CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 RUN AIRPORTS DEVELOP AIRPORTS GROW OUR FOOTPRINT

GENERAL INFORMATION Country of incorporation and domicile South Africa Company registration number 1993/004149/30 Directors Independent Non executive Directors S Macozoma 1 B Luthuli 2 C Mabude 2 K Moroka 2 K Matlou 2 J Lamola M Mabela S Simelane Executive Directors B Maseko M Manyama 3 Non-executive Directors R Morar D Botha Registered office The Maples Riverwoods Office Park 24 Johnson Road Bedfordview 2008 Postal address PO Box 75480 Gardenview 2047 Bankers Standard Bank Nedbank Auditors Auditor-General South Africa Secretary N Kekana 1 Resigned as at 30 November 2016 2 Resigned on 16 February 2017. Reinstated on 31 May 2017 3 Resigned as at 4 January 2017 These consolidated annual financial statements were prepared under the supervision of: Dirk Kunz CA(SA). These consolidated annual financial statements have been audited in compliance with the applicable requirements of the Companies Act No. 71 of 2008.

1 AIRPORTS COMPANY SOUTH AFRICA 1 CONTENTS 2 REPORT OF THE BOARD AUDIT AND RISK COMMITTEE 3 DIRECTORS RESPONSIBILITIES AND APPROVAL 4 GROUP SECRETARY S CERTIFICATION 5 REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON AIRPORTS COMPANY SOUTH AFRICA 12 14 16 DIRECTORS REPORT DETAILED INDEX TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS STATEMENT OF FINANCIAL POSITION 17 STATEMENT OF COMPREHENSIVE INCOME 18 20 STATEMENT OF CHANGES IN EQUITY STATEMENT OF CASH FLOWS 21 NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

2 AIRPORTS COMPANY SOUTH AFRICA REPORT OF THE BOARD AUDIT AND RISK COMMITTEE The Board Audit and Risk Committee (Committee) of the Airports Company South Africa consists of five non-executive directors. The skills and competencies of the members are outlined in the Board and executive curricula vitae supplementary report, which can be found at www.airports.co.za. The Committee operated under terms of reference which are approved by the Board. The Committee has carried out its duties as per the Companies Act and the Public Finance Management Act, including the special mandates that are assigned by the Board from time to time. The Committee reports that it has discharged its responsibilities as it relates to the following, namely review of: The Group s policies and procedures for detecting and preventing fraud. The effectiveness of the Group s policies, systems and procedures. The controls over significant financial and operational risks. Any other matters referred to it by the Board of Directors. The Group s compliance with significant legal and regulatory provisions. The significant reported cases of employee conflicts of interest, misconduct or fraud, or any other unethical activity by employees and/or Group. The internal audit charter to ensure internal audit function discharges its responsibilities with independence and objectivity in accordance with the International Standards for The Professional Practice of Internal Auditing (Standards). The effectiveness and adequacy of the Internal Audit department and adequacy of its annual work plan. Considered whether the independence, objectives, organisation, resourcing plans, financial budgets, audit plans and standing of internal audit function provide adequate support to enable the Committee to meet its objectives. The results of the work performed by the internal audit function in relation to financial reporting, corporate governance, risk areas, internal control, significant investigation and management response. The independence and objectivity of external auditors. The external auditor s findings and reports submitted to management. The accounting and auditing concerns identified by internal and external auditors. The adequacy, reliability and accuracy of financial information provided by management. The integrated report, annual consolidated financial statements, performance and prospects of the Group and recommendations for approval to the Board of Directors. The Committee acknowledges an increase in irregular expenditure reported. The primary cause for the largest component of this transgression is non-compliance to internal supply chain procedures. Management is in the process of improving the compliance to supply chain management procedures through the implementation of the new supply chain management operating model. The Committee is continuously monitoring the status of irregular expenditure and all corrective measures implemented. The Committee is of the opinion that there are areas of internal financial controls that need improvement to ensure that the financial records may be relied upon in the preparation of the consolidated annual financial statements, and accountability for assets and liabilities is maintained. The conclusion has been reached based on the discussions and explanations obtained from management, external and internal auditors based on the results of their audits. The Committee obtained assurance from the external auditors that their independence was not impaired and confirmed that no reportable irregularities were identified and reported by the external auditors in terms of the Auditing Profession Act No. 26 of 2005. The Committee is satisfied that the accounting policies adopted in the preparation of the consolidated annual financial statements are appropriate. The Committee is of the view that the process followed on accounting judgement and estimates used in the preparation of the financial statements needs to be reviewed. The Committee reviewed the going concern of the Company and is satisfied that the adoption of the going concern premise in the preparation of the consolidated annual financial statements is appropriate. We therefore recommend that the consolidated annual financial statements, as submitted, be approved. On behalf of the Board Audit and Risk Committee, S Simelane Chairman 31 August 2017

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 3 DIRECTORS RESPONSIBILITIES AND APPROVAL The Directors are required in terms of the Companies Act No. 71 of 2008, Treasury Regulations and the Public Finance Management Act No. 1 of 1999 as amended, to maintain adequate accounting records and are responsible for the content and integrity of the consolidated annual financial statements and related financial information included in this report. It is their responsibility to ensure that the consolidated annual financial statements fairly present the state of affairs of the Group as at the end of the financial period and the results of its operations and cash flows for the period then ended, in conformity with International Financial Reporting Standards (IFRS). The external auditors are engaged to express an independent opinion on the consolidated annual financial statements. The consolidated annual financial statements are prepared in accordance with IFRS 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 control established by the Group and place 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 Group and all employees are required to maintain the highest ethical standards in ensuring the Group s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the Group is on identifying, assessing, managing and monitoring all known forms of risk across the Group. While operating risk cannot be fully eliminated, the Group 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 on for the preparation of the consolidated annual financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss. The consolidated annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business. The external auditors are responsible for independently auditing and reporting on the Group s consolidated annual financial statements. The consolidated annual financial statements have been examined by the Group s external auditors, and their report is presented on page 5 to 11. The consolidated annual financial statements set out on pages 16 to 78, which have been prepared on the going concern basis, were approved by the Board of Directors on 31 August 2017 and were signed on its behalf by: R Morar S Simelane Chairman Chairman of Audit and Risk Committee 31 August 2017 31 August 2017

4 AIRPORTS COMPANY SOUTH AFRICA GROUP SECRETARY'S CERTIFICATION DECLARATION BY THE GROUP SECRETARY IN RESPECT OF SECTION 88(2)(E) OF THE COMPANIES ACT NO. 71 OF 2008 In terms of Section 88(2)(e) of the Companies Act, No. 71 of 2008, as amended, I certify that the Group has lodged with the Companies and Intellectual Property Commission all such returns and notices as are required of a state owned company in terms of the Companies Act and that all such returns and notices are true, correct and up to date. In terms of Section 8(1) of the Airports Company Act No. 44 of 1993, as amended, I certify that, for the financial year ended 31 March 2017, Airports Company South Africa SOC Limited has lodged, with the Minister of Transport, the consolidated annual financial statements in respect of the preceding financial year. I declare that, to the best of my knowledge, the Group has lodged with the Commissioner of Companies all such returns as are required of a public company in terms of the Companies Act No. 71 of 2008, as amended, and that all such returns are true, correct and up to date. N Kekana Company Secretary 31 August 2017

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 5 REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON AIRPORTS COMPANY SOUTH AFRICA REPORT ON THE AUDIT OF THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS Opinion 1. I have audited the consolidated and separate financial statements of the Airports Company South Africa and its subsidiaries (the group) set out on pages 18 to 78 which comprise, the consolidated and separate statement of financial position as at 31 March 2017, and the consolidated and separate statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, as well as the notes to the consolidated and separate financial statements, including a summary of significant accounting policies. 2. In my opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate financial position of the Airports Company South Africa group as at 31 March 2017, and its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS) and the requirements of the Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA). Basis for opinion 3. I conducted my audit in accordance with the International Standards on Auditing (ISAs). My responsibilities under those standards are further described in the auditor-general s responsibilities for the audit of the consolidated and separate financial statements section of my report. 4. I am independent of the Airports Company South Africa group in accordance with the International Ethics Standards Board for Accountants Code of ethics for professional accountants (IESBA code) together with the ethical requirements that are relevant to my audit in South Africa. I have fulfilled my other ethical responsibilities in accordance with these requirements and the IESBA code. 5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my unqualified opinion. Key audit matters 6. Key audit matters are those matters that, in my professional judgement, were of most significance in my audit of the current period. These matters were addressed in the context of my audit of the financial statements as a whole and in forming my opinion thereon and I do not provide a separate opinion or conclusion on these matters. Key audit matter How the matter was addressed in the audit Valuation of interest-bearing borrowings and derivative financial instruments The valuation of the listed interest bearing borrowings (bonds) and derivative financial instruments, as disclosed in notes C.1 and C.3 respectively, require judgement and estimation to determine the appropriate valuation techniques and to source the relevant and reliable inputs. The financial instrument comprises of Inflation linked bonds of which the calculation is based on future estimate of CPI which is added as a component to arrive at the effective interest rate used to calculate the amortised cost. Derivatives are carried at Fair value; ACSA makes use of fair values provided by the bank to record the fair value of the derivatives at year end. ACSA also assess the effectiveness of the hedging instruments at the end of each financial year by performing their own estimate of the JIBAR linked floating rate. Due to the significant management judgements applied and the high degree of estimation uncertainty, the valuation of interestbearing borrowings and derivative financial instruments at fair value is considered a matter of significance in my audit. The audit procedures performed included considering the appropriateness of the valuation techniques utilised in terms of the requirements of International Accounting Standard 39: Financial Instruments (IAS 39). I assessed the appropriateness of the valuation model with reference to approaches commonly used. I also assessed the judgements and estimates applied by management against my understanding of current market practice and conditions. In addition, I obtained independently the fair values of the financial instrument directly from the bank to compare to the fair values used by management at year end. I performed my own assessment to test the effectiveness of the hedging instrument by comparing the Fair Value movement over the interest accrued for the year and I found that management assessment of ineffectiveness was in line with my expectation.

6 AIRPORTS COMPANY SOUTH AFRICA REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON AIRPORTS COMPANY SOUTH AFRICA CONTINUED Key audit matter Impairment and collectability of trade receivables Trade receivables comprise a significant portion (17%) of the current assets. As indicated in Note D.1, 23% of the trade receivables are past due but not impaired, representing a total balance of R231 million. The 2016/17 receivables provision has increased by 110% (R112 million) relative to the prior year (R53 million). This increase is not proportional to the 7% increase in the trade receivables balance over the same period. Management provides for doubtful debts in relation to balances outstanding for longer than 90 days, these are further adjusted by a specific provision in relation to balances less than 90 days outstanding but whose recoverability, in the view of management, may be doubtful. Accordingly, the estimation of the allowance for trade receivables is a significant judgement area and is therefore considered a key audit matter. How the matter was addressed in the audit I assessed the validity of material long outstanding receivables by considering payments received subsequent to year-end and the outcomes of management follow-ups to identify potentially impaired balances. I further assessed the appropriateness of the determination of the allowance for doubtful debt by management. The assessment of the appropriateness of the allowance for trade receivables comprised a variety of audit procedures including: Challenging the appropriateness and reasonableness of the assumptions applied in management s assessment of the receivables allowance Consideration of the recoverability of significant trade receivables over 90 days Verification of receipts from trade receivables subsequent to year-end Consideration of the completeness and accuracy of the disclosures Valuation of investment property The carrying value of investment properties amounted to R5.2 billion and the fair value adjustment recorded in net profit for the year in respect of investment properties was R505 million. Significant judgement is required in determining the fair value of investment properties and for the purposes of our audit we identified the valuation of investment properties as representing a key audit matter due to the significance of the balance to the financial statements as a whole, combined with the judgement associated with determining the fair value. Investment properties comprise various categories of properties, the most significant being Commercial Property and Undeveloped Land (held for future use) as investment property. The models used to determine the fair values for each of the categories differ due to the different nature of each of these categories (rental history is incorporated in commercialised properties and rental potential/similar properties market values are used for properties that were never commercialised before). Independent valuators are used to determine the fair values for all of the properties held in these categories annually. The inputs with the most significant impact on these valuations are disclosed in note B.1. The income capitalisation approach was used taking into account the improvements made on the leased properties. The potential net rental income is capitalised according to its expected initial yield. In each case, the type of property, its use and efficiency, location and condition will be taken into account. I was satisfied that the trade receivables are fairly valued and adequately provided against where doubt exists. I further considered whether the provisions were misstated and concluded that they were appropriate in all material respects, and disclosures related to trade receivable in the consolidated financial statements are appropriate. I assessed the competence, capabilities and objectivity of the management s independent valuator, and verified their qualifications. In addition, I discussed the scope of their work with management and reviewed their terms of engagement to determine that there were no matters that affected their independence and objectivity or imposed scope limitations upon them. I confirmed that the approaches they used are consistent with applicable financial reporting framework (IFRS) and industry norms. I made use of more senior members in the team to evaluate the management s expert s significant assumptions and valuation methods used. I compared these inputs to the entity-specific information used (contract details with regard to leases entered into, rental amount used, actual condition of the property whether land lease or land and improvements) to confirm the appropriateness of judgements used by the expert. I was satisfied that the carrying amount of the investment properties in the financial statements is reasonable.

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 7 Emphasis of matter 7. I draw attention to the matters below. My opinion is not modified in respect of this matter. Restatement of prior year amounts 8. As disclosed in note G.16 to the financial statements, the corresponding figures for 31 March 2016 and 31 March 2015 have been restated as a result of the errors discovered during the 2016-17 financial year. Irregular expenditure disclosure 9. As disclosed in note G.13 to the financial statements, irregular expenditure disclosed as incurred in the current year has increased significantly compared to the amount disclosed in the prior year. Other matters 10. I draw attention to the matters below. My opinion is not modified in respect of this matter. Unaudited supplementary schedules 11. The supplementary information set out on pages 2 to 4 does not form part of the financial statements and is presented as additional information. I have not audited these schedules and, accordingly, I do not express an opinion thereon. Responsibilities of the board of directors 12. The board of directors, which constitutes the accounting authority, is responsible for the preparation and fair presentation of the consolidated and separate financial statements in accordance with IFRS and the requirements of the PFMA and for such internal control as the accounting authority determines is necessary to enable the preparation of the consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error. 13. In preparing the consolidated and separate financial statements, the accounting authority is responsible for assessing the group s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the accounting authority either intends to liquidate the group or to cease operations, or has no realistic alternative but to do so. Auditor-general s responsibilities for the audit of the consolidated and separate financial statements 14. My objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and separate financial statements. 15. A further description of my responsibilities for the audit of the consolidated and separate financial statements is included in the annexure to the auditor s report. Introduction and scope 16. In accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA) and the general notice issued in terms thereof I have a responsibility to report material findings on the reported performance information against predetermined objectives for selected objectives presented in the annual performance report. I performed procedures to identify findings but not to gather evidence to express assurance. 17. My procedures address the reported performance information, which must be based on the approved performance planning documents of the public entity. I have not evaluated the completeness and appropriateness of the performance indicators included in the planning documents. My procedures also did not extend to any disclosures or assertions relating to planned performance strategies and information in respect of future periods that may be included as part of the reported performance information. Accordingly, my findings do not extend to these matters.

8 AIRPORTS COMPANY SOUTH AFRICA REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON AIRPORTS COMPANY SOUTH AFRICA CONTINUED 18. I evaluated the usefulness and reliability of the reported performance information in accordance with the criteria developed from the performance management and reporting framework, as defined in the general notice, for the following selected objectives priorities presented in the annual performance report of the public entity for the year ended 31 March 2017: Objectives priorities Pages in the annual performance report Objective 1 Create value for our shareholders. 66 Objective 3 Increase stakeholder satisfaction through effective partnership. 66 Objective 4: Improve the passenger experience through demonstrated 66 operational excellence. Objective 5: Contribute to increase traffic through the airports we operate. 68 Objective 13: Provide equitable access to safe airports in all SA regions to allow more 70 people to fly. Objective 14: Improve connectivity to the regions we serve. 70 Objective 15: Reduce our environmental impact. 70 19. I performed procedures to determine whether the reported performance information was properly presented and whether performance was consistent with the approved performance planning documents. I performed further procedures to determine whether the indicators and related targets were measurable and relevant, and assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete. 20. The material findings in respect of the usefulness and reliability of the selected objectives are as follows: Objective 5: Contribute to increase traffic through the airports we operate 21. I was unable to obtain sufficient appropriate audit evidence to validate the existence of systems and processes that enable reliable reporting of actual service delivery against the indicator, as required by the Framework for managing programme performance information. This was due to ACSA not being able to obtain the actual annual number of passengers to be used in the index calculation and also using estimates which cannot be verified. I was unable to validate the existence of systems and processes by alternative means. 22. I did not identify any material findings on the usefulness and reliability of the reported performance information for the following objectives: Objective 1: Create value for our shareholders Objective 3: Increase stakeholder satisfaction through effective partnership Objective 4: Improve the passenger experience through demonstrated operational excellence Objective 13: Provide equitable access to safe airports in all SA regions to allow more people to fly Objective 14: Improve connectivity to the regions we serve Objective 15: Reduce our environmental impact Other matter 23. I draw attention to the matters below. Achievement of planned targets 24. Refer to the annual performance report on pages 66 to 91 for information on the achievement of planned targets for the year and explanations provided for the overachievement of a number of targets. This information should be considered in the context of the opinions expressed on the usefulness and reliability of the reported performance information in paragraphs 2.3.2 2.3.8 of this report. Adjustment of material misstatements 25. I identified material misstatements in the annual performance report submitted for auditing. These material misstatements were on the reported performance information of Improve the passenger experience through demonstrated operational excellence and Provide equitable access to safe airports in all SA regions to allow more people to fly. As management subsequently corrected the misstatements, I did not report any material findings on the usefulness and reliability of the reported performance information.

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 9 REPORT ON AUDIT OF COMPLIANCE WITH LEGISLATION Introduction and scope 26. In accordance with the PAA and the general notice issued in terms thereof I have a responsibility to report material findings on the compliance of the group with specific matters in key legislation. I performed procedures to identify findings but not to gather evidence to express assurance. 27. The material findings in respect of the compliance criteria for the applicable subject matters are as follows: Annual financial statements 28. The financial statements submitted for auditing were not prepared in accordance with the prescribed financial reporting framework as required by section 55(1) (b) of the PFMA and section 29(1)(a) of the Companies Act. Material misstatements of non-current assets and disclosure items were identified by the auditors in the submitted financial statements but were subsequently corrected which resulted in the financial statements receiving an unqualified audit opinion. Procurement and contract 29. We were unable to obtain sufficient appropriate audit evidence that all contracts were awarded as per legislation because information relating to one contract awarded could not be provided for audit purpose. 30. Goods, works or service were not procured through a procurement process which is fair, equitable, transparent and competitive, as required by section 51(1) (a) (iii) of the PFMA. 31. The preferential point system was not applied in some procurement of goods and services above R30 000, as required by section 2(a) of the Preferential Procurement Policy Framework Act. 32. Contracts were awarded to and quotations accepted from bidders based on preferential points that were not allocated and calculated in accordance with the requirements of the Preferential Procurement Policy Framework Act and its regulations. 33. Contracts were awarded to and quotations accepted from bidders that had not scored the highest points in the evaluation process, as required by section 2(1)(f) of Preferential Procurement Policy Framework Act and Preferential procurement regulations. 34. Contracts were awarded to and quotations accepted from bidders based on functionality criteria that were not stipulated and differed from those stipulated in the original invitation for bidding and quotations, in contravention of Preferential Procurement Regulation 4. 35. Construction contracts were awarded to contractors that were not registered with the Construction Industry Development Board (CIDB) and did not qualify for the contract in accordance with section 18(1) of the CIDB Act and CIDB regulations 17 and 25(7A) Expenditure management 36. Effective steps were not taken to prevent irregular expenditure and fruitless and wasteful expenditure, as required by section 51(1) (b) (ii) of the PFMA. OTHER INFORMATION 37. The Airports Company South Africa and its subsidiaries accounting authorities are responsible for the other information. The other information comprises the information included in the annual report which includes the director s report, the audit committee s report and the company secretary s certificate as required by the Companies Act. The other information does not include the consolidated and separate financial statements, the auditor s report thereon and those selected objectives presented in the annual performance report that have been specifically reported on in the auditor s report. 38. My opinion on the financial statements and findings on the reported performance information and compliance with legislation do not cover the other information and I do not express an audit opinion or any form of assurance conclusion thereon. 39. In connection with my audit, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate financial statements and the selected objectives presented in the annual performance report, or my knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work I have performed on the other information obtained prior to the date of this auditor s report, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard.

10 AIRPORTS COMPANY SOUTH AFRICA REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON AIRPORTS COMPANY SOUTH AFRICA CONTINUED INTERNAL CONTROL DEFICIENCIES 40. I considered internal control relevant to my audit of the consolidated and separate financial statements, reported performance information and compliance with applicable legislation; however, my objective was not to express any form of assurance thereon. Leadership Oversight responsibility 41. There has been slow response in implementing the commitments made in the prior year to address the internal control deficiencies in the areas of financial and performance reporting and compliance. Action plans to address internal control deficiencies 42. Effective action plan was not developed and implemented to ensure that the repeat findings and related internal control deficiencies are addressed. Financial and performance management Regular, accurate and complete financial and performance reports 43. The financial statements contained misstatements which resulted in material adjustments being made pertaining to property, plant and equipment, Investment property, trade and other payables, trade and other receivables, Revenue, Expenditure, capital commitments, prior period error adjustments, related party disclosure, fruitless and wasteful expenditure and irregular expenditure disclosure.this was mainly due to financial statements submitted for audit that were not accurate and complete as a result deficiencies in the review process. Pretoria 31 August 2017

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 11 ANNEXURE AUDITOR GENERAL S RESPONSIBILITY FOR THE AUDIT 1. As part of an audit in accordance with the ISAs, I exercise professional judgement and maintain professional scepticism throughout my audit of the consolidated and separate financial statements, and the procedures performed on reported performance information for selected objectives and on the entity s compliance with respect to the selected subject matters. FINANCIAL STATEMENTS 2. In addition to my responsibility for the audit of the consolidated and separate financial statements as described in the auditor s report, I also: identify and assess the risks of material misstatement of the consolidated and separate financial statements whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. obtain an understanding of internal control relevant to the audit 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. evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the board of directors, which constitutes the accounting authority. conclude on the appropriateness of the board of directors, which constitutes the accounting authority s use of the going concern basis of accounting in the preparation of the financial statements. I also conclude, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Airports Company South Africa and its subsidiaries ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor s report to the related disclosures in the financial statements about the material uncertainty or, if such disclosures are inadequate, to modify the opinion on the financial statements. My conclusions are based on the information available to me at the date of the auditor s report. However, future events or conditions may cause entities to cease to continue as a going concern. evaluates the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. I am responsible for the direction, supervision and performance of the group audit. COMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE 3. I communicate with the accounting authority regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit. 4. I also confirm to the accounting authority that I have complied with relevant ethical requirements regarding independence, and communicate all relationships and other matters that may reasonably be thought to have a bearing on my independence and here applicable, related safeguards.

12 AIRPORTS COMPANY SOUTH AFRICA DIRECTORS REPORT GENERAL INFORMATION The Directors have pleasure in submitting their report on the consolidated annual financial statements of Airports Company South Africa SOC Limited for the year ended 31 March 2017, published on 15 September 2017. The Company was established in terms of the Airports Company Act No. 44 of 1993 as amended. NATURE OF BUSINESS The principal activities of the Company are the acquisition, establishment, development, provision, maintenance, management, control and operation of airports or part of any airport or any facilities or services that are normally performed at an airport. There have been no material changes to the nature of the Group s business from prior years. REVIEW OF OPERATIONS Revenue for the Group amounted to R8.6 billion (March 2016: R8.3 billion), including non-aeronautical revenue of R3.2 billion (March 2016: R3.1 billion). Profit before income tax for the Group amounted to R2.5 billion (March 2016: R2.6 billion). The profit for the year for the Group was R2.0 billion (March 2016: R1.8 billion) after taxation expense of R495 million (March 2016: R789 million). DIVIDENDS The Board of Directors has approved but not yet paid an ordinary dividend of R358 million for the 2017 financial period (March 2016: ordinary dividend of R343 million). CAPITAL EXPENDITURE During the current year, R893 million (March 2016: R1.3 billion) was spent on capital expenditure relating to improvements, expansions and replacements by the Group (Refer to notes B.1, B.2 and G.1 for more details). SHARE CAPITAL There were no changes to the authorised and issued share capital of the Company and the Group during the financial period. GOING CONCERN The consolidated annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES There were no acquisitions or disposals during the year ended 31 March 2017. Airports Company South Africa SOC Limited is the ultimate parent of the Group. The Group has a 100% interest in Airports Company South Africa Global Limited, a management Company incorporated in Mauritius. Airports Company South Africa Global Limited is registered in Mauritius with a financial year end of 31 March. The investment has been accounted for as a subsidiary. Airports Company South Africa Global Limited holds a 10% interest in the Mumbai International Airport Private Limited (MIAL). The investment has been accounted for as an associate. Airports Company South Africa SOC Limited holds a 100% interest in JIA Piazza Park Proprietary Limited with a financial year end of 31 March. The investment has been accounted for as a subsidiary. Airports Company South Africa SOC Limited holds a 100% interest in Precinct 2A Proprietary Limited with a financial year end of 31 March. The investment has been accounted for as a subsidiary. The Group has a 50% interest in Airport Logistics Property Holdings Proprietary Limited with a financial year end of 30 June, which is a joint venture between the Company and The Bidvest Group Limited. The investment has been accounted for as a joint venture using the equity method of accounting. Airports Company South Africa SOC Limited has a 40% interest in the La Mercy JV Property Investments Proprietary Limited with a financial year end of 31 March, a property holding, development and letting company. The investment has been accounted for as an associate using the equity method of accounting.

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 13 Airports Company South Africa SOC Limited holds a 20% interest in Aeroporto de Guarulhos Participações S.A. Aeroporto de Guarulhos Participações S.A. is registered in Brazil with a financial year end of 31 December. The investment has been accounted for as an associate using the equity method of accounting. Airports Company South Africa SOC Limited holds 100% of Sakhisizwe Community Programme NPC which is a special purpose entity (SPE) created and controlled by Airports Company South Africa from a government grant received from the Department of Transport. Details of the assets, liabilities, revenues and expenses of the subsidiaries, joint ventures and associates that are included in the consolidated statement of comprehensive income and the consolidated statement of financial position are set out in notes E.1, E.2 and E.3 of the consolidated annual financial statements. DIRECTORS AND SECRETARY Details of the Directors and the Company Secretary are given on the inside front cover of this report. INTERESTS OF DIRECTORS AND OFFICERS No contracts were entered into in which directors and officers of the Company had an interest and which affect the business of the Group. The Directors had no interest in any third party or company responsible for managing any of the business activities of the Group. The emoluments of directors are determined by the board remuneration committee (Directors emoluments can be found in note G.11). INFORMATION REQUIRED IN TERMS OF THE PUBLIC FINANCE MANAGEMENT ACT (PFMA) In terms of the materiality framework agreed with the shareholder and as per section 55(2)(b)(i) and (ii) of the PFMA, any losses due to criminal conduct or irregular or fruitless and wasteful expenditure that individually (or collectively where items are closely related) exceed R60 million for the Group, must be disclosed separately, including any criminal or disciplinary steps taken as a consequence of such losses or irregular or fruitless and wasteful expenditure. Fruitless and wasteful expenditure amounted to R37 million (March 2016: R6 million). The fruitless and wasteful expenditure relates mainly to non-compliance with National Treasury cost containment measures. Cumulative irregular expenditure is R603 million (March 2016: R446 million). The irregular expenditure incidents relate to contravention of the supply chain management policy and the Preferential Procurement Policy Framework Act No. 5 of 2000 (PPPFA) and regulations. Management has controls in place to monitor and report on this type of expenditure on a regular basis. This information is considered and presented to the Executive Committee (Exco) and the Audit and Risk Committee for review on a quarterly basis.

14 AIRPORTS COMPANY SOUTH AFRICA DETAILED INDEX TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS Page number Statement of Financial Position 16 Statement of Comprehensive Income 17 Statement of Changes in Equity 18 Statement of Cash Flows 20 Notes to the Consolidated Annual Financial Statements 21 1. Basis of preparation and accounting policies 21 2. New Standards and Interpretations 21 3. Segmental information 25 A. Managing EBITDA 29 A.1 Revenue 29 A.2 Other income 30 A.3 Employee costs 31 A.4 Other operating expenses 32 B. Assets 33 B.1 Investment property 33 B.2 Property and equipment 34 C. Debt and cash management 42 C.1 Interest-bearing borrowings 42 C.2 Finance income and expenses 44 C.3 Derivative financial instruments and hedging information 44 D. Managing working capital 46 D.1 Trade and other receivables 46 D.2 Cash and cash equivalents 47 D.3 Trade and other payables 47 Page number E. Investments 50 E.1 Investments in subsidiaries 50 E.2 Investments in joint ventures 51 E.3 Investments in associates 52 E.4 Commitments 54 F. Financial instruments and financial instruments risk management 56 F.1 Financial instruments 56 F.2 Financial risk management 60 G. Other 63 G.1 Intangible assets 63 G.2 Deferred tax 64 G.3 Retirement benefit obligation 65 G.4 Investments 68 G.5 Share capital 68 G.6 Other reserves 68 G.7 Deferred income 69 G.8 Provisions and contingencies 70 G.9 Taxation 71 G.10 Earnings per share and Dividends per share 72 G.11 Related parties 72 G.12 Events after the reporting period 74 G.13 Irregular expenditure 74 G.14 Fruitless and wasteful expenditure 75 G.15 Contingencies 76 G.16 Prior period errors 76 D.4 Cash generated from operations 48 D.5 Tax paid 49 D.6 Other non-current assets 49

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 15

16 AIRPORTS COMPANY SOUTH AFRICA STATEMENT OF FINANCIAL POSITION As at 31 March 2017 Figures in Rand thousand Note Mar 2017 GROUP Restated Mar 2016 Restated Mar 2015 Mar 2017 COMPANY Restated Mar 2016 Restated Mar 2015 ASSETS Non-current assets Property and equipment B.2 18 724 723 19 256 160 19 461 841 18 677 362 19 208 421 19 424 654 Investment property B.1 5 527 075 4 963 907 4 418 729 5 184 086 4 601 439 4 096 580 Intangible assets G.1 134 367 174 326 213 146 134 221 174 095 213 146 Investments in subsidiaries E.1 821 358 794 028 785 586 Investments in joint ventures E.2 175 221 147 734 127 942 Investments in associates E.3 998 527 1 761 660 1 348 026 814 820 658 632 296 056 Other non-current assets D.6 257 815 330 613 95 021 257 815 330 613 95 021 25 817 728 26 634 400 25 664 705 25 889 662 25 767 228 24 911 043 Current assets Inventories 2 237 1 459 1 391 788 352 Derivative financial instruments C.3 701 701 Current tax receivable 4 263 60 824 4 980 56 263 Trade and other receivables D.1 1 099 469 1 044 115 1 197 433 1 072 583 1 028 488 1 186 234 Investments G.4 1 575 151 760 100 515 899 1 575 151 760 100 515 899 Cash and cash equivalents D.2 1 670 865 1 369 568 1 226 566 1 647 344 1 356 400 1 198 914 4 351 985 3 236 066 2 946 970 4 295 866 3 201 603 2 901 748 Total assets 30 169 713 29 870 466 28 611 675 30 185 528 28 968 831 27 812 791 EQUITY AND LIABILITIES EQUITY Share capital ordinary G.5 500 000 500 000 500 000 500 000 500 000 500 000 Share premium G.5 250 000 250 000 250 000 250 000 250 000 250 000 Treasury share reserve (44 024) (44 024) (44 024) Other reserves G.6 868 298 703 989 67 887 201 141 191 958 163 709 Retained earnings 17 458 975 15 753 511 14 179 689 18 102 965 15 541 952 13 439 300 19 033 249 17 163 476 14 953 552 19 054 106 16 483 910 14 353 009 LIABILITIES Non-current liabilities Derivative financial instruments C.3 3 449 3 766 50 719 3 449 3 766 50 719 Retirement benefit obligation G.3 28 475 27 647 30 831 28 475 27 647 30 831 Deferred income G.7 62 109 64 467 62 859 62 109 64 467 62 859 Deferred tax liability G.2 486 329 1 346 013 1 365 206 505 113 1 147 244 1 187 735 Interest-bearing borrowings C.1 8 268 457 7 914 261 10 036 846 8 268 457 7 914 261 10 036 846 8 848 819 9 356 154 11 546 461 8 867 603 9 157 385 11 368 990 Current liabilities Derivative financial instruments C.3 2 224 2 604 24 304 2 224 2 604 24 304 Current tax payable 254 562 61 999 254 562 61 999 Trade and other payables D.3 779 072 1 242 578 705 258 761 330 1 220 778 685 888 Deferred income G.7 2 799 3 613 3 339 3 058 3 613 3 339 Provisions G.8 185 950 198 786 177 058 181 107 198 786 177 058 Interest-bearing borrowings C.1 1 063 038 1 903 255 1 139 704 1 061 538 1 901 755 1 138 204 2 287 645 3 350 836 2 111 662 2 263 819 3 327 536 2 090 792 Total liabilities 11 136 464 12 706 990 13 658 123 11 131 422 12 484 921 13 459 782 Total equity and liabilities 30 169 713 29 870 466 28 611 675 30 185 528 28 968 831 27 812 791

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 17 STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 March 2017 GROUP COMPANY Figures in Rand thousand Note Mar 2017 Restated Mar 2016 Mar 2017 Restated Mar 2016 Revenue A.1 8 582 692 8 305 765 8 417 473 8 146 952 Other income A.2 70 910 66 769 70 866 66 728 Employee costs A.3 (1 345 636) (1 185 791) (1 316 855) (1 156 328) Operating expenses A.4 (2 204 721) (1 977 437) (2 119 335) (1 920 655) Earnings before interest, tax, depreciation and amortisation 5 103 245 5 209 306 5 052 149 5 136 697 Fair value gains on investment properties B.1 483 286 326 754 502 765 286 434 Depreciation, amortisation and impairments B.2 & G.1 (1 270 333) (1 307 885) (1 264 487) (1 303 146) Loss from equity accounted investments E.2 & E.3 (1 017 103) (690 435) Finance income C.2 162 956 129 281 219 579 185 807 Finance costs C.2 (1 004 180) (1 093 358) (1 004 063) (1 093 210) Gains on remeasurement and disposal of financial instruments C.2 90 540 59 623 90 540 59 623 (Gains)/losses on property and equipment (9 603) 546 (9 603) 546 Profit before taxation 2 538 808 2 633 832 3 586 880 3 272 751 Taxation G.9 (494 703) (789 128) (683 139) (895 948) Profit for the year 2 044 105 1 844 704 2 903 741 2 376 803 Other comprehensive income: Items that will not be reclassified to profit or loss: Actuarial gains (150) 3 930 (150) 3 930 Income tax relating to items that will not be reclassified 42 (340) 42 (340) Gains on investment property valuation 2 560 2 560 Total items that will not be reclassified to profit or loss 2 452 3 590 2 452 3 590 Items that may be reclassified to profit or loss: Exchange differences on translating foreign operations 198 561 771 491 Deferred tax relating to foreign currency translation differences (43 435) (163 638) Effects of cash flow hedges 9 457 33 952 9 457 33 952 Deferred tax relating to cash flow hedges (2 726) (9 293) (2 726) (9 293) Total items that may be reclassified to profit or loss 161 857 632 512 6 731 24 659 Other comprehensive income for the year net of taxation 164 309 636 102 9 183 28 249 Total comprehensive income for the year 2 208 414 2 480 806 2 912 924 2 405 052 Earnings per share Per share information Basic earnings per share (cents) G.10 413.75 383.20 580.75 498.11 Diluted earnings per share (cents) G.10 413.75 383.20 580.75 498.11

18 AIRPORTS COMPANY SOUTH AFRICA STATEMENT OF CHANGES IN EQUITY For the year ended 31 March 2017 GROUP Figures in Rand thousand Share capital Share premium Treasure share reserve Other reserves Retained income Total equity Balance at 1 April 2015 previously stated 500 000 250 000 (44 024) 67 887 14 036 403 14 810 266 Adjustments prior period error 143 286 143 286 Balance at 1 April 2015 restated 500 000 250 000 (44 024) 67 887 14 179 689 14 953 552 Profit for the year 1 844 704 1 844 704 Other comprehensive income: Actuarial gains on defined benefit post-retirement medical aid liability, net of tax 3 590 3 590 Foreign currency translation differences, net of tax 607 853 607 853 Cash flow hedge reserve on derivative financial instruments, net of tax 24 659 24 659 Dividends declared (270 882) (270 882) Total other comprehensive income 636 102 (270 882) 365 220 Balance at 1 April 2016 previously stated 500 000 250 000 (44 024) 703 989 15 723 964 17 133 929 Adjustments prior period error 29 547 29 547 Balance at 1 April 2016 restated 500 000 250 000 (44 024) 703 989 15 753 511 17 163 476 Profit for the year 2 044 105 2 044 105 Other comprehensive income: Actuarial gains on defined benefit post-retirement medical aid liability, net of tax (108) (108) Gains on investment property valuation 2 560 2 560 Cash flow hedge reserve on derivative financial instruments, net of tax 6 731 6 731 Foreign currency translation differences, net of tax 155 126 155 126 Dividends declared (338 641) (338 641) Total other comprehensive income 164 309 (338 641) (174 332) Balance at 31 March 2017 500 000 250 000 (44 024) 868 298 17 458 975 19 033 249 Note G.5 G.5 G.6

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 19 COMPANY Figures in Rand thousand Share capital Share premium Other reserves Retained income Total equity Balance at 1 April 2015 previously stated 500 000 250 000 163 709 13 296 017 14 209 726 Adjustments prior period error 143 283 143 283 Balance at 1 April 2015 restated 500 000 250 000 163 709 13 439 300 14 353 009 Profit for the year 2 376 803 2 376 803 Other comprehensive income: Actuarial losses on defined benefit post-retirement medical aid liability, net of tax 3 590 3 590 Cash flow hedge reserve on derivative financial instruments, net of tax 24 659 24 659 Dividends declared (274 151) (274 151) Total other comprehensive income 28 249 (274 151) (245 902) Balance at 1 April 2016 previously stated 500 000 250 000 191 958 15 512 409 16 454 367 Prior period errors 29 543 29 543 Balance at 1 April 2016 restated 500 000 250 000 191 958 15 541 942 16 483 910 Profit for the year 2 903 741 2 903 741 Other comprehensive income: Actuarial gain on defined benefit post-retirement medical aid liability, net of tax (108) (108) Gains on investment property valuation 2 560 2 560 Cash flow hedge reserve on derivative financial instruments, net of tax 6 731 6 731 Dividends declared (342 728) (342 728) Total other comprehensive income 9 183 (342 728) (333 545) Balance at 31 March 2017 500 000 250 000 201 141 18 102 965 19 054 106 Note G.5 G.5 G.6

20 AIRPORTS COMPANY SOUTH AFRICA STATEMENT OF CASH FLOWS For the year ended 31 March 2017 GROUP COMPANY Figures in Rand thousand Note Mar 2017 Mar 2016 Mar 2017 Mar 2016 Cash flows from operating activities Cash receipts from customers 8 755 705 8 153 134 8 508 416 8 304 698 Cash paid to suppliers and employees (3 685 483) (2 575 962) (3 495 338) (2 776 987) Cash generated from operations D.4 5 070 222 5 577 172 5 013 078 5 527 711 Interest income 132 961 129 281 189 584 185 807 Tax paid D.5 (1 025 734) (1 065 471) (1 014 368) (1 063 358) Net cash inflow from operating activities 4 177 449 4 640 982 4 188 294 4 650 160 Cash flows from investing activities Purchase of property and equipment (821 415) (1 160 797) (815 303) (1 144 757) Sale of property and equipment 983 3 709 983 3 762 Purchase of investment property B.1 (55 107) (55 107) Purchase of other intangible assets G.1 (1 337) (2 566) (1 317) (2 262) Loans to Group companies (advanced)/repaid 2 647 (27 330) (8 442) Increase in short-term investments (815 050) (244 201) (815 050) (244 201) Increase in investments in associates E.3 (156 187) (362 576) (156 187) (362 576) Net cash outflow from investing activities (1 848 113) (1 763 784) (1 869 311) (1 758 476) Cash flows from financing activities Financial instruments held for trading (2 592) (44 611) (2 592) (44 613) Interest-bearing borrowings repaid (635 915) (1 458 067) (635 915) (1 458 067) Dividends paid (338 641) (270 882) (338 641) (270 882) Interest paid (1 050 891) (960 636) (1 050 891) (960 636) Net cash outflow from financing activities (2 028 039) (2 734 196) (2 028 039) (2 734 198) Increase in cash and cash equivalents 301 297 143 002 290 944 157 486 Cash and cash equivalents at the beginning of the year 1 369 568 1 226 566 1 356 400 1 198 914 Cash and cash equivalents at the end of the year D.2 1 670 865 1 369 568 1 647 344 1 356 400

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 21 NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS For the year ended 31 March 2017 1. BASIS OF PREPARATION AND ACCOUNTING POLICIES 1.1 Accounting policies The most significant accounting policies have been moved next to the relevant notes in the consolidated annual financial statements. The remainder of the accounting policies not relating to a specific note are dealt with here. All accounting policies are consistent with the previous period. 1.2 Statement of compliance and basis of preparation The consolidated and separate annual financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and its interpretations issued by the International Accounting Standards Board (IASB), as well as the requirements of the South African Companies Act No. 71 of 2008, as amended and the Public Finance Management Act No. 1 of 1999, as amended. The financial statements have been prepared on the historical cost basis, except for investment property and certain financial instruments that are carried at fair value. 1.3 Basis of consolidation The Group controls and consolidates an entity where the Group has power over the entity s relevant activities; is exposed to variable returns from its involvement with the investee; and has the ability to affect the returns through its power over the entity, including structured entities. Determining whether the Group controls another entity requires judgement by identifying an entity s relevant activities, being those activities that significantly affect the investee s returns, and whether the Group controls those relevant activities by considering the rights attached to both current and potential voting rights, de facto control and other contractual rights, including whether such rights are substantive. 1.4 Estimates and assumptions In preparing the financial statements, management is required to make estimates and assumptions that affect the amounts represented in the financial statements and related disclosures. Use of available information and the application of judgement are inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the financial statements. The significant judgements have been disclosed in the applicable notes. These include: Accounting for investment in associates note E.3 Fair value of financial instruments note F.1 Post-retirement medical aid obligation note G.3 Fair value of investment property note B.1 Useful lives and residual values of assets note B.2 Contingencies note G.15 Property and equipment note B.2 Current and Deferred Tax notes G.9 and G.2 1.5 Changes in accounting policy and disclosures The accounting policies are consistent with those adopted in the prior period and the accounting policies set out below have been applied consistently to all periods presented in these financial statements, and have been applied consistently by Group entities. 1.6 Functional and presentation currency These financial statements are presented in South African Rand, which is the Company s functional currency. All financial information presented in Rand has been rounded to the nearest thousand unless otherwise indicated. 1.7 Comparative figures Comparative figures are restated in the event of a change in accounting policy, prior period error or reclassification. 2. NEW STANDARDS AND INTERPRETATIONS 2.1 Standards and interpretations effective and adopted in the current year There were a number of new standards and interpretations effective and adopted in the current period; none of these are considered to have a material impact on the Group.

22 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 2. NEW STANDARDS AND INTERPRETATIONS (CONTINUED) 2.2 Standards and interpretations not yet effective There are a number of new standards and amendments which will only be effective after the 2017 financial year end. None of these are expected to have a significant impact on the Group, except for IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial instruments. Management has not opted to early adopt any of the standards and interpretations. Topic Key requirements Effective date IFRS 9 'Financial Instruments' IFRS 15 Revenue from Contracts with Customers IFRS 7 Financial Instruments: Disclosures IFRS 16 Leases The complete version of IFRS 9 replaces most of the guidance in IAS 39. IFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortised cost, fair value through other comprehensive income (OCI) and fair value through profit or loss. The basis of classification depends on the entity s business model and the contractual cash flow characteristics of the financial asset. Investments in equity instruments are required to be measured at fair value through profit or loss with the irrevocable option at inception to present changes in fair value in OCI. There is now a new expected credit losses model that replaces the incurred loss impairment model used in IAS 39. For financial liabilities, there were no changes to classification and measurement except for the recognition of changes in own credit risk in other comprehensive income, for liabilities designated at fair value, through profit or loss. Management is currently in the process of assessing the impact of this new standard. This is the converged standards on revenue recognition. It replaces IAS 11 Construction Contracts, IAS 18 Revenue and related interpretations. Revenue is recognised when a customer obtains control of a good or service. A customer obtains control when it has the ability to direct the use of land and obtain the benefits from the good or service. The core principle of IFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognises revenue in accordance with that core principle by applying the following steps: Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation. IFRS 15 also includes a cohesive set of disclosure requirements that will result in an entity providing users of financial statements with comprehensive information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity s contracts with customers. Management is currently in the process of assessing the impact of this new standard. Additional disclosures (and consequential amendments) resulting from IFRS 9. Management is currently in the process of assessing the impact of this new standard. IFRS 16 specifies how an entity will recognise, measure, present and disclose leases. The standard provides a single lessee accounting model, requiring lessees to recognise assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance, with IFRS 16 s approach to lessor accounting substantially unchanged from its predecessor, IAS 17. Management is currently in the process of assessing the impact of this new standard. Annual periods beginning on or after 1 January 2018 Annual periods beginning on or after 1 January 2018 Concurrent with adoption of IFRS 9 Annual periods beginning on or after 1 January 2019

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 23 2. NEW STANDARDS AND INTERPRETATIONS (CONTINUED) 2.2 Standards and interpretations not yet effective (continued) Topic Key requirements Effective date IAS 7 Statement of Cash Flows IAS 12 Income Taxes Amendments to clarify that entities shall provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities. Management is currently in the process of assessing the impact of this new standard. Amendments regarding the recognition of deferred tax assets for unrealised losses. Unrealised losses on debt instruments measured at fair value and measured at cost for tax purposes give rise to a deductible temporary difference regardless of whether the debt instrument s holder expects to recover the carrying amount of the debt instrument by sale or by use. The carrying amount of an asset does not limit the estimation of probable future taxable profits. Estimates for future taxable profits exclude tax deductions resulting from the reversal of deductible temporary differences. An entity assesses a deferred tax asset in combination with other deferred tax assets. Where tax law restricts the utilisation of tax losses, an entity would assess a deferred tax asset in combination with other deferred tax assets of the same type. Annual periods beginning on or after 1 January 2017 Annual periods beginning on or after 1 January2017 IFRS 10 Consolidated Financial Statements IAS 28 Investment in Associates IAS 40 Investment Property Management is currently in the process of assessing the impact of this new standard. Amendments to clarify the treatment of the sale or contribution of assets from an investor to its associate or joint venture, as follows: Require full recognition in the investor s financial statements of gains and losses arising on the sale or contribution of assets that constitute a business (as defined in IFRS 3 Business Combinations ) Require the partial recognition of gains and losses where the assets do not constitute a business, i.e. a gain or loss is recognised only to the extent of the unrelated investors interests in that associate or joint venture. Amendments to clarify the treatment of the sale or contribution of assets from an investor to its associate or joint venture, as follows: Require full recognition in the investor s financial statements of gains and losses arising on the sale or contribution of assets that constitute a business (as defined in IFRS 3 Business Combinations ) Require the partial recognition of gains and losses where the assets do not constitute a business, i.e. a gain or loss is recognised only to the extent of the unrelated investors interests in that associate or joint venture. The amendment in paragraph 57 was made to state that an entity shall transfer a property to, or from, investment property when, and only when, there is evidence of a change in use. A change of use occurs if property meets, or ceases to meet, the definition of investment property. A change in management s intentions for the use of a property by itself does not constitute evidence of a change in use. Management is currently in the process of assessing the impact of this new standard. Effective date deferred indefinitely Effective date deferred indefinitely Annual periods after 1 January 2018

24 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 2. NEW STANDARDS AND INTERPRETATIONS (CONTINUED) 2.2 Standards and interpretations not yet effective (continued) Annual Improvements to IFRS Standards 2014 2016 Cycle Topic Key requirements Effective date IFRS 12 Disclosure of Interests in Other Entities IAS 28 Investment in Associates Clarifies the scope of the standard by specifying that the disclosure requirements in the standard, except for those in paragraphs B10 B16, apply to an entity s interests listed in paragraph 5 that are classified as held for sale, as held for distribution or as discontinued operations in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. Clarifies that the election to measure at fair value through profit or loss an investment in an associate or a joint venture that is held by an entity that is a venture capital organisation, or other qualifying entity, is available for each investment in an associate or joint venture on an investment-by-investment basis, upon initial recognition. Annual periods beginning on or after 1 January 2017 Annual periods beginning on or after 1 January 2018 2.3 Foreign currency 2.3.1 Foreign operations The assets and liabilities of foreign operations, including fair value adjustments arising on acquisition, are translated to South African Rand at closing rate. The income and expenses of foreign operations are translated at the dates of the transactions using an average rate. Differences arising upon the translation of the foreign operation into South African Rand are recognised directly in other comprehensive income and are recognised in the statement of changes in equity as part of the foreign currency translation reserve account. 2.3.2 Foreign currency transactions and balances Transactions in foreign currencies are translated to the respective functional currencies of the Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities are retranslated at year end at the closing rate (exchange rate at year end). Non-monetary assets and liabilities are measured at historical cost are not retranslated at year end, while non-monetary assets and liabilities measured at fair value are retranslated at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on translation are recognised in profit and loss. Refer to note F.2 (price risk) for the significant exchange rates that applied throughout the period. 2.4 Impairment of non-financial assets The carrying amounts of property and equipment, and intangible assets are reviewed at each reporting date to determine whether there is an indication of impairment. If any such indication exists, then the asset s recoverable amount is estimated. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Assets are grouped together into the smallest groups of assets that generate cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the cash-generating unit ). An impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount.

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 25 3. SEGMENTAL INFORMATION The Group s reported segments are based on reports reviewed by the Executive Committee (Exco) to make strategic decisions. Five reportable segments were identified, namely: O.R. Tambo International; Cape Town International; King Shaka International; Regional Airports; and Corporate and Other 1. The Regional Airports segment comprises the smaller airports in South Africa which the Group manages, namely: Bram Fischer International Airport; East London Airport; Port Elizabeth International Airport; George Airport; Kimberley Airport; and Upington International Airport. 1 Other comprises the results of the subsidiaries, joint ventures and associates outlined in the directors report on pages 12 and 13 of these consolidated annual financial statements. Information regarding the operations of each reportable segment is included below. Exco assesses the performance of the operating segments as a measure of earnings before interest, taxation, depreciation and amortisation expense (EBITDA). The Group calculates EBITDA as follows: Profit/(loss) before tax; Add Interest expense; Less Interest income; Add Depreciation, amortisation and any impairment; Subtract/Add Loss/gain from equity accounted investments. Items not allocated to segments Current and deferred tax liabilities, derivative financial instruments and interest-bearing liabilities have not been allocated to operating segments as these are managed centrally. Similarly, interest income and expenditure are not allocated to operating segments as they are driven largely by the Corporate division, which manages the cash requirements of the Company. Corporate overhead expenses are not allocated to the reportable segments.

26 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 3. SEGMENTAL INFORMATION (CONTINUED) O.R. Tambo International Cape Town International King Shaka International Figures in Rand thousand Mar 2017 Mar 2016 Mar 2017 Mar 2016 Mar 2017 Mar 2016 Revenue Aeronautical 3 387 083 3 339 384 1 183 088 1 079 489 497 366 456 724 Non-aeronautical 1 871 340 1 879 118 660 797 611 035 284 061 262 667 Total revenue 5 258 423 5 218 502 1 843 885 1 690 524 781 427 719 391 EBITDA 4 070 149 4 151 064 1 271 643 1 234 617 446 209 382 707 Fair value gains/(loss) on investment properties 276 247 143 297 124 219 146 212 23 032 39 333 Depreciation, amortisation and impairments investments (465 882) (475 559) (249 183) (238 059) (273 636) (344 867) Loss from equity accounted investments Segment profit/(loss) before tax 3 890 591 3 822 601 1 152 302 1 157 364 226 266 79 030 Reportable total assets* 39 321 634 33 212 184 12 307 613 10 297 429 7 872 088 7 101 325 Reportable total liabilities 226 796 353 656 196 182 398 942 91 198 102 688 * The negative assets are mainly as a result of the sweeping bank account that has bank transfers from the airports to the corporate account, which is then used for operations.

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 27 Regional Airports Corporate and Other Elimination Total Mar 2017 Mar 2016 Mar 2017 Mar 2016 Mar 2017 Mar 2016 Mar 2017 Mar 2016 322 315 319 039 5 389 852 5 194 636 176 373 161 026 261 506 253 105 (61 237) (55 822) 3 192 840 3 111 129 498 688 480 065 261 506 253 105 (61 237) (55 822) 8 582 692 8 305 765 222 177 199 176 (905 604) (752 446) (1 329) (5 812) 5 103 245 5 209 306 79 266 (42 408) 19 900 66 310 (39 378) (25 990) 483 286 326 754 (195 148) (178 466) (86 484) (70 659) (275) (1 270 333) (1 307 885) (1 017 103) (690 435) (1 017 103) (690 435) 107 505 (10 680) (2 766 273) (2 382 408) (71 583) (32 077) 2 538 808 2 633 830 4 595 877 3 933 718 (32 525 902) (24 187 228) (1 405 857) (547 786) 30 165 453 29 809 642 49 899 95 229 1 223 666 594 605 (729 336) (8 029) 1 058 405 1 537 091

28 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 3. SEGMENTAL INFORMATION (CONTINUED) Below is the reconciliation of the segmental information to that presented in the statement of financial position and statement of comprehensive income. Figures in Rand thousand Mar 2017 Mar 2016 Reportable segment revenue are reconciled to total revenue as follows: Segment revenue for reportable segments 8 382 423 8 108 482 Corporate and Other segment revenue 200 269 197 283 Total revenue per statement of comprehensive income 8 582 692 8 305 765 Reportable segment profit before tax are reconciled to total profit before tax as follows: Segment profit before tax for reportable segments 5 376 667 5 048 315 Corporate and Other segment profit before tax (2 837 859) (2 414 483) Total profit before tax per statement of comprehensive income 2 538 808 2 633 832 Reportable segment assets are reconciled to total assets as follows: Segment assets for reportable segments 64 097 212 54 544 656 Corporate and Other segment assets (33 931 759) (24 735 014) Reportable assets 30 165 453 29 809 642 Unallocated 1 4 260 60 824 Total assets per statement of financial position 30 169 713 29 870 466 Reportable segment liabilities are reconciled to total liabilities as follows: Segment liabilities for reportable segments 564 074 950 515 Corporate and Other segment liabilities 494 332 586 576 Reportable liabilities 1 058 406 1 537 091 Unallocated 1 10 078 059 11 169 899 Total liabilities per statement of financial position 11 136 465 12 706 990 1 Comprises current and deferred tax liabilities/assets, derivative financial instruments and interest-bearing liabilities, as these are carried at the Corporate and Other segments. Figures in Rand thousand Reportable segments Corporate and Other 2017 Other material items: Fair value gains on investment properties 502 765 (19 479) 483 286 Depreciation, amortisation and impairments (1 183 849) (86 484) (1 270 333) Loss from equity accounted investments (1 017 103) (1 017 103) 2016 Other material items: Fair value gains on investment properties 286 434 40 320 326 754 Depreciation, amortisation and impairments (1 236 952) (70 933) (1 307 885) Loss from equity accounted investments (690 435) (690 435) Major customer Included in revenue are amounts of R1.7 billion and R920 million from the top two customers (2016: R1.71 billion). There are no other customers who represent more than 10% of revenue for both 2017 and 2016. Total

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 29 A. MANAGING EBITDA A.1 Revenue Accounting policy The Group and Company earn revenue from aeronautical and non-aeronautical goods and services: Aeronautical revenue Aeronautical revenue is recognised when the services are provided to the customer. Type of revenue Landing fees Passenger service charges Aircraft parking Determination Using regulated tariffs for aircraft landings based on the maximum take-off weight of landing aircrafts for each landing. Using regulated tariffs for each departing passenger at an airport of departure. On regulated tariffs for each aircraft parked for over four hours, based on the maximum take-off weight of aircraft parking per 24-hour period. Non-aeronautical revenue Non-aeronautical revenue is recognised when services are provided to the customer. Type of revenue Determination Examples Advertising* Retail* Based on the higher of a minimum guaranteed rental and/or a percentage of turnover. Based on the higher of a minimum guaranteed rental and/or a percentage of turnover. Rental of advertising space to concessionaires. Rental of retail space to concessionaires. Parking* Based on time-based tariffs. Providing short- and long-term parking facilities. Car hire* Property rental* Hotel operations Recoveries Finance income Rental is based on the higher of a minimum guaranteed rental and/or a percentage of turnover. Based on medium- and long-term rental agreements with tenants. Accommodation income is recognised at the date the guests are invoiced. Recoveries include water, electricity and other utility charges recovered from tenants. Finance income comprises interest income on funds invested and overdue debtors. Finance income is recognised as it accrues in profit and loss, using the effective interest method. Concession fees and the rental of space and kiosks to car hire companies. Rentals of offices, air lounges, aviation fuel depots, warehousing, logistics facilities, hotels and filling stations. Invoice value of accommodation and sale of food and beverages. Water and electricity invoices. Charges on overdue debtor accounts, and interest earned on bank balance. Revenue is recognised when it is probable that future economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable for services provided in the normal course of business, net of trade discounts and volume rebates, and value added tax. Revenue is recognised to match the period in which the services are provided. Operating leases Group and Company as a lessor All leases that do not meet the criteria of a financial lease are classified as operating leases. * Operating lease income net of any incentives given to lessees, is recognised on the straight-line basis or a more representative basis where applicable over the lease term and is recognised in revenue. When an operating lease is terminated before the lease period has expired, any payment required by the Group by way of a penalty is recognised as income in the period in which termination takes place.

30 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 A. MANAGING EBITDA (CONTINUED) A.1 Revenue (continued) GROUP COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Mar 2017 Mar 2016 Aeronautical Landing fees 1 928 938 1 869 357 1 928 938 1 869 357 Passenger service charges 3 389 185 3 254 874 3 389 185 3 254 874 Aircraft parking 71 729 70 405 71 729 70 405 5 389 852 5 194 636 5 389 852 5 194 636 Non-aeronautical Advertising 193 538 187 324 193 538 187 324 Retail 1 185 836 1 141 492 1 185 473 1 141 492 Parking 539 291 536 223 539 291 536 223 Car hire 244 921 226 100 244 921 226 100 Property rental 612 538 646 238 615 336 634 908 Hotel operations 142 891 132 987 Recoveries 1 163 890 133 881 161 967 133 881 Other 2 109 935 106 884 87 095 92 388 1 Recoveries include water, electricity and other utility charges recovered from tenants. 2 Other includes permits and airports management services. 3 192 840 3 111 129 3 027 621 2 952 316 8 582 692 8 305 765 8 417 473 8 146 952 At the reporting date, the Group has contracted with tenants for the following future minimum cash lease payments in respect of advertising, retail and property leases: GROUP COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Mar 2017 Mar 2016 Contractual future cash lease payments (unrecognised) 6 093 219 8 572 633 5 580 081 8 021 020 Within one year 1 094 963 2 446 280 992 694 2 346 055 Two to five years 2 572 161 5 366 238 2 205 436 5 003 138 After five years 2 426 095 760 115 2 381 951 671 827 A.2 Other income Other income is any income that accrued to the Group from activities that are not part of the normal operations and is recognised as earned. GROUP COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Mar 2017 Mar 2016 Other 3 70 910 66 769 70 866 66 728 3 Other includes training income and rates refunds.

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 31 A. MANAGING EBITDA (CONTINUED) A.3 Employee costs Accounting policy Employee costs are recognised as an operating expense in the period during which services are rendered by the employees. Type of benefit Defined contribution plans Policy Obligations for contributions to defined contribution pension plans and medical aid schemes are recognised as an employee benefit expense in profit and loss when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available. Defined benefit plans Short-term benefits The Group operates a number of defined benefit retirement and medical aid plans. Employer companies contribute to the cost of benefits taking account of the recommendations of the actuaries. Net interest income/(expense) is determined on the defined benefit asset/(liability) by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the net defined benefit asset/(liability). Other expenses related to the defined benefit plans are also recognised in operating expenses. When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in employee costs. The Group recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs. Past service cost is recognised as an expense at the earlier of plan amendment curtailment, and recognition of related restructuring or termination benefits. Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or incentive scheme plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably. GROUP COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Mar 2017 Mar 2016 Basic 1 029 966 876 110 1 006 663 850 327 Performance bonus 154 864 165 189 152 732 164 243 Medical aid Company contributions 69 358 62 194 67 729 61 106 Pension benefits 91 448 82 298 89 731 80 652 1 345 636 1 185 791 1 316 855 1 156 328

32 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 A. MANAGING EBITDA (CONTINUED) A.4 Other operating expenses GROUP COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Mar 2017 Mar 2016 Repairs and maintenance 322 321 294 118 318 894 290 318 Security 276 835 250 224 273 896 247 700 Electricity and water 321 359 303 695 312 422 294 710 Auditors remuneration 13 751 14 306 12 394 13 278 Operating lease expense* 33 318 28 974 33 001 28 543 Impairment of trade and other receivables 60 033 1 176 59 394 812 Information systems expenses 191 259 148 048 191 195 146 179 Rates and taxes 274 448 255 548 263 332 245 744 Cleaning 129 880 115 833 124 709 115 168 Marketing 51 880 63 351 49 818 62 060 Managerial, technical and other fees 126 868 134 959 117 403 125 693 Travel local 32 163 34 284 32 171 34 265 Travel overseas 7 272 8 887 7 205 8 623 Insurance 65 301 20 275 65 073 20 079 Administration 53 939 45 672 26 018 31 807 Training 42 236 38 841 41 856 38 812 Foreign currency losses 5 160 5 160 Consumables 38 135 26 535 38 253 15 633 Socio-economic and enterprise development 38 930 54 919 38 822 54 919 Telephone and fax 17 219 17 125 17 219 17 022 Recruitment expenses 11 368 6 921 11 368 6 921 Legal expenses 24 454 34 311 24 454 34 305 Other expenses 15 429 4 630 6 864 17 042 Bank charges 12 694 14 826 9 977 12 285 Service standards monitoring 15 625 13 277 15 625 13 277 Membership fees 10 087 7 084 10 076 6 706 Loss on sale of assets 17 917 34 458 17 896 33 594 * Accounting policy Operating leases expense Company and Group as a lessee. 2 204 721 1 977 437 2 119 335 1 920 655 Accounting policy Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease liability. This liability is not discounted. Any contingent rents are expensed in the period they are incurred. The Company leases properties for their Group (Corporate) head offices and for their Regional Airports head office. At the reporting date, the Group has outstanding commitments under non-cancellable operating leases for future minimum lease payments. The commitments comprise a number of separate operating leases in relation to properties, none of which is individually significant to the Group or Company. GROUP AND COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Contractual future cash lease payments (unrecognised) 41 655 65 519 Within one year 23 079 11 494 One to two years 15 811 11 828 Two to five years 2 765 23 098 After five years 19 099

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 33 B. ASSETS B.1 Investment property Accounting policy Investment property comprises a number of commercial properties that are leased to third parties. Investment property is carried at fair value, determined annually using discounted cash flow projections. Changes in fair values are recorded in profit or loss. Significant judgement, estimate and source of estimation uncertainty The discounted cash flow analysis valuation technique uses transactions observable in the market at the reporting date. The Group and Company use their judgement to select a variety of methods and make assumptions relating to market yields, escalation rates and key valuation inputs that are mainly based on market conditions existing at each reporting date. Reconciliation of investment property GROUP Figures in Rand thousand Mar 2017 Mar 2016 Mar 2015 Balance at 1 April 4 963 907 4 418 729 3 941 998 Previously reported 4 881 537 4 336 073 3 865 021 Restatement 82 370 82 656 76 977 Improvements/additions 70 427 157 015 49 094 Write-offs (4 125) (30) Change in fair value Recognised in statement of comprehensive income 483 286 326 754 419 922 Reclassification from property and equipment 13 580 61 439 7 715 Balance at 31 March 5 527 075 4 963 907 4 418 729 COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Mar 2015 Balance at 1 April 4 601 439 4 096 580 3 589 254 Previously reported 4 519 069 4 013 925 3 512 277 Restatement 82 370 82 655 76 977 Improvements/additions 70 427 157 016 49 093 Write-offs (4 125) (30) Change in fair value Recognised in statement of comprehensive income 502 765 286 434 450 518 Reclassification from property and equipment 13 580 61 439 7 715 Balance at 31 March 5 184 086 4 601 439 4 096 580 The amount of rental income from investment properties recognised in profit for the period was as follows: GROUP COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Mar 2017 Mar 2016 Rental payments received 612 538 646 238 615 336 634 908 Per statement of comprehensive income 612 538 646 238 615 336 634 908 Operating expenses directly incurred in relation to investment properties amounted to R8 million (2016: R8.8 million) in the current financial year.

34 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 B. ASSETS (CONTINUED) B.1 Investment property (continued) Fair values Investment properties are stated at fair value, which has been determined based on valuations performed by accredited independent valuers, as at 31 March 2017 and 31 March 2016. Where there was a lack of comparable data, a valuation model in accordance with that recommended by the International Valuation Standards Committee has been applied. The following main inputs have been used: GROUP AND COMPANY Mar 2017 Mar 2016 Market yield of comparable properties (%) 8 12 7 11 Average escalation of lease rentals (%) 6 10 8 10 Average duration of lease (years) 1 5 1 5 Fair value hierarchy The fair values of these investment properties are determined using valuation techniques which use inputs that are directly or indirectly observable. They are therefore classified as Level 2 on the fair value hierarchy. B.2 Property and equipment Accounting policy Items of property and equipment are measured at cost less accumulated depreciation and impairment losses. Gains and losses on disposal are recognised within profit and loss. The costs of day-to-day maintenance are recognised in profit and loss. Depreciation is recognised on a straight-line basis to reduce the assets to their residual values over their estimated useful lives. Land is not depreciated. A summary of the changes in the estimated useful lives of different asset groups is as follows: Category Equipment Motor vehicles Pavements Buildings Useful lives 3 50 years 5 30 years 3 60 years 6 50 years

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 35 B. ASSETS (CONTINUED) B.2 Property and equipment (continued) Impairment The carrying amounts of property and equipment, and intangible assets are reviewed at each reporting date to determine whether there is an indication of impairment. If any such indication exists, then the asset s recoverable amount is estimated. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where it is not possible to determine recoverable amounts for individual assets, assets are grouped together into the smallest groups of assets that generate cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the cash-generating unit ). An impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognised in profit and loss. Impairment losses recognised in respect of cash-generating units are allocated to reduce the carrying amount of the assets in the unit (group of units) on a pro rata basis. Derecognition The gain or loss arising from the derecognition of an item of property 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 and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item. An asset s carrying amount is written down immediately to its recoverable amount if the asset s carrying amount is greater than its estimated recoverable amount.

36 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 B. ASSETS (CONTINUED) B.2 Property and equipment (continued) Figures in Rand thousand Cost GROUP Mar 2017 Accumulated depreciation Carrying value Land 827 184 827 184 Buildings 13 210 602 (5 015 139) 8 195 463 Equipment 5 954 442 (2 335 106) 3 619 336 Motor vehicles 424 724 (188 659) 236 065 Pavements 7 759 696 (3 109 225) 4 650 471 Work in progress 1 196 204 1 196 204 Total 29 372 852 (10 648 129) 18 724 723 Figures in Rand thousand Cost COMPANY Mar 2017 Accumulated depreciation Carrying value Land 827 184 827 184 Buildings 13 193 805 (5 010 670) 8 183 135 Equipment 5 904 063 (2 319 609) 3 584 454 Motor vehicles 424 724 (188 659) 236 065 Pavements 7 759 696 (3 109 225) 4 650 471 Work in progress 1 196 053 1 196 053 Total 29 305 525 (10 628 163) 18 677 362

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 37 Cost GROUP Mar 2016 Accumulated depreciation Carrying value Cost GROUP Mar 2015 Accumulated depreciation Carrying value 831 172 831 172 716 873 716 873 13 058 384 (4 635 491) 8 422 893 13 178 236 (3 694 174) 9 484 062 5 331 391 (1 957 233) 3 374 158 3 720 167 (2 378 931) 1 341 236 445 844 (170 323) 275 521 336 308 (157 624) 178 684 7 411 675 (2 695 072) 4 716 603 8 673 087 (2 128 499) 6 544 588 1 635 813 1 635 813 1 196 398 1 196 398 28 714 279 (9 458 119) 19 256 160 27 821 069 (8 359 228) 19 461 841 Cost COMPANY Mar 2016 Accumulated depreciation Carrying value Cost COMPANY Mar 2015 Accumulated depreciation Carrying value 831 172 831 172 716 873 716 873 13 038 087 (4 627 258) 8 410 829 13 169 948 (3 689 708) 9 480 240 5 281 929 (1 943 295) 3 338 634 3 686 942 (2 378 920) 1 308 022 445 844 (170 323) 275 521 336 308 (157 624) 178 684 7 411 675 (2 695 072) 4 716 603 8 673 087 (2 128 499) 6 544 588 1 635 662 1 635 662 1 196 247 1 196 247 28 644 369 (9 435 948) 19 208 421 27 779 405 (8 354 751) 19 424 654

38 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 B. ASSETS (CONTINUED) B.2 Property and equipment (continued) GROUP Figures in Rand thousand Land Buildings Opening balance at 1 April 2014 restated 716 873 9 883 043 Opening balance previously reported 742 736 10 031 580 Adjustments prior period error (25 863) (148 537) Additions 70 911 Disposals (1 008) Reclassifications to investment property (2 978) Transfers* 95 739 Depreciation (561 645) Opening balance at 1 April 2015 restated 716 873 9 484 062 Opening balance previously reported 742 736 9 622 291 Adjustments prior period error (25 863) (138 229) Additions 71 073 47 699 Disposals Reclassifications to investment property (20 899) Transfers* 8 373 185 438 Depreciation and impairment (433 151) Reconstruction reclassification* 96 653 (861 155) Reclassification relating to investment property and intangible assets (40 901) Opening balance at 1 April 2016 restated 831 172 8 422 893 Opening balance previously reported 857 035 8 556 751 Adjustments prior period error (25 863) (133 858) Additions 15 126 Disposals (8 254) Transfers 9 592 166 772 Write-offs Depreciation and impairment (401 074) Reclassification relating to Investment property and intangible assets (13 580) Closing balance at 31 March 2017 827 184 8 195 463 * Reconstruction reclassification relates to all the transfers that occurred through the fixed assets verification project to ensure the assets have been recognised in the correct category.

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 39 GROUP Equipment Motor vehicles Pavements Work in progress Total 1 581 721 103 523 6 562 728 1 172 664 20 020 552 1 537 553 103 523 6 562 758 1 172 664 20 150 814 44 168 (30) (130 262) 166 085 64 403 99 224 525 800 926 423 (72 730) (1 395) (1 099) (76 232) (4 737) (7 715) 119 563 44 984 241 780 (502 066) (453 403) (32 831) (353 308) (1 401 187) 1 341 236 178 684 6 544 588 1 196 398 19 461 841 1 305 125 178 684 6 544 614 1 196 398 19 589 848 36 111 (26) (128 007) 49 424 23 264 8 228 961 109 1 160 797 (1 043) (2 273) (34 851) (38 167) (9 915) (30 814) 98 321 41 568 12 956 (346 656) (313 373) (41 030) (340 729) (130 272) (1 258 555) 2 197 634 75 308 (1 508 440) 1 959 (38 942) 3 347 158 275 521 4 716 603 1 635 813 19 256 160 3 343 525 275 049 4 714 032 1 766 085 19 512 477 30 633 472 2 571 (130 272) (256 317) 116 238 4 777 13 693 671 581 821 415 (10 006) (658) (8 685) (27 603) 545 764 6 187 255 498 (1 084 148) (100 335) (27 042) (27 042) (411 707) (49 762) (326 638) (1 189 181) 4 889 (8 691) 3 619 336 236 065 4 650 471 1 196 204 18 724 723

40 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 B. ASSETS (CONTINUED) B.2 Property and equipment (continued) COMPANY Figures in Rand thousand Land Buildings Opening balance at 1 April 2014 716 873 9 878 954 Opening balance previously reported 742 736 10 027 491 Adjustments prior period error (25 863) (148 537) Additions 70 902 Disposals (1 008) Reclassification relating to investment property and intangible assets (2 978) Transfers 95 739 Depreciation (571 369) Opening balance at 1 April 2015 restated 716 873 9 480 240 Opening balance previously reported 742 736 9 618 469 Adjustments prior period error (25 863) (138 229) Additions 71 073 35 292 Disposals Reclassifications to investment property and intangible assets (20 899) Transfers* 8 373 185 438 Depreciation and impairment (428 987) Reconstruction reclassification* 96 653 (861 154) Reclassification relating to investment property and intangible assets (40 901) Opening balance at 1 April 2016 restated 831 172 8 410 829 Opening balance previously reported 857 035 8 544 687 Adjustments prior period error (25 863) (133 858) Additions 15 126 Disposals (9 330) Transfers 9 592 166 772 Write-offs Depreciation and impairment (400 262) Reclassification relating to investment property and intangible assets (13 580) Closing balance at 31 March 2017 827 184 8 183 135 * Reconstruction reclassification relates to all the transfers that occurred through the fixed assets verification project to ensure the assets have been recognised in the correct category. The reclassifications to investment property and Intangible assets which amounted to R8.7 million have been disclosed above. No property and equipment have been pledged or used as collateral to the Group s and Company s contractual commitments and obligations.

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 41 COMPANY Equipment Motor vehicles Pavements Work in progress Total 1 550 391 103 523 6 562 728 1 172 513 19 984 982 1 506 223 103 523 6 562 758 1 172 513 20 115 244 44 168 (30) (130 262) 159 561 64 403 99 226 525 800 919 892 (72 551) (1 395) (1 099) (76 053) (4 737) (7 715) 119 563 44 984 241 780 (502 066) (448 942) (32 831) (353 310) (1 396 452) 1 308 022 178 684 6 544 588 1 196 247 19 424 654 1 271 911 178 684 6 544 614 1 196 247 19 552 661 36 111 (26) (128 007) 45 791 23 264 8 228 961 109 1 144 757 (231) (2 273) (34 851) (37 355) (9 915) (30 814) 98 321 41 568 12 956 (346 656) (312 860) (41 030) (340 728) (130 272) (1 253 877) 2 197 632 75 308 (1 508 441) (2) 1 959 (38 942) 3 338 634 275 521 4 716 603 1 635 662 19 208 421 3 308 001 275 049 4 714 031 1 765 934 19 464 737 30 633 472 2 572 (130 272) (256 316) 110 126 4 777 13 693 671 581 815 303 (8 181) (658) (8 685) (26 854) 545 764 6 187 255 648 (1 084 148) (100 335) (27 042) (27 042) (406 778) (49 762) (326 638) (1 183 440) 4 889 (8 691) 3 584 454 236 065 4 650 471 1 196 053 18 677 362

42 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 C. DEBT AND CASH MANAGEMENT C.1 Interest-bearing borrowings Figures in Rand thousand GROUP Mar 2017 Mar 2016 Carrying Fair Carrying value value value Fair value Unsecured Long-term bonds 6 855 291 6 880 220 7 043 047 7 123 743 Infrastructure finance 128 087 130 186 147 257 159 176 Southern Sun Hotel Interests (Pty) Ltd 1 500 1 500 1 500 1 500 L Agence Francaise de Developpement (AFD) 595 533 639 816 680 416 722 715 L Agence Francaise de Developpement (AFD1) 1 751 084 1 912 548 1 945 296 2 108 501 9 331 495 9 564 270 9 817 516 10 115 635 Figures in Rand thousand COMPANY Mar 2017 Mar 2016 Carrying Fair Carrying value value value Fair value Unsecured Long-term bonds 6 855 293 6 880 220 7 043 047 7 123 743 Infrastructure finance 128 087 130 186 147 257 159 176 L Agence Francaise de Developpement (AFD) 595 532 639 816 680 416 722 715 L Agence Francaise de Developpement (AFD1) 1 751 083 1 912 548 1 945 296 2 108 501 Term and debt repayment schedule Figures in Rand thousand 9 329 995 9 562 770 9 816 016 10 114 135 Interest rate GROUP Maturity date Mar 2017 Carrying value Mar 2016 Carrying value Nominal Long-term bonds amount AIR01 R2 billion 8.85% Mar 2019 2 004 385 2 003 717 AIR02 R1.712 billion 11.30% Apr 2023 1 825 316 1 827 312 AIRL01 R999 million Inflationlinked Apr 2028 1 699 976 1 886 316 AIR04U R500 million 11.59% Oct 2029 524 836 524 858 AIR04 R544 million 9.25% May 2024 560 959 561 004 AIR05 R232 million 10.00% May 2030 239 819 239 840 6 855 291 7 043 047 Long-term loans Southern Sun Hotel Interests (Pty) Ltd 2% N/A 1 500 1 500 L Agence Francaise de Developpement (AFD) 10.35% Nov 2023 595 533 680 416 L Agence Francaise de Developpement (AFD1) 10.55% Jan 2026 1 751 084 1 945 296 Infrastructure Finance Corporation Ltd (INCA) JIBAR-linked Nov 2023 128 087 147 257 2 476 204 2 774 469 9 331 495 9 817 516

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 43 C. DEBT AND CASH MANAGEMENT (CONTINUED) C.1 Interest-bearing borrowings (continued) The table below analyses the Group s interest-bearing borrowings in terms of their maturities. Figures in Rand thousand Carrying amount Contractual cash flows 6 months or fewer Between 6 12 months Between 1 2 years Between 2 5 years More than 5 years 2017 9 331 495 8 782 044 523 830 539 205 1 055 565 2 556 852 4 106 592 2016 9 817 516 13 019 312 1 249 356 652 399 1 275 550 3 600 048 6 241 959 The cash to meet these maturities will be obtained from operating activities and reserves. List of the persons (natural and incorporated) who hold beneficial interests equal to or in excess of 5% of the total number of listed securities of that class issued by the Group as at the 31st of March 2017. Bond holder Holding % Bond: AIR01 GEPF bonds 18% Old Mutual Life Assurance Co SA Ltd 10% Sasol Pension Fund 8% Stanlib Income Fund 8% RMB Custody and Trustee Services 13% MMI Group Ltd 6% Bond: AIR04 GEPF Bonds 22% Old Mutual Multi-Managers 17% Investec Asset Management 14% PIC UIF 9% AIPF-NT (STD007) 6% Allan Gray Life Global 5% Bond: AIRL01 MMI Group Ltd 30% SBSA ITF Prud Infl Plus Fnd 9% Investment Solution Ltd ISL Coronation FDL AM 9% Standard Chartered Bank as trustee for Coro balanced plus fund COBP 9% Stanlib Inflation Linked 9% Old Mutual Life Assurance Co SA Ltd 5% Bond holder Holding % Bond: AIR02 Investec Corporate Bond Fund 24% Nedcor Capital Treasury 16% Old Mutual Life Assurance Co SA Ltd 10% GEPF Bonds 9% SBSA ITF Prudential Corporate Bond Fund 5% Metal Industries Provident Fund in-house Bond Account 5% Bond: AIR05 Prudential Corporate Bond Fund 21% Investment Solution Ltd 12% Allan Gray Balanced Fund 25% Rand Mutual Assurance Company Ltd OMIG 5%

44 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 C. DEBT AND CASH MANAGEMENT (CONTINUED) C.2 Finance income and expenses Accounting policy Finance income comprises of interest income on funds invested and is recognised using the effective interest method in profit and loss. Finance expenses comprise of interest expense on borrowings and are recognised using the effective interest method in profit and loss. Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised to the cost of those assets until such time as the assets are substantially ready for their intended use. Investment income earned on the temporary investment of specific borrowings, pending their expenditure on qualifying assets, is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised as an expense in the period in which they are incurred. GROUP COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Mar 2017 Mar 2016 Interest received 162 956 129 281 219 579 185 807 Finance income 162 956 129 281 219 579 185 807 Finance costs (1 004 180) (1 093 358) (1 004 063) (1 093 210) Gains on remeasurement and disposal of trading financial instruments* 90 540 59 623 90 540 59 623 Total finance expense (913 640) (1 033 735) (913 523) (1 033 587) Net finance expense (750 684) (904 454) (693 944) (847 780) * Interest rate swaps. C.3 Derivative financial instruments and hedging information Accounting policy Cash flow hedges When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognised in other comprehensive income and accumulated in the hedging reserve. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in profit or loss. The amount accumulated in equity is retained in other comprehensive income and reclassified to profit or loss in the same period or periods during which the hedged forecast cash flows affect profit or loss or the hedged item affects profit or loss. If the forecast transaction is no longer expected to occur, the hedge no longer meets the criteria for hedge accounting, the hedging instrument expires or is sold, terminated or exercised, or the designation is revoked, then hedge accounting is discontinued prospectively. If the forecast transaction is no longer expected to occur, then the amount accumulated in equity is reclassified to profit or loss. The following information relates to derivative financial instruments included in the consolidated annual financial statements: GROUP AND COMPANY Mar 2017 Mar 2016 Figures in Rand thousand Assets Liabilities Assets Liabilities Interest rate swaps cash flow hedges 5 673 5 658 Forward foreign exchange contracts held for trading 712 5 673 6 370 Current 2 224 2 604 Non-current 3 449 3 766 5 673 6 370

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 45 C. DEBT AND CASH MANAGEMENT (CONTINUED) C.3 Derivative financial instruments and hedging information (continued) Interest rate swaps cash flow hedge The Group entered into an interest rate swap contract relating to the INCA loan in order to fix the interest rate on these loans. Under the interest rate swap contract, the Group and Company agree with other parties to exchange, at specified quarterly and semi-annual intervals, the difference between fixed rates and floating rate interest amounts that are calculated by reference to the agreed notional principal amounts. During the current financial year, the hedging relationship was revoked as it is not effective, nor is it expected to be in the future. All changes in the interest rate swap will be recognised in the profit or loss. The ineffective portion recognised in profit or loss that arises from cash flow hedges amounts to a loss of R7.9 million (2016: R34 million) for both the Group and Company. The notional principal amounts of the outstanding derivative contracts were as follows (figures in Rand thousand): Notional amount Fair value Interest rate swaps Receive Pay Mar 2017 Mar 2016 Mar 2017 Mar 2016 30 November 2023 3 month JIBAR +1.90% 10.98% 250 000 250 000 (5 673) (5 658) 250 000 (5 673) (5 658) Forward foreign exchange contracts 1 (712) Total derivatives (5 673) (6 370) 1 The notional principle amounts of the outstanding forward foreign exchange contracts at 31 March 2017 were Rnil (2016:$2.3 million). The exchange rates may vary (2016: R15.3393 to R16.4675). The table below analyses the Group and Company s derivative financial instruments in terms of their maturities. The amounts disclosed are the contractual undiscounted cash flows: Figures in Rand thousand Carrying amount Contractual cash flows 6 months or fewer Between 6 12 months Between 1 2 years Between 2 5 years More than 5 years Mar 2017 5 673 5 673 1 099 972 1 618 1 875 109 Mar 2016 6 370 6 370 2 209 395 2 166 1 477 123

46 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 D. MANAGING WORKING CAPITAL D.1 Trade and other receivables GROUP COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Mar 2017 Mar 2016 Trade receivables 888 914 864 002 866 950 847 888 Impairment of trade receivables 114 186 (55 559) (111 759) (53 095) Loan to joint venture/associate 97 580 88 848 97 580 88 848 Loans and receivables 872 308 897 291 853 415 883 641 Taxation receivable 834 Prepayment 4 858 33 056 4 563 32 675 Insurance receivable* 103 042 102 716 103 042 102 716 Lease receivables 6 025 7 177 Other receivables 113 236 10 218 104 386 9 456 1 099 469 1 044 115 1 072 583 1 028 488 * Includes a contingency policy underwritten by Guardrisk. The amount receivable represents the balance of the special experience account. The special experience account is payable on demand. The average credit period is 31 days (2016: 33 days). Trade receivables are carried at cost which normally approximates their fair value due to short-term maturity thereof. An adjustment for impairment of receivables has been made for estimated irrecoverable amounts. Loans to joint ventures and associates bear no interest and have no fixed repayment terms. The maximum exposure to credit risk for trade receivables at the reporting date before the impairment provision, guarantees and deposits held by type of customer was: GROUP COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Mar 2017 Mar 2016 Aeronautical 678 635 648 099 678 635 648 099 Commercial 274 034 209 461 274 034 209 461 Other 65 777 95 290 45 334 79 176 1 018 446 952 850 998 003 936 736 Figures in Rand thousand Trade and other receivables GROUP Allowance for impairment Trade and other receivables COMPANY Allowance for impairment March 2017 Not past due 784 280 767 151 Past due 0 30 days 81 780 80 967 Past due 31 60 days 27 426 27 381 Past due 61 days and above 124 960 114 186 122 504 (111 115) Total trade and other receivables 1 018 446 114 186 998 003 (111 115) March 2016 Not past due 755 416 739 302 Past due 0 30 days 81 993 81 993 Past due 31 60 days 20 833 20 833 Past due 61 days and above 95 290 (55 559) 91 424 (53 095) Total trade and other receivables 953 532 (55 559) 933 552 (53 095)

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 47 D. MANAGING WORKING CAPITAL (CONTINUED) D.1 Trade and other receivables (continued) Impairment The movement in the allowance for impairment in respect of trade receivables during the year was as follows: Any subsequent reversals of impairment, or recoveries of amounts previously impaired (including debts that have been written off), are reflected within impairment of trade receivables credit impairment charges in profit or loss. GROUP COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Mar 2017 Mar 2016 Balance at 1 April 2016 55 559 87 547 53 095 87 547 Increase/(decrease) in allowance 60 032 (609) 59 393 (609) Bad debts written-off (1 405) (31 379) (1 373) (33 843) Balance at 31 March 2017 114 186 55 559 111 115 53 095 Credit quality of financial instruments The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to historical information about the customer. Before accepting any new customer, the Group and Company use an external credit scoring system to assess the potential customer s credit quality and define credit limits by customer. Limits and scoring attributed to customers are reviewed periodically. 60% of the trade receivables that are neither past due nor impaired were recovered within one month after the reporting date. Of the trade receivables balance, for both the Group and Company, at the end of the year, R150 million (March 2016: R147 million) is due from one significant client. There are no other customers who represent more than 10% of the total balance of trade receivables. As at 31 March 2017, the Group and Company had no significant concentration of credit risk (March 2016: Nil). The allowance account in respect of trade receivables is used to record impairment losses unless the Group and Company are satisfied that no recovery of the amounts owing is possible; at that point the amounts considered irrecoverable are written off against the allowance account. D.2 Cash and cash equivalents Cash and cash equivalents consist of: GROUP COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Mar 2017 Mar 2016 Cash on hand 369 163 134 75 Bank balances 1 130 029 1 110 467 1 106 743 1 098 510 Money markets 540 467 258 938 540 467 257 815 1 670 865 1 369 568 1 647 344 1 356 400 The Group and Company s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in note F.2. Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short term, highly-liquid investments with original maturities of three months or fewer, and bank overdrafts and is available for use by the Group and Company. Cash and cash equivalents are classified as Level 2 on the fair value hierarchy. D.3 Trade and other payables GROUP COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Mar 2017 Mar 2016 Trade payables 508 336 951 877 502 644 939 563 VAT 79 258 47 372 76 774 45 473 Bonuses payable 12 391 11 541 12 391 11 188 Leave payable 61 624 49 333 60 306 48 381 Deposits received 109 546 96 510 102 770 91 054 Lease payable 67 315 66 545 Other payables* 7 917 18 630 6 445 18 574 * Other payables includes overtime accruals. 779 072 1 242 578 761 330 1 220 778

48 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 D. MANAGING WORKING CAPITAL (CONTINUED) D.3 Trade and other payables (continued) The Group and Company s exposure to liquidity risk related to trade and other payables is disclosed in note F2. The table below analyses the Group and Company s trade and other payables in terms of their maturities. The amounts disclosed are the contractual undiscounted cash outflows: Figures in Rand thousand Carrying amount Contractual cash flows 6 months or fewer Between 6 12 months Between 1 2 years Between 2 5 years More than 5 years Group March 2017 779 072 779 072 779 072 March 2016 1 242 579 1 242 579 1 242 579 Figures in Rand thousand Carrying amount Contractual cash flows 6 months or fewer Between 6 12 months Between 1 2 years Between 2 5 years More than 5 years Company March 2017 761 330 761 330 761 330 March 2016 1 220 776 1 220 776 1 220 776 D.4 Cash generated from operations GROUP COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Mar 2017 Mar 2016 Profit before taxation 2 538 808 2 633 832 3 586 880 3 272 751 Adjustments for: Depreciation and amortisation 1 270 333 1 307 885 1 264 487 1 303 146 Impairment of trade receivables 60 033 1 176 59 394 812 Loss on sale of assets 17 917 34 458 17 896 33 594 Loss from equity accounted investments 1 017 103 690 435 5 160 Finance income (162 956) (129 281) (219 579) (185 807) Finance costs 1 004 180 1 093 358 1 004 063 1 093 210 Foreign exchange differences (4 863) (11 178) (4 844) Movements in retirement benefit obligation (678) 746 (678) Movements in provisions (12 836) 21 728 (17 679) 21 728 Deferred income 3 172 1 882 2 913 1 882 Gains/(losses) on property and equipment 9 603 (546) 9 603 (546) Unrealised fair value gains and losses (237 236) (606 000) (273 318) (560 713) 5 502 580 5 038 495 5 429 138 4 985 217 Changes in working capital: Inventories (778) (68) (436) (352) Other non-current assets 72 797 (235 592) 72 797 (235 592) Trade and other receivables (116 031) 153 240 (104 133) 158 355 Trade and other payables (388 346) 621 097 (384 288) 620 083 5 070 222 5 577 172 5 013 078 5 527 711

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 49 D. MANAGING WORKING CAPITAL (CONTINUED) D.5 Tax paid GROUP COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Mar 2017 Mar 2016 Balance at beginning of the year 60 824 (57 019) 56 263 (61 999) Current tax for the year recognised in profit or loss (954 564) (947 628) (942 900) (945 096) Prior period overprovision (385 053) (385 053) Interest accrued 2 760 2 760 Balance at end of the year 250 299 (60 824) 254 562 (56 263) D.6 Other non-current assets (1 025 734) (1 065 471) (1 014 368) (1 063 358) GROUP COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Mar 2017 Mar 2016 Lease receivable non-current portion 240 379 314 032 240 379 314 032 Investments* 17 436 16 581 17 436 16 581 257 815 330 613 257 815 330 613 * Investments relate to the acquisition made by the Company of 100% shareholding in a cell captive with Guardrisk Life Limited in September 2003 to fund its obligation arising from 2002, whereby the Company agreed to increase the minimum pension payout to employees. Guardrisk performs a half-yearly review per individual covered to establish the present value of the Company s obligation on the prescribed valuation basis (as approved by Guardrisk Life Statutory Actuaries) in order to assess the Company s commitment as per the assets and expressed liabilities and ensure sufficient life funds are transferred to the non-distributable reserves.

50 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 E. INVESTMENTS E.1 Investments in subsidiaries Accounting policy Subsidiaries are all entities (including structured entities) over which the Company has control. The Company uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Company. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Company recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest s proportionate share of the acquiree s net assets. Intra-group transactions, balances and unrealised gains/(losses) are eliminated on consolidation. Unrealised losses are eliminated in the same manner as unrealised gains, but only to the extent that there is no evidence of impairment. The Company s investments in subsidiaries are carried at cost, net of accumulated impairment losses. The Company treats transactions with non-controlling interests that do not result in a loss of control, as equity transactions. Gains or losses on disposals to non-controlling interests are also recorded in equity. COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Indebtedness 821 358 794 028 Total interest in subsidiaries 821 358 794 028 Directors valuation 821 358 794 028 Aggregate after tax (losses)/profits of subsidiary companies (109 039) 58 450 Details of the Company s subsidiaries at 31 March 2017 are indicated below. All subsidiaries are incorporated in South Africa except for Airports Company South Africa Global Limited which is incorporated in Mauritius. Subsidiaries Principal activity Interest held Indebtedness Mar 2017 Mar 2016 Mar 2017 Mar 2016 OSI Airport Systems (Pty) Ltd Dormant 51% 51% Precinct 2A (Pty) Ltd Property owning 100% 100% 678 802 647 060 JIA Piazza Park (Pty) Ltd Hotel operations 100% 100% Airports Company South Africa Global Ltd Management company 100% 100% 72 664 77 958 751 466 725 018 Special purpose entities* Lexshell 342 Investment Holdings (Pty) Ltd Airport Management Scheme Incentive Scheme Company (Pty) Ltd Sakhisizwe Community Programme (NPC) Employee share option plan % % 37 148 36 265 Employee share option plan % % 30 098 30 098 Non-profit company (Education) % % 2 646 2 647 69 892 69 010 821 358 794 028 * The Company s accounts include the consolidation of the Airport Management Share Incentive Scheme Company Proprietary Limited and Lexshell 342 Investment Holdings Proprietary Limited. Although the Airport Management Share Incentive Scheme Company Proprietary Limited is wholly owned by the Airport Management Share Incentive Scheme Trust and Lexshell 342 Investment Holdings Proprietary Limited is wholly owned by the ACSA Kagano Trust, in terms of IFRS 10: The Group consolidates these entities as it is exposed to significant risks that are associated with loans extended to the entities to acquire shares of the Company. Sakhisizwe Community Programme NPC is a Special Purpose Entities created and controlled by ACSA from a government grant received from the Department of Transport (refer to Note G.7).

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 51 E. INVESTMENTS (CONTINUED) E.2 Investments in joint ventures Accounting policy The Group holds a 50% interest in Airports Logistics Property Holdings (Pty) Ltd. It has been classified as a joint venture due to the decisions about the relevant activities requiring unanimous consent of the parties sharing control. Associates and joint ventures are initially measured at cost per Group and Company purposes. Subsequently they are accounted for using the equity method for Group purposes at an amount that reflects the Group s share of the net assets of the associate or joint venture (including goodwill). Equity accounting is applied from the date on which the entity becomes an associate or joint venture up to the date on which the Group ceases to have significant influence or joint control. Equity accounting of losses is restricted to the interests in these entities, including unsecured receivables or other commitments, unless the Group has an obligation or has made payments on behalf of the associate or joint ventures. Unrealised profits from transactions are eliminated in determining the Group s share of equity accounted profits. Unrealised losses are eliminated in the same way as unrealised gains (but only to the extent that there is no evidence of impairment). Where there is an indicator of impairment, the carrying amount of the investment is tested for impairment by comparing its recoverable amount with its carrying amount. Impairment losses are recognised through non-trading and capital related items. Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount, but only to the extent that the investment s carrying amount does not exceed the carrying amount that would have been determined, net of equity accounted losses, if no impairment loss had been recognised. For a disposal of an associate or joint venture, being where the Group loses significant influence over an associate or loses joint control over a joint venture, the difference between the sales proceeds and any retained interest and the carrying value of the equity accounted investment is recognised as a gain or loss in non-trading and capital related items. On disposal of an associate or joint venture that is a foreign operation, the relevant amount in the Foreign Currency Translation Reserve (FCTR) is reclassified to non-trading and capital related items at the time at which the profit or loss on disposal is recognised. Any gains or losses in other OCI reserves that relate to the associate or joint venture are reclassified to non trading and capital related items at time of the disposal. Distributions (dividends) received from the entities reduce the carrying amount of the investment. If the entity incurs losses, the Group will only recognise these losses until the carrying amount of the investment reaches zero, unless the Group has incurred obligations or made payments on behalf of the entity. The Company subsequently measures its investment in joint venture at cost less accumulated impairment losses. The following represents the Group s share of assets, liabilities, revenue and expenses of the joint venture: Figures in Rand thousand Airport Logistics Property Holdings (Pty) Ltd Opening balance at 1 April 2015 127 942 Share of profits 19 792 Opening balance at 1 April 2016 147 734 Share of profits 27 487 Closing balance at 31 March 2017 175 221 GROUP Figures in Rand thousand Mar 2017 Mar 2016 Summarised statement of comprehensive income Revenue 71 542 56 240 Profit for the period 54 974 39 584 Total comprehensive income 54 974 39 584 Summarised statement of financial position Non-current assets 478 500 439 300 Current assets 50 141 45 832 Non-current liabilities (177 682) (189 149) Current liabilities (517) (516) Total net assets 350 442 295 467

52 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 E. INVESTMENTS (CONTINUED) E.3 Investments in associates Accounting policy The Group accounts for its investments in associates using the equity method of accounting (refer to the investment in joint ventures accounting policy for more detail). The Company accounts for its investment in associates at cost less any impairment losses. Significant judgement, estimates and sources of estimation uncertainty Associates are entities that the Group and Company believe that they have the ability (and power) to participate in the financial and operating policy decisions of the entities, which gives the Group and Company significant influence over them. The following associates exist in the Group and Company: Investment in Mumbai International Airport Private Limited The Group and Company have a 10% equity interest through Airports Company South Africa Global Limited, in the 30-year concession (with an option for a further 30 years) to modernise the Chhatrapati Shivaji International Airport in Mumbai. Airports Company South Africa is an integral investor in the project, as well as being the designated airport operator. Aeroporto de Guarulhos Participações S.A. The Group and Company have a 20% equity interest in the 20-year concession to modernise the Guarulhos International Airport. Airports Company South Africa is an integral investor in the project, as well as being the designated airport operator for a five-year period. La Mercy Joint Venture Company Proprietary Limited (Dube Trade Port) Airports Company South Africa and the Dube Trade Port Company Limited (LMJVC) have 40% and 60% interest in La Mercy Joint Venture Company Proprietary Limited respectively. This joint venture arrangement objective is to commercially enable land holdings in excess of 848 hectares. The vast majority of the land is zoned undetermined and the objective is to rezone and service the properties to unlock development opportunities. Investments in associate: Company Name of company % ownership interest Carrying amount 2017 Mar 2017 Mar 2016 Mar 2017 Mar 2016 Country of incorporation Direct associates La Mercy JV Property Investments (Pty) Ltd 40% 40% 38 173 38 173 South Africa Aeroporto de Guarulhos Participações S.A 20% 20% 776 647 620 459 Brazil 814 820 658 632 Indirect associates Mumbai International Airport Private Ltd 10% 10% India Guarantees issued Equity guarantee an Airport Operator guarantee has been issued by Airports Company South Africa Global Limited to Mumbai International Airport Private Limited for an amount of INR3 billion, R672 million for March 2017 (2016: R727 million). This guarantee is limited to Airports Company South Africa Global s performance fee of USD1.2 million for both years.

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 53 E. INVESTMENTS (CONTINUED) E.3 Investments in associates (continued) Reconciliation of movement in investments in associates Group Figures in Rand thousand La Mercy JV Property Investments (Pty) Ltd Mumbai International Airport Private Ltd Aeroporto de Guarulhos Participações S.A Total Investment at 31 March 2015 239 387 890 958 217 681 1 348 026 Acquisitions 362 576 362 576 Share of losses (3 273) (84 614) (622 339) (710 226) Share of OCI 2 283 135 365 623 637 761 285 Investment at 31 March 2016 238 397 941 709 581 554 1 761 660 Acquisitions/equity injection 156 189 156 189 Share of losses (13 714) (119 967) (910 909) (1 044 590) Share of OCI (67 543) 192 811 125 268 Investment at 31 March 2017 224 683 754 199 19 645 998 527 Summarised financial information of associates for March 2017 Figures in Rand thousand La Mercy JV Property Investments (Pty) Ltd Mumbai International Airport Private Ltd Aeroporto de Guarulhos Participações S.A Total Summarised statement of comprehensive income Revenue 6 181 5 057 211 7 591 704 12 655 096 Loss for the period (5 886) (1 199 672) (4 554 549) (5 760 107) Total comprehensive loss (5 886) (1 199 672) (4 554 549) (5 760 107) Summarised statement of financial position Non-current assets 286 439 29 463 053 69 105 143 98 854 635 Current assets 270 678 3 134 128 1 522 266 4 927 072 Non-current liabilities 6 362 (20 216 745) (66 991 637) (87 202 020) Current liabilities (1 772) (4 838 433) (7 974 258) (12 814 463) Total net assets 561 707 7 542 003 (4 338 486) 3 7695 224

54 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 E. INVESTMENTS (CONTINUED) E.3 Investments in associates (continued) Summarised financial information of associates for March 2016 Figures in Rand thousand La Mercy JV Property Investments (Pty) Ltd Mumbai International Airport Private Ltd Aeroporto de Guarulhos Participações S.A Summarised statement of comprehensive income Revenue 8 763 2 681 392 7 489 380 10 179 535 Loss for the period (8 783) (820 774) (5 274 061) (6 103 618) Total comprehensive loss (8 783) (820 774) (5 274 061) (6 103 618) Summarised statement of financial position Non-current assets 320 958 32 285 200 67 042 471 99 648 629 Current assets 277 388 3 607 335 1 348 913 5 233 636 Non-current liabilities (169) (23 154 179) (63 797 805) (86 952 153) Current liabilities (2 185) (3 295 894) (6 171 988) (9 470 067) Total net assets 595 992 9 442 462 (1 578 409) 8 460 045 E.4 Commitments Capital commitments GROUP COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Mar 2017 Mar 2016 Contracted for Within one year 237 596 429 473 237 596 429 473 One to two years 3 123 97 173 3 213 97 173 Two to five years 352 491 100 667 352 491 100 667 After five years 221 123 338 539 221 123 338 539 Not yet contracted for Not yet contracted for and authorised by directors 29 581 29 581 Total 814 423 995 433 814 423 995 433

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 55

56 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 F. FINANCIAL INSTRUMENTS AND FINANCIAL INSTRUMENT RISK MANAGEMENT F.1 Financial instruments F.1.1 A Accounting classifications and fair values The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. In the 2017 financial year, derivative financial instruments of R5.7 million were transferred from Level 2 to a Level 1 in the hierarchy. This is due to quoted prices becoming more reliably available. There were no other transfers in the 2017 or 2016 financial years. All fair value measurements are recurring. March 2017 Figures in Rand thousand Note Financial assets not measured at fair value Trade and other receivables 1 D.1 Investments G.4 Cash and cash equivalents D.2 Financial liabilities measured at fair value Derivative financial instruments C.3 Financial liabilities not measured at fair value Interest-bearing borrowings C.1 Trade payables 2 D.3 * The Group has not disclosed fair values for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of their fair values. 1 Prepayments and lease receivables (R11 million) that are not financial assets are not included. 2 VAT (R79 million ) that is not a financial liability is not included. March 2016 Figures in Rand thousand Note Financial assets not measured at fair value Trade and other receivables 1 D.1 Investments G.4 Cash and cash equivalents D.2 Financial liabilities measured at fair value Derivative financial instruments C.3 Financial liabilities not measured at fair value Interest-bearing borrowings C.1 Trade payables 2 D.3 * The Group has not disclosed fair values for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of their fair values. 1 Prepayments and lease receivables (R33 million) that are not financial assets are not included. 2 VAT and lease payables (R47 million and R67 million) that are not financial liabilities are not included.

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 57 Loans and receivables Carrying amount Fair value derivatives Fair value Other financial liabilities Total Level 1 Level 2 Total 1 088 587 1 088 587 * * * 1 575 151 1 575 151 * * * 1 670 865 1 670 865 * * * 5 673 5 673 5 673 5 673 9 331 495 9 331 495 6 330 455 3 233 815 9 564 270 699 815 699 815 * * Loans and receivables Carrying amount Fair value derivatives Fair value Other financial liabilities Total Level 1 Level 2 Total 1 011 059 1 011 059 * * * 760 100 760 100 * * * 1 369 568 1 369 568 * * * 6 370 6 370 6 370 6 370 9 817 516 9 817 516 6 518 189 3 597 446 10 115 635 1 127 892 1 127 892 * * *

58 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 F. FINANCIAL INSTRUMENTS AND FINANCIAL INSTRUMENT RISK MANAGEMENT (CONTINUED) F.1 Financial instruments (continued) F1.1 B Measurement of fair values The fair value of financial instruments may require some judgement or may be derived from readily available sources. The degree of judgement involved is reflected in the fair value measurements section below, although this does not necessarily indicate that the fair value is more or less likely to be realised. Financial assets The fair values of the investments and derivative financial instruments are determined with reference to quoted market prices and are therefore classified as Level 1 on the fair value hierarchy. Financial liabilities Financial liabilities at amortised cost The fair value of the Group and Company s financial liabilities carried at amortised cost, which includes trade and other payables and interest-bearing borrowings approximates their fair value. Financial liabilities at fair value through profit or loss The Group and Company s financial liabilities carried at fair value consist of its derivatives which includes forward foreign exchange contracts and interest rate swaps. The fair values of forward foreign exchange contracts are determined using forward exchange rates at the balance sheet date. The fair values of interest rate swaps are calculated as the present value of the estimated future cash flows based on observable yield curves. The fair values of these derivatives are therefore determined using valuation techniques which uses inputs that are directly or indirectly observable. They are therefore classified as Level 2 on the fair value hierarchy. Valuation techniques and significant unobservable inputs The following tables show the valuation techniques used in measuring Level 2 fair values. There are no Level 3 fair values and no unobservable inputs. Financial instruments measured at fair value Valuation technique type Derivative financial instruments Discounted cash flows: The valuation model considers the present value of expected payment, discounted using a risk free adjusted discount rate. Interest-bearing borrowings Discounted cash flows (unlisted instruments): The valuation model considers the present value of expected payment, discounted using a risk free adjusted discount rate. Market comparison technique (listed instruments): The fair values are based on bank values.

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 59 F. FINANCIAL INSTRUMENTS AND FINANCIAL INSTRUMENT RISK MANAGEMENT (CONTINUED) F.1 Financial instruments (continued) F.1.2 Initial recognition and measurement The Group and Company initially record both financial assets and financial liabilities at fair value. Where transaction costs are incurred they are recognised as part of the initial cost of the financial instrument, unless the financial assets or liabilities are classified as at fair value through profit or loss, in which case the transactional costs are recognised in profit or loss. F.1.3 Subsequent measurement The majority of the Group and Company's financial assets are categorised as 'loans and receivables' and are therefore subsequently measured at amortised cost. Amortised cost is the basis of moving the initial amount of the financial instrument (fair value of the instrument) to the maturity value of the instrument on a systematic basis using a fixed interest rate (effective interest rate) taking into account repayment dates and initial premiums or discounts. The carrying amount of amortised cost financial assets is adjusted for impairments. Investments and derivative financial instruments are classified as financial assets at fair value through profit or loss and are subsequently measured at their fair values. The majority of the Group and Company's financial liabilities are classified as 'financial liabilities at amortised cost' and are therefore subsequently measured at amortised cost. The derivative financial instruments are however classified as financial liabilities at fair value through profit or loss and are subsequently measured at their fair values. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. F.1.4 Impairment of financial assets Financial assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Impairment is normally determined based on a realistic assessment of future cash flows discounted using the original effective interest rate compared with contractual amounts. For amounts due to the Group, significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy and default of payments are all considered indicators of impairment. Impairment losses are recognised in profit or loss. Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised cost, the reversal is recognised in profit and loss.

60 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 F. FINANCIAL INSTRUMENTS AND FINANCIAL INSTRUMENT RISK MANAGEMENT (CONTINUED) F.2 Financial risk management The Group s comprehensive risk management process involves identifying, understanding and managing the risks associated with each of the Group s business units. Risk awareness, control and compliance are embedded in the Group s day-to-day activities. The Group Risk Management unit independently monitors, manages and reports risk as mandated by the Board of Directors through the Audit and Risk Committee, and the Economic Regulations Committee. The Executive Committee and business units are ultimately responsible for managing risks that arise. A sound financial risk management framework is in place at the Group, based on a best-practice Enterprise Risk Management Framework, built on rigorous governance structures. Credit risk Credit risk is the risk of loss to the Group as a result of the failure by a customer or counterparty to meet its contractual obligations. This is mitigated by the guarantees held for the exposure at a given period. Credit risks can also arise from cash and cash equivalents, accounts receivable and derivative financial instruments. These risks are effectively managed in terms of the Board-approved financial risk management framework that specifies the investment and counterparty policies. Trade and other receivables The Group s exposure is influenced mainly by the individual characteristics of each customer. The demographics of the Group s customer base, including the default rate of the industry and country in which customers operate, has less of an influence on credit risk. Approximately 18% (March 2016: 26%) of the Group s aeronautical revenue is attributable to transactions with a single customer. The main concentration of credit risk is in the Johannesburg region, which approximates 61% (March 2016: 63%) of the trade receivables of the Group. Each new customer is analysed individually for creditworthiness before the Group s standard payment terms and conditions are offered. The Group s review includes external ratings, where available, and in some cases bank references. Credit limits are established for each customer, which represents the maximum open amount, and these limits are reviewed on an ongoing basis. Customers that fail to meet the Group s benchmark creditworthiness may transact with the Group only on a prepayment/cash basis. More than 60% of the Group s customers have been transacting with the Group for over 16 years, and losses have occurred infrequently. In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are an individual or legal entity, whether they are aeronautical, commercial or retail customer, geographic location, industry, aging profile, maturity and existence of previous financial difficulties. Customers that are graded as high risk are placed on a restricted customer list, and future transactions are made on a prepayment basis with approval of the Financial Risk Management Committee. Customers are considered to be 'high risk' when they have not met the credit terms as stipulated in their trading contracts. Investments and cash and cash equivalents In complying with the Treasury Regulations, Airports Company South Africa s Financial Risk Management Framework limits the Group to investments in A short-term rated instrument or AAA rated instruments and counterparts. For banks and financial institutions, only independently rated parties with a minimum rating of A are accepted with respect to cash and cash equivalents. Market risk Market risk is the risk that the Group s earnings or capital, or its ability to meet business objectives, will be adversely affected by changes in the level or volatility of market rates or prices such as interest rates, foreign exchange rates and commodity prices. Interest rate risk The Group s interest rate risk arises from its borrowings. The Group s policy is to maintain a mix of fixed to floating rate debt within the Board-approved parameters. As at 31 March 2017, the Group s fixed to floating rate profile after hedging, on net debt was 73% (2016: 79%) fixed. At the reporting date, the interest profile of the Group s interest-bearing financial instruments was: Fixed-rate instruments Variable-rate instruments Total Figures in Rand thousand Mar 2017 Mar 2016 Mar 2017 Mar 2016 Mar 2017 Mar 2016 Carrying amount Interest-bearing borrowings 6 855 291 7 783 944 2 476 204 2 033 572 9 331 495 9 817 516 73 % 79 % 27 % 21 %

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 61 F. FINANCIAL INSTRUMENTS AND FINANCIAL INSTRUMENT RISK MANAGEMENT (CONTINUED) F.2 Financial risk management (continued) Tariff risk Aeronautical revenues contributing 63% (March 2016: 63%) of the Group s revenue are regulated by an independent Economic Regulator using a price cap methodology. The regulated tariff is linked to the CPI index. A change in CPI has a positive or a negative impact on the revenue earned by the Group. However, the Group is allowed to adjust the difference between actual and forecast CPI in future tariffs. The tariff is determined for a five-year period every three years with a two-year overlap. The Board has approved a regulatory strategy which seeks to proactively influence the regulatory approach in line with best practice. In this regard, the Group proactively manages the economic regulatory risk while balancing the interests of both the Group and the customers. Price risk The Group is exposed to price risk on various investments which is based on quoted prices. A 5% change in the quote price of the Stanlib Income Fund as at 31 March 2017 would have had the effect of changing profit for the period by R79 million (March 2016: R33 million). Foreign exchange risk The Group has two foreign investments that give rise to limited exposure to foreign currency risk, arising primarily with respect to the Brazilian real and Indian rupee. All foreign debt instruments are issued in rand and the Group also uses foreign exchange contracts to hedge material expenditure once the project or purchase cash flows are certain refer to note C.3. In order to manage risks from fluctuations in currency rates, the Group makes use of forward exchange contracts to manage exposure to fluctuations in foreign currency rates on importation of equipment. The Group s exposure to foreign currency risks was as follows, based on notional amounts: Figures in thousands of Dollars Mar 2017 Mar 2016 Trade receivables 596 591 Cash and cash equivalents 215 112 Trade payables (52) (116) Foreign exchange contracts (2 263) Gross balance sheet exposure 759 (1 676) Figures in thousands of Euros Mar 2017 Mar 2016 Foreign exchange contracts (1 000) Gross balance sheet exposure (1 000) Average rate Reporting spot rate Figures in Rand Mar 2017 Mar 2016 Mar 2017 Mar 2016 The following significant exchange rates applied during the year: USD 14.045 13.635 13.420 16.051 INR 0.071 0.073 0.075 0.062 BRS 4.262 3.847 4.297 4.139 Sensitivity analysis A 10% weakening of the rand against the following currencies at 31 March 2017 would have increased/(decreased) equity, and profit and loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for March 2016. Equity Profit or loss Figures in Rand thousand Mar 2017 Mar 2016 Mar 2017 Mar 2016 USD (37 075) (51 541) 10 469 3 676 INR (20 312) (118 614) 11 997 14 250 BRS 93 319 (19 051) 455 (19 051) 35 932 (189 206) 22 921 (1 125)

62 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 F. FINANCIAL INSTRUMENTS AND FINANCIAL INSTRUMENT RISK MANAGEMENT (CONTINUED) F.2 Financial risk management (continued) A 10% strengthening of the Rand against the above currencies at 31 March would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant. Liquidity risk Liquidity risk is the risk of not being able to generate sufficient cash to honour financial commitments. From the Group s perspective, this would include the Group not being able to advance funds for capital expenditure, redeem and service loans, finance operational costs and service unanticipated financial commitments. The objective of the Financial Risk Management Framework is to ensure continuity of funding and flexibility, ensuring debt maturities are spread over a range of dates to manage refinancing risks. The Group is not exposed to excessive refinancing risk in any one year. As at 31 March 2017, the Group had facilities of R3.25 billion (31 March 2016: R4.0 billion), of which R2.25 billion (2016: R1.3 million) has been utilised for both periods respectively. Facility Amount Figures in Rand thousand Mar 2017 Mar 2016 Total facilities 3 250 000 4 001 367 Utilised facilities (2 250 000) (1 250 000) Total unutilised 1 000 000 2 751 367 Uncommitted facilities represent undrawn lines of credit where the bank has an agreement with the Group entity to make available an amount (up to the maximum specified) in loans on demand from the Group. The Group is under no obligation to actually take out a loan at any particular time. Committed facilities are those lines of credit where the Group and the bank have clearly defined terms and conditions which bind the bank to lend the Group up to the amounts stated in the agreement. Please refer to the following notes for details on the Group and Company s financial liabilities in terms of their maturities: Unsecured borrowings note C.1 Trade and other payables note D.3 Derivative financial instruments note C.3 Capital risk management The Group s capital management strategy is designed to ensure that the Group is adequately capitalised in a manner consistent with the Group s risk profile, economic regulatory requirements and maintaining an investment rating level. The Group monitors capital adequacy through the gearing ratio, as represented by net interest-bearing debt to total capital. Net debt is calculated as total interest-bearing borrowings (including current and non-current borrowings as shown in the statement of financial position) less cash and cash equivalents plus short-term investments. Total capital is calculated as equity as shown in the consolidated statement of financial position, plus net debt. The Group s maximum gearing ratio is up to 60% (2016: up to 60%). The gearing ratio is determined by the Treasury department and approved by Airports Company South Africa s Board. The objective is to minimise the weighted average cost of debt. The gearing ratios as at 31 March 2017 and 2016 were as follows: GROUP COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Mar 2017 Mar 2016 Total borrowings 9 331 495 9 817 516 9 329 995 9 816 016 Less: cash and cash equivalents and short-term investments (3 246 016) (2 129 668) (3 222 495) (2 116 500) Net debt 6 085 479 7 687 848 6 107 500 7 699 516 Total equity 19 033 249 17 163 476 19 054 106 16 483 910 Total capital 25 118 728 24 851 324 25 161 606 24 183 426 Gearing ratio (net debt divided by total capital) 24% 31% 24% 32% None of the entities in the Group are subject to externally imposed capital requirements.

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 63 G. OTHER G.1 Intangible assets Accounting policy Intangible assets comprise of computer software and are measured initially at cost and are carried at cost less accumulated amortisation and impairment losses. Amortisation is provided to write down the computer software on a straight-line basis to its residual value over three to five years. Changes in accounting estimate In March 2016, the Company reassessed and adjusted the useful lives of certain property and equipment based on past experience and assessment of condition following a physical verification performed. The effect of this change in accounting estimate was recognised prospectively from 1 April 2015 onward. As a result of this change, depreciation expense for the year ended 31 March 2016 changed by approximately R17.3 million. It is impracticable to determine the effect of the change in future years. GROUP Mar 2017 Mar 2016 Accumulated Carrying Accumulated Carrying Figures in Rand thousand Cost amortisation value Cost amortisation value Computer software 493 021 (358 654) 134 367 441 009 (266 683) 174 326 Figures in Rand thousand Cost COMPANY Mar 2017 Mar 2016 Accumulated Carrying Accumulated amortisation value Cost amortisation Carrying value Computer software 492 788 (358 567) 134 221 440 631 (266 536) 174 095 Reconciliation of intangible assets Figures in Rand thousand Opening balance Previously reported Adjustments Prior period error GROUP Opening balance Restated Additions Transfers Reclassification Amortisation Total 2017 Computer software 34 039 140 287 174 326 1 337 (4 889) 44 480 (80 887) 134 367 2016 Computer software 55 511 157 635 213 146 2 565 (1 959) 9 917 (49 343) 174 326 Reconciliation of intangible assets Figures in Rand thousand Opening balance Previously reported Adjustments Prior period error COMPANY Opening balance Restated Additions Transfers Reclassification Amortisation Total 2017 Computer software 33 808 140 287 174 095 1 317 (4 889) 44 480 (80 782) 134 221 2016 Computer software 55 511 157 635 213 146 2 262 (1 959) 9 917 (49 271) 174 095

64 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 G. OTHER (CONTINUED) G.2 Deferred tax Accounting policy Deferred tax assets and liabilities represent amounts of tax that will become recoverable and/or payable in future accounting periods. They generally arise as a result of temporary differences, where the time at which profits and losses are recognised for tax purposes differs from the time at which the relevant transaction is recorded in the accounts. A deferred tax asset represents a tax reduction that is expected to arise in a future period. A deferred tax liability represents taxes which will become payable in a future period as a result of a current or an earlier transaction. In respect of deferred tax assets, the Group and Company only recognise a deferred tax asset when the availability of future profits necessary to support the deferred tax asset is probable. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the asset is realised or liability is settled, based on tax rates and laws that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax assets and liabilities reflects the tax consequences that would flow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. The most significant management assumption is the forecasts used to support the probability assessment that sufficient taxable profits will be generated by the entities in the Group in order to utilise the deferred tax assets. GROUP COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Mar 2015 Mar 2017 Mar 2016 Mar 2015 Deferred tax liability Property and equipment 170 809 489 314 170 809 489 314 Investment property 905 488 999 758 740 147 863 041 958 768 705 991 Intangible assets 20 187 7 039 6 768 20 187 7 039 6 768 Lease receivables 2 009 69 023 67 170 2 009 69 023 67 170 Investments in associates 6 839 49 859 186 362 1 506 5 850 5 850 Impairment of trade and other receivables 7 778 (11 150) (18 385) 7 778 (11 150) (18 385) Other assets and liabilities (387 402) 118 349 (33 190) (320 837) 4 579 3 469 Prepayments 450 561 3 853 450 561 3 853 Provisions (69 020) (65 745) (56 023) (69 021) (65 745) (55 485) Derivative financial instruments 7 510 (20 810) 7 510 (20 810) 486 329 1 346 013 1 365 206 505 113 1 147 244 1 187 735 The deferred tax liability relates to income tax in the same jurisdiction, and the law allows net settlement.

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 65 G. OTHER (CONTINUED) G.2 Deferred tax (continued) Reconciliation of deferred tax liability GROUP COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Mar 2017 Mar 2016 At beginning of year 1 346 013 1 365 206 1 147 244 1 187 735 Prior period overprovision: Recognised in the statement of comprehensive income (231 861) (231 861) Timing differences (385 052) (385 052) Movements during the year: Change in estimate 1 194 1 194 recognised in the statement of comprehensive income (290 918) (158 500) (29 096) (49 148) recognised directly in other comprehensive income 46 953 139 307 2 684 8 657 486 329 1 346 013 505 113 1 147 244 Deferred tax liabilities expected to be recovered after more than 12 months 554 899 1 411 196 573 683 1 199 413 Deferred tax liabilities expected to be recovered within the next 12 months (68 570) (65 183) (68 570) (52 169) 486 329 1 346 013 505 113 1 147 244 G.3 Retirement benefit obligation GROUP AND COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Post-retirement medical benefit plan asset (4 189) (3 686) Post-retirement medical benefit plan liability 16 018 14 388 A. Net Post-retirement medical benefit liability 11 829 10 702 defined benefit plan B. Life fund plan liability defined benefit plan 16 646 16 945 Total employee benefit liabilities 28 475 27 647 A. Post-retirement medical benefit The Company makes contributions to a defined benefit plan that provides medical benefits to employees upon retirement. The employees eligible for the post-retirement benefit are those who were in employment at 1 August 2007. The plan entitles retired employees to receive a reimbursement of certain medical costs.

66 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 G. OTHER (CONTINUED) G.3 Retirement benefits (continued) Movement in net defined benefit liability: GROUP AND COMPANY Present value of plan liability Fair value of plan asset Net liability Figures in Rand thousand Mar 2017 Mar 2016 Mar 2017 Mar 2016 Mar 2017 Mar 2016 Balance at 1 April 14 388 16 254 (3 686) (3 739) 10 702 12 515 Included in other comprehensive income: Actuarial (gains)/ losses arising from: 503 (2 975) (54) 402 449 (2 573) Financial assumptions 345 (3 432) (54) 402 291 (3 030) Demographic assumptions 158 457 158 457 Included in profit or loss: 1 742 1 670 (375) (307) 1 367 1 363 Current service cost 329 337 329 337 Interest cost 1 413 1 333 1 413 1 333 Return on plan assets (375) (307) (375) (307) Other: Benefits paid (615) (561) 499 431 (116) (130) Contributions by employer (573) (473) (573) (473) Balance at 31 March 16 018 14 388 (4 189) (3 686) 11 829 10 702 Plan asset An insured annuity policy was purchased from Sanlam Life, in the Company's name, to fund the contribution subsidies paid to current pensioners. The policies will pay a level amount each month to the relevant medical schemes on behalf of the Company, for as long as the pensioners and/or the pensioners spouses are still alive. The insured annuity policy can only be used to fund medical aid contributions, and is not available as an asset to the Company's creditors. The full fair value of R4.2 million (2016: R3.7 million) per the reconciliation above relates to that annuity policy. The Company has also set aside an amount of R13.4 million (2016: R13.5 million) as a funding vehicle. As this amount is not protected against its creditors, it has not been included as a plan asset but rather as cash and cash equivalents in note D.2. The Company does not expect to pay contributions to this plan in 2018. Net expense recognised in profit or loss GROUP AND COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Current service cost 329 337 Interest cost 1 038 1 333 Return on plan asset (307) 1 367 1 363 Cumulative expenses recognised in other comprehensive income Balance at 1 April 2016 (23 780) (26 353) Actuarial gains recognised during the year 449 2 573 Balance at 31 March 2017 (23 331) (23 780)

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 67 G. OTHER (CONTINUED) G.3 Retirement benefits (continued) GROUP AND COMPANY Mar 2017 Mar 2016 Principal assumptions at the reporting date: Discount rates used 9.90% 9.90% Healthcare cost inflation 7.50% 7.50% Average retirement age (years) 60 60 The assumptions used by actuaries are the best estimates chosen from a range of possible actuarial assumptions which, due to the timescale covered, may not necessarily be borne out in practice. The gap between the assumptions has remained unchanged at 2.4% p.a. over the valuation period. Assumed healthcare cost trend rates have a significant effect on the amounts recognised. A one percentage point change in assumed healthcare cost trend would have the following effects: GROUP AND COMPANY 1% increase 1% decrease Figures in Rand thousand Mar 2017 Mar 2016 Mar 2017 Mar 2016 Effect on liability (10 125) (2 259) 13 968 1 845 GROUP AND COMPANY Figures in Rand thousand Mar 2017 Mar 2016 B. Life Fund Balance at 1 April 2016 16 944 18 316 Actuarial (gains)/losses recognised in other comprehensive income during the year (299) (1 372) Balance at 31 March 2017 16 645 16 944 The Company acquired a 100% shareholding in a cell captive with Guardrisk Life Limited in September 2003 to fund its obligation arising from 2002, whereby the Company agreed to increase the minimum pension pay-out to employees. Guardrisk performs a half-yearly review per individual covered to establish the present value of the Company s obligation on the prescribed valuation basis (as approved by Guardrisk Life Statutory Actuaries) in order to assess the Company s commitment as per the assets and expressed liabilities and ensure sufficient life funds are transferred to the non distributable reserves.

68 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 G. OTHER (CONTINUED) G.4 Investments GROUP AND COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Current investments Stanlib Income Fund 601 271 760 100 Cadiz Money Market Fund 50 159 Investec SteFi Plus Fund 415 735 Nedgroup Investments Core Income Fund Account 507 986 1 575 151 760 100 G.5 Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effects. There were no changes to the number of shares outstanding (in issue) at 31 March 2017 and 31 March 2016. Authorised 1 000 000 000 ordinary shares of R1 par value each. GROUP AND COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Issued Ordinary 500 000 500 000 Share premium 250 000 250 000 750 000 750 000 Unissued 500 000 000 ordinary shares of R1 par value each. The unissued ordinary shares are under the general authority of the Board of Directors. Shareholder Shareholding (%) South African Government 74.6% Public Investment Corporation 20% Empowerment investors 4.2% Staff share incentive scheme 1.2% G.6 Other reserves GROUP Figures in Rand thousand Total Fair value Foreign currency translation reserve Actuarial reserve Balance at 1 April 2015 67 887 36 658 50 317 (19 088) Actuarial gains, net of tax 3 590 3 590 Loss on remeasurement of financial instruments 24 659 24 659 Foreign currency translation differences, net of tax 607 853 607 853 Balance at 1 April 2016 703 989 61 317 658 170 (15 498) Actuarial gain, net of tax (108) (108) Gains on investment property 2 560 2 560 Loss on remeasurement of financial instruments 6 731 6 731 Foreign currency translation differences, net of tax 155 126 155 126 Balance at 31 March 2017 868 298 70 608 813 296 (15 606)

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 69 G. OTHER (CONTINUED) G.6 Other Reserves (continued) COMPANY Figures in Rand thousand Total Fair value Actuarial reserve Balance at 1 April 2015 163 709 182 797 (19 088) Actuarial losses, net of tax 3 590 3 590 Loss on remeasurement of financial instruments 24 659 24 659 Balance at 1 April 2016 191 958 207 456 (15 498) Actuarial gain, net of tax (108) (108) Gains on investment property 2 560 2 560 Loss on remeasurement of financial instruments 6 731 6 731 Balance at 31 March 2017 201 141 216 747 (15 606) G.7 Deferred income Deferred income consists of the following balances: GROUP Figures in Rand thousand Mar 2017 Mar 2016 Dube Trade Port rentals 26 948 28 324 Gautrain development 9 080 9 769 Government grants 26 493 29 577 Other 2 387 410 64 908 68 080 COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Dube Trade Port rentals 26 948 28 324 Gautrain development 9 080 9 769 Government grants 26 493 29 577 Other 2 646 410 65 167 68 080 Gautrain development relates to a grant received by the Group in the 2009 financial year from the Gautrain operator. Assets belonging to the Group, located at the O.R. Tambo International Airport's central terminal building are being used by the Gautrain operator. The assets will become the property of the Group at the end of the 34-year term of the agreement with the operator. Government grants Government grants are recognised initially as deferred income at fair value when there is reasonable assurance that they will be received and the Group will comply with the conditions associated with the grant. Grants that compensate the Group for expenses incurred are recognised in profit or loss as other income on a systematic basis in the same periods in which the expenses are recognised. Grants that compensate the Group for the cost of an asset are recognised in profit or loss on a systematic basis over the useful life of the asset. Government grants of the Group and Company are the following: A grant of R35.1 million was received in the 2010 financial year. This grant was used for the construction of the road within the Cape Town International Airport precinct. A grant of R7.5 million was received in the 2006 financial year. This grant is being used to fund engineering students from disadvantaged backgrounds. There are no outstanding conditions required to be met for this grant.

70 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 G. OTHER (CONTINUED) G.8 Provisions and contingencies Accounting policy Provisions are recognised when the Group and Company have a present obligation as a result of a past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and a reliable estimate can be made of the obligation. The amount of a provision is the present value of the expenditure expected to be required to settle the obligation. Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement is recognised when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement is treated as a separate asset. The amount recognised for the reimbursement does not exceed the amount of the provision. Currently the Group and Company provide for staff incentive bonuses. The provision for bonuses is payable within three months of finalisation of the audited consolidated annual financial statements. As such it is not present valued as the effect of the time value of money is not expected to be material. Provisions are not recognised for future operating losses. If an entity has a contract that is onerous, the present obligation under the contract is recognised and measured as a provision. Levies on infrastructure projects, where these levies do not meet the probability criteria defined within IFRS, are not provided for, but disclosed as contingent liabilities. Reconciliation of provisions GROUP Figures in Rand thousand Long-term incentive Staff incentive bonus Environmental rehabilitation Other provisions Total Opening balance at 1 April 2015 9 463 120 000 43 388 4 207 177 058 Additions 154 464 11 011 165 475 Utilised during the year (9 463) (120 031) (14 253) (143 747) Closing balance at 31 March 2016 154 433 29 135 15 218 198 786 Additions 157 440 3 941 161 381 Utilised during the year (151 102) (9 634) (11 688) (172 404) Effect of passage of time 1 518 1 518 Unused amounts reversed during the period (3 331) (3 331) Closing balance at 31 March 2017 157 440 21 019 7 491 185 950 Reconciliation of provisions Figures in Rand thousand Long-term incentive Staff incentive bonus COMPANY Environmental rehabilitation Other provisions Total Opening balance at 1 April 2015 9 463 120 000 43 388 4 207 177 058 Additions 154 464 11 011 165 475 Utilised during the year (9 463) (120 031) (14 253) (143 747) Closing balance at 31 March 2016 154 433 29 135 15 218 198 786 Additions 156 062 3 940 160 002 Utilised during the year (151 102) (9 634) (15 132) (175 868) Effect of passage of time 1 518 1 518 Unused amounts reversed during the period (3 331) (3 331) Closing balance at 31 March 2017 156 062 21 019 4 026 181 107 The staff incentive bonus represents the liability at year-end provided for the planned employee incentive bonus payment. The environmental provision is in terms of a Record of Decision issued by the Minister of Environmental Affairs and Tourism in 2008 to rehabilitate the property at the farm La Mercy no.15124 in Durban at King Shaka International Airport, as follows: Rehabilitation and maintenance of the wetlands in terms of a long-term phased plan. Implementation of a waste water management plan, including the decommissioning of a package plant used during construction of the airport.

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 71 G. OTHER (CONTINUED) G.9 Taxation Accounting policy The Group s foreign subsidiary Airports Company South Africa Global, is a tax resident in South Africa, therefore Airports Company South Africa Global and other companies within the Group will pay taxes according to the rates applicable in South Africa. Most taxes are recorded in the statement of comprehensive income and relates to taxes payable for the reporting period (current tax). The charge also includes benefits and charges relating to when income and expenses are recognised in a different period for tax and accounting purposes (deferred tax). The Group and Company recognise provisions for tax based on objective estimates of the amount of taxes that may be due. Where the final tax determination is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions respectively, in the period in which such determination is made. There may be transactions and calculations for which the ultimate tax determination has an element of uncertainty during the ordinary course of business. Uncertain tax positions, which do not meet the probability criteria defined within IFRS, are not provided for but are rather disclosed as contingent liabilities or assets as appropriate. There are no income tax implications on dividends paid by Airports Company South Africa to its shareholders. This is because all Airports Company South Africa shareholders are exempt beneficial owners of Airports Company South Africa shares in terms of section 64F of the Income Tax Act. Major components of the tax expense (income) GROUP COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Mar 2017 Mar 2016 Current Current year 965 010 922 528 953 346 919 996 Prior period (10 446) 25 100 (10 446) 25 100 Total current tax 954 564 947 628 942 900 945 096 Deferred Current year (166 133) (158 500) (6 789) (49 148) Overprovision prior year (293 728) (252 972) Total deferred tax (459 861) (158 500) (259 761) (49 148) Total 494 703 789 128 683 139 895 948 Reconciliation of the tax rate expense Reconciliation between applicable tax rate and average effective tax rate. GROUP COMPANY Figures in % Mar 2017 Mar 2016 Mar 2017 Mar 2016 Applicable tax rate 28.00 28.00 28.00 28.00 Non-deductible expenses (1.50) 0.55 (1.61) 0.55 CGT differential* 2.36 Overprovision current tax (0.17) 0.74 (0.29) 0.74 Prior year adjustments (2.83) (2.83) Other (6.84) (0.10) (7.05) * The CGT rate differential is attributable to the taxes on the equity accounted profits. 19.49 28.72 19.05 26.46

72 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 G. OTHER (CONTINUED) G.10 Earnings per share and dividends per share (Group only) Accounting policy Basic earnings per share Earnings per share (EPS) is calculated using the weighted average number of ordinary shares in issue during the period and is based on the net profit attributable to ordinary shareholders. For the purpose of calculating EPS, treasury shares are deducted from the number of ordinary shares in issue. Diluted earnings per share Diluted EPS is calculated by adjusting the earnings and number of shares for the effects of dilutive options and other dilutive potential ordinary shares. The effects of anti-dilutive potential ordinary shares are ignored in calculating diluted EPS. Dividends per share Dividends per share is calculated by using the total dividends paid out over an entire year (including annual dividends but not including special dividends) divided by the weighted average number of outstanding ordinary shares issued. Earnings per share Figures in Rand thousand Mar 2017 Mar 2016 Total profit for the year attributable to shareholders 2 044 105 1 844 704 Weighted average number of ordinary shares in issue 494 038 494 038 Basic earnings per share (cents per share) 413.75 383.20 Dividend per share Figures in Rand thousand Mar 2017 Mar 2016 Final dividend declared 338 641 274 151 Weighted average number of ordinary shares in issue 494 038 494 038 Dividend per share (cents per share) 68.55 55.49 G.11 Related parties Airports Company South Africa SOC Limited is one of the 21 Schedule 2 major public entities in terms of the Public Finance Management Act No. 1 of 1999 as amended and therefore falls within the national sphere of government. As a consequence, Airports Company South Africa SOC Limited has a significant number of related parties that are public entities. In addition, the Company has a related party relationship with its subsidiaries, associates and with its directors and executive officers (key management). Unless specifically disclosed, these transactions are concluded on an arm s length basis and the Group and Company are able to transact with any entity. Key management personnel has been defined as Airports Company South Africa s Board of Directors and prescribed officers effective for 2017 and 2016. Non-executive Directors are included in the definition of key management personnel as required by IFRS. The definition of key management includes the close family members of key management personnel and any entity over which key management exercises control or joint control. Close family members are those family members who may be expected to influence, or be influenced by, that person in their dealings with the Group. They may include the person s domestic partner and children, the children of the person s domestic partner, and dependants of the person or the person s domestic partner.

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 73 G. OTHER (CONTINUED) G.11 Related parties (continued) Related party transactions Figures in Rand thousand Services rendered Services received Amounts due from Amounts due to Mar 2017 Mar 2016 Mar 2017 Mar 2016 Mar 2017 Mar 2016 Mar 2017 Mar 2016 National departments 39 401 35 550 23 682 5 399 1 348 4 284 2 283 (0.44) Constitutional institutions 200 2 Major public entities 2 160 935 2 197 419 484 590 205 170 206 091 248 033 757 (51) National government business 178 Other national public entities* 29 216 21 866 467 801 819 309 5 407 2 536 116 (1) Subsidiaries and joint ventures 116 036 58 167 72 861 316 938 397 1 Included in the amounts disclosed are transactions concluded with related parties, that were completed at less than market value. Executive Directors Figures in Rand thousand Salary Pension fund contributions Other benefits* Total Mar 2017 Mar 2016 Mar 2017 Mar 2016 Mar 2017 Mar 2016 Mar 2017 Mar 2016 B Maseko 1 3 526 3 397 311 293 2 085 3 553 5 922 7 243 M Manyama 2 2 816 2 712 248 237 1 017 1 523 4 081 4 472 6 342 6 109 559 530 3 102 5 076 10 003 11 715 1 Appointed 15 May 2013. 2 Resigned 4 January 2017. * Other benefits comprise of cash bonuses and long service awards. Non-executive Directors Directors fees Figures in Rand thousand Appointment date Resignation date Mar 2017 Mar 2016 S Macozoma (Retired Chairman) 1 March 2012 30 November 2016 663 806 R Morar (Chairman effective 1 December 2016) 1 January 2012 608 468 D Botha (fees payable to the PIC) 1 August 2013 460 397 J Lamola 1 December 2012 439 391 K Moroka 1 December 2012 16 February 2017 506 464 B Luthuli 1 December 2012 16 February 2017 735 643 C Mabude 1 December 2012 16 February 2017 579 443 K Matlou 1 March 2015 16 February 2017 459 351 M Mabela 1 March 2015 773 523 S Simelane 1 March 2015 769 482 5 991 4 968

74 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 G. OTHER (CONTINUED) G.11 Related parties (continued) Prescribed officers Figures in Rand thousand Salary Pension fund contributions Other benefits* Total Mar 2017 Mar 2016 Mar 2017 Mar 2016 Mar 2017 Mar 2016 Mar 2017 Mar 2016 DA Cloete 2 107 1 985 185 174 1 317 2 088 3 609 4 247 PM du Plessis 2 071 1 968 183 172 1 248 2 265 3 502 4 405 H Jeena 2 329 2 224 205 194 1 161 2 567 3 695 4 985 TS Mekgoe 2 388 2 552 178 224 1 759 1 615 4 325 4 391 B Mbomvu 2 139 2 037 189 179 994 1 025 3 322 3 241 T Delomoney 1 956 1 843 172 161 1 174 1 924 3 302 3 928 JR Neville 1 824 1 824 G Vracar 1 011 1 011 Y Schoeman 991 74 2 567 3 632 A Vermeulen 2 465 2 343 217 204 1 483 1 012 4 165 3 559 S Mmakau 2 038 1 941 179 168 1 463 368 3 680 2 477 B Pityi 1 988 1 887 175 165 1 151 502 3 314 2 554 R Shinners 2 005 1 919 177 168 863 3 045 2 087 G Gopal* 2 149 2 018 188 175 1 339 410 3 676 2 603 B Matshego 2 030 1 455 179 127 881 3 090 1 582 C Shilowa 2 027 835 179 72 2 206 907 J Phateng*** 1 170 102 423 1 695 S Ngwenya** 706 62 100 868 J Khambule**** 1 906 168 533 2 607 D Kunz # 1 864 162 564 2 590 32 168 27 168 2 798 2 359 16 030 19 601 50 996 49 128 * G Gopal (Group Executive: Technical Services and Solutions, appointed 1 May 2015. Acting Chief Operating Officer, appointed 1 January 2017). ** S Ngwenya (Chief Audit Executive, appointed 21 November 2016). *** T Phateng (Acting General manager: Regional Airports). **** J Khambule ( General Manager: Regional Airports, appointed 1 April 2016). # D Kunz (Acting Chief Financial Officer, effective 5 January 2017). G.12 Events after the reporting period No matter which is material to the financial affairs at the Company has occurred between 31 March 2017 and the approval date of the financial statements. The Board of Directors has approved but not yet paid an ordinary dividend of R358 million. G.13 Irregular expenditure Group and Company Irregular expenditure is recorded in the notes to the financial statements when confirmed. The amount recorded is equal to the value of the irregular expenditure incurred unless it is impractical to determine in which case reasons therefore will be provided in the notes. Irregular expenditure defined in section 1 of the Public Finance Management Act No. 1 of 1999 (PFMA) as expenditure other than unauthorised expenditure incurred in contravention of or that is not in accordance with a requirement of any applicable legislation including (a) this Act; or (b) the State Tender Board Act No. 86 of 1968 or any regulations made in terms of that Act; or (c) any provincial legislation providing for procurement procedures in that provincial government.

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 75 G. OTHER (CONTINUED) G.13 Irregular expenditure (continued) GROUP AND COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Opening balance 446 264 312 126 Add: irregular expenditure adjustment 124 875 Add: irregular expenditure current year 914 916 134 138 Less: amounts condoned in the current year (882 796) Irregular expenditure awaiting condonation 602 539 446 264 Current year 384 617 134 138 Prior years 217 922 312 126 Total 602 539 446 264 Current year and prior year The irregular expenditure identified in the prior year relates to various incidents reported. These incidents relate to contravention of the Supply Chain Management policy and the Preferential Procurement Policy Framework Act (PPPFA) and Regulations. G.14 Fruitless and wasteful expenditure Section 1 of the PFMA defines fruitless and wasteful expenditure as expenditure which was made in vain and would have been avoided had reasonable care been exercised. GROUP AND COMPANY Figures in Rand thousand Mar 2017 Mar 2016 Opening balance 5 748 13 114 Add: fruitless and wasteful expenditure adjustment 33 Add: fruitless and wasteful expenditure current year 31 293 5 756 Less: amounts recovered/written off (214) (13 122) Fruitless and wasteful expenditure not yet closed (awaiting appropriate action) 36 860 5 748 Current year 31 080 5 748 Prior years 5 781 Add: fruitless and wasteful expenditure adjustment Total 36 861 5 748 Details of fruitless and wasteful expenditure Current year The fruitless and wasteful expenditure identified in the current year relates to the following incidents reported. The fruitless and wasteful expenditure relates mainly to non-compliance with National Treasury cost containment measures: 1) interest on provisional payment; and 2) financial misconduct. Prior year The fruitless and wasteful expenditure identified in the prior year relates to the following incidents reported. These mainly related to: 1) losses in relation to cancelled tenders; 2) interest on provisional payment; and 3) financial misconduct.

76 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 G. OTHER (CONTINUED) G.15 Contingencies Contingent assets Accounting Policy Contingent assets are not recognised in the annual financial statements but are disclosed when, as a result of past events, it is probable that economic benefits will flow to the Group, but this will only be confirmed by the occurrence or non occurrence of one or more uncertain future events which are not wholly within the Group s control. Contingent liabilities Accounting Policy Contingent liabilities include certain guarantees (other than financial guarantees) and letters of credit and are not recognised in the annual financial statements but are disclosed in the notes to the annual financial statements unless they are considered remote. Nedbank has provided guarantees of R27.4 million to Airports Company South Africa SOC Limited. The Company has signed levy agreements in respect of infrastructure projects relating to the City of Cape Town for R13 million. The obligation to pay these levies are contingent upon the city choosing to invoke their right in terms of the agreement. Contingencies relating to interests in joint ventures There are no contingencies relating to interests in joint ventures. G.16 Prior period errors The prior year adjustments relate to a physical asset verification that was performed in March 2017, an error in the accounting of prepaid insurance premiums and certain expenses recorded in the incorrect financial period. Asset verification The Company reassessed and adjusted the useful lives of certain intangible assets carried at zero net carrying amount, that were determined to be still in use. During the physical verification there were assets that were identified on the floor and could not be traced or linked due to the insufficient documentation in the old fixed assets register. There were also assets that were in the old intangible assets register which could not be linked to the assets found on the floor. These were accounted for in the prior financial year as this was the most practical period to restate, an amount of R130 million in write-offs. The Company also identified buildings which were incorrectly classified as property and equipment instead of investment property or investment property instead of property and equipment. There were reclassifications where assets were moved from one asset class to another within property and equipment. Provisions, trade receivables (prepayments) An error in the treatment of prepaid insurance premiums has been corrected in the current year, wherein there was as misclassification between trade receivables and payables, as well as an error in the accuracy of the amount. The error has been retrospectively corrected in the financial statements. Operating expenses, trade payables Certain expense items were found to have been recorded in the incorrect financial year, resulting in an error. The error has been retrospectively corrected in the financial statements. The correction of these errors affect both the Group s and Company s results, and has been applied retrospectively.

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 77 G. OTHER (CONTINUED) G.16 Prior period errors (continued) A summary of the changes to the prior year is as follows: Effect on Statement of Financial Position GROUP COMPANY Figures in Rand thousand Mar 2016 Mar 2015 Mar 2016 Mar 2015 Investment property Previously stated 4 881 537 4 336 073 4 519 069 4 013 925 Restatement due to investment properties 82 370 82 656 82 370 82 655 Restated amount 4 963 907 4 418 729 4 601 439 4 096 580 Property and equipment Previously stated 19 512 477 19 589 848 19 464 737 19 552 661 Restatement due to property and equipment (256 317) (128 007) (256 316) (128 007) Restated amount 19 256 160 19 461 841 19 208 421 19 424 654 Intangible assets Previously stated 34 039 55 511 33 808 55 511 Restatement due to intangible assets 140 287 157 635 140 287 157 635 Restated amount 174 326 213 146 174 095 213 146 Trade and other receivables Previously stated 1 014 864 1 183 312 999 237 1 172 113 Restatement 29 251 14 121 29 251 14 121 Restated amount 1 044 115 1 197 433 1 028 488 1 186 234 Retained earnings Previously stated 15 723 964 14 036 403 15 512 409 13 296 017 Restatement 29 547 143 286 29 543 143 283 Restated amount 15 753 511 14 179 689 15 541 952 13 439 300 Trade and other payables Previously stated 1 276 534 724 241 1 254 729 704 870 Restatement (33 956) (18 983) (33 951) (18 982) Restated amount 1 242 578 705 258 1 220 778 685 888 Provisions Previously stated 198 786 174 955 198 786 174 955 Restatement 2 103 2 103 Restated amount 198 786 177 058 198 786 177 058

78 AIRPORTS COMPANY SOUTH AFRICA NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS CONTINUED For the year ended 31 March 2017 G. OTHER (CONTINUED) G.16 Prior period errors (continued) Effect on Statement of Comprehensive Income GROUP COMPANY Figures in Rand thousand Mar 2016 Mar 2015 Mar 2016 Mar 2015 Depreciation, amortisation and impairments Previously stated 1 163 099 1 476 962 1 158 359 1 472 223 Restatement due to computer software 17 347 (157 635) 17 347 (157 635) Restatement due to property and equipment 127 439 (5 486) 127 440 (5 486) Restated amount 1 307 885 1 313 841 1 303 146 1 309 102 Operating expense Previously stated 2 009 638 1 872 315 1 952 856 1 809 759 Restatement (32 201) (31 000) (32 201) (31 000) Restated amount 1 977 437 1 841 315 1 920 655 1 778 759 Gains/(losses) on property and equipment Previously stated 91 357 91 357 Restatement due to property and equipment 546 (3) 546 (3) Restated amount 546 91 354 546 91 354 Fair value gains on investment property Previously stated 328 454 414 243 288 134 444 840 Restatement due to incorrectly classified property (1 700) 5 679 (1 700) 5 679 Restated amount 326 754 419 922 286 434 450 519

CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 2017 79

80 AIRPORTS COMPANY SOUTH AFRICA NOTES

GREYMATTER & FINCH # 10583

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