ANNUAL FINANCIAL STATEMENTS. for the 13 months ended 31 March 2003

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1 ANNUAL FINANCIAL STATEMENTS 25

2 DIRECTORS RESPONSIBILITY FOR THE ANNUAL FINANCIAL STATEMENTS The directors are responsible for monitoring the preparation of and the integrity of the annual financial statements and related information included in this annual report. In order for the board to discharge its responsibilities, management has developed and continues to maintain a system of internal control. The board has ultimate responsibility for the system of internal control and reviews its operation, primarily through the audit committee. The internal controls include a risk-based system of internal accounting and administrative controls designed to provide reasonable but not absolute assurance that assets are safeguarded and that transactions are executed and recorded in accordance with generally accepted business practices and the group s policies and procedures. These controls are implemented by trained, skilled personnel with an appropriate segregation of duties, are monitored by management and include a comprehensive budgeting and reporting system operating within strict deadlines and an appropriate control framework. The external auditors are responsible for reporting on the annual financial statements. The annual financial statements are prepared in accordance with Statements of South African Generally Accepted Accounting Practice and incorporate disclosures in line with the accounting philosophy of the group. They are based on appropriate accounting policies consistently applied and are supported by reasonable and prudent judgements and estimates. The directors believe that the group will be a going concern in the year ahead. Accordingly the going concern basis in preparing the annual financial statements has been adopted. The annual financial statements for the period ended 31 March 2003 set out on pages 28 to 53, were approved by the board of directors on 27 May 2003 and are signed on its behalf by BS Kantor CHAIRMAN PA Theodosiou MANAGING DIRECTOR 27 May 2003 DECLARATION BY COMPANY SECRETARY In my capacity as Company Secretary, I hereby confirm, in terms of the Companies Act, 1973, that for the period ended 31 March 2003, the company has lodged with the Registrar of Companies all such returns as are required of a public company in terms of this Act and that all such returns are true, correct and up to date. CB Marlow (Company Secretary) 26

3 REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF ACUCAP PROPERTIES LIMITED We have audited the annual financial statements and group annual financial statements of Acucap Properties Limited set out on pages 28 to 53 for the 13 months ended 31 March These annual 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 annual financial statements fairly present, in all material respects, the financial position of the company and of the group at 31 March 2003 and the results of their operations and cash flows for the period then ended in accordance with Statements of South African Generally Accepted Accounting Practice, and in the manner required by the Companies Act in South Africa. KPMG Inc. Registered Accountants and Auditors Chartered Accountants (S.A.) Cape Town 27 May

4 DIRECTORS REPORT The directors have pleasure in presenting their report for the thirteen months ended 31 March NATURE OF BUSINESS Acucap Properties Limited carries on the business of a property holding company through the ownership of investment property held by its wholly owned subsidiaries. GENERAL REVIEW OF OPERATIONS No new properties were acquired since listing, but considerable effort was expended in bedding down the portfolio, and also in optimising the performance of the individual properties. Planning has been completed for significant re-tenanting activities at Key West, to commence in the 2004 financial year. A substantial refurbishment of the Sunward Centre at Boksburg got underway, and will be completed by November In April 2003, work commenced on the upgrade of the Atterbury Office Park, pursuant to the proposed development of a new building on the site in the 2004 financial year. The property portfolio was revalued at 31 March 2003 by the group s independent valuers to R million, representing a 5.54% increase in valuation since the date of listing. Subsequent to the year end, the group acquired two industrial properties from Old Mutual for R44.8 million, one at City Deep in Johannesburg and the other at Epping in Cape Town. These properties are slightly yield enhancing, and represent the group s first entry into the industrial market, where vacancy levels have started to decline and there is evidence that rentals have begun to firm. Both properties are of a quality consistent with the Acucap portfolio as a whole. Interest rates on borrowings were well managed in an environment of rapidly escalating short-term rates, with the result that the group achieved an average borrowing cost of 13.63% for the year. At 31 March 2003, 90% of borrowings were subject to fixed interest rates, with a weighted average fixed interest rate expiry of approximately 3 1 /2 years. The results and financial position of the group are set out in the accompanying financial statements and notes. INTEREST DISTRIBUTIONS It is a matter of considerable satisfaction that we have been able to distribute cents per linked unit for the period since listing, against our forecast of cents, and that our results have so closely matched our initial promise. This was achieved despite a more hostile financial environment and very largely because the property portfolio performed so well, to the credit of the group s management company. Distributions were: Cents per linked unit Pre-listing Distribution number 2 for the period 1 March 2002 to 26 March Post-listing Distribution number 3 for the period 27 March 2002 to 30 September Distribution number 4 for the period 1 October 2002 to 31 March

5 SHARE CAPITAL The authorised share capital of the company is 100 million shares of 0.1 cent each linked to 100 million subordinated unsecured variable rate debentures of R9.99 each. A linked unit comprises one ordinary share and one subordinated unsecured variable rate debenture. During the period under review linked units were issued (2002 : ). The linked units issued consist of ordinary shares of 0.1 cent each issued at a premium of 0.9 cents and subordinated unsecured variable rate debentures issued at R9.99 each. The linked units were issued in order for the group to fund the acquisition of properties. The linked units were listed on the JSE Securities Exchange on 27 March SUBSIDIARIES Details of the company's interest in its subsidiaries are set out in note months ended 12 September March 2003 (date of incorporation) to 28 February 2002 R'000 R'000 The attributable interest in profits / (losses) after tax of subsidiaries was ( 7 106) DIRECTORATE During the period under review the following directors held office: Non-executive: F M Berkeley, D de Beer, R C Frolich, B S Kantor, M J Lindeque, H J Mocke, B Stevens, U J van der Walt, N D C Whale Executive: J H Rens, P A Theodosiou There were no changes to the board during the period under review. In terms of the articles of association the following directors retire at the forthcoming annual general meeting and are eligible for re-election: F M Berkeley, B S Kantor, M J Lindeque, H J Mocke, B Stevens and U J van der Walt DIRECTORS' SHAREHOLDINGS Direct Indirect Total Percentage 31 March 2003 FM Berkeley % D de Beer % BS Kantor % JH Rens % B Stevens % PA Theodosiou % NDC Whale % % At listing (27 March 2002) JH Rens % PA Theodosiou % NDC Whale % % 28 February 2002 JH Rens % PA Theodosiou % NDC Whale % % There have been no changes in the directors' shareholdings between 31 March 2003 and the date of this report. 29

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7 DIRECTORS REPORT (continued) DIRECTORS REMUNERATION Fees paid to directors during the 13 months ended 31 March 2003 were as follows: 13 months ended 12 September March 2003 (date of incorporation) to 28 February 2002 R'000 R'000 FM Berkeley* D de Beer* RC Frolich BS Kantor AE le Roux (resigned ) - 5 M J Lindeque H J Mocke** B Stevens U J van der Walt NDC Whale * The directors remuneration payable to FM Berkeley and D de Beer was paid to Nedcor Investment Bank Limited ** The directors remuneration payable to HJ Mocke was paid to Sanlam Property Asset Management (Proprietary) Limited The executive directors' remuneration is paid by Acucap Property Management (Proprietary) Limited 13 months ended 12 September March 2003 (date of incorporation) to 28 February 2002 R'000 R'000 JH Rens PA Theodosiou CORPORATE GOVERNANCE AND INTERNAL CONTROLS The company's position in regard to corporate governance and internal controls is set out in a separate statement in the annual report. MANAGEMENT BY A THIRD PARTY The group has no employees and is managed by Acucap Property Management (Pty) Limited in terms of an asset management agreement (see note 17.1). Messrs JH Rens (10%), PA Theodosiou (10%) and NDC Whale (1.5%) have indirect shareholdings in Acucap Property Management (Pty) Ltd. SPECIAL RESOLUTIONS The company did not pass any special resolutions during the period under review. SECRETARY The company secretary is CB Marlow CA (S.A.) (appointed 13 September 2002 upon resignation of D de Beer) Business address: Suite A11, Westlake Square, Westlake Drive, Westlake Postal address: PO Box 31079, Tokai,

8 BALANCE SHEETS at 31 March March February March February 2002 Group Group Company Company Note R'000 R'000 R'000 R'000 ASSETS Non current assets Investment properties Interest in subsidiaries Current assets Deferred tax Accounts receivable Cash and cash equivalents Total assets EQUITY AND LIABILITIES Shareholders interest / (deficit) ( 7 009) Share capital and share premium Non-distributable reserve Accumulated loss ( ) ( 7 106) - - Non current liabilities Debentures Loans Deferred tax Current liabilities Accounts payable Debenture interest payable Total equity and liabilities

9 INCOME STATEMENTS 12 September September months ended (date of incorporation) 13 months ended (date of incorporation) 31 March 2003 to 28 February March 2003 to 28 February 2002 Group Group Company Company Note R'000 R'000 R'000 R'000 Revenue Net operating expenses ( 9 843) ( 893) 13 - Operating profit Revaluation of investment properties ( 3 395) Interest received Interest paid debentures ( ) ( 1 908) ( ) ( 1 908) loans ( ) ( 7 281) - - Profit / (loss) before exceptional items and taxation ( 4 309) - - Exceptional items ( 9 392) ( 3 306) - - Listing costs ( 7 393) ( 2 754) - - Cost of raising finance ( 1 999) ( 552) - - Profit / (loss) before taxation ( 7 615) - - Taxation 11 ( ) Net profit / (loss) for the period ( 7 106) - - Cents Cents Earnings / (loss) per share (73.20) Headline loss per share 13 (9.46) (15.10) Interest distribution per linked unit Post listing interim final Pre listing Distribution per linked unit

10 STATEMENTS OF CHANGES IN EQUITY Share Share Non distributable Accumulated Total capital premium reserve loss R'000 R'000 R'000 R'000 R'000 GROUP Issue of 7 shares on 12 September Issue of shares on 4 February Net loss for the period ( 7 106) ( 7 106) Balance at 28 February ( 7 106) ( 7 009) Issue of shares on 14 March Issue of shares on 26 March Net profit for the period Transfer to non-distributable reserve ( ) - Balance at 31 March ( ) COMPANY Issue of 7 shares on 12 September Issue of shares on 4 February Balance at 28 February Issue of shares on 14 March Issue of shares on 26 March Balance at 31 March

11 CASH FLOW STATEMENTS 12 September September months ended (date of incorporation) 13 months ended (date of incorporation) 31 March 2003 to 28 February March 2003 to 28 February 2002 Group Group Company Company Note R'000 R'000 R'000 R'000 Cash flows from operating activities Cash generated by operations Interest received Interest paid ( ) ( 9 189) ( ) ( 1 908) Net cash inflow / (outflow) from operating activities ( 1 147) Cash flows from investing activities Acquisition of investment properties ( ) ( ) - - Loan to subsidiary - - ( ) ( ) Net cash outflow from investing activities ( ) ( ) ( ) ( ) Cash flows from financing activities Proceeds from the issue of shares Proceeds from the issue of debentures Loans raised Loans repaid ( 7 185) Net cash inflow from financing activities Net cash inflow for the period Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

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13 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 1. ACCOUNTING POLICIES The financial statements incorporate the principal accounting policies set out below, which are consistent with those adopted in the previous financial period. 1.1 Statement of compliance The financial statements are prepared in accordance with South African Statements of Generally Accepted Accounting Practice and the requirements of the Companies Act in South Africa. 1.2 Basis of preparation The financial statements are prepared on the historical cost basis, except for investment properties and financial instruments which are carried at fair value. 1.3 Basis of consolidation The group financial statements incorporate the assets, liabilities, operating results and cash flows of the company and its subsidiaries. The results of subsidiaries acquired or disposed of during the period are included from the effective dates of acquisition and up to the effective dates of disposal. Intercompany balances and transactions and any resulting unrealised gains and losses are eliminated in preparing the group financial statements. Goodwill on acquisitions, being the net excess of the cost of investments in subsidiaries over the underlying net asset values at the effective dates of acquisition, is written off over its useful life. The accounting policies of the subsidiaries are consistent with those of the holding company. 1.4 Investment properties Investment properties are properties held to earn rental income and appreciate in capital value. The cost of investment properties comprises the purchase price and directly attributable expenditure. Subsequent expenditure relating to investment properties is capitalised when it is probable that future economic benefits from the use of the asset will be increased. All other subsequent expenditure is recognised as an expense in the period in which it is incurred. After initial recognition investment properties are measured at fair value. Fair values are determined annually by external independent professional valuers on the open market value basis. Gains or losses arising from changes in the fair values are included in net profit or loss for the period in which they arise. Unrealised gains, net of deferred tax, are transferred to a non-distributable reserve in the statement of changes in equity. Unrealised losses, net of deferred tax, are transferred against a non-distributable reserve to the extent that the decrease does not exceed the amount held in the non-distributable reserve. On disposal of investment properties, the difference between the net disposal proceeds and the carrying value is charged or credited to the income statement. Revaluation gains / losses accounted for in the non-distributable reserve relating to such disposals are transferred to/against distributable reserves/accumulated loss in the statement of changes in equity. Borrowing costs Borrowing costs that are directly attributable to investment properties that necessarily take a substantial period of time to prepare for their intended use are capitalised. Capitalisation continues up to the date that the investment properties are substantially complete. Capitalisation is suspended during extended periods in which active development is interrupted. 37

14 1.5 Impairment The carrying amounts of the group s assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. 1.6 Financial instruments Measurement Financial instruments are initially measured at cost, which includes transaction costs. Subsequent to initial recognition these instruments are measured as set out below. Accounts receivable Accounts receivable originated by the group are stated at cost less a provision for doubtful debts. Cash and cash equivalents Cash and cash equivalents are measured at fair value at balance sheet date. Financial liabilities Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisations. Gains and losses on subsequent measurement Gains and losses arising from a change in fair value of financial instruments are included in net profit or loss in the period in which the change arises. Offset Financial assets and financial liabilities are offset and the net amount reported in the balance sheet when the group has a legally enforceable right to set off the recognised amounts, and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. 1.7 Cash and cash equivalents Cash and cash equivalents comprise cash on hand, deposits held on call with banks and investments in money market instruments, net of bank overdrafts, all of which are available for use by the group unless otherwise stated. 1.8 Provisions Provisions are recognised when the group has present legal or constructive obligations arising from past events, from which outflows of economic benefits are probable, and where reliable estimates can be made of the amount of the obligations. Where the effect of discounting is material, provisions are discounted. The discount rate is a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. 1.9 Revenue Revenue comprises rental income, excluding VAT. 38

15 1.10 Tax Current tax comprises tax payable calculated on the basis of the expected taxable income for the period, using the tax rates enacted at the balance sheet date. Deferred tax is provided using the balance sheet liability method, based on temporary differences. Temporary differences are differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities using tax rates enacted or substantively enacted at the balance sheet date. The effect on deferred tax of any changes in tax rates is recognised in the income statement. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the associated unused tax losses and deductible temporary differences can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised Segment reporting On a primary basis, the group operates in the following geographical areas of South Africa: Gauteng, and Cape. The property usage of the group's property portfolio is the secondary segment. Segment results include revenue and expenses directly attributable to a segment and the relevant portion of enterprise revenue and expenses that can be allocated on a reasonable basis to a segment. Segment assets and liabilities comprise those assets and liabilities that are directly attributable to the segment or can be allocated to the segment on a reasonable basis. 39

16 31 March February March February 2002 Group Group Company Company R'000 R'000 R'000 R' INVESTMENT PROPERTIES Cost Subsequent expenditure* Revaluation ( 3 395) - - Carrying value Movement in investment properties Carrying value at beginning of period Additions Subsequent expenditure* Revaluation ( 3 395) - - Carrying value at end of period * includes interest capitalised of R (2002:Rnil) Investment properties are encumbered as per note 9 A register of investment properties is available for inspection at the group's registered office. Investment properties were independently valued at 31 March 2003 on the open market value basis by the following professional valuers who are registered with the South African Institute of Valuers: Cape Town properties - MRB Gibbons of Mills Fitchet Magnus Penny (Proprietary) Limited Gauteng properties - P Parfitt and G MacFarlane of Quadrant Property Group (Proprietary) Limited Eastern Cape properties - G J Boyd of Majola & Boyd (Proprietary) Limited 40

17 31 March February March February 2002 Issued Share Issued Share Percentage Percentage Capital Capital Holding Holding R R 3. INTEREST IN SUBSIDIARIES Acucap Investments (Proprietary) Limited % 100% Acucap Investments 2 (Proprietary) Limited % - 31 March February 2002 R'000 R'000 Shares at cost - - Loan The loan to Acucap Investments (Pty) Limited bears interest at a rate of not less than 99% of the net profit of Acucap Investments (Pty) Limited as defined in the debenture trust deed. Interest is payable six monthly The share in and loan to Acucap Investments (Pty) Limited are ceded and pledged to Nedbank Limited as security for the Nedbank Limited loans to the subsidiary (see note 9).

18 31 March February March February 2002 Group Group Company Company R'000 R'000 R'000 R' DEFERRED TAX Balance at beginning of period ( 509) Movement during the period ( 509) - - Balance at end of period ( 509) - - Comprising Revaluation of investment properties ( 509) CASH AND CASH EQUIVALENTS Cash on call Current account SHARE CAPITAL Authorised 100 million ordinary shares of 0.1 cent each Issued (2002: ) ordinary shares of 0.1 cent each Share premium Each share is linked to a debenture, which together comprises a linked unit (see note 8). The unissued shares are under the control of the directors until the next annual general meeting. 7. NON DISTRIBUTABLE RESERVE Investment property revaluation reserve The deficit of R on revaluation of the properties as at 28 February 2002 was included in the accumulated loss at that date. 42

19 31 March February March February 2002 Group Group Company Company R'000 R'000 R'000 R' DEBENTURES (2002: ) subordinated unsecured variable rate debentures of R9.99 each The debentures bear interest at a rate of not less than 99% of the net profit as defined in the debenture trust deed. Interest is payable six monthly. The debentures are redeemable: after 25 years from date of allotment subject to a special resolution with redemption taking place 5 years after the date of the special resolution; at the option of the company subject to compliance with statutes and the requirements of the JSE Securities Exchange, as applicable; immediately at the option of the trustee if the company fails to adhere to the terms of the trust deed; commits an act of insolvency or disposes of or attempts to dispose of the whole or substantially the whole of its undertaking. The rights of debenture holders to repayment are subordinated in favour of the claims of other creditors. 43

20 31 March February March February 2002 Group Group Company Company R'000 R'000 R'000 R' LOANS Secured % fixed rate Nedbank Limited("Nedbank") facility prime less 1.5% facility Jan facility Jan facility Oct facility Apr facility May facility Mar The terms are as follows: Interest rate The capital is repayable in full on 31 March The interest rates on all fixed rate facilities revert to prime minus 1.5% per annum on expiry of the fixed rates. The loans are secured by a pledge and cession of the shares in Acucap Investments (Pty) Ltd and of any claims which Acucap Properties Ltd may have against Acucap Investments (Pty) Ltd (see note 3). Nedbank holds in its possession the title deeds to the properties (see note 2). Acucap Investments (Pty) Ltd may not dispose of more than 10% of its investment properties without the consent of Nedbank (see note 2). Acucap Investments (Pty) Ltd requires the written consent of Nedbank before it may incur any indebtedness, other than the indebtedness to Nedbank and ordinary trade creditors, of more than R Expiry date of Balance carried forward

21 31 March February March February 2002 Group Group Company Company R'000 R'000 R'000 R' LOANS (continued) If the gross amount due to Nedbank exceeds 55% of the gross carrying value of the investment properties or the income of Acucap Investments (Pty) Ltd for any quarter does not exceed 150% of the interest due, then Acucap Investments (Pty) Ltd will be required to repay such portion of the capital advanced to achieve the above minimum ratios. Acucap Investments (Pty) Ltd may not purchase, redeem or reduce its share capital during the period of the agreement. Unsecured Loans from vendors

22 12 September September months ended (date of incorporation) 13 months ended (date of incorporation) 31 March 2003 to 28 February March 2003 to 28 February 2002 Group Group Company Company R'000 R'000 R'000 R' PROFIT / (LOSS) BEFORE TAXATION is stated after charging/(crediting) Income from subsidiaries - - ( ) ( 1 908) Administration fees - - ( 193) - Interest received - - ( ) ( 1 908) Auditors remuneration audit fee other fees Property administration fees (Increase)/decrease in fair value of investment properties ( ) Interest received ( 558) ( 365) ( 66) ( 1 908) 11. TAXATION South African normal tax deferred ( 509) - - Reconciliation of tax rate % % % % Effective tax rate 36 ( 7) - - CGT inclusion rate increased to company rate Non deductible portion of capital loss - ( 6) - - Permanent differences ( 6) ( 11) - - Deferred tax asset not raised ( 1) ( 6) - - Standard tax rate 30 ( 30) - - Provision for current taxation is not necessary as the company had no taxable income. A subsidiary had a computed tax loss at 31 March 2003 of R (2002: R ) which is available for set off against future taxable income. 46

23 12 September September months ended (date of incorporation) 13 months ended (date of incorporation) 31 March 2003 to 28 February March 2003 to 28 February 2002 Group Group Company Company R'000 R'000 R'000 R' NOTES TO THE CASH FLOW STATEMENT Cash generated by operations Profit / (loss) before taxation ( 7 615) - - Adjusted for: Interest received ( 558) ( 365) ( ) ( 1 908) Interest paid (Increase) / decrease in fair value of investment properties ( ) Changes in working capital Increase in accounts receivable ( 1 462) ( 3 965) - - (Decrease) / increase in accounts payable ( 998) Increase in debenture interest payable EARNINGS / (LOSS) PER SHARE 13.1 Earnings / (loss) per share The calculation of the earnings / (loss) per share is based on the weighted average number of shares in issue during the period (2002: ) and a profit of R (2002: loss of R ) 13.2 Headline loss per share The calculation of the headline earnings / (loss) per share is based on a weighted average of shares in issue during the period (2002: ) and the headline loss is calculated as follows: Net profit / (loss) for the period ( 7 106) Listing costs Revaluation of investment properties ( ) Deferred tax on revaluation ( 509) Headline loss ( 3 625) ( 1 466) 14. CAPITAL COMMITMENTS AUTHORISED Contracted for Not contracted for The capital expenditure will be funded from cash resources, additional loan facilities and the issue of additional linked units. 47

24 R'000 R'000 R'000 R'000 Total Offices Retail Commercial 15. SEGMENTAL INFORMATION Segment results Group: 13 months ended 31 March 2003 Gauteng Revenue Net operating expenses ( 5 293) ( 6) ( 5 135) ( 152) Operating profit Cape Revenue Net operating expenses ( 4 019) ( 1 912) ( 1 776) ( 331) Operating profit Total allocated Revenue Net operating expenses ( 9 312) ( 1 918) ( 6 911) ( 483) Operating profit allocated Property revaluation ( 183) Taxation ( ) 373 ( ) ( 2 539) Allocated net profit for the period Reconciliation to net profit in the income statement Total Unallocated Allocated Revenue Operating expenses ( 9 843) ( 531) ( 9 312) Operating profit ( 531) Revaluation of investment properties Interest received Interest paid ( ) ( ) - Exceptional items ( 9 392) ( 9 392) - Taxation ( ) - ( ) Net profit for the period ( )

25 R'000 R'000 R'000 R'000 Total Offices Retail Commercial 15. SEGMENTAL INFORMATION (continued) Segment results (continued) Group: 12 September 2001 (date of incorporation to 28 February 2002 Gauteng Revenue Net operating expenses ( 278) ( 16) ( 262) - Operating profit Cape Revenue Net operating expenses ( 534) ( 348) ( 144) ( 42) Operating profit Total allocated Revenue Net operating expenses ( 812) ( 364) ( 406) ( 42) Operating profit allocated Property revaluation ( 3 395) ( 2 121) ( 803) ( 471) Taxation Allocated net profit for the period Reconciliation to net loss in the income statement Total Unallocated Allocated Revenue Operating expenses ( 893) ( 81) ( 812) Operating profit ( 81) Revaluation of investment properties ( 3 395) - ( 3 395) Interest received Interest paid ( 9 189) ( 9 189) - Exceptional items ( 3 306) ( 3 306) - Taxation Net (loss) / profit for the period ( 7 106) ( )

26 R'000 R'000 R'000 R'000 Total Offices Retail Commercial 15. SEGMENTAL INFORMATION (continued) Segment assets and liabilites Group: 31 March 2003 Gauteng Investment properties Accounts receivable Deferred tax ( ) ( 1 131) ( ) ( 1 621) Accounts payable ( 2 220) ( 703) ( 1 355) ( 162) Net segmental assets Cape Investment properties Accounts receivable Deferred tax ( 531) ( 848) Accounts payable ( 645) ( 222) ( 291) ( 132) Net segmental assets Total Investment properties Accounts receivable Deferred tax ( ) 691 ( ) ( 2 469) Accounts payable (2 865) ( 925) ( 1 646) ( 294) Net segmental assets Total Unallocated Allocated Investment properties Accounts receivable Cash and cash equivalents Total assets Debentures Loans Deferred tax Accounts payable Debenture interest payable Total liabilities

27 R'000 R'000 R'000 R'000 Total Offices Retail Commercial 15. SEGMENTAL INFORMATION (continued) Segment assets and liabilites (continued) Group: 28 February 2002 Gauteng Investment properties Accounts receivable Deferred tax Accounts payable ( 243) ( 160) ( 83) - Net segmental assets Cape Investment properties Accounts receivable Deferred tax ( 7) 71 Accounts payable ( 428) ( 197) ( 219) ( 12) Net segmental assets Total Investment properties Accounts receivable Deferred tax Accounts payable ( 671) ( 357) ( 302) ( 12) Net segmental assets Total Unallocated Allocated Investment Properties Accounts receivable Deferred tax Cash and cash equivalents Total assets Debentures Loans Accounts payable Debenture interest payable Total liabilities

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29 16. FINANCIAL INSTRUMENTS Exposure to interest rate and credit risk arises in the normal course of the group s business Interest rate risk The group actively manages its fixed and floating rate mix and these are positioned according to expected interest rate movements. Borrowings reprice as reflected in note Credit risk Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. At the balance sheet date there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet Fair values The fair values of all financial instruments aproximate to the values reflected in the balance sheet. 17. RELATED PARTY TRANSACTIONS 17.1 Identity of related parties Subsidiaries (see note 3) Directors as listed in the directors' report Acucap Property Management (Pty) Limited - asset managers The assets and the affairs of the group are managed by Acucap Property Management (Pty) Ltd, whose directors are Messrs D de Beer (resigned 12 April 2003), HJ Mocke, JH Rens, K Reynolds (appointed 15 May 2003), PA Theodosiou and NDC Whale. Messrs JH Rens, PA Theodosiou and NDC Whale are indirect beneficial shareholders in Acucap Property Management (Pty) Ltd Material related party transactions A promotors fee of 1.6% of the cost of investment properties purchased and listing costs was paid as follows: 1%, amounting to R (2002: R ) paid in linked units to the shareholders of Acucap Property Management (Pty) Ltd and capitalised as an acquisition cost of investment properties. 0,6%, amounting to R (2002: R ) paid in cash to Acucap Property Management (Pty) Ltd and included in listing costs Acucap Property Management (Pty) Ltd earns monthly management fees in terms of an asset management agreement. This fee amounts to 0.5% of the market capitalisation and loan funding (excluding debentures). In respect of the first year after listing, the management company agreed to underwrite the forward yield as disclosed in the prospectus by contributing an amount limited to its first year management fee for this purpose, in terms of clause 7.3 of the management contract. 18. CHANGE OF YEAR END The company changed its year end from the last day of February to the last day of March. 53