4 Scenarios
As Is – the status Quo
Inheritance
Family Trusts
Syndicates
75
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
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%
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 one beneficiary must be appointed as the Voting Beneficiary
No Conversion Fee
78
AGM - 2012 11th
August 2012 11th
August 2012
Inheritance – Table B
79
Purchase Price R 100 000
0% 6.666667
No
of
Beneficiaries
Conversion
Fee
Levy %
of
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
AGM - 2012 11th
August 2012 11th
August 2012
Inheritance Examples
80
No. Of
Beneficiaries
Conversion
FeeLevy Total
Levy Per
Beneficiary1 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
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
AGM - 2012 11th
August 2012 11th
August 2012
Family Trusts – Table C
82
R 100 000
0.5% 10
No
of
Beneficiaries
Conversion
Fee
%
Conversion
Fee
Levy %
of
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 StructurePurchase Price
AGM - 2012 11th
August 2012 11th
August 2012
Family Trusts - Examples
83
Purchase PriceNo. Of
Beneficiaries
Conversion
FeeLevy Total
Levy Per
Beneficiary2 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
AGM - 2012 11th
August 2012 11th
August 2012
84
Other Syndicates – (Part d)
To allow the transfer of shares to Syndicates – Multiple ownership
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
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 StructurePurchase Price
AGM - 2012 11th
August 2012 11th
August 2012
Other Syndicates - Examples
86
Purchase PriceNo. Of
Members
Conversion
FeeLevy 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
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
AGM - 2012 11th
August 2012 11th
August 2012
Purchase PriceNo. Of
Members
Conversion
FeeLevy 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
Re
lie
f in
L
evy S
tru
ctu
re
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
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
AGM - 2012 11th
August 2012 91
Medium / Long
Term
Plans
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 operational 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
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
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
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
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
AGM - 2012 11th
August 2012 97
General
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
AGM - 2012 11th
August 2012 11th
August 2012
99
General Issues
Speeding remains a concern
AGM - 2012 11th
August 2012 11th
August 2012
100
Closure
Thank you for your attendance and input
Please join us for a light meal (Blou Wildebeest) directly after the meeting
THANK YOU ONCE AGAIN
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