THE GOLF RESORTS CLUB · 2018. 6. 5. · THE GOLF RESORTS CLUB Registered Office 1 Crompton Street...

THE GOLF RESORTS CLUB

Registered Office 1 Crompton Street Pinetown 3610

Managing Agent Club Leisure Management (Pty) Ltd 1 Crompton Street Pinetown 3610

Bankers ABSA Corporate & Merchant Bank 4 Frosterley Crescent Frosterley Park La Lucia Ridge Office Estate 4019

Auditors Moore Stephens CJL 5th Floor, The Spinnaker Albert Terrace Durban 4001

Trustees Founder Trustees A G Usher A N Ridl B R Herd

Member Trustees C A Wright P Blain M O’Sullivan

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NOTICE

Notice is hereby given that the Annual General Meeting of


will be held at the Hotel Intercontinental,OR Tambo Airport

at 13h00 on Friday, 22 June 2018

AGENDA

1. Present / Acceptance of Proxies / Apologies.

2. To establish a quorum.

3. To approve the minutes of the Annual General Meeting held on 25 April 2017.

4. To receive a report from the Chairman of the Board of Trustees.

5. To consider the Consolidated Audited Financial Statements for the year ended 31 December 2017.

6. To appoint Auditors for the ensuing year, and to approve the determination of the Auditors’ remuneration by the Trustees.

7. To receive a report from the Managing Agent.

8. To receive the 2018 budget for The Golf Resorts Club.

9. To receive and note the Annual Subscription Fees of R341 per debenture for Platinum memberships and R236 per point for Gold memberships for the year 1 January 2018 to 31 December 2018, as approved by the Trustees.

10. To elect 3 (three) Ordinary Members as Trustees in the place of those retiring in terms of the Club Constitution. All Ordinary Trustees are required to retire annually but will be eligible for re-election.

11. To determine and approve the Trustees remuneration for the 2019 year (2018 : R3,255 per meeting)

12. To transact such other business as may be transacted at an Annual General Meeting of the Club.

The Annual Report will be made available on our website from two weeks prior to the Annual General Meeting. Should you require a printed copy of the documentation, please contact our offices and a hard copy will be mailed to you.

Contact Details: Ishana Hiralall Tel: 031 717 7604Fax: 031 709 1810E-mail: [email protected]: www.golfresortsclub.com

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mailto:[email protected]

http://www.golfresortsclub.com

GENERAL INFORMATION

1. A member shall not be entitled to vote at any general meeting if any contributions payable by him in respect of obligations to the Club have not been duly paid.

2. Trustees shall be elected at each Annual General Meeting and shall hold office until the next succeeding Annual General Meeting. The number of Trustees shall be determined from time to time by the Members of the Club in a general meeting, provided that there shall be no less than 3 (three) and no more than 5 (five) Trustees, but this number will always be equal to the number of Founder Trustees currently holding office.

3. A quorum at any General Meeting shall consist of not less than 4 (four) Members of whom 2 (two) shall be founder Members, and one of whom shall be the Chairman of the Trustees, personally present or represented by proxy, who are entitled to vote.

a. If, within half-an-hour from the time appointed for a General Meeting, a quorum of Members is not present, the meeting, if convened by or on the requisition of Members, shall be dissolved.

b. In any other case it shall stand adjourned to the same day of the next week at the same time and place, and if, at such adjourned meeting, a quorum is not present, the meeting shall be dissolved.

4. Nominations for the election of Trustees shall be given in writing, accompanied by the written consent of the person nominated, together with a brief curriculum vitae of the person nominated, should that personnot already be a Trustee. Nomination forms must be in the hands of the Managing Agent at least 48 hours before commencement of the meeting.

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THE GOLF RESORTS CLUB/GOLF RESORTS CLUB (SA)

MINUTES OF THE SIXTH COMBINED ANNUAL GENERAL MEETING

HELD AT THE HOTEL INTERCONTINENTAL, O R TAMBO AIRPORT, JOHANNESBURG

ON 25 APRIL 2017

Mr Usher welcomed everyone to the joint Annual General Meeting of Golf Resorts Club and Golf Resorts Club SA. He introduced himself, the trustees present, Mr Naidoo of Club Leisure Group, and Mrs Raab and Mr Jordaan from the Managing Agents, First Resorts and Hotel Management (Pty) Ltd. Mr Usher requested that if anyone present wished to ask questions or raise queries, they should introduce themselves for the record. 1 PRESENT

A G Usher (Chairman) Founder Trustee GRC C A Wright Member Trustee GRC & GRC SA B R Herd Founder Trustee GRC M O’Sullivan Member Trustee GRC

C T Xulu Member Trustee GRC SA In addition, 12 members were present according to the attendance register.

In attendance: J J Jordaan (First Resorts) P A Raab (First Resorts) M Naidoo (Club Leisure Group) PROXIES: 3 proxies from GRC members and 4 proxies from GRC SA members were tabled and recorded. APOLOGIES: A N Ridl Founder Trustee GRC & GRC SA S J Lamont Founder Trustee GRC & GRC SA P Blain Member Trustee GRC Mrs J Aitken Member No. 652914 All members who had submitted proxies were considered to have sent apologies.

2 QUORUM AND NOTICE OF MEETING

Three members present in person or by proxy represent a quorum. More than the required number of Trustees and Members being present, the meeting was considered duly constituted. The notice of the meeting had been circulated and was taken as read.

3 MINUTES OF THE COMBINED ANNUAL GENERAL MEETING HELD ON 24 MAY 2016

The minutes of the fifth combined Annual General Meeting held on 24 May 2016 had been published on the website and were included in the Annual Report of each Club. Hard copies were handed out at the meeting. Mr Berry referred to the request for Related Parties to be included in future sets of accounts. Mr Naidoo confirmed that the requested information for 2015 had been published on the website as undertaken at the last AGM. The same would be done for the 2016 accounts, and in future this detail would be included in the annual financial statements. Mr Kohloffel queried whether it had not been agreed that the auditors should be present at the meeting. It was noted that the minutes recorded the Chairman’s statement that since the historical queries had been dealt with, this should not be necessary. The minutes were taken as read and approved. Proposed: B Berry Seconded: C A Wright

4 MINUTES OF THE SPECIAL GENERAL MEETING (GRC SA) HELD ON 24 MAY 2016

The minutes of the Special General Meeting held on 24 May 2016 were included in the Annual Report of GRC SA. The minutes were taken as read and approved. Proposed: B Berry Seconded: C A Wright

5 CHAIRMAN’S REPORT The report by the Chairman was included in the meeting pack and was taken as read. The Chairman added that the Developer had been looking at opportunities to expand outside the existing resorts. Elements and Simbithi had been considered, but one did not want a similar situation to arise as was the case at Hans Merensky, and the management of the resort, financial viability, etc. were looked at. The best option now was Zebula, which was also closer for the Gauteng market, and a decision should be made by mid-year.

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A lot of emphasis was placed on maintenance and refurbishment, and a large proportion of the levy goes towards the upkeep of the houses. There is a high usage rate and it is sometimes difficult to undertake maintenance, especially for extended periods. Very little was done between October and April, since this was high season at the coast, and the winter months are better for this type of work. The programme is behind, and there was a carryover of approx. R1,5 million from last year’s budget. At Pezula the solution to the problems with the painted floors is to put in laminate flooring, which is more soundproof and aesthetically pleasing. The Fancourt bathrooms will be redone this year, and the roofs at Arabella need to be replaced – the HOA has put the Club on terms. The status quo at Hans Merensky has changed, and the HOA is apparently still managed by the owners of the hotel, who are in financial difficulties. The golf course has recovered and is in better condition, but the resort and hotel are running on a shoestring. Action has been taken by a collective group of homeowners, and a meeting is scheduled with the Business Rescue Practitioner on 5 May 2017. The other estates are in good condition, although Cape Town has been struck by drought. Natal has had rain, and Gauteng too. Golf cart maintenance and repairs have reduced considerably, and 10 carts which have reached the end of their lifespan and are uneconomical to repair are being replaced this year. Occupancies are high, as is the number of beds used, although the 3BR houses are not being fully utilised. This does have a bearing on the type of estate or house that will be looked at in future. For families, big houses are more popular. There have been a few incidences of overcrowding. We are alerted by the housekeepers, and the resort managers are authorised to take the necessary action. Fines are imposed where necessary. At Erinvale a member went onto the course and played without paying fees. The golf club subsequently invoiced GRC and the member refused to pay on the grounds that he was “just practising”. This is an ongoing problem with residents. The old club is fully subscribed, but 100 new members have joined GRC SA. We now have almost 2000 members in total. The industry generally is having a difficult time, with fewer people joining than leaving, but there is still a huge market for the product, with about 200.000 active players in the country. There is room for development of the Club, and record sales were achieved in January, but February was down against budget.

6 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016 The Chairman explained that each Club has a Pty Ltd company in which the properties are registered, and the shares in the company are owned by the Club. The Club and property company finances are combined. The Chairman requested that members indicate which Club’s accounts they are querying when questions are asked. GRC Mr Naidoo addressed the amendments that had been carried out compared to the previous accounts. At the 2016 meeting the question was asked why investments were not shown at fair value. Reporting requirements for the clubs previously required that investments be shown at cost. The Club’s accounting policy has now been amended to show investments at fair value. Mr Kohloffel queried the reduction in cash receipts from R10 million to R7 million (Page 22/36). Mr Naidoo said GRC was now a closed Club, with holiday property being equivalent to Members’ Investment and Debentures issued. The number of debentures held by the Developer has been reduced as the final adjustment in the balancing of the Club, resulting in a reduction in the amount of revenue generated. This did not impact on operations, and the Club is still very healthy financially. It had no impact on the value of the debentures, since the value of the members’ investment must equate to the property held. The Developer is also counted as a member. The Chairman added that GRC is ring-fenced and the number of members does not change. The debentures issued tally up exactly to the number of weeks in the properties. Excess debentures were cancelled and some properties had to be transferred from one club to the other. For the first time in a long while we have a clean and up to date situation where there is no query about ownership between the two clubs. The properties have been correctly allocated and registered. Mr Kohloffel queried the Prepayments referred to under Note 6 (Page 27/36). Mr Naidoo explained that this was in respect of levies paid in advance for Champagne Sports. Payment is usually done in January; payment was done in December in order to take advantage of the discount offered. This is the total levy for the whole year on two units. The Chairman said other estates bill the levy monthly. Mr Naidoo added that the VAT amount reflected what SARS owes the Club. It is difficult to claim refunds from SARS, as any refund situation usually triggers a VAT audit and cash is tied up as payment is only made a few months down the line. We take advantage of a section in the VAT act that allows inputs to be claimed up to five years after the invoice date, thus managing the cash flow of the Club. It mitigates the risk of submitting a claim and waiting 6 months for a refund, and it is better to have a credit with SARS than having a substantial amount to claim. Mr Kohloffel asked if the Club was

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trading in deficit. Mr Naidoo said this was not the case; there is a timing difference with the levy income, most of which is received at the beginning of the year, while payments are made during the course of the year. Mr Kohloffel queried the audit fees of R210 000 compared to R133 000 last year. Mr Naidoo said this amount included valuation costs which should be considered professional fees, for which there is no line item. It also includes additional audits for subsidiary companies for 2012-2016. There would be a drop in costs this year. Mr Kohloffel said there had been a dramatic increase in bank charges. Mr Naidoo said the Club had started accepting online payments for levies, using a third party called MyGate. This is being revisited, as the cost is substantial. Mr Kohloffel queried the increase in rent paid from R156 000 to R422 000. The explanation last year had been that it was for the rental units at Zimbali. Mr Naidoo said this rental is paid for members who want to use a unit that is not owned by the Club. Sometimes an exchange is done with RCI or stock is rented in an area where the Club does not have enough units for a large group or family. Normally guests would pay in the extra amount. This is shown separately because it cannot be offset. The Club did not want to take away this service. Mr Kohloffel suggested that the income received be shown separately in future accounts. Mr Kohloffel commented that Subscriptions had increased from R142 000 to R168 000. Mr Naidoo said this was for DSTV subscriptions and TV licences, as well as Fedhasa and VOASA, but the Club now also had to pay a monthly levy to the new Ombudsman for sectional title units. Mr Sibanyoni said members were told last year that the audit fees would be much less this year. Mr Naidoo said there was a backlog of audits which reduced over time. Some were done in 2015, but the bulk was completed in 2016. The Club is not allowed to make a provision, and the expense must be shown when the work is actually done. There will still be a few small extra audits in 2017, such as the Selborne syndicated companies in which the Club was a majority owner. These have been closed and the property has been brought into the Club. This cost will be reflected in 2018. Mr Sibanyoni said it was unfair to members to distribute the AFS at such short notice. They were posted on the evening of the Easter weekend, allowing only 4 days for members to go through the details. The Chairman said this was a valid point, and it had been discussed at the trustees’ meeting before the AGM. Notice of the AGM date had been sent out in February, and it was said that the AFS would be available 2 weeks before the AGM. However, no reminder was sent. Next year the AFS will go out earlier and a reminder will be sent to members when the information is available. Mr Sibanyoni said the comment had been made that the AGM was earlier this year. For companies there was a legislated deadline. He suggested that the AFS be provided 3 weeks before the meeting. The Chairman said that was fair. Mr Berry said the Revaluation reserve under Note 9 (Page 28/36) had not changed although there had been a fair value adjustment of R3 million. Mr Naidoo will attend to the reallocation. Mr Berry said the Related party transactions should be the last item in the notes, with a breakdown of fees/income or expenses between the entities. Mr Naidoo apologised for not including this information. As mentioned earlier, he would put this information on the website for 2016 with the comparatives for 2015, and include them in the 2017 accounts. This would be an addendum that did not form part of the annual financial statements, and will be published on the website under Login – Documents – Financial notices. The information will be published by mid-May. GRC SA Mr Sibanyoni said Clarens is shown as encumbered on Page 34/37, but there is no matching bank loan. Mr Naidoo said Clarens is included with Pinnacle Point under Note 3. Liability is limited to the outstanding balance. If the debtor defaults, the bank has the right to take back the property, sell it and pay the bond, and pay the residual balance to the owner. The Chairman added that the reason these two estates are shown together is that there was a common Developer. It was noted that 28 Arabella under Note 3 should correctly read 228 Arabella. The Related Party information will be handled in the same manner as for GRC. Mr Osner suggested that the Accumulated surplus be split to reflect the operating profit/loss, refurbishment levy and revaluation separately, so that members could see what is available for refurbishment. Mr Naidoo said this was done previously but the format had changed over time. It used to be the practice to retain a fixed asset register and do a write-off each year. The Club is now run from a budget perspective and expenses are written off in full in the year in which they are incurred. Mr Osner said the revaluation adjustment does not match the fair value adjustment. It was explained that the variance was due to the deferred tax provision on the eventual disposal of the property. Mr Osner queried the increase in Club Management Fees from R1 349 00 (2104) to R1 665 000 (2015) and R2 260 000 (2016). Mr Naidoo said this was because of the rental properties. The fees are paid per property

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managed and there had been 5 rental units at Zimbali. This year, 3 of those have been taken out. The amount paid in from the prior year contributed to this increase, as no provision was made last year. Mr Sibanyoni queried the increase in Trustees fees from R15 000 to R55 000. Mr Naidoo explained that in 2015 GRC was carrying most of the cost because there were more trustees in the old club. It was felt that there was an imbalance, as all the trustees contribute equally to the running of both clubs, and the decision was made to split the expenses equally. In GRC the expense had increased from R73 000 to R75 000. This included a bit of extra travel to Hans Merensky to deal with the situation there, if not for this, it would have been R55 000 in both Clubs. The Chairman added for the sake of transparency that the Trustees receive R3 000 per meeting attended and reimbursement of travel expenses. Mr Sibanyoni said added together this made R130 000. The Chairman said it was mainly for travelling. It had also been decided to reduce the number of board meetings from 4 to 3 per year, one of which will be a telephone conference. It is now only necessary to travel for two meetings – one in Pinetown for the budget discussion and one in Johannesburg for the AGM. The AGM costs include the hire of the venue and refreshments. The other meeting is held at Club Leisure’s office and there is no charge for the venue. Mr Naidoo said GRC also pays a portion of the costs for attendance at the AGM of the subsidiary companies – there had been 2 in 2016. The annual financial statements for the year ended 31 December 2016 were thereafter adopted. For GRC : Proposed: H Kohloffel Seconded: L Hale For GRC SA : Proposed: M Sibanyoni Seconded: C Osner.

7 APPOINTMENT OF AUDITORS AND APPROVAL OF AUDITORS’ REMUNERATION

The Chairman said Management had been asked last year to get quotes from other auditors. Several companies had been approached, including the current auditors. The quotes received were as follows: PWC - R285 000 PKF - R245 000 Moore Stevens - R170 000, which included an increase of 5% over the current fee. The Chairman said the Trustees proposed that the current auditors be retained. Mr Sibanyoni asked whether it was permissible for an audit to be done for a fixed fee. Mr Naidoo said it is. The meeting agreed unanimously to stay with the current auditors, and the Trustees were authorised to remunerate the auditors for their services.

8 MANAGING AGENT’S REPORT Mr Jordaan said that he did not have much to add to the Chairman’s report. The biggest problems at the moment were the Arabella roofs and the Hans Merensky matter. Hans Merensky will be discussed at the meeting on 5 May 2017. The developer is still controlling the estate, the business rescue practitioner has not responded to correspondence, and GRC members still cannot play golf. Nedbank brought an application for liquidation, but they were paid. Each time an application is brought, the debt is paid. Numerous complaints were received about the three rental units at Ebuhleni, and the lease has not been renewed. Zimbali is still one of the most popular destinations, and the Developer is looking for something else at the estate. First Resorts has taken over the management of Elements, and this estate will also be considered for GRC. Mr Kohloffel asked if the Club would buy at Zimbali. Mr Jordaan said the problem is the cost, but there are some owners in financial difficulty, and CLD has asked to be notified if they go on auction. It would definitely be better to spend money on maintaining Club property than a rental home. Mr Berry asked if anything was going to happen at Vaal de Grace. Mr Jordaan said the Developer had paid R1,8 million up front. This would definitely still be considered, as it is a beautiful estate. Single storey houses are preferred – taking into account visitors with physical disabilities -, but most houses are double-storey. Mr Jordaan said feedback from members is very important, and if they notice things, they let us know. Mr Berry commented that he had problems at Zimbali (Yellowwood). This is a 3 storey house and there is no railing on the bottom stairs. The electricity tripped continually and he could not get into the garage because there was no key. He did get hold of the manager and the problems were dealt with, but he wasted half a day. At Erinvale it took about 5 hours to sort out the issues. There were numerous items missing from the inventory and the estate manager said people never check it. There was no soap and the housekeeper said there had been no stock for 2 months. This and the inventory issue had been reported to the regional manager. The regional manager said he knew nothing about the problem. Soap was subsequently delivered. Mr Sibanyoni commented that 86% occupancy did not constitute full use. The Chairman said most houses run at 100% over the summer, but some are not utilised fully – for example, Hans Merensky was empty in February. The bed utilisation figures show where a 3 bedroom house only has 2 or 4 people.

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9 ADOPTION OF THE 2017 BUDGET The Chairman said the Trustees had approved the budget and the levies had been raised. This item will in future be amended to read “To receive the budget”. Mr Sibanyoni said members should receive the budget much earlier. The Chairman said the information on the new levies and the budget are circulated during December. It is a requirement to note the budget at the AGM. Mr Sibanyoni asked whether members should not approve the levies. The Chairman said the Trustees approve the levies. Mr Sibanyoni asked if he did not agree with the levies, could he raise this with the trustees, which The Chairman confirmed. The Chairman said at the next budget meeting the trustees would look at how big the reserve fund should be, as it was unnecessary to keep building it up. The 5-year refurbishment plan will be considered and that will help determine any increase for the following year. Mr Osner asked whether there was any minimum requirement in terms of the new controlling body. Mr Jordaan said at the moment this was confined to Sectional Title body corporate and share block companies. The budgets for 2017 for both the Golf Resorts Club and Golf Resorts Club SA were adopted without amendment.

10 ANNUAL SUBSCRIPTION / ANNUAL LEVY FOR THE YEAR ENDING 31 DECEMBER 2017 The fees for 2017 had been approved by the Trustees and implemented. The subscription for Platinum memberships is R325 per debenture and R225 per debenture for Gold memberships. The levies for GRC SA are a provisional amount, and the top-up payable depends on the chosen destination. The provisional figure is calculated on a sliding scale, depending on the number of points owned, and the schedule is included in the AGM booklet. The fees have already been raised and these are the amounts members have been paying.

11 ELECTION OF TRUSTEES FOR THE ENSUING YEAR

The Chairman said the Clubs are run jointly. Combined meetings are held and eight Trustees look after the business of both Clubs. It is necessary to elect three ordinary trustees for each club. No new nominations had been received and the existing board members were available for re-election, so the Board would remain unchanged. Mr Sibanyoni said based on the voting last year, there was no chance of any new trustees coming in. He asked where the 14.000 votes for some of the trustees came from. The Chairman explained that these were the Developer votes. Mr Naidoo said the reason it came to a vote last year was because there was not sufficient information or background on the new nominees. The AGM notice was sent out much earlier this year so that if there were nominations for new trustees, the information could be put on the website and people would be able to make an informed decision. Mr Sibanyoni said if he nominated someone at the meeting and the Developer votes were in competition there would be no chance. The Chairman said nominations had to be received at least 48 hours before the meeting. Only if there was a vacant position, could nominations be taken from the floor. The Chairman said it was good for the trustees to change from time to time. If someone wants to stand, they should put forward their CV and it would be circulated to the board. If that process is followed, the Developer will not exercise his right to vote. The Chairman hoped that the Developer would stand back and let the members make a decision. Mr Sibanyoni understood that the Developer was invested in the club. The Developer knows the existing trustees and would naturally vote for them unless at some point a decision is made that new trustees are needed. However, when he looked at the report on the voting, he felt there was no point in nominating new trustees. The Chairman said it takes a while for new trustees to get their head around the Club structure. The point has been reached where the clubs are very easy to run and it would not be difficult to get a grasp of the business. The Chairman personally would like to see some new blood on the board, as this would bring a new perspective. Mr Osner asked whether owners who relinquished their debentures would still have voting power. The Chairman said they would. The Developer had very few debentures left in GRC. In GRC SA the Developer has a big interest, as the Club is still growing. If it reaches the same stage as the old club, the Developer will eventually have no vote. Mr O’Sullivan said he had listened to the comments. He was not being disrespectful, but he did not particularly want to be a trustee. As the Sales Director of CLG he thought it was the greatest thing for the Club and the health of the brand to have existing members who use the Club to become involved, but it was a thankless task. The Developer would also like to have more members actively involved. The perception here is that the trustees are on the board because the Developer has a massive controlling vote. The Developer has nothing to gain by

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blocking other people from becoming trustees. The existing trustees have a particular set of skills. Mr O’Sullivan said people should stand up and be nominated. Mr Sibanyoni asked who the Developer is. Mr O’Sullivan said it is Club Leisure Development. Mr Sibanyoni asked what the Developer’s relationship is to the directors or trustees. The Chairman said Mr Ridl, Mr Lamont, Ms Wright and Mr O’Sullivan all part of Club Leisure Group. Mr Blain, Mr Herd, Mr Xulu and The Chairman are not related to the group. Mr Sibanyoni said his question was intended to find out where the votes came from. He understood that non-executive members are needed on the board and, hopefully, going forward this would be possible. He thanked the trustees for the time they spend and said what they get does not equal what they put into the task. The existing Board members were reappointed. The combined Board will consist of: Founder Trustees Member Trustees

GRC A G Usher (Chairman) A N Ridl B R Herd

P Blain C A Wright M O’Sullivan

GRC (SA) S J Lamont A N Ridl

C A Wright C T Xulu M O’Sullivan.

12 TRUSTEES REMUNERATION The Chairman said the Trustees are paid an amount equal to one year’s levy in the old Club. The remuneration was approved unanimously.

13 OTHER BUSINESS

13.1 Establishment of a resales division: The Chairman said this had been discussed at the trustees’ meeting and it was agreed that it should be explored further. Currently the Club just advertises when someone wants to sell. The information goes into the newsletter and onto the website, to existing members, but not out into the wider market. It was felt that resales should be marketed outside the Club. The board will take the matter forward and look into it.

Mr Hale asked what the resale value of a Platinum debenture is. The Chairman said it was currently about R2 500. Some members have taken the redemption option after 10 years and were refunded the purchase value. If there is a willing seller and buyer and no commission is involved, one can get this price. If there is an organisation taking commission, the amount could be reduced by 20-30%. It is an expensive product to market.

13.2 Appointment of trustees: Mr Sibanyoni said the General Information specifies that “The number of Trustees shall be determined from time to time ... in a general meeting”. This was not included on the agenda. The Chairman said if a nomination had been received today for another member, the meeting could have said instead of having a vote, one could just increase the number of trustees. That would be a way to get a new member onto the board without losing the expertise of the existing trustees.

13.4 Members who are not golfers: Mr Osner asked how many club members are golfers. He does not play, and had visited Matekula which was very nice but not always available. The Chairman said members had the option to swop out to other resorts through Premier Private Resorts. The whole list of RCI resorts is available to the Club.

13.5 New property: A member who had arrived late enquired whether anything had been done about obtaining property in Gauteng. The Chairman said this had been discussed earlier and Mr Jordaan would be able to assist with information.

There being no further questions, the Chairman thanked everyone for attending and the meeting dissolved at 14h35.

CONFIRMED THIS ________ DAY OF ______________ 2018.

CHAIRMAN

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THE GOLF RESORTS CLUB/ GOLF RESORTS CLUB (SA)

REPORT BY THE CHAIRMAN FOR THE ANNUAL GENERAL MEETING

22 JUNE 2018

Welcome to the seventh combined AGM of The Golf Resorts Club and Golf Resorts Club SA. The original GRC Club was founded in 1993 and celebrates its 25th anniversary this year. The past 25 years have certainly flown by! I still recall the inaugural meeting at the Intercontinental Hotel in Sandton where the 5 founding trustees signed the founding documents. What is really encouraging is that most of the members who joined in the first year are still members! In the past year under review the Members again made good use of the Club across the portfolio of resorts. The feedback system after a member’s visit is working well, which has enabled the Managing Agents to maintain the consistency of high member satisfaction levels. The following units were renovated/ upgraded during the year. More detail will be covered in the Managing Agent’s report tabled at the AGM. Arabella

- Roof replaced on both houses, vinyl flooring installed Atlantic Beach - Softs refurbishment and upgrade of kitchen cupboards & blinds done (see attached pics) Boschenmeer - Lounge and dining room curtains and kitchen blinds replaced Clarens

- Patio cupboard doors replaced (pic attached) Erinvale

- Bedroom upgrade including vinyl flooring, cushions and throws Fancourt

- Bathrooms upgraded in all 3 lodges, vinyl flooring in bedrooms 724, New paved area created for 2nd golf cart (pics)

Hans Merensky - Both lodges thatch repaired, lounge and dining room curtains replaced

Kruger Park Lodge - Washing machine replaced with a dishwasher

Magalies Park - Bathrooms refurbished, softs upgraded, laundry/golf cart area tiled and upgraded

Pezula - Vinyl flooring installed, gas fireplace in Nantucket 9 replaced, bedroom softs upgraded

Pinnacle Point - Block 3 units refurbished

White River - Bathroom extension and upgrade

Zimbali – Putter - Refurbished kitchen and laid vinyl flooring in passageway

Zimbali – Fairways - Replaced lounger cushions and softs in dining room

The ongoing drought in the Western Cape and resultant water restrictions had an impact on the

conditioning of golf courses such as Atlantic Beach and Boschenmeer. The early winter rains this

year are a welcome relief and we are hopeful that these courses will be restored back to their

former glory by next summer.

The Golf Digest magazine conducted their course ratings review during 2017 and published the

results in March this year. A point to note is that 12 of the 17 Golf Resorts courses are in the Top

100!

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Good news is that the developers, Club Leisure, have added a new resort to the GRCSA portfolio –

Elements in the Waterberg area north of Pretoria. Elements is ranked 29th on the Golf Digest Top

100 list and will be a very popular destination.

Unit 23 Kauai, Zimbali has also been added to the GRCSA portfolio as a rental unit.

On the financial side, the Clubs once again find themselves in a net asset and net current asset

situation, backed by the cash reserves on hand at the year end. The Financial Statements have

been posted on our website and will be presented for adoption at the AGM.

Golf Resorts Properties Proprietary Limited and Golf Resorts Properties SA Proprietary Limited, wholly owned subsidiaries of The Golf Resorts Club and The Golf Resorts Club SA respectively, have adopted the SAICA guide for share block accounting for the 2017 year end. This guide has been applied retrospectively and the 2016 comparatives contained in the annual financial statements differ from those in the annual financial statements published for the year ended 31 December 2016. All adjustments were made to the opening comparative statement of financial position.

The value of the property is now shown in the Clubs’ individual financial statements as opposed to the property companies’ financial statements. In the consolidated accounts, the only change is that there is no longer a deferred tax element related to the fair valuing of the properties. The values of the properties remain the same.

The benefit is that the Clubs can apply the S10(1)(e) exemption provided for in the Income Tax Act in calculating the taxation payable in respect of the property companies. The company will not be taxed on any operating surpluses, except if it has earned interest income, and then only if the interest income is in excess of R50,000.

The budget and proposed expenditure for 2018 will be discussed later. These estimates were

compiled by the Managing Agent, based on the actual costs in the previous year, known amounts

for certain expense items that can be obtained in advance, and calculations using trends and

statistics in the industry. As always, the Trustees consider these figures very carefully before

approving the expense and the subscription amounts. The subscriptions for 2018 were approved

and have already been implemented.

The Trustees have decided to discontinue the purchase of prepaid rounds at Pinnacle Point due to the difficulties experienced in obtaining refunds from members for the golf rounds they played at Pinnacle Point. From 1 July this year, Club members will have to pay direct at Pinnacle Point when booking.

I wish to thank all the Trustees for their diligent service to the board and the Club members this past year as well as to the staff of the First Resorts management company, from the Reservations department through to the house keepers on site. A special thanks also to the Club’s secretary, Pat Raab, for whom no task is too big or difficult! In these times of renewed hope and enthusiasm in our beloved country I wish all our members straight drives and bunker free vacations!

ALLEN USHER

CHAIRMAN

Page 11 of 38

THE GOLF RESORTS CLUBCONSOLIDATED ANNUAL FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2017

Page 12 of 38

The Golf Resorts ClubConsolidated Annual Financial Statements for the year ended 31 December 2017

Index

The reports and statements set out below comprise the consolidated annual financial statements and supplementaryinformation presented to the members:

Contents Page

Independent Auditor's Report 2 - 4

Trustees' Responsibilities and Approval 5

Trustees' Report 6

Consolidated Statement of Financial Position 7

Consolidated Statement of Comprehensive Income 8

Consolidated Statement of Changes in Funds 9

Consolidated Statement of Cash Flows 10

Accounting Policies 11 - 13

Notes to the Consolidated Annual Financial Statements 14 - 20

The following supplementary information does not form part of the consolidated annual financial statements and isunaudited:

Consolidated Detailed Statement of Comprehensive Income 21

Supplementary Information 22 - 23

1

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2

Independent Auditor’s Report

To the members of The Golf Resorts Club

Opinion

We have audited the consolidated annual financial statements of The Golf Resorts Club and its subsidiary (the group) set out on pages 7 to 20, which comprise the consolidated statement of financial position as at 31 December 2017, and the consolidated statement of comprehensive income, consolidated statement of changes in funds and consolidated statement of cash flows for the year then ended, and notes to the consolidated annual financial statements, including a summary of significant accounting policies.

In our opinion, the consolidated annual financial statements of The Golf Resorts Club for the year ended 31 December 2017 are prepared, in all material respects, in accordance with the basis of accounting as set out in note 1 to the consolidated annual financial statements.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated annual financial statements section of our report. We are independent of the group in accordance with the Independent Regulatory Board for Auditors Code of Professional Conduct for Registered Auditors (IRBA Code) and other independence requirements applicable to performing audits of financial statements in South Africa. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code and in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBA Code is consistent with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Parts A and B). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter – Basis of accounting

We draw attention to note 1 to the consolidated annual financial statements, which describes the basis of accounting. The consolidated annual financial statements are prepared in accordance with the Club’s own accounting policies to satisfy the financial information needs of the trustees. As a result, the consolidated annual financial statements may not be suitable for another purpose. Our opinion is not modified in respect of this matter.

Other information

The trustees are responsible for the other information. The other information comprises the trustees’ report, the consolidated detailed statement of comprehensive income and supplementary information, which we obtained prior to the date of this report. Other information does not include the consolidated annual financial statements and our auditor's report thereon.

Our opinion on the consolidated annual financial statements does not cover the other information and we do not express an audit opinion or any form of assurance conclusion thereon.

An independent member firm of Moore Stephens International Limited – members in principal cities throughout the world.

Moore Stephens CJL Partnership | Trading as Moore Stephens. Registered Auditors - Practice Number 925624 Partners: DT Belling, D Harryparsad, HD Hillermann, CF Reid, L Sarabjit, SRN Templar, TL Wright.

MOORE STEPHENS CJL 5th Floor, The Spinnaker Albert Terrace Durban 4001

P O Box 11800, Marine Parade Durban, 4056

T +27 (0)31 332 8622F +27 (0)31 332 1828E [email protected]

www.moorestephens.co.za

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3

In connection with our audit of the consolidated annual financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated annual financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the trustees for the consolidated annual financial statements

The trustees are responsible for the preparation and fair presentation of the consolidated annual financial statements in accordance with basis of accounting as set out in the Club’s Constitution, and for such internal control as the trustees determine is necessary to enable the preparation of consolidated annual financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated annual financial statements, the trustees are responsible for assessing the group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the group or to cease operations, or have no realistic alternative but to do so. Auditor's responsibilities for the audit of the consolidated annual financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated annual financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated annual financial statements. As part of an audit in accordance with International Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the consolidated annual financial

statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the trustees.

Conclude on the appropriateness of the trustees’ use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated annual financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the group to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the consolidated annual financial statements, including the disclosures, and whether the consolidated annual financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated annual financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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4

We communicate with the trustees regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Moore Stephens CJL Chartered Accountants (SA) Registered Auditor Per: Devek Harryparsad CA(SA), RA Partner 30 May 2018 Durban

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Trustees' Report

The trustees submit their report for the year ended 31 December 2017.

1. Review of activities

Main business and operations

The Club is engaged in the securing of use and occupation rights and interests in immovable property or use schemes orspecific property or accommodation for the benefit of its members, and the management of the collective interests of itsmembers, applicable to the common interests in such immovable property or use schemes or specific property oraccommodation. The Club's activities includes the collection of levies from its members and the application of such leviesas provided for in the Constitution and Regulations of the Club from time to time. The Club operates principally in SouthAfrica.

The operating results and state of affairs of the Club are fully set out in the attached consolidated annual financialstatements and do not in our opinion require any further comment.

2. Events after the reporting period

The trustees are not aware of any matter or circumstance arising since the end of the financial year that has a materialimpact on the consolidated annual financial statements.

3. Trustees

The trustees of the Club during the year and to the date of this report are as follows:

Name

Founder TrusteesA G UsherA N RidlB R Herd

Member TrusteesC A WrightP BlainM O' Sullivan

4. Interest in subsidiaries

Name of subsidiary Country of Incorporation Golf Resorts Properties Proprietary Limited South Africa

The above entity has been consolidated in these consolidated annual financial statements.

Golf Resorts Properties Proprietary Limited is a shareholder of share block companies. In terms of note 1.5 to theconsolidated annual financial statements, these subsidiaries are not consolidated into these consolidated annual financialstatements.

5. First-time Adoption of Share Block Accounting in subsidiary

Golf Resorts Properties Proprietary Limited, a wholly owned subsidiary of The Golf Resorts Club, has adopted the SAICAguide for share block accounting, for the first time for the 2017 year end. On principle this guide has been appliedretrospectively and the 2016 comparatives contained in these annual financial statements differ from those published inthe annual financial statements published for the year ended 31 December 2016. All adjustments were made to theopening comparative statement of financial position. The club has amended its accounting policies accordingly.

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Consolidated Statement of Financial Position

2017Restated

2016Notes R R

Assets

Non-Current Assets

Investment property 2 58 730 000 58 730 000

Developer bond obligation 4 1 031 317 1 462 299

59 761 317 60 192 299

Current Assets

Developer bond obligation 4 288 825 223 144

Accounts receivable 5 2 282 552 2 735 129

Cash and cash equivalents 6 3 207 537 2 412 283

5 778 914 5 370 556

Total Assets 65 540 231 65 562 855

Funds and Liabilities

Funds

Members' investment 7 7 364 458 7 270 458

Revaluation reserve 12 028 433 12 028 433

Accumulated surplus 4 804 983 5 183 561

24 197 874 24 482 452

Liabilities

Non-Current Liabilities

Loan from related company 3 203 391 335 282

Other financial liabilities 8 37 504 035 37 857 221

37 707 426 38 192 503

Current Liabilities

Loan from related company 3 41 013 39 904

Other financial liabilities 8 247 812 223 144

Current tax payable 33 316 45 103

Accounts payable 9 3 312 790 2 579 749

3 634 931 2 887 900

Total Liabilities 41 342 357 41 080 403

Total Funds and Liabilities 65 540 231 65 562 855

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Consolidated Statement of Comprehensive Income

2017Restated

2016Notes R R

Revenue 10 8 611 416 8 134 219

Other income 46 161 2 150

Operating expenses (9 220 026) (7 905 146)

Operating (deficit)/surplus (562 449) 231 223

Investment revenue 11 234 099 230 916

Finance costs 12 (991) (4 769)

(Deficit)/Surplus before taxation (329 341) 457 370

Taxation 13 (49 237) (3 809)

Total comprehensive (deficit)/surplus for the year (378 578) 453 561

Transfer from/(to) accumulated surplus 378 578 (453 561)

- -

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Consolidated Statement of Changes in FundsMembers'investment

Revaluationreserve

Accumulatedsurplus

Total funds

R R R R

Opening balance as previously reported 7 133 458 - 14 444 423 21 577 881AdjustmentsChange in accounting policy - 12 028 433 (9 714 423) 2 314 010

Balance at 01 January 2016 as restated 7 133 458 12 028 433 4 730 000 23 891 891Surplus for the year - - 453 561 453 561Other comprehensive income - - - -

Total comprehensive deficit for the year - - 453 561 453 561

Units issued 137 000 - - 137 000

Total movement for the year 137 000 - - 137 000

Balance at 01 January 2017 7 270 458 12 028 433 5 183 561 24 482 452Deficit for the year - - (378 578) (378 578)Other comprehensive income - - - -

Total comprehensive deficit for the year - - (378 578) (378 578)

Units issued 94 000 - - 94 000

Total movement for the year 94 000 - - 94 000

Balance at 31 December 2017 7 364 458 12 028 433 4 804 983 24 197 874

Notes 7

9

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Consolidated Statement of Cash Flows

2017Restated

2016Notes R R

Cash flows from operating activities

Cash receipts from members 10 722 286 7 478 355

Cash paid to suppliers (10 145 277) (6 963 614)

Cash generated from operations 14 577 009 514 741

Investment revenue 234 099 230 916

Finance costs (991) (4 769)

Tax (paid)/refunded 15 (61 024) 4 748

Net cash generated from operating activities 749 093 745 636

Cash flows from investing activities

Proceeds from sale of plant and equipment 46 161 2 150

Movement in developer bond obligation 312 164 296 370

Net cash generated from investing activities 358 325 298 520

Cash flows from financing activities

Movement in members' investment 94 000 137 000

Movement in other financial liabilities (406 164) (433 371)

Net cash utilised in financing activities (312 164) (296 371)

Total cash movement for the year 795 254 747 785

Cash at the beginning of the year 2 412 283 1 664 498

Total cash at the end of the year 6 3 207 537 2 412 283

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Accounting Policies

1. Presentation of Consolidated Annual Financial Statements

The consolidated annual financial statements have been prepared in accordance with the accounting policies as set outbelow. The consolidated annual financial statements have been prepared on the historical cost basis, except for themeasurement of investment property at fair value and certain financial instruments at fair value or amortised cost. Theyare presented in South African Rand.

These accounting policies are consistent with the previous period, except for the changes set out in note 18 First-timeAdoption of Share Block Accounting.

1.1 Consolidation

Basis of consolidation

The consolidated annual financial statements incorporate the results and performance of the Club and its subsidiaries.

Control exists when the Club has the power to govern the financial and operating policies of an entity so as to obtainbenefits from its activities.

The results of the subsidiary are included in the consolidated annual financial statements from the effective date ofacquisition to the effective date of disposal. All material intragroup transactions, balances, income and expenses areeliminated.

Adjustments are made when necessary to the annual financial statements of the subsidiary to bring its accounting policiesin line with those of the group.

The subsidiaries disclosed in note 3 to the consolidated annual financial statements have been treated as investmentsand are not consolidated.

1.2 Significant judgements and sources of estimation uncertainty

In preparing the consolidated annual financial statements, management is required to make judgements, estimates andassumptions that affect the amounts represented in the consolidated annual financial statements and related disclosures.The estimates and associated assumptions are based on historical experience and other factors that are considered to berelevant. Actual results in the future could differ from these estimates which may be material to the consolidated annualfinancial statements. Significant judgement includes:

Impairment testing

The Club reviews and tests the carrying value of assets when events or changes in circumstances suggest that thecarrying amount may not be recoverable. When such indicators exist, management determines the recoverable amountby performing value in use and fair value calculations. These calculations require the use of estimates and assumptions.When it is not possible to determine the recoverable amount for an individual asset, management assesses therecoverable amount for the cash generating unit to which the asset belongs.

Taxation

Judgement is required in determining the provision for income taxes due to the complexity of legislation. There are manytransactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business.The Club recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due.Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differenceswill impact the income tax provisions in the period in which such determination is made.

Fair value adjustments

Investment property is measured at fair value. A level of judgement is required to calculate this fair value and to determinethe supporting variables used in this calculation.

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Accounting Policies

1.3 Investment property

Investment property comprises use and occupation rights and interests in immovable property or use schemes or specificproperty or accommodation for the benefit of the Club's members. In addition, only investment property whose fair valuecan be measured reliably without undue cost or effort on an ongoing basis is included in investment property.

Investment property is initially recognised at cost.

After initial recognition, investment property is measured at fair value at each reporting date with changes in fair valuerecognised in surplus or deficit.

1.4 Plant and equipment

As from 01 January 2012, plant and equipment are expensed in the year of acquisition.

1.5 Investments in subsidiaries

Investments in subsidiaries other than Golf Resorts Properties Proprietary Limited are carried as investment property atfair value and are not consolidated.

The investment in Golf Resorts Properties Proprietary Limited is consolidated into these consolidated annual financialstatements.

1.6 Financial instruments

Initial measurement

Financial instruments are initially measured at the transaction price. This includes transaction costs, except for financialinstruments which are measured at fair value through surplus or deficit.

Financial instruments at amortised cost

Financial instruments may be designated to be measured at amortised cost less any impairment using the effectiveinterest rate method. These include accounts receivable, loans and accounts payable.

Accounts payable and accounts receivable that relate to the same party are offset against each other.

At the end of each reporting date, the carrying amounts of assets held in this category are reviewed to determine whetherthere is any objective evidence of impairment. If so, an impairment loss is recognised.

Financial instruments at cost

Commitments to receive a loan are subsequently measured at cost less impairment.

Debentures are recorded at cost.

All financial instruments whose fair value cannot otherwise be measured reliably, and which do not meet the criteria to bedesignated as instruments measured at amortised cost, are measured at cost less impairment.

Financial instruments at fair value

All other financial instruments are measured at fair value through surplus and deficit.

1.7 Tax

Current tax assets and liabilities

Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid inrespect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

Current tax liabilities/(assets) for the current and prior periods are measured at the amount expected to be paid to/(recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted bythe reporting date.

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Accounting Policies

1.7 Tax (continued)

Tax expense

Tax expense is recognised in the same component of total comprehensive income or funds as the transaction or otherevent that resulted in the tax expense.

1.8 Impairment of assets

The entity assesses at each reporting date whether there is any indication that an asset may be impaired.

If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If itis not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generatingunit to which the asset belongs is determined.

An impairment loss of assets is recognised immediately in surplus or deficit.

If an impairment loss subsequently reverses, the carrying amount of the asset (or group of related assets) is increased tothe revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had noimpairment loss been recognised for the asset (or group of assets) in prior years. A reversal of impairment is recognisedimmediately in surplus or deficit.

1.9 Revenue and interest

Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivablefor services provided in the normal course of business, net of value added tax.

Interest is recognised, in surplus or deficit, using the effective interest rate method.

1.10 Borrowing costs

Borrowing costs are recognised as an expense in the period in which they are incurred.

1.11 Members' investment

Members' investment is reflected in the notes to the annual financial statements at cost, which includes administrationcosts.

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Notes to the Consolidated Annual Financial Statements2017 2016

R R

2. Investment property

2017 2016

Fair value Fair value

Freehold and Sectional Title Units 58 730 000 58 730 000

Reconciliation of investment property - 2017

Openingbalance

Total


Reconciliation of investment property - 2016

Openingbalance

Total


Pledged as security

Carrying value of assets pledged as security:


Investment property represents the right of use that the club has to properties that are owned by its subsidiaries.

Details of valuations

The effective date of the valuations was 22 April 2016. Valuations were performed by an independent valuer, Mr A WBosch, valuer of the High Court of South Africa and Appraiser appointed by the Minister of Justice. Mr A W Bosch is notconnected to the company and has continuing experience in the location and category of the investment properties beingvalued.

The valuations were based on open market value for existing use, and are for information purposes only. There is nointention to sell the houses in the short term.

3. Loan from related company

Dainfern Sales and Marketing Proprietary Limited 244 404 375 186

The above loan is linked to the mortgage bond over Boschenmeer 26, the property held in Dainfern Sales and MarketingProprietary Limited. The bond is repayable in monthly instalments of R7,489 (2016: R7,838) and bears interest at 8.45%p.a. (2016: 9.30% p.a.).

Non-current liabilities 203 391 335 282Current liabilities 41 013 39 904

244 404 375 186

4. Developer bond obligation

Club Leisure Development Proprietary Limited - Developer bond obligation 1 320 142 1 685 443

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4. Developer bond obligation (continued)

The Developer's bond obligation represents the extent to which the developer has undertaken to settle debts encumberedover the Club's assets as reflected by the loans in note 8 and the mortgage bond held in subsidiary Dainfern Sales andMarketing Proprietary Limited as reflected by the loan in note 3. The loan is repayable monthly at the same rate as theloans, referred to in notes 3 and 8.

Non-current assets 1 031 317 1 462 299Current assets 288 825 223 144

1 320 142 1 685 443

5. Accounts receivable

Accounts receivable 1 000 778 1 782 220Prepayments 853 713 783 892Deposits 550 550VAT 427 511 168 467

2 282 552 2 735 129

6. Cash and cash equivalents

Cash and cash equivalents consist of:

Cash on hand 423 2 184Bank balances 3 207 114 2 410 099

3 207 537 2 412 283

7. Members' investment

IssuedUnits issued 7 364 458 7 270 458

Reconciliation of number of units issued:Reported as at 01 January 7 270 458 7 133 458Units issued 94 000 137 000

7 364 458 7 270 458

Members investment comprises Platinum and Gold units without an attached debenture. This has arisen from memberssplitting their original debentures and selling a portion of their membership.

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8. Other financial liabilities

Golf Resorts Club DebenturesThe debentures are unsecured, bear no interest and will only beredeemed in terms of the debenture rules.

36 676 109 36 770 109

Bank loansThese loans are secured by investment property referred to in note 2, arerepayable in monthly instalments inclusive of interest charged at ratesbetween 8.25% - 9.05% (2016: 8.50% - 9.30%) p.a. Refer to note 6 in thesupplementary information to the annual financial statements for details ofbonds held.

1 075 738 1 310 256

37 751 847 38 080 365

Non-current liabilitiesAt amortised cost 37 504 035 37 857 221

Current liabilitiesAt amortised cost 247 812 223 144

37 751 847 38 080 365

9. Accounts payable

Accounts payable 3 312 790 2 579 749

10. Revenue

Levy income 8 611 416 8 134 219

11. Investment revenue

Interest receivedBank 178 745 189 888Interest charged on accounts receivable 55 354 41 028

234 099 230 916

12. Finance costs

Accounts payables 2 -Interest paid on bank overdraft 545 21Late payment of tax 444 4 748

991 4 769

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13. Taxation

Major components of the tax expense

CurrentLocal income tax - current period 49 237 -Local income tax - recognised in current tax for prior periods - 3 809

49 237 3 809

Reconciliation of the tax expense

Reconciliation between accounting (deficit)/surplus and tax expense.

Accounting (deficit)/surplus (329 341) 457 370

Tax at the applicable tax rate of 28% (2016: 28%) (92 215) 128 064

Tax effect of adjustments on taxable incomePrior period adjustment - 3 809Exempt receipts and accruals in terms of Section 10(1)(e) 141 452 (128 064)

49 237 3 809

The trustees are of the opinion that the Club is taxed under section 10(1)(e) of the Income Tax Act, in terms of which levyincome earned by the Club is exempt from taxation. Taxation is payable on any receipts and acruals other than leviesderived by the Club, to the extent that the aggregate of those receipts and accruals exceed R 50,000, after the deductionof a pro-rata portion of certain administration expenses.

An application has been made to the South African Revenue Service for the retrospective application of the exemption.

14. Cash generated from operations

(Deficit)/Surplus before taxation (329 341) 457 370Adjustments for:Surplus on disposal of plant and equipment (46 161) (2 150)Investment revenue (234 099) (230 916)Finance costs 991 4 769Changes in working capital:Accounts receivable 452 577 (96 485)Accounts payable 733 042 382 153

577 009 514 741

15. Tax (paid)/refunded

Balance at beginning of the year (45 103) (36 546)Current tax for the year recognised in surplus or deficit (49 237) (3 809)Balance at end of the year 33 316 45 103

(61 024) 4 748

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16. Prior period errors

A bond in favour of Nedbank Limited over the Hans Merensky 314 property was not previously accounted for in theannual financial statements of Golf Resorts Properties Proprietary Limited, a wholly owned subsidiary of the Club. Thebond liability and the corresponding loan asset with Club Leisure Development Proprietary Limited has now beenrecorded.

This adjustment has been applied retrospectively.

The correction of the errors results in adjustments as follows:

Statement of Financial PositionOther financial assets (non-current) - 563 275Other financial assets (current) - 52 882Other financial liabilities (non-current) - (563 275)Other financial liabilities (current) - (52 882)

17. First-time Adoption of Share Block Accounting in subsidiary

The subsidiary, Golf Resorts Properties Proprietary Limited, has adopted the SAICA guide for share block accounting, forthe first time for the 2017 year end. On principle this guide has been applied retrospectively and the 2016 comparativescontained in these consolidated annual financial statements differ from those published in the consolidated annualfinancial statements published for the year ended 31 December 2016. All adjustments were made to the openingcomparative statement of financial position. The club has amended its accounting policies accordingly.

The date of transition was 01 January 2016 and the effect of the transition on the consolidated annual financialstatements was as follows.

Reconciliation of equity at 01 January 2016 (Date of transition to the guide)

As reportedpreviously

Effects oftransition

As nowreported

Trade and other receivables 2 996 809 (261 680) 2 735 129

Total current assets 2 996 809 (261 680) 2 735 129

Deferred tax liability (2 575 690) 2 575 690 -

Total liabilities (2 575 690) 2 575 690 -

Total assets less total liabilities 421 119 2 314 010 2 735 129

Revaluation reserve - (12 028 433) (12 028 433)Accumulated surplus (14 897 984) 9 714 423 (5 183 561)

Total Equity (14 897 984) (2 314 010) (17 211 994)

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18. Related parties

`

Relationships

Holding entity The Golf Resorts Club

Subsidiary Golf Resorts Properties Proprietary LimitedSubsidiaries of Golf Resorts Properties Proprietary Limited Dainfern Sales and Marketing Proprietary Limited

Golf Resorts Investments Proprietary LimitedSyndicate G08 Selborne Park Proprietary LimitedSyndicate P17 Selborne Park Proprietary Limited

Common management Club Leisure Development Proprietary LimitedClub Leisure Management Proprietary LimitedClub Leisure Travel Proprietary LimitedClub Property Holdings Proprietary LimitedFirst Cleaning and Maintenance Proprietary LimitedFirst Resorts and Hotel Management ProprietaryLimitedGolf Resorts Club (SA) Golf Resorts Properties (SA) Proprietary LimitedPremier Private ResortsRocket Ridge Investments 1 Proprietary LimitedSelborne Hotel Spa and Golf Estate ProprietaryLimited

Trustees and directors P BlainB R HerdS J LamontA N RidlM O'SullivanA G UsherC A Wright

Related party balances and transactions with other related parties

Related party balances

Loan accounts - Owing (to)/by related partiesClub Leisure Development Proprietary Limited 757 122 1 069 286Dainfern Sales and Marketing Proprietary Limited (244 404) (375 187)Golf Resorts Investments Proprietary Limited 13 680 13 680

Amounts included in Accounts receivableClub Leisure Development Proprietary Limited - 1 138 444Syndicate P17 Selborne Park Proprietary Limited 152 794 222 030Golf Resorts Properties (SA) Proprietary Limited 51 682 25 251Syndicate G08 Selborne Park Proprietary Limited 247 019 332 401Golf Resorts Club (SA) 12 205 -

Amounts included in Accounts payableClub Leisure Management Proprietary Limited 80 770 144 474Club Property Holdings Proprietary Limited 2 434 14 114First Cleaning and Maintenance Proprietary Limited 8 815 8 615Premier Private Resorts 2 006 8 026First Resorts and Hotel Management Proprietary Limited 53 187 -Golf Resorts Properties (SA) Proprietary Limited 3 882 -Selborne Hotel Spa and Golf Estate Proprietary Limited 3 145 -Rocket Ridge Investments 1 Proprietary Limited 12 645 -

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18. Related parties (continued)

Related party transactions

Expenses paid to related partiesClub Leisure Management Proprietary Limited 156 089 167 150Selborne Hotel Spa and Golf Estate Proprietary Limited 37 149 -Club Leisure Travel Proprietary Limited 5 045 23 939First Cleaning and Maintenance Proprietary Limited 85 386 97 054Golf Resorts Properties (SA) Proprietary Limited 4 498 11 170Premier Private Resorts 15 491 14 515Rocket Ridge Investments 1 Proprietary Limited 173 320 121 005Club Property Holdings Proprietary Limited 7 523 -Trustees fees 23 250 24 050

Management fees paid to related partyClub Leisure Management Proprietary Limited 846 542 794 473First Resorts and Hotel Management Proprietary Limited 599 872 524 535

Recoveries received from related partiesClub Leisure Development Proprietary Limited 55 746 71 196Golf Resorts Properties (SA) Proprietary Limited 331 600 60 627

20

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Consolidated Detailed Statement of Comprehensive Income

2017Restated

2016Notes R R

Revenue

Levy income 11 8 611 416 8 134 219

Other income

Investment revenue 11 234 099 230 916

Surplus on disposal of plant and equipment 46 161 2 150

280 260 233 066

Operating expenses

Accommodation use fee 376 194 469 167

Administration fees 55 386 34 615

Assessment rates and municipal charges 246 208 248 960

Auditor's remuneration 182 561 210 811

Bank charges 85 094 118 068

Club management fees 846 542 794 473

Estate management fees 559 872 558 735

Garden maintenance 72 161 89 129

Golf cart maintenance 238 991 199 301

Golf membership subscriptions 336 585 298 322

Housekeeping 1 388 442 1 316 229

Insurance 133 429 134 028

Legal expenses 12 686 68 536

Levies 1 699 080 1 411 987

Pool maintenance 49 704 55 269

Postage, printing and stationery 28 710 33 522

Refurbishments 1 905 852 747 531

Repairs and maintenance 364 501 402 389

Subscriptions 167 297 168 791

Telephone and fax 12 560

Trustees fees and travel expenses 33 703 75 678

Utilities 437 016 469 045

9 220 026 7 905 146

Operating (deficit)/surplus (328 350) 462 139

Finance costs 12 (991) (4 769)

(Deficit)/Surplus before taxation (329 341) 457 370

Taxation 13 (49 237) (3 809)

Total comprehensive (deficit)/surplus for the year (378 578) 453 561

Transfer from/(to) accumulated surplus 378 578 (453 561)

- -

21The supplementary information presented does not form part of the consolidated annual financial statements and is unaudited

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Supplementary Information

1. Freehold and Sectional Title units

Unencumbered 2017R

2016R

Atlantic Beach - Erf 3411 Melkboschstrand 3 950 000 3 950 000Erinvale 21 Stand 12586 Somerset West 4 500 000 4 500 000Flat no. 1937 Section no.37 of Lot 19 San Lameer 1 650 000 1 650 000Stand 1606 White River Ext 26 2 800 000 2 800 000Villa no. 10309 known as Lot 103, Unit 5 San Lameer 2 250 000 2 250 000Erinvale 18 - Erf 12605 Somerset West 5 600 000 5 600 000Hans Merensky 107 - Erf 32 Portion 29 of Merensky 4 250 000 4 250 000Knysna River Club - Erf 14009 950 000 950 000

25 950 000 25 950 000

2. Freehold and Sectional Title units

Encumbered 2017R

2016R

Hans Merensky 314 - Erf 32 portion 46 of Merensky 4 250 000 4 250 000Pezula No.10 - Erf 12390 Knysna 2 600 000 2 600 000Zimbali Estate - 5 Putter Erf Port Zimbali 4 850 000 4 850 000

11 700 000 11 700 000

3. Share Block companies

2017R

2016R

Champagne Sports Resort - Unit 32 2 400 000 2 400 000Champagne Sports Resort - Unit 33 2 800 000 2 800 000Kruger Park Lodge - Unit 515 2 550 000 2 550 000Selborne Park Share Block Limited - Unit G1 2 400 000 2 400 000

10 150 000 10 150 000

4. Investment in similar schemes

2017R

2016R

Points held in Premier Private Resorts 475 000 475 000

5. Properties held in subsidiaries

2017R

2016R

Dainfern Sales and Marketing Proprietary Limited - Boschenmeer 26 2 405 000 2 405 000Golf Resort Investments Proprietary Limited - Fancourt 609 3 900 000 3 900 000Syndicate G8 Selborne Park Proprietary Limited - Unit G08 2 400 000 2 400 000Syndicate P17 Selborne Park Proprietary Limited - Unit P17 1 750 000 1 750 000

10 455 000 10 455 000


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Supplementary Information

6. Bank loans

Monthlyrepayments

2017

Monthlyrepayments

2016

2017R

2016R

Nedbank Limited - Hans Merensky 314 8 602 8 678 563 021 616 156ABSA Bank Ltd - Stand 12390 Knysna 9 045 9 106 314 625 383 395First National Bank Ltd - Stand 306 PortZimbali

11 600 11 600 198 092 310 705

29 247 29 384 1 075 738 1 310 256


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THE GOLF RESORTS CLUBBUDGET 2018BUDGET INCOME STATEMENT

2017 Variance to 2017 Budget Variance

( % )TOTAL Platinum Gold

No of Members 774 644 130 No of houses 21 17 4 No. of Weeks 1,006 886 120 Points

Points in stock 32,945 25,625 7,320Net points issued to members (32,303) (25,226) (7,077)

Total points issued (32,945) (25,625) (7,320)Add back : Points held by Developer 642 399 243

Net points available 642 399 243Prior year rates (Incl VAT) R 325 R 225Percentage increase applied 5.0% 5.0%Required current year rate (incl VAT) R 341 R 236Rate per point (excl VAT) R 299 R 207SUBSCRIPTION INCOME 9,187,689 7,670,703 1,516,986 8,750,110 437,579 5%

Rent paid - Member requests (288,385) (240,769) (47,615) (106,636) (181,749) 170%MANAGEMENT FEE (10% OF INCOME) (889,930) (742,993) (151,699) (875,011) (14,919) 2%NET OPERATING INCOME 8,009,373 6,686,940 1,317,672 7,768,462 240,911 3%OTHER INCOME

Interest received 210,290 185,214 25,076 199,052 11,238 6%TOTAL INCOME 8,219,664 6,872,154 1,342,748 7,967,515 252,149 3%EXPENSESDIRECT COSTS◊ 5,861,198 5,173,025 688,173 5,765,124 96,073 2%

Electricity & Water 455,980 414,859 41,121 525,870 (69,890) -13%Garden Service 86,024 62,084 23,940 82,634 3,390 4%Golf Cart Expenses - Maintenance 182,893 136,033 46,860 201,484 (18,591) -9%Accommodation use fee 50,388 50,388 0 52,268 (1,880) -4%Housekeeping 1,445,665 1,265,358 180,307 1,419,336 26,329 2%Insurance 138,753 108,330 30,423 142,316 (3,563) -3%Levies 1,772,700 1,566,755 205,945 1,639,755 132,945 8%Pool Maintenance 48,151 48,151 0 54,646 (6,495) -12%Rates & Taxes 254,796 228,273 26,522 259,056 (4,260) -2%Repairs & Maintenance 314,273 268,809 45,464 340,180 (25,907) -8%TV Licenses & DSTV 165,230 145,130 20,100 173,498 (8,268) -5%Golf membership subscriptions 334,879 334,879 0 304,755 30,124 10%Printing 15,189 13,952 1,237 12,791 2,398 19%Telephone & Fax 13 11 2 528 (514) -98%Estate Management fee 596,264 530,012 66,252 556,007 40,256 7%

OVERHEADS* 251,398 221,420 29,978 228,543 22,855 10%AGM Expenses 4,975 4,382 593 1,539 3,436 223%Audit Fees 76,500 67,378 9,122 74,130 2,370 3%Administration fees 36,996 32,584 4,412 23,187 13,809 60%Bank Charges 30,927 27,239 3,688 29,688 1,239 4%Credit card charges 82,000 72,222 9,778 80,000 2,000 3%Legal Fees 20,000 17,615 2,385 20,000 0 0%

TRUSTEES EXPENSES 47,241 41,607 5,633 53,636 (6,395) -12%Insurance 6,333 5,578 755 7,219 (886) -12%Travel & Venue 16,495 14,528 1,967 23,167 (6,671) -29%Trustee fees 24,413 21,501 2,911 23,250 1,163 5%

TOTAL EXPENSES BEFORE REFURBISHMENT COSTS 6,159,837 5,436,052 723,784 6,047,304 112,533 2%RESERVES 2,008,360 1,557,848 450,512 1,483,074 525,286 35%

Refurbishment◊ 1,610,335 1,319,033 291,302 1,223,074 387,261 32%Golf Cart Expenses - Acquisitions 398,025 238,815 159,210 260,000 138,025 53%Revaluation of property 0 0 0 0 0 0%

TOTAL EXPENSES 8,168,197 6,993,900 1,174,297 7,530,378 637,819 8%SURPLUS/ (DEFICIT) 51,467 (121,746) 168,451 437,137 (385,670) -88%◊ - Budgeted cost per house* - Apportioned by no. of weeks

BUDGET TO BUDGET2018

Page 36 of 38


NOMINATION FORM

I/We, _____________________________ ____ ______ Member:

Duly authorized thereto as a member of THE GOLF RESORTS CLUB hereby nominate the following person/s as Trustee/s at the Annual General Meeting of the Club. Their signature/s signify acceptance of the nomination/s.

Declaration by Nominees

I/ we understand that by accepting nomination as a Trustee below, I/ we also consent to having my/ our Curriculum Vitae and relevant personal information published on the Club’s website and other communication portals from time to time.

NAMES OF PROPOSED TRUSTEE/S & SIGNATURE/S OF NOMINEE/S

NominationAccepted (Signature of nominee)

1. ____________________________ ______________________

2. ____________________________ ______________________

3. ____________________________ ______________________

MEMBER'S SIGNATURE _____________________________________

Signed at ___________________________ on this _____ day of _____________________ 2018

N.B.

1. This form must be in the hands of the Managing Agents at least 48 hours before the Annual General

Meeting, i.e. 20 June 2018.

2. No nomination is valid unless signed by the nominee/s.

3. Should the nominee not already be a Trustee of the Club, a brief curriculum vitae is to accompany the

acceptance of the nomination.

4. The present Trustees term of office expires with the Annual General Meeting, which makes it essential that you nominate at least 3 people.

5. CV’s for new nominees (i.e. not already on the board of trustees) must reach the Managing Agent on or before the 22 May 2018. This is to enable the Managing Agent to publish the CV’s on the Club’s website for consideration by the members.

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PROXY

I / We ___________________________________________Membership No: _____________

Being a member of THE GOLF RESORTS CLUB and entitled to vote do hereby

VOTE: IN FAVOUR* AGAINST* ABSTAIN*

To approve the minutes of the Annual General Meeting held on 25 April 2017

To appoint Moore Stephens as Auditors for 2018

To approve the determination of the Auditors’ remuneration by the Trustees *Place an X in the box below your choice

Or appoint:________________________________________________________or failing him / her, the Chairman of the Meeting as my / our duly authorised representative to vote on my / our behalf at the Annual General Meeting of the Club to be held on 22 June 2018.

Signed by me / us on this ________ day of ______________________ 2018.

_________________________________________________SIGNATURE/S

This proxy Form must be signed, dated and returned to the address given below not later than 20 June 2018:

Club Leisure Management (Pty) LtdP.O Box 1583PINETOWN3610

OR Fax no: 031 709 1810 OR email to [email protected]

If married in Community of Property, then signature by both spouses is required unless proof of the contrary disposing of the requirement is lodged.

Page 38 of 38

THE GOLF RESORTS CLUB · 2018. 6. 5. · THE GOLF RESORTS CLUB Registered Office 1 Crompton Street...

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