Chairman Report - Elements Private Golf Reserve

Chairman Report
On 30 May 2017 we held a Special General Meeting to make sure that the administrative and procedural
processes were followed to support the changes and direction that we have been working on for the last
2 years. All of the resolutions were passed unanimously (except for 1 non-present proxy voting against),
which I think bears witness to the efforts of our Trustees to communicate every step of the way.

For a meeting of this administrative nature we had a great turnout and the quorum for the special
resolutions was easily achieved. We had one resolution which requires not only a unanimous vote in
favour but also a positive vote by any institutional bond holders on the stands. This is a resolution allowing
the trustees to sell stands that become the property of the Body Corporate by way of recoveries against
bad debts or, for example, the stands the BC is receiving from Klaprops in terms of the settlement
agreement.

At the end of the SGM I made a final appeal to Owners to raise the remaining R600K that we needed to
buy out Legacy lock stock and barrel. We had an unbelievable response, with a number of the Owners
taking up large chunks of the Rights Issue in Elements Owners Ltd (previously NEWCO, the Company
acquiring the Bushill (Pty) Ltd Shares and Loan account). The response was so good, in fact, that we were
able to raise the entire amount of R9,5M which we set out to do, and I am delighted to announce that this
was paid over to Legacy on their extended deadline of 9 June 2017. This is not only a massive financial
milestone but also a positive psychological booster. EVERYTHING THAT WE AS OWNERS NOW DO FOR
OUR FANTASTIC RESERVE BENEFITS NO-ONE BUT OURSELVES! EVERYTHING THAT WE DO FOR OUR
FANTASTIC RESERVE IS CONTOLLED BY NO-ONE BUT OURSELVES! Elements Private Golf Reserve is now
truly, in every sense of the word, OUR RESORT. This is a unique situation for a resort of our stature where
you don’t have a “Developer” with a profit motive driving the resort but rather the Owners themselves
who invested in the resort driving the resort forward to achieve their lifestyle objectives. Obviously, we
need to be watching our finances very closely, but with the assets of the Reserve having been acquired
relatively cheaply and now owned by the Owners, we have a very strong financial base.

Fortunately, we also have 4 very strong and experienced Financial Trustees watching the financial
situation of the Reserve. A few stands have already been sold by Owners, so interest in Elements has
grown dramatically in the last month.

We are now holding regular events at the Club, and the addition of a world-class mountain biking track
has brought an added dimension to the Reserve.

Once again, thank you to Owners for their trust in the Trustees’ decisions, and my thanks to the Trustees
for their diligence and selfless dedication.

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From the General Manager

The support and passion for Elements shown by all Home Owners continues to impress every day. There
is no doubt that Elements is a special place that is appreciated by all who come to enjoy the golf course
and the peace, tranquility and Bushveld environment. Word of mouth is by far the best marketing tool we
have and with more and more members and guests visiting the Estate we know that we will continue to
grow the numbers of rounds played.

The golfing highlight of the month was the Invitational Open Golf day held on 5 May 2017. 80 guests from
the golfing world attended and all enjoyed a wonderful golfing experience. Following the event a News
Report was distributed to over 400 contacts in golf including our Home Owners. The reaction has been
positive and has already led to new leads and contacts. The Home Owner highlight of the month was the
Special General Meeting held on 30 May. This was an outstanding meeting which sealed the future success
of Elements without any doubt. This is reported on elsewhere in the newsletter. Another highlight was
the construction of our very own 21 km cycle track through the Estate. For this we thank Melgard Meyer,
the General Manager at Sondela and Event Manager for the Liberty Waterberg Cycle Encounter which
took place over the second weekend of June.

Business levels fell in May compared to the previous two months, but this was expected and followed
normal trends where golf rounds drop off during the winter months.

We are working through the Limpopo Department of Tourism in an attempt to get the access road from
Bela Bela tarred. This is going to be a drawn-out process but we will not let up until we have success.
We have stated that we will attract thousands more tourists to the Waterberg and that we will have a
better opportunity to sell properties and employ hundreds more people once the road is tarred. We will
keep you posted on progress.

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We will report on the Club Championships and Liberty Waterberg Cycle Encounter in the June newsletter
but for now want to mention what a huge success they both were. Our thanks and appreciation is
extended to all who worked such long hours to make the Cycle Challenge run so smoothly. Well done to
everyone. One of the most significant long-term benefits resulting from this cycle challenge is the fact that
guests were accommodated in a luxury tented village on the tee boxes of the driving range. This was very
well received, even on the coldest night of the year so far, and we are now promoting “Golf and Glamping”
as a unique Elements offering.

I believe we are succeeding in restoring the credibility and reputation of Elements with help and
participation from Trustees, Home Owners and Guests. We have said it before but it is worth repeating:
“Word of mouth is the most powerful marketing tool we have” and we need to rely on all who have a
stake in Elements to continuously promote the estate. Thank you.

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Golf Operations

Golf operations continue to run smoothly but income is still below the budget forecast. Total golf revenue
for May was R211, 165.00 and for the year to date R793, 987.00, which is 13% below budget. We do
expect golf rounds and revenue to come closer to budget as word spreads that the course is in good
condition and as our marketing initiatives materialise.

Merchandise sales remain encouraging,averaging R68.50 per round of golf played. We have a limited but
good quality range of men’s and ladies’ shirts and jackets on hand. We have just taken delivery of a limited
range of Nike shirts and jackets which we expect to sell well. Most of the old stock from last year has now
been sold. We encourage you to visit the golf shop on your next visit and take a look at the product range
we have on offer.

We concentrate on offering a consistently high level of customer service and on making sure that every
single golfer feels welcome and has a great golfing experience, on and off the course. Feedback from
players is positive.

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Golf Course Report

 The golf course remains in very good condition considering the winter conditions. The fairways are
still green and are still being mowed twice a week. Greens remain world-class and are running at a speed
of 11ft 7 ins on the Stimp Meter. We are attempting to slow them down to around 10ft 6ins but this is
difficult with slow growth rates during the winter months.

We have re-measured the golf course and increased the length off the white club tees to 6,350 meters,
which has increased the SAGA stroke rating from 70 to 72, and this has been well received by players. The
rating off the blue forward tees has been increased from 67 to 69 and off the red Ladies’ tees from 70 to
71. A highly ranked and challenging Championship golf course such as Elements needs to be rated where
it now is. The HNA handicap system has been corrected to reflect these new ratings for handicap
calculation purposes.

Some new signage has been placed on the course for the benefit of golfers. For example, the distance to
the end of the fairway on the 1st hole has been measured and is indicated on a sign board. The length and
effective length on the elevated tee on the 9th hole has also been included. We remind all golfers that
the entire golf course is now measured from the middle of the tee to the middle of the green.

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Fauna and Flora

There is a fantastic Naboom on the road to the Game Viewing Hide which has been cut open and we are
in the process of turning it into a picnic spot. There will be benches and a braai for the benefit and comfort
of owners to use at leisure. We hope it will become a popular venue. As time goes by we plan to place a
few picnic tables at other remote sites and also off the golf course with good views for the pleasure of
owners. If anybody would like to sponsor a picnic spot, please contact the club and we will discuss options
available.

The game on the farm is all in good condition and growing in numbers. We have no option but to reduce
the numbers of Impala and we are investigating the best way to accomplish this.

The project to remove all alien vegetation from the property has not yet commenced due to cash flow
constraints. We remind owners that we would appreciate assistance from those who are willing to
remove Khaki Bush from their homes and we will remove it from the site.

  One of the finest specimens of                                         New Naboom picnic spot.
Gardenia Volkensii at the 14th Green.

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Security Report

Unfortunately we experienced three break in’s on the evening of 2 June 2017, into houses 299, 271 & 278.
Small items were stolen such as cell phones, a laptop, clothing, etc. Please secure your house at all times
and especially before going to bed. The Trustees have approved a decision to house one fully trained
security patrol dog on the Estate. The dog will be housed in a kennel at the main entrance gate and will
be used to patrol on foot and in the patrol vehicle as required. This will greatly enhance the overall security
of the property.

We have decided to sell fire wood for the convenience of owners and guests. This is being done at the
entrance gate and managed officially by the security Officers on duty.

                                               Marketing

Our marketing initiatives are growing and are already bringing positive results. These include:

    1) General awareness of Elements through a targeted programme of distributing 4-ball vouchers to
       key people and golf clubs.
    2) Trade exchanges with two golf media companies offering complimentary rounds in exchange for
       bringing events to Elements.
    3) Trade exchange with a leading golf marketing and promotion company offering complimentary
       rounds in exchange for exposure and golf events.
    4) Internet packages offered through a leading internet marketing company.
    5) “Golf and Glamping” packages offered directly to end users and also to Standard Tour Operators.
    6) Re-establishment of the Limpopo Golf and Safari Route through packages with the other Limpopo
       golf estates.
    7) A new initiative to offer packages for Golf and Glamping (glamorous camping) unique to Elements.
    8) Creation of our own golf events.

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Invitational Golf Day

The Invitational was held on Friday, 5 May 2017, with the goal of exposing the golf experience at Elements
to the broader golf public. It has been reported on extensively already sothere is no need to say more
than that it was successful and very well received by all who participated. We thank everyone who did
enter and who shared the day with us.

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General

During the month we experienced an unfortunate incident where a visiting group of young golfers got out
of hand and caused disruption by making excessive noise late at night. This type of behaviour will not be
tolerated under any circumstances.The group was refused play the following morning and their behaviour
was reported to their home clubs. We are expanding on the current noise policy but in essence it states
that no loud music or talking or raucousbehaviour will be tolerated after 22h00 at night.

Security is instructed to monitor noise levels continuously and to warn those misbehaving immediately it
is noted. If they do not co-operate, their power supply will be cut or - in extreme cases -, if they are
visitors, they will be escorted off the estate. Home owners will not be evicted but may be fined if they
do not respond positively to the warnings. There will be zero tolerance on this policy and we know that
all owners will co-operate fully.

An information leaflet has been created and is distributed by Security at the entrance gate to all visitors
entering the property. It addresses the various activities available and some of the important rules, and
provides all the important emergency contact numbers required.

We have a proposal from a reliable Maintenance Contractor in Bela Bela to conduct regular maintenance
inspections at private homes on the Estate and then to report on and quote for any repair work that needs
to be completed. He is Arno Peschl and can be contacted on 083 601 1788 or arnopeschl@telkomsa.net.
Please feel free to contact him for a quote on the service he offers.

Many owners have a golf cart bought from Golf and Bush Car in Bela Bela. This company has been bought
out by Heinrich du Preez, CEO of Radical Golf. The company name will change to Golf Car SA and will
relocate to the Waterfront in Bela Bela. They will offer a comprehensive range of electric car services
including new car sales, re-sales, trade-ins, servicing of all makes of carts, maintenance and supply of
spares. Please contact Louise on 082 554 8174 or louise@golfcarsa.co.za or office@golfcarsa.co.za should
you require any service from the new company.

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