Minutes of Annual General Meeting No 3 held on 4 December 2008

CROYDON VINEYARD ESTATE HOMEOWNER ASSOCIATION


Tel: (021) 843 3610
Fax: (021) 843 3609


MINUTES FOR ANNUAL GENERAL MEETING NO. 3

DATE: 4TH DECEMBER 2008
TIME: 17:00
VENUE: CROYDON VINEYARD ESTATE







ATTENDANCE PANEL ORGANIZATION

JG Bergman (In the Chair) Developer Trustee (JGB)
D Ashworth Developer Trustee (DA)
B de Sousa Developer Trustee (BdS)
C Steenkamp Homeowner Trustee (CS)
G van Ryn Exceed (GvR)
C Visser Estate Manager (CV)

ATTENDANCE FLOOR ERF

J van der Horst Developer Trustee (JvdH)
J Schooling Developer Representative (JS)
PL van der Merwe Erf 1339
E Burger Erf 1344
KT Aldum Erf 1345
EE Burger Erf 1355
Lombicore 101 cc Erf 1358
WC Rossouw & L Robertson Erf 1395
Bernard Family Trust Erf 1417
M Myburgh Erf 1418
Dr J Pieper Erf 1462
Volkel Properties Erf 1486
Verbei Dei Investments Erf 1503
Milestone Properties 15 Erf 1505
C Harris Erf 1522
Verbei Dei Investment Erf 1536
J Pheiffer Erf 1537
J & L Fullstone Erf 1546
W Bronkhorst Erven 1559 & 1560

MINUTED BY

T Tyson JBB Development Consultants (TT)


Next meeting: TBA



1. WELCOME AND INTRODUCTION

1.1. JGB welcomed all to the 3rd Annual General Meeting of the Association and apologised for the late start but confirmed that start was within the stipulated half hour proceeding.

1.2. JGB confirmed that the developer was present and represented by J Schooling and therefore a quorum was in place and the meeting could be legally constituted.

1.3. JGB introduced the panel to the floor, namely:

1.3.1. Dean Ashworth who is a Developer Trustee

1.3.2. Casper Steenkamp who is a Homeowner Trustee

1.3.3. Himself, Jan Bergman as the chairman and Developer Trustee

1.3.4. Basil de Sousa who is a Developer Trustee

1.3.5. Gerhard van Ryn who is the representative form Exceed being the Associations Auditors

1.3.6. Corius Visser as the Estate Manager

2. APOLOGIES

2.1. The apologies for non attendance to the AGM received by the Association were as follows:

2.1.1. JH Bos (Developer Trustee)

2.1.2. C Fourie (Homeowner Trustee)

2.1.3. Clive Lewis (Erf 1461)

2.1.4. John Swart (Erf 1534)

2.1.5. MC Engelbrecht (Erf 1453)

2.1.6. Naude (Erf 1572)

3. APPROVAL OF MINUTES OF ANNUAL GENERAL MEETING HELD ON THE 28TH NOVEMBER 2007

3.1. Approval of the minutes of the previous Annual General meeting was proposed by John Schooling (Developer representative), seconded by Jason Parkin (Erf 1505). No objections or comments were received from the floor. Therefore the minutes were duly accepted as being correct.

4. MATTERS ARISING FROM THE MINUTES AFORESAID (ITEM 3)

4.1. The panel and floor noted no matters arising from the minutes of the previous AGM.

5. CHAIRMANS REPORT

JGB as chairman of the Trustees Committee presented his report as follows:

5.1. Administration

5.1.1. The company Exceed has successfully taken over the accounting and auditing function of the books for both the Homeowner Association and Croydon Wine Company.

5.1.2. In addition an in-house bookkeeper has been appointed to perform the bookkeeping functions for the estate as well as assist with general administration.

5.2. House Design and Construction

5.2.1. The functions of plan scrutiny and building site control have successfully been outsourced to Boland Building Control Services. This arrangement has proven to be most beneficial to the Association and its members with plans scrutinised and commented mostly within a week from submission. No negative feedback has been received from a Homeowner to date.

5.2.2. The current status is as follows.

• Plans submitted to date 32
• Plans approved 30
• Houses completed 14
• Houses under construction 4
• Families living on the estate 12, 4 of which are rentals

5.2.3. A significant increase in plan submission and construction is expected during the course of 2009.

5.3. Wineco

5.3.1. Wineco has performed well even in the adverse economic climate and all the management and staff of WINECO must be given recognition for this achievement.

5.3.2. Wineco harvested its first crop this year and will bottle the first wines early in the new year.

5.3.3. The first crop produced almost 22 000 litters of wine and the second production looks to be at the full projected capacity of 50 to 50 tons.

5.3.4. In summary WINECO is in a financially sound position in spite of the current economic climate.

5.4. Financial

5.4.1. It has been a challenging year with costs increasing dramatically.

5.4.2. An in-house house bookkeeper has been employed and together with the assistance from Exceed the accounts have been placed in good order.

5.4.3. Some members are in arrears with the payment of levies but the trustee committee is dealing with this on a case-by-case basis.

5.5. Security

5.5.1. The security company has performed well and the estate has had no breaches of security.

5.6. Lifestyle Centre

5.6.1. From January 2008 to present approximately 1300 people utilising the function room.. There has been approximately 11 homeowner functions with the balance being people from the public domain.

5.6.2. Charmain has been doubling successfully as a function coordinator in addition to her normal functions and the facility has operated very successfully.

5.7. Sales/Resales

5.7.1. The Developer have 14 erven unsold at present and even though he is not legally compelled to do so is paying levies on these erven.

5.7.2. Seeff Properties are currently contracted as the on-site sales agents and have created a regular presence in the winery and on the estate.

5.7.3. From June 2008 to date approximately 10 resale’s have been registered at the Deeds Office.

5.8. The Area

5.8.1. The Cape Town Film Studios has now commenced with the recent launch that was held on Monday, 1 December 2008. The City has already begun to spend their money and construction by the developer is expected to commence in January 2009.

5.8.2. Croydon Olive Estate is nearing completion and the developer has around 45 erven unsold.

5.8.3. De Kelderhof is in its construction phase and the construction on the first houses should commence around March 2009.

5.8.4. There are development plans issued in various states of formality available for the site on the corner of Kramat Road and the R102, as well as for the portion of Vergenoegd adjoining Kramat Road. The trustees are commenting on the application and the members of the association are also welcome to do so directly.

5.8.5. Sitari is taking some time to get off the ground but the approvals for the residential development is linked to the construction of a golf course and any changes the trustee committee has, through the attorneys, issued a pre-emptive objection to the local authority against any transfers that may be requested prior to a guarantee for the cost of constructing the golf course having been issued. The trustees are monitoring the situation. The trustees will also try and negotiate memberships and the like when the golf course goes ahead.

5.9. Trustees

5.9.1. As we are still in the development period, the trustee committee comprise 5 developer trustees and 2 homeowner trustees.

5.9.2. The trustees meet on a regular basis of at least once per month in order to deal with any issues that may arise.

5.9.3. In addition, several focus meetings are held, mostly regarding finance and architecture, on an ad-hoc basis with certain individual Trustees who then report back to the Trustee committee.

5.10. General

5.10.1. The Estate is operating at a satisfactory level and this holds promise for the stage when more members reside at Croydon Vineyard Estate.

5.10.2. Most of the issues that normally appear in the start-up phase of such developments have been resolved and most elements of the Association are now operating problem free.

5.10.3. In closing JGB thanked the trustee committee for all their time and effort they have put into the estate. In addition JGB thanked the management and the staff of the estate for the successful running of the state.

5.11. The only comment from the floor with regards to the Chairman’s report was a request to ensure that the report is put onto the estates website.

6. FINANCIALS

6.1. Presentation and adoption of the financial statements

6.1.1. Gerhard van Ryn gave a brief overview of the financial statements pointing out the following:

6.1.1.1. It was noted that the 08 financial statements are calculated on a 15 month and not a 12 month period in comparison to the 07 financial statements.

6.1.1.2. It was noted that income in the 08 (15 month period) was at 2,847,527 as opposed to the 07 (12 month period) of 1,801,749

6.1.1.3. It was noted that in the 08 15 month period expenses were 2,830,955 as opposed to the 07 12 month period of 1,721,393.

6.1.1.4. The above resulted in the association making a small profit of approximately 50,000.

6.1.2. A query with regards to the accounting fees was made and received response as follows:

6.1.2.1. Willie Bronkhorst (Erven 1559 & 1560) raised a query with regards to the substantial increase in accounting fees from the 07 financial year to the 08 financial year and felt that an amount of approximately 120,000 for accounting and bookkeeping fees is a bit excessive. He made the suggestion that an in-house person should be appointed to do the Pastel accounts and these should just be audited at the end of the year.

6.1.2.2. Ivan van der Merwe (erf 1339) agreed with the sentiments as expressed by Mr Bronkhorst in item 6.1.2.1 above.

6.1.2.3. CV explained that one of the reasons that the accounting fee appeared drastically less in the 07 financial statements was due to the fact that the previous auditors, Enslins Lindermans, had included a portion of their fees under Management fees and therefore the 07 figures under accounting fees are not a true representation of the costs.

6.1.2.4. GvR added that the fees were higher in the 08 financial year as they had to be paid an hourly rate in order to complete the bookkeeping function of the estate during the period where a suitable staff member was being appointed and this raised the cost.

6.1.2.5. JGB explained that the approximately 120,000 only equates to approximately 8,000 per month.

6.1.2.6. CV explained that currently the situation is running as WB suggested whereby they have appointed a competent person to do the estate bookkeeping as well as assist with the estate administration for R 9,000 per month.

6.1.2.7. GvR advised that the audit fee has been substantially reduced from the R 40,000 proposed by the previous financial firm to the R 20,000 charged by Exceed.

6.1.3. A query with regards to the Estate Managers fees was raised:

6.1.3.1. IvdM raised a query with regards to the costs of the Estate manager and his remuneration and queried who makes payment of his salary and who evaluates performance and the like.

6.1.3.2. JGB explained that the HOA only pays an amount of approximately R 10,000 towards the managers salary and the balance is decided and paid by the Wine Company.

6.1.4. A query with regards to landscaping fees was raised:

6.1.4.1. WB raised a query with regards to the cost of Landscaping on the estate and felt that 400,000 was too high:

6.1.4.2. CV reiterated that the financials reflect a 15 month period. CV explained that this costs include maintenance of irrigation, diesel, chemicals, labor ect and all these costs have gone up substantially from the time the last financial statements were prepared.

6.1.4.3. WB queried the laborers and how they operate. CV advised that he received 3 quotations from various parties and that the labor is outsourced but managed in house, this is done in order to minimize employees of the Association.

6.1.4.4. JGB advised WB that a true cost comparison, as stated by WB, cannot be made between the Croydon Olive Estate and the Croydon Vineyard Estate as at this stage as the majority of costs including landscaping still fall under guarantee.

6.1.4.5. Johan Pheiffer (Erf 1537) suggested that people apply their minds to the costs and stated that taking a landscaping cost of R 400,000 and dividing that by the 15 months and then the 205 erven it services comes to R130 per month which sounds reasonable.

6.1.5. WB raised a query with regards to the increase in security costs:

6.1.5.1. CV advised that there has been a substantial increase in activity on the estate due to more people residing on the estate and the increased building activity, to this end additional guards are being utilized as opposed to the first 12 months of the estate operating.

6.1.6. IvdM queried the high scrutiny fee originally paid to Van Biljon & Visser and now Boland Building Control Services:

6.1.6.1. BdS explained that this is a contract between the HOA and Boland Building Control Services, the HOA therefore pays the scrutiny fee to BCS and recoups same from the individual HO and is therefore not an actual cost to the HOA>

6.1.7. WB felt overall that costs are too high and should be brought down. IvdM advised he is concerned that the estate is run on a fixed income and therefore that leads to the impression that everything needs to be utilized.

6.1.7.1. JGB advised that costs have been compared to both Atlantic Beach and kenrock Country Estate and CVE is operating within the other estate parameters.

6.1.7.2. JP agreed that costs should be critically looked at but is also not keen on cutting costs and therefore risking the estate functionality or appearance.

6.1.7.3. JGB advised that it is also up to the members to throughout the year be involved and not just at the AGM. IvdM stated that the AGM is the only chance that the members get to comment. Emile Burger (Erf 1344) advised that he does not reside on the estate but managed to remain involved.

6.1.7.4. IvdM suggested that financial reports should be prepared once every quarter and then comparisons could be made. This suggestion was met with agreement.

6.1.7.5. EB stated that a balance should be maintained.

6.1.7.6. BdS stated that he serves as a Trustee for many estates and the worst complaints to be faced with at an AGM of an active estate is poor service delivery and residents would far rather pay more for a high standard.

6.1.7.7. CS advised that he too is involved with many estates and feels that the levy of R890 per month is a bargain.

6.1.7.8. JGB advised that the Trustees are by no means blaze about costs.

6.1.7.9. JGB advised that should any homeowner wish to be involved on a sub-committee level with regards to financial or the like they are more than welcome to do so, in addition any member is more than welcome to come to the estate and look into the financials should they so wish to do so.

6.1.7.10. It was suggested that for the next AGM the figures are presented as actual versus budget and short descriptions are provided for each. This suggestion was agreed.

6.1.8. The signing off of the financial statements was proposed by Junior van der Horst and seconded by John Schooling with no objections from the floor and therefore passed.

6.2. Levies for 2008 / 2009

6.2.1. A levy increase of 9% was proposed, bringing the levies from R930 to R1015 per month inclusive of VAT.

6.2.2. Marius Snyman (Erf 1503) advised that levies increasing on an annual basis is reasonable but queried how persons not paying levies are dealt with:

6.2.2.1. BdS advised that currently the estate is doing everything legally possible. The current procedure includes firstly the estate will contact the member and try to come to some kind of payment terms with the member, including getting them to sign a stop order for the monthly levies so they don’t fall further behind on their levy payments. If the homeowner does not attend to this then the legal process is being followed where the estate is at the end of with a few people. This includes a summons being issued which depending on the person, could lead to a sale in execution. BdS advised that in certain cases this is working and there has been a significant improvement in compliance with levy payments.

6.2.2.2. JGB advised that the estate is always protected as a condition of title is that the HOA needs to provide a consent to transfer of any erf and this they will not do without the levies being paid in full.

6.2.3. IvdM felt that the estate was in breach due to non deliverance of wine:

6.2.3.1. JGB advised that the Constitution stipulates that the wine allocation is an annual allocation and in addition that this will be made available when it is available and does not need to be distributed monthly.

6.2.3.2. CV advised and the floor confirmed that the availability of the wine was communicated with the members.

6.2.3.3. IvdM felt that the 3 month wine collection stipulation would now be unfair as there would be a substantial quantity to collect when it is next available. JGB advised that this was taken to a vote and passed at the previous AGM. The estate was having serious problems with non collection of wine with people taking 18 months to collect it which led to storage and other problems. JGB advised that should a member have a problem in collecting the wine they are requested to contact the estate directly in order to make alternative arrangements with them.

6.2.4. The increase in levies was proposed by JS and seconded by IvdM with no objections from the floor and therefore passed.

6.3. Auditor’s remuneration for the past financial year

6.3.1. The auditors remuneration for the past financial year was 22,000 exclusive of VAT.

6.3.2. JP queried the type of audit that is conducted. GvR stated that all the statutory requirements are met. Should a serious issue be picked up (of which none were) then this will be investigated.

6.3.3. No objections were revived and the auditors remuneration was passed.

6.4. Appointment of Auditors

6.4.1. Exceed was reappointed and no objections from the floor raised.

7. THE ELECTION OF TRUSTEES OTHER THAN THE DEVELOPERS REPRESENTATIVES

7.1. JGB advised that in terms of the Constitution the Developer Trustees are nominated and elected by the Developer and will remain the same as last year as follows:

7.1.1. Jan Bergman

7.1.2. Basil de Sousa

7.1.3. John Bos

7.1.4. Dean Ashworth

7.1.5. Junior van der Horst

7.2. JGB advised that in terms of the constitution the Homeowner Trustees are supposed to be nominated by the Developer and appointed at the AGM however should anyone from the floor wish to nominate or be nominated the Trustee Committee was more than happy to put the nominations to a vote.

7.2.1. No nominations from the floor were made and therefore the nominations from the developer namely, Casper Fourie, Casper Steenkamp, MC Engelbrecht and Jason Parkin were put to a vote.

7.2.2. Casper Steenkamp and Jason Parkin were voted in as the homeowner representatives unanimously.

8. TO CONSIDER AND, IF DEEMED FIT, PASS WITH OR WITHOUT MODIFICATION THE PROPOSED GENERAL RESOLUTION NO1 AND SPECIAL RESOLUTION NO 1

8.1. JGB advised that General Resolution 1 is not technically required in terms of the constitution but has however been submitted and that the delay in the holding of the AGM was due to finalisation of the accounts. No objections were received from the floor and was therefore passed.

8.2. JGB advised that Special Resolution 1 was required as the erf numbers of the vineyard erven were erroneously omitted when preparing the constitution. No objections to the amendment was received from the floor and was therefore passed.

8.3. JGB advised that Special Resolution 2 was required due to a typographical error. No objections were received from the floor and was therefore passed.

9. GENERAL

9.1. JGB requested that all members confirm their contact details with the estate as they are unable to ascertain as to weather or not notices, news, ect are being received by the members.

9.2. JP requested that penalty levies in terms of the commencement of construction be looked into:

9.2.1. JP put to the committee the fact that he purchased for investment purposes and the current economic climate was not foreseen at the time. He further stated that he feels let down by the developer as he was not aware at the time that an opposition estate would be erected on the adjacent property by the same developer.

9.2.2. Several suggestions were put forward by the floor including:

9.2.2.1. Penalty levy deferment

9.2.2.2. Penalty levy waiver for a fixed period of time.

9.2.3. JGB advised that the legal implications of the above would mean the following:

9.2.3.1. The constitution would need to be amended and therefore a Special General meeting would need to be called for as amendments of the constitution does not fall within the Trustees power. This would require attendance by 51% of the members of the association who are legible for voting and a 75% majority to vote for the amendment of those in attendance.

9.2.3.2. JP raised concern with regards to non attendance of members to the Special meeting looking at the small outcome at the AGM. JGB responded in saying that this is a decision to be made by the members and should attendance be poor then penalty levies are deemed of little importance to the members.

9.2.3.3. The suggestion of giving a member from the floor the contact details of the other members in order for them to lobby responses was rejected due to privacy policies.

9.2.3.4. JGB advised that the Trustees do have the power to defer payment or make payment arrangements of the penalty levies. And the Trustee committees current opinion is that they are happy to meet with individuals on a case by case basis in order to discuss the possibilities as mentioned above.

9.2.3.5. A concern was raised by a member of the floor with regards to members entitled to vote as this would affect the voting of the resolutions. CV advised that currently people behind on their levies and therefore not entitled to vote only equates to approximately 10% of members and therefore should not affect it greatly.

9.2.4. Members for the penalty waiver were of the following opinions:

9.2.4.1. A member from the floor stated that the current economic slump was not anticipated and are sitting with a 2 year investment that has not as yet shown growth.

9.2.4.2. Juan Hammond (Erf 1503) stated that he feels that a penalty levy will scare away possible investors and he supports the penalty levy waiver.

9.2.4.3. A member from the floor felt that penalty levies would result in more foreclosures.

9.2.5. Members against the penalty waiver were of the following opinions:

9.2.5.1. JGB stated that he feels it would be unfair on the members who have already gone to the expense of building to waiver the penalty levies.

9.2.5.2. CS requested that the members for the penalty waiver think it through carefully as the plots and houses on the estate will have a higher value if more properties are built.

9.2.6. Developer position:

9.2.6.1. JGB, as a developer Trustee, stated that at the end of the day the estate belongs to the members and should a Special General Meeting be called for the developer would abstain from using its casting vote, however will reserve the right to cast votes on the 14 unsold erven. In addition the developer will also not utilise its casting vote for the calling or attendance of the Special General Meeting.

9.2.7. Outcome & General Comments:

9.2.7.1. It was suggested, and agreed to, that the following course of action is followed:

9.2.7.1.1. The developer together with the HOA will draft a few resolutions in this regard with various stipulations such as signing of stop orders for normal levies, landscaping of erven ect for circulation to all members of the association.

9.2.7.1.2. The members can peruse and put forward suggestions in this regard. Once all suggestions have been received the resolutions can be sent out with a notice for the Special General Meeting.

9.2.7.1.3. Members can either then vote by proxy or in person at the Special General Meeting.

9.2.7.1.4. Should the resolution to waiver penalty levies not be passed the Trustee committee will still be open to looking into individual cases with regards to payment terms.

9.2.7.1.5. Levies for the upcoming year are calculated taking into account the profit received by the Association in the previous financial year. Should the payment of penalty levies result in a profit for the association this could result in a reduction of levies in the following financial year.

9.3. A member from the floor queried the high scrutiny fee and feels it is too high as he approached the estate and asked advise on who to appoint as they would know the design manual. He was of the opinion that the scrutiny fee should be less for someone going with an architect suggested by the estate.

9.3.1. JGB advised that this is a question of cost and he should therefore approach the Trustee Committee in this regard.

10. CLOSE

10.1. JGB thanked all for attending and called a close to the AGM.

10.2. A member from the floor thanked the developer for its independence.

10.3. A member form the floor and the Trustee committee thanked the Estate Manager and staff of the estate for their work throughout the year and complimented them on the operations thereof.