MABULA TIMESHARE

STRUCTURAL CHALET REFURBISHMENT PROPOSAL

PERIOD: MAY 2007 TO FEBRUARY 2009

HISTORY OF PREVIOUS ACCOMMODATION REFURBISHMENT & FUTURE REFURBISHMENT PROPOSALS :

BUSH LODGE | MODJADJI & SUNSET HILL | GAME LODGE
Please click on a link above to view in terms of the Timeshare unit which you own and all the relevant "Scope of Works" and costs will be available for you to review.

There was a general lack of adequate provisions for future replacements made by the original developer / management that were liquidated in 1991. This factor and the restricted cash flow following the liquidation resulted in the provisions for future replacements being totally inadequate.

As a result of the above liquidation, replacements were non-existent for the period 1991 to the end of 1994. During this period, provisions for replacements in each year's budget were accelerated at a rate of 20% per annum, to make up for the lack of provisions in previous years. Only from 1995 was the Company in a position to perform major accommodation refurbishments, which have taken place as follows:

The items detailed for refurbishment as above, have generally been accorded a life expectancy of 5 years with the exception of the items in use at Game Lodge which have been accorded a 4 year life span due to the use of these units as Hotel Units with a high turn-over of occupants in comparison to normal timeshare accommodation.

Other items for replacement within accommodation units which are not included in the above have had life-spans attached to them, ranging from 2 to 15 years.

STRUCTURAL CHALET REFURBISHMENT :

It is extremely clear from the above refurbishment provisions in the existing refurbishment plan that they clearly revolve around “softs” refurbishment. This has been adequate and has clearly served a purpose. The problem now exists that the physical interior shell of each of the units is dated and tired and this is being brought to Management's attention by many of the Shareholders and Guests. Many of the units are in excess of 20 years old and at no time has physical structural refurbishment been carried out.

The items which would need to be addressed in all the various units are available on the various web pages and include:

It is scheduled that this plan be carried out over a 15 month period.

FUNDING

A once-off refurbishment levy was determined, with half the payment due in 2006 and the second half in early 20007. The levy was calculated according to the bed numbers per unit, e.g.: Modjadji 16 (6-sleeper), and the costs divided by the entire camp bed numbers, to give a per bed cost. This was the basis of the proposed Special Refurbishment Levy. The required amount for the entire project is estimated to be R24, 5 million (Including VAT).

The interest accrued to the refurbishment account, will remain within the account and will be used to combat the effects of inflation over the duration of the project, and to fund any items that become apparent but were not budgeted for. Any excess funds available after the completion of the project, will be placed back into the Timeshare Reserve Replacement Levy Fund.

Minimal normal levy increases will need to be achieved in 2008, but at the same time, normal type Capital Expenditure will need to continue albeit at a reduced cost and minimal planned projects.

TIMING

It was initially envisaged that a period of four weeks per unit would be required on a seven days per week working basis, however now that construction has begun, a minimum of seven weeks is required per unit.

The time periods on each unit overlap so as to allow the thatching teams and the demolition team to move into units ahead of the construction team, in order for a work flow pattern to be formulated. Once the construction, re-tiling and installation of new cupboards is complete, the electrical work is finished and the unit is handed over to the interior decorator for the installation of the curtains, pictures and furniture. Housekeeping then get the unit, which takes two days to thoroughly clean, and then installs the utensils, crockery, cutlery and make up the beds.

A full plan from the designated project manager / architect is in place with the desired time frames, dead-lines, and a contingency plan in case of delays.

In brief, the programme is as follows:

The entire project is being done by a large contractor, Safari Thatching, as the M.T.S. Maintenance Team still need to continue with the day-to-day maintenance issues.

All the Mabula Maintenance Weeks have been spacebanked with R.C.I. for 2006, 2007 and 2008 and we then take back weeks when we require them for refurbishment. R.C.I. is also allocating to us the weeks of our Owners who have spacebanked their weeks with R.C.I. annually, would do so as normal, and would allocate their exchange guests into the maintenance weeks we could give them. M.T.S. has 77 maintenance weeks available each year and we could organize through R.C.I. for the various camps' units to be released back to us.

CONCLUSION

For Mabula Timeshare to maintain its “Gold Crown” status, which has associated benefits to Shareholders, it is imperative that this refurbishment programme takes place. The units have become “tired” and ongoing maintenance cannot keep up with repairs to outdated, worn and broken tiles, counter tops, cupboards, light fittings and furniture.

The challenge is to keep the levies for the next three years as competitive as possible and not to exceed inflation. If we can do this, the next time a project of this nature may need to be addressed will be between 2016 / 2020.

If this programme did not start now, the effect of inflation, particularly in terms of building costs, will become prohibitive and apart from losing “Gold Crown” status, the overall Mabula experience would diminish over the next few years.