MANZI MONATE COUNTRY CLUB SHARE BLOCK LIMITED 16TH ANNUAL GENERAL MEETING 9TH SEPTEMBER 2006

Notice of 16th Annual General Meeting ofManzi Monate Country Club Share Block Limited

Reg. Nr: 1990/03001/06

You are cordially invited by the Management of Manzi Monate Country Club Share Block Ltd. to attend the Annual General Meeting to be held on the 9th of September 2006 at Manzi Monate Country Club, Plot 105, Zeekoegat, Kameeldrift, Pretoria at 10H30

The agenda is as follows:

1. Opening/Welcome
2. Quorum/Proxies/Apologies
3. Approval of the minutes of the previous Annual General Meeting held on 18 June 2005
4. Matters arising out of previous meeting
5. Chairman’s report
6. Approval of the financial statements for the year ending 31 December 2005
7. Approval of auditors’ remuneration
8. Appointment of auditors
9. Approval of insurance with or  without amendments
10. Election of directors
11. General
12. Vote of thanks and closing

BY ORDER OF THE BOARD

MINUTES OF THE FIFTEENTH ANNUAL GENERAL MEETING OF SHAREHOLDERS HELD ON THE
18TH DAY OF JUNE 2005 AT MANZI MONATE

PRESENT:
SHAREHOLDERS AS PER ATTENDANCE REGISTER.

DIRECTORS:
JOHN MEYER (JM) (Chairman)
IAN WILCOCKS (IW)
MARTHA BRUMMER (MB)
GERALD BRUMMER (GB)
DS NICO VAN DER WESTHUIZEN (NvdW)

PRESENT BY INVITATION:
MARJORIE DREYER (VRS)
LAWRENCE WILCOCKS (VRS)
JOHAN VAN NIEKERK (VRS)
WILLEM ABRIE (THEUNISSEN ABRIE AUDITORS)
JOHAN LAMPRECT (RESORT MANAGER)
EILEEN JEFFERSON (ASSISTANT RESORT MANAGERESS)
RESORT STAFF MEMBERS
VRS STAFF

APOLOGIES:
JOHAN COETZEE

1.         OPENING AND WELCOME

Ds. van der Westhuizen opened the meeting in prayer and Mr Meyer the Chairman
welcomed everybody to the Meeting.

2.         QUORUM / PROXIES / APOLOGIES

Quorum present
3 (three) proxies were received, submitted and accepted.

The following apologies were received:

Mr Johan Coetzee

The Chairman declared the meeting properly constituted and invited the shareholders to join the Directors, VRS staff and Manzi Monate staff to have a look at one of the recently refurbished and upgraded chalets.

The shareholders requested that when the next pack was sent out that the RSVP insert should not also have the agenda printed on it as the RSVP was not retained.

3.         APPROVAL OF THE MINUTES OF THE MEETING HELD ON 31 JULY 2004

The minutes were accepted and approved without amendments.

4.         MATTERS ARISING FROM THE MINUTES

There were no matters arising.

5.         CHAIRMAN’S REPORT

The Chairman briefed the shareholders on the refurbishment and upgrade of the chalets and that he was well aware of the fact that some of the shareholders were upset because of the upgrade levy, but when they inspected the chalets and saw the results of the upgrade they realised it was well worth it.

The Chairman’s report was accepted as read and approved.

6.         APPROVAL OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDING   31 DECEMBER 2004

The Chairman introduced Johan van Niekerk who presented the financials to the shareholders.

Resolved:
The financial statements were accepted by a unanimous resolution.

7.         APPROVAL OF AUDITORS REMUNERATION

The auditor’s remuneration was approved.

8.         APPOINTMENT OF AUDITORS

The Chairman stated that at present the Board was not satisfied with the current auditors and would like to appoint new auditors. The Chairman introduced Messrs Theunissen Abrie Auditors (Professor Willie Abrie and son Willie Abrie) to the meeting and proposed them as the new auditors.

Professor Willie Abrie gave a brief overview of their practice and after discussion the shareholders unanimously agreed not to renew the Agreement with Messrs Kloppers and Associates and to appoint Messrs Theunissen Abrie as the auditors for the ensuing year.

Resolved:
That Theunissen Abrie Auditors be appointed for 2006 financial year.

9.         APPROVAL OF THE BUDGET FOR THE FINANCIAL YEAR ENDING DECEMBER 2004

The Chairman briefed the meeting on the budget and confirmed that it was compiled on a zero base principle. Each budget item was analysed, costed and evaluated, and then compared to the previous year’s actuals to ensure that trends and allocations were taken into account. The budget incorporated a provision for future refurbishments, which meant that over and above the annual increase in operational expenditure the reserve was costed in as well. The meeting ratified the budget compiled by the
Directors.

10.        APPROVAL OF INSURANCE
 
The Chairman outlined the insurance schedule and confirmed that the underwriters were Santam and the brokers HIU. The insurance schedule was unanimously approved by the shareholders.

11.        ELECTION OF DIRECTORS

Both Mr I Wilcocks and Mr CJ Ballan retired as Directors in terms of the rotation of Director’s provision in the Articles of Association. Mr CJ Ballan was not available for re-election. There were no other nominations and Mr I Wilcocks was unanimously elected as Director.

Resolved:
The meeting unanimously agreed to reduce the size of the Board to 6 Directors.

12.        GENERAL

As the formalities had been concluded the Chairman opened the meeting to items of general interest to all shareholders.

Mr Duim raised the query as to the efficiency of VRS in responding to telephonic enquiries.

Mr Marx stated that his statements were received very late but that his address had not changed.

The Chairman referred the queries to Marjorie Dreyer, Director of VRS who undertook to look into the matters urgently.

Mr TP du Plessis raised the question as to why a special meeting was not held to approve the refurbishment. The Chairman responded by pointing out that the refurbishment of the existing units was a shareholders levy expense and that the Directors were authorised to approve this type of expenditure. The Directors however thought it prudent to circulate a detailed colour brochure outlining the total refurbishment, which included improvements funded by the developer, which would not be recovered from the Company. All communications with shareholders were responded to and on various occasions the Chairman had met, or discussed the issue with shareholders individually and they had all agreed that the refurbishments would enhance the value of their timeshare portfolio. With this in mind the Board was saddened that not more shareholders attended the AGM so that they could view the improvements. A shareholder requested that the meeting be held later in a warmer time of the year.

13.        VOTE OF THANKS AND CLOSING

The Chairman complimented the staff of Manzi Monate who were dressed in their new uniforms and thanked them for their dedication.

The Chairman thanked the Directors, personnel and VRS staff and extended a special word of thanks to the members for their input and attendance and closed the meeting.

CHAIRMAN’S REPORT
 
It is my pleasure to provide you with this Chairman's report, reflecting on the past financial year and the occurrences during this time period.

The refurbishment is almost complete and the feedback from members and visitors alike has been very encouraging and when completed the units will be spacious and comfortable.

Thankfully this will also mean that the pain of raising the money will be well compensated by the fact that every cent that has been spent on the resort will have enhanced its appearance and the holiday experience of our members and guests. If you have not visited the resort since the upgrading commenced, I really would encourage you to do so and inspect the newly upgraded units and to evaluate them for yourself!

I would like to extend a word of thanks to our Managing Agent, VRS under the guidance of Marjorie Dreyer, for the way in which they have conducted and controlled the affairs of the Company, It is encouraging to see that of the levies raised, 99.79% has been collected, and of the refurbishment funds raised, 99.00% has been collected. 

As is the case with all Share Block Companies, where levies are regarded as the lifeblood of the Company, the nonpayment of ordinary or refurbishment levy’s can’t be allowed which means that the Company has to take action against the defaulters for recovery of the outstanding balance.  And whilst this is unfortunate, it is very necessary for the future operation of the Company.  You will therefore note that several weeks have been placed on the tender list to recover monies due to the Company by shareholders who have defaulted.

The feedback from our shareholders has been extremely positive and whilst there has been considerable inconvenience during the past year, the end result has been welcomed by our shareholders.  Once the refurbishment has been completed we will then be able to pay further attention to other maintenance plans around the swimming pool.
 
From the attached financial statements you will note that the control of the funds and the governance of the Company is in good hands and in this regard would once again like to thank our on-site team under the leadership of Johan and Eileen as well as our offsite Share Block Administrator Charmaine Bekker and Members of the Board for giving of their time input and effort to ensure that the upgrade program was conducted as professionally as possible. 

I would like to highlight the following regarding the financial statements for the year ending 31 December 2005.

The detailed income statement for the year provides the results of the operations of the Company for the year.

The income for the year is made up mainly of Levy income amounting to R2 335 439, which increased with 10% from 2004 and the refurbishment levy of   R4 486 688.

Other income for the year includes interest received that has increased with 94% from 2004.  This is mainly due to the additional funds available for investment caused by the unutilised refurbishment levy for the year.  Other income also includes        R53 127 other income including breakage replacement income and crazy golf income.

Total expenditure for the year increased with
R3 576 794 when compared with the total expenditure of 2004.  The main cause of this is the increase in the refurbishment expenditure of R3 125 000. 

There have been various fluctuations in other expenditure for the year:

1. The drastic decline in Assessment rates from the 2004 to the 2005 year is due to the settlement of R94 022 included in the 2004 figure due to the historic dispute with the municipality.
2. Discount allowed included in 2005 is the discount of 5% allowed by the Board of directors on levies paid by members prior to 31 January 2005.  The 2004 discount has been offset against levy income of that year.
3. Assets expensed include new additions for the year as set out in note 2 to the financial statements. 
4. Garden services declined as the 2005 figure only includes costs paid to the contractor responsible for gardening whereas the 2004 figure also included a substantial amount paid for new plants and installation of irrigation.
5. Other office expenses included replacement of computers at R10 350, Printer/Fax Scanner at R3 900 and installation of an alarm system at R9 980 and other expenditure such as replacement of chairs whereas there was no such expenditure in the current year.
6. Printing and stationary for 2004 includes AGM costs for printing and posting of booklets amounting to approximately

R11 800, where this expense was carried by the Managing Agent in 2005.
The major increase in salaries is due to the fact that the Developer contributed to the salary of the Resort Manager and Assistant Manager in 2004 and in terms of the budget approval at the last AGM this contribution fell away in 2005 which explains the major portion of the increase in this item.

The balance sheet reflects the assets of the Company and the method in which this has been funded.

The increase in fixed assets is caused by new assets purchased during the year as mentioned above.

The trade and other receivables of R453 264 is a reflection on the effectiveness of the collection process of the Managing Agent considering the Refurbishment levy raised was R4 486 688. 
Cash and cash equivalents increased just over R1M, which has been caused mainly by the amount of the refurbishment levy that must still be spent in 2006.

As you will be able to see the balance of the refurbishment levy raised and spent during the year has been transferred to the special reserve fund / replacement reserve.

The other movement in Capital and reserves is explained in the statement of changes in equity.

The decrease in trade payables is due to the fact that most trade debtors have been paid prior to year end and the other major movement is the increase in levies received in advance which affirms the shareholders confidence in the operation of their Company.

If you have any questions regarding the attached financials please do not hesitate to communicate with the Managing Agent prior to the Annual General Meeting and they will be able to assist you regarding any queries.

The Board met regarding the 2007 budget and it appears that we would be able to contain the increase to approximately 3% and to make a further provision of approximately 11% to provide for the installation of a generator to overcome the electricity problems being experienced in our country.

I would encourage you to attend the AGM to obtain first hand knowledge of the affairs of the Company. However, if this is not possible, please take a moment to complete the enclosed proxy form and send the completed document back to the Managing Agent in terms the timeframe specified therein.  It is vital that we obtain input from our shareholders regarding the ongoing governance of the Company and your contribution by way of the proxy form is therefore important.

On behalf of the Board and the Managing Agent I would like to wish you every success for the balance of the financial year and I look forward to meeting with you at the AGM.

Regards and God bless,

John Meyer.
Chairman.

MANZI MONATE COUNTRY CLUB SHARE BLOCK LTD
(Registration number 1990/003001/06)
ANNUAL FINANCIAL STATEMENTS
for the year ended 31 December 2005

The reports and statements set out below comprise the annual financial statements presented to shareholder.

Approval
The financial statements which appear on pages 3 to 14 were approved by the board on and signed on their
behalf by:

REPORT OF THE INDEPENDENT AUDITORS TO THE SHAREHOLDERS OF
MANZI MONATE COUNTRY CLUB SHARE BLOCK LTD

We have audited the annual financial statements of MANZI MONATE COUNTRY CLUB SHARE BLOCK
LTD set out on pages 3 to 11 for the year ended 31 December 2005. These financial statements are the
responsibility of the company's directors. Our responsibility is to express an opinion on these financial
statements based on our audit.

Scope
We conducted our audit in accordance with statements of South African Auditing Standards. Those standards
require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free
of material misstatement. An audit includes:
· examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,
· assessing the accounting principles used and significant estimates made by management, and
· evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

Audit opinion
In our opinion, the financial statements fairly present, in all material respects, the financial position of the
company at 31 December 2005 and the results of its operations and cash flows for the year then ended in
accordance with generally accepted accounting practice, appropriate to the business and in the manner
required by the Companies Act in South Africa.

Departure from South African Statements of Generally Accepted Accounting Practice
Without qualifying our opinion above, we draw attention to the fact that the financial statements have not
been drawn up in accordance with South African Statements of Generally Accepted Accounting Practice. The
Directors report discloses the reasons for, nature and effect of the departure from these Statements.

Theunissen Abrie Inc
Chartered Accountants (S.A.)
Registered Accountants and Auditors
Per: W Abrie
Pretoria

MANZI MONATE COUNTRY CLUB SHARE BLOCK LTD
(Registration number 1990/003001/06)
REPORT OF THE DIRECTORS
for the year ended 31 December 2005

The directors present their report for the year ended 31 December 2005. This report forms part of the
audited financial statements.
1. Business and operations

The company's business and operations and the results thereof are clearly reflected in the attached
financial statements. No material fact or circumstance has occurred between the accounting date and the
date of this report.
The main business of the company is that of a share block company and did not change during the period
under review.

2. Statements of responsibility

The directors and management are responsible for the maintenance of adequate accounting records and
the preparation and integrity of the financial statements and related information. The external auditors are
responsible for independently auditing and reporting on the fair presentation of financial statements in
conformity with South African Auditing Standards. The financial statements have been prepared in
accordance with generally accepted accounting practice and in the manner required by the Companies
Act, 1973.
The directors and management are also responsible for the company's system of internal financial control.
These are designed to provide reasonable, but not absolute, assurance as to the reliability of the financial
statements, and to adequately safeguard, verify and maintain accountability of assets, and to prevent and
detect misstatement and loss. Nothing has come to the attention of the directors to indicate that any
material breakdown in the functioning of these controls, procedures and systems has occurred during the
year under review.
The financial statements have been prepared on the going concern basis, since the directors have every
reason to believe that the company has adequate resources in place to continue in operation for the
foreseeable future.
Asset replacements and additions are charged to the income statement annually. No depreciation is
provided for. This accounting treatment differs from the relevant South African Statements of Generally
Accepted Accounting Practice, which require that property, plant and equipment be capitilised and
depreciated over their respective useful lives.
Your board considers that the South African Statements of Generally Accepted Accounting Practice in
relation to property, plant and equipment is not appropriate for Share Block Companies in the timeshare
industry. Discussions have been initiated with other players in the South African timeshare industry and
the accounting regulatories to obtain exemption from compliance with the current South African
Statements of Generally Accepted Accounting Practice. Once these discussions have been concluded
your board will consider whether any changes in the presentation of yor annual financial statements is
required. The board has taken note of the fact that the Timeshare Institute of South Africa (TISA), is in
process of formulating guidelines to assist in the preparation and presentation of financial statements for
companies in the timeshare industry. These guidelines will be implemented once they have been
finalised by TISA.

3. Dividends

Due to the nature of the companies business, no dividends may be declared or paid.

MANZI MONATE COUNTRY CLUB SHARE BLOCK LTD
(Registration number 1990/003001/06)
REPORT OF THE DIRECTORS
for the year ended 31 December 2005

4. Fixed assets

There have been no major changes in the fixed assets during the period or any changes in the policy
relating to their use.

5. Directors

The directors of the company during the accounting period and up to the date of this report were as
follows:

Mr IL Wilcocks
Mr CJ Ballan - Retired on 18 June 2005
Mr JW Meyer
Mr JG Brummer
Mr JCT Coetzee
Mrs WM Brummer
Ds JNF van der Westhuizen

6. Secretary

The secretary of the company is Ms. M.A. Dreyer.

MANZI MONATE COUNTRY CLUB SHARE BLOCK LTD
(Registration number 1990/003001/06)
BALANCE SHEET
at 31 December 2005

MANZI MONATE COUNTRY CLUB SHARE BLOCK LTD
(Registration number 1990/003001/06)
INCOME STATEMENT
for the year ended 31 December 2005

MANZI MONATE COUNTRY CLUB SHARE BLOCK LTD
(Registration number 1990/003001/06)
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2005

MANZI MONATE COUNTRY CLUB SHARE BLOCK LTD
(Registration number 1990/003001/06)
CASH FLOW STATEMENT
for the year ended 31 December 2005

MANZI MONATE COUNTRY CLUB SHARE BLOCK LTD
(Registration number 1990/003001/06)
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2005

1 Basis of preparation
The financial statements are prepared in accordance with South African Statements of Generally
Accepted Accounting Practice. The financial statements are prepared under the historical cost convention
as modified by the revaluation of certain property, plant and equipment, marketable securities and
investment properties where appropriate.

1.1 Fixed assets
Replacements of property and equipment are charged against the income statement.
Additions to property and equipment, which represents an increase in quantity of an existing asset type or
the purchase of an entirely new category of assets are also charged against this reserve, but are raised as
property and equipment with a corresponding credit to a non-distributable reserve. Property and
equipment is not depreciated.
Disposals of property and equipment, which are not expected to be replaced are debited to the relevant
distributable reserve, with the related proceeds on disposal being credited to the reserve for property and
equipment.
The above accounting policy has been applied, because the directors believe it is the most appropriate to
the company, taking into account the purpose and use of the levy fund as prescribed by the Share Block
Control Act. The accounting policy differs from General Accepted Accounting Practise, which requires
that the cost of each item of property and equipment be determined by reference to the latest cost of the
assets on hand, and that depreciation be charged over the useful lives of the assets.

1.2 Cash and cash equivalents
Cash and cash equivalents represent cashbook balances and not bank balances. Expenses paid for but not
yet processed by the bank are included in the cashbook balances.

1.3 Loan obligation
The amount represents the Share Block's loan obligation to shareholders. These loans, together with
shares held, represents the shareholders' investment in the company, which in conjunction with a use
agreement, gives right to accommodation in the buildings. The loans do not bear interest and are not
repayable, save in the event of the winding up of the company.

2. Fixed assets

MANZI MONATE COUNTRY CLUB SHARE BLOCK LTD
(Registration number 1990/003001/06)
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2005

2. Fixed assets (continued) -

MANZI MONATE COUNTRY CLUB SHARE BLOCK LTD
(Registration number 1990/003001/06)
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2005

MANZI MONATE COUNTRY CLUB SHARE BLOCK LTD
(Registration number 1990/003001/06)
DETAILED INCOME STATEMENT
for the year ended 31 December 2005

MANZI MONATE COUNTRY CLUB SHARE BLOCK LTD
(Registration number 1990/003001/06)
Tax registration number
TAX COMPUTATION
31 December 2005

MANZI MONATE COUNTRY CLUB SHARE BLOCK

Registration number 1990/03001/06

INSURANCE SCHEDULE 2006