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3 ANNUAL REPORT 2007 l TABLE OF CONTENTS SECTION 1 CHAIRMAN S REPORT Financial page 2 Portfolio status page 2 Business philosophy page 3 Outlook and strategy page 4 Name change page 5 Board functioning page 5 Conclusion page 5 SECTION 2 ASSET MANAGER S REPORT Introduction page 8 Financial performance page 8 Portfolio overview page 9 Looking forward page 13 Conclusion page 13 SECTION 3 CONSOLIDATED FINANCIAL STATEMENTS Report of the independent auditors page 16 Directors responsibilities and approval page 17 Directors report page 18 Consolidated balance sheet page 24 Consolidated income statement page 25 Consolidated statement of changes in equity page 26 statement of changes in equity page 27 Consolidated cash flow statement page 28 Accounting policies page 30 Notes to the consolidated financial statements page 37 Country of Incorporation South Africa Nature of Business Property development and investment holding company Directors BF van Niekerk Chairman GJ Oosthuizen Executive Director LLS van der Watt Chief Executive Officer NFJ Haasbroek Non-Executive Director (resigned) P Tredoux Non-Executive Director Registered Office Mertech Building, Glenfield Office Park, Oberon Street, Faerie Glen, 0043, Pretoria, South Africa Business Address Mertech Building, Glenfield Office Park, Oberon Street, Faerie Glen, 0043, Pretoria, South Africa Postal Address Postnet Suite 205, Private Bag X20009, Garsfontein, 0042, Pretoria, South Africa Bankers Nedbank Limited Investec Bank Limited Standard Bank Limited FirstRand Bank Limited ` Auditors TAG Incorporated Chartered Accountants (S.A.) Registered Auditors Secretary T Smith Registration 1997/000543/06 Page 1 l ATTACQ ANNUAL REPORT 2007

4 Section 1 l CHAIRMAN S REPORT FOR THE YEAR ENDED 30 JUNE 2007 FRANCOIS VAN NIEKERK CHAIRMAN The Board s responsibility is to represent, preserve and enhance shareholder interest. At the conclusion of the Attacq Property Fund s ( Attacq ) second fiscal year this report is presented on behalf of the directors to inform shareholders and other stakeholders on the company s results and matters relevant to sustained growth. Attacq is a member of the Atterbury Property and company prowess can largely be attributed to sharing in the group s dynamic progression whilst starting to explore the incremental success of its own business initiatives. The recent formation of the Attacq Property Fund is corroborated by the successful consolidation of its investment portfolio over the past year together with a reassuring acceptance and harmonious functioning of Attacq within the Atterbury structure. FINANCIAL The consolidated Attacq Property Fund s after tax net profit for the financial year to 30 June 2007 increased by 33% to R481.1 million. The investment portfolios assessed fair value increase in book value represents R290 million or 59% of the company profit. During the financial year Attacq s asset base grew 88% to R3.37 billion. The valuation is based on the Attfund Limited ("Attfund") share price and own buildings at fair value determined with an Dream more than others think practical, expect more than others think possible Howard Shultz, Founder: Starbucks Coffee It takes a village to raise a child African Proverb average capitalisation rate of 8.7%. The board considers the valuation realistic and moderate - a viewpoint supported by the acceptable overall fund gearing of 34%. The Attacq share price increased by 34% to R5.48. Individual shareholders increased from 174 to 230 and altogether million shares were traded, amounting to some R90 million - from a shareholder perspective the major complaint being low availability of shares. In accordance with current growth objectives no dividend was declared. PORTFOLIO STATUS The stable and functional core portfolio was augmented as follows - with more specific detail in the Asset Manager s report: The investment in Attfund remained unchanged, is now valued at R1.58 billion and constitutes 50.7% of our noncurrent assets. Acquisitions: Attacq acquired 20% in Rapfund, the Hampton Office Park in Bryanston and Cape Town properties Great Westerford, Shell House and The Terraces. Post year end two smaller buildings were sold, i.e. Waterkloof Corner to Rapfund (increasing the 20% interest to approximately 25%) and FNB House to an unrelated buyer. Also an investment of R51 million was made in a regional shopping centre in Leipzig, Germany. ATTACQ ANNUAL REPORT 2007 l Page 2

5 BUSINESS PHILOSOPHY In line with the Atterbury s business philosophy of sharing with colleagues, business partners, shareholders and with fellow South Africans in need, a collective perspective by associates involved in each of the four areas, is given below: Atterbury Team Shared ownership with A-level colleagues is directly related to the group s past and expected future progress. The views of three longstanding staff members are: "As a shareholder I am proud to be associated with Attacq and the incredible achievements extending from the hands-on approach and enthusiasm which is the Atterbury culture. Our straightforward and honest style of doing business earned respect in the industry and gives the credibility that enables us to do the deals perceived to be unachievable by our peers. In a company where nothing is considered impossible and every individual has the freedom to express themselves - only the sky is the limit for this investment!" - Lucille Louw, Director: Atterbury Asset Managers (Pty) Ltd "Being a young shareholder, investing my hard earned cash into a property fund was quite a difficult decision at first, but having the opportunity to be in on the action and watch the fund grow from a share price of R2.76 to R5.48 in a short two years was exciting and very motivating to me. I see it as a privilege to be a shareholder in Attacq, and look forward to many years of benefit - even until I am not so young any more!" - Karin Dercksen, Accountant: Atterbury Property Holdings (Pty) Ltd "Attacq Property Fund has exceeded the expectations of its shareholders. This is as a result of the careful and calculated management of the fund. Within the management team there is an exceptional base of knowledge and experience in property and property finance. This knowledge base, together with a conservative yet extremely positive outlook can only bode well for the future of the fund." - James Ehlers, MD: Atterbury Property Developments (Pty) Ltd Risk comes from not knowing what you re doing Warren Buffet business organisations remain a particular success differential. The views of two business partners: "Business decisions are made based on sound financial principles. For us it extends further than that, to the integrity of the people that we are dealing with. We like the aggressive and focused approach as indicated by developing, investing and acquiring only world-class properties. It is therefore a privilege to be associated with the Attacq Property Fund." - Hannes Pickard, CEO: Retail Africa Property Developments "The unique blend of aggression, knowledge and strong determination of the Attacq team has earned them tremendous respect from their peers in the Property Industry. Their work ethic and methodology ensures that properties under their control continue to achieve superior returns. This together with the strong bond and mutual respect shown to their service providers and tenants will ensure the continued outperformance of their portfolio" - Scott Thorburn, Director: Property Management, RMB Properties (Pty) Ltd Attacq Shareholders It is gratifying that many of Attacq s 230 shareholders show an enthusiastic and growing interest and involvement with company affairs: Atterbury Business Partners The Atterbury business fundamental of achieving optimal synergy through the participative involvement of like-minded "As a sportsman, I am always thinking about my financial future after rugby. Fortunately I had an opportunity to invest in a prosperous fund like Attacq, managed by a team of young, dynamic individuals that spells a rosy future for myself and other shareholders." - Fourie du Preez, Springbok Rugby World Cup Winning Squad You have to perform at a consistently higher level than others. That s the mark of a true professional. Professionalism has nothing to do with getting paid for your services. Joe Paterno, Football Coach: Penn State University "I felt privileged to have been invited to invest in the Attacq Property Fund. The performance in the past year has vindicated my decision to invest. I would like to buy mores shares, but no one is selling. It looks like all the investors rank this investment highly." - Lebo Masekela, CEO: Infotech (Pty) Ltd Attacq Community Involvement Currently favourable economic conditions underscore possibly the major deficiency of the capitalist system; being the furtherance of pronounced societal imbalances. South Africa s Page 3 l ATTACQ ANNUAL REPORT 2007

6 political reality requires of business to materially assist government in arresting endemic poverty and mounting socioeconomic expectation by preserving and preferably promoting sustainable and equitable social parity. Consequently 34% of Attacq s shareholding is registered in the name of two community beneficial trusts, representing the Atterbury s social response. "At Mergon Foundation we steward the proceeds from our investment in Attacq responsibly in order to bring about an enduring positive change to the lives of people in underprivileged communities across Southern Africa. We have established partnerships with leading community based organisations who, through their focus and understanding, is able to apply the funds distributed by Mergon Foundation optimally. The fund allocation budget for the forthcoming fiscal year is R10 million or nearly R40,000 per working day. Our partners are all dedicated to the social upliftment of the needy and reach tens of thousands of South Africans on a daily basis. The programs address immediate and longer term needs i.e. wide ranging skills development, basic healthcare, food programs, social upliftment and charity work. A typical example is MES, an inner city initiative in Johannesburg who provides regular healthcare to people, food parcels to 880 families, placed 440 people in jobs during the past year and provide quality low cost housing to some families on an on-going basis." - Pieter Faure, CEO: Mergon Foundation "Proceeds from the Atterbury Trust s shareholding in Attacq provide financial assistance to pre-primary and primary schools and study loans for tertiary education. Atterbury Trust was established in 1995 and is currently involved with several schools - basically improving infrastructure, study conditions and subsidising teacher salaries - as well as with 75 students at university level. A scientific recruitment and selection process is followed to identify candidates who have absolutely no financial resources. Assistance includes an interest free study loan, mentorship and personal guidance and we are particularly proud of a 95%+ success rate. To date graduates include 7 accountants & CA s, 4 in economic & management sciences, 3 in engineering, 4 in law, 3 in natural sciences, 3 in education and 9 BTech qualifications. True to the tradition of progress and growth synonymous with the Atterbury name, we wish to expand educational assistance You make a living by what you get, a life by what you give to young individuals with the potential but without the financial ability to better equip themselves. The established infrastructure of the Trust is available to other business benefactors who wish to contribute to education - probably the most pressing longer term national priority. The legacy of the Atterbury Trust will continue through talented young South Africans being supported - both financially and personally - towards creating a better future for themselves and their families." - Zahn Hulme, Chief Administrator: Atterbury Trust OUTLOOK AND STRATEGY Winston Churchill The persistent current global economic buoyancy, strong South African economy and even stronger growth of the South African property sector since 1999, could well bring on the perception of assured and prolonged prosperity. But the inevitable reality of a cyclical downturn is a given - much as the timing thereof will remain illusively unpredictable. Current and expected movements of the business conjuncture influence our longer term business perspective and is a matter under constant Board surveillance. In the wider context the local political landscape is perhaps of more immediate concern. We share the growing apprehension within the business community that pronounced and widely debated political shortcomings and bureaucratic ineptness is fast moving towards overshadowing the undeniable plus performances of the South African Government. South Africa s undoubted potential will only be realised by political leadership finding at least a minimum level of governmental guidance and public sector effectiveness. Furthering the national ideal of unity through diversity surely also requires an even more positive and pragmatic working relationship with South African business and with civil society to jointly address the daunting challenges of our land. How do we know when irrational exuberance has unduly escalated asset values? Alan Greenspan From a business perspective, furthermore, the compelling need to correct past inequalities is not assisted by the injudicious enforcement of petty political ideologies such as the misguided concept of economic growth through increased central direction and less reliance on market forces. Already the IMF expressed concern about their perception of the South African government s mounting appetite for state-directed economic intervention. Any of these notions could well threaten both the balanced progress towards fulfillment of our revered national promise as ATTACQ ANNUAL REPORT 2007 l Page 4

7 well as the proud record of a South African global contribution often disproportionate to our size. Knowing your business is a fundamental requirement for success but acknowledging the unpredictable and uncontrollable elements of the macro environment remains of equal importance. Some years ago Socrates said the beginning of wisdom is knowing what you don t know - or, one might add, can t control. Given these evolving realities, the strategy is to counter any shorter term cyclical movements by an investment portfolio of the best possible quality and prudent attention to relative liquidity. In terms of political uncertainty, focused attention is given to international diversification. NAME CHANGE The business environment refers to Attacq as "Atterbury s Property Fund". In response to this practical reality the company name will be changed shortly to ensure a simplified group identity. BOARD FUNCTIONING A society that puts equality ahead of freedom will end up with neither CONCLUSION Milton Friedman, Economist and Nobel Prize Winner Attacq Property Fund concluded a successful second year. This reflects directly on the dedication and expertise of Atterbury colleagues but especially on the personal quality and business style of our executive directors Louis van der Watt as CEO and Gideon Oosthuizen. Their ever increasing industry recognition and credibility stems from a seemingly endless source of insightful creativity and vigorous dedication coupled with unquestioned integrity. Board membership remained unchanged. At year end non executive director Neno Haasbroek was not available for reelection. A person with Neno s experience, phlegmatic disposition and considered wisdom is not easily replaced. A word of sincere appreciation is extended to Neno. It is to our benefit that he remains a business partner. On behalf of the Board and all shareholders we offer our appreciation, support and respect to Louis, Gideon, Talana, Lucille and all operational colleagues. A very constructive and positive continued working relationship with executive management supported the Board s focus on corporate governance application commensurate with the commitment to promote and protect the best interest of all shareholders. Francois van Niekerk Chairman Page 5 l ATTACQ ANNUAL REPORT 2007

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9 SECTION 2 l ASSET MANAGER S REPORT SECTION 2 ASSET MANAGER S REPORT Introduction page 8 Financial performance page 8 Portfolio overview page 9 Looking forward page 13 Conclusion page 13 Page 7 l ATTACQ ANNUAL REPORT 2007

10 Section 2 l ASSET MANAGER S REPORT FOR THE YEAR ENDED 30 JUNE 2007 LOUIS VAN DER WATT, CHIEF EXECUTIVE OFFICER AND GIDEON OOSTHUIZEN, EXECUTIVE DIRECTOR INTRODUCTION The Asset Management Team has enjoyed another year of working in positive and buoyant market conditions. Although interest rate hikes have had the effect of cooling the overexuberance that some may have felt during the preceding year, we can still report on a year of growth and/or improvement in virtually all aspects of the business. We concur with the sentiments of the Chairman in that extra vigilance is required during periods of prolonged prosperity. Our aim herein is to provide a balanced picture of the state of the investment portfolio under our management, and provide shareholders with insight into the approach we have adopted in reaction to current and future macro-economic and industry expectations. FINANCIAL PERFORMANCE The gross value of assets in the Attacq portfolio, as at 30 June 2007, was R3.37 billion. The three key groupings contributing to such value are: 1. Attacq holds a 45.7% interest in Attfund Limited ( Attfund ) which, at the current share price of R92.93, is valued at R1.58 billion. Attfund grew its share price by 22% during the past 12 months. In the current valuation, the Attfund portfolio is valued at an average capitalisation rate of 7.7%, which compares favourably with the retail property market, yet remains conservative when compared to listed funds of similar quality. 2. The second grouping is our directly held portfolio of 10 buildings. These buildings were fairly valued at 30 June 2007 by an independent valuer, Rode and Associates, at a gross value of R1.2 billion. The directly held assets are valued at an average weighted capitalisation rate of 8.7%, which is conservative for the quality of assets held in our portfolio. The conservative approach to capitalisation rates ensures that our shareholders can expect long term, stable share price growth, based on fundamental improvements such as improved net operating income or redevelopment/refurbishment, rather than the appealing but temporary benefits arising from yield compression. 3. The third key asset grouping in the balance sheet is our 20% stake in the recently formed Rapfund. Since its inception in September 2006, Rapfund have performed admirably and have shown a total (i.e. capital value plus debenture interest) annualised return of 33%. The average capitalisation rate for this brand new and solely retail portfolio is 8%. At year end Attacq s 20% interest in Rapfund was valued at R44.4 million. Due to the inclusion of four key property acquisitions for a significant portion of the reporting period, the gross rental income on directly held properties rose sharply to R77.0 million (from R30.3 million in 2006). Net profit before taxation was R607.9 million (up from R429.7 million) which includes the net operating income, fair value adjustment of R290 million as well as R291.8 million income from associates of which the main contributor was again Attfund. Gross value of assets is R3.37 billion The total liabilities as at 30 June 2007, including both the current portion of borrowings as well as deferred tax provision for future capital gains tax, is R1.4 billion. Total long-term borrowings (excluding deferred tax of R188.4 million, but including the short term portion of long term borrowings of R220.8 million) are R1.16 billion which, when compared to related assets of R3.3 billion (non-current assets plus ATTACQ ANNUAL REPORT 2007 l Page 8

11 inventory), implies total fund gearing of 35%. On a see-through basis, Attacq s effective gearing is 53% when taking into account that Attfund as a key value contributor has gearing levels of 46%. The guideline of fixing between 60% and 70% of all debt has stood us in good stead through the period of rising interest rates. At year end, 61% of all debt was fixed at an average rate of 11.78%. By hedging a minimum of 60% of all debt, the real effect on our cash flow is that our interest payable rises by approximately 1% for every 2.5% that the Reserve Bank increases its lending rates. Share Price On 30 June 2007, the Net Asset Value for the Attacq Property Fund was R1.9 billion. The number of shares in issue on this date was 349,749,932; which means that the share price on a Net Asset Value basis for the 2006/2007 financial year end is R5.48 per share. This reflects an increase of 34% from the previous year. PORTFOLIO OVERVIEW Office and Commercial The following properties were added to the portfolio during the reporting period: Great Westerford This A-Grade office complex of m², situated at 240 Main Road, Rondebosch, at the junction with Dean Street in Newlands, Cape Town, is one of the most sought-after properties/locations in the Western Cape. Since taking ownership in October 2006, Attacq has overseen smaller-scale upgrades to various elements of the tenant environment (such as the restaurant, gym, reception area and access control). Construction of an on-site parking garage and 10 luxury townhouses will commence during 2008 at an estimated cost of R100 million. This will further enhance the long term value of the asset and is expected to contribute greatly to securing extended lease agreements with existing blue chip tenants. Vacancies are less than 2% and more than 90% of leases only expire beyond 12 months into the future. The asset is valued at R382.6 million. Shell House, Cape Town CBD This 25 floor property is one of the landmarks in the Cape Town CBD. Shell has been the major tenant in Shell House for many years. Their intention to move to different premises as a result of the relocation of their Head Office function to Johannesburg, with a reduced representation in the Cape, sparked the The share price is R5.48 per share opportunity for Attacq to acquire the building. Their staggered vacation of the building is expected to be finalised by end March Attacq has already commenced improvements to the property on existing vacant floors and common areas and will continue the phased refurbishment exercise on a floor by floor basis over the next 24 months at a refurbishment cost of approximately R40 million. Various blue chip tenants and tenants in the engineering and legal fields have shown interest in occupying the property. We are confident that factors including but not limited to the quality of the property, its location and the revitalisation of the Cape Town CBD will ensure the comprehensive letting of the property by completion of the project. Short term vacancies vary between 15% and 18% as a result of the ongoing refurbishment. The asset offers 26,470m² of prime location office space and has been valued at R183.1 million. Hampton Office Park, Bryanston, Johannesburg Situated at 20 Georgian Crescent, Bryanston, in the highly sought after A-Grade Bryanston office node, Hampton Office Park is fully let and offers 10,529m² in a serene landscaped environment with ample secure parking. A further 2,600m² building including a canteen is on the drawing board and construction should commence within the next financial year. The estimated cost of R28 million should add in excess of R3.2 million to the net income of the office park. Current vacancies are negligible and although the tenant lease expiry profile is just over 50% over the next 12 months, the major contributor to such is one of our larger blue chip tenants who has renewed and will be taking additional space. On 30 June 2007 the property was valued at R127.1 million. The Terraces, Claremont, Cape Town The Terraces office block, in extent 5 300m² was purchased on 1 December 2006 as part of a larger sectional title scheme acquired by the Atterbury. The remainder of the residentially-oriented project was completed by Atterbury Property Cape and Attacq acquired the office space for R70 million during the year and retail space for R5 million after year end. The building is situated on the corner of Protea and Corwen Roads in Claremont. Attacq holds a 45.7% interest in Attfund Limited This prime location complemented by ample parking on-site, has attracted blue chip tenants and made the building an instant success in the area. On 30 June 2007 the property was valued at R90.1 million. Page 9 l ATTACQ ANNUAL REPORT 2007

12 Other Offices The remainder of the directly held properties in the Attacq portfolio, the majority situated in Pretoria s sought after eastern suburbs, have all performed admirably and will, in conjunction with the strong assets that have been added during the year, remain the core of the office portfolio going forward. Retail Attacq has maintained course with its strategy of holding its retail assets via shareholding in the two leading retail funds: Attfund and Rapfund (Pty) Ltd. Attfund Limited Attfund has grown its asset base to a considerable R7.5 billion and has further entrenched its position as one of South Africa s leading retail property owners. The focus on large (in excess of 15,000m²) regional shopping malls has been retained. After adding the Cape Gate precinct during the latter half of 2006, Attfund is currently the owner of 8 regional malls in high-growth nodes across the country. Retail property consists of 91% (by area) of the directly held assets in the fund with the balance made up of 4 blue chip office parks. Key retail assets in the Attfund portfolio include the following: Atterbury Value Mart Woodlands Boulevard Centurion Mall (25%) Clearwater Mall Garden Route Mall Cape Gate Somerset Value Mart Willow Bridge Key office assets include: Glenfield Office Park Glenwood Office Park Lakefield Office Park Tygerberg Office Park In addition to the above, Attfund has a 23% stake in Sycom Property Fund, a property unit trust fund that is listed on the JSE. The value of Attfund s investment in Sycom is R827 million. Attfund has also strengthened its focus on international diversification during the year under review. Interests in two offshore property groups are held via asset swaps, namely a R85 million investment in the US based Simon, and a R320 million investment in German based Deutsche Euroshop (DES), both of which are purely retail focused funds. After year end, Attfund made a further significant investment of R350 million in DES and in a more direct entry into the offshore market, Attfund, Sycom, Attacq and Atterbury Property participated in a consortium to acquire a 55% stake in Nova Eventis, a 96,000m² shopping mall located outside the city of Leipzig in Germany. The Attfund share price at June 2007 was determined to be R92.93, up 22% from its level of R75.91 in June Attacq holds 45.7% of Attfund which is valued at R1.58 billion. Subsequent to year end, a rights issue at R90 per share was offered to shareholders to raise funds for the Nova Eventis and DES investments respectively, and Attacq decided to pursue its rights to a maximum value of R300 million. Attfund remains a key investment to Attacq and forms the core of our retail exposure and investment strategy. The intent would be to remain strongly invested in Attfund and, if opportunities arise, to either make further investment, or follow our rights in share issue situations. Attacq should continue to commit resources to its investment in Attfund. We have great faith in and respect for the management team, both at Board level, as well as in the trenches at the asset and property manager, Parkdev (Pty) Ltd. Rapfund Rapfund was formed with effect 1 September 2006 as part of the property developer Retail Africa s strategy of consolidating its portfolio of convenience shopping centres into a single balance sheet investment. Rapfund will focus solely on smaller (less than 15,000m²) convenience/neighbourhood shopping centres. The fund launched with 8 recently-completed assets, all of which are in A-income areas in Gauteng and the Western Cape. On inception, the fund s gross assets, pre liabilities, were valued at R420 million. Immediately after formation, Attacq acquired a 20% stake for a cash consideration of R36.46 million. It was also agreed, as part of the transaction, that Attacq investments falling within the scope of Rapfund would be sold to Rapfund, with payment partially in cash and partially in the form of equity. In this regard Waterkloof Corner was offered to Rapfund in April Waterkloof Corner (corner of Waterkloof Road and Crown Street in Waterkloof) is a convenience shopping centre of 6,576m² that was refurbished by Atterbury Property during The shopping centre was sold for R73.6 million in a transaction that would push Attacq s interest in Rapfund up to approximately 25%. This transaction was formally completed post year end and is therefore reflected in Attacq s financial statements as an Asset held for Sale. During the year another asset was acquired in the form of The Parks, situated in Johannesburg. The pipeline of new developments in the Retail Africa stable is exciting and the fund is expected to continue growing its asset base via acquisitions from this source during the next financial year. Key assets in the Rapfund portfolio include the following: Steenberg Village (Constantia, Cape Town) San Ridge Square (Midrand) Kingfisher Corner (East Rand) Edenmeadows (East Rand) Featherbrooke (North/West Rand) Honeydew (North/West Rand) L Corro (North/West Rand) ATTACQ ANNUAL REPORT 2007 l Page 10

13 Clearwater Crossing (North/West Rand) The Parks (Gauteng Central) Waterkloof Corner (Pretoria) Rapfund is structured as a variable loan stock company. The linked unit price on inception (1 September 2006) was R10.001, which had grown to R12.16 by 30 June 2007 after disbursements of R0.39 per unit were declared. This represents an annualised total growth of 23%. At year end Attacq s investment in Rapfund is valued at R44.3 million and Attacq received R1.4 million as a debenture interest from Rapfund. Rapfund is a new investment in Attacq s portfolio, but it has already become clear that the fund strategically complements the Attfund holding and allows Attacq to be exposed to the total spectrum of retail property assets, in collaboration with partners that are leaders in their respective fields. Retail Africa Asset Managers have shown remarkable adeptness at taking control of the portfolio and providing reliable information to stakeholders. We look forward to working with the Retail Africa team to grow this portfolio to one of the most sought after focused property funds in the South African investment landscape. Other Retail - Brooklyn Square Brooklyn Square (corner of Middle and Veale Streets in Brooklyn, Pretoria) is a 13,118m² mix of retail and office use. It was acquired during the latter half of 2005 and the vision from the onset was to bring about a marked change in the centre s use and marketability by way of a significant re-design and refurbishment project. At the start of 2007, the planning phase had almost been completed, however following partial damage to the centre by a fire in March 2007, the decision was naturally taken to move the commencement date forward by 6 months. The project will cost approximately R110 million and the refurbishment project will ensure that the asset in its final state delivers an estimated net operating income of R21.6 million which, when valued at a capitalisation rate of 8%, would allow the asset to be re-valued at roughly R270 million. The newly refurbished centre is expected to improve the usability for tenants and the public across the board, from a parking, tenant mix and centre design perspective; which in turn would provide improved and sustainable trading conditions; translating into higher income and optimal capital appreciation of the asset in line with its prime location. Brooklyn Square is a prime example of Attacq s process of acquire, refine, hold. Post-year end events As mentioned before, Waterkloof Corner has been sold to Rapfund, and FNB House, a small office asset that was not part of the long term portfolio, was sold for R10 million. Offshore exposure of R115 million Sanlam Life Insurance Limited becomes a 15% shareholder Two further and notable transactions were concluded after financial year end: the Nova Eventis investment, and a rights issue to raise funds to follow Attacq s rights in the Attfund capital raising process. Nova Eventis As mentioned earlier, Attfund, Sycom, Attacq and the Atterbury Property participated in a consortium which acquired a collective 55% stake in Nova Eventis, which is a 96,000m² shopping mall located on the outskirts of the city of Leipzig in Germany (previously East Germany). The centre has been completely re-built in recent years and opened in its current guise in September This particular area in Germany exhibits many of the traits that define our own market. Management is conducted by a world-class property management company ECE, who manage around 80 similar assets in Europe. Attacq s participation in the consortium is direct and indirect via its shareholding in Attfund. Direct exposure to the transaction will be approximately R50 million; with indirect exposure of approximately R115 million. The forecast return on the investment is 4.5% in Euro terms. It is foreseen that this type of direct involvement in offshore assets would be further pursued in partnership with other SA companies, in order to diversify our currency risk without necessarily attracting significantly more management resources. Rights Issue Secondly, and more noteworthy perhaps, was the following: In July 2007, Attfund indicated its intention to raise R600 million by way of rights issue to its shareholders. The funds were to be used in two different offshore transactions: firstly, to fund an outstanding equity portion of the investment Attfund recently made in Nova Eventis, and secondly, to take up additional shareholding in Deutsche Euroshop. The latter decision was driven by the cumulative effect of (1) an international downward re-rating of prime property asset prices in the wake of the subprime lending crisis and fall-out, as well as (2) the relative strength of the Rand against the Euro during this period. The Attacq Board felt it was appropriate to pursue our rights as shareholder during the Attfund capital raising process. As Attacq did not possess the cash to pursue its rights from internal resources, the decision was taken to make a R300 million share offer to a strategic investor. Sanlam Life Insurance Limited has decided to make the investment in Attacq and will subsequently become a (roughly) 15% shareholder in Attacq. The transaction was fueled by the intention of the Atterbury to pursue collaboration with the Sanlam on its property portfolio in general. Page 11 l ATTACQ ANNUAL REPORT 2007

14 Brooklyn Square Waterkloof Corner as at 28 Feb Brooklyn Gardens Investec Lady Brooks Lord Charles Hampton Park McCarthy Motors Great Westerford Shell House Terraces GRAPHICAL REPRESENTATIONS OF ATTACQ S TOTAL HOLDINGS BY SECTOR AND BY REGION (Inclusive of the directly held portfolio, shareholding in ATTFUND and shareholding in RAPFUND Exclusive of the off-shore investments) 19.40% 80.60% 59.24% 40.76% Office Parks Retail Western Cape Gauteng GLA SPREAD BY SECTOR GLA SPREAD BY REGION 26.67% 73.33% 60.73% 39.27% Office Parks Retail Western Cape Gauteng CONTRIBUTION TO NET INCOME BY SECTOR CONTRIBUTION TO NET INCOME BY REGION 8% 4% 60% 28% Listed Off-shore Office Retail GROSS VALUE SPREAD BY SECTOR INCLUDING OFF-SHORE AND LISTED INVESTMENTS Lease expiry 0-6 months Lease expiry 6-12 months Lease expiry months ATTACQ PORTFOLIO - LEASE EXPIRY PROFILE AS AT 30 JUNE 2007 ATTACQ ANNUAL REPORT 2007 l Page 12

15 LOOKING FORWARD Branding As mentioned briefly in the Chairman s report, the name of the fund, namely Attacq Property Fund, is being reviewed with the purpose of aligning the fund s branding with that of the greater Atterbury Property. It has been our experience that brand confusion exists between Atterbury, Attfund and Attacq. Furthermore, in most instances where Atterbury and Attacq are mentioned in the same breath, Attacq is referred to as Atterbury s Property Fund. Although the shareholder base of Attacq is much wider than the original small base of Atterbury shareholders, close links remain between the two entities. To name a few: shared management, shared physical space, the same banking and other professional services partners, and most notably, the pipeline of projects which are developed by Atterbury Property and then made available to Attacq for acquisition. Therefore, shareholders could expect a proposal within the next financial year to change the name of Attacq Property Fund to an Atterbury -aligned name. The Attacq brand will be retained and used as an office-only 100% owned subsidiary fund of the larger Atterbury fund. Pipeline and New Focus Areas Following from the above, Attacq will continue to remain as close as possible to Atterbury Property Development and identify projects where the assets are of the type and quality that Attacq wishes to retain in the long run, either directly, or in one of the focused funds in which we may own a strategic stake. Examples that shareholders might already have noted (in the Pretoria region especially) are the Brooklyn Bridge complex on Brooklyn Circle, and the Trevenna Campus between the new DTI Campus and Sunny Park. The latter has various government tenants expressing a great deal of letting interest. Although Attacq does not invest in residential development for the sake of retaining any of those assets, it has participated as developmental investor in, for example, Kingswood Retirement Village in Newlands, Pretoria. The project s projected net profit is R30 million with Attacq s portion of such being 25%, a profit of R7.5 million for providing surety to the project during its early stages, a step that did not require any cash resources to be committed, and as such implies a very high return on investment for the particular project. Further similar projects will be pursued to ensure that additional cash profit can be made where opportunities present themselves. Finally, the industrial and leisure property asset classes are both being monitored with interest, as each offers its own unique reason for inclusion in a balanced long term portfolio. It may be reasonable to expect some additions in these asset classes to be added to the portfolio in the years to come. standstill in The whole property sector should continue to perform well, albeit with some short-term pressures arising from cyclical behaviour in the economy. A bit of pressure is not always a bad thing it does serve to shake out participants in the market who may be too intent on making a quick turn. One can only hope that speculative behaviour, should it turn out for the worst, only affects those that participate therein knowingly and of their own accord, and that it does not trap innocent investors who thought they were investing in a secure asset by placing their funds in dubious property schemes. Our approach will remain as before: we are long term investors and accumulators of excellent properties, the type of assets that will withstand short term pressures and fluctuations, and will deliver long term value and returns to investors. We do take measured risk by using our balance sheet to participate in earlier stages of new projects, and we do gear high in certain cases in order to achieve superior returns on particular assets. However, at the overall balance sheet level, our gearing remains low, our interest risk mitigation strategy is followed religiously, and our investors may rest assured that each and every investment decision is made after having being exposed to the scrutiny, collective skill and sound abilities of a team of people that are themselves significantly invested in the fund under their management. In this regard the executive directors wish to extend their sincerest thanks to all members of the Asset Management team, Atterbury Property and especially its financial division, as well as those members of our key service providers who, by each excelling in their own field, contribute to the continued success and growth of the Attacq Property Fund. Yours sincerely, Attacq to be branded as an office-focused Atterbury Fund CONCLUSION The executive directors remain positive on the medium to long term outlook for a property investor in South Africa. Fundamental factors that are driving property prices to higher levels will continue to do so, in our opinion, for the next 3-5 years to come. The world we operate in will not come to a Gideon Oosthuizen Executive Director Louis van der Watt Chief Executive Officer Page 13 l ATTACQ ANNUAL REPORT 2007

16

17 Section 3 l CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 SECTION 3 The reports and statements set out below comprise the consolidated financial statements presented to the shareholders: Report of the independent auditors page 16 Directors responsibilities and approval page 17 Directors report page 18 Consolidated balance sheet page 24 Consolidated income statement page 25 Consolidated statement of changes in equity page 26 statement of changes in equity page 27 Consolidated cash flow statement page 28 Accounting policies page 30 Notes to the consolidated financial statements page 37 Page 15 l ATTACQ ANNUAL REPORT 2007

18 Section 3 l REPORT OF THE INDEPENDENT AUDITORS To the shareholders of Attacq Property Fund Limited and its subsidiaries We have audited the accompanying consolidated financial statements of Attacq Property Fund and its subsidiaries, which comprise the directors report, the balance sheet as at 30 June 2007, the income statement, the statement of changes in equity and cash flow statement for the year then ended, a summary of significant accounting policies and other explanatory notes, as set out on pages 18 to 75. Directors responsibility for the consolidated financial statements The s directors are responsible for the preparation and fair presentation of these consolidated financial statements in accordance with South African Statements of Generally Accepted Accounting Practice, and in the manner required by the Companies Act of South Africa, This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of annual financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors responsibility Our responsibility is to express an opinion on these annual financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the annual financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual financial statements. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the annual financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the annual financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the director, as well as evaluating the overall presentation of the annual financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Audit opinion In our opinion, the consolidated financial statements fairly present, in all material respects, the financial position of Attacq Property Fund Limited and its subsidiaries as at 30 June 2007, and of its financial performance and its cash flows for the year then ended in accordance with South African Statements of Generally Accepted Accounting Practice, and in the manner required by the Companies Act of South Africa, TAG Incorporated Per: P Lombard Chartered Accountants (SA) Pretoria Registered Auditors 17 October 2007 ATTACQ ANNUAL REPORT 2007 l Page 16

19 Section 3 l DIRECTORS RESPONSIBILITIES AND APPROVAL The directors are required by the South African Companies Act, 1973, to maintain adequate accounting records and are responsible for the content and integrity of the consolidated financial statements and related financial information included in this report. It is their responsibility to ensure that the consolidated financial statements fairly present the state of affairs of the as at the end of the financial year and the results of its operations and cash flows for the period then ended, in conformity with South African Statements of Generally Accepted Accounting Practice. The external auditors are engaged to express an independent opinion on the consolidated financial statements. The consolidated financial statements are prepared in accordance with South African Statements of Generally Accepted Accounting Practice and are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates. The directors acknowledge that they are ultimately responsible for the system of internal financial controls established by the and places considerable importance on maintaining a strong control environment. To enable the directors to meet these responsibilities, the board sets standards for internal control aimed at reducing the risk of error or loss in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the and all employees are required to maintain the highest ethical standards in ensuring the s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the is on identifying, assessing, managing and monitoring all known forms of risk across the. While operating risk cannot be fully eliminated, the endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints. The directors are of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records may be relied upon for the preparation of the consolidated financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss. The directors have reviewed the s cash flow forecast for the year to 30 June 2008 and, in the light of this review and the current financial position, they are satisfied that the has or has access to adequate resources to continue in operational existence for the foreseeable future. The consolidated financial statements set out on pages 18 to 75, which have been prepared on the going concern basis, were approved by the board on 17 October 2007 and were signed on its behalf by: P. Tredoux B.F. van Niekerk Page 17 l ATTACQ ANNUAL REPORT 2007

20 Section 3 l DIRECTORS REPORT l ATTACQ DIRECTORS l PIERRE TREDOUX, NENO HAASBROEK, GIDEON OOSTHUIZEN, FRANCOIS VAN NIEKERK, LOUIS VAN DER WATT The directors submit their report for the year ended 30 June A further report from the asset manager and a chairman s report are included with the financial statements. 1. Review of operations Main business and operations The principle activities of the Attacq is direct and indirect property holdings and property developments undertaken directly or indirectly by itself, its subsidiaries or its development partner being the Atterbury. There were no changes in the nature of the s activities in the current year and its main geographical areas of business remain Gauteng and the Western Cape. Attacq Property Fund Limited (the ultimate Holding ) appointed Atterbury Investment Managers (Pty) Ltd (Attvest) as the asset manager during the 2006 financial year. During the current year Attvest ceded its asset management contract to Atterbury Asset Managers (Pty) Ltd (AAM), a subsidiary of Attvest. Certain directors of Attacq have a material interest in both Attvest and AAM, which was duly declared. The s profit on ordinary activities after taxation for the year amounted to R481,137,181,(2006: R362,433,785) after deducting taxation of R115,767,947 (2006: R58,878,632). 2. Events subsequent to the year end Two properties were disposed of subsequent to year end. The FNB House (office building) and Waterkloof Corner (convenience center) were sold for a total consideration of R83,133,350. Both these properties were reclassified at year end as assets held for sale. Attacq made the decision to diversify offshore. Subsequent to year end, it made an investment of R52,000,000 through an Investec asset swap in the Stenham European Shopping Centre Fund. The exchange rate at the the day of trade was R9.71 to the Euro. During September 2007, Attacq subscribed to 3,333,334 additional Attfund Limited shares in terms of a rights offered by Attfund Limited. The take-up price was R90 per share thereby totaling a R300 million additional investment by Attacq. As a result the s interest in Attfund Limited increased to above 46%. The additional investment of R300 million was financed through an Attacq share allotment to Sanlam Life Insurance Limited. The share issue price to Sanlam is equal to the Attacq published share price as at 30 June 2007, being R5.48. ATTACQ ANNUAL REPORT 2007 l Page 18

21 Section 3 l DIRECTORS REPORT (continued) 3. Directors interest in shares At the financial year end the directors direct and indirect interest in the s issued shares were as follows: Beneficial Non-beneficial Direct Indirect Direct Indirect ,886,759 98,526,377-12,913, ,314,014 74,428, ,252,394 During the year 133,868,803 shares were issued to directors or entities in which directors have an interest. 4. Authorised and issued share capital Attacq has an authorised share capital of 500,000,000 R ordinary par value shares. The allotted the following Ordinary shares of R during the year under review: Ordinary Issue shares at price per Total Allotted to Transaction details R each share in R value in R 1 July 2006 Attventure (Pty) Ltd Deal fee 2,149, ,919,046 1 July 2006 Atterbury Investment Deal fee 716, ,973,014 Managers (Pty) Ltd 1 October 2006 Atterbury Investment Rand Merchant Bank guarantee 34,497, ,000,134 Managers (Pty) Ltd 2 January 2007 Mergon Trust Acquisition of Attfund Limited shares 94,814, ,213,291 1 April 2007 L Riley Acquisition of Attfund Limited shares 457, ,944, June 2007 Atterbury Investment Rand Merchant Bank guarantee 1,690, ,372,842 Managers (Pty) Ltd 20 June 2007 Heritage Trust Acquisition of Attfund Limited shares 2,380, ,162,500 The share price of the at year end is calculated at R5.48 per share. This calculation is based on a net equity value of R1.918 billion and 349,749,932 issued shares. According to the records of the, the only shareholders registered as holding five percent or more of the s shares at 30 June 2007, other than the shares held directly by directors are the following: Number of shares R R shares shares Atterbury Trust (only in 2006) 12,722,832 12,726,832 BNF Trust 68,031,530 66,978,948 Atterbury Property Holdings (Pty) Ltd 17,060,210 16,027,253 TTA Shares (Pty) Ltd (only in 2006) 1,410,621 11,310,621 Mergon Trust 107,727,912 12,913,572 Atterbury Investment Managers (Pty) Ltd (only in 2007) 39,776,303 1,971,997 Page 19 l ATTACQ ANNUAL REPORT 2007

22 Section 3 l DIRECTORS REPORT (continued) 5. Special Resolutions On 5 December 2006 special resolutions were taken and registered whereby the following was decided: Certain sections of the Memorandum of Association were amended to reflect the correct objective and main business of Attacq. Additional paragraphs to the Articles were inserted to simplify the workings of the Board of Directors. The Board of Directors have been empowered to investigate the revision and amendments to the Memorandum and Articles of Association and to circulate such proposed further revision and amendments to the members for written comments. 6. Subsidiaries and associate companies Effective Shares Issued Capital Name and nature of business No % % No No Direct subsidiaries and associates Subsidiaries - Atterbury Property Johannesburg (Pty) Ltd Development company - Atterbury Property Investments (Pty) Ltd Investment company - Riverport Trading 143 (Pty) Ltd Property investment company - Atterbury Property Cape Holdings (Pty) Ltd 10, ,000 10,000 Investment company - Attstore (Pty) Ltd Dormant - Lady Brooks (Pty) Ltd 1, ,000 1,000 Property investment company - Lord Charles & Lady Brooks Office Park Holdings (Pty) Ltd 1, ,000 1,000 Property investment company - Erf 321 Hatfield Beleggings (Pty) Ltd 1, ,000 1,000 Dormant - Atterbury Attfund Investments (Pty) Ltd 10, ,000 10,000 Investment company - Highgrove Property Holdings (Pty) Ltd Investment company - Attcorn Property Holdings (Pty) Ltd Investment company - Harlequin Duck Properties 204 (Pty) Ltd Property investment company ATTACQ ANNUAL REPORT 2007 l Page 20

23 Section 3 l DIRECTORS REPORT (continued) 6. Subsidiaries and associate companies (continued) Effective Shares Issued Capital Name and nature of business No % % No No Associates - Attfund Limited 37,219, ,002,412 16,536,822 Property Investment company - Clifton Dunes Investment 415 (Pty) Ltd ( Rapfund ) 18,318, ,662,610 - Property Investment Indirect subsidiaries and associates Subsidiaries - Aldabri 96 (Pty) Ltd Property investment company - Attcorn Property Gauteng (Pty) Ltd Development company - Brooklyn Square (Pty) Ltd 9,174, ,174,653 9,174,653 Property investment company - Interactive Trading 800 (Pty) Ltd Investment company - Razorbill Properties 91 (Pty) Ltd Dormant Associates - Western Breeze Trading 41 (Pty) Ltd 1, Development company - Attvest Property Development JV (Pty) Ltd Investment company 7. Fixed assets The group acquired fixed assets with a cost of R764,000 during the year under review. Motor vehicles with a carrying value of R225,000 are encumbered as per note 17 of the financial statements. 8. Investment properties The acquired the following investment properties during the year: Property Held by Acquisition value Fair value at year end R 000 R 000 The Terraces Harlequin Duck Properties 204 (Pty) Ltd 75,342 90,109 Great Westerford Attacq Property Fund Ltd 289, ,640 Hampton Office Park Attacq Property Fund Ltd 78, ,101 Shell House Attacq Property Fund Ltd 113, ,108 The is currently in the process of renovating its investment properties known as Brooklyn Square and Shell House. Page 21 l ATTACQ ANNUAL REPORT 2007

24 Section 3 l DIRECTORS REPORT (continued) 9. Dividends No dividends were declared or recommended during the year by the holding company. Certain of the holding company s subsidiaries have declared dividends during the financial year and elected to roll over their liability regarding Secondary Tax on Companies to the holding company as per Section 64B of the Income Tax Act. 10. Directors The directors of the during the accounting period and up to the date of this report were as follows: N.F.J Haasbroek RSA (Resigned 1 July 2007) G.J. Oosthuizen RSA P. Tredoux RSA L.L.S. van der Watt RSA B.F. van Niekerk RSA 11. Secretary T. Smith continues as company secretary of the. 12. Auditors TAG Incorporated will continue in office in accordance with section 270(2) of the Companies Act. B.F. van Niekerk Pretoria 17 October 2007 ATTACQ ANNUAL REPORT 2007 l Page 22

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26 Section 3 l CONSOLIDATED BALANCE SHEET FOR THE YEAR ENDED 30 JUNE 2007 Notes R 000 R 000 R 000 R 000 Assets Non-current Assets Property, plant and equipment Investment properties 3 746,899 56,837 1,222, ,289 Goodwill ,887 12,009 Investment in subsidiaries 5 489, , Investment in associates 6 1,141, ,064 1,624,234 1,255,310 Investments 7 6,132 4,345 6,132 4,345 Straight line debtor 9,065 1,963 18,550 7,311 Other financial assets , ,202-2,544,396 1,289,482 3,031,731 1,720,287 Non-current assets held for sale ,133 13,877 Current Assets Inventory ,528 21,852 Taxation Trade and other receivables 15 7,582 5,597 15,641 10,405 Loans to shareholders 9 2 4, ,437 Loans to subsidiaries, associates and joint ventures 8 70,249 69,529 6,106 - Other financial assets 10 6,774 9,986 19,681 12,597 Cash and cash equivalents 11 8,041 2,688 13,881 7,347 93,370 92, ,839 57,638 Total Assets 2,637,766 1,382,254 3,372,703 1,791,802 Equity and Liabilities Equity Issued capital , , , ,085 Non-distributable reserves 9,254-65,869 56,616 Distributable reserves 907, , , ,961 1,795, ,056 1,918, ,662 Minority Interest ,728 9,740 Liabilities Non-Current Liabilities Held to maturity ,099 65, , ,931 Deferred tax ,044 78, ,377 78, , ,364 1,090, ,652 Non-current liabilities held for sale ,800 - Current Liabilities Loans from shareholders 9 24, ,512 23, ,205 Loans from subsidiaries, associates and joint ventures 8 16,528 39, ,521 Taxation - 19,910 1,659 23,276 Trade and other payables 18 15,721 8,176 45,685 31,143 Current portion of liabilities held to maturity 17 29, ,830 55,586 Bank overdraft 11 12,172 5,000 13,507 5,017 98, , , ,748 Total Liabilities 842, ,198 1,434, ,400 Total Equity and Liabilities 2,637,766 1,382,254 3,372,703 1,791,802 ATTACQ ANNUAL REPORT 2007 l Page 24

27 Section 3 l CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2007 Notes R 000 R 000 R 000 R 000 Gross revenue 49,125 4, ,787 61,515 - Rental income 42,024 2,194 76,991 30,347 - Straight line rental adjustments 7,101 1,963 9,876 4,014 - Sales ,920 27,154 Cost of revenue - - (34,469) (4,732) Gross profit 49,125 4, ,318 56,783 Other income 19 40,205 25,565 51,675 21,953 Fair value adjustments 339, , , ,703 Operating costs (52,453) (7,632) (71,546) (45,894) Operating profit 376, , , ,545 Operating profit is stated after: Income Profit on disposal of subsidiaries ,471 Profit on disposal of investments Fair value adjustments 346, , , ,881 - Investment properties 3 209,690 26, , ,329 - Investments and investment in subsidiaries 5 & 7 134, ,753 2, ,552 - Other financial assets - unrealised profit on valuation of derivative 10 2,685-2,685 - Excess of acquirer s interest in the net fair value of acquiree s identifiable assets, liabilities and contingent liabilities over cost - - 3,369 13,466 Expenditure Loss on disposal of property, plant and equipment Loss on disposal of investment properties Loss on disposal of subsidiaries Loss on disposal of associates Loss on disposal of investments ,597 Impairment of investments 5 7, Impairment of goodwill - - 3,122 - Auditors remuneration Audit fee Other services Depreciation - Property, plant and equipment Lease rentals ,622 - Premises ,574 - Equipment Income from associates 6 & , , ,774 Investment income 24 32,212 3,404 25,647 5,414 Finance costs 25 (50,539) (4,319) (83,740) (27,990) Profit before taxation 561, , , ,743 Taxation 22 (86,163) (68,440) (115,768) (58,879) Profit after taxation 475, , , ,864 Minority interest - - (10,956) (8,430) Profit attributable to ordinary shareholders 475, , , ,434 Page 25 l ATTACQ ANNUAL REPORT 2007

28 Section 3 l CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2007 Fair value adjustment Share of Non- Other Share of profit of Share Share distributable Investment financial profit of joint Distributable capital premium reserve properties assets Investments associates ventures reserves Total R 000 R 000 R 000 R 000 R 000 R 000 R 000 R 000 R 000 R 000 Balance at 1 July ,303-35, , , ,409 Net profit for the year 370, ,864 Minority shareholders interest in profits (8,430) (8,430) Transfer to revaluation reserve 56,616 56,616 Transfer to fair value adjustment , , (302,881) - Share in profit / (losses) of associates ,774 (116,774) - Capital gains tax on profit of associates (16,932) 16,932 Capital gains tax on fair value adjustment (17,013) (26,849) (26) 43,888 - Since acquisition reserves of associates realised (387,599) (776) 388,375 - Capital gains tax on since acquisition reserves of 56, (56,314) - associates realised Fair value adjustment realised (20,883) 20,883 - Capital gains tax on fair value adjustment realised ,047 (3,047) - Dividends paid - Ordinary shares (82,569) (82,569) Dividends paid - Preference shares (minorities) (8,000) (8,000) Share buy - back (700) (700) Issue of share capital , ,471 Total changes ,760 56,616 74,051 - (172,873) 99, , ,253 Balance at 1 July ,063 56, , , , ,662 Net profit for the year 492, ,093 Transfer to revaluation reserve 9,254 9,254 Minority shareholders interest in profits (9,347) (1,609) (10,956) Transfer to fair value adjustment ,215 2,685 2,130 (290,030) - Capital gains tax on fair value adjustment (41,356) (309) 41,665 - Tax on fair value adjustments (779) Share in profit / (losses) of associates ,757 (291,757) - Capital gains tax on profit of associates (42,305) 42,305 - Fair value adjustment realised (179) Capital gains tax on fair value adjustment realised (26) - Dividends paid - Preference shares (minorities) (6,000) (6,000) Issue of share capital , ,583 Total changes ,569 9, ,512 1,906 1, ,450 (153) (12,400) 1,048,973 Balance at 30 June ,632 65, ,358 1,906 1, , ,720 1,918,635 Note 16 ATTACQ ANNUAL REPORT 2007 l Page 26

29 Section 3 l COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2007 Fair value adjustment Share of Non- Other Share of profit of Share Share distributable Subsidia- Investment financial profit of joint Distributable capital premium reserve ries properties assets Investments associates ventures reserves Total R 000 R 000 R 000 R 000 R 000 R 000 R 000 R 000 R 000 R 000 R 000 Balance at 1 July , , ,162 2,579-26, ,405 Net profit for the year 310, ,448 Transfer to fair value adjustment ,265 26, , (357,713) - Capital gains tax on fair value adjustment of subsidiaries and associates (18,743) (3,909) (29,190) (26) 51,868 - Fair value adjustment realised (4,094) (6,931) 11,025 - Capital gains tax on fair value adjustment realised ,005 (1,599) - Since acquisition reserves realised (252,973) (776) 253,749 - Capital gains tax on since acquisition reserves realised 36, (36,730) - Dividends paid (82,569) (82,569) Share buy- back (700) (700) Issue of share capital , ,471 Total changes , ,021 23,050 - (50,162) (664) , ,651 Balance at 1 July , ,514 23, , , ,056 Net profit for the year 475, ,387 Transfer to non-distributable reserves 9,254 9,254 Transfer to fair value adjustment , ,690 2,685 2,130 (339,639) - Capital gains tax on fair value adjustment (18,144) (30,405) (309) 48,858 - Tax on fair value adjustment (779) 779 Share in profits/(losses) of associate ,362 (203,362) - Capital gains tax on profits of associates (29,487) 29,487 Fair value adjustment realised (20) (179) Capital gains tax on fair value adjustment realised (29) - Issue of share capital , ,583 Total changes ,569 9, , ,285 1,906 1, ,875 (153) 11,680 1,049,224 Balance at 30 June ,632 9, , ,335 1,906 1, , ,021 1,795,281 Note 16 Page 27 l ATTACQ ANNUAL REPORT 2007

30 Section 3 l CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2007 Notes R 000 R 000 R 000 R 000 Cash flow from operating activities Cash generated from operating activities ,740 20,971 39,896 21,801 Investment income 32,212 3,404 25,647 5,414 Interest paid (50,539) (4,319) (83,740) (27,990) Dividends paid - (30,062) (6,000) (38,063) Taxation paid (20,630) (5,666) (26,261) (6,966) Net cash from operating activities 783 (15,672) (50,458) (45,804) Cash flow from investing activities Expenditure to maintain operating capacity Proceeds of disposal of subsidiaries ,383-4,383 Proceeds of redemption of share premium by subsidiaries Proceeds of disposal of associates Proceeds of disposal of investments ,062-7,062 Proceeds of disposal of investment property ,000 Expenditure to expand operating capacity Subsidiaries acquired (31,501) (11,035) (31,501) Property, plant and equipment acquired (588) - (894) (76,525) Investment properties acquired (480,372) (26,226) (495,714) (30,238) Loans granted (raised) / repaid during the year (144,304) (156) (154,601) 537 Investment in associates (67,913) - (67,934) - Investments acquired (4,000) - (4,280) - Net cash from investing activities (696,749) (46,187) (734,458) (64,031) Cash flow from financing activities Capital raised 564,584 23, ,584 23,522 Loans raised 542,826 54, , ,929 Loans from shareholders (repaid) / raised (389,379) 3,833 (420,451) (92,243) Loans from group companies (repaid) / raised (23,162) 31,408 (1,461) (1,981) Loans to group companies (repaid) / raised (720) (47,732) (6,106) 34,955 Net cash from financing activities 694,149 65, , ,182 Total cash movement for the period (1,817) 3,777 (1,995) 5,347 Cash at the beginning of the period (2,312) (6,089) 2,330 (2,123) Cash acquired with subsidiaries Cash disposed with subsidiaries - (1,339) Total cash at the end of the period 11 (4,129) (2,312) 374 2,330 ATTACQ ANNUAL REPORT 2007 l Page 28

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32 Section 3 l ACCOUNTING POLICIES FOR THE YEAR ENDED 30 JUNE Presentation of Financial Statements The consolidated financial statements are prepared in accordance with South African Standards of Generally Accepted Accounting Practice and the Companies Act of South Africa. The consolidated financial statements have been prepared under the historical cost convention as modified by the revaluation of certain property, plant and equipment, marketable securities and investment properties where appropriate. Accounting policies are consistent with that of the previous year. 1.1 Investment properties Investment properties are those properties which are held for long-term rental yields or for capital appreciation, other than owner occupied properties. Investment properties comprise freehold land, freehold buildings and leasehold improvements. Investment properties are recognised as assets when, and only when, it is probable that future economic benefits that are associated with the investment properties will flow to the enterprise, and the cost of the investment properties can be measured reliably. Investment properties are initially recognised at cost. Transaction costs are included in the initial measurement. Costs include initial costs incurred and costs incurred subsequently to add to, or to replace a part of, or service a property. If a replacement part is recognised in the carrying amount of the investment property, the carrying amount of the replaced part is derecognised. Subsequent expenditure is charged to the asset s carrying value only when it is probable that future economic benefits associated with the item will flow to the and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the income statement during the financial period in which it is incurred. Fair value Subsequent to initial measurement, investment properties are measured at fair value. Fair value is based on active market prices, adjusted, if necessary, for any difference in nature, location or condition of the specific asset. These valuations are done annually by appointed external valuers. Investment properties that are being redeveloped for continued use as investment properties continue to be measured at fair value. The fair value of investment properties reflect, amongst other things, rental income from current leases and assumptions about rental income from future leases in the light of current market conditions. Similarly, the fair value also reflects the cash outflows that would normally be expected in respect of the properties. A gain or loss arising from a change in fair value is included in net profit or loss for the period in which it arises. If an investment property becomes owner occupied, it is reclassified as property, plant and equipment, and its fair value at the date of the reclassification becomes its cost for accounting purposes. Property that is currently being constructed or developed for future use as investment property is classified as property, plant and equipment and stated at its fair value during construction or untill the development is complete. At completion date, the property is reclassified and subsequently accounted for as an investment property. If an item of property, plant and equipment becomes an investment property because its use has changed, any difference resulting between the carrying amount and the fair value of this item at the date of transfer is recognised in equity as a revaluation of property, plant and equipment. However, if a fair value gain reverses a previous impairment loss, the gain is recognised in the income statement. Investment property held for sale without redevelopment is classified as non-current assets held for sale. 1.2 Property, plant and equipment The cost of an item of property, plant and equipment is recognised as an asset when: it is probable that future economic benefits associated with the item will flow to the company, and the cost of the item can be measured reliably. ATTACQ ANNUAL REPORT 2007 l Page 30

33 Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised. Property, plant and equipment are carried at cost less accumulated depreciation and any impairment losses. Depreciation is provided on all property, plant and equipment other than freehold land, to write down the cost, less residual value, by equal instalments over their useful lives as follows: Item Useful life Furniture and fittings 6 years Office equipment 5 years Computer equipment 3 years Other fixed assets 5 years Computer software 2 years Motor vehicles 5 years Signage 10 years The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each financial year end. An asset s carrying amount is written down immediately to its recoverable amount if its carrying amount is greater than its estimated recoverable amount. The gain or loss arising from the derecognition of an item of property, plant and equipment is included in profit or loss when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item. 1.3 Investment in subsidiaries Subsidiaries are those entities over whose financial and operating policies the has control so as to obtain the benefits from their activities. The Consolidated financial statements include the assets, liabilities, income and expenses and cash flows of the holding company and its subsidiaries. The results of the subsidiaries are included from the effective date of acquisition. On date when control ceases, subsidiaries are de-consolidated from the s results. On acquisition, the recognises the subsidiary s identifiable assets, liabilities and contingent liabilities at fair value, except for assets classified as held-for-sale, which are recognised at fair value less costs to sell. Inter-company balances and transactions and any resulting unrealised gains and losses are eliminated in preparing the Consolidated financial statements. The accounting policies of the subsidiaries are consistent with those of the holding company. 1.4 Investment in joint ventures Joint ventures are those entities over which the has joint control established by a contractual agreement. An investment in a joint venture, where the interests are in the operations of the joint venture, is accounted for using the equity method, except when the asset is classified as held-for-sale. Under the equity method, the investment in a joint venture is initially recognised at cost and the carrying amount is increased or decreased to recognise the s share of the profits or losses of the investee after acquisition date. The use of the equity method is discontinued from the date of which the ceases to have joint control over, or have significant influence in, a jointly controlled entity. An investment in a joint venture where joint control is maintained over the assets of the joint venture, is accounted for using the proportionate consolidation method. The use of the proportionate consolidation method is discontinued from the date on which the ceases to have joint control over, or have significant influence in, a jointly controlled entity. 1.5 Investment in associates Associates are entities over which the has significant influence but not control. Significant influence is defined as having between 20% and 50% of the shareholding and voting rights. An investment in an associate is accounted for using the equity method, except when the asset is classified as held-for-sale. Under the equity method, the investment is initially recognised at cost and the carrying amount is increased or decreased to recognise the s share of the profits or losses of the investee after acquisition date. The use of the equity method is discontinued from the date the ceases to have significant influence over an associate. Page 31 l ATTACQ ANNUAL REPORT 2007

34 Section 3 l ACCOUNTING POLICIES FOR THE YEAR ENDED 30 JUNE 2007 (continued) Impairment losses are deducted from the carrying amount of the investment in associate. Distributions received from the associates reduce the carrying amount of the investment. Profits and losses resulting from transactions with associates are recognised only to the extent of unrelated investors interest in the associate. 1.6 Financial instruments Initial recognition The classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement. Financial assets and financial liabilities are recognised on the s balance sheet when the becomes party to the contractual provisions of the instrument. Financial assets and liabilities are recognised initially at fair value. In the case of financial assets or liabilities not classified at fair value through profit and loss, transaction costs that are directly attributable to the acquisition or issue of the financial instruments are added to the fair value. For financial assets carried at fair value: the change in fair value is recognised in profit or loss or in equity, as appropriate Subsequent measurement After initial recognition financial assets are measured as follows: loans and receivables and held-to-maturity investments are measured at amortised cost using the effective interest rate method; investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured, are measured at cost; other financial assets, including derivatives, at fair value, without any deduction for transaction costs which may incur on sale or other disposal thereof. After initial recognition financial liabilities are measured as follows: financial liabilities at fair value through profit or loss, including derivatives that are liabilities, are measured at fair value. other financial liabilities are measured at amortised cost using the effective interest rate method Gains and losses A gain or loss arising from a change in a financial asset or liability is recognised as follows: A gain or loss on a financial asset or liability classified as at fair value through profit or loss is recognised in profit or loss. A gain or loss on an available-for-sale financial asset is recognised directly in equity, through the statement of changes in equity, until the financial asset is derecognised, at which time the cumulative gain or loss previously recognised in equity is recognised in profit or loss. Financial assets and financial liabilities carried at amortised cost: a gain or loss is recognised in profit or loss when the financial asset or financial liability is derecognised or impaired, and through the amortisation process Loans to / (from) group companies These include loans to holding companies, fellow subsidiaries, subsidiaries, joint ventures and associates and are recognised initially at cost plus direct transaction costs. Subsequently these loans are measured at amortised cost using the effective interest rate method, less any impairment loss recognised to reflect irrecoverable amounts. On loans receivable an impairment loss is recognised in profit or loss when there is objective evidence that it is impaired. The impairment is measured as the difference between the investment s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition. Impairment losses are reversed in subsequent periods when an increase in the investment s recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to the restriction that the carrying amount of the ATTACQ ANNUAL REPORT 2007 l Page 32

35 investment at the date the impairment is reversed shall not exceed what the amortised cost would have been had the impairment not been recognised Trade and other receivables Trade and other receivables are initially measured at cost and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the asset s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition Trade and other payables Trade and other payables are initially measured at cost, and are subsequently measured at amortised cost, using the effective interest rate method Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value. These are initially and subsequently recorded at cost Bank overdrafts and borrowings Bank overdrafts and borrowings are initially measured at cost, and are subsequently measured at amortised cost, using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the s accounting policy for borrowing costs. 1.7 Tax Current tax assets and liabilities Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset. Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. Deferred tax liabilities and assets A deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from: the initial recognition of goodwill; or goodwill for which amortisation is not deductible for tax purposes; or the initial recognition of an asset or liability in a transaction which: is not a business combination; and at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss). A deferred tax liability is recognised for all taxable temporary differences associated with investments in subsidiaries, branches and associates, and interests in joint ventures, except to the extent that both of the following conditions are satisfied: the parent, investor or venturer is able to control the timing of the reversal of the temporary difference; and it is probable that the temporary difference will not reverse in the foreseeable future A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilised, unless the deferred tax asset arises from the initial recognition of an asset or liability in a transaction that: is not business combination; and at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss). A deferred tax asset is recognised for the carry forward of unused tax losses to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilised. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the assets is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. Deferred tax on fair value adjustment arising from use is raised at normal rates. (Currently 29%.) Deferred tax on fair value adjustment arising through realisation is raised at the inclusion rate of 50% of normal tax rates. (Currently 14.5%). Page 33 l ATTACQ ANNUAL REPORT 2007

36 Section 3 l ACCOUNTING POLICIES FOR THE YEAR ENDED 30 JUNE 2007 (continued) Tax expense Current and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the extent that the tax arises from: a transaction or event which is recognised, in the same or a different period, directly in equity, or a business combination Current tax and deferred taxes are charged or credited directly to equity if the tax relates to items that are credited or charged, in the same or a different period, directly to equity. 1.8 Inventories Properties that are being developed for future sale are classified as inventories. Inventories are measured at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. The cost of inventories comprise of all costs of purchases, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. When inventories are sold, the carrying amount of those inventories are recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value, are recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs. 1.9 Share capital and equity An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Shares are classified as equity instruments when there is no fixed or determinable obligation to transfer cash or other assets. If the acquires its own equity instruments, those instruments are deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the s own equity instruments. Consideration paid or received shall be recognised directly in equity Leases A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership Operating leases - lessor Properties leased out under operating leases are included in investment property. Operating lease income is recognised as income on the straight line basis over the lease term. Initial direct costs incurred in negotiating and arranging operating leases are expensed in the period in which it is incurred. Income for leases is disclosed under revenue in the income statement Operating leases - lessee Payments, including prepayments made under operating leases are charged to the income statement on a straight line basis over the period of the lease. Any contingent rent is expensed in the period it is incurred Goodwill Goodwill is initially measured at cost, being the excess of a business combination over the s interest of the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquired subsidiary. Separately recognisable goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on disposal of an entity includes the carrying amount of goodwill relating to the specific entity. ATTACQ ANNUAL REPORT 2007 l Page 34

37 The excess of the s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of the business combination is immediately recognised in profit or loss Provisions Provisions are recognised when the has a present obligation (legal or constructive) as a result of a past event, it is probable that the will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. When some or all of the economic benefits required to settle the provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that the reimbursement will be received and the amount of the receivable can be reliably measured Revenue Revenue from the sale of goods is recognised when all the following conditions have been satisfied: the has transferred to the buyer the significant risks and rewards of ownership of the goods: the retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; the amount of revenue can be measured reliably; it is probable that the economic benefits associated with the transaction will flow to the ; and the costs incurred or to be incurred in respect of the transaction can be measured reliably. When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the balance sheet date. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied: the amount of revenue can be measured reliably; it is probable that the economic benefits associated with the transaction will flow to the ; the stage of completion of the transaction at the balance sheet date can be measured reliably; and the cost incurred for the transaction and the costs to complete the transaction can be measured reliably. When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue shall be recognised only to the extent of the expenses recognised that are recoverable. Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for goods and services provided in the normal course of business, net of trade discounts and volume rebates, and value added tax. Interest is recognised, in profit or loss, using the effective interest rate method. Dividends are recognised, in profit or loss, when the s right to receive payment has been established. Derivatives are measured at fair value through profit and loss Borrowing costs Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of that asset until such time as the asset is ready for its intended use. The amount of borrowing costs eligible for capitalisation is determined as follows: Actual borrowing costs on funds specifically borrowed for the purpose of obtaining qualifying assets less any temporary investment of those borrowings. Weighted average of the borrowing costs applicable to the entity on funds generally borrowed for the purpose of obtaining a qualifying asset. The borrowing costs capitalised do not exceed the total borrowing costs incurred. The capitalisation of borrowing costs commences when: expenditure for the asset have been occurred; borrowing costs have been incurred, and activities that are necessary to prepare the assets for its intended use or sale are in progress. Capitalisation is suspended during extended periods in which active development is interrupted. Capitalisation ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete. All other borrowing costs are recognised as an expense in the period in which they are incurred Dividend distribution Dividend distribution to the shareholders is recognised as a liability in the s financial statements in the period in which the dividends are approved. Page 35 l ATTACQ ANNUAL REPORT 2007

38

39 Section 3 l NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE Property, plant and equipment Cost / Accumulated Carrying Cost / Accumulated Carrying Valuation depreciation value Valuation depreciation value R 000 R 000 R 000 R 000 R 000 R 000 Other fixed assets 364 (23) Motor vehicles 225 (19) Total 589 (42) The carrying value of property, plant and equipment can be reconciled as follows: Carrying Carrying value at value at beginning Disposals / end of of the year Acquisitions Transfers Depreciation the year 2007 R 000 R 000 R 000 R 000 R 000 Other fixed assets (23) 341 Motor vehicles (19) (42) Land and buildings 3,340 - (3,340) - - 3,340 - (3,340) - - Motor vehicles are encumbered as per note Cost / Accumulated Carrying Cost / Accumulated Carrying Valuation depreciation value Valuation depreciation value R 000 R 000 R 000 R 000 R 000 R 000 Other fixed assets 698 (140) (6) 23 Motor vehicles 225 (19) Total 923 (159) (6) 23 Page 37 l ATTACQ ANNUAL REPORT 2007

40 Section 3 l NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 (continued) 2. Property, plant and equipment (continued) The carrying value of property, plant and equipment can be reconciled as follows: Carrying Carrying value at value at beginning Disposals / end of of the year Acquisitions Transfers Depreciation the year 2007 R 000 R 000 R 000 R 000 R 000 Other fixed assets (135) 558 Motor vehicles (19) (153) Land and buildings 16,886 76,441 (93,326) - - Furniture and fittings (249) (160) - Office equipment 46 - (43) (4) - Computer equipment (90) (27) - Computer software 6 - (2) (3) - Other fixed assets (6) 23 Motor vehicles (133) ,457 76,609 (93,843) (200) Investment properties R 000 R 000 R 000 R 000 Fair value Balance at beginning of the year 56, , ,199 Additions 482, , ,499 Transfers (2,270) 29,878 (85,403) 93,326 Disposals (64,064) Net gain from fair value adjustment 209,690 26, , ,329 Balance at end of the year 746,899 56,837 1,222, ,289 Reconciled as follows: Cost 510,250 29, , ,942 Fair value adjustment 236,649 26, , ,347 Total value 746,899 56,837 1,222, ,289 Investment properties consist of: Attstore Balance at beginning of the year ,000 Additions Disposals (15,064) Balance at end of the year ATTACQ ANNUAL REPORT 2007 l Page 38

41 3. Investment properties (continued) R 000 R 000 R 000 R 000 Building G, DTI Campus * Balance at beginning of the year 56,837-56,837 - Transfer from property, plant and equipment - 3,340-3,340 Additions , ,538 Transfers (2,270) - (2,270) Net gain from fair value adjustment 2,335 28,922 2,335 28,922 Straight line rental adjustment against fair value (3,663) (1,963) (3,663) (1,963) Balance at end of the year 54,049 56,837 54,049 56,837 Reconciled as follows: Cost 28,417 29,878 28,417 29,878 Fair value adjustments 31,257 28,922 31,257 28,922 Straight line rental adjustment against fair value (5,625) (1,963) (5,625) (1,963) 54,049 56,837 54,049 56,837 Brooklyn Gardens ( Aldabri ) Balance at beginning of the year ,018 19,601 Additions Net gain from fair value adjustment ,928 6,450 Straight line rental adjustment against fair value - - (90) (33) Balance at end of the year ,961 26,018 Reconciled as follows: Cost ,105 13,000 Fair value adjustments ,078 13,150 Straight line rental adjustment against fair value - - (222) (132) ,961 26,018 Brooklyn Park ( Aldabri ) Balance at beginning of the year ,000 Disposals (47,000) Balance at end of the year Brooklyn Square Shopping Centre Balance at beginning of the year ,095 - Additions ,635 Net gain from fair value adjustment ,908 30,000 Straight line rental adjustment against fair value (540) Balance at end of the year , ,095 Reconciled as follows: Cost ,630 97,635 Fair value adjustments ,908 30,000 Straight line rental adjustment against fair value - - (455) (540) , ,095 * Leasehold improvements Page 39 l ATTACQ ANNUAL REPORT 2007

42 Section 3 l NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 (continued) 3. Investment properties (continued) R 000 R 000 R 000 R 000 FNB House ( Aldabri ) Balance at beginning of the year ,550 9,478 Additions Net (loss) / gain from fair value adjustment - - (55) 651 Straight line rental adjustment against fair value Transfer to assets held for sale - - (10,500) - Balance at end of the year ,550 Reconciled as follows: Cost ,899 Fair value adjustments Straight line rental adjustment against fair value ,550 Great Westerford Balance at beginning of the year Additions 289, ,930 - Net gain from fair value adjustment 95,365-95,365 - Straight line rental adjustment against fair value (2,655) - (2,655) - Balance at end of the year 382, ,640 - Reconciled as follows: Cost 289, ,930 - Fair value adjustments 95,365-95,365 - Straight line rental adjustment against fair value (2,655) - (2,655) - 382, ,640 - Hampton Office Park Balance at beginning of the year Additions 78,806-78,806 - Net gain from fair value adjustment 48,613-48,613 - Straight line rental adjustment against fair value (318) - (318) - Balance at end of the year 127, ,101 - Reconciled as follows: Cost 78,806-78,806 - Fair value adjustments 48,613-48,613 - Straight line rental adjustment against fair value (318) - (318) - 127, ,101 - ATTACQ ANNUAL REPORT 2007 l Page 40

43 3. Investment properties (continued) R 000 R 000 R 000 R 000 Investec Pretoria Branch offices Balance at beginning of the year ,023 - Transfer from property, plant and equipment ,392 Net gain from fair value adjustment ,705 21,258 Straight line rental adjustment against fair value - - (3,344) (627) Balance at end of the year ,384 77,023 Reconciled as follows: Cost ,392 56,392 Fair value adjustments ,963 21,258 Straight line rental adjustment against fair value - - (3,971) (627) ,384 77,023 Lady Brooks Balance at beginning of the year ,542 20,223 Additions Net gain from fair value adjustment ,469 Reversal of prior year building cost accruals - - (141) - Straight line rental adjustment against fair value (215) Balance at end of the year ,802 26,542 Reconciled as follows: Cost ,130 12,271 Fair value adjustments ,043 14,679 Straight line rental adjustment against fair value - - (371) (408) ,802 26,542 Lord Charles and Lady Brooks Office Park Balance at beginning of the year ,695 - Additions Net gain from fair value adjustment ,966 13,155 Transfer from property, plant and equipment ,595 Straight line rental adjustment against fair value - - (592) (55) Balance at end of the year ,976 46,695 Reconciled as follows: Cost ,503 33,595 Fair value adjustments ,121 13,155 Straight line rental adjustment against fair value - - (648) (55) ,976 46,695 McCarthy Dealership ( Aldabri ) Balance at beginning of the year - - 5,661 - Additions ,168 3,712 Net gain from fair value adjustment ,138 Straight line rental adjustment against fair value - - (314) (189) Balance at end of the year ,748 5,661 Reconciled as follows: Cost ,880 3,712 Fair value adjustments - - 2,371 2,138 Straight line rental adjustment against fair value - - (503) (189) ,748 5,661 Page 41 l ATTACQ ANNUAL REPORT 2007

44 Section 3 l NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 (continued) 3. Investment properties (continued) R 000 R 000 R 000 R 000 Shell House Balance at beginning of the year Additions 113, ,097 - Net gain from fair value adjustment 70,476-70,476 - Straight line rental adjustment against fair value (465) - (465) - Balance at end of the year 183, ,108 - Reconciled as follows: Cost 113, ,097 - Fair value adjustments 70,476-70,476 - Straight line rental adjustment against fair value (465) - (465) - 183, ,108 - Waterkloof Corner ( Aldabri ) Balance at beginning of the year ,868 52,897 Additions - - 1, Net gain from fair value adjustment - - 4,759 12,300 Straight line rental adjustment against fair value - - 1,032 (429) Transfer to assets held for sale - - (72,633) - Balance at end of the year ,868 Reconciled as follows: Cost ,560 Fair value adjustments ,340 Straight line rental adjustment against fair value (1,032) ,868 The Terraces Balance at beginning of the year Acquisitions ex subsidiary ,342 - Additions - - 4,830 - Net gain from fair value adjustment ,889 - Straight line rental adjustment against fair value - - (952) - Balance at end of the year ,109 - Reconciled as follows: Cost ,164 - Fair value adjustments ,897 - Straight line rental adjustment against fair value - - (952) ,109 - ATTACQ ANNUAL REPORT 2007 l Page 42

45 3. Investment properties (continued) R 000 R 000 R 000 R 000 A register containing information relating to investment properties as required by paragraph 22 (3) of the Fourth Schedule of the Companies Act is available for inspection at the Registered Offices of the.the effective date of the valuations was 30 June The valuations were performed by an independent valuer, A de Wet (B.Proc.LLB (UP), Nat Dip in Real Estate (Unisa)). A de Wet is associated to Rode & Genote Valuers and not connected to the company and has recent experience in location and category of the investment properties being valued. Building G, DTI Campus, was however valued by the directors of the company based on the net present value of future cash flows. The properties have been mortgaged as per note 17. The properties known as FNB House and Waterkloof Corner are in the process of being sold. Refer to note 13 for details thereof. 746,899 56,837 1,222, , Goodwill Carrying value at the beginning of the year ,009 7,123 Additions ,886 Impairments - - (3,122) - Carrying value at the end of the year - - 8,887 12, Investment in subsidiaries Fair value Balance at the beginning of the year 365, , Additions - 94, Disposals (20) (4,102) - - Fair value realised through distributions (6,164) Cost realised through distributions (7,607) Net gain from fair value adjustment 138, , Balance at the end of the year 489, , Cost 94, , Net gain from fair value adjustment 395, , Balance at the end of the year 489, , Page 43 l ATTACQ ANNUAL REPORT 2007

46 Section 3 l NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 (continued) 5. Investment in subsidiaries (continued) R 000 R 000 R 000 R 000 Investment in subsidiaries comprise: Atterbury Property Holdings (Pty) Ltd Balance at the beginning of the year - 6, Disposals - (8) - - Net (loss) / gain from fair value adjustments - (6,141) - - Balance at the end of the year Atterbury Property Cape Holdings (Pty) Ltd Balance at the beginning of the year 94,182 43, Disposals - (4,094) - - Additions - 19, Net gain from fair value adjustments 27,526 35, Balance at the end of the year 121,708 94, Atterbury Attfund Investments (Pty) Ltd Balance at the beginning of the year 28,188 18, Net gain from fair value adjustments 8,030 9, Balance at the end of the year 36,218 28, Erf 321 Hatfield Beleggings (Pty) Ltd Balance at the beginning of the year 10,923 4, Additions - 5, Value realised through distributions (10,822) Net gain from fair value adjustments Balance at the end of the year , Lady Brooks (Pty) Ltd Balance at the beginning of the year 12,031 3, Additions - 3, Net gain from fair value adjustments 961 5, Balance at the end of the year 12,992 12, Lord Charles & Lady Brooks Office Park Holdings (Pty) Ltd Balance at the beginning of the year 10, Net gain from fair value adjustments 8,793 10, Balance at the end of the year 19,267 10, ATTACQ ANNUAL REPORT 2007 l Page 44

47 5. Investment in subsidiaries (continued) R 000 R 000 R 000 R 000 Attstore (Pty) Ltd Balance at the beginning of the year 2,950 3, Fair value realised through distributions (2,948) Net loss from fair value adjustments - (54) - - Balance at the end of the year 2 2, Atterbury Property Johannesburg (Pty) Ltd Balance at the beginning of the year 2, Additions - 2, Net loss from fair value adjustments (2,130) - Balance at the end of the year - 2, Interactive Trading 800 (Pty) Ltd Balance at the beginning of the year 26,141 5, Additions - 11, Net gain from fair value adjustments 8,215 9, Balance at the end of the year 34,356 26, Highgrove Property Holdings (Pty) Ltd Balance at the beginning of the year 31, Additions - 18, Net gain from fair value adjustments 14,978 12, Balance at the end of the year 46,343 31, Autumn Star Trading 597 (Pty) Ltd Balance at the beginning of the year Disposal (20) Net gain from fair value adjustments Balance at the end of the year Attcorn Property Gauteng (Pty) Ltd Balance at the beginning of the year Additions Net loss from fair value adjustments (253) Balance at the end of the year Aldabri 96 (Pty) Ltd Balance at the beginning of the year 10, Additions - 7, Net gain from fair value adjustments 3,367 3, Balance at the end of the year 14,224 10, Attcorn Property Holdings (Pty) Ltd Balance at the beginning of the year Transferred from associates Net loss from fair value adjustments (1) Balance at the end of the year Page 45 l ATTACQ ANNUAL REPORT 2007

48 Section 3 l NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 (continued) 5. Investment in subsidiaries (continued) R 000 R 000 R 000 R 000 Riverport Trading 143 (Pty) Ltd Balance at the beginning of the year 9, Additions - 1, Disposals Net gain from fair value adjustments 9,259 7, Balance at the end of the year 18,373 9, Atterbury Property Investments (Pty) Ltd Balance at the beginning of the year 126,645 57, Additions - 28, Net gain from fair value adjustments 39,794 40, Balance at the end of the year 166, , Harlequin Duck Properties 204 (Pty) Ltd Balance at the beginning of the year Additions Net gain from fair value adjustments 19, Balance at the end of the year 19, Total value 489, , Investment in associates Fair value Balance at the beginning of the year 861,064-1,255,310 - Additions 67,914-67, ,364 Transfers - 861, ,172 Reserves gained from additions included in non-distributable reserves 9,254-9,254 - Share in retained profits 203, , ,774 Balance at the end of the year 1,141, ,064 1,624,234 1,255,310 Reconciled as follows: Cost 928, ,064 1,206,449 1,138,536 Share of retained profits since acquisition and non-distributable reserves 212, , ,774 Balance at the end of the year 1,141, ,064 1,624,234 1,255,310 ATTACQ ANNUAL REPORT 2007 l Page 46

49 6. Investment in associates (continued) R 000 R 000 R 000 R 000 Investments in associates comprise the following: Attfund Limited Balance at the beginning of the year 861,064-1,255,310 - Transfer from other investments - 861, ,172 Additions 31,451-31, ,364 Reserves gained from additions included in non-distributable reserves 9,254-9,254 - Share of retained profits for the year 195, , ,774 Balance at the end of the year 1,097, ,064 1,580,034 1,255,310 Clifton Dunes Investment 415 (Pty) Ltd ( Rapfund ) Balance at the beginning of the year Additions 36,463-36,463 - Share of retained profits for the year * 7,915-7,915 - Balance at the end of the year 44,378-44,378 - Attvest Property Development JV (Pty) Ltd ( Paradise Coast ) Balance at the beginning of the year Additions Share of retained losses for the year (9) - (9) - Balance at the end of the year (9) - (9) - Western Breeze Trading 41 (Pty) Ltd ( Lynnwood Junction ) Balance at the beginning of the year Share of retained losses for the year (170) - (170) - Balance at the end of the year (170) - (170) - Total value 1,141, ,064 1,624,234 1,255,310 The disposed of the following associates at par value in 2006: Atterbury Property One (Pty) Ltd Atterbury Wedge (Pty) Ltd Attpower Developments (Pty) Ltd Bella Rosa Development (Pty) Ltd Class A Trading 71 (Pty) Ltd Erf 81 Lynnwood (Pty) Ltd Mandela Development Corridor (Pty) Ltd National Formatt Property Consultants (Pty) Ltd Parkdev (Pty) Ltd Rodgers Real Estate (Pty) Ltd Shock Proof Investments 23 (Pty) Ltd Superstrike Investments 14 (Pty) Ltd Top Coat Investments 5 (Pty) Ltd Page 47 l ATTACQ ANNUAL REPORT 2007

50 Section 3 l NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 (continued) 6. Investment in associates (continued) Proportion interest held in associates: Proportion Owned % % % % Attfund Limited Clifton Dunes Investments 415 (Pty) Ltd ( Rapfund ) Attvest Property Development JV (Pty) Ltd Western Breeze Trading 41 (Pty) Ltd ( Lynnwood Junction ) The s share of the results of its associates and its share of the assets and liabilities are as follows: Name Assets Liabilities Revenue Profit Attfund Limited 7,510,668 2,334, , ,218 Clifton Dunes Investments 415 (Pty) Ltd ( Rapfund ) 471, ,763 44,238 26,093 Attvest Property Development JV (Pty) Ltd 6,206 6,235 - (36) Western Breeze Trading 41 (Pty) Ltd ( Lynnwood Junction ) 84,355 85,165 - (811) Attacq Property Fund Limited has provided co-suretyship in respect of the bonds provided for Attvest Property Development JV (Pty) Ltd and Western Breeze Trading 41 (Pty) Ltd and in return received equity in the developments. Refer to note 28 for details thereof. The investment in Clifton Dunes Investment 415 (Pty) Ltd comprise shares at par value of R0.001 each and linked units of variable rate redeemable debentures in Rapfund Investments (Pty) Ltd, redeemable at R10 each at 30 June The retained profits of the year include interest received on the debentures. 7. Investments R 000 R 000 R 000 R 000 Fair value Balance at the beginning of the year 4,345 85,973 4, ,418 Additions 4, ,814 4, ,291 Disposals (4,343) (13,617) (4,343) (25,381) Transfer to associates - (861,064) - (649,172) Net gain from fair value adjustment 2, ,239 2, ,189 Balance at the end of the year 6,132 4,345 6,132 4,345 Reconciled as follows: Cost 4, ,002 2 Fair value adjustment 2,130 4,343 2,130 4,343 Balance at the end of the year 6,132 4,345 6,132 4,345 Rainprop (Pty) Ltd Balance at the beginning of the year Balance at the end of the year ATTACQ ANNUAL REPORT 2007 l Page 48

51 7. Investments (continued) R 000 R 000 R 000 R 000 Trevenna Development (Pty) Ltd Balance at the beginning of the year Additions 4,000-4,000 - Net gain from fair value adjustment 2,130-2,130 - Balance at the end of the year 6,130-6,130 - Isibaya House (Pty) Ltd Balance at the beginning of the year Additions (At par less than R1,000) Net loss from fair value adjustment Balance at the end of the year Le Chateau Property (Pty) Ltd Balance at the beginning of the year Additions (At par less than R1,000) Net loss from fair value adjustment Balance at the end of the year Attfund Limited Balance at the beginning of the year - 75, ,926 Additions - 593, ,291 Disposals - (9,306) - (9,306) Net gain from fair value adjustment - 201, ,261 Transfer to associates - (861,064) - (649,172) Balance at the end of the year Gosforth Park Holdings (Pty) Ltd Balance at the beginning of the year - 4,311-4,311 Disposals - (4,311) - (4,311) Balance at the end of the year Erf 321 Hatfield Beleggings (Pty) Ltd (right to receive rental income) Balance at the beginning of the year ,765 Transfer to other financial assets (13,877) Net gain from fair value adjustment ,112 Balance at the end of the year Rainprop Development & Construction Joint Venture Balance at the beginning of the year 4,343 4,164 4,343 4,164 Net gain from fair value adjustment Investment realised (4,343) - (4,343) - Balance at the end of the year - 4,343-4,343 Infotech (Pty) Ltd Balance at the beginning of the year - 2,250-2,250 Disposals - (2,250) - (2,250) Balance at the end of the year Page 49 l ATTACQ ANNUAL REPORT 2007

52 Section 3 l NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 (continued) 7. Investments (continued) The group held investments in the following companies: Proportion Owned % % % % Unlisted Rainprop (Pty) Ltd Trevenna Development (Pty) Ltd Isibaya House (Pty) Ltd Le Chateau Property Development (Pty) Ltd Loans to / (from) subsidiaries, associates and joint ventures R 000 R 000 R 000 R 000 Subsidiaries - Aldabri 96 (Pty) Ltd (14,047) (22,168) Attcorn Property Gauteng (Pty) Ltd Attcorn Property Holdings (Pty) Ltd 4,200 4, Atterbury Attfund Investments (Pty) Ltd Atterbury Property Cape Holdings (Pty) Ltd 3,066 1, Atterbury Property Investments (Pty) Ltd Atterbury Property Johannesburg (Pty) Ltd 7,905 16, Attstore (Pty) Ltd (103) (3,717) Autumn Star Trading 597 (Pty) Ltd - (3,071) Erf 321 Hatfield Beleggings (Pty) Ltd (1,900) Harlequin Duck Properties 204 (Pty) Ltd 42, Highgrove Property Holdings (Pty) Ltd - 28, Interactive Trading 800 (Pty) Ltd 2,406 (8,809) Lady Brooks (Pty) Ltd 177 (304) Lord Charles & Lady Brooks Office Park Holdings (Pty) Ltd 3,733 18, Razorbill Properties 91 (Pty) Ltd Riverport Trading 143 (Pty) Ltd (418) (99) - - Joint ventures - Rainprop Development & Construction Joint Venture (60) (1,521) (60) (1,521) Associates - Attvest Property Development JV (Pty) Ltd 6,106-6,106 - ATTACQ ANNUAL REPORT 2007 l Page 50

53 8. Loans to / (from) subsidiaries, associates and joint ventures (continued) R 000 R 000 R 000 R 000 The loans from or to subsidiaries/associates bear no interest, are unsecured and have no fixed terms of repayment, except as noted below: The following loans bear interest at prime: - Riverport Trading 143 (Pty) Ltd - Atterbury Property Johannesburg (Pty) Ltd The following loans bear interest at prime -1%: - Attvest Property Development JV (Pty) Ltd Current assets 70,249 69,529 6,106 - Current liabilities (16,528) (39,689) (60) (1,521) 9. Loans to / (from) shareholders - Atterbury Trust (3,355) (5,302) (3,355) (5,302) - Atterbury Property Holdings (Pty) Ltd (2,096) 3,432 (2,096) 3,432 - BNF Trust 2 (6,067) 2 (6,067) - Deut 28 Trust (693) - Belsize Trust - (930) - (930) - Village Trust (1,590) 1,540 (1,065) 2,005 - Mergon Trust (17,123) (406,213) (17,123) (406,213) The loans bear no interest, have no fixed terms of repayment and are unsecured, except as noted below. The loan from Mergon Trust bears interest at prime -2% The following loans bear interest at prime: - Atterbury Property Holdings (Pty) Ltd - Village Trust Current assets 2 4, ,437 Current liabilities (24,164) (418,512) (23,639) (419,205) 10. Other financial assets Loans and receivables Association for People with Disabilities Atterbury Investment Managers (Pty) Ltd 147, ,517 Atterbury Property One (Pty) Ltd 1,359 5,474 1,359 5,474 Autumn Star Trading 597 (Pty) Ltd 5 5 Circlevest (Pty) Ltd ,907 1,737 DH Booysen Emerald Trust 2,976 2,638 2,976 2,638 Isibaya House (Pty) Ltd 1,024-1,024 - Rainprop (Pty) Ltd Trevenna Development (Pty) Ltd WDB Investment Holdings (Pty) Ltd Zwelinzima Holdings (Pty) Ltd Sundry short term loans 118 1, ,055 Page 51 l ATTACQ ANNUAL REPORT 2007

54 Section 3 l NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 (continued) 10. Other financial assets (continued) R 000 R 000 R 000 R 000 The loans are unsecured and indefinite. Unless specified, the loans bear no interest except the loans below which bear interest at prime: - Atterbury Property One (Pty) Ltd - Autumn Star Trading 597 (Pty) Ltd - Emerald Trust - Rainprop (Pty) Ltd - Trevenna Development (Pty) Ltd The loan to Atterbury Investment Managers (Pty) Ltd is in respect of 50% of the guarantee issued by Rand Merchant Bank and carries terms correlating to that of the guarantee. The terms being: interest at 12% per annum capitalised monthly, final instalment payable in April ,291 9, ,198 12,597 Held for trading instruments Derivative financial assets Carrying value at the beginning of the year Fair value adjustment 2,685-2,685 - Carrying value at the end of the year 2,685-2,685 - Derivatives comprise interest rate swap agreements entered into with Rand Merchant Bank with fixed nominal rates of between 11.09% and 11.17% with floating rate option of JIBAR-SAFEX +2.35%. Derivatives have maturity dates of 15 December 2009, 5 December 2010 and 15 December Total non current financial assets 150, ,202 - Total current financial assets 6,774 9,986 19,681 12, Cash and cash equivalents Bank accounts and cash on hand 8,041 2,688 13,881 7,347 Bank overdrafts (12,172) (5,000) (13,507) (5,017) (4,129) (2,312) 374 2,330 The enjoys overdraft facilities to the amount of R20,000,000. Sureties provided to the bankers of the : - Pledge of 536,993 Attfund Limited shares - Deed of Pledge and cession of Call account limited to R150,000. ATTACQ ANNUAL REPORT 2007 l Page 52

55 12. Deferred tax R 000 R 000 R 000 R 000 Deferred tax liability The balance comprises: ` - Advance receipts (617) - (872) (9) - Assessed losses (1,172) - (15,490) (13,194) - Prepayments (49) - Wear and Tear allowance 1,741-3, Straight line debtor 2, ,103 1,663 - Pre-production interest - - 1,221 1,221 - Bad debt allowance (3) - (82) - - Fair value adjustment on derivatives Capital Gains Tax on fair value adjustments & equity accounting 161,688 78, ,687 88, ,044 78, ,377 78, Held for sale 13.1 Non-current assets held for sale 2007: The is in the process of selling its investment properties known as: - Waterkloof Corner - FNB House 2006: The is in the process of selling its right to receive income from Erf 321 Hatfield Beleggings (Pty) Ltd. Investment properties ,133 - Other investments , Non-current liabilities held for sale Standard Bank Limited mortgage bonds over investment properties held for sale. Liabilities held to maturity , Inventory Work-in-progress: Mapungubwe Development ,934 8,946 Work-in-progress: College House Development - - 1,507 12,906 Work-in-progress: Intaba Development 165, ,528 21,852 The work-in-progress consist of the following: Mapungubwe Development: Consisting of Erven 1084 and 1166 Marshall Town, Johannesburg. The erven were developed in luxury apartments known as Mapungubwe Luxury Apartments situated in the financial district of Johannesburg. College House Development: Consisting of Erf 4687 Johannesburg. The erf was developed into residential apartments. Intaba Development: Consisting of Erf , Claremont, Cape Town. The erf is being developed into residential units. Pledge as security for long term liabilities refer note 17. Page 53 l ATTACQ ANNUAL REPORT 2007

56 Section 3 l NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 (continued) 15. Trade and other receivables R 000 R 000 R 000 R 000 Trade receivables ,195 1,163 Deposits paid VAT refundable - - 1,302 2,222 Sundry receivables 6,920 5,382 8,763 6,784 7,582 5,597 15,641 10, Issued Capital Authorised Ordinary shares of R Reconciliation of shares in R-value issued: Reported as at 01 July Share buy-back (less than R1,000) Issue of share capital Total issued shares The unissued ordinary shares are under the control of the directors in terms of resolution of members passed at the last annual general meeting. This authority remains in force until the next annual general meeting. Issued Ordinary Share premium 878, , , , , , , , Liabilities held to maturity Held at amortised costs Secured liabilities Investec Bank Limited Attacq Property Fund Limited 6,116-6,116 - Secured loan bearing interest at prime (13%), repayable in full by 31 March Secured by Cession and pledge of: 234,514 Attfund Limited shares held in the name of Atterbury Property Cape Holdings (Pty) Ltd to the value of R17,588,550 and Joint and Several suretyship provided by Atterbury Property Cape Holdings (Pty) Ltd limited to R17,588,550. ATTACQ ANNUAL REPORT 2007 l Page 54

57 17. Liabilities held to maturity (continued) R 000 R 000 R 000 R 000 Interactive Trading 800 (Pty) Ltd ,316 48,474 Secured loans bearing interest at prime (13%), repayable in monthly instalments (52 remaining), in structured, balloon payments. Secured by Cession and pledge of: 2,482,509 Attfund Limited shares to the value of R198,600,720 held by Interactive Trading 800 (Pty) Ltd and suretyship by Attacq Property Fund Limited of R5,750,000. Autumn Star Trading 597 (Pty) Ltd ,041 divested from this company during the year under review. Riverport Trading 143 (Pty) Ltd ,299 43,628 Secured loan bearing interest at prime -1.5% per annum, repayable in monthly instalments of R626,334 over the next 8 months, then increasing to R682,687 for the following 12 months. A total of 106 instalments remain at 30 June Secured as follows: Mortgage bond over Erf 757/4 Menlo Park with office building thereon known as Investec Pretoria Branch Offices. Suretyship by Attacq Property Fund Limited limited to R30,600,000. Nedcor Limited Attacq Property Fund Limited 7,159 6,474 7,159 6,474 Secured loan bearing interest at prime -1% per annum, monthly repayments consist of interest only. A balloon payment is due April Secured by pledge of 261,700 Attfund Limited shares. Rand Merchant Bank Attacq Property Fund Limited 284,068 58, ,068 58,777 Mortgage bonds bearing interest at between 9.25% % (2006: 9.25% %). Repayable in monthly instalments of between R67,107 and R485,250 (2006: R196,253 - R449,315) over remaining periods of between months. Secured as follows: Mortgage bond registered over long-term notarial lease of land and buildings known as Building G, DTI Campus, situated on Portion 469 (a portion of Portion 433) of the farm Elandspoort. Cession of rental income and any right, title or interest under any lease entered into in respect of Building G, DTI Campus. First mortgage bond to the amount of R550,000,000 plus additional R110,000,000 registered over the following properties: - Remaining extent of Erf , Cape Town, with office buildings thereon known as Great Westerford. - Section 1 of the Sectional Title Scheme 747/2006, situated on the remaining extent of Erf , Cape Town Central with office buildings thereon known as Shell House and Ovenstone House. - Remaining extent of Erf 17, Bryanston Ext 5, with office buildings thereon known as Hampton Office Park. Page 55 l ATTACQ ANNUAL REPORT 2007

58 Section 3 l NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 (continued) 17. Liabilities held to maturity (continued) R 000 R 000 R 000 R Cession of lease agreements and insurances in respect of the above 3 properties. - Pledge of 8,678,575 Attfund Limited shares of which 2,856,575 will be released once the Shell House building is fully occupied. Guarantee facility issued at interest rate of 12% per annum, capitalised monthly with a balloon payment in April A monthly guarantee fee of 1.8% per annum is also charged. 295, ,035 - Standard Bank Limited Atterbury Property Johannesburg (Pty) Ltd ,171 14,321 Attcorn Property Gauteng (Pty) Ltd and Atterbury Property Johannesburg (Pty) Ltd are jointly developing the luxury apartments known as Mapungubwe with Circlevest Properties (Pty) Ltd. The original secured loan has been repaid in full during the year under review. Subsequently, a further secured loan was raised by the three entities for the development, it bears interest at prime -1% per annum, repayable before 31 August Secured as follows: - Bond over Erven 1084 and 1166 Marshall Town, Johannesburg - Suretyship by Attacq Property Fund Limited for the amount of R33,750,000 Attcorn Property Gauteng (Pty) Ltd ,475 The loan has been settled during the year under review. Aldabri 96 (Pty) Ltd ,043 67,614 Total bond outstanding 63,843 Transferred to held for sale liabilities (38,800) Mortgage bond bearing interest at between 10.84% fixed and 11.75% (prime linked) per annum, repayable in instalments of between R248,215 and R405,815. Secured as follows: Bond over: - Erf 767 Brooklyn known as Brooklyn Gardens - Erven 326/7, 325/1, 325/RE, 1029/RE, 1029/1, 59/2 and portion 1 (remaining extent) of Erf 60 Arcadia - Suretyship by Attacq Property Fund Limited to the amount of R93,671,000 ATTACQ ANNUAL REPORT 2007 l Page 56

59 17. Liabilities held to maturity (continued) R 000 R 000 R 000 R 000 Brooklyn Square (Pty) Ltd ,547 65,545 Mortgage bonds bearing interest at between prime -1.25% and prime, repayable over a period of 10 years. The original loan being repayable in bulk capital payment of between R3,153,500 and R11,990,000 and the ancillary loan is repayable over 10 years with the first year only interest to be serviced, thereafter capital and interest starting with a monthly instalment of R440,000 per month, escalating at 8% per annum. Secured as follows: Bond over Erven 172, 184, 406 and 415/RE Nieuw Muckleneuk with shopping centre thereon, and Joint and several suretyship by: - Attacq Property Fund Limited to the amount of R104,918,025 - Aldabri 96 (Pty) Ltd limited to the amount of R104,918,025 and - Highgrove Property Holdings (Pty) Ltd limited to the amount of R104,918,025. Lady Brooks (Pty) Ltd ,806 13,049 Mortgage bond bearing interest at prime -1.25% per annum. The repayment terms state that for the first 24 months after completion of the development interest will be repayable and that the total loan is repayable within 10 years after completion. Current monthly instalments amount to R226,448 at 30 June Secured as follows: Bond over Erf 380 and Erf 381, Brooklyn with office buildings thereon known as Lady Brooks Office. Limited suretyship from the following entities: - Attacq Property Fund Limited to the amount of R9,533,810 - Mergon Trust to the amount of R3,336,190 and - BNF Trust to the amount of R3,860,000 and Joint and several surety by Attacq Property Fund Limited to the amount of R1,000,000. Lord Charles & Lady Brooks Office Park Holdings (Pty) Ltd ,502 15,074 Mortgage bond bearing interest at between 9.66% and 13.0% per annum, repayable between 12 and 105 months in instalments of between R32,214 and R109,111. Secured as follows: - Bond over Erf 876 Brooklyn with office buildings thereon known as Lord Charles and Lady Brooks Office Park and - Suretyship by Attacq Property Fund Limited to the amount of R35,759,000. ABSA Bank Limited ,756 - Harlequin Duck Properties 204 (Pty) Ltd Mortgage bonds bearing interest at between prime -1% and prime, repayable between 1 and 8 months. Page 57 l ATTACQ ANNUAL REPORT 2007

60 Section 3 l NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 (continued) 17. Liabilities held to maturity (continued) R 000 R 000 R 000 R 000 Secured as follows: - Continuous covering mortgage bond to the value of R200,000,000 over Erf 11892, Claremont, Cape Town, and - Unlimited suretyship provided by Oudekaap Developments (Pty) Ltd and limited suretyship of R230,000,000 provided by Attacq Property Fund Limited. Executour Fleet Services (Pty) Ltd Attacq Property Fund Limited Hire purchase payable over a period of 60 months in monthly instalments of R5,044 at a prime linked rate. Secured over motor vehicles as per note 2. Redeemable preference shares ,000 - The 13 redeemable preference shares are redeemable within the next 12 months at a par value of R1 as well as a premium per share of R999,999. Unsecured liabilities Acceleration emarketing (Pty) Ltd 1, , Attventure (Pty) Ltd ,358 Finbez Beleggings CC P.J.J. van Rensburg Parkdev S.A. (Pty) Ltd VRF Holdings (Pty) Ltd Atterbury Investment Managers (Pty) Ltd 11,197-11,197 - TTA Shares (Pty) Ltd 3,994-3,994 - McCarthy Volkswagen Dealership (Church Street, Pretoria) The loans have no fixed repayment terms. Unless specified, the loans bear no interest. - Acceleration emarketing (Pty) Ltd Prime -2% - Atterbury Investment Managers (Pty) Ltd Prime -2% - TTA Shares (Pty) Ltd Prime The loan from Acceleration emarketing (Pty) Ltd is repayable on demand. Non-current liabilities 579,099 65, , ,931 Current liabilities 29, ,830 55,586 ATTACQ ANNUAL REPORT 2007 l Page 58

61 18. Trade and other payables R 000 R 000 R 000 R 000 Trade payables 13, ,761 2,323 Deposits held 1,440-4, VAT payables 304 2, ,856 Sundry payables 611 5,272 21,616 25,174 15,721 8,176 45,685 31, Other income Developers profits 23,428 23,843 18,477 16,372 Operational cost recoveries 16, ,369 4,328 Sundry income 137 1, ,253 40,205 25,565 51,675 21, Operating lease receivables Value of minimum lease payments receivable - within one year 47,133 5,692 79,501 43,998 - in second to fifth year inclusive 120,488 27, , ,636 - later than 5 years 5, ,334 61, , , , , , Directors emoluments Emoluments received Non-executive - Services as directors Executive - Other services , , Taxation Major components of the tax expense / income Current Local income tax - recognised in current tax for current periods - 7,363 3,256 9,922 Deferred Current period 86,163 50, ,123 37,260 Secondary tax on companies Charge for the year - 10,303 1,389 11,697 86,163 68, ,768 58,879 Reconciliation of the tax expense Applicable tax rate 29.0% 29.0% Adjusted for: - Non-deductible expenditure 0.2% - - Dividends received (0.8%) - - Fair value adjustments - 50% (8.8%) (13.7%) - Share of retained profits of associates - 50% (4.3%) - - Secondary tax on companies - 2.8% Net reduction (13.7%) (10.9%) Effective rate 15.3% 18.1% Page 59 l ATTACQ ANNUAL REPORT 2007

62 Section 3 l NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 (continued) 23. Share of associated companies retained profit R 000 R 000 R 000 R 000 Attributable share of retained profit for the year excluding extraordinary items Net (loss) / profit for the year 203, , , , , , Investment income Dividend revenue Dividends from subsidiaries 14, Other dividends Interest revenue Loans and receivables 16,235 1,300 14,620 4,042 Bank accounts Other interest 251 1,600 10, ,212 3,404 25,647 5, Finance costs Non-current liabilities 48,112 2,093 77,817 16,272 Bank overdrafts Other interest 1,436 1,489 4,929 10,978 50,539 4,319 83,740 27, Related parties Relationship Related parties are defined as those entities with which the transacted during the year and in which the following relationship(s) exist: Shareholding Directorships Management Transactions between group companies which are eliminated on consolidation are not disclosed. Purchases / Balances services owing Sales to from by / (to) Parkdev (Pty) Ltd Atterbury Investment Managers (Pty) Ltd ,397 6,187 (39) Atterbury Property Holdings (Pty) Ltd , ,354 3,433 BNF Trust (6,067) Mergon Trust (17,123) (406,213) Atterbury Parkdev Consortium (Pty) Ltd ,700 - ATTACQ ANNUAL REPORT 2007 l Page 60

63 26. Related parties (continued) Purchases / Balances services owing Sales to from by /(to) Attventure (Pty) Ltd (1,357) Attfund Limited , Atterbury Property Cape (Pty) Ltd Atterbury Asset Managers (Pty) Ltd (679) Atterbury Property Developments (Pty) Ltd National Formatt Property Commercial (Pty) Ltd National Formatt Property Retail Consultants (Pty) Ltd Contingent liabilities R 000 R 000 R 000 R 000 Liability for Secondary Tax on Companies which would arise if Attacq Property Fund Limited were to distribute their reserves 113,420 53, The s bankers have issued the following guarantees to creditors of said companies: Brooklyn Square (Pty) Ltd Attacq Property Fund Limited (Building G, joint venture) ,668 Aldabri 96 (Pty) Ltd Commitments 28.1 Shares pledged 2,724,023 Shares (2006: 3,280,319 Shares) held by the in Attfund Limited were pledged as security in respect of the obligations towards Investec Bank Limited as per note 17. 7,678,575 Shares held by the in Attfund Limited were pledged as security in respect of the obligations towards Rand Merchant Bank as per note ,700 Shares (2006: 946,668 Shares) held by the in Attfund Limited were pledged as security in respect of the obligations towards Nedcor Limited as per note 17. A total of 1,942,170 Shares held by the in Attfund Limited were pledged as security in respect of joint and several sureties provided to Investec Bank Limited as detailed in A total of 563,446 Shares held by the in Attfund Limited were pledged as security in respect of joint and several sureties provided to Nedcor Limited as detailed in Pledge of 536,993 Attfund Limited shares to Nedbank Limited for overdraft facilities granted as per note 11. Page 61 l ATTACQ ANNUAL REPORT 2007

64 Section 3 l NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 (continued) 28.2 Capital commitments Already contracted but not provided for Investment properties The has contracted a revamp project of its Investment Property situated at Erf 415 Nieuw Muckleneuk, known as Brooklyn Square. The total expected contract value excluding VAT, amounts to R106,545,568. This includes expected relocation costs of tenants which suffered losses due to fire damage which occurred in March The project will be funded through additional mortgage bonds. The expected completion date is May Approved but not contracted Investment properties - The has approved a revamp project of its Investment Property Shell House. No contracts have been entered into in this regard. The total expected cost of the revamp is expected to be R40,000,000. The project will be staged as floors in the building becomes vacant. The is in the process of acquiring Centurion Gate Property in which Kumba Recourses has entered into a lease yielding a 9% cap rate. The total consideration price is approximately R128,000,000. Atterbury Investment Managers (Pty) Ltd, a company under common management, will facilitate the deal Contingent commitments R 000 R 000 R 000 R 000 Sureties given by the : Surety in respect of loan funds advanced by Investec Bank Limited to Atterbury Property Developments (Pty) Ltd for acquisition and development of Beau Rivage. 39,000 9,710 39,000 9,710 Surety in respect of loan funds advanced by Investec Bank Limited to Le Chateau Property Development (Pty) Ltd for development of Le Chateau. 35,737 25,000 35,737 25,000 Surety in respect of loan funds advanced by Investec Bank Limited to Papillio Investments 40 (Pty) Ltd for acquisition and development of Paradise Coast. 62,000 78, ,589 78,416 Surety in respect of loan funds advanced by Investec Bank Limited to Mergon Trust for Infotech (Pty) Ltd capital requirements. - 6,050-6,050 Surety in respect of loan funds advanced by Investec Bank Limited to Interactive Trading 800 (Pty) Ltd. 5,750 5,750 5,750 5,750 Surety in respect of loan funds advanced by Investec Bank Limited to Autumn Star Trading 597 (Pty) Ltd for the proposed new development in Jeffreys Bay, Western Cape. - 6,000-6,000 ATTACQ ANNUAL REPORT 2007 l Page 62

65 28.3 Contingent commitments (continued) R 000 R 000 R 000 R 000 Surety in respect of loan funds advanced by Investec Bank Limited to Wattchatt (Pty) Ltd. 5,283 4,622 16,060 4,622 Surety in respect of loan funds advanced by Investec Bank Limited to Riverport Trading 143 (Pty) Ltd in respect of finance lease agreement of Investec Pretoria Regional Offices. 30,600 19,095 30,600 19,095 Surety in respect of loan funds advanced by Standard Bank Limited to Lady Brooks (Pty) Ltd for the development of the Lady Brooks Office Park situated in Menlo Park, Pretoria. 9,534 9,534 9,534 9,534 Surety in respect of loan funds advanced by Standard Bank Limited to Lord Charles and Lady Brooks Office Park Holdings (Pty) Ltd for the development of the Lord Charles and Lady Brooks Office Park situated in Menlo Park, Pretoria. 35,759 35,759 35,759 35,759 Surety in respect of loan funds advanced by Investec Bank Limited to Leopont 543 Properties (Pty) Ltd to acquire property situated in Ashley Gardens, Pretoria. 22,500-22,500 - Surety in respect of loan funds advanced by Rand Merchant Bank to Atterbury Property One (Pty) Ltd for the acquisition and development of Kingswood Retirement Village. 60,000-60,000 - Surety in respect of loan funds advanced by ABSA Bank Limited to Harlequin Duck Properties 204 (Pty) Ltd for the development of Intaba apartments. 230, ,000 - Surety in respect of loan funds advanced by Rand Merchant Bank to Harlequin Duck Properties 204 (Pty) Ltd for the development of The Terraces. 75,000-75,000 - Joint surety given in respect of loan funds advanced by Standard Bank Limited to Atterbury Property Johannesburg (Pty) Ltd, Attcorn Property Gauteng (Pty) Ltd and Circlevest Properties (Pty) Ltd for the Mapungubwe development. - 43,000-43,000 Joint surety given in respect of loan funds advanced by Standard Bank Limited to Atterbury Property Johannesburg (Pty) Ltd, Attcorn Property Gauteng (Pty) Ltd and Circlevest Properties (Pty) Ltd as follows: 35,625 33,750 35,625 33,750 - Bond amounting to R50,000,000 over Erven 1084 and 1166 Marshall Town, Johannesburg. Joint surety given in respect of loan funds advanced by Standard Bank Limited to Brooklyn Square (Pty) Ltd as additional surety over Erf 415, Nieuw Muckleneuk. 104,918 30, ,918 30,000 Joint surety given in respect of loan funds advanced by Rand Merchant Bank to Trevenna Development (Pty) Ltd as additional surety over Erf 59, a portion of Erf 78 and remaining extents of Erf 79 and 433 of Farm Elandspoort No 357 Division JR. 14,000 64,840 14,000 64,840 Page 63 l ATTACQ ANNUAL REPORT 2007

66 Section 3 l NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 (continued) 28.3 Contingent commitments (continued) R 000 R 000 R 000 R 000 Surety in respect of loan funds advanced by Nedcor Limited to Western Breeze Trading 41 (Pty) Ltd for the development of the mixed use development situated in Lynnwood Manor, Pretoria. 55,650 36,844 55,650 36,844 Surety in respect of loan funds advanced by Standard Bank Limited to Isibaya House (Pty) Ltd for the development of residential development known as Isibaya House. 28,253 25,103 28,253 25,103 Surety in respect of loan funds advanced by Standard Bank Limited to Aldabri 96 (Pty) Ltd for the acquisition of various commercial properties. 93,671 45,738 93,671 45,738 Surety in respect of loan funds advanced by Investec Bank Limited for the fractional ownership development known as Staytus Luxury Lifestyle Collection ,300 1,300 Surety in respect of loan funds advanced by Nedcor Limited for the mixed use development to be undertaken by Nulane Investments 40 (Pty) Ltd in Worcester, Western Cape ,700 5,700 Surety in respect of loan funds advanced by Investec Bank Limited for the mixed use development to be undertaken by Cape Gannet Properties 142 (Pty) Ltd in Paarl, Western Cape Surety in respect of loan funds advanced by Standard Bank Limited for the Kraaibosch Residential Estate currently under development in George, Western Cape ,000 30,000 Surety in respect of loan funds advanced by Investec Bank Limited to Atterbury Property Cape (Pty) Ltd ,400 3,400 Surety in respect of loan funds advanced by Standard Bank Limited for the Bella Rosa Lifestyle Village currently under development in Tygervalley, Western Cape. 20,000 20,000 20,000 20, Comparative figures Certain comparative figures have been reclassified to comply with International Accounting Standards (IAS) 1: Presentation of financial statements. In previous years rental income was reflected as other income. Due to the holding company becoming a direct investor in commercial property, rental income is reflected as gross revenue. Loan accounts having no fixed repayment terms are reclassified as current liabilities or current assets to comply with International Accounting Standards (IAS) 1: Presentation of financial statements. ATTACQ ANNUAL REPORT 2007 l Page 64

67 30. Risk management The s risk management has been disclosed in the asset management report in the annual report. The details of the s interest costs as well as percentage of debt fixed are discussed. 31. Notes to the cash flow statement 31.1 Cash flows from operating activities R 000 R 000 R 000 R 000 Profit before taxation 561, , , ,743 Adjustments for: Investment income (32,212) (3,404) (25,647) (5,414) Finance costs 50,539 4,319 83,740 27,990 Depreciation Loss / (profit) on disposal of property, plant and equipment (Profit) / loss on disposal of subsidiaries 20 (281) 20 (7,125) Loss / (profit) on disposal of associates (Profit) / loss on disposal of other investments - (548) - 5,049 Loss / (profit) on disposal of investment properties Fair value adjustment to investments (127,264) (330,753) (1,850) (185,552) Fair value adjustment to investment properties (209,690) (26,959) (285,215) (117,329) Fair value adjustment to other financial assets (2,685) - (2,685) - Non-cash item - straight line debtor movement (7,101) (1,963) (9,876) (4,014) Excess of cost above fair value - - (3,369) (13,466) Equity income from associate (203,362) - (291,757) (116,774) Impairment of Goodwill - - 3,122 - Change in working capital: Decrease / (increase) in inventories - - (50,229) 21,667 (Decrease) / increase in accounts receivable 2,358 (4,825) 2,510 (6,755) Increase / (decrease) in accounts payable 7,545 5,972 13,118 (6,890) 39,740 20,971 39,896 21, Subsidiaries acquired Harlequin Duck Properties 204 (Pty) Ltd Acquired 100% of the company 1 December 2006 Investment Property 70,000-70,000 - Inventories 130, ,446 - Straight line debtor 1,363-1,363 - Trade and other receivables 3,403-3,403 - Current tax refundable Cash and cash equivalents Loans from shareholders (30,319) - (30,319) - Other financial liabilities (160,572) - (160,572) - Deferred tax 1,466-1,466 - Trade and other payables (1,424) - (1,424) - 14,404-14,404 - Goodwill on acquisition (excess on acquisition) (14,404) - (3,369) - Purchase price ,035 - Net cash purchase price ,035 - Page 65 l ATTACQ ANNUAL REPORT 2007

68 Section 3 l NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 (continued) 31.2 Subsidiaries acquired (continued) R 000 R 000 R 000 R 000 Aldabri 96 (Pty) Ltd Acquired 20% of the company 1 July 2005 Investment Property - 128, ,976 Loans to shareholders - 37,396-37,396 Straight line debtor Trade and other receivables Cash and cash equivalents - 1,209-1,209 Loans from group companies - (43,766) - (43,766) Loans from shareholders - (1,989) - (1,989) Other financial liabilities - (78,543) - (78,543) Deferred tax - (6,317) - (6,317) Current tax payable - (40) - (40) Trade and other payables - (860) - (860) - 37,206-37,206 Minus: Other shareholders interest and interest previously acquired - (29,743) - (29,743) - 7,463-7,463 Goodwill on acquisition (excess on acquisition) Purchase price - 7,799-7,799 Shares issued - 7,799-7,799 Net cash purchase price Atterbury Property Cape Holdings (Pty) Ltd Acquired 40% of the company 1 July 2005 Loans to shareholders - 1,871-1,871 Other financial assets - 74,174-74,174 Deferred tax - (9,635) - (9,635) Current tax payable - (901) - (901) Trade and other payables ,509-65,509 Minus: Other shareholders interest and interest previously acquired - (42,380) - (42,380) - 23,129-23,129 Goodwill on acquisition (excess on acquisition) - (3,836) - (3,836) Purchase price - 19,293-19,293 Shares issued - 19,293-19,293 Net cash purchase price ATTACQ ANNUAL REPORT 2007 l Page 66

69 31.2 Subsidiaries acquired (continued) R 000 R 000 R 000 R 000 Erf 321 Hatfield Beleggings (Pty) Ltd Acquired 49% of the company 1 July 2005 Other financial assets - 11,765-11,765 Trade and other receivables Cash and cash equivalents Loans from shareholders - (812) - (812) Other financial liabilities - (604) - (604) Deferred tax - (1,396) - (1,396) Trade and other payables - (407) - (407) - 9,196-9,196 Minus: Other shareholders interest and interest previously acquired - (4,690) - (4,690) - 4,506-4,506 Goodwill on acquisition (excess on acquisition) Purchase price - 5,343-5,343 Shares issued - 3,707-3,707 Accruals - 1,636-1,636 Lady Brooks (Pty) Ltd Acquired 49% of the company 1 July 2005 Investment Property - 20,223-20,223 Loans to shareholders Other financial assets Trade and other receivables Cash and cash equivalents Other financial liabilities - (14,000) - (14,000) Deferred tax - (922) - (922) Trade and other payables - (333) - (333) - 6,226-6,226 Minus: Other shareholders interest and interest previously acquired - (3,162) - (3,162) - 3,064-3,064 Goodwill on acquisition (excess on acquisition) Purchase price - 3,064-3,064 Shares issued - 3,064-3,064 Net cash purchase price Page 67 l ATTACQ ANNUAL REPORT 2007

70 Section 3 l NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 (continued) 31.2 Subsidiaries acquired (continued) R 000 R 000 R 000 R 000 Atterbury Property Johannesburg (Pty) Ltd Acquired 25% of the company 1 July 2005 Property, plant and equipment Investment in subsidiaries Loans to group companies Other financial assets - 3,046-3,046 Inventories Trade and other receivables Cash and cash equivalents Loans from shareholders - (6,285) - (6,285) Deferred tax Trade and other payables - (27) - (27) - (1,474) - (1,474) Minus: Other shareholders interest and interest previously acquired - 1,474-1,474 Goodwill on acquisition (excess on acquisition) - 2,130-2,130 Purchase price - 2,130-2,130 Shares issued - 2,130-2,130 Net cash purchase price Attcorn Property Gauteng (Pty) Ltd Acquired 8% of the company 1 July 2005 Inventories Trade and other receivables Cash and cash equivalents - - Loans from group companies - (393) - (393) Loans from shareholders - (3) - (3) Deferred tax Trade and other payables - (4) - (4) - (40) - (40) Minus: Other shareholders interest and interest previously acquired (3) - (3) Goodwill on acquisition (excess on acquisition) Purchase price Shares issued Net cash purchase price ATTACQ ANNUAL REPORT 2007 l Page 68

71 31.2 Subsidiaries acquired (continued) R 000 R 000 R 000 R 000 Attcorn Property Holdings (Pty) Ltd Acquired 56% of the company 1 July 2005 Property, plant and equipment Investment in subsidiaries Loans to group companies Other financial assets - 2,879-2,879 Trade and other receivables Cash and cash equivalents Loans from shareholders - (4,384) - (4,384) Other financial liabilities - (550) - (550) Deferred tax Trade and other payables - (412) - (412) - (1,351) - (1,351) Minus: Other shareholders interest and interest previously acquired (1,351) - (1,351) Goodwill on acquisition (excess on acquisition) - 1,352-1,352 Purchase price Shares issued Net cash purchase price Highgrove Property Holdings (Pty) Ltd Acquired 100% of the company 1 July 2005 Investment in subsidiaries - 27,317-27,317 Loans to group companies - 27,878-27,878 Loans from shareholders - (61,323) - (61,323) Trade and other payables - (5,984) - (5,984) - (12,112) - (12,112) Minus: Other shareholders interest and interest previously acquired - 55,369-55,369-43,257-43,257 Goodwill on acquisition (excess on acquisition) - 7,186-7,186 Purchase price - 50,443-50,443 Shares issued - 18,943-18,943 Net cash purchase price - 31,500-31,500 Page 69 l ATTACQ ANNUAL REPORT 2007

72 Section 3 l NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 (continued) 31.2 Subsidiaries acquired (continued) R 000 R 000 R 000 R 000 Riverport Trading 143 (Pty) Ltd Acquired 17% of the company 1 July 2005 Property, plant and equipment - 9,900-9,900 Trade and other receivables Cash and cash equivalents Loans from shareholders - (3,503) - (3,503) Other financial liabilities - (4,871) - (4,871) Deferred tax Trade and other payables - (2,126) - (2,126) - (146) - (146) Minus: Other shareholders interest and interest previously acquired - (473) - (473) Goodwill on acquisition (excess on acquisition) - 1,033-1,033 Purchase price - 1,360-1,360 Shares issued - 1,360-1,360 Net cash purchase price Atterbury Property Investments (Pty) Ltd Acquired 30% of the company 1 July 2005 Investment in subsidiaries - 95,765-95,765 Loans from shareholders - (2) - (2) Deferred tax - (13,885) - (13,885) - 81,878-81,878 Minus: Other shareholders interest and interest previously acquired - (51,451) - (51,451) 30,427 30,427 Goodwill on acquisition (excess on acquisition) - (1,698) - (1,698) Purchase price - 28,729-28,729 Shares issued - 28,729-28,729 Net cash purchase price ATTACQ ANNUAL REPORT 2007 l Page 70

73 31.2 Subsidiaries acquired (continued) R 000 R 000 R 000 R 000 Interactive Trading 800 (Pty) Ltd Acquired 15% of the company 1 July 2005 Investment in subsidiaries - 73,942-73,942 Other financial assets - 143, ,111 Trade and other receivables - 6,000-6,000 Cash and cash equivalents - - Loans from group companies - (35,890) - (35,890) Loans from shareholders - (5,633) - (5,633) Other financial liabilities - (35,159) - (35,159) Deferred tax - (20,676) - (20,676) Current tax payable - (12) - (12) Trade and other payables - (13,017) - (13,017) - 112, ,666 Minus: Other shareholders interest and interest previously acquired - (100,733) - (100,733) - 11,933-11,933 Goodwill on acquisition (excess on acquisition) - (666) - (666) Purchase price - 11,267-11,267 Shares issued - 11,267-11,267 Net cash purchase price Total purchase price on acquisition of subsidiaries - 31,501 11,035 31, Proceeds of disposal of subsidiaries Autumn Star Trading 597 (Pty) Ltd Sold 100% of the investment 24 May 2007 Trade and other receivables Tax refundable (9) - (9) - Other financial liabilities (4) - (4) Interest sold Profit / (loss) on sale of investment Selling price Sold on loan account Net cash proceeds Page 71 l ATTACQ ANNUAL REPORT 2007

74 Section 3 l NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 (continued) 31.3 Proceeds of disposal of subsidiaries (continued) R 000 R 000 R 000 R 000 Atterbury Property Cape Holdings (Pty) Ltd Sold 6.25% of the investment 1 July 2005 Loans to shareholders - 1,871-1,871 Other financial assets - 74,174-74,174 Trade and other receivables Cash and cash equivalents Deferred tax - (9,635) - (9,635) Current tax payable - (902) - (902) Trade and other payables - (1) - (1) 65,509 65,509 Interest sold - 4,384-4,384 Profit / (loss) on sale of investment - (2,009) - (2,009) Selling price - 2,375-2,375 Sold on loan account - 2,375-2,375 Net cash proceeds Atterbury Property Holdings (Pty) Ltd (formerly known as Atterbury Property (Pretoria) (Pty) Ltd) Sold 100% of the investment 31 December 2005 Investment property - 2,024-2,024 Property, plant and equipment Investment in subsidiaries - 1,242-1,242 Loans to group companies Inventories Trade and other receivables - 1,186-1,186 Cash and cash equivalents - (283) - (283) Loans to shareholders - (8,048) - (8,048) Deferred tax - 2,552-2,552 Trade and other payables - (527) - (527) - (1,404) - (1,404) Interest sold - (1,404) - (1,404) Profit / (loss) on sale of investment - 1,412-1,412 Selling price Sold on loan account Net cash proceeds ATTACQ ANNUAL REPORT 2007 l Page 72

75 31.3 Proceeds of disposal of subsidiaries (continued) R 000 R 000 R 000 R 000 Nieuw Pivot Investments (Pty) Ltd Sold 60% of the investment 1 July 2005 Trade and other receivables - 2,478-2,478 Cash and cash equivalents - (13) - (13) Loans to shareholders - (2,486) - (2,486) Deferred tax Current tax payable Trade and other payables (6) - (6) Interest sold - (4) - (4) Profit / (loss) on sale of investment Selling price Sold on loan account Net cash proceeds Atterbury Parkdev Consortium (Pty) Ltd Sold 100% of the investment 1 July 2005 Trade and other receivables Cash and cash equivalents Loans from group companies (161) Loans to shareholders (50) Deferred tax Trade and other payables (7) Interest sold (7) Profit / (loss) on sale of investment Selling price Sold on loan account Net cash proceeds Page 73 l ATTACQ ANNUAL REPORT 2007

76 Section 3 l NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007 (continued) 31.3 Proceeds of disposal of subsidiaries (continued) R 000 R 000 R 000 R 000 Attcorn Property Gauteng (Pty) Ltd Sold 8% of the investment 1 July 2005 Inventories Trade and other receivables Cash and cash equivalents Loans from group companies (393) Loans to shareholders (3) Deferred tax Trade and other payables (4) (40) Interest sold (3) Profit / (loss) on sale of investment Selling price Paid via issue of shares Net cash proceeds Atterbury Property One (Pty) Ltd Sold 100% of the investment 1 July 2005 Loans from group companies - (1) - (1) - (1) - (1) Interest sold - (1) - (1) Profit / (loss) on sale of investment Selling price Sold on loan account Net cash proceeds ATTACQ ANNUAL REPORT 2007 l Page 74