unique strategy

investing in the future

Pangbourne Properties Limited Annual Report 2006 profile

Pangbourne is a Property Loan Stock company listed on the JSE Limited under “Financials ‒ Real Estate” with a market capitalisation of R3,0 billion. Total properties under management exceed R7,1 billion. Pangbourne’s prime objective is to increase distributions at a rate in excess of CPIX on a sustainable basis. Pangbourne has differentiated itself from other property loan stock companies by undertaking own management of the properties in which it has an interest. Management and staff own 5,6% of the units in issue through the Pangbourne Unit Purchase Trust scheme, thereby aligning management and staff objectives with those of unitholders. focused on the future

contents ifc company profile 2 five-year financial summary and highlights 3 distributable earnings 4 year in review 6 chairman’s and ceo’s report front cover 14 directorate Corporate Park 16 corporate governance Linbro Park 22 developments and portfolio Centurion 43 annual financial statements Jet Park ibc unitholder information Pangbourne Properties Limited 1 Annual Report 2006

Linbro Park Development

Linbro Park

Linbro Park Development Johannesburg ● Premier Industrial Park ● High demand ● One of few remaining undeveloped stands Pangbourne Properties Limited 2 Annual Report 2006 five-year financial summary

2006 2005 2004 2003 2002 R’000 R’000 R’000 R’000 R’000

Revenue 489 451 362 097 291 907 275 846 166 135

Distributable earnings (page 3) 212 218 172 944 161 428 156 204 90 424

Investment properties 2 929 538 2 107 591 1 100 223 1 200 538 1 253 967

Investment and loans in associates 685 060 453 603 394 811 117 306 163

Trading investment in listed units 41 052 ̶ 23 290 162 592 63 607

Total assets 4 184 221 2 901 748 1 781 628 1 628 087 1 360 046

Combined unitholders’ interest 2 361 279 1 390 338 1 049 346 957 569 890 221

Net borrowings 1 484 905 1 266 773 552 295 485 948 349 284

Weighted average units in issue 205 235 904 179 080 833 176 130 961 175 981 149 105 029 358

Earnings per unit (cents)

Earnings 128,83 165,59 74,77 68,22 22,80

Distributable earnings per combined unit 103,40 96,57 91,66 88,76 86,09

Total distribution per unit 103,00 96,00 91,50 89,00 88,00

Net debt: income earning assets 33,0% 45,9% 33,9% 30,5% 25,3%

JSE STATISTICS

Highest unit price traded (cents) 1 500 1 035 800 720 700

Lowest unit price traded (cents) 980 717 660 506 480

Closing unit price (cents) 1 200 1 030 720 690 500

Volume of units traded 93 534 868 92 417 490 79 466 357 77 893 671 36 791 233

Units traded to average units in issue 45,6% 51,6% 45,1% 44,3% 35,0%

Total returns

Opening unit price (cents) 1 030 720 690 500 650

Income return (cents) 103,0 96,0 91,5 89,0 88,0

Capital return (cents) 170 310 30 190 (150)

Total return (cents) 273,0 406,0 121,5 279,0 (62,0)

Return: opening unit price 26,5% 56,4% 17,6% 55,8% (9,5%) highlights

 Asset growth from R2,9 billion to R4,2 billion  Gearing reduced to 33,0% providing further opportunities for growth  Total property assets under management R7,1 billion  Successful development of vacant land

TOTAL DISTRIBUTION PER UNIT

2006 103,00 2005 96,00 2004 91,50 2003 89,00 2002 88,00

TOTAL ASSETS ‒ R’000

2006 4 184 221 2005 2 901 748 2004 1 781 628 2003 1 628 087 2002 1 360 046

PROPERTY GEOGRAPHIC SPREAD BY RENTAL Mpumalanga 1% Free State 1%

KwaZulu-Natal 17% 81% highlights continued

 Distribution growth of 7,3%  Total return to unitholders of 26,5%  Ten-year annualised return of 39% per annum

2005 RAND VALUE ‒ Expiry profile of leases

Monthly 7%

07/05-06/06 26%

07/06-06/07 13% 07/07-06/08 23%

07/08-06/09 11%

07/09 20% onwards

2006 RAND VALUE ‒ Expiry profile of leases

Monthly 6% 07/06-06/07 23% 07/07-06/08 23% 07/08-06/09 23% 07/09-06/10 6% 07/10 19% onwards

PROPERTY USAGE BY RENTAL

Retail 6%

Industrial Commercial 76% 18% Pangbourne Properties Limited 3 Annual Report 2006 distributable earnings for the year ended 30 June 2006

Group

2006 2005 Distributable earnings R’000 R’000

Revenue ‒ Rentals received 277 581 246 055 ‒ Financing fees received 41 240 30 607 ‒ Facilitation fees received 15 070 ̶ ‒ Promoters fees received 8 000 ̶ ‒ Management fees received 20 645 14 060 ‒ Interest 77 015 58 775 ‒ Profit on sale of trading properties 3 880 5 911

Selling price of trading properties 17 000 12 600 Cost of trading properties (13 120) (6 689)

‒ Profit on sale of developed properties 5 436 ̶

Selling price of developed properties 32 900 ̶ Cost of developed properties (27 464) ̶

Net building costs (63 915) (43 869) Administration costs (76 191) (58 365) Net profit on disposal of investments held-for-trade 1 034 1 051 Interest received 14 395 12 350 Finance costs (113 884) (94 150) Cash share of profit from associates ̶ 2 300 SA normal tax and STC (3 936) (812) Minority interest (1 489) (969) Consolidation adjustment for BEE finance costs 7 337 ̶

Distributable earnings 212 218 172 944

Investors’ distributable earnings per combined unit

Weighted average number of combined units in issue 205 236 179 081 Distributable earnings per combined unit (cents) 103,40 96,57

Net asset value per combined unit with iFour Properties Limited and Siyathenga Property Fund Limited investments carried at market value 1 187 931

MAKE-UP OF DISTRIBUTION

Fees 5% Trading properties 1% Developed properties 1% Property management fees 5% Paforma contribution 4%

Distributions from listed associates 17%

Building income 67%

Annuity income Pangbourne Properties Limited 4 Annual Report 2006 year in review

long-term

September 2005 October 2005

CEO Athol Announcement of Campbell passed the R125 million away Yard BEE transaction on the back of a property transaction

2005

September 2005 September 2005 December 2005

Acquisition of Appointment of Agreement Abbeydale portfolio Craig Hutchison as concluded R86 million CEO for the acquisition of TRFPT portfolio R1,4 billion Pangbourne Properties Limited 5 Annual Report 2006 partnerships

February 2006 June 2006

Board declared Appointment to and announced the board of increased interim William Midgley and distribution of Rob Wesselo as 47 cents per unit executive directors

2006

April 2006 June 2006

The Pangbourne Board declared and Unit Purchase announced Trust Scheme is increased final extended to distribution of all staff 56 cents per unit Pangbourne Properties Limited 6 Annual Report 2006 chairman’s and ceo’s report

Peter Campbell Craig Hutchison Chairman Chief Executive Officer

“Over a ten-year period Pangbourne has returned an impressive 39% on an annualised basis to unitholders.”

General market comment There was stability an impressive 39% on an annualised basis to in the economic markets in for the unitholders. majority of the year which provided the platform for substantial growth in the property industry. Distribution growth increased 7,3% (2005: 5%) High oil prices, increasing current account deficits from 96 cents to 103 cents per combined unit for and growth in the demand for credit have all the year. This is in line with our vision of fuelled the fear of inflation. This, coupled with maintaining distribution growth in excess of global interest rate increases, resulted in interest inflation. In looking at our trading for the rates hardening in July 2006, signalling the turn in forthcoming year there is no indication that our the interest rate cycle. The result has been a distribution growth will be less than the growth cooling off of listed property share prices. that we had in the current year. However, property is a long term investment and, Strategy Some four years ago, Pangbourne while there has been an upward movement in embarked on a strategy of having an associated interest rates, the underlying fundamentals of the house of specialised property funds. The property market remain strong, being driven by the continued demand for rentable space as well mechanics are that Pangbourne holds strategic as a shortage of zoned land for development. stakes in specialised funds in the property industry. Pangbourne undertakes the property Performance of the Pangbourne unit price management, asset management services and and distribution Pangbourne has again ‒ as financial and corporate administration of the an investment, on an annual basis ‒ delivered to associated funds. The Managing Director and the its combined unitholders. The opening share executive team of the specialised fund are then price at 1 July 2005 was R10,30 while the closing able to focus on asset management to maximise share price as at 30 June 2006 was R12,00. (The the performance of their property investments. high for the year was R15,00). This, together with distributions for the year of 103 cents, gives a This strategy provides Pangbourne with annuity total return to investors of 26,5%. As property is income from its directly held properties, from generally considered a long term investment, it is service contracts with the specialised funds and more appropriate to measure the return over a from the distributions received from the strategic 10 year period where Pangbourne has delivered holdings. In a property loan stock structure the Pangbourne Properties Limited 7 Annual Report 2006

distribution is essentially the flow through of net Year under review rental income to unitholders in the form of Transactions Pangbourne has continued its interest on the debentures. In addition to the aggressive growth strategy throughout the year annuity income, this strategy gives Pangbourne under review, with a number of transactions the opportunity of warehousing properties for the being completed which were yield enhancing. specialised funds, or partnering with reputable The first of these was the successful listing of developers, in order to assist in the growth of the Siyathenga in August 2005, followed by associated funds. Pangbourne maintains gearing Pangbourne’s initial black empowerment deal at levels of around 33% which enables it to move with Yard Capital who acquired a 6,15% stake in quickly in the market to take advantage of any Pangbourne on the back of a R125 million opportunities that arise. property acquisition. Structuring the transaction

The strategy also enables investors to select an as a vendor placement enabled Pangbourne to investment in the property sector which suits effect an empowerment deal which was not their risk profile. Alternatively they may obtain dilutionary to unitholders. exposure to the property market as a whole The highlight of the year was undoubtedly the through Pangbourne with its strategic stakes acquisition of the Transnet Retirement Funds and management contracts in its underlying Property Trust (“TRFPT”) portfolio totalling associate companies. R1,4 billion.

Having the capacity to offer multi placings in Pangbourne currently has a 36,5% stake in iFour, units within specialised funds was a key attraction a 42,4% stake in Siyathenga and a 70% stake in to the vendor. The transaction enabled Paforma. iFour is currently focussing on acquiring Pangbourne to significantly grow the assets of predominantly decentralised retail and value both Pangbourne and Siyathenga with quality, centres. Siyathenga invests in regional and yield enhancing properties. It also afforded lifestyle shopping centres. Paforma focuses on Pangbourne the opportunity to place 37,4 million short term property financing primarily in the Pangbourne combined units with TRFPT thereby residential sector. increasing our market capitalisation. A number of

Pangbourne recently announced the proposed development and redevelopment opportunities acquisition of a 40,6% stake in the Calulo have been identified in the TRFPT portfolio and Property Fund. The transaction is subject to these are currently on the drawing board for Competition authorities’ approval and future investment.

thereafter a compulsory offer has to be made In addition to the TRFPT portfolio and the Yard to minority unitholders of Calulo. It is envisaged Capital vendor placing for properties, Pangbourne that Calulo will serve as the specialised office acquired 19 buildings for R147 million. fund in the multi fund strategy. Pangbourne Pangbourne is using the demand for properties to will assist in the growth of assets in the fund as actively asset manage the portfolio by disposing well as the placing of further equity to improve of functionally obsolete buildings in declining liquidity and investor appeal in the fund.

Distributable earnings “Pangbourne has continued its aggressive growth strategy +22,7% throughout the year.” Increase in distributable earnings R212,2 million (2005: R172,9 million) Pangbourne Properties Limited 8 Annual Report 2006 chairman’s and ceo’s report continued

Centurion and Corporate Park.

“Strategy is to create an associated house of specialised property funds.”

areas and utilising the proceeds to acquire yield In both the industrial and commercial sectors of enhancing properties which also improve the the property market upward reversions of rentals overall quality of the portfolio. During the year are being achieved in the portfolio. This is predominantly as a result of the building cost 22 buildings were sold for R111 million. increases that have taken place over recent years Negotiations are underway to sell a further 54 as well as the scarcity of both rentable space and buildings with a total book value of R181 million. land zoned for development. Pangbourne historically had a short lease expiry profile and this Portfolio performance has been advantageous in an upward Directly held properties Pangbourne’s directly reversionary rental market. held properties consist predominantly of Investment in iFour During the current financial industrial and commercial buildings. The rental year, the holding in iFour reduced to 36,5% as a demand for the industrial space continues to go result of a portion of the purchase consideration from strength to strength. The industrial portfolio for the acquisition of the TRFPT portfolio being as at 30 June 2006 had an occupancy of 97,5%, settled through iFour linked units. A strategic and there are no signs of this abating in the holding of 40% is considered ideal and, to this end, foreseeable future. a portfolio of properties is being assembled that complements the iFour strategy. Pangbourne The office portfolio that Pangbourne has been received distributions from iFour of 87 cents per assembling over the past two years has been linked unit during the financial year, through its selectively chosen with location and quality in strategic holding. The distribution, because of the mind and is well set to capitalise on the growing structure of a property loan stock, is a flow through demand for office space. The occupancy factor of the net property rentals received in iFour. in the office portfolio at 30 June 2006 was 91,4% Pangbourne will be assisting in the future growth and the expectation is that this will improve in iFour through development opportunities as over the next 12 months. The office portfolio is well as through property acquisitions. Together going to be re-aligned in terms of our strategy with the growth in the share price and the and is envisaged to be part of the Calulo distributions received, the total return from iFour Property Fund. for the 12 month period was 21%. Pangbourne Properties Limited 9 Annual Report 2006

Pomona development ‒ Johannesburg

The Palisades ‒ Jet Park a solid performance Pomona development ‒ Johannesburg ● Close to new air cargo facilities The developments have been selectively chosen with our ● Easy access to major freeways knowledge of the demand and rental rates in the market. ● Major new logistics node Pangbourne Properties Limited 10 Annual Report 2006

chairman’s and ceo’s report continued

Investment in Siyathenga Subsequent to the Boardwalk shopping centre extension With the successful listing of the Siyathenga portfolio on acquisition of the TRFPT portfolio, a R420 million 5 August 2005, the Siyathenga portfolio has extension agreement on the Boardwalk shopping grown from strength to strength. Most centre in Richards Bay was “inherited”. This significantly has been the acquisition by development agreement is at a fixed yield of 9,3% Siyathenga of R520 million of quality properties and will take place within Pangbourne and will out of the TRFPT portfolio which were identified then be offered to Siyathenga, which currently as being suited to Siyathenga’s strategy. With a owns the existing adjoining Boardwalk centre. return of 25% for the period since listing, and a Extensive demographic studies have been high quality property portfolio, Siyathenga has undertaken for the Richards Bay area and these certainly been a success story for Pangbourne and more than support the extension of some every indication is that it will continue to prosper 2 into the future. Pangbourne will be assisting 30 000 m , bringing the total centre to 2 Siyathenga in future growth through the approximately 60 000 m . warehousing of property portfolios as well as Pomona vacant land A development, situated identifying development opportunities. within one kilometre of the new airfreight terminal at

Investment in Paforma Paforma, a 70% owned Johannesburg International Airport, is taking place subsidiary which specialises in short term over three phases, each phase consisting of property financing, once again produced a solid approximately 11 000 m2 of rentable area. Work on performance, posting a contribution to the first phase is to begin in November 2006 and the Pangbourne of R10,5 million. The debtors’ book expected completion date of this phase is August has increased from R79 million in July 2005 to 2007. Construction of phase II will commence as R126 million at 30 June 2006. The book is tightly soon as phase I is 70% let. The design takes into managed and the adequacy of provisions is account the latest requirements for optimal stacking constantly monitored and is well under control. height and truck reticulation as well as flexibility for the size of the unit required, which can vary between Developments The shortage of property stock 2 000 m2 if multi-tenanted and 11 000 m2 for a single in the market has pushed purchase yields of user. The development cost for all three phases existing properties to unacceptable levels, making including land is approximately R120 million and the the acquisition of properties unattractive under completed project will yield 10%. current gearing scenarios. Pangbourne has been improving its yields by entering into development Riverhorse Valley A 50% joint venture projects on vacant land that had been acquired as development has been entered into with J T Ross part of various portfolios. Pangbourne has also in the Imvubu business park at Riverhorse Valley entered into partnerships on various projects that, in Durban. Three units are being developed on with our property experience and knowledge of this site. Two of the units have already been let our tenant base, provide attractive returns on while the third of 1 800 m2 is being developed to investment. It is not the intention of Pangbourne meet future demand. Tenants for the leased units to build up a development arm within the are Unitrans, occupying 14 200 m2, and Vodacom, company but rather to partner with reputable occupying 1 900 m2. The total development cost developers. Developments that are currently in including land is approximately R68 million giving the pipeline are: an initial yield on the project of 9,5%.

Revenue “Pangbourne has been improving on acquisition yields by entering into R489,5 million development projects on Revenue up 35,2% vacant land.” (2005: R362,1 million) Pangbourne Properties Limited 11 Annual Report 2006

Jet Park development ‒ Johannesburg

Jet Park quality and strength Jet Park development ‒ Johannesburg ● Centre of East Rand industrial hub It is envisaged that Calulo will serve as the specialised office fund in ● Excellent freeway access the multi fund strategy. ● Close proximity to airport Pangbourne Properties Limited 12 Annual Report 2006 chairman’s and ceo’s report continued

Linbro Village and Chelsea Park.

“Pangbourne has focused on acquiring and retaining the skills of the best people in the industry.”

Sunninghill office park Spare bulk was acquired on this development and there is every reason to with the Sunninghill Office Park adjacent to the believe that the development will be fully occupied Sunninghill hospital as part of the TRFPT on date of completion. acquisition. Plans are in place to erect a 6 800 m2 Jetpark Jetpark remains a sought after area for office block that will be incorporated into the tenants looking for industrial space. To help with Sunninghill Hospital with Netcare as a long term the demand in this area, Pangbourne has tenant. There is further additional bulk of 6 000 m2 developed its remaining two vacant land sites in in which a tenant has already expressed interest . Jetpark. The developments are two free standing The land was acquired as part of the TRFPT warehouses of 2 288 m2 and 2 454 m2 transaction and the return on total investment respectively. Work commenced in May 2006 and will be approximately 10,5%. the units are due for completion in October 2006. Linbro park A vacant piece of land was acquired The project is expected to return a yield of 11%. in Linbro as part of the TRFPT portfolio. There is a constant demand for space in this secure park and, Tillbury industrial park With Tillbury fully as it is one of the last vacant stands that can be occupied and there still being demand for space developed in the park, it is highly sought after. The in that area, development of phase I of this site 2 total development is 6 000 m and has been was started in November 2005 on the remaining designed with the flexibility to accommodate two vacant land adjacent to Tillbury industrial park. tenants or a single tenant. Negotiations are well Phase II, was completed in June 2006. Work on under way with prospective tenants to take up the phase III which consists of 3 223 m2 of midi and space. The project will yield approximately 10,5%. mini units with offices, began in July 2006 and is Kildrummy office park A lifestyle office park is due for completion in December 2006. Phase IV, being developed in Paulshof on the corner of which consists of approximately 4 000 m2, will Witkoppen Road and Umhlanga Avenue. It consists commence as soon as phase III is 70% let. The of eight office blocks varying between 750 and yield on money spent on these developments is 1 800 m2 each. The development has excellent expected to be 11%. visibility and access from Witkoppen Road as well as the N1 highway. Expected completion date is July The above developments have been carefully 2007 at an initial yield of 9,5%. Marketing has begun chosen based on our knowledge of the demand Pangbourne Properties Limited 13 Annual Report 2006

and rental rates in the market. The completed management, financial management, rental projects will be yield enhancing and will add to collections and legal, company secretarial and the quality of the property portfolios of both asset management services. Pangbourne and its associated companies. The strategy formulation and implementation, Broad based black economic asset management and overall operations of the empowerment The Yard Capital stake in group of associated companies is overseen by the Pangbourne has diluted from the initial 6,15% to Strategy Committee. Good corporate governance 5% as a result of the combined units that were is maintained by ensuring a majority of issued to TRFPT in April 2006. The funding independent directors on all the companies’ structure that was used to assist Yard Capital in boards of directors. The Strategy Committee is acquiring their stake in Pangbourne cannot be chaired by the Chief Executive Officer of replicated in the current market conditions where Pangbourne and consists of the managing the listed property yields have moved below the directors from the funds as well as Pangbourne interest funding offered by banking institutions. executives responsible for asset, financial, legal Pangbourne remains committed to black and strategy management. economic empowerment, and is actively There have been changes to the investigating alternative structures that will offer Conclusion board of Pangbourne in the current financial year the selected black empowerment partners the with the untimely passing away of Athol Campbell. opportunity to participate in an equity holding in In addition Anthony Diepenbroek resigned to Pangbourne with the accompanying voting rights. pursue his own interests and the board thanks Structure and staffing Pangbourne has him for his contribution. The board appointed grown significantly since 1998 from properties Craig Hutchison as Athol Campbell’s successor as under management of R365 million to the current Chief Executive Officer. William Midgley and Rob level of R7 billion properties under management. Wesselo subsequently joined the board as The staff complement in the same period has executive directors responsible for legal and grown from 20 employees to approximately 160. In strategy, respectively. We wish them well with order for this type of growth to take place it has their appointments and careers with Pangbourne. been essential to implement structures and With the number of transactions that have taken procedures that keep pace with the expanding place, it has been a very busy year for all growth. concerned. A special thanks goes to the board, The specialised funds require experts in the field executive and staff for the long hours that have for each of the property sectors. To this end, gone into making this year a success for Pangbourne’s recruitment has focused on Pangbourne. acquiring and retaining the skills of the best Pangbourne’s vision is to increase distributions people available in the industry for each of these to unitholders on an ongoing basis at rates sectors. exceeding inflation from a quality asset base The operations of Pangbourne are overseen by a managed by committed people supporting Pangbourne Executive Committee, chaired by the this strategy over the long term. All our Chief Executive Officer, which is responsible for projects and transactions are selected with the implementation and control of property this vision in mind.

innovative strategy for sustainable growth Pangbourne Properties Limited 14 Annual Report 2006 the team

1 2 3

1 Colin K Hickling (68)* Colin was previously Managing Director and 6 Deputy Chairman of Bloemfontein Board of Executors and is currently a director of The Public Trustee & Trust Corporation and Chairman of Sentech Ltd. He served three 4 5 terms on the SA Council of Valuers and a term on the UTC ACT Advisory Committee. He previously served as Deputy Chairman of the SABC, Chairman of the Association of Trust Companies, Chairman of the Association of Participation Bond Managers, Mayor of Bloemfontein and Council Member of the University of the Free State. Colin has served on the Pangbourne board since 1996 and is a member of the Audit and Risk Committee as well as the Remuneration and Nominations Committee.

2 John Braidwood Gibbon (65)* CA(SA) John retired as a partner of PricewaterhouseCoopers Inc. in 2001 having been with the practice since 1964. He is a past 7 president of Rotary and a former member of Council of the then University of Port Elizabeth. While in Port Elizabeth, John played 5 Bryan Douglas Hopkins (59)* a major role in the rescue of the private bus BCom (Hons), Accounting & Tax, CA(SA) service and its development into a very successful community owned business. After qualifying as a chartered accountant, John is a non-executive director of Hudaco Bryan was a member of staff at the Department of Accounting at the University of Industries Ltd, iFour Properties Ltd. and Cape Town and was appointed Professor of Siyathenga Property Fund Ltd. He also serves as chairman of the Audit and Risk Committees Accounting in 1979. He served on the Accounting Standards Committee of the South for these cmpanies. African Institute of Chartered Accountants and John joined the Pangbourne board in 2001, is co-authored with Professor G. K. Everingham chairman of the Audit and Risk Committee as ‘Generally Accepted Accounting Practice ‒ well as serving on the Remuneration and A South African Viewpoint” published by Nomination Committee. Juta & Co. In 1994 he joined Old Mutual Asset Managers as Head of Research and member of the executive team. Bryan was appointed Chief 3 Peter Lamont Campbell (69)* 4 Yvonne Kegomoditswe Nene Chairman Investment Officer and Executive Director of Molefi (41)* Old Mutual Asset Managers on its formation CA(SA), AMP Harvard BSoc (Fort Hare), Honours (UCT) into a company in June 1997. Peter retired as deputy chairman of Nampak Nene is currently the Managing Director and Bryan is a non-executive director of Limited in 1997 after 34 years service in the owner of Mandate Molefi, Human Resources Mvelaphanda Group Ltd and chairman of its group. This included 21 years with Metal Box and Transformation Consultants, a wholly audit committee. He is also serving a three year SA Ltd., five years as chief executive. In 1993 black and female company. She has travelled term on the Directorate of Market Abuse. Peter was elected Packaging Achiever of the extensively throughout the world, Year by the Packaging Council of S.A. for his Bryan was a director of Pangbourne from 1996 benchmarking South Africa’s Change to 1999 and rejoined the Board in February service to the packaging industry. He remains Management Strategies with those of other a non-executive director of Nampak and 2005. He serves as a member of the Audit and countries. Nene qualified as a Social Worker Risk Management Committee. chairman of Nampak’s audit committee. but later moved to the field of Human Peter is currently chairman of Hudaco Resources. Nene worked for Eskom for a Industries Ltd., as well as non-executive period of 10 years in several positions within 6 Barney Mathlhola Henry Tsita (54)* director of Crookes Brothers Ltd. and Delta the Corporate Affairs and Human Resources MAP (Wits) 7 Craig McLaren Hutchison (36)**† Electrical Industries Ltd. He is on the audit Departments. Barney is currently an executive director of Chief Executive Officer committee of these companies. She was seconded by Eskom to the Shikisha Tyre and Rubber Company, a black The Consultative Business Movement, of Department of Labour as Head of Human entity established in partnership with BCom, BAcc (Hons), CA(SA) which Peter was a member, was a group of Resources Management. She sits on the Board Goodyear SA. He was previously an executive Craig qualified as a chartered accountant concerned businessmen who played an active as a Non-Executive Director of Hudaco director of the FABCOS Group and, from 1984 on completion of his articles with Deloitte role in facilitating the business transition Industries Ltd and Royal Africa Investment to 1996, a senior business consultant at the and Touche in July 1999, having been process in South Africa. Peter is also a Past Holdings Ltd, Non-Executive Director of Centre for Developing Business at Wits Lead Group Manager on the Union Chancellor of the Order of St John of South Innovent and is a member of the Institute of Business School. Barney is also the non- Transport Worldwide audit, which Africa. Directors and corporate member of Institute executive chairman of Ninham Shand (Pty) Ltd., included listing it on Nasdaq. He joined Peter has been a member of the Pangbourne of People Management. a consulting engineering firm, as well as a Pangbourne as Group Financial Manager board since 1995 and has served as chairman Nene was appointed to the board of director of the South African Post Office Ltd. in October 2000 and was appointed to the since 1999. Peter is also a member of the Pangbourne in February 2005 and serves on Barney is currently chairman of Pangbourne’s board on 29 June 2004. Audit and Risk Committee and Remuneration the Remuneration and Nominations and Transformation Committee as well as being a Craig was appointed Chief Executive and Nominations Committee. Transformation Committees. member of the Audit and Risk Committee. Officer in September 2005. Pangbourne Properties Limited 15 Annual Report 2006

8 David John Kennedy (64)** AUDIT AND RISK MANAGEMENT Dave has been involved in the property COMMITTEE industry since 1967. In 1992 he joined Habron, the management company for J B Gibbon Pangbourne at the time, as Property Chairman Manager. In 1996 Pangbourne decided to P L Campbell 8 put in the management structures and systems to manage their own buildings C K Hickling and Dave accepted the position as General Manager Property of Pangbourne’s B D Hopkins property portfolio. Dave has been an C M Hutchison integral part of managing the growth of Pangbourne from an asset base of B M H Tsita R365 million in 1996 to the current level of R4,2 billion. Dave was appointed to the board in 2003. REMUNERATION AND NOMINATION COMMITTEE 9 Anthony John Warren Langdon P L Campbell Richards (64)** Chairman BA (Dublin) J B Gibbon Tony is a partner in Change Partners C K Hickling (executive coaching) and chairman of Paforma Property Finance (Pty) Ltd. C M Hutchison† Previously he was an executive director of Hunt Leuchars & Hepburn Ltd till 1984, Y K N Molefi thereafter a member of the Industrial Member of the Nominations Investment Company Ltd board to 1990, as † well as serving on the board of Robinson Committee only 9 10 Group Holdings Ltd from 1991 to 1998. After being appointed to the board in 1995, Tony was joint managing director of Pangbourne TRANSFORMATION COMMITTEE Properties Ltd with Athol Campbell from B M H Tsita 1996 to 1999. Chairman Tony is currently non-executive chairman of iFour Properties Ltd and Siyathenga Property P L Campbell Fund Ltd. C M Hutchison Y K N Molefi 10 William James Midgley (48)** BA LLB (UCT) A J W L Richards William is an attorney (admitted in 1985), conveyancer and notary, with extensive experience in the fields of general EXECUTIVE COMMITTEE commercial law with particular emphasis on property law and the listed property sector. C M Hutchison He joined Edward Nathan & Friedland in 1991 Chief Executive Officer and remained with them till June 2006. In G B Clark that time, William gained extensive General Manager ‒ Property Management experience in a wide area of listed property related legal and listing issues, including J J Groenewald mergers and acquisitions, listings, BEE Company secretary 11 funding, collective investment schemes, debenture schemes, the property charter and D J Kennedy the dti Code of Good Practice. Asset management William joined the Pangbourne board on C D Kramer 28 June 2006 with an established knowledge Finance and administration of the company as a result of having been closely involved with Pangbourne’s growth U van Biljon strategy over the past eight years. General Manager ‒ Property Management L M Wiseman 11 Robert Nicolaas Wesselo (42)** Credit Control Manager BA LLB (Wits) Rob practised for six years as an attorney after being admitted in 1992, focusing on COMPANY SECRETARY litigation. He joined Group 5 Building Division J J Groenewald as Development Director and remained with CA(SA) them for five years. For the past six years, Rob * Independent non-executive directors has been involved with the financial markets, 2nd Floor, Pangbourne House ** Executive directors specialising in structured finance and interest 382 Jan Smuts Avenue rate derivatives to the listed property sector. † Member of the Nominations Craighall 2196 Committee only Rob moved from Rand Merchant Bank to PO Box 781706 Pangbourne in January 2006 and was appointed to the board as an executive 2146 director on 28 June 2006. Registration No: 1987/002352/06 Share code: PAP ISIN: ZAE 000005252

160 working together as a team Pangbourne Properties Limited 16 Annual Report 2006 corporate governance

Corporate practices and conduct Pangbourne board, which meets four times a year, is responsible for subscribes to and is committed to ensuring that good the strategic direction of the group and the Chief corporate governance is practised throughout the group. Executive Officer, who chairs the Executive Committee, is The directors have, accordingly, established mechanisms responsible for its implementation. Personal information and policies appropriate to the company’s business in of the executive, non-executive and independent keeping with its commitment to best practices in directors is set out on page 14. corporate governance. The board is of the opinion that the group currently complies with all the significant requirements as set out in the King II report and the JSE Limited Listing Requirements.

Directorate The board of directors is responsible to the “Actively investigating alternative unitholders and the company for the ultimate control of structures that will offer the the business of Pangbourne and for ensuring that appropriate management and control structures are in selected black empowerment place. The board consists of an independent, non- partners the opportunity to executive chairman, five independent non-executive participate in an equity holding directors, and five executive directors. The Chairman of Pangbourne Properties Limited is elected on an annual in Pangbourne with the basis by the board and the function of this office is accompanying voting rights.” separate from that of the Chief Executive Officer. The

Details of directors’ attendance at meetings are set out below.

Audit and Risk Remuneration Management and Nomination Transformation Director Board Committee Committee Committee

A B A B A B A B

P L Campbell 4 4 3 3 2 2 3 3

A M A Campbell (deceased 11 September 2005) 1 0 1 0

J A A Diepenbroek (resigned 9 March 2006) 3 3

J B Gibbon 4 4 3 3 2 2

C K Hickling 4 4 3 3 2 2

B D Hopkins 4 4 3 3

C M Hutchison 4 4 2 2 1 1 3 3

D J Kennedy 4 4

Y K N Molefi 4 4 2 2 3 3

A J W L Richards 4 4 3 3

B M H Tsita 4 4 3 2 3 3

W J Midgley (appointed 28 June 2006) 0 0

R N Wesselo (appointed 28 June 2006) 0 0

Column A is the number of meetings held during the director’s term of office. Column B is the number of meetings attended by the director.

All directors have access to the advice and services of the company secretary and, with prior agreement of the chairman, are entitled to seek independent professional advice at the company’s cost. Pangbourne Properties Limited 17 Annual Report 2006

corporate governance continued

● Appointme nts to the board The board as a whole, within meets at least three times a year with management and its powers, selects and appoints directors on the external auditors to ensure that management implements recommendation of the Remuneration and Nomination and maintains an environment of effective corporate control Committee. and accounting, to review the group financial statements, with particular reference to current accounting issues and Prior to appointment, potential board appointees are specific disclosures in the financial statements to ensure that subject to a “fit and proper” test, as required by the JSE all such disclosures are in accordance with the International Limited. Director appointments are in terms of a formal and Financial Reporting Standards. The committee also monitors transparent procedure and are subject to confirmation by the risk management process in the group. the shareholders at the annual general meeting. Members of the Audit and Risk Management Committee are One third of the directors retire by rotation annually. If listed on page 15. eligible, their names are submitted for re-election at the annual general meeting, accompanied by the appropriate Risk management The board is responsible for ensuring that biographical details. appropriate risk management processes are in place and that

● Induction and development A formal orientation such processes are managed on a day-to-day basis by the programme is provided to all newly appointed directors. Executive Committee. In addition, new directors are provided with a “Directors’ A systematic, documented assessment of the processes and guide” setting out Pangbourne’s board and committees’ outcomes surrounding key risks is taken annually. This risk governance structure, all committees’ terms of reference, assessment addresses the company’s exposure to: the board plan for the year, the Code of Ethics, the board ● physical and operational risks; charter and founding documents. ● human resource risks; Directors are kept appropriately informed of key ● technology risks; developments affecting the company and industry ● business continuity and disaster recovery; between board meetings. ● credit and market risks; and The board has established an Executive Committee, an ● legislative compliance risks. Audit and Risk Management Committee, Remuneration and Nomination Committee as well as a Transformation The group maintains a Risk Register. For effectiveness, the risk Committee, to give detailed attention to certain of its management process relies on regular review, responsibilities and which operate within defined written communication, judgement and the knowledge of the terms of reference. management closest to those issues to achieve a risk management process embedded in day-to-day activities. The Executive Committee The Executive Committee The board uses generally recognised risk management and comprises the Chief Executive Officer, executive directors and internal control systems and frameworks to maintain a sound senior executives of the company and formulates the financial system of risk management and internal control to provide and operating strategies of the group for consideration and reasonable assurance of achieving organisational objectives approval of the board, monitors the implementation and with regard to: results thereof and monitors the risk management process. ● effectiveness and efficiency of operations; Details of the Executive Committee are set out on page 14. ● safeguarding the company’s assets (including information);

● compliance with applicable laws, regulations and The Audit and Risk Management Committee This supervisory requirements; committee is chaired by an independent non-executive ● supporting business sustainability under normal as well as director and includes an executive director and four adverse operating conditions; independent non-executive directors. The external auditors have free access to the chairman of this committee, the board ● reliability of reporting; and Chairman and the Chief Executive Officer. The committee ● behaving responsibly to all stakeholders. Pangbourne Properties Limited 18 Annual Report 2006 corporate governance continued

Internal control Internal audit and internal control are The Nomination Committee, which includes the Chief managed using a combination of the Executive Committee Executive Officer, is responsible for the assessment and review process over operations and the management of nominations of potential new directors as well as individual property portfolios, coverage of identified areas by recommendations on the composition of the board. an extension of the statutory audit function and by Members of this committee are listed on page 15. undertaking certain work internally.

The object of these procedures is to assist management The Transformation Committee and the directors in the effective discharge of their duties. Black economic empowerment Pangbourne recognises The scope of the internal audit function is to review the need to ensure broader-based participation of black the reliability and integrity of the financial and operating people in the formal economy in order to achieve information, the system of internal control, the means of sustainable development and prosperity, both at corporate safeguarding the assets, the effective management of level and in the national interest. To this end, Pangbourne the group’s resources, and the effective conduct of is continuing to explore opportunities to further black its operations. economic empowerment in the property industry. The The scope of the work undertaken and the results thereof are company has actively participated in the consultative monitored by the Audit and Risk Management Committee. forums which were responsible for producing the draft property charter. In line with the dti code of practice, the Management reporting The group has comprehensive charter has set targets for ownership, control, employment management reporting disciplines in place managed by the equity and enterprise development. In addition, as industry Executive Committee, which include the preparation of specific challenges, the industry has set itself targets for annual budgets and three-year profit and cash flow development in previously disadvantaged areas and forecasts. Individual and consolidated budgets are reviewed disposals of property to empowered companies. The and approved by the board. Monthly results are reviewed company is addressing these challenges in a proactive against budgets and prior years, where appropriate, by the manner. In addition, the procurement policy of the Executive Committee. Earnings and cash flow forecasts are company is aimed at identifying previously disadvantaged regularly updated and are reviewed and monitored by the individuals who are able to supply the necessary service to Executive Committee. the company. A Transformation Committee, chaired by independent non-executive director Barney Tsita, has been The Remuneration and Nomination Committee The established to monitor and guide the company to achieve board maintains a Remuneration Committee comprising transformation. independent non-executive directors. The committee meets at least once a year. It is responsible for reviewing the Members of the committee are listed on page 15. compensation arrangements for the Chief Executive Officer, independent non-executive directors, non-executive directors Employment equity Pangbourne has a policy of and senior executives. This committee also reviews retirement empowering its employees and encouraging them to benefits, management incentive schemes, the general maximise their potential. Departmental management is remuneration policy of the group and The Pangbourne Unit encouraged to enhance the motivation and commitment of Purchase Trust. The Committee is responsible for ensuring all employees by providing opportunities for involvement in that the company has a succession plan in place for key business and personal performance improvement. The group personnel. The remuneration paid to directors is disclosed in has designed employment policies which are appropriate to note 34 to the annual financial statements. Details of the its business and markets and which aim to attract, retain and Remuneration Committee are set out on page 15. motivate the quality of staff necessary to compete. These Pangbourne Properties Limited 19 Annual Report 2006

corporate governance continued

policies provide equal employment opportunities, without individual with the necessary energy and commitment to discrimination. Furthermore, all employees are encouraged to nurture and develop the facility for the benefit of the school improve their education by participating in the company’s as well as the local community, has been very challenging educational assistance programme. and the appointment during August 2005 of Mr Archie Caluza as the responsible person, has finally resulted in the A programme is in place to ensure that the employee learners reaping the benefit of the facility. Adult education profile will be more representative of the demographics of classes take place Monday to Thursday from 14:30 to 17:00 the regions in which the group operates whilst for Microsoft Office applications, and certificates of maintaining the group’s high standards. An Employment competency are issued to participants according to their Equity Committee oversees and monitors the acquired skills. These certificates were used as references in implementation of and compliance with the job applications with multinationals in the Mooi River area, Employment Equity Act. for example Wimpy, and the applicants were successful as a result of their computer literacy. Social investment The board recognises the need to

define and act upon Pangbourne’s responsibilities to all The school is highly regarded by the Department of stakeholders and that the “triple bottomline” principle Education and regularly achieves the highest pass rate for regulates the conduct of the business in ways that ensure matriculants from schools in previously disadvantaged sustainable social, environmental and economic communities in KwaZulu-Natal. The Department has development for the benefit of all stakeholders. recently acknowledged the contribution the computer facility is making to the education process and has allocated Pangbourne has been supporting the Nottingham Road a computer teaching post to the school. Combined School since 2002. The school is situated on the

road between Rosetta and Nottingham Road in the Natal A wider educational exposure has also been encouraged Midlands and provides educational opportunities to the and supported by Pangbourne in that the school has rural community of the area. As a result of the high been entered for the Liberty Life JSE Schools Challenge. standards set by the headmaster, Mr Protus Sokhela and The Challenge is aimed at exposing the learners to the committed to by the staff, the school has attracted learners workings of the JSE Limited and investing in shares and the from as far a field as Mooi River. The school has 450 learners. money market. Time is set aside by Pangbourne management, when visiting the school, to address the Pangbourne has re-established a computer centre at the teams participating in the Challenge, and to guide the school, providing the learners with 26 computers, linked teacher responsible for the pupils, to assist them in to a local area network, connected to the internet and fully understanding basic economic and investment principles. maintained by Pangbourne. Armed response security has

been provided as well as a secure environment to house The Pangbourne advertising board outside the school reads the computers. All equipment, including a projector “investing in our country’s future”. This is a long-term project and a colour scanner, originates from upgrade programmes as the real benefit to pupils will only manifest itself in the implemented at Pangbourne’s offices. Educational software, grade one of today. Pangbourne management is primarily focused on mathematics and language for all committed to continue giving the school the support it grades, has been installed on the system and caters for requires to build on the educational excellence it has individual performance monitoring of the learners. An initial already achieved. outlay of R150 000 was required to establish the facility and continuing financial support of R180 000 per annum is Pangbourne also supports its local community through staff required to maintain the facility. The salary of the teacher supporting organisations looking after neglected and constitutes the bulk of the funding. Finding a suitable abused children. Money is raised by the staff, which is Pangbourne Properties Limited 20 Annual Report 2006 corporate governance continued

matched rand for rand by the company, and the money is which is beyond reproach. Pangbourne has a code of used to purchase gifts and food which is then delivered and ethics which has been adopted by the board. handed out by Pangbourne staff to the children. A special effort is made at Easter and Christmas to give the children Safety, health and environment The Executive the opportunity to participate in these festive occasions. Committee is responsible for developing framework policies, guidelines and compliance regarding safety, Dealing in securities The company complies with health and the environment and ensuring that these are the JSE Limited regulations whereby directors and officers implemented effectively throughout the group. of the company are prohibited from dealing in its units for a designated period preceding the announcement of its financial results or in any other period considered sensitive. ‘The “triple bottom line” principle ensures sustainable social, Stakeholder communication The company environmental and economic subscribes to the principle of timeous and relevant communication to all relevant parties, including development.’ unitholders and employees.

Code of ethics All directors and employees are required to maintain the highest ethical standards in ensuring that the group’s business practices are conducted in a manner Pangbourne Properties Limited 21 Annual Report 2006

community support Nottingham Road Combined School The school is situated in the Natal midlands and provides educational opportunities to the rural community. The school has attracted learners from as far afield as Mooi River and has 450 students. Pangbourne Properties Limited 22 Annual Report 2006 developments and portfolio

Cambridge Commercial Park

Cambridge Commercial Park is a high demand small industrial node with the benefit of exposure to the N1 Fury Ford motor dealership freeway as well as access from Witkoppen Road. It is surrounded by middle and high income residential suburbs and as a result thereof there is no possibility of immediate competition.

Cambridge Commercial Park West

Kildrummy Office Park

It is expected that there will be strong demand for this lifestyle office park which will enhance the office component of the Cambridge/Paulshof mixed use node comprising Cambridge Commercial Park (industrial), Cambridge Crossing (retail) and Cambridge Manor (office)

Kildrummy Office Park developments Pangbourne Properties Limited and portfolio 23 Annual Report 2006

Nelspruit

Pretoria

Johannesburg

Potchefstroom  Industrial properties Klerksdorp Richards Bay  Office properties Welkom  Retail properties Bloemfontein  Other properties

 Vacant land Pietermaritzburg

 Properties sold during the year Durban

Port Shepstone

Cape Town Pangbourne Properties Limited 24 Annual Report 2006 properties as at 30 June 2006

2 2

Industrial properties Name/address of property Site area m Lettable area m Rent received R’000 Building expenditure R’000 Net building income/(loss) R’000 Occupancy factor

ABS Centre 10 Dartfield Road, Eastgate Ext, Johnnesburg 4 413 5 571 943 (257) 686 64% Aeroport 01 cnr Loper Avenue and Zurich Street, Aeroport, Ekurhuleni 1 742 1 590 506 (138) 368 100% Aeroport 02 78 Loper Road, Aeroport, Ekurhuleni 4 760 2 722 564 (117) 447 100% AFM 79 Reedbuck Crescent, Corporate Park South, Randjespark, Johannesburg 3 978 4 194 1 438 (301) 1 137 100% Airways Close 5 Willcox Road, Prospecton, eThekwini 15 462 7 200 1 234 (428) 806 92% Alexander Road 18, 19, 20, 21 and 22 Alexander Road, Westmead, eThekwini 10 501 3 992 1 048 (342) 706 100% Alrode 01 28 Fuch Street, Alrode, Ekurhuleni 5 375 2 584 303 (33) 270 100%

Aeroport 01 Alrode South 02 83 De Beer Street, Alrode South, Ekurhuleni 2 100 1 000 102 (88) 14 100% Alrode South 07 257 Bosworth Street, Alrode South, Ekurhuleni 3 430 1 670 219 (138) 81 100% Alrode South 08 249 Bosworth Street, Alrode South, Ekurhuleni 2 817 1 568 190 (63) 127 100% Alrode South 09 175, 176 Barnato Road, cnr Barnato and Tarry Roads, Alrode South, Ekurhuleni 4 136 1 452 222 (4) 218 100% Alrode South 10 17 Statler Street and 26 Van der Bijl Street, Alrode South, Ekurhuleni 3 138 634 102 10 112 100% Ampaglass Nywerheids Street and 2 Essex Terrace, Tunney, Ekurhuleni 12 054 12 814 2 071 (23) 2 048 100% AFM Anderbolt 60 and 61 Lea Road, Anderbolt, Ekurhuleni 9 686 7 400 691 (103) 588 100% Anderbolt 03 12 Atlas Road, Anderbolt, Ekurhuleni 18 332 8 587 1 824 (187) 1 637 100% Anderbolt 04 103 and 104 Top Road, cnr Top and Main Roads, Anderbolt, Ekurhuleni 18 190 7 845 1 435 (195) 1 240 100% Anderbolt 06 88 Kirschner Road, Anderbolt, Ekurhuleni 9 163 3 983 706 (251) 455 100% Anderbolt 07 cnr Dormeyl, Craig and Main Roads, Anderbolt, Ekurhuleni 41 797 17 432 3 194 (560) 2 634 97% Anderbolt 09 The Avenues, 128 14th Avenue, Anderbolt, Ekurhuleni 18 170 9 185 1 651 (333) 1 318 100% Anmerity 38 Hendrik van Eck Street, Rosslyn, Tshwane 40 468 7 776 827 (201) 626 72% Barnes 122 10th Road, Kew, Johannesburg 2 974 900 146 (31) 115 100% Pangbourne Properties Limited 25 Annual Report 2006

properties continued as at 30 June 2006

2 2

Industrial properties continued Name/address of property Site area m Lettable area m Rent received R’000 Building expenditure R’000 Net building income/(loss) R’000 Occupancy factor

Bart Street 8 Field Street, cnr Bart and Field Streets, Wilbart, Ekurhuleni 3 930 3 473 615 98 713 100% Benrose 01 17 and 19 Bridget Road and 32, 34, 36, 38 and 40 Main Reef Road, Benrose, Johannesburg 14 922 8 802 1 327 (307) 1 020 100% Benrose 02 19 and 29 Reuven Road, cnr Reuven and Main Reef Roads, Benrose, Johannesburg 1 891 809 125 (12) 113 0% Benrose 04 5 Bridget Road, Benrose, Johannesburg 6 236 5 094 668 (111) 557 100% Benrose 05 9, 11, 13, 15, 17, 21 and 23 Reuven Road, Benrose, Johannesburg 14 876 9 539 1 297 (920) 377 62% Benrose 06 cnr Main Reef and Reuven Roads, Benrose, Johannesburg 3 715 2 225 465 (130) 335 100% Benrose 07 12, 14, 16 and 18 Reuven Road, Benrose, Johannesburg 3 598 2 529 532 (55) 477 100% Benrose 08 23 New Goch Road, Benrose, Johannesburg 29 585 13 538 2 251 (363) 1 888 100% Benrose 09 17 Barney Road, Benrose, Johannesburg 1 883 2 498 230 (6) 224 48% Benrose 10 23 and 25 Barney Road, Benrose, Johannesburg 4 003 3 290 505 (93) 412 100% Benrose 57 Benrose 11 96 Main Reef Road, Benrose, Johannesburg 4 155 2 726 376 (304) 72 100% Benrose 12 35, 37, 39, 41, 43 and 47 New Goch Road, Benrose, Johannesburg 2 748 1 783 321 (83) 238 90% Benrose 13 94 Main Reef Road, Benrose, Johannesburg 2 453 2 722 78 (35) 43 0% Benrose 14 84 Main Reef Road, Benrose, Johannesburg 2 997 6 461 757 (632) 125 97% Benrose 15 68 Main Reef Road, Benrose, Johannesburg 2 809 2 063 70 261 331 100% Benrose 16 56 and 62 Main Reef Road, Benrose, Johannesburg 3 573 736 72 (72) ̶ 100% Benrose 18 100, 102 and 104 Main Reef Road, cnr New Goch and Main Reef Roads, Benrose, Johannesburg 6 061 3 731 896 (104) 792 100% Benrose 19 114 and 116 Main Reef Road, Benrose 59 Benrose, Johannesburg 2 101 2 004 302 (61) 241 85% Pangbourne Properties Limited 26 Annual Report 2006

properties continued as at 30 June 2006

2 2

Industrial properties continued Name/address of property Site area m Lettable area m Rent received R’000 Building expenditure R’000 Net building income/(loss) R’000 Occupancy factor

Benrose 20 19 Julbert Road, Benrose, Johannesburg 1 890 872 157 (112) 45 100% Benrose 22 25 Raebor Road, Benrose, Johannesburg 984 415 91 (39) 52 100% Benrose 23 128 and 130 Main Reef Road, Benrose, Johannesburg 1 257 1 819 118 (35) 83 65% Benrose 24 55 and 57 Raebor Road, Benrose, Johannesburg 1 073 715 167 (15) 152 100% Benrose 25 136 Main Reef Road, Benrose, Johannesburg 1 676 1 389 211 ̶ 211 100% Benrose 26 138 Main Reef Road, Benrose, Johannesburg 5 921 4 765 619 (125) 494 100% Benrose 27 77 Raebor Road, Benrose, Johannesburg 7 428 3 946 567 (85) 482 100% Benrose 62 Benrose 28 57 Raebor Road, Benrose, Johannesburg 4 805 3 535 596 (62) 534 100% Benrose 29 19, 21 and 23 Julbert Road, cnr Raebor and Julbert Roads, Benrose, Johannesburg 2 266 1 730 292 41 333 100% Benrose 30 29 Julbert Road, Benrose, Johannesburg 1 311 1 242 193 (148) 45 100% Benrose 31 31 Julbert Road, Benrose, Johannesburg 1 311 1 133 124 (240) (116) 100% Benrose 32 33 Julbert Road, Benrose, Johannesburg 1 311 937 194 66 260 100% Benrose 33 35 Julbert Road, Benrose, Johannesburg 1 311 1 159 176 (34) 142 100% Benrose 69 Benrose 35 39 and 45 Julbert Road, Benrose, Johannesburg 1 771 1 673 342 22 364 100% Benrose 36 47 and 49 Julbert Road, Benrose, Johannesburg 1 573 1 523 248 (162) 86 100% Benrose 37 55 and 57 Julbert Road, Benrose, Johannesburg 1 573 1 540 261 (57) 204 100% Benrose 39 63 and 65 Julbert Road, Benrose, Johannesburg 10 151 1 836 357 (86) 271 100% Benrose 40 58, 60, 62, 64, 70, 72 and 76 Raebor Road, Benrose, Johannesburg 10 456 4 603 892 (161) 731 100% Benrose 42 26 New Goch Road, Benrose, Johannesburg 705 368 58 (59) (1) 100% Benrose 43 28 New Goch Road, cnr Julbert and New Goch Roads, Benrose, Johannesburg 756 806 189 (14) 175 100% Benrose 44 6 Julbert Road, Benrose, Johannesburg 1 079 842 149 (21) 128 100% Pangbourne Properties Limited 27 Annual Report 2006

properties continued as at 30 June 2006

2 2

Industrial properties continued Name/address of property Site area m Lettable area m Rent received R’000 Building expenditure R’000 Net building income/(loss) R’000 Occupancy factor

Benrose 45 22 and 24 New Goch Road, Benrose, Johannesburg 3 612 ̶ 78 (66) 12 50% Benrose 46 18 New Goch Road, cnr New Goch and Barney Roads, Benrose, Johannesburg 4 403 3 066 185 (250) (65) 0% Benrose 47 33, 35 Raebor Road, Benrose, Johannesburg 3 812 2 584 213 (170) 43 100% Benrose 48 16 and 18 Julbert Road, cnr Julbert and Raebor Roads, Benrose, Johannesburg 2 238 1 841 312 (189) 123 100% Benrose 49 1 and 3 Theodore Road, cnr Raebor and Theodore Roads, Benrose, Johannesburg 1 561 1 098 142 (27) 115 100% Benrose 51 26 Julbert Road, Benrose, Johannesburg 1 978 2 054 426 (62) 364 100% Benrose 53 Benrose 74 15 Theodore Road, Benrose, Johannesburg 989 836 173 (4) 169 100% Benrose 54 30 Julbert Road, cnr Julbert and Adam Roads, Benrose, Johannesburg 1 961 1 983 279 (8) 271 100% Benrose 55 39, 41 and 43 Barney Road, cnr Barney and Raebor Roads, Benrose, Johannesburg 3 459 2 933 438 (128) 310 100% Benrose 56 6 Theodore Road, Benrose, Johannesburg 1 062 844 146 (37) 109 100% Benrose 57 45, 47 and 49 Barney Road, Benrose, Johannesburg 3 112 2 030 452 (57) 395 100% Benrose 58 28 and 30 Adam Road, Benrose, Johannesburg 2 200 2 204 376 (328) 48 100% Benrose 59 38, 40, 42 and 44 Julbert Road, Benrose, Johannesburg 6 960 3 564 567 (110) 457 100% Benrose 60 46 Julbert Road, Benrose, Johannesburg 3 514 3 123 600 (56) 544 100% Benrose 61 50 Julbert Road, Benrose, Johannesburg 2 720 1 902 290 (124) 166 100% Benrose 62 71 Barney Road, Benrose, Johannesburg 6 297 3 617 382 (127) 255 100% Benrose 63 63 Barney Road, Benrose, Johannesburg 3 378 2 262 415 (28) 387 100% Benrose 64 18, 20, 22, 24 and 26 Adam Road, cnr Adam and Barney Roads, Benrose, Johannesburg 6 600 4 225 915 (121) 794 100% Benrose 65 Benrose 79 60 and 62 Barney Road, Benrose, Johannesburg 1 198 841 157 (57) 100 100% Pangbourne Properties Limited 28 Annual Report 2006

properties continued as at 30 June 2006

2 2

Industrial properties continued Name/address of property Site area m Lettable area m Rent received R’000 Building expenditure R’000 Net building income/(loss) R’000 Occupancy factor

Benrose 66 6 Adam Road, Benrose, Johannesburg 4 666 4 394 961 24 985 100% Benrose 68 47 Robyn Road, Benrose, Johannesburg 2 533 1 864 380 (31) 349 100% Benrose 69 39 Robyn Road, Benrose, Johannesburg 4 250 3 469 608 (82) 526 100% Benrose 70 44 Barney Road, cnr Barney and Adam Roads, Benrose, Johannesburg 35 841 16 446 241 (341) (100) 100% Benrose 71 25, 27 and 29 Raebor Road, cnr Barney and Raebor Roads, Benrose, Johannesburg 2 961 2 347 419 (107) 312 100% Benrose 72 16 New Goch Road, cnr New Goch and Barney Roads, Benrose, Johannesburg 1 030 607 103 (91) 12 100% Cambridge 04 Benrose 73 12 New Goch Road, Benrose, Johannesburg 1 782 1 158 184 123 307 100% Benrose 74 13 ‒ 43 New Goch Road, Benrose, Johannesburg 2 098 1 471 325 (68) 257 100% Benrose 75 18 and 24 Barney Road, Benrose, Johannesburg 8 225 4 600 768 (97) 671 100% Benrose 78 108, 110 and 112 Main Reef Road, Benrose, Johannesburg 5 046 2 362 416 (60) 356 92% Benrose 79 45 Robyn Road, Benrose, Johannesburg 2 437 1 536 329 (37) 292 100% Broadwalk Motor City Broadwalk Motor City cnr Old Pretoria and Broadwalk Roads, Halfway House, Johannesburg 6 906 4 615 777 (270) 507 100% Bromhof 3 Arbeid Street, Strijdom Park, Johannesburg 2 300 1 501 394 (78) 316 100% Cambridge 01 22 Witkoppen Road, Paulshof, Johannesburg 7 688 3 483 512 (85) 427 100% Cambridge 02 22 Witkoppen Road, Paulshof, Johannesburg 26 126 10 877 904 (250) 654 100% Cambridge 03 22 Witkoppen Road, Paulshof, Johannesburg 3 588 1 163 105 (67) 38 100% Cambridge 04 23 Witkoppen Road, Paulshof, Johannesburg 3 090 1 268 229 (27) 202 100% Cedarfield Close 13 13 Cedarfield Close, Springfield Park, eThekwini 2 599 1 344 411 (129) 282 100% Cedarfield Close 3 3 Cedarfield Close, Springfield Park, eThekwini 15 039 6 549 5 383 (319) 5 064 100% Cedarfield Close 3a 6 Cedarfield Close, Springfield Park, eThekwini 12 698 5 140 1 965 (2) 1 963 100% Pangbourne Properties Limited 29 Annual Report 2006

properties continued as at 30 June 2006

2 2

Industrial properties continued Name/address of property Site area m Lettable area m Rent received R’000 Building expenditure R’000 Net building income/(loss) R’000 Occupancy factor

Clovelly Park 342 Old Pretoria Road, Halfway House, Johannesburg 25 438 11 725 2 736 (827) 1 909 100% Colkene 71 Reedbuck Crescent, Corporate Park, Randjespark, Johannesburg 4 631 part of AFM ̶ ̶ ̶ 0% Corporate Park 01 64 Lechwe Street, Corporate Park South, Johannesburg 10 210 5 447 432 (83) 349 100% Corporate Park 02 66 Lechwe Street, Corporate Park South, Johannesburg 10 210 4 835 403 (72) 331 100% Corporate Park 03 78 Lechwe Street, Corporate Park South, Johannesburg 10 172 5 268 441 (61) 380 100% Corporate Park 04 142 Lechwe Street, Corporate Park South, Johannesburg 5 351 2 714 179 (49) 130 100% Corporate Park 05 144 Lechwe Street, Corporate Park Coventry Park South, Johannesburg 5 351 2 876 189 (57) 132 100% Coventry Park 675 Old Pretoria Main Road, Halfway House, Johannesburg 12 194 6 293 385 (284) 101 98% Covora Road 9 Covora Road, Jet Park, Ekurhuleni 6 714 3 831 575 (380) 195 100% Crescent Heights 139 Old Pretoria Road, cnr James Crescent and Old Pretoria Road, Crescent Heights Halfway House, Johannesburg 15 050 7 170 2 047 (484) 1 563 100% Cuzco 484 Kyalami Boulevard, Kyalami Business Park, Johannesburg 3 902 2 646 640 (127) 513 100% Dashing 1105 Anvil Road, Robertville, Johannesburg 16 049 10 800 1 392 (256) 1 136 100% Del Engineering 11 Martinus Ras Street, Rosslyn, Tshwane 32 372 12 810 1 559 (598) 961 100% Diesel Road 37 Diesel Road, Isando, Ekurhuleni 42 718 21 824 3 381 (1 194) 2 187 100% Dovehouse 1 Walton Road, cnr Walton and Sabax Roads, Aeroton, Johannesburg 6 764 3 928 331 (81) 250 89% Eastgate 01 7, 9, 11 and 13 Olympia Street, Eastgate Ext, Johannesburg 27 832 8 210 2 077 (395) 1 682 100% Eastgate 02 12 and 14 Olympia Street, Eastgate Ext, Johannesburg 8 672 4 433 1 185 (538) 647 100% Eastgate 04 15, 17, 19 and 21 Olympia Street, Eastgate Ext, Johannesburg 17 412 9 053 2 440 (503) 1 937 100% Corporate Park 02 Pangbourne Properties Limited 30 Annual Report 2006

properties continued as at 30 June 2006

2 2

Industrial properties continued Name/address of property Site area m Lettable area m Rent received R’000 Building expenditure R’000 Net building income/(loss) R’000 Occupancy factor

Ebonyfield Avenue 20 Ebonyfield Avenue, Springfield Park, eThekwini 8 338 5 305 1 824 (334) 1 490 100% Ebonyfield 19 19 Ebonyfield Avenue, Springfield Park, eThekwini 4 270 2 412 824 (195) 629 100% Elandsfontein 01 60 North Reef Road, Elandsfontein, Ekurhuleni 48 090 24 686 554 (736) (182) 100% FT Alrode 15 Vereeniging Road, Alrode, Ekurhuleni 21 562 4 128 569 (135) 434 100% Gap House 44 Sixth Street, Wynberg, Johannesburg 3 718 2 127 328 (55) 273 100% Germiston 01 Jonas Road (off Jack), Germiston, Ekurhuleni 92 349 11 628 740 (173) 567 100% Germiston 02 Jonas Road (off Jack), Germiston, Ekurhuleni Part of GM01 23 546 663 (249) 414 100%

Elandsfontein 01 Germiston 03 Jonas Road (off Jack), Germiston, Ekurhuleni Part of GM02 13 168 623 (172) 451 100% Grader Road 17 Grader Road, Spartan, cnr Roller Street and Grader Road, Spartan Ext, Ekurhuleni 6 348 3 029 756 (39) 717 100% Grid 1 Imola Place, cnr Imola and Kyalami Roads, Westmead, eThekwini 1 955 1 491 388 (137) 251 100% Hekro 38 Isando Road, cnr Electron Avenue and Isando Road, Isando, Ekurhuleni 14 509 10 585 1 391 (517) 874 100% Hennops 01 30 Bell Street, Hennopspark, Tshwane 19 049 8 500 3 470 67 3 537 100% Heriotdale 02 Hennops 01 1 Keerom Road, cnr Main Reef Road, Heriotdale, Johannesburg 41 211 18 834 3 425 242 3 667 100% Hilti 68 ‒ 72 Gazelle Avenue, Corporate Park South, Randjespark, Johannesburg 4 513 2 372 909 (96) 813 100% Hi-Performance 126 10th Road, Kew, Johannesburg 1 487 800 75 (56) 19 100% Hitachi 10 Hawthorne Place, Mahogany Ridge, eThekwini 6 770 1 610 689 (75) 614 100% Industria 01 cnr Commando Road and Price Extension, Industria, Johannesburg 57 744 38 931 3 880 (613) 3 267 100% Isando 01 3 Latei Street and 8 Hulley Street, Isando, Ekurhuleni 7 464 4 804 735 (325) 410 100% Isando 02 154 Monteer Road, Isando, Ekurhuleni 37 947 20 433 653 (82) 571 100% Pangbourne Properties Limited 31 Annual Report 2006

properties continued as at 30 June 2006

2 2

Industrial properties continued Name/address of property Site area m Lettable area m Rent received R’000 Building expenditure R’000 Net building income/(loss) R’000 Occupancy factor

Jet Park 01 2 and 4 Derrick Coetzee Road, Jet Park, Ekurhuleni 2 003 1 088 291 (53) 238 100% Jet Park 02 64 Kelly Road, Jet Park, Ekurhuleni 3 274 1 784 589 (145) 444 77% Jet Park 03 56 Kelly Road, Jet Park, Ekurhuleni 7 665 3 821 1 142 (208) 934 100% Jet Park 04 (The Palisades) 39 Kelly Road, Jet Park, Ekurhuleni 28 804 18 465 5 078 (833) 4 245 97% Jet Park 07 Yaldwyn Road, Jet Park, Ekurhuleni 14 180 3 829 1 053 (71) 982 100% Jet Park 08 Jones Road, Jet Park, Ekurhuleni 43 282 25 416 1 600 (591) 1 009 93% John Street Industrial Park 18 and 20 John Street, Selby, Johannesburg 19 467 14 191 2 522 (675) 1 847 100% Jonathan Ball 10, 12 and 14 Watkins Street, Jetpark 07 Denver, Johannesburg 5 765 3 224 871 (6) 865 100% Joyner Road 2 Joyner Road, Prospecton, ethekweni 23 643 17 505 2 425 (268) 2 157 100% Kew 492 cnr 3rd Avenue and 10th Road, Kew, Johannesburg 2 974 1 928 131 (33) 98 100% KMI 17 Fuchs Street, Alrode, Ekurhuleni 13 157 5 760 544 (102) 442 100% Koppel Elga 33 Brewery Street, cnr Brewery and Isando Roads, Jonathan Ball Isando, Ekurhuleni 13 546 8 745 1 596 (313) 1 283 100% Kramer Road 17 Kramer Road, Kramerville, Johannesburg 6 675 6 223 1 685 (455) 1 230 100% Lakeview 01 Lakeview Business Park, Yaldwyn Road, Jet Park, Ekurhuleni 1 150 527 113 (26) 87 100% Lakeview 03 Lakeview Business Park, Yaldwyn Road, Jet Park, Ekurhuleni 1 200 527 179 (30) 149 100% Lakeview 04 Lakeview Business Park, Yaldwyn Road, Jet Park, Ekurhuleni 1 200 757 163 (22) 141 100% Lakeview 05 Lakeview Business Park, Yaldwyn Road, Jet Park, Ekurhuleni 1 200 757 141 (14) 127 100% Lakeview 06 Lakeview Business Park, Yaldwyn Road, Jet Park, Ekurhuleni 1 200 757 136 (11) 125 100% Lakeview 07 Lakeview Business Park, Yaldwyn Road, Jet Park, Ekurhuleni 1 200 757 172 (34) 138 100% Lakeview 07.1 Lakeview Business Park, Yaldwyn Road, Jet Park, Ekurhuleni 6 406 2 667 490 (37) 453 100% Lakeview 09 Kramer Road Lakeview Business Park, Yaldwyn Road, Jet Park, Ekurhuleni 8 688 2 063 469 (184) 285 100% Pangbourne Properties Limited 32 Annual Report 2006

properties continued as at 30 June 2006

2 2

Industrial properties continued Name/address of property Site area m Lettable area m Rent received R’000 Building expenditure R’000 Net building income/(loss) R’000 Occupancy factor

Lakeview 10 Lakeview Business Park, Yaldwyn Road, Jet Park, Ekurhuleni 2 724 1 466 253 (19) 234 100% Lakeview 11 Lakeview Business Park, Yaldwyn Road, Jet Park, Ekurhuleni 4 888 2 721 591 (131) 460 100% Lakeview 14 Lakeview Business Park, Yaldwyn Road, Jet Park, Ekurhuleni 3 568 1 796 316 (9) 307 100% Lakeview 15 Lakeview Business Park, Yaldwyn Road, Jet Park, Ekurhuleni 3 218 1 982 405 (2) 403 100% Lanzerac Old Pretoria Road, Halfway House, , Johannesburg 18 796 9 412 2 824 (47) 2 777 87% Le Roy Somer Bart Street, Wilbart, Ekurhuleni 2 488 1 099 274 (10) 264 100% Linbro 01 9 Galaxy Avenue, Linbro Park, Johannesburg 25 006 13 499 1 798 (550) 1 248 100% Linbro 02 Linbro 01 cnr Milkyway Avenue and Proton Streets, Linbro Park, Johannesburg 3 754 1 796 195 (29) 166 100% Linbro 03 8 Milkyway Avenue, Linbro Park, Johannesburg 9 568 3 645 347 (56) 291 100% Linbro 04 4 Neutron Street, Linbro Park, Johannesburg 3 823 2 000 185 (30) 155 100% Linbro 05 4 Electron Street, Linbro Park, Johannesburg 5 386 1 944 186 (40) 146 100% Linbro Village 09 Linbro Village, 12 Village Crescent, Linbro Park, Johannesburg 1 373 593 276 (51) 225 100% Linbro Village 28 Linbro Village, 22 Village Crescent, Linbro Park, Johannesburg 1 373 612 206 (27) 179 100% Merinda Industrial Park Lucem House 5 5th Street, Wynberg, Johannesburg 3 718 5 186 817 (339) 478 100% Malcolm Road 20 and 22 Malcolm Road, Westmead, eThekwini 8 092 5 526 1 072 (195) 877 100% Mercurius Motors Jurgens Street, Isando, Ekurhuleni 22 750 6 553 3 502 (15) 3 487 100% Merinda Industrial Park 71 and 73 Rudo Nel Street and 2 and 4 Rachel Street, Hughes, Ekurhuleni 17 647 8 130 1 839 (742) 1 097 96% Midrand 01 cnr Richards Drive and Le Roux Avenue, Halfway House, Johannesburg 4 045 1 658 438 (206) 232 100% Midwest 1217 Leader Avenue, Robertville, 1 551 1 551 219 (66) 153 100% Mini Park 13 Trafford Road, Westmead, eThekwini 17 468 9 626 2 163 (451) 1 712 100% Nature’s Source 1211 Umgeni Road, Stanford, eThekwini 4 857 9 470 2 981 (101) 2 880 100% Pangbourne Properties Limited 33 Annual Report 2006

properties continued as at 30 June 2006

2 2

Industrial properties continued Name/address of property Site area m Lettable area m Rent received R’000 Building expenditure R’000 Net building income/(loss) R’000 Occupancy factor

Nitor 14 Commerce Crescent, cnr Dartfield Road and Commerce Crescent, Eastgate Ext, Johannesburg 6 644 8 035 1 830 (497) 1 333 96% North Coast Road 85 85 North Coast Road, eThekwini 2 102 1 266 258 (71) 187 100% Northlands Décor Park cnr Witkoppen and Newmarket Streets, Northriding, Johannesburg 2 120 2 120 201 (1) 200 100% Olifantsfontein 01 1 Porcelain Road, Olifantsfontein, Johannesburg 152 635 34 105 962 (251) 711 100% Park Central 03 11 Broad Street, Park Central, Johannesburg 5 843 7 643 1 109 (189) 920 100% Park Central 04 36 Simmonds Southway, cnr Simmonds Southway and Wall Street, Park Central, Johannesburg 12 758 11 090 1 450 (86) 1 364 100% Park Central 05 1 London Lane, cnr London Lane and Wall Street, Park Central, Johannesburg 5 612 4 362 733 (338) 395 100% Park Central 06 27, 28, 29, 30, 31, 32 and 33 Amsterdam Avenue, Park Central, Northlands Décor Park Johannesburg 5 165 3 313 547 (169) 378 100% Park Central 09 12 and 22 Simmonds Southway, cnr Simmonds Southway and Wall Street, Park Central, Johannesburg 5 724 2 706 510 (85) 425 100% Park Central 10 8 Landsborough Street, Park Central, Johannesburg 6 924 4 564 692 (264) 428 100% Park Central 11 1 Amsterdam Avenue, Park Central, Johannesburg 1 469 966 167 (310) (143) 100% Park Central 12 3 ‒ 7 Ruargh Street, Park Central, Johannesburg 6 844 3 742 530 (253) 277 100% Prospecton Industrial Park 6 Prospecton Road, Isipingo, eThekwini 34 800 19 729 603 (243) 360 89% Putco Rosslyn Rautenbach Street, Rosslyn, Tshwane 24 281 4 145 868 (409) 459 100% PVC 57 Detroit Road, Apex, Ekurhuleni 21 278 8 747 457 (511) (54) 100% Reliance 107 Heidelberg Road, City Deep, Johannesburg 11 397 6 768 1 038 (433) 605 91% Nitor Reuven 01 5 Andrea Road, Reuven, Johannesburg 2 365 2 724 333 (81) 252 100% Reuven 02 2 Andrea Road, cnr Andrea and Booysens Roads, Reuven, Johannesburg 1 099 1 123 372 (600) (228) 100% Reuven 04 66 and 68 Booysens Road, Reuven, Johannesburg 2 919 3 089 614 (36) 578 100% Reuven 05 Mandy Road, Reuven, Johannesburg 8 260 6 193 1 178 (140) 1 038 100% Pangbourne Properties Limited 34 Annual Report 2006

properties continued as at 30 June 2006

2 2

Industrial properties continued Name/address of property Site area m Lettable area m Rent received R’000 Building expenditure R’000 Net building income/(loss) R’000 Occupancy factor

Reuven 07 21 Mandy Road, Reuven, Johannesburg 1 939 1 253 260 (68) 192 100% Reuven 09 39 Andrea Road, cnr Andrea and Ivanseth Roads, Reuven, Johannesburg 6 458 2 599 475 (43) 432 100% Reuven 11 6 Ivanseth Road, Reuven, Johannesburg 1 954 1 831 351 (33) 318 100% Reuven 12 8, 10, 12 and 14 Ivanseth Road, Reuven, Johannesburg 7 537 9 252 889 (305) 584 100% Reuven 14 27 Heronmere Road, Reuven, Johannesburg 3 625 2 122 335 (96) 239 100% Richards Bay 4 Chloorkring, Alton, Richards Bay 10 722 3 260 622 (39) 583 100% Richard Carte Road 46 Richard Carte Road, Mobeni, eThekwini 33 111 11 653 2 824 (620) 2 204 100% Richards Drive 912 Richards Drive, Halfway House, Johannesburg 10 508 4 320 966 (338) 628 100% Riverview 18 Suni Avenue, Corporate Park South, Randjespark, Johannesburg 2 509 1 160 317 (75) 242 100% Robertville 01 Anvil Road, Robertville, Johannesburg 19 731 15 128 1 286 (42) 1 244 100% Robertville 02 Anvil Road, Robertville, Johannesburg 21 664 9 917 822 1 823 100% Roodekop 01 Bevan Road, Roodekop, Ekurhuleni 58 085 20 255 2 935 (949) 1 986 100% Rosslyn 53 Hendrik van Eck Street, Rosslyn, Tshwane 30 663 12 600 1 632 (259) 1 373 100% Safari 213 Monte Carlo Crescent, Kyalami Business Park, Johannesburg 3 042 1 428 468 (92) 376 100% Sandton Commercial Village 15th Street, Eastgate Ext, Johannesburg 11 110 7 993 513 (161) 352 95% Sebenza 01 23 Buwbes Road, cnr Buwbes and Bundow Roads, Sebenza, Ekurhuleni 2 263 1 179 264 (83) 181 100%

Riverview Serbian 1133 Anvil Road, Robertville, Johannesburg 2 738 2 399 394 (22) 372 100% Sharland Avenue 1380 Sharland Road, Driehoek, Ekurhuleni 2 572 1 680 344 (29) 315 100% Snigger 19 Indianapolis Street, Kyalami Business Park, Johannesburg 4 972 2 009 678 (241) 437 100% Spartan 01 4 Spanner Road, Spartan, Ekurhuleni 5 251 2 946 580 (114) 466 100% Spartan 02 2 Spanner Road, Spartan, Ekurhuleni 5 207 1 987 461 (80) 381 100% Springbok Park 35 and 37 Springbok Road, Industria West, Johannesburg 39 236 18 459 3 413 (727) 2 686 100% Stormill 88 147 Remstang Road, cnr Remstang Road and Ratchet Avenue, Stormill, Johannesburg 3 600 2 168 425 (71) 354 100% Pangbourne Properties Limited 35 Annual Report 2006

properties continued as at 30 June 2006

2 2

Industrial properties continued Name/address of property Site area m Lettable area m Rent received R’000 Building expenditure R’000 Net building income/(loss) R’000 Occupancy factor

Stormill 90 141 Remstang Road, Stormill, Johannesburg 4 161 2 243 264 (134) 130 100% Sucosa House 3 Desmond Street, cnr Desmond and Appel Streets, Kramerville, Johannesburg 2 288 3 128 887 (147) 740 100% Sunnyrock Marco Place, off North Reef Road, Sunnyrock, Ekurhuleni 12 251 6 139 893 (239) 654 75% Sydney Road 565, 595 and 607 Sydney Road and 15 Watford Road, eThekwini 19 434 31 145 6 110 (800) 5 310 100% Tillbury 16th Road, Randjespark, Johannesburg 63 129 19 982 4 420 (2 055) 2 365 83% Tulisa Park 186, 188 and 189 South Rand Road, Tulisa Park, Johannesburg 13 589 7 768 890 (174) 716 100% Value 20 Loper Avenue, Aeroport, Ekurhuleni 11 114 3 827 981 (146) 835 100% Valley Chain 80 Gazelle Avenue, Corporate Park South, Johannesburg 3 180 1 578 373 (151) 222 100% Vodacom 31 Beacon Road, Florida North, Johannesburg 2 714 678 571 196 767 100% Wadeville 01 10 Log Road, Wadeville, Ekurhuleni 32 950 13 247 1 543 (199) 1 344 100% Wally’s Minis 5 Birmingham Road, Benoni South, Ekurhuleni 21 364 8 776 1 388 (527) 861 100% Watkins 3 Watkins Street, Denver Ext 4, Johannesburg 2 393 1 631 296 (15) 281 100% Welkom 3 3rd Street, Voorspoed East, Valley Chain Matjhabeng 13 682 5 182 364 (65) 299 100% Wilbart 22 Mountjoy Street, Wilbart, Ekurhuleni 2 483 1 664 375 (118) 257 100% Willowfield Crescent 79 Willowfield Crescent, Springfield Park, eThekwini 4 165 2 983 852 1 853 100% Wynberg 01 8 Thora Crescent, Wynberg, Johannesburg 1 781 2 283 215 (201) 14 100% Wynberg 02 18 Thora Crescent, Wynberg, Johannesburg 1 598 1 566 241 (87) 154 100% Wynberg 04 12 Thora Crescent, Wynberg, Johannesburg 1 641 2 433 286 (76) 210 100% Wynberg 05 15 Thora Crescent, Wynberg, Johannesburg 1 659 1 693 231 (86) 145 100% Wynberg 07 44 Andries Street, Wynberg, Johannesburg 7 435 3 662 569 (284) 285 100% Wynberg 08 46 Andries Street, Wynberg, Johannesburg 3 718 1 796 333 (72) 261 100% Wynberg 09 48 Andries Street, Wynberg, Johanneburg 3 718 1 738 314 (131) 183 100% Pangbourne Properties Limited 36 Annual Report 2006

properties continued as at 30 June 2006

2 2

Office properties Name/address of property Site area m Lettable area m Rent received R’000 Building expenditure R’000 Net building income/(loss) R’000 Occupancy factor

9 Burnside Island 9 Burnside Island, Craighall, Johannesburg 1 983 839 362 (198) 164 0% 357 357 Rivonia Boulevard, Rivonia, Johannesburg 3 966 3 640 2 345 (773) 1 572 100% Acacia House Redlands Estate, 1 George McFarlane Avenue, Wembley, Pietermaritzburg, Msunduzi 5 468 798 635 (7) 628 100% Cato Street 30 and 32 Cato Street, Durban, eThekwini 1 372 2 071 524 (129) 395 100% Centurion 01 1023 Bank Street, Centurion, Tshwane 2 240 2 560 1 670 (424) 1 246 100% Centurion 02 1257 South Road, Centurion, Tshwane 2 110 1 805 1 030 (298) 732 100% Civilia 14 Elizabeth Street, Bloemfontein, Mangang 2 795 6 487 1 751 (453) 1 298 86%

357 Rivonia Chislehurston 01 33 Impala Road, Chislehurston, Johannesburg 3 053 1 399 1 626 (806) 820 100% Chelsea Office Park 57 Wessel Road, Rivonia, Johannesburg 2 855 3 633 395 (213) 182 84% Constantia View 01 2 Hogsback Road, Quellerina Ext 4, Johannesburg 14 291 1 347 997 (541) 456 100% Constantia View 02 2 Hogsback Road, Quellerina Ext 4, Johannesburg Part of CV1 1 070 700 (433) 267 100% Curzon Building B, Turnberry Office Park, Grosvenor Road, Bryanston, Johannesburg 4 028 1 306 842 (275) 567 100% Curzon Fish Eagle Kingfisher Crescent, Meyersdal, Ekurhuleni 2 088 1 445 991 (263) 728 97% Florida Seniors 31 Beacon Road, Florida North, Roodepoort 17 131 2 909 929 (235) 694 83% Girton Road 19 Girton Road, , Johannesburg 8 854 7 384 4 449 (1 757) 2 692 9% Heavenly Verse 189 Monte Carlo Crescent, Kyalami Business Park, Johannesburg 8 337 5 212 1 650 (428) 1 222 100% KPMG Redlands Estate, 1 George McFarlane Avenue, Wembley, Pietermaritzburg, Msunduzi 1 502 1 400 1 085 (51) 1 034 100% Kyalami 02 66 Kyalami Boulevard, Kyalami Business Park, Johannesburg 3 777 1 296 815 (201) 614 100% Moores Rowland 245 North Ridge Road, Morningside, eThekwini 5 068 2 342 1 790 (469) 1 321 100% Nampak Centre 114 Dennis Road, Athol Gardens, Johannesburg 10 134 5 736 5 356 18 5 374 100% Pangbourne Properties Limited 37 Annual Report 2006

properties continued as at 30 June 2006

2 2

Office properties continued Name/address of property Site area m Lettable area m Rent received R’000 Building expenditure R’000 Net building income/(loss) R’000 Occupancy factor

Pangbourne House 382 Jan Smuts Avenue, Craighall, Johannesburg 2 976 5 663 2 751 (790) 1 961 94% Richmond Forum cnr Cedar and Napier Roads, Richmond, Johannesburg 3 667 4 250 413 (165) 248 94% Roban 178 Erasmus Street, Meyerspark, Tshwane 2 088 3 287 1 214 (323) 891 100% Sandown 01 137 Daisy Street, Sandown, Johannesburg 12 864 5 650 1 525 (225) 1 300 100% Sunninghill 01 3 Simba Road, Sunninghill, Johannesburg 10 380 5 375 1 118 (222) 896 100% Sunninghill 02 Inyanga Close (off Leeukop Road), Sunninghill, Johannesburg 16 343 2 069 332 (198) 134 100% Sunninghill 03 Richmond Forum Inyanga Close (off Leeukop Road), Sunninghill, Johannesburg Part of 02 2 292 399 (118) 281 100% Sunninghill 04 Inyanga Close (off Leeukop Road), Sunninghill, Johannesburg 11 556 4 552 714 (585) 129 100% Wedgewood Office Park 3 Muswell Road, Bryanston, Johannesburg 19 776 9 844 1 946 (750) 1 196 93%

Sunninghill

Retail properties

Benoni 01 cnr Oos Street and New Modder Road, Ekurhuleni 69 369 16 784 7 464 (5) 7 459 100% Mayberry Park cnr Onyx and Delphinium Streets, Mayberry Park, Ekurhuleni 5 035 1 653 293 (107) 186 100% Menlyn Home City cnr Lois Avenue and Garsfontein Drive, Menlyn, Tshwane 36 856 4 573 713 (273) 440 100% Menlyn Motor City cnr Lois Avenue and Garsfontein Drive, Menlyn, Tshwane Part of home 5 201 1 033 (248) 785 100% N1 Value Centre Nathan Mallach Road, Goodwood, Cape Town 41 403 16 263 2 847 (675) 2 172 99%

OK Bazaars ‒ Roodepoort cnr Lambert and Van Wyk Streets, Roodepoort, Johannesburg 6 591 6 222 700 (177) 523 100% Nelspruit 01 7 Old Pretoria Road, Nelspruit 26 059 9 983 1 838 ̶ 1 838 100% Shopping Centre Wedgewood Office Park 34 Edward Street, cnr Edward and Miller Streets, Sophiatown, Johannesburg 19 629 6 511 2 459 (556) 1 903 100% Pangbourne Properties Limited 38 Annual Report 2006 properties continued as at 30 June 2006

2 2

Trading properties Name/address of property Site area m Lettable area m Rent received R’000 Building expenditure R’000 Net building income/(loss) R’000 Occupancy factor

Boland Bank 221 West Street, Durban, eThekwini 2 176 7 882 913 (279) 634 100% Conlog House 270 Brickfield Road, Sydenham, eThekwini 4 872 14 893 730 (93) 637 100% Eastside Plaza Baviaanspoort Road, East Lynne, Tshwane 7 976 3 975 439 (238) 201 85% Renaissance Place 444 Jan Smuts Avenue, Bordeaux, Johannesburg 4 146 4 405 737 (401) 336 100% Selby 60 Trump Street, Selby, Johannesburg 15 674 11 924 300 (172) 128 92%

2 2

Trading properties sold Name/address of property Site area m Lettable area m Rent received R’000 Building expenditure R’000 Net building income/(loss) R’000

Kyalami 01 65 Kyalami Boulevard, Kyalami Business Park, Johannesburg 3 876 1 312 285 (215) 70 National Gate 32 Gazelle Close, Corporate Park South, Johannesburg 4 072 2 101 386 (244) 142 01 Pretoria Avenue, Randburg 12 045 5 774 ̶ (340) (340)

Solutions House 42 Gazelle Avenue, Corporate Park South, Johannesburg 3 521 1 814 617 (179) 438 St Albans 56 High Street, Mayfair West, Johannesburg 833 780 ̶ (12) (12) Teljoy 12 Claim Street, Johannesburg 2 477 5 244 ̶ (49) (49) Pangbourne Properties Limited 39 Annual Report 2006

properties continued as at 30 June 2006

2 2

Vacant land Name/address of property Site area m Lettable area m Rent received R’000 Land expenditure R’000 Net land income/(loss) R’000

Benrose 38 59 and 61 Julbert Road, Benrose, Johannesburg 2 082 ̶ ̶ ̶ ̶ Benrose 39 5 Daniel Road, Benrose, Johannesburg 8 145 ̶ ̶ ̶ ̶ Benrose 41 2, 6, 10 and 14 Daniel Road, Benrose, Johannesburg 8 261 ̶ ̶ ̶ ̶ Benrose 52 28 Julbert Road, Benrose, Johannesburg 989 ̶ ̶ ̶ ̶ Benrose 67 74 and 76 Barney Road, Benrose, Johannesburg 5 340 ̶ ̶ ̶ ̶ Benrose 77 75 Barney Road, Benrose, Johannesburg 102 525 ̶ ̶ ̶ ̶ Eastgate 10 Delphi Street, Eastgate, Johannesburg 7 165 ̶ (15) (6) (21) Florida 31 Beacon Road, Florida North, Johannesburg 10 000 ̶ ̶ ̶ ̶ Horizon Cabanas 38 Van Santen Drive, Horizon View, Johannesburg 8 100 ̶ ̶ (20) (20) Jet Park 09 Erf 560 and 561, Jet Park Ext 42, Ekurhuleni 3 944 ̶ ̶ (8) (8) Jet Park 10 Erf 555 and 556, Jet Park Ext 41, Ekurhuleni 4 593 ̶ ̶ (8) (8) Jupiter Nasmith Road, Jupiter, Ekurhuleni 17 098 ̶ ̶ ̶ ̶ Linbro 06 Portion 5 of Erf 9, Frankenwald Ext 3, Linbro Park, Johannesburg 12 374 ̶ ̶ ̶ ̶ New Modder Townships New Modderfontein, cnr Vermont and Daveyton Avenues, Ekurhuleni 8 069 583 ̶ 18 (92) (74) Park Central 01 2, 4, 6 and 8 Broad Street, Park Central, Johannesburg 5 652 ̶ ̶ ̶ ̶ Park Central 02 7 Broad Street, Park Central, Johannesburg 4 379 ̶ ̶ ̶ ̶ Park Central 13 8, 10, 12 and 14 Paris Crescent, Park Central, Johannesburg 8 565 ̶ ̶ (51) (51) Park Central 14 2, 4 and 6 Amsterdam Avenue, Park Central, Johannesburg 10 431 ̶ ̶ ̶ ̶ Pomona Vacant Land Holding 276, Pomona Estate, Ekurhuleni 60 671 ̶ ̶ ̶ Riverhorse Imvubu Business Park, eThekwini (50% portion of ownership) 38 777 ̶ ̶ ̶ ̶

Sunninghill 05 Part of Erf 1124, Sunninghill Ext 81, Sunninghill Johannesburg 02 ̶ ̶ ̶ ̶ Tillbury Tillbury 16th Road, Randjespark, Johannesburg 23 540 ̶ ̶ ̶ ̶ Pangbourne Properties Limited 40 Annual Report 2006 properties continued as at 30 June 2006

2 2

Properties sold Name/address of property Description Site area m Lettable area m Rent received R’000 Building expenditure R’000 Net building income/(loss) R’000

Alberton 01 Jubilist Street, Raceview, Ekurhuleni Retail 6 958 2 400 29 (9) 20 Benrose 17 50, 52 Main Reef Road, Benrose, Johannesburg Industrial ̶ 2 225 ̶ (3) (3) Benrose 21 45 Raebor Road, Benrose, Johannesburg Industrial 1 004 1 154 ̶ 6 6 Benrose 76 103 Main Reef Road, Benrose, Johannesburg Industrial 3 928 3 796 42 (86) (44) Broadwalk Centre West and Broad Streets, eThekwini Retail 4 533 6 556 ̶ 11 11 Clayville 40 Industry Road, Clayville, Johannesburg Industrial 9 175 2 310 ̶ 6 6 Commerce House 13 Commerce Crescent, Eastgate Ext 13, Johannesburg Industrial 3 217 3 285 ̶ (38) (38) Constantia Park 1415 North Coast Road, Durban North, eThekwini Industrial 17 646 9 825 271 (53) 218 Cottage and Home 3 Estmil Road, Diep River, Cape Town Industrial 2 429 2 016 202 (58) 144 Dawn Park cnr Dagbreek and Bauhinia Streets, Dawnpark, Ekurhuleni Vacant Land 225 630 ̶ ̶ ̶ ̶ Devonshire Place 2 Devonshire Place, eThekwini Office 2 237 7 266 2 167 (660) 1 507 Delvers Square 89 Kerk Street, cnr Kerk and Delvers Streets, Johannesburg Office 991 5 631 ̶ (3) (3) Eastgate 03 8 and 10 Olympia Street and 4 and 6 Delphi Street, Eastgate, Johannesburg Industrial 30 029 3 479 ̶ (140) (140) Embassy House cnr Beatrix and Edmond Streets, Arcadia, Tshwane Office 1 960 3 419 361 (361) ̶ Founders Hill 16 Pressburg Road, cnr Pressburg and Chilworth Roads, Founders View, Ekurhuleni Industrial 6 190 3 516 ̶ (8) (8) Fuchs Street 15 Fuchs Street, Alrode, Ekurhuleni Vacant Land 12 989 ̶ ̶ (36) (36) Future Bank House 122 De Korte Street, , Johannesburg Office 634 2 584 294 (223) 71 Game 100 Indianapolis Street, Kyalami Business Park, Johannesburg Industrial 3 174 1 654 107 (24) 83 Gezina 01 cnr Michael Brink and Frederika Streets, Gezina, Tshwane Retail 48 251 14 908 602 (6) 596 IFM 107, 105 2nd Avenue, cnr 2nd Avenue and Wynberg Road, Wynberg, Johannesburg Industrial 7 436 4 584 ̶ 79 79 Jan Smuts Highway 268, 270 Jan Smuts Highway, eThekwini Industrial 3 899 4 103 ̶ (5) (5) Pangbourne Properties Limited 41 Annual Report 2006 properties continued as at 30 June 2006

2 2

Properties sold continued Name/address of property Description Site area m Lettable area m Rent received R’000 Building expenditure R’000 Net building income/(loss) R’000

Jet Park 05 Malcolm Moodie Crescent, Jet Park, Ekurhuleni Vacant Land 72 800 ̶ ̶ ̶ ̶ Jet Park 06 Malcolm Moodie Crescent, Jet Park, Ekurhuleni Industrial 24 652 11 191 1 012 (411) 601 Kelhof Building 110 Pritchard Street, cnr Pritchard and Delvers Streets, Johannesburg Office 2 218 1 341 ̶ (3) (3) KLM House 1A Stan Road, Morningside, Johannesburg Office 5 752 1 505 ̶ (25) (25) Kya Sands cnr Hilston and Tanjovan Streets, Kya Sands Industrial 5 198 3 184 ̶ (158) (158) Kew 573 11th Road, Kew, Johannesburg Industrial 2 974 1 668 ̶ (46) (46) Kew 833 cnr 3rd Avenue and 10th Road, Kew, Johannesburg Industrial 8 922 4 867 276 (73) 203 Klerksdorp 01 13 Emily Hobhouse Street, Klerksdorp Retail 1 735 2 774 59 6 65 Linden 41 7th Street, Linden, Johannesburg Office 1 573 1 535 ̶ (1) (1) Linel House Lenchen Avenue South, Tshwane Office 2 782 2 712 ̶ (58) (58) Longmeadows cnr Modderfontein and Parkway South Roads, Longmeadow Business Park, Johannesburg Industrial 6 000 2 420 ̶ (60) (60) Maynard Plaza cnr Church Street and Station Road, Wynberg, Cape Town Office 2 801 10 623 ̶ (10) (10) Mowbray cnr Main Road and Rhodes Avenue, Mowbray, Cape Town Retail 5 507 5 436 127 24 151 Musgrave Road 135 Musgrave Road, Berea, eThekwini Office 2 711 4 348 312 (43) 269 New Doornfontein 02 16 Lower Ross Street, Between Lower Ross and Lower Page Street, New Doornfontein, Johannesburg Industrial 1 983 1 477 ̶ 4 4 North State 95 Market Street, cnr Kruis and Market Streets, Johannesburg Office 1 489 1 083 ̶ 3 3 Observatory cnr Main and Lower Main Roads, Observatory, Cape Town Office 3 494 1 279 49 ̶ 49 OK Bazaars ‒ Potchefstroom 117 Kerk Street, Potchefstroom Retail 4 634 6 549 12 (147) (135) OK Benoni 53 Princess Avenue, Benoni, Ekurhuleni Retail 1 190 4 672 (28) (30) (58) Pangbourne Properties Limited 42 Annual Report 2006 properties continued as at 30 June 2006

2 2

Properties sold continued Name/address of property Description Site area m Lettable area m Rent received R’000 Building expenditure R’000 Net building income/(loss) R’000

OK Bazaars ‒ Eloff Street 74 Pritchard Street, cnr Eloff, Pritchard, President, Von Brandis Streets, Johannesburg Retail 34 224 3 424 ̶ (260) (260) Oxford Manor 196 Oxford Road, Illovo, Johannesburg Office 16 559 12 725 674 (49) 625 Pineslopes cnr Witkoppen Road and The Straight, Pineslopes, Johannesburg Retail ̶ 20 482 1 369 (198) 1 171 Plantation Road 18 18 Plantation Road, Edenvale Industrial 7 718 4 048 ̶ (24) (24) Plantation Road 20 20 Plantation Road, Edenvale Industrial 8 122 4 209 ̶ (6) (6) Port Shepstone Dick King Road, Port Shepstone Retail 7 738 8 963 188 (22) 166 President Place cnr Hood Avenue and Baker Street, Rosebank, Johannesburg Office 6 865 13 102 712 (198) 514 Prism 96 Indianapolis Street, Kyalami Business Park, Johannesburg Industrial 2 990 1 230 164 (86) 78 Randhill 104 Bordeaux Drive, Randburg Office 1 941 4 644 79 (118) (39) Rietfontein Peschwar Street, , Johannesburg Vacant Land 116 389 ̶ ̶ ̶ ̶ Shoprite Claremont 92‒98 Main Road, Claremont, Cape Town Retail 3 491 4 615 ̶ (57) (57) Strydom Street “B” 6 Strydom Street, Denver, Johannesburg Industrial 2 409 1 734 ̶ (18) (18) Temple Court 169 Jeppe Street, cnr Jeppe and Eloff Streets, Johannesburg Residential 250 325 ̶ (1) (1) Umhlanga Crescent 1 ‒ 3 Sunset Crescent, New Town Centre, Umhlanga Ridge, eThekwini Retail 54 518 26 330 1 716 (226) 1 490 West Street 409/423 West Street, Durban, eThekwini Retail 5 567 14 200 705 (2) 703 Wynberg 06 9 Thora Crescent, Wynberg, Johannesburg Industrial 1 659 2 745 ̶ 41 41 Other Beach Hotel 107 Marine Parade, Durban, eThekwini Other 1 254 14 174 2 399 (309) 2 090 Other 39 (143) (104) Total 277 581 (63 915) 213 666 Pangbourne Properties Limited 43 Annual Report 2006

financials

contents

responsibility for and approval of the annual 51 statements of changes in equity 44 financial statements 52 summary of accounting policies 45 report of the independent auditors 56 notes to the annual financial statements 46 directors’ report 76 notice of annual general meeting 48 income statements 80 notice of general meeting of debenture holders 49 balance sheets 81 form of proxy for Pangbourne shareholders 50 cash flow statements 83 form of proxy for Pangbourne debenture holders Pangbourne Properties Limited 44 Annual Report 2006 responsibility for and approval of the annual financial statements for the year ended 30 June 2006

The company’s directors are responsible for the preparation of indicate that there has been any material breakdown in the the annual financial statements of the company and group functioning of these controls and systems during the year. annual financial statements set out on pages 46 to 75. These The directors are of the opinion that the group is financially financial statements have been prepared using appropriate sound and operates as a going concern. The financial accounting policies, supported by reasonable and prudent statements have been prepared on this basis. judgement and estimates in conformity, in all material respects, with International Financial Reporting Standards The directors of the company accept responsibility for these (IFRS). They also take into account the nature of the business, annual financial statements, which were approved on good corporate governance and the requirements of the 30 August 2006 and are signed on their behalf by: Companies Act of South Africa.

The directors and the Audit Committee are satisfied that management has maintained reliable accounting records and an effective system of internal controls. The financial statements have been prepared from these records on the P L Campbell C M Hutchison basis of the consistent use of appropriate accounting policies Chairman Chief Executive Officer and fairly present the state of affairs of the company and the group. Nothing has come to the attention of the directors to 30 August 2006

Declaration by the Company Secretary in respect of section 268g of the Companies Act, 1973

I declare that, to the best of my knowledge, the company has lodged with the Registrar all such returns as are required of a public company in terms of the Companies Act, 1973 and that all such returns are true, correct and up to date.

J J Groenewald Company Secretary

30 August 2006 Pangbourne Properties Limited 45 Annual Report 2006 report of the independent auditors

We have audited the annual financial statements and group In our opinion, the annual financial statements and group financial statements of Pangbourne Properties Limited set annual financial statements present fairly, in all material out on pages 46 to 75 for the year ended 30 June 2006. respects, the financial position of the company and group at These annual financial statements are the responsibility of 30 June 2006, and the results of their operations and cash the company’s directors. Our responsibility is to express an flows for the year then ended in accordance with opinion on these annual financial statements based on International Financial Reporting Standards and in the manner required by the Companies Act of South Africa. our audit.

We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the annual financial statements are free of material misstatement. An audit includes examining, on a test basis, Deloitte & Touche evidence supporting the amounts and disclosures in the Registered Auditors annual financial statements. An audit also includes assessing the accounting principles used and significant estimates made Per: G Krog by management, as well as evaluating the overall financial Partner statement presentation. We believe that our audit provides a reasonable basis for our opinion. 30 August 2006

Deloitte & Touce National Executive: G G Gelink Chief Executive A E Swiegers Chief Operating Officer G M Pinnock Audit D L Kennedy Tax L Geeringh Consulting M G Crisp Financial Advisory L Bam Strategy C R Beukman Finance T J Brown Clients and Markets S J C Sibisi Public Sector and Corporate Social Responsibility N T Mtoba Chairman of the Board J Rhynes Deputy Chairman of the Board

A full list of partners and directors is available on request.

Buildings 1 and 2, Deloitte Place, The Woodlands Office Park, Woodlands Drive, Sandton. Pangbourne Properties Limited 46 Annual Report 2006 directors’ report

The directors have pleasure in presenting this, the Special resolutions Special resolutions passed at the 19th annual report of the company for the year ended annual general meeting of Pangbourne shareholders on 30 June 2006. 13 October 2005 were as follows:

Review of operations The implementation of the 1. Resolved that subject to the provisions of the Companies strategic plan continued with the R1,4 billion acquisition of Act, 1973, and the Listing Requirements of the JSE Limited a high quality portfolio of properties from the Transnet (“the JSE”), the board of directors be authorised, up to and Retirement Funds Property Trust. Siyathenga Property Fund including the date of the following annual general purchased R505 million of the mainly retail properties of the meeting, to approve the purchase by the company of its fund from Pangbourne. Refurbishing and selling of older own shares provided that: properties and development of vacant land offer ● the general authority shall not extend beyond 15 (fifteen) opportunities for upgrading the portfolio and growth in the months from the date of the passing of the resolution; future. ● the general authority to the repurchase by the company shall not exceed the percentage of the company’s issued Nature of business Pangbourne is a property share capital permitted from time-to-time by the JSE for investment company, with a 70% interest in Paforma repurchase; Property Finance (Proprietary) Limited which is operating ● in the short-term, property-related financing industry. the repurchase by the company shall not be made at a Pangbourne Services (Proprietary) Limited, a wholly-owned price more than that permitted pursuant to the Listing subsidiary, provides management and related services in Requirements of the JSE; respect of properties owned by the group and those ● the repurchase will not take place within the prohibited owned by associated companies. Both companies are periods provided by the Listing Requirements of the JSE incorporated in the Republic of South Africa. from time-to-time.

The property portfolio consists of direct investments in 2. Resolved that, subject to the provisions of the Companies industrial, commercial and retail properties in South Act, 1973, and the Listing Requirements of the JSE, the Africa’s major centres. The company’s combined units are board of directors be authorised, up to and including the listed on the JSE Limited. date of the following annual general meeting, to approve the purchase by any subsidiary of the company of shares Subsidiary companies Details of the company’s issued by the company, provided that: principal subsidiary companies are as follows: ● this general authority shall not extend beyond 2006 15 months from the date of the passing of this resolution; Issued share Indebted- ● it be made at a price more than permitted pursuant to capital ness the Listing Requirements of the JSE; R R’000 ● it takes place within a period within which repurchases are prohibited in terms of the Listing Requirements of Paforma Property Finance the JSE; and (Proprietary) Limited ‒ 70% 200 40 624 ● the purchase may not result in the subsidiary, together Pangbourne Services with all other subsidiaries of the company, holding more (Proprietary) Limited ‒ 100% 100 47 477 than 10% of the entire issued share capital of the Panhold (Proprietary) Limited ‒ company. 100% 1 174 530 The special resolution passed at the general meeting of Pangbourne shareholders on 7 March 2006 was as follows: 2005 Issued Resolved that the company’s authorised share capital be share Indebted- increased from R2 500 000, divided into 250 000 000 ordinary capital ness shares of 1 cent each, to R5 000 000, comprising 500 000 000 R R’000 ordinary shares of 1 cent each, by the creation of 250 000 000 ordinary shares of 1 cent each, which additional ordinary Paforma Property Finance shares will in all respects rank pari passu with the existing (Proprietary) Limited ‒ 70% 120 25 227 ordinary shares in the capital of the company. Pangbourne Services (Proprietary) Limited ‒ 100% 100 32 528 Financial results The results of the company and group for Siyathenga Property Fund the year ended 30 June 2006 are set out in the accompanying Limited ‒ 100% 300 266 767 financial statements and notes.

The interest of the company in the aggregate profits after Administration and management The group employs tax of its subsidiary companies for the year was R1,7 million personnel directly to administer and manage the property (2005: R4,4 million) and its share of aggregate losses was portfolio as well as the property portfolios of iFour Properties R5,17 million (2005: R8,9 million). Limited and Siyathenga Property Fund Limited. Pangbourne Properties Limited 47 Annual Report 2006

directors’ report continued

Distributions The following distributions were declared Mr J A A Diepenbroek resigned as a director on 9 March 2006. during the period under review: Mr W J Midgley and Mr R N Wesselo were appointed directors Distribution Distribution on 28 June 2006. number 39 number 40 Mr C M Hutchison was appointed Chief Executive Officer in Declaration date 27 February 2006 29 June 2006 September 2005. Last date to trade cum distribution 7 April 2006 6 October 2006 In terms of paragraph 80 of the company’s articles of Record date 13 April 2006 13 October 2006 association, Mr P L Campbell and Mr C K Hickling retire at the Payment date 18 April 2006 16 October 2006 forthcoming annual general meeting but, being eligible, offer Ordinary dividend ‒ themselves for re-election. cents per unit 0,9215 1,098 Debenture interest ‒ In terms of paragraph 83.2 of the company’s articles of cents per unit 46,0785 54,902 association, Mr W J Midgley and Mr R N Wesselo retire at the Total distribution ‒ forthcoming annual general meeting but, being eligible, offer cents per unit 47,0000 56,000 themselves for re-election.

At 30 June 2006, the directors’ direct and indirect beneficial Directorate and secretary Details of the directors and interests in the combined units of the company were as secretary are reflected on pages 14 and 15 of this report. follows:

Direct Indirect

Director Beneficial Non-beneficial Beneficial Non-beneficial Total

2006 2005 2006 2005 2006 2005 2006 2005 2006 2005

A M A Campbell ̶ 3 100 000 ̶ ̶ ̶ ̶ ̶ ̶ ̶ 3 100 000

P L Campbell ̶ ̶ ̶ ̶ 8 000 8 000 ̶ ̶ 8 000 8 000

J A A Diepenbroek ̶ 699 100 ̶ ̶ ̶ ̶ ̶ ̶ ̶ 699 100

C K Hickling ̶ ̶ ̶ ̶ 2 000 2 000 ̶ ̶ 2 000 2 000

C M Hutchison 1 550 200 840 000 ̶ ̶ ̶ ̶ ̶ ̶ 1 550 200 840 000

D J Kennedy 1 330 000 1 330 000 ̶ ̶ ̶ ̶ ̶ ̶ 1 330 000 1 330 000

W J Midgley 707 500 ̶ ̶ ̶ ̶ ̶ ̶ ̶ 707 500 ̶

A J W L Richards 1 062 200 1 442 000 ̶ ̶ ̶ ̶ ̶ ̶ 1 062 200 1 442 000

R N Wesselo 464 300 ̶ ̶ ̶ 2 052 ̶ ̶ ̶ 466 352 ̶

Total 5 114 200 7 411 100 ̶ ̶ 12 052 10 000 ̶ ̶ 5 126 252 7 421 100

No director of Pangbourne has any non-beneficial holdings The Pangbourne Unit Purchase Trust The Trust issued in Pangbourne’s issued units. 4 916 600 units to employees during the period under review. At 30 June 2006, the Trust held 93 600 unreserved No director of Pangbourne has any interest in any units, being units not taken up by staff and being held for transaction which is, or was, of an unusual nature, or the next issue in October 2006. The Trust accounts have contained unusual conditions, or which was material to been consolidated with the Pangbourne accounts. Pangbourne and which was effected during the current financial year, or which was effected during any earlier financial year and which remains in any respect outstanding or unperformed. Pangbourne Properties Limited 48 Annual Report 2006 income statements for the year ended 30 June 2006

Group Company

2006 2005 2006 2005 Notes R’000 R’000 R’000 R’000

Revenue 1 489 451 362 097 436 517 325 426 Straight-line operating lease adjustment 22 281 3 076 21 342 2 238

511 732 365 173 457 859 327 664 Net building costs 63 915 43 869 61 695 43 289 Administration costs 76 191 58 365 48 862 37 779 Cost of trading and developed properties sold 40 584 6 689 40 584 6 689

Profit from rental income, investment revenues and fees 2 331 042 256 250 306 718 239 907 Net revaluation of investment properties 354 823 223 485 356 079 198 358 Attributable to straight-line operating lease adjustment (22 281) (3 076) (21 342) (2 238) Gross revaluation of investment properties 8 377 104 226 561 377 421 200 596 Unrealised revaluation of listed investment held-for-trade 18 8 152 ̶ 8 152 ̶ Net profit on disposal of investments held-for-trade 1 034 1 051 1 034 1 051 Goodwill ‒ written off** (156 199) ̶ (156 199) ̶ Goodwill ‒ realised 11 ̶ (1 235) ̶ (1 235) Net profit on disposal of investment properties 55 562 5 461 55 562 33 573 Amortisation of intangible asset 12 (4 878) (4 878) (4 878) (4 878) Fair value adjustment on units issued during the year** (150 861) ̶ (150 861) ̶ (Loss)/profit on sale of portion of subsidiary (133) 304 (133) ̶

Profit before financing costs and taxation 438 542 480 438 415 474 466 776 Interest received 3 14 395 12 350 16 153 17 476 Finance costs 3 (113 884) (94 150) (91 050) (83 241) Movements in fair value of interest rate derivatives 22 14 878 (24 888) 15 412 (22 376)

Profit before taxation and distribution to unitholders 353 931 373 750 355 989 378 635 Debenture interest ‒ debt portion 7 (100 140) (83 448) (100 140) (83 448)

Total distribution to combined unitholders 7 (216 722) (173 922) (227 333) (176 241) Debenture interest ‒ equity portion, disclosed in statements of changes in equity*** 7 112 332 87 062 122 734 89 336 Dividends ‒ disclosed in statements of changes in equity*** 7 4 250 3 412 4 459 3 457

Amortised debenture interest (3 147) (2 700) (3 147) (2 700)

Profit before taxation 250 644 287 602 252 702 292 487 Taxation 4 (33 466) (10 497) (29 111) (10 183) Taxation reversed in statements of changes in equity* 4 (32 576) (25 247) (35 592) (25 907) Share of profit from associates 9 79 826 44 684 81 973 44 684

Profit for the year 264 428 296 542 269 972 301 081

Attributable to: Equity holders of the parent 263 128 295 899 Minority interest 1 300 643

264 428 296 542 Basic and diluted earnings per combined unit (cents) 6 128,83 165,59 Distribution per combined unit (cents) 7 103,00 96,00

* Provision for taxation, including the provision for tax which is reversed in the statement of changes in equity, is made in accordance with IFRS. ** This relates to a fair value adjustment on the difference between the agreement price and the fair value of units given up in associates to acquire a portfolio of properties from TRFPT. Pangbourne Properties Limited 49 Annual Report 2006 balance sheets as at 30 June 2006

Group Company

2006 2005 2006 2005 Notes R’000 R’000 R’000 R’000

ASSETS Non-current assets 3 570 926 2 677 460 3 551 271 2 258 347 Direct and indirect investment in property 3 411 728 2 561 194 3 176 669 1 893 475 Investment properties 8 2 929 538 2 107 591 2 694 479 1 439 872 Land held for development 8 22 564 ̶ 22 564 ̶ Investment properties held-for-sale (225 434) ̶ (225 434) Investments and loans in associates 9 685 060 453 603 685 060 453 603

Equipment, furniture and fittings 10 10 249 8 242 ̶ ̶ Goodwill 11 ̶ 6 566 ̶ 6 566 Intangible asset 12 1 628 6 506 1 628 6 506 Long-term loans 13 7 031 9 248 76 428 20 237 Deposits held 5 698 4 222 5 495 3 483 Deferred tax asset 14 1 355 2 918 ̶ ̶ Investments in Unit Purchase Trust and subsidiary companies 15 ̶ ̶ 291 051 328 080 Loans to participants of the Unit Purchase Trust 16 133 237 78 564 ̶ ̶ Current assets 613 295 224 288 465 039 139 394 Trading properties 8 73 095 18 918 73 095 18 918 Investment properties held-for-sale 225 434 ̶ 225 434 ̶ Accounts receivable 173 286 127 972 36 507 53 114 Prepayments 18 101 11 072 17 532 10 806 Other receivables 17 52 765 31 769 52 765 31 769 Current portion of long-term loans 13 4 260 4 494 4 260 4 494 Current portion of deferred interest ̶ 46 ̶ 46 Investment held-for-trade 18 41 052 ̶ 41 052 ̶ Bank balances and cash 25 302 30 017 14 394 20 247

Total assets 4 184 221 2 901 748 4 016 310 2 397 741

EQUITY AND LIABILITIES Capital and reserves 1 471 055 693 928 1 538 451 689 855 Share capital and premium 19 585 899 166 073 644 497 153 884 Accumulated profits 743 555 382 220 743 131 382 001 Debentures equity portion*** 20 141 601 145 635 150 823 153 970

Debentures debt portion*** 20 890 224 696 410 945 916 696 410

Combined unitholders’ interest 2 361 279 1 390 338 2 484 367 1 386 265 Minority interest 1 639 339 ̶ ̶ Non-current liabilities Other interest-bearing borrowings 21 1 462 405 1 250 743 1 219 514 768 107 Fair value of interest rate derivatives 22 22 016 36 894 18 733 34 145 Deferred tax liability 14 83 814 54 287 83 814 54 287 Current liabilities 253 068 169 147 209 882 154 937 Accounts payable and accruals 23 101 256 55 492 72 842 40 853 Current portion of other interest-bearing borrowings 21 22 500 16 030 ̶ 16 030 Taxation 2 424 771 2 180 576 Combined unitholders for dividends and interest 126 888 96 854 134 860 97 478 Total equity and liabilities 4 184 221 2 901 748 4 016 310 2 397 741

Net asset value per unit (cents) including debenture debt portion 1 151 776 GEARING Net debt excluding debenture debt portion: income earning assets (%) 33,0 45,9

*** The split of denbenture between debt and equity portions, does not represent the legal substance of the debentures, but has been done in order to comply with International Financial Reporting Standards. Pangbourne Properties Limited 50 Annual Report 2006 cash flow statements for the year ended 30 June 2006

Group Company

2006 2005 2006 2005 Notes R’000 R’000 R’000 R’000

CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers 412 460 357 144 425 448 343 979 Cash paid to suppliers and employees (211 302) (147 480) (205 483) (137 458)

Cash generated from operations 27.1 201 158 209 664 219 965 206 521 Interest received 14 395 12 350 16 153 17 476 Financing costs (113 884) (94 150) (91 050) (83 241) Investment income 77 015 58 775 77 015 58 775 Taxation paid (3 498) (820) (198) (606)

Net cash inflow from operating activities 175 186 185 819 221 885 198 925 Distributions to unitholders (186 688) (167 125) (189 951) (168 491)

Net cash (outflow)/inflow from operating activities (11 502) 18 694 31 934 30 434

CASH FLOWS FROM INVESTING ACTIVITIES Changes in deposits held (1 476) (2 131) (2 012) (1 392) Additions to investment and trading properties (1 078 253) (869 364) (1 212 496) (517 757) Additions to equipment, furniture and fittings ‒ expansion (6 428) (3 291) ̶ ̶ Proceeds from disposal of investment properties 332 561 75 100 503 783 378 730 Proceeds from disposal of equipment, furniture and fittings 1 922 933 ̶ ̶ Net movement of investment and loans in associates 16 639 (11 086) 16 639 (11 113) Decrease/(increase) in long-term loans 2 451 (8 816) (55 957) 11 292 Net proceeds from decrease in investments held-for-trade 1 034 24 341 1 034 24 341 Net proceeds from disposal of trading properties 17 000 5 911 17 000 5 911 (Increase)/decrease in loans to participants of the Unit Purchase Trust (54 673) 407 ̶ ̶

Net cash outflow from investing activities (769 223) (787 996) (732 009) (109 988)

CASH FLOWS FROM FINANCING ACTIVITIES Net units issued 65 745 75 769 221 816 59 202 Net long-term borrowings raised 720 687 714 478 435 377 275 340 Increase/(decrease) in loans to subsidiary companies ̶ ̶ 37 029 (242 674)

Net cash inflow from financing activities 786 432 790 247 694 222 91 868

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 5 707 20 945 (5 853) 12 314 Cash and cash equivalents at the beginning of the year 30 017 9 072 20 247 7 933 Deconsolidation of Siyathenga 27.2 (10 422) ̶ ̶ ̶

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 25 302 30 017 14 394 20 247 Pangbourne Properties Limited 51 Annual Report 2006 statements of changes in equity for the year ended 30 June 2006

Attribu- table to Deben- Accumu- equity Share Share tures Minority lated holders of capital premium equity interest profit the parent Total Notes R’000 R’000 R’000 R000 R’000 R’000 R’000 GROUP Balance at 1 July 2004 1 762 128 433 140 228 ̶ 116 997 387 420 387 420

‒ as previously stated 1 762 128 433 140 228 ̶ 116 997 387 420 387 420 ‒ IFRS 3 Transitional adjustment ̶ ̶ ̶ ̶ 28 829 28 829 28 829

Arising on issue of treasury units during the year 18 8 530 8 107 ̶ ̶ 16 655 16 655 Arising on issue of units during the year 71 27 347 ̶ ̶ ̶ 27 418 27 418 Share issue expenses of subsidiary written off against share premium ̶ (88) ̶ ̶ ̶ (88) (88) Minority share of current year profits ̶ ̶ ̶ 643 (643) ̶ ̶ Profit on sale of portion of subsidiary ̶ ̶ ̶ (304) ̶ ̶ (304) Profit for the year ̶ ̶ ̶ ̶ 296 542 296 542 296 542 Reversal of taxation on debenture interest equity portion 4 ̶ ̶ ̶ ̶ 25 247 25 247 25 247 Distribution to unitholders ‒ debenture interest equity portion 7 ̶ ̶ ̶ ̶ (87 062) (87 062) (87 062) Distribution to unitholders ‒ dividend portion 5/7 ̶ ̶ ̶ ̶ (3 412) (3 412) (3 412) Net profit on disposal of investments available-for-sale ̶ ̶ ̶ ̶ 3 022 3 022 3 022 Transfer of amortised debenture interest ‒ debt portion ̶ ̶ (2 700) ̶ 2 700 ̶ ̶

Balance at 30 June 2005 1 851 164 222 145 635 339 382 220 694 571 694 267

‒ as previously stated 1 851 164 222 145 635 339 382 220 694 571 694 267 ‒ IFRS 3 write-off of goodwill to opening retained earnings 11 ̶ ̶ ̶ ̶ (6 566) (6 566) (6 566)

Arising on issue and repurchase of treasury units during the year (20) (1 548) (887) ̶ ̶ (2 455) (2 455) Arising on issue of units during the year 424 270 109 ̶ ̶ ̶ 270 533 270 533 Fair value adjustment on units issued during the year ̶ 150 861 ̶ ̶ ̶ 150 861 150 861 Minority share of current year profits ̶ ̶ ̶ 1 300 (1 960) ̶ (660) Profit for the year ̶ ̶ ̶ ̶ 264 428 264 428 264 428 Reversal of taxation on debenture interest equity portion 4 ̶ ̶ ̶ ̶ 32 576 32 576 32 576 Distribution to unitholders ‒ debenture interest equity portion 7 ̶ ̶ ̶ ̶ (112 332) (112 332) (112 332) Distribution to unitholders ‒ dividend portion 5/7 ̶ ̶ ̶ ̶ (4 250) (4 250) (4 250) Net profit on disposal of investments available-for-sale ̶ ̶ ̶ ̶ 90 278 90 278 90 278 Capital gains tax on sale of units ̶ ̶ ̶ ̶ (2 218) (2 218) (2 218) Fair value adjustment of investments available-for-sale ̶ ̶ ̶ ̶ 98 232 98 232 98 232 Transfer of amortised debenture interest ‒ debt portion ̶ ̶ (3 147) ̶ 3 147 ̶ ̶ Balance at 30 June 2006 2 255 583 644 141 601 1 639 743 555 1 473 658 1 472 694

COMPANY Balance at 1 July 2004 1 819 124 647 156 670 ̶ 113 255 396 391 396 391

‒ as previously stated 1 819 124 647 156 670 ̶ 113 255 396 391 396 391 ‒ IFRS 3 Transitional adjustment ̶ ̶ ̶ ̶ 28 829 28 829 28 829

Units issued 71 27 347 ̶ ̶ ̶ 27 418 27 418 Profit for the year ̶ ̶ ̶ ̶ 301 081 301 081 301 081 Reversal of taxation on debenture interest equity portion 4 ̶ ̶ ̶ ̶ 25 907 25 907 25 907 Distribution to unitholders ‒ debenture interest equity portion 7 ̶ ̶ ̶ ̶ (89 336) (89 336) (89 336) Distribution to unitholders ‒ dividend portion 5/7 ̶ ̶ ̶ ̶ (3 457) (3 457) (3 457) Net profit on disposal of investments available-for-sale ̶ ̶ ̶ ̶ 3 022 3 022 3 022 Transfer of amortised debenture interest ‒ debt portion ̶ ̶ (2 700) ̶ 2 700 ̶ ̶ Balance at 30 June 2005 1 890 151 994 153 970 ̶ 382 001 689 855 689 855

‒ as previously stated 1 890 151 994 153 970 ̶ 382 001 689 855 689 855 ‒ IFRS 3 write-off of goodwill to opening retained earnings 11 ̶ ̶ ̶ ̶ (6 566) (6 566) (6 566)

Units issued 548 339 204 ̶ ̶ ̶ 339 752 339 752 Fair value adjustment on units issued during the year ̶ 150 861 ̶ ̶ ̶ 150 861 150 861 Profit for the year ̶ ̶ ̶ ̶ 269 972 269 972 269 972 Reversal of taxation on debenture interest equity portion 4 ̶ ̶ ̶ ̶ 35 592 35 592 35 592 Distribution to unitholders ‒ debenture interest equity portion 7 ̶ ̶ ̶ ̶ (122 734) (122 734) (122 734) Distribution to unitholders ‒ dividend portion 5/7 ̶ ̶ ̶ ̶ (4 459) (4 459) (4 459) Net profit on disposal of investments available-for-sale ̶ ̶ ̶ ̶ 90 164 90 164 90 164 Capital gains tax on sale of units ̶ ̶ ̶ ̶ (2 218) (2 218) (2 218) Fair value adjustment of investments available-for-sale ̶ ̶ ̶ ̶ 98 232 98 232 98 232 Transfer of amortised debenture interest ‒ debt portion ̶ ̶ (3 147) ̶ 3 147 ̶ ̶ Balance at 30 June 2006 2 438 642 059 150 823 ̶ 743 131 1 538 451 1 538 451 Pangbourne Properties Limited 52 Annual Report 2006 summary of accounting policies for the year ended 30 June 2006

Presentation of annual financial statements The The investment is initially recorded at cost and the carrying annual financial statements and group annual financial amount is increased or decreased to recognise the investors’ statements are presented in South African Rands since that is share of the profit or losses of the investee after the date of the currency in which the group’s transactions are acquisition. denominated. The results and assets and liabilities of associates are Summary of significant accounting policies The incorporated in these financial statements using the equity financial statements have been prepared in accordance with method of accounting. International Financial Reporting Standards (IFRS). Where a group enterprise transacts with an associate of the IFRS 1 - First-time adoption of International Financial group, unrealised profit and losses are eliminated to the Reporting Standards has been applied in the preparation extent of the group’s interest in the relevant associate, except of the annual financial statements and group annual where unrealised losses provide evidence of an impairment of financial statements. the asset transferred.

There has been no impact on the income statement for prior Investments held-for-trade Investments held-for-trade are years due to the adoption of IFRS; the only impact on the restated to fair values. Fair values are based on market values, balance sheet has been the writing-off of goodwill to opening for listed shares, prevailing at the time. Gains or losses arising retained earnings. from changes in fair values or sale of investments held-for-trade is included in income for the period. The accounting policies are consistent with those applied for the year ended 30 June 2005 except for goodwill, where the Investments available-for-sale (long-term policy has been adjusted to comply with IFRS. investments) Investments available-for-sale are restated to fair values. Fair values are based on market values The annual financial statements and group annual financial prevailing at the time; where this does not fairly reflect the statements have, except for the revaluation of investment fair value of the listed investment an appropriate moving properties, listed investments and financial instruments, average is applied. which are marked to market, been prepared on the historical-cost basis. Gains or losses arising from changes in fair values are recognised directly in equity until the listed investment is The principal accounting policies adopted are set out below. disposed of or is determined to be impaired, at which time Key management judgements, estimates and the cumulative gain or loss previously recognised in equity is assumptions Where necessary, management has made included in income. estimates regarding the recoverability of certain trade debtors, Goodwill Goodwill arising on consolidation and acquisitions and accordingly raised a provision for bad debts. In addition, represents the excess of the group’s interest in the fair value management has made certain judgements and assumptions of the identifiable assets and liabilities of a subsidiary, regarding the revaluation and fair value of investment and associate or jointly controlled entity at the date of acquisition. trading properties. Goodwill is recognised as an asset and carried at cost less Consolidation The group annual financial statements accumulated impairment losses. It is reviewed for impairment include the financial statements of the company and its at least annually or where there is an indication of subsidiaries. The operating results of the subsidiaries are impairment. Any impairment is recognised immediately in included from the effective dates of acquisition up to the profit and loss and is not subsequently reversed. Goodwill is allocated to cash-generating units for the purpose of effective dates of disposal. Intercompany balances and impairment testing. transactions are eliminated. On disposal of a subsidiary or associate, the attributable Where necessary, adjustments are made to the financial amount of goodwill is included in the profit and loss statements of subsidiaries to bring the accounting on disposal. policies used into line with those used by other members of the group. IFRS 3 requires that, after reassessment, any excess of the acquirer’s interest in the net fair value of the acquiree’s Interests in associates An associate is an enterprise over identifiable assets, liabilities and contingent liabilities over the which the group is in a position to exercise significant cost of the business combination should be recognised influence, through participation in the financial and operating immediately in profit or loss. IFRS 3 prohibits the recognition policy decisions of the investee, but does not have control or of negative goodwill in the balance sheet. joint control over these policies. Pangbourne Properties Limited 53 Annual Report 2006

summary of accounting policies continued for the year ended 30 June 2006

Previously, under IAS 22 (superseded by IFRS 3), the group Investment properties Investment property, accounted for released negative goodwill to income over a number of utilising the fair value model, which is stated at valuation, accounting periods, based on an analysis of the circumstances constitutes investment properties held by the group for rental- from which the balance resulted and assessing it for producing purposes. These properties are valued every year by impairment. Negative goodwill was reported as a deduction the directors with an external valuation being performed on from assets in the balance sheet. one sixth of the properties every six months by a member of the Institute of Valuers, on an open market basis. Surpluses and In accordance with the transitional rules of IFRS 3, the group deficits arising from the valuations of properties are charged has applied the revised accounting policy prospectively from against income for the period. 1 July 2005. Therefore the change has no impact on amounts reported in prior periods. Depreciation is not provided on investment properties. Expenditure capitalised to install new tenants is depreciated The carrying amount of goodwill at 1 July 2005 has been over the initial period of the lease. derecognised at the transition date. The costs of repairs and maintenance to investment Therefore, an adjustment of R6 566 000 is made to opening properties are charged against income, whereas expenditure retained earnings and goodwill at 1 July 2005. that enhances the value of the property is capitalised. Equipment, furniture and fittings Equipment, furniture and Investment properties held-for-sale Investment properties fittings, other than investment property, is stated at cost less that are earmarked for disposal in the foreseeable future are accumulated depreciation and impairment. separately classified on the face of the balance sheet. Equipment, furniture and fittings is depreciated over the Trading properties Properties which do not meet the estimated useful life of the assets on a straight-line basis. The investment criteria are identified as trading properties and principal rates used for this purpose are: have been separately classified on the face of the balance Computer equipment 33,3% straight line sheet. These trading properties are accounted for utilising the

Furniture and fittings 10,0% straight line fair value model, which is stated at valuation and are valued every year by directors with an external valuation being Motor vehicles 25,0% straight line performed on one sixth of the properties every six months by The gain or loss arising on the disposal or retirement of an a member of the Institute of Valuers, on an open market basis. asset is determined as the difference between the sales Surpluses and deficits arising from the valuations of proceeds and the carrying amount of the asset and is properties are charged against income for the period.

recognised in income. Intangible assets Expenditure on acquisition of Impairments At each balance sheet date, the group reviews management rights is initially recognised at cost and, using the carrying amounts of its assets to determine whether there the straight-line method, amortised over its useful life. The is any indication that those assets may be impaired. If any carrying amount is reviewed annually and adjusted for such indication exists, the recoverable amount of the asset is impairment where considered necessary.

estimated. Where it is not possible to estimate the recoverable Expenditure on the development of the Pangbourne brand is amount for an individual asset, the recoverable amount is expensed as incurred. determined for the cash-generating unit to which the asset belongs. If the recoverable amount of an asset or cash- Leased assets Leases of property, equipment, furniture and generating unit is estimated to be less than the carrying fittings, where the group assumes substantially all the benefits amount, the carrying amount of the asset or cash-generating and risks of ownership, are classified as finance leases. Assets unit is reduced to its recoverable amount. The impairment leased in terms of finance lease agreements are capitalised at losses are recognised as an expense immediately. amounts equal at the inception of the lease to the fair value of the leased property, or, if lower, at the present value of the Where an impairment loss subsequently reverses, the carrying minimum lease payments and are depreciated in accordance amount of the asset or cash-generating unit is increased to with the policies applicable to equivalent items of equipment, the revised estimate of its recoverable amount in order that furniture and fittings. The corresponding rental obligations, the increased carrying amount does not exceed the carrying net of finance charges, are included in interest-bearing amount that would have been determined had no borrowings. Lease finance charges are amortised over the impairment loss been recognised for the asset or cash- duration of the leases by using a constant periodic rate of generating unit in prior years. A reversal of an impairment is interest on the remaining balance of the liability for each recognised as income immediately. period. Leases under which the risks and benefits of Pangbourne Properties Limited 54 Annual Report 2006 summary of accounting policies continued for the year ended 30 June 2006

ownership are effectively retained by the lessor are classified This rate has been elected as the value of properties is preserved as operating leases. Obligations incurred under operating through active asset management of the portfolio, ie buying leases are charged to the income statement in equal properties that have a potential for satisfactory returns and instalments over the period of the lease. growth in value, and selling properties that present risks such as unacceptable levels of occupancies and rentals that indicate Retirement benefit costs Payments to defined contribution signs of potential permanent decline in value. plans are charged as an expense as they fall due. Revenue Revenue represents: Borrowing costs Borrowing costs directly attributable to the ● acquisition, construction or production of qualifying assets are gross rentals, recognised on an accrual basis; capitalised as part of the costs of those assets. Capitalisation ● fees received from financing operations and facilitation of such borrowing costs ceases when the assets are transactions, net of value-added taxation; substantially ready for their intended use or sale. Investment ● fees received from property and asset management; income earned on the temporary investment of specific ● sales price of trading and developed properties; and borrowings pending their expenditure on qualifying assets, is ● distributions received from investments accrued on a deducted from the borrowing costs capitalised. time basis. All other borrowing costs are expensed in the period in which Consolidated revenue excludes sales to group subsidiary they are incurred. companies. The charge for current tax is based on the results Taxation Revenue is recognised on a straight-line basis over the lease for the year as adjusted for items which are non-taxable or term which is offset by the change in the fair value of disallowable. It is calculated using tax rates that have been investment properties and had no net impact on earnings. enacted or substantively enacted by the balance sheet date. Financial instruments The group’s principal financial assets Deferred tax liabilities are recognised for all taxable temporary are bank balances, cash and cash equivalents, long-term differences, unless the deferred tax liability arises from: loans, deferred interest, prepayments, convertible loan notes, ● goodwill for which amortisation is not deductible for tax investments, accounts and other receivables. Accounts purposes; or receivable are stated at their nominal value as reduced by ● the initial recognition of an asset or liability in a transaction appropriate allowances for estimated irrecoverable amounts. which: Financial liabilities and equity instruments are classified ● is not a business combination; and according to the substance of the contractual arrangements ● at the time of the transaction, affects neither accounting entered into. Significant financial liabilities include interest- profit nor taxable profit; or bearing bank loans, and overdrafts, vendor finance, trade and ● revaluations of investment properties to the extent that other payables. The accounting policy for finance lease taxation is not payable on the sale of the investment property. obligations is outlined above.

Deferred tax assets are recognised for all deductible Finance charges, including premiums payable on settlement temporary differences to the extent that it is probable that or redemption, are accounted for on the accrual basis and are taxable profit will be available against which the deductible added to the carrying amount of the instrument to the extent temporary difference can be utilised, unless the deferred tax that they are not settled in the period in which they arise. asset arises from: Trade and other payable are stated at their nominal value. ● negative goodwill; or Derivative instruments The group uses derivative financial ● from the initial recognition of an asset or liability in a instruments, including interest rate swaps, forward rate transaction which: agreements, interest rate caps and forward exchange ● is not a business combination; and contracts, to hedge its exposure to interest rates. It is the ● at the time of the transaction, affects neither accounting policy of the group not to trade in derivative financial profit nor taxable profit; or instruments for speculative purposes. ● revaluations of investment properties to the extent that In terms of hedge accounting, hedges are either (a) fair value taxation is not claimable on the sale of the investment hedges, which hedge the exposure to changes in fair value of properties. a recognised asset or liability, or (b) cash flow hedges, which Deferred tax is raised on revaluations at the sales rate. hedge exposure to variability in cash flows. Pangbourne Properties Limited 55 Annual Report 2006

summary of accounting policies continued for the year ended 30 June 2006

In the case of fair value hedges, any gains or losses on ● Bridging finance marking to market the hedge instrument are recognised ● Agents’ commission immediately in net profit for the year. On a secondary basis, the geographical location of the Gains and losses on effective cash flow hedging instruments properties has been identified. in respect of firm commitments or forecast transactions, are The basis of segmental reporting is representative of the recognised directly in equity. Any ineffective portion of a cash internal structure used for management reporting. flow hedge is recognised in net profit for the year. When the hedged firm commitment or forecast transaction is Segment results include revenue and expenses that are recognised as an asset or liability, the cumulative associated directly attributable to a segment and the relevant portion of gains or losses reflected in equity are included in the initial the group’s revenue and expenses that can be allocated on a measurement of the asset or liability. For other cash flow reasonable basis to that segment, whether from external hedges that do not result in the recognition of an asset or transactions or from transactions with other group segments. liability, the cumulative gains or losses recognised in equity Segment assets and liabilities comprise those operating are included in the profit for the period in which the hedged assets and liabilities that are directly attributable to the firm commitment or forecast transaction affects profit. segment or can be allocated to a segment on a reasonable basis. Segment assets are reported after deducting Segmental reporting The group earns revenue in the form intercompany transactions that are reported as direct of property rentals, interest received from investment and offsets in the group’s balance sheet. trading stock and fees from short-term property-related financing. On a primary basis the group is organised into IFRS 7 Financial Instruments: Disclosures This standard is seven major operating segments: effective for the group from the year ending 30 June 2008. ● Property management comprising the running and letting The standard adds certain new disclosures about financial of owned properties instruments to those currently required by ● Trading of listed investment stock IAS 32 Financial Instruments: Disclosure and Presentation. The ● Trading of property stock Standard also replaces the disclosures currently required by ● Investment in property stock IAS 30 Disclosures in the Financial Statements of Banks and ● Transfer duty finance Similar Financial Institutions. The group is in the process of evaluating the effects of the new Standard. Pangbourne Properties Limited 56 Annual Report 2006 notes to the annual financial statements for the year ended 30 June 2006

Group Company

2006 2005 2006 2005 R’000 R’000 R’000 R’000

1. REVENUE Revenue from: ‒ Rentals 277 581 246 055 265 762 240 539 ‒ Financing fees 41 240 30 607 ̶ ̶ ‒ Introduction and facilitation fee 15 070 ̶ 15 070 ̶ ‒ Promoter’s fees 8 000 ̶ 8 000 ̶ ‒ Management fees 20 645 14 060 20 770 13 512 ‒ Interest (associates and investments) 77 015 58 775 77 015 58 775 ‒ Sales of trading properties 17 000 12 600 17 000 12 600 ‒ Sales of developed property 32 900 ̶ 32 900 ̶ 489 451 362 097 436 517 325 426 Prior year revenue has been restated to reflect the gross sales price of trading properties sold, with the cost of trading properties sold disclosed in the income statement.

2. PROFIT FROM RENTAL INCOME, INVESTMENT REVENUES AND FEES Profit from rental income, investment revenues and fees is arrived at after taking into account the following: Auditors’ remuneration ‒ Audit fees 861 721 160 668 ‒ Expenses 5 11 5 11 ‒ Other services ̶ 20 ̶ 20 ‒ Other audit services capitalised to investment properties 926 ̶ 926 ̶ 1 792 752 1 091 699 Depreciation ‒ Computer equipment 577 645 ̶ ̶ ‒ Furniture and fittings 472 424 ̶ ̶ ‒ Motor vehicles 1 562 1 795 ̶ ̶ 2 611 2 864 ̶ ̶ Net profit on disposal of equipment, furniture and fittings

‒ Computer equipment ̶ 5 ̶ ̶ ‒ Furniture and fittings 1 ̶ ̶ ̶ ‒ Motor vehicles 111 289 ̶ ̶ 112 294 ̶ ̶ Staff costs (excluding directors) 33 205 30 500 310 285 Allocated to profit on disposal of investment properties ̶ (1 610) ̶ ̶ Allocated to cost of investment properties (1 820) (1 923) ̶ ̶ 31 385 26 967 310 285 Included in staff costs are: Pension contribution 2 806 986 ̶ ̶ Number of employees 172 131 3 2 Directors’ emoluments (refer note 34) Executive directors 4 759 6 639 ̶ ̶

‒ Short-term benefits for managerial services 4 759 6 639 ̶ ̶

Non-executive directors 1 003 820 963 780

‒ For services as directors 1 003 820 963 780 Pangbourne Properties Limited 57 Annual Report 2006

notes to the annual financial statements continued for the year ended 30 June 2006

Group Company

2006 2005 2006 2005 R’000 R’000 R’000 R’000

2. PROFIT FROM RENTAL INCOME, INVESTMENT REVENUES AND FEES continued Details of directors’ service contracts Contracts of C M Hutchison, D J Kennedy, A J W L Richards, R N Wesselo and W J Midgley with a subsidiary stipulate a notice period of six months, the reason being that the company deems this to be the period necessary to find and train their replacement. There are no other contracts or agreements concluded with directors or under negotiation.

3. INTEREST Interest received ‒ bank 2 726 1 785 2 353 1 687 ‒ bonds 513 721 513 721 ‒ tenants 2 082 1 928 2 078 1 928 ‒ Unit Purchase Trust loan ̶ ̶ 2 544 2 066 ‒ loans to participants of the Unit Purchase Trust 8 143 7 916 ̶ ̶ ‒ other 931 ̶ 8 665 11 074

Total interest received 14 395 12 350 16 153 17 476

Finance costs ‒ long-term loans 111 443 91 350 90 865 82 747 ‒ deferred payments 45 314 45 314 ‒ other 2 396 2 486 140 180

Total finance costs 113 884 94 150 91 050 83 241

4. TAXATION South African normal tax Current taxation ‒ Current year (2 162) (374) ̶ ̶ ‒ Capital gains tax 948 ̶ 1 025 ̶ Deferred taxation ‒ Current year (30 478) (9 685) (29 527) (9 745) Secondary tax on companies (1 774) (438) (609) (438)

Tax per the income statement (33 466) (10 497) (29 111) (10 183) Taxation reversed in statements of changes in equity (32 576) (25 247) (35 592) (25 907)

Effective tax (66 042) (35 744) (64 703) (36 090)

Tax rate reconciliation Tax at the statutory rate is reconciled for the effective tax rate as follows: % % % % Statutory tax rate 29,0 29,0 29,0 29,0 Permanent differences ̶ (0,1) ̶ (0,1) Secondary tax on companies 0,8 0,4 0,3 0,4 Capital gains tax adjustments (3,5) (16,9) (3,7) (17,0)

Effective tax rate 26,3 12,4 25,6 12,3 Deferred taxation assets have been recognised to the extent that it is probable that future taxable profits will be available against which the deductible temporary difference can be utilsed. Estimated assessable losses available for set-off against future taxable income (11 866) (24 952) (9 052) (19 859)

5. DIVIDENDS Interim paid 2 067 1 561 2 200 1 587 Final declared 2 183 1 851 2 259 1 870

4 250 3 412 4 459 3 457 Pangbourne Properties Limited 58 Annual Report 2006 notes to the annual financial statements continued for the year ended 30 June 2006

6. EARNINGS PER UNIT The earnings per combined unit is calculated on the weighted average number of units in issue during the year of 205 235 904 (2005: 179 080 833) and profit for the year of R264 428 000 (2005: R296 542 000). Headline loss for the combined units of R2 307 000 (2005: R42 104 000) has been based on the weighted average number of units in issue during the year of 205 235 904 (2005: 179 080 833) and on net profit for the year, adjusted for headline reconciling items.

Profit before Profit for taxation Taxation the year Reconciliation between earnings and headline earnings R’000 R’000 R’000

Profit before tax after share of profits from associates 330 470 (66 042) 264 428 Adjustments: ̶ ̶ ̶ Net revaluation of investment properties (354 823) 51 449 (303 374) Net goodwill written off 156 199 ̶ 156 199 Net profit on disposal of investment properties (55 562) 8 057 (47 505) Adjustments for associates: (110 784) 38 729 (72 055)

Goodwill written off 20 992 ̶ 20 992 Revaluation of associate investment properties (133 638) 38 756 (94 882) Loss on disposal of investment properties 181 (27) 154 Amortisation of listing, debenture, mortgage and securitisation expenses 1 681 ̶ 1 681

Headline loss (34 500) 32 193 (2 307)

Headline loss per combined unit (cents) (1,12)

Group Company

2006 2005 2006 2005 R’000 R’000 R’000 R’000

7. DISTRIBUTIONS TO COMBINED UNITHOLDERS Analysis of distribution to unitholders is as follows: ‒ Debenture interest debt portion 100 140 83 448 100 140 83 448 ‒ Debenture interest equity portion 112 332 87 062 122 734 89 336 ‒ Dividends 4 250 3 412 4 459 3 457 The split of debenture interest between debt and equity does not represent the legal substance of the debentures, but has been done in order to comply with International Financial Reporting Standards.

216 722 173 922 227 333 176 241 Distributions per combined unit are as follows: (cents per unit) ‒ Distribution No. 37 ̶ 44,50 ̶ 44,50 ‒ Distribution No. 38 ̶ 51,50 ̶ 51,50 ‒ Distribution No. 39 47,00 ̶ 47,00 ̶ ‒ Distribution No. 40 56,00 ̶ 56,00 ̶

103,00 96,00 103,00 96,00 Pangbourne Properties Limited 59 Annual Report 2006

notes to the annual financial statements continued for the year ended 30 June 2006

Group Company

2006 2005 2006 2005 R’000 R’000 R’000 R’000

8. INVESTMENT PROPERTIES Opening net carrying amount 2 126 509 1 100 223 1 458 790 1 085 594

Revaluation adjustments 377 104 226 561 377 421 200 596 Additions ‒ acquisitions 1 719 319 835 170 1 676 808 483 563 Additions ‒ subsequent expenditure 56 536 34 194 55 112 34 194 Net disposals and deconsolidation (1 254 271) (69 639) (777 993) (345 157)

Closing net carrying amount 3 025 197 2 126 509 2 790 138 1 458 790 Reconciled to the annual financial statements as follows: Investment properties* 2 929 538 2 107 591 2 694 479 1 439 872 Land held for development 22 564 ̶ 22 564 ̶ Trading properties 73 095 18 918 73 095 18 918

3 025 197 2 126 509 2 790 138 1 458 790 Contingent straight-line operating lease asset included in carrying amount above 41 346 19 065 39 569 18 227 Current year movement included in revaluation adjustments 22 281 3 076 21 342 2 238 The comparable amounts under the historical-cost convention for properties which have been revalued 2 261 242 1 164 855 2 025 865 1 146 675

* Included in the above closing amount is R57 million relating to a property which has been developed. The property is expected to be completed and start generating revenue from September 2006. A schedule of investment properties owned by the group is set out in the enclosed booklet. A register of investment properties is available for inspection at the registered office of the company. Investment properties were revalued by a net R377 million at 30 June 2006. The basis of valuation was open-market value. One hundred and ninety-seven properties were valued externally, resulting in a R243 million increase in value. Eighty-five properties were valued internally resulting in a R134 million increase in value. Certain land and buildings are held as security for mortgage loans. The value of encumbered investment properties is set out in note 21. Revenue is recognised on a straight-line basis over the lease term which is offset by the change in the fair value of investment properties and has no net impact on earnings. Properties which do not meet the investment criteria are identified as trading properties and have been restated as such in the prior year. It was announced on SENS on Wednesday, 14 December 2005 and in the press on Thursday, 15 December 2005 that Pangbourne concluded an agreement to acquire a portfolio of 48 properties from TRFPT, comprising a mixture of industrial, commercial and retail properties. Pangbourne also entered into an agreement to dispose of six properties which were more suited to Siyathenga immediately upon completion of the acquisition. Pangbourne acquired the TRFPT portfolio for an aggregate purchase consideration of R1 404 million, to be discharged through a cash payment of R702 million and the delivery to TRFPT of 37 360 057 new Pangbourne combined units at an issue price of R10,54 per new Pangbourne combined unit, 18 920 393 iFour linked units at R9,17 per iFour linked unit and 23 000 000 Siyathenga linked units at R5,86 per Siyathenga linked unit. It was announced on SENS on Tuesday, 11 October 2005 and in the press on Wednesday, 12 October 2005 that an agreement had been reached between Pangbourne and Yard Capital in terms of which Yard Capital would acquire an indirect interest of approximately 6,15% in the issued share capital and debenture capital of Pangbourne. In order to facilitate the introduction of black economic empowerment at an equity ownership level, Pangbourne has elected to allot and issue the subscription units to Panya, a wholly owned subsidiary of Pangbourne established to facilitate the transaction, at a price of R10,10 per subscription unit, for a total subscription price of R125 000 000. The subscription price represents a 5% discount to the 30-day trade-weighted average price per unit from the date of approval of the transaction by the board, after deduction of the distribution payable to combined unitholders registered on 30 September 2005 in which Panya will not participate. Furthermore, to avoid dilution of the distribution to combined unitholders, Pangbourne will claw back the distribution for the period 1 July 2005 to the date of issue of the subscription units calculated on a pro rata basis over the six months ending 31 December 2005. Following such allotment and issue, Panya will hold approximately 6,15% of Pangbourne’s combined units in issue. The subscription price is to be funded by Absa. In addition, Yard Capital has undertaken to contribute R5 000 000 to the transaction, which will be used to pay transaction costs and reduce the capital amount of the Absa funding. Pangbourne Properties Limited 60 Annual Report 2006 notes to the annual financial statements continued for the year ended 30 June 2006

8. INVESTMENT PROPERTIES (continued) As security for the Absa funding, Panya will pledge the subscription units to Absa. Pangbourne will grant Absa a limited recourse suretyship and mortgage bonds in favour of Absa will be registered over certain properties owned by Pangbourne to the value of R148 000 000. The Absa funding is to be serviced and repaid through the distributions received by Panya in respect of its Pangbourne combined units. Exposure to interest rate fluctuations will be hedged by entering into interest rate fixes for various periods in respect of 80% of the Absa funding. It was announced on SENS on Tuesday, 31 May 2005 that an agreement was reached between Pangbourne and Paramount Property Fund Limited that Pangbourne would acquire a portfolio of 15 properties and the leases as a letting enterprise and as a going concern for a purchase consideration of R125 million. The risk and benefit in respect of the property would pass to Pangbourne on the date of occupation, which is 1 September 2005. In terms of the agreement governing this acquisition, it was envisaged that Pangbourne may raise funds for the settlement of the consideration payable for the Paramount acquisition through the issue of new combined units.

Group Company

2006 2005 2006 2005 R’000 R’000 R’000 R’000

9. INVESTMENTS AND LOANS IN ASSOCIATES iFour Properties Limited Opening balance of investment and loans 434 469 375 774 434 469 375 774 Units acquired ̶ 39 845 ̶ 39 845 Units disposed (103 116) (13 139) (103 116) (13 139) Share of post-acquistion profits net of distributions received 74 529 35 407 74 529 35 407 Goodwill realised (1 209) (3 418) (1 209) (3 418)

Closing balance at the end of the year 404 673 434 469 404 673 434 469

Goodwill included in closing balance 15 434 16 643 15 434 16 643

Market value at the end of the year 557 846 672 313 557 846 672 313

Siyathenga Property Fund Limited Cost of investment ‒ transfer from subsidiary 152 147 ̶ 150 000 ̶ Units acquired 234 371 ̶ 234 371 ̶ Units disposed (115 000) ̶ (115 000) ̶ Profits prior to reclassification (consolidated by group) ̶ ̶ 2 147 ̶ Share of post-acquistion profits net of distributions received 8 370 ̶ 8 370 ̶

Closing balance at the end of the year 279 888 ̶ 279 888 ̶

Market value at the end of the year 272 570 ̶ 272 570 ̶ Siyathenga was a wholly owned subsidiary in the prior financial year. On listing, Pangbourne’s holding was diluted, and at year-end was 42%, which has been accounted for accordingly.

UCIC ‒ Umhlanga Crescent Investment Company (Pty) Limited Opening balance of investment and loans 19 134 19 037 19 134 19 010 Dividend received (15 777) ̶ (15 777) ̶ Loans repaid (861) (12 598) (861) (12 571) Share of post-acquistion (losses)/profits (1 997) 12 695 (1 997) 12 695 Closing balance at the end of the year (directors’ valuation) 499 19 134 499 19 134

Total 685 060 453 603 685 060 453 603 Certain listed investments are held as security as mortgage loans. The value of encumbered listed investments is set out in note 21. Pangbourne Properties Limited 61 Annual Report 2006

notes to the annual financial statements continued for the year ended 30 June 2006

9. INVESTMENTS AND LOANS IN ASSOCIATES (continued) Details of the group associates at 30 June 2006 are as follows:

Portion of Portion of ownership voting power Name of associate interest held Principal activity

iFour Properties Limited 37% 37% Property ownership and letting

Siyathenga Property Fund Limited 42% 42% Property ownership and letting

UCIC (Umhlanga Crescent Investment Company (Pty) Limited) 40% 40% Property management All of these companies are incorporated in the Republic of South Africa.

2006 2005 R’000 R’000

Summarised financial information for iFour Properties Limited Revenue 324 474 306 424 Profit for the year 210 935 75 442 Group’s share of associates’ profit for the year 74 529 35 407 Total assets 2 507 460 2 071 353 Total liabilities (net of debenture capital) 1 455 464 1 403 047 Group’s share of associates’ net assets 389 239 327 469

Summarised financial information for Siyathenga Property Fund Limited Revenue 118 860 ̶ Profit for the year 30 461 ̶ Group’s share of associates’ profit for the year 8 370 ̶ Total assets 1 502 136 ̶ Total liabilities (net of debenture capital) 835 735 ̶ Group’s share of associates’ net assets 279 888 ̶

Summarised financial information for UCIC Revenue ̶ 18 816 (Loss)/profit for the year (4 993) 28 368 Group’s share of associates’ (loss)/profit for the year (1 997) 12 695 Total assets 1 789 53 645 Total liabilities 1 766 13 162 Group’s share of associates’ net assets 9 16 193 Pangbourne Properties Limited 62 Annual Report 2006 notes to the annual financial statements continued for the year ended 30 June 2006

Computer Furniture and Motor equipment fittings vehicles Total R’000 R’000 R’000 R’000

10. EQUIPMENT, FURNITURE AND FITTINGS Group Year ended 30 June 2006 1 284 3 659 5 306 10 249

Opening net carrying amount 769 2 321 5 152 8 242

Cost 5 394 3 884 8 269 17 547 Accumulated depreciation (4 625) (1 563) (3 117) (9 305)

Additions 1 113 1 810 3 505 6 428 Net disposals (21) ̶ (1 789) (1 810) Depreciation (577) (472) (1 562) (2 611) Closing net carrying amount 1 284 3 659 5 306 10 249

Cost 3 334 5 359 8 018 16 711 Accumulated depreciation (2 050) (1 700) (2 712) (6 462)

Year ended 30 June 2005 769 2 321 5 152 8 242

Opening net carrying amount 1 143 2 278 5 033 8 454

Cost 5 126 3 417 7 201 15 744 Accumulated depreciation (3 983) (1 139) (2 168) (7 290)

Additions 284 467 2 540 3 291 Net disposals (13) ̶ (626) (639) Depreciation (645) (424) (1 795) (2 864) Closing net carrying amount 769 2 321 5 152 8 242

Cost 5 394 3 884 8 269 17 547 Accumulated depreciation (4 625) (1 563) (3 117) (9 305)

Group Company

2006 2005 2006 2005 R’000 R’000 R’000 R’000

11. GOODWILL The carrying amount of goodwill at 1 July 2005 has been derecognised at the transition date based on management’s assessment of its recoverable amount. Therefore, an adjustment of R6 566 000 has been made to opening retained earnings and goodwill at 1 July 2005.

Opening balance 6 566 7 801 6 566 7 801 Goodwill realised (6 566) (1 235) (6 566) (1 235)

Adjusted opening balance ̶ 6 566 ̶ 6 566 Pangbourne Properties Limited 63 Annual Report 2006

notes to the annual financial statements continued for the year ended 30 June 2006

Group Company

2006 2005 2006 2005 R’000 R’000 R’000 R’000

12. INTANGIBLE ASSET (PURCHASE OF MANAGEMENT AGREEMENT) Opening balance 6 506 11 384 6 506 11 384 Amortisation of intangible asset (4 878) (4 878) (4 878) (4 878)

Closing balance 1 628 6 506 1 628 6 506 Amortised over a period of three years, starting from 1 November 2003.

13. LONG-TERM LOANS Analysis of long-term loans receivable is as follows:

13.1 Loan to the Pangbourne Unit Purchase Trust secured by the units held in the trust ̶ ̶ 69 397 10 989

13.2 Secured by a first mortgage bond over fixed property to be repaid in full on 30 June 2007 4 260 4 260 4 260 4 260

13.3 Secured by a first mortgage bond over fixed property repaid in full ̶ 148 ̶ 148

13.4 Secured by a first mortgage bond over fixed property repaid in full ̶ 334 ̶ 334

13.5 Loan to directors of a subsidiary, secured by personal securities and a pledge of units. To be repaid within eight years from date of signature. Interest is charged at the prime lending rate or such other rate that is agreed by both parties in writing. 7 031 9 000 7 031 9 000 Less: portion payable within 12 months transferred to current assets (4 260) (4 494) (4 260) (4 494)

7 031 9 248 76 428 20 237

14. DEFERRED TAX Movement of deferred tax: Opening balance 51 369 41 684 54 287 44 542 Effect of rate change ̶ (1 451) ̶ (1 483) Current year charge 31 090 11 136 29 527 11 228

Closing balance 82 459 51 369 83 814 54 287

Analysis of deferred tax Capital gains tax relating to property and investments 54 842 27 726 54 843 28 036 Debentures and amortised interest on debentures 43 739 44 651 43 738 44 651 Fair value of interest rate derivatives (5 495) (10 699) (5 432) (9 902) Provisions (5 293) (4 959) (4 817) (4 625) Effect of estimated assessable losses (3 441) (7 236) (2 625) (5 759) Intangible asset 471 1 886 471 1 886 Gain on mark to market of listed investments (2 364) ̶ (2 364) ̶

82 459 51 369 83 814 54 287 Pangbourne Properties Limited 64 Annual Report 2006 notes to the annual financial statements continued for the year ended 30 June 2006

Group Company

2006 2005 2006 2005 R’000 R’000 R’000 R’000

15. INVESTMENTS IN UNIT PURCHASE TRUST AND SUBSIDIARY COMPANIES ‒ Units at directors’ valuation ̶ ̶ 1 616 1 616 ‒ Amounts owing by subsidiaries and Unit Purchase Trust ̶ ̶ 299 998 337 027

̶ ̶ 301 614 338 643 Provision for impairment in Paforma ̶ ̶ (10 563) (10 563)

Directors’ valuation ̶ ̶ 291 051 328 080

16. LOANS TO PARTICIPANTS OF THE UNIT PURCHASE TRUST In terms of the Pangbourne Unit Purchase Trust, the trustees of the scheme may from time to time offer units to participating scheme members. In terms of the trust deed the offer price of these units is deemed to be the ruling closing price one day prior to the date of the offer. If such units are accepted by the participating member, the units are issued to the members, a loan equal to the number of units multiplied by the offer price is opened, and the units are pledged back to the trust as security for the loan. Loans for scheme units attract interest at the weighted average cost of capital of the trust. This equates to the interest charged by Pangbourne at its weighted average and actual interest rates for external borrowings on a pro rata basis.

A M A Campbell* ̶ 17 627 ̶ ̶ J A A Diepenbroek* ̶ 7 029 ̶ ̶ A J W L Richards 6 579 8 407 ̶ ̶ D J Kennedy 6 103 7 440 ̶ ̶ C M Hutchison 15 417 4 875 ̶ ̶ R N Wesselo 6 301 ̶ ̶ ̶ W J Midgley 9 601 ̶ ̶ ̶

Amounts owing by directors 44 001 45 378 ̶ ̶ Amounts owing by other employees and 89 236 33 186 ̶ ̶ ex-employees

Total 133 237 78 564 ̶ ̶

*The loans for A M A Campbell of R9 912 588 and J A A Diepenbroek of R7 903 602 are included as part of amounts owing by other employees and ex-employees in the current year as at year-end neither were directors. Pangbourne Properties Limited 65 Annual Report 2006

notes to the annual financial statements continued for the year ended 30 June 2006

Group Company

2006 2005 2006 2005 R’000 R’000 R’000 R’000

17. OTHER RECEIVABLES Investment income receivable 37 695 31 769 37 695 31 769 Fees receivable 15 070 ̶ 15 070 ̶

Closing balance 52 765 31 769 52 765 31 769

18. INVESTMENT HELD-FOR-TRADE Paramount Properties Limited Purchases 32 900 ̶ 32 900 ̶ Unrealised revaluation of listed investment held-for-trade 8 152 ̶ 8 152 ̶

Closing balance 41 052 ̶ 41 052 ̶

TOTAL 41 052 ̶ 41 052 ̶ The investment held-for-trade is comprised of 5 864 528 units at a market value of R7 at 30 June 2006.

19. SHARE CAPITAL AND PREMIUM Authorised 500 000 000 (2005: 250 000 000) ordinary shares of 5 000 2 500 5 000 2 500 1 cent each

Issued 243 719 765 (2005: 188 973 270) ordinary shares of 1 cent each 2 314 1 890 2 438 1 890 Share premium 572 876 151 906 642 059 151 994

Share capital and premium before treasury units 575 190 153 796 644 497 153 884 Issue of treasury units 10 709 12 277 ̶ ̶

Opening balance 12 277 3 729 ̶ ̶ Arising on treasury units issued during the year 2 087 8 548 ̶ ̶ Arising on treasury units repurchased during the year (3 655) ̶ ̶ ̶

585 899 166 073 644 497 153 884

Statutory share premium 435 038 166 073 493 636 153 884 Share premium arising from compliance with IFRS reflecting fair value adjustment on units issued 150 861 ̶ 150 861 ̶

Each share is linked with nine variable rate debentures to form one combined unit. The unissued ordinary shares of the company are under the control of the directors until the forthcoming annual general meeting. There are 2 142 667 (2005: 1 852 067) units held as treasury units in subsidiaries of the holding company. Pangbourne Properties Limited 66 Annual Report 2006 notes to the annual financial statements continued for the year ended 30 June 2006

Group Company

2006 2005 2006 2005 R’000 R’000 R’000 R’000

20. DEBENTURES 2 175 036 282 (company 2 193 477 885); (2005: 1 684 090 827) subordinated debentures of 50 cents each. Opening balance 842 045 802 154 850 380 818 596 Issue of treasury units 1 516 8 107 ̶ ̶ Repurchase of treasury units (2 403) ̶ ̶ ̶ Arising on issue of units during the year 190 667 31 784 246 359 31 784

1 031 825 842 045 1 096 739 850 380 Reconciled to the annual financial statements as follows: Balance sheet ‒ debentures equity portion 141 601 145 635 150 823 153 970 ‒ debentures debt portion 890 224 696 410 945 916 696 410

1 031 825 842 045 1 096 739 850 380 In terms of the debenture trust deed, the aggregate interest entitlement of every nine debentures linked to each ordinary share in respect of any financial year shall be 50 times the dividend declared on each ordinary share for the same period, but with a minimum of 10% per annum of the nominal value of the debentures. The interest is payable on declaration of dividends. The debentures are redeemable after 25 years from date of allotment, subject to one year’s notice, if so elected by debenture holders’ resolution.

21. OTHER INTEREST-BEARING Interest BORROWINGS rate (%)

21.1 Secured by a first mortgage bond over fixed property and listed investments with a book 13,35 50 000 50 000 50 000 50 000 value of R531 million (2005: R477,6 million), to be repaid 13,20 50 000 50 000 50 000 50 000 in full by 3 February 2008 11,14 80 000 80 000 80 000 80 000 21.2 Secured by a first mortgage bond over fixed property and listed investments with a book value of R279,34 million (2005: R179,7 million), to be repaid in full on 31 March 2009 9,73 135 600 100 000 135 600 100 000 21.3 Secured by a first mortgage bond over fixed property and listed investments with a book value of R89,8 million in 2005, repaid in full 12,95 ̶ 50 000 ̶ 50 000 21.4 Secured by a first mortgage bond over fixed property and listed investments with a book value of R103 million (2005: R89,8 million), to be repaid in full on 31 March 2009 12,75 50 000 50 000 50 000 50 000 21.5 Secured by first mortgage bond over the Pekro property, repaid in full 9,25 ̶ 3 568 ̶ 3 568 21.6 Secured by a first mortgage bond over fixed property and listed investments with a book value of R82,40 million (2005: R71,9 million), to be repaid on or before 31 March 2009 11,00 40 000 40 000 40 000 40 000 Pangbourne Properties Limited 67 Annual Report 2006

notes to the annual financial statements continued for the year ended 30 June 2006

Group Company

Interest 2006 2005 2006 2005 rate (%) R’000 R’000 R’000 R’000

21. OTHER INTEREST-BEARING BORROWINGS (continued) 21.7 Secured by a first mortgage bond over fixed property and listed investments with a book value of R126,7 million in 2005, repaid in full 8,72 ̶ 70 520 ̶ 70 520 21.8 Secured by a first mortgage bond over fixed property and listed investments with a book value of R86,1 million in 2005, repaid in full 10,00 ̶ 15 000 ̶ 15 000 21.9 Vendor finance secured by bank guarantee, repaid in full 12,50 ̶ 2 462 ̶ 2 462 21.10 Secured by a first mortgage bond over fixed property and listed investments with a book value of R212 million (2005: R178,7 million) 9,50 ̶ 14 000 ̶ 14 000 21.11 Secured by a first mortgage bond over fixed property with a book value of R89,85 million to be repaid in full on 31 March 2009 8,72 55 000 54 997 55 000 54 997 21.12 Secured by a first mortgage bond over fixed property and listed investments with a book value of R27 million in 2005, repaid in full 8,90 ̶ 15 000 ̶ 15 000 21.13 Secured by a first mortgage bond over fixed property and listed investments with a book value of R464,25 million (2005: R150 million), repayable in full on 31 March 2009* 10,13 236 091 138 590 236 091 138 590 21.14 Unsecured loan, repaid in full 9,50 ̶ 10 000 ̶ 10 000 21.15 Secured by a first mortgage bond over listed investments with a book value of R80 million in 2005, repaid in full 8,90 ̶ 40 000 ̶ 40 000 21.16 Secured with a consortium of banks by a first mortgage bond over fixed property and listed investments with a book value of R322,2 million in 2005** 9,32 ̶ 192 000 ̶ ̶ 21.17 Secured with a consortium of banks by a first mortgage bond over fixed property and listed investments with a book value of R263,5 million in 2005** 9,01 ̶ 157 000 ̶ ̶ 21.18 Secured with a consortium of banks by a first mortgage bond over fixed property and listed investments with a book value of R60,3 million in 2005, bearing interest at prime minus 1,5%** 9,00 ̶ 35 961 ̶ ̶ 21.19 Secured by a first mortgage bond over fixed property and listed investments with a book value of R112,3 million, repayable in full on 31 March 2009 8,72 64 311 ̶ 64 311 ̶ 21.20 Secured by a first mortgage bond over fixed property and listed investments with a book value of R804 million, repayable in full on 31 March 2009 8,72 459 050 ̶ 459 050 ̶ Pangbourne Properties Limited 68 Annual Report 2006 notes to the annual financial statements continued for the year ended 30 June 2006

Group Company

Interest 2006 2005 2006 2005 rate (%) R’000 R’000 R’000 R’000

21. OTHER INTEREST-BEARING BORROWINGS (continued) 21.21 Secured by a first mortgage bond over fixed property and listed investments with a book value of R177,86 million, repayable in full on 31 March 2009 8,72 48 137 ̶ ̶ ̶ 21.22 Secured by a first mortgage bond over fixed property and listed investments with a book value of R31,24 million, repayable in full on 14 November 2007 9,77 12 500 ̶ ̶ ̶ 21.23 Secured by a first mortgage bond over fixed property and listed investments with a book value of R31,24 million, repayable in full on 14 November 2006 9,52 12 500 ̶ ̶ ̶ 21.24 Secured by a first mortgage bond over fixed property and listed investments with a book value of R31,24 million, repayable in full on 14 November 2008 9,87 12 500 ̶ ̶ ̶ 21.25 Secured by a first mortgage bond over fixed property and listed investments with a book value of R156,22 million, repayable in full on 15 November 2010 10,05 62 500 ̶ ̶ ̶ 21.26 Secured by a first mortgage bond over fixed property and listed investments with a book value of R67,91 million, repayable in full on 31 October 2012 8,80 25 000 ̶ ̶ ̶ 21.27 Secured by a session of Paforma’s debtors book, by Pangbourne 9,60 34 268 35 629 ̶ ̶ 21.28 Secured by a pledge of Pangbourne combined units, bearing interest at the overnight call rates Various 10 000 10 000 ̶ ̶ 21.29 Call account (538) ̶ (538) ̶ 21.30 Secured by a pledge of Pangbourne combined units, bearing interest at 10,01% 10,01 11 800 11 746 ̶ ̶ 21.31 Secured by a pledge of Pangbourne combined units, to be repaid in full on 4 June 2006 11,90 ̶ 20 000 ̶ ̶ 21.32 Secured by a pledge of Pangbourne combined units, bearing interest at a JIBAR-linked rate Various 36 186 20 300 ̶ ̶

1 484 905 1 266 773 1 219 514 784 137 Less: portion payable within 12 months (22 500) (16 030) ̶ (16 030) Net long-term interest-bearing borrowings 1 462 405 1 250 743 1 219 514 768 107 Age profile of settlement 2 ‒ 5 years 1 437 405 1 250 743 1 219 514 768 107 >5 years 25 000 ̶ ̶ ̶ The interest rates are rates currently applicable to the respective loan balances, which may be fixed or floating. These are not always reflective of the interest rates applicable up to maturity date.

*These interest rates, although floating with original funder, have been fixed as part of a counterparty agreement, to fix interest @10,13% for a period of three years, of which 1,5 years is outstanding at 30 June 2006, at which date the fixes can be re-negotiated. These interest rate fixes have been fair valued and the movement has been disclosed in note 22. The interest charge in the income statement reflects the cash flows resulting from the fix. ** Siyathenga was a wholly owned subsidiary in the prior financial year and therefore its loans were included above. On listing, Pangbourne’s holding was diluted, and at year-end was 42%, which has been accounted for accordingly. (Refer note 27.2). Pangbourne Properties Limited 69 Annual Report 2006

notes to the annual financial statements continued for the year ended 30 June 2006

Group Company

2006 2005 2006 2005 R’000 R’000 R’000 R’000

22. FAIR VALUE OF INTEREST RATE DERIVATIVES Opening balance 36 894 12 006 34 145 11 769 Movement (14 878) 24 888 (15 412) 22 376

Closing balance 22 016 36 894 18 733 34 145

23. ACCOUNTS PAYABLE AND ACCRUALS Trade payables 37 295 17 908 25 442 11 782 Leave pay and bonus accruals 2 199 1 605 18 13 Tenant deposits 17 640 13 386 16 415 11 346 Sundry payables 44 122 22 593 30 967 17 712

101 256 55 492 72 842 40 853

Movement on leave pay and bonus accruals Opening balance 1 605 1 269 13 30 Current year charged 1 368 1 217 20 8 Current year utilised (774) (882) (15) (26)

Closing balance 2 199 1 605 18 13

24. BORROWING POWERS The directors have unlimited powers but have set a limit of 50% of the value of income-earning assets, excluding the debt portion of debentures.

25. CONTINGENT LIABILITIES 25.1 The company has signed a suretyship in favour of a bank in respect of a loan of R58 000 000 made by the bank to the Pangbourne Unit Purchase Trust. 25.2 In terms of a lease entered into on 1 April 1995, the company is liable to compensate one of its tenants for improvements effected by the tenant to the fixed property, if the lease is cancelled before the contractual expiry thereof on 31 March 2015. The amount of compensation is based on R3 200 000, the amount expended by the tenant, reducing proportionately over the period of the lease. The company’s obligation in this regard is covered by a mortgage bond registered over the company’s fixed property with a book value of R19 350 000.

26. COMMITMENTS 26.1 There are contracted commitments for capital expenditure of R145 305 000 (2005: R23 430 000 ). These will be funded from the group’s resources. 26.2 The operating lease commitment for a subsidiary’s premises amounts to R129 546 for the next 12 months. Pangbourne Properties Limited 70 Annual Report 2006 notes to the annual financial statements continued for the year ended 30 June 2006

Group Company

2006 2005 2006 2005 R’000 R’000 R’000 R’000

27. NOTES TO THE CASH FLOW STATEMENT 27.1 Reconciliation of profit before taxation and distributions to unitholders, to cash generated from operations Profit before taxation and distribution to unitholders 353 931 373 750 355 989 378 635 Adjusted for: Movements in fair value of interest rate derivatives (14 878) 24 888 (15 412) 22 376 Net profit on disposal of trading and developed properties (9 316) (5 911) (9 316) (5 911) Net profit on disposal of investment properties (55 562) (5 461) (55 562) (33 573) Depreciation 2 611 2 864 ̶ ̶ Interest received (14 395) (12 350) (16 153) (17 476) Finance costs 113 884 94 150 91 050 83 241 Investment income (77 015) (58 775) (77 015) (58 775) Unrealised revaluation of listed investment held-for-trade (8 152) ̶ (8 152) ̶ Net profit on disposal of investments held-for-trade (1 034) (1 051) (1 034) (1 051) Gross revaluation of investment properties (377 104) (226 561) (377 421) (200 596) Fair value adjustment on units issued during the year 150 861 ̶ 150 861 ̶ Goodwill written off 156 199 ̶ 156 199 ̶ Goodwill realised ̶ 1 235 ̶ 1 235 Amortisation of intangible asset 4 878 4 878 4 878 4 878 Net profit on disposal of equipment, furniture and fittings (112) (294) ̶ ̶ Loss/(profit) on sale of portion of subsidiary 133 (304) 133 ̶

Profit before working capital changes 224 929 191 058 199 045 172 983 Working capital changes: (Increase)/decrease in accounts and other receivables (76 991) (4 953) (11 069) 18 553 Increase in accounts payable and accruals 53 220 23 559 31 989 14 985 Cash generated from operations 201 158 209 664 219 965 206 521 27.2 Deconsolidation of Siyathenga Property, plant and equipment 647 614 Deposits made 864 Deferred tax asset 612 Accounts receivable 2 350 Prepaid expenses 484 Non-interest-bearing borrowings (117 535) Bank balances and cash 10 422 Interest-bearing borrowings (385 020) Accounts payable and accruals (7 456) Taxation (55) Net assets on 5 August 2005 152 280 Transfer investment cost and group portion of post acquisition reserves to associate 152 147 Loss on sale of portion of subsidiary (133) 27.3 Non-cash investing and financing activities ‒ Amortised interest on debenture debt portion ‒ Revaluation of listed investments “held-for-trade” and “available-for-sale” ‒ Revaluation of investment properties ‒ Issue of treasury units The group has undrawn borrowing facilities of R161,4 million and an additional R1 520 million is available subject to provision of further security.

28. RETIREMENT BENEFIT COSTS The group’s employees are members of one of two retirement plans: either the group and the employee contribute a fixed percentage to a recognised retirement annuity fund of the employee’s choice; or the company contributes to a defined contribution pension fund. All benefits from these funds accrue to the employee, in terms of the legislation governing these funds. The pension fund is governed by the Pension Funds Act of 1956. The company has no commitment, formal or otherwise, to meet unfunded benefits. All benefits from the retirement annuity funds accrue to the employees in terms of the legislation governing these funds. The group has no commitment for post-retirement medical aid benefits. Pangbourne Properties Limited 71 Annual Report 2006

notes to the annual financial statements continued for the year ended 30 June 2006

Listed invest- Property Property ment stock Transfer Agents’ manage- stock Trading invest- duty Bridging commis- ment trading properties ments finance* finance* sion* Corporate Total 2006 2006 2006 2006 2006 2006 2006 2006 2006 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

29. SEGMENTAL INFORMATION Business segment Revenue Rentals 277 581 ̶ ̶ ̶ ̶ ̶ ̶ ̶ 277 581 Financing fees ̶ ̶ ̶ ̶ 9 520 23 484 8 236 ̶ 41 240 Management fees 43 715 ̶ ̶ ̶ ̶ ̶ ̶ ̶ 43 715 Interest distributions ̶ ̶ ̶ 77 015 ̶ ̶ ̶ ̶ 77 015 Sale of developed property 32 900 ̶ ̶ ̶ ̶ ̶ ̶ ̶ 32 900 Sales of trading properties ̶ ̶ 17 000 ̶ ̶ ̶ ̶ ̶ 17 000

Total revenue 354 196 ̶ 17 000 77 015 9 520 23 484 8 236 ̶ 489 451

Segment results Profit from rental income, investment revenue and fees 226 576 ̶ 3 881 77 015 4 513 11 134 3 905 4 018 331 042 Net revaluation of investment properties 354 823 ̶ ̶ ̶ ̶ ̶ ̶ ̶ 354 823 Attributable to straight- line operating lease adjustment (22 281) ̶ ̶ ̶ ̶ ̶ ̶ ̶ (22 281) Gross revaluation of investment properties 377 104 377 104 ̶ ̶ ̶ ̶ ̶ ̶ ̶ Unrealised revaluation of listed investment held-for-trade 8 152 ̶ ̶ ̶ ̶ ̶ ̶ ̶ 8 152 Net profit on disposal of investments held- for-trade ̶ 1 034 ̶ ̶ ̶ ̶ ̶ ̶ 1 034 Goodwill written off ̶ ̶ ̶ (156 199) ̶ ̶ ̶ ̶ (156 199) Net profit on disposal of investment properties 55 562 ̶ ̶ ̶ ̶ ̶ ̶ ̶ 55 562 Amortisation of intangible asset ̶ ̶ ̶ ̶ ̶ ̶ ̶ (4 878) (4 878 ) Fair value adjustment on units issued during the year ̶ ̶ ̶ ̶ ̶ ̶ ̶ (150 861) (150 861) Loss on sale of portion of subsidiary ̶ ̶ ̶ ̶ ̶ ̶ ̶ (133) (133) Interest received 11 669 ̶ ̶ ̶ ̶ ̶ ̶ 2 726 14 395 Finance costs (45) ̶ ̶ ̶ (743) (1 832) (642) (110 622) (113 884 ) Movement in fair value of interest rate derivatives ̶ ̶ ̶ ̶ ̶ ̶ ̶ 14 878 14 878 Profit before taxation and distributions to shareholders 656 737 1 034 3 881 (79 184) 3 770 9 302 3 263 (244 872) 353 931

Other information

Total assets 3 043 535 ̶ 73 095 737 825 28 770 74 071 22 339 204 586 4 184 221

Total liabilities** 98 638 ̶ ̶ 8 134 20 077 6 105 ̶ 1 688 349 1 821 303

Depreciation ̶ ̶ ̶ ̶ ̶ ̶ ̶ 2 611 2 611

Capital expenditure 1 775 855 ̶ ̶ ̶ ̶ ̶ ̶ 6 428 1 782 283

**Segment of Paforma Property Finance (Pty) Limited ** Excludes debenture debt portion Pangbourne Properties Limited 72 Annual Report 2006 notes to the annual financial statements continued for the year ended 30 June 2006

Listed invest- Property Property ment stock Transfer Agents’ manage- stock Trading invest- duty Bridging commis- ment trading properties ments finance* finance* sion* Corporate Total 2005 2005 2005 2005 2005 2005 2005 2005 2005 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000

29. SEGMENTAL INFORMATION (continued) Revenue Rentals 246 055 ̶ ̶ ̶ ̶ ̶ ̶ ̶ 246 055 Financing fees ̶ ̶ ̶ ̶ 10 113 13 173 7 321 ̶ 30 607 Management fees 14 060 ̶ ̶ ̶ ̶ ̶ ̶ ̶ 14 060 Interest distributions ̶ ̶ ̶ 58 775 ̶ ̶ ̶ ̶ 58 775 Sales of trading properties ̶ ̶ 12 600 ̶ ̶ ̶ ̶ ̶ 12 600

Total revenue 260 115 ̶ 12 600 58 775 10 113 13 173 7 321 ̶ 362 097

Segment results Profit from rental income, investment revenue and fees 174 173 ̶ 5 911 58 775 4 568 5 950 3 306 3 567 256 250 Net revaluation of investment properties 223 485 ̶ ̶ ̶ ̶ ̶ ̶ ̶ 223 485

Attributable to straight-line operating lease adjustment (3 076) ̶ ̶ ̶ ̶ ̶ ̶ ̶ (3 076) Gross revaluation of investment properties 226 561 ̶ ̶ ̶ ̶ ̶ ̶ ̶ 226 561

Net profit on disposal of investments held-for- trade ̶ 1 051 ̶ ̶ ̶ ̶ ̶ ̶ 1 051 Goodwill realised (1 235) ̶ ̶ ̶ ̶ ̶ ̶ ̶ (1 235) Net profit on disposal of investment properties 5 461 ̶ ̶ ̶ ̶ ̶ ̶ ̶ 5 461 Amortisation of ̶ ̶ ̶ ̶ ̶ ̶ ̶ intangible asset (4 878) (4 878) Profit on sale of portion ̶ ̶ ̶ ̶ ̶ ̶ ̶ of subsidiary 304 304 Interest received 10 484 ̶ ̶ ̶ ̶ ̶ ̶ 1 866 12 350 Finance costs (314) ̶ ̶ ̶ (207) (270) (150) (93 209) (94 150) Movement in fair value of interest rate derivatives ̶ ̶ ̶ ̶ ̶ ̶ ̶ (24 888) (24 888)

Profit before taxation and distributions to shareholders 412 054 1 051 5 911 58 775 4 361 5 680 3 156 (117 238) 373 750

Other information Total assets 2 218 862 ̶ 18 918 485 372 27 462 36 013 14 113 101 008 2 901 748

Total liabilities** 39 557 ̶ ̶ 11 538 14 648 5 751 ̶ 1 439 577 1 511 071

Depreciation ̶ ̶ ̶ ̶ ̶ ̶ ̶ 2 864 2 864

Capital expenditure 869 364 ̶ ̶ ̶ ̶ ̶ ̶ 3 291 872 655

*Segments of Paforma Property Finance (Pty) Limited **Excludes debenture debt portion Pangbourne Properties Limited 73 Annual Report 2006

notes to the annual financial statements continued for the year ended 30 June 2006

2006 2005 R’000 R’000

29. SEGMENTAL INFORMATION (continued) Geographical segments Revenue by location The following table shows the distribution of the company’s consolidated rentals by geographical location: Gauteng 438 533 306 946 KwaZulu-Natal 46 763 48 585 Western Cape 202 3 017 Free State 2 115 2 029 Mpumalanga 1 838 1 099 North West ̶ 421 489 451 362 097 Analysis of property by geographical location The following table shows the carrying amount of investment property by geographical area in which the assets are located: Gauteng 2 434 489 1 487 214 KwaZulu-Natal 552 618 582 229 Western Cape ̶ 23 922 Free State 20 090 13 718 Mpumalanga 18 000 15 232 North West ̶ 4 194 3 025 197 2 126 509 Segment revenue and expenses Revenue and expenses that are directly attributable to a segment are allocated to those segments. Expenses not directly attributable to a segment are allocated to the corporate segment. Segment assets and liabilities Segment assets include all operating assets used by a segment and consist principally of investment properties, receivables and cash. Assets not directly attributable to a particular segment are allocated to the corporate segment. Segment liabilities include all operating liabilities of a segment and consist principally of outstanding accounts.

30. FINANCIAL INSTRUMENTS Exposure to credit and interest rate risk arises in the normal course of the company’s business. 30.1 Interest rate risk The company manages the interest rate risk by fixing the interest rate for the major portion of its borrowings, taking advantage of interest rate movements. Bank balances and cash: comprise cash held and short-term deposits. 30.2 Credit risk A credit policy is in place and the exposure to credit risk is managed on an ongoing basis. The carrying amount of each financial asset in the balance sheet represents the maximum credit risk exposure. 30.3 Fair values Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. 30.4 Liquidity risk The group handles liquidity risk by strict monitoring of the daily cash balances and utilising forecasted cash flows. The group’s borrowing powers are limited in terms of the articles of the company and all borrowings are approved by the board of directors. 30.5 Financial assets and liabilities have been reflected at fair value.

31. SUBSEQUENT EVENTS Pangbourne recently announced the proposed acquisition of a 40,6% stake in the Calulo Property Fund. The transaction is subject to competition commission approval and thereafter a compulsory offer has to be made to minority unitholders of Calulo. It is envisaged that Calulo will serve as the specialised office fund in the multi fund strategy. Pangbourne will assist in the growth of assets in the funds as well as the placing of further equity to improve liquidity and investor appeal in the funds.

32. FUTURE RENTALS The group has agreements in place for the receipt of the following rentals: Group Company

2006 2005 2006 2005 R’000 R’000 R’000 R’000

Within 1 year 313 039 262 483 300 552 182 987 From 2 ‒ 5 years 596 320 565 941 574 624 365 622 > 5 years 104 234 64 585 87 611 9 535 Pangbourne Properties Limited 74 Annual Report 2006 notes to the annual financial statements continued for the year ended 30 June 2006

Group and Company

2006 2005 R’000 R’000

33. RELATED-PARTY TRANSACTIONS Transactions between the company and its subsidiaries, which are related parties of the company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the group and other related parties are disclosed below. All transactions were conducted at arms length. Day to day management of the iFour Properties Limited and Siyathenga Property Fund Limited portfolios has been carried out by Pangbourne Properties Limited. Pangbourne Properties Limited owns 37% of iFour Properties Limited and 42% of Siyathenga Property Fund Limited.

33.1 Trading transactions The following fees have been earned from iFour Properties Limited: ‒ Management fees 13 153 12 463 ‒ Directors’ fees 375 300 ‒ Sales of developed property in return for shares in Paramount Property Limited (refer note 18) 32 900 ̶ 46 428 12 763 The following distibution has been earned from iFour Properties Limited: ‒ Interest distributions received 58 660 58 775 The following amount is owed by iFour Properties Limited: 509 3 868 The following fees have been earned from Siyathenga Property Fund Limited: ‒ Introduction and facilitation fees 15 070 ̶ ‒ Promoters’ fees 8 000 ̶ ‒ Management fees 7 042 ̶ ‒ Directors’ fees 265 66 30 377 66 The following distibution has been earned from Siyathenga Property Fund Limited: ‒ Interest distributions received 17 114 ̶ The following amount is owed by Siyathanga Property Fund Limited: 15 482 ̶ Purchase of the Crescent Shopping Centre by 100%-held subsidiary, Siyathenga One (Pty) ̶ 176 120 Limited, from Umhlanga Crescent Investment Company (Pty) Limited The following fees specific to the TRFPT transaction which were capitalised to investment properties, were paid to a former director: Success fee 3 510 ̶ Consulting fee 760 ̶ 4 270 ̶

Company

2006 2005 R’000 R’000

Company 33.2 Intercompany fees The following fees have been earned from Panhold (Proprietary) Limited: Asset management fee 2 945 ̶ Collection management fee 57 ̶ 3 002 ̶ The following fee has been earned from Fixtrade (Proprietary) Limited: Accounting fee 416 ̶ 416 ̶ The following fees have been charged by Pangbourne Services (Proprietary) Limited: Administration fee 29 928 21 835 Accounting fee 14 007 10 645 Financial management fee 703 534 44 638 33 014 Pangbourne Properties Limited 75 Annual Report 2006

notes to the annual financial statements continued for the year ended 30 June 2006

Group Company

2006 2005 2006 2005 R’000 R’000 R’000 R’000

34. DIRECTORS’ REMUNERATION Independent non-executive directors P L Campbell 288 250 288 250 L S Barnard ̶ 20 ̶ 20 J B Gibbon 173 150 173 150 C K Hickling 170 155 130 115 B M H Tsita 195 175 195 175 Y K N Molefi 92 35 92 35 B M Hopkins 85 35 85 35

Executive directors A M A Campbell Remuneration 525 1 856 ̶ ̶ Bonus ‒ allocated to acquisition of investment properties ̶ 513 ̶ ̶ Bonus ‒ allocated to profit on disposal of investment properties ̶ 437 ̶ ̶ Retirement funding contributons ̶ 130 ̶ ̶

A J W L Richards Remuneration 1 184 1 276 ̶ ̶ Bonus ‒ allocated to acquisition of investment properties 300 243 ̶ ̶ Bonus ‒ allocated to profit on disposal of investment properties ̶ 207 ̶ ̶ Retirement funding contributons 209 192 ̶ ̶

D J Kennedy Remuneration 1 132 1 117 ̶ ̶ Bonus ‒ allocated to acquisition of investment properties 400 216 ̶ ̶ Bonus ‒ allocated to profit on disposal of investment properties ̶ 184 ̶ ̶ Retirement funding contribution 2 2 ̶ ̶ R N Wesselo Remuneration 8 ̶ ̶ ̶ C M Hutchison Remuneration 1 697 1 201 ̶ ̶ Bonus ‒ allocated to acquisition of investment properties 1 000 243 ̶ ̶ Bonus ‒ allocated to disposal of investment properties ̶ 207 ̶ ̶ Retirement funding contributions 2 2 ̶ ̶ J A A Diepenbroek Remuneration ‒ allocated to acquisition of investment properties 596 758 ̶ ̶ Bonus ‒ allocated to acquisition of investment properties ̶ 230 ̶ ̶ Bonus ‒ allocated to profit on disposal of investment properties ̶ 195 ̶ ̶ Retirement funding contributions ̶ 105 ̶ ̶

TOTAL 8 058 10 134 963 780 Pangbourne Properties Limited 76 Annual Report 2006 notice of annual general meeting

Notice is hereby given that the 19th annual general meeting 3.2 To consider the re-appointment of C K Hickling of members of Pangbourne Properties Limited (“Pangbourne”) who retires by rotation in terms of the company’s or (“the company”) will be held in the company’s Conference articles of association. Room, 3rd Floor, Pangbourne House, 382 Jan Smuts Avenue, Colin K Hickling (68) Craighall, Johannesburg on Wednesday, 18 October 2006 at Colin was previously Managing Director and 10:00, for the following business: Deputy Chairman of Bloemfontein Board of 1. Annual financial statements To receive and Executors and is currently a director of The Public consider the audited annual financial statements for the Trustee & Trust Corporation and Chairman of year ended 30 June 2006. Sentech Ltd. He served three terms on the SA Council of Valuers and a term on the UTC ACT 2. Directors’ remuneration To consider and, if deemed Advisory Committee. He previously served as fit, to pass with or without modification, the following Deputy Chairman of the SABC, Chairman of the ordinary resolution: Association of Trust Companies, Chairman of the “Resolved that fees of R1 003 000 payable to the directors Association of Participation Bond Managers, for their services for the year ended 30 June 2006 be Mayor of Bloemfontein and Council Member of approved.” the University of the Free State.

3. Re-election of directors Colin has served on the Pangbourne board since 1996 and is a member of the Audit and Risk 3.1 To consider the re-appointment of P L Campbell Committee as well as the Remuneration and who retires by rotation in terms of the company’s Nominations Committee. articles of association. 3.3 To consider the re-appointment of W J Midgley Peter Lamont Campbell (69) who retires by rotation in terms of the company’s CA(SA), AMP Harvard articles of association. Chairman

Peter retired as deputy chairman of Nampak Limited William James Midgley (48) in 1997 after 34 years service in the group. This BA LLB (UCT) included 21 years with Metal Box SA Ltd., five years as William is an attorney (admitted in 1985), chief executive. In 1993 Peter was elected Packaging conveyancer and notary, with extensive Achiever of the Year by the Packaging Council of S.A. experience in the fields of general commercial for his service to the packaging industry. He remains a law with particular emphasis on property law non-executive director of Nampak and chairman of and the listed property sector. He joined Edward Nampak’s audit committee. Nathan & Friedland in 1991 and remained with them till June 2006. In that time, William gained Peter is currently chairman of Hudaco Industries extensive experience in a wide area of listed Ltd., as well as non-executive director of Crookes property related legal and listing issues, Brothers Ltd. and Delta Electrical Industries Ltd. He is on the audit committee of these companies. including mergers and acquisitions, listings, BEE funding, collective investment schemes, The Consultative Business Movement, of which debenture schemes, the property charter and Peter was a member, was a group of concerned the dti Code of Good Practice. businessmen who played an active role in William joined the Pangbourne board on facilitating the business transition process in South 28 June 2006 with an established knowledge of Africa. Peter is also a Past Chancellor of the Order of the company as a result of having been closely St John of South Africa. involved with Pangbourne’s growth strategy Peter has been a member of the Pangbourne board over the past eight years. since 1995 and has served as chairman since 1999. Peter is also a member of the Audit and Risk 3.4 To consider the re-appointment of R N Wesselo who Committee and Remuneration and Nominations retires by rotation in terms of the company’s articles Committee. of association. Pangbourne Properties Limited 77 Annual Report 2006

notice of annual general meeting continued

Robert Nicolaas Wesselo (42) 7. Special Resolution Number 1: General authority to BA LLB (Wits) purchase shares. Rob practised for six years as an attorney after being 7.1 To consider and, if deemed fit, to pass, with or without admitted in 1992, focusing on litigation. He joined modification, the following as a special resolution: Group 5 Building Division as Development Director and remained with them for five years. For the past six years, “Resolved that subject to the provisions of the Rob has been involved with the financial markets, Companies Act, 1973, and the Listing Requirements specialising in structured finance and interest rate of the JSE, the board of directors of the company be derivatives to the listed property sector. authorised, up to and including the date of the Rob moved from Rand Merchant Bank to Pangbourne following annual general meeting, to approve the in January 2006 and was appointed to the board as an repurchase by the company of its own shares executive director on 28 June 2006. provided that: ● the general authority shall not extend beyond 4. Re-appointment of auditors To consider the re- 15 months from the date of the passing of this appointment of Deloitte & Touche as auditors of the resolution; company until the conclusion of the next annual general ● the general authority to the repurchase by meeting. the company shall not exceed 10% in aggregate of the company’s issued share capital in a 5. Auditors’ remuneration To authorise the directors to financial year; fix and pay the auditors’ remuneration for the year ended ● the repurchase by the company shall not be made at 30 June 2006. a price more than that permitted pursuant to the 6. Ordinary Resolution Number 6: Shares under the Listing Requirements of the JSE; and control of the directors ● the repurchase is effected through the order book operated by the JSE trading system, without To consider and, if deemed fit, to pass with or without prior understanding or arrangement between the modification, the following resolution as an ordinary resolution: company and the counter party; and ● the repurchase will not take place during periods “Resolved that, subject to the requirements of the within which repurchases are prohibited in terms Companies Act, 1973 and the JSE Limited (“JSE”), the of the Listing Requirements of the JSE.” directors be and are hereby authorised to allot and issue unissued ordinary shares of 1 cent each in the capital of The reason for and effect of this resolution is to the company: enable the board of directors, up to the earlier of ● to such person/s and upon such terms and conditions the date of the next annual general meeting or as they may determine; 15 months from the date of the passing of this ● as the consideration for the acquisition by the resolution, to approve the repurchase by the company or any of its subsidiaries of immovable company of its shares as part of the purchase of its property, or for shares in and/or loan accounts against combined units, subject to the limitations included companies owning immovable property; and in the resolution and provided that, after such repurchase, the company will still comply with the ● provided that the directors are not authorised to issue shareholder spread requirements set out in the more ordinary shares than such number of ordinary Listing Requirements of the JSE. For the purposes shares as constitutes 10% of the number of ordinary hereof, the company may, at any point in time, only shares in the company’s issued share capital as at the date of the passing of this resolution (for which appoint one agent to effect repurchases on its calculation a particular issue of shares approved by the behalf. At present the JSE does not allow shareholders shall be disregarded) and provided repurchases to be made at a price greater than 10% further that each ordinary share is linked to nine above the weighted average of the market value of debentures of 50 cents each, such authority to expire the combined units for the five business days at the next annual general meeting of the company.” immediately preceding the date on which the Pangbourne Properties Limited 78 Annual Report 2006 notice of annual general meeting continued

transaction is effected. The directors of Pangbourne subsidiary of the company of shares issued by the are of the opinion that opportunities to repurchase company, provided that:

the company’s combined units, which could ● this general authority shall not extend beyond enhance the earnings per combined unit and/or net 15 months from the date of the passing of this asset value per unit, may present themselves in the resolution; future. Accordingly, in order that the group be ● it be made at a price more than permitted placed in a position to be able to utilise the pursuant to the Listing Requirements of the JSE; provisions of the Companies Act, 1973, it is ● it takes place within a period within which proposed that the board of directors of the repurchases are prohibited in terms of the Listing company be authorised to authorise the company, Requirements of the JSE; by way of general authority, to acquire, as part of the purchase of its combined units, 10% of the ● the purchase is effected through the order book company’s issued share capital. operated by the JSE trading system, without prior understanding or arrangement between the The directors of Pangbourne are of the opinion that, subsidiary and the counter party; and taking into account the maximum number of ● the purchase may not result in the subsidiary, combined units that could be repurchased: together with all other subsidiaries of the ● the company and the group would be in a company, holding more than 10% of the entire position to repay their debts in the ordinary issued share capital of the company.” course of business for a period of 12 months after the date of the notice of this annual general The reason for and effect of this resolution is to meeting (“the next year”); authorise the directors, until the earlier of the next ● the assets of the company and the group, annual general meeting or 15 months from the date recognised and measured in accordance with the of the passing of this resolution, to approve the accounting policies used in the company’s latest acquisition by any subsidiary of the company of audited annual group financial statements, would shares issued by the company, as part of the be in excess of the liabilities of the company and purchase of combined units issued by the company, the group for the next year; subject to the limitations included in the resolution. ● the share capital and reserves of the company For the purposes hereof, the subsidiary may, at any and the group for the next year will be adequate point in time, appoint only one agent to effect for ordinary business purposes; and purchases on its behalf. At present the JSE does not ● the working capital of the company and the allow purchases to be made at a price greater than group will be adequate for the next year’s 10% above the weighted average of the market ordinary business purposes. value of the combined units for the five business days immediately preceding the date on which the The company will not enter the market to proceed with any acquisition of shares in terms of Special transaction is effected.

Resolution Number 1 until its sponsor has The information as set out in paragraph 11.26(b) of the confirmed in writing to the JSE the adequacy of the Listing Requirements of the JSE, relating to directors company’s working capital pursuant to the Listings and management, major shareholders, material Requirements of the JSE. changes, directors’ interests in securities, share capital

7.2 To consider and, if deemed fit, to pass, with or of the company, responsibility and litigation, is without modification, the following, mutatis contained in the body of the annual report. mutandis as if it were a special resolution: The company will not enter the market to proceed “Resolved that subject to the provisions of the with any acquisition of shares in terms of Special Companies Act, 1973, and the Listing Requirements Resolution Number 1 until its sponsor has confirmed of the JSE, the board of directors be authorised, up in writing to the JSE the adequacy of the company’s to and including the date of the following annual working capital pursuant to the Listings Requirements general meeting, to approve the purchase by any of the JSE. Pangbourne Properties Limited 79 Annual Report 2006

notice of annual general meeting continued

Voting and proxies Pangbourne shareholders holding On a show of hands, every shareholder present in person shall certificated combined units and Pangbourne shareholders have only one vote in respect of the number of shares he who have already dematerialised their Pangbourne shares holds or represents, provided that a proxy shall in respect of and who have elected own-name registration in a sub-register the number of shareholders he represents have only one vote.

through a CSDP, who are unable to attend the general On a poll, every member of Pangbourne present in person meeting of members but wish to be represented thereat, or represented by proxy shall have one vote for every share must complete and return the form of proxy, in accordance held in Pangbourne by such member. with the instructions contained therein, to the company’s A resolution put to the vote shall be decided on a show of transfer secretaries, Computershare Investor Services 2004 hands, unless before or on the declaration of the results of (Proprietary) Limited, Ground Floor, 70 Marshall Street, the show of hands a poll shall be demanded by the Johannesburg (PO Box 61051, Marshalltown, 2107), to be chairperson of the meeting, or by not less than five received by no later than 10:00 on Monday, 16 October 2006. members having the right to vote at the meeting, or by a Pangbourne shareholders who have already member or members representing not less than one tenth dematerialised their Pangbourne combined units through of the total voting rights of all the members having the a CSDP or broker and who have not elected own-name right to vote at the meeting, or by a member or members registration and who wish to attend the annual general entitled to vote at the meeting and holding in the meeting of shareholders must instruct their CSDP or aggregate not less than at least one tenth of the issued broker to issue them with the necessary authority to share capital of the company. attend. Should Pangbourne shareholders who have already dematerialised their Pangbourne combined units By order of the board wish to vote by way of proxy, they must provide their Pangbourne Properties Limited CSDP or broker with their voting instructions in terms of the custody agreement entered into between them and

their CSDP or broker.

In respect of dematerialised combined units, it is

important to ensure that the person or entity (such as a J J Groenewald nominee) whose name has been entered into the relevant Company Secretary sub-register maintained by a CSDP completes the form of proxy in terms of which he appoints a proxy to vote at the Johannesburg general meeting of shareholders. 26 September 2006 Pangbourne Properties Limited 80 Annual Report 2006 notice of general meeting of debenture holders

Notice is hereby given of a general meeting of debenture by way of proxy, they must provide their CSDP or broker with holders of Pangbourne Properties Limited (“Pangbourne”) or their voting instructions in terms of the custody agreement (“the company”) to be held in the company’s Conference entered into between them and their CSDP or broker. Room, 3rd Floor, Pangbourne House, 382 Jan Smuts Avenue, In respect of dematerialised combined units, it is important to Craighall, Johannesburg on Wednesday, 18 October 2006 at ensure that the person or entity (such as a nominee) whose 10:30 or immediately following the annual general meeting of name has been entered into the relevant sub-register members which has been convened for 10:00 on that day, for maintained by a CSDP completes the form of proxy in terms the following business: of which he appoints a proxy to vote at the general meeting of debenture holders. Ordinary Resolution number 1: “Resolved that, to the extent that the resolutions passed at the annual general On a show of hands, every debenture holder present in meeting of Pangbourne shareholders convened immediately person shall have only one vote in respect of the number of before this meeting directly affects the interests of the debentures he/she holds or represents, provided that a proxy Pangbourne debenture holders, it be approved.” shall in respect of the number of debenture holders he/she represents have only one vote. Voting and proxies Pangbourne debenture holders holding certificated combined units who are unable to attend On a poll, every Pangbourne debenture holder present in the general meeting of debenture holders but wish to be person or represented by proxy shall have one vote for every represented thereat and Pangbourne debenture holders who debenture unit held in Pangbourne by such debenture have already dematerialised their Pangbourne combined units holder. and who have elected own-name registration in a sub-register A resolution put to the vote shall be decided on a show of through a CSDP, must complete and return the form of proxy, hands, unless before or on the declaration of the results of the in accordance with the instructions contained therein, to the show of hands a poll shall be demanded by the chairperson company’s transfer secretaries, Computershare Investor of the meeting or by any debenture holder who is present in Services 2004 (Proprietary) Limited, Ground Floor, 70 Marshall person or by proxy. Street, Johannesburg (PO Box 61051, Marshalltown, 2107), to be received by no later than 10:30 on Monday, By order of the board 16 October 2006. Pangbourne Properties Limited

Pangbourne debenture holders who have already dematerialised their Pangbourne combined units through a CSDP or broker and who have not elected own-name registration and who wish to attend the general meeting of J J Groenewald debenture holders must instruct their CSDP or broker to issue Company Secretary them with the necessary authority to attend. Should Pangbourne debenture holders who have already Johannesburg dematerialised their Pangbourne combined units wish to vote 26 September 2006 Pangbourne Properties Limited 81 Annual Report 2006

pangbourne properties limited (“pangbourne”) Incorporated in the Republic of South Africa (Registration No. 1987/002352/06) Share code: PAP ISIN ZAE: 000005252

Form of Proxy for Pangbourne Shareholders

For use only by Pangbourne shareholders holding certificated combined units, Central Securities Depository Participants’ (“CSDPs”) nominee companies, brokers’ nominee companies and shareholders who have dematerialised their combined units and who have elected own-name registration, at the annual general meeting of shareholders of Pangbourne to be held in the Conference Room, 3rd Floor, Pangbourne House, 382 Jan Smuts Avenue, Craighall, Johannesburg, 2196 at 10:00 on Wednesday, 18 October 2006 (“the annual general meeting of shareholders”).

Pangbourne shareholders who have already dematerialised their combined units through a CSDP or broker must not complete this form of proxy and must provide their CSDP or broker with their voting instructions.

I/We (BLOCK LETTERS PLEASE)

of

Telephone work ( ) Telephone home ( )

Being the holder/s or custodians of shares hereby appoint (see note 1 overleaf):

1. or failing him/her

2. or failing him/her

3. the chairman of the annual general meeting of shareholders,

as my/our proxy to act for me/us at the annual general meeting of shareholders for the purpose of considering and, if deemed fit, passing, with or without modification, the resolutions to be proposed thereat and at each adjournment or postponement thereof, and to vote for and/or against and/or abstain from voting in respect of the Pangbourne shares registered in my/our name (see note 2 overleaf) as follows:

Please indicate with an X In favour of Against Abstain

1. To receive and consider the audited annual financial statements

2. To approve the directors’ remuneration for the year ended 30 June 2006

3. Re-appointment of directors

3.1 To re-appoint Mr P L Campbell

3.2. To re-appoint Mr C K Hickling

3.3. To re-appoint Mr W J Midgley

3.4. To re-appoint Mr R N Wesselo

4. To re-appoint Deloitte & Touche as auditors

5. To authorise the directors to determine and pay the auditors’ remuneration

6. To authorise the directors to issue shares

7. To authorise the directors to repurchase shares

7.1 on the open market and repurchase on a pro rata basis

7.2 by a subsidiary

and generally to act as my/our proxy at the said annual general meeting of shareholders. If no directions are given, the proxy holder will be entitled to vote or abstain from voting, as the proxy holder deems fit.

Signed at on 2006

Signature Assisted by (where applicable)

Each shareholder is entitled to appoint one or more proxies (who need not be a shareholder/s of Pangbourne) to attend, speak and vote in place of that shareholder at the annual general meeting of shareholders.

Please read the note on the reverse side hereof. Pangbourne Properties Limited 82 Annual Report 2006

Notes 6. Any alteration or correction made to this form of proxy must be initialled by the signatory/ies. 1. A shareholder may insert the name of a proxy or the names of two alternative proxies of the shareholder’s 7. On a show of hands, every shareholder shall have choice in the space/s provided, with or without deleting only one vote, irrespective of the number of shares “the chairman of the annual general meeting of he/she holds or represents, provided that a proxy shareholders”, but any such deletion must be initialled by shall, irrespective of the number of shareholders he/ the shareholder. The person whose name stands first on she represents, have only one vote. the form of proxy and who is present at the meeting of 8. On a poll, every Pangbourne shareholder present in shareholders will be entitled to act as proxy to the person or represented by proxy shall have one vote exclusion of those whose names follow. for every Pangbourne share held by such 2. A shareholder’s instructions to the proxy must be shareholder. indicated by the insertion of the relevant number of votes 9. A resolution put to the vote shall be decided on a exercisable by that shareholder in the appropriate box show of hands, unless before or on the declaration provided. So as to provide for voting on a show of hands of the results of the show of hands a poll shall be or on a poll, as the case may be, shareholders are demanded by the chairman of the meeting, or by requested to complete the form of proxy by stating the not less than five members having the right to vote number of shares held by them. Failure to comply with at the meeting, or by a member or members the above will be deemed to authorise the proxy to vote representing not less than one tenth of the total or abstain from voting at the annual general meeting of voting rights of all the members having the right to shareholders as he/she deems fit in respect of all the vote at the meeting, or by a member or members shareholder’s votes exercisable thereat. A shareholder or entitled to vote at the meeting and holding in proxy is not obliged to use all the votes exercisable by the aggregate not less than one tenth of the issued shareholder or his/her proxy, but the total of the votes share capital of the company. cast and in respect of which abstention is recorded may not exceed the total of the votes exercisable by the 10. If a poll is demanded, the resolution put to the vote shareholder or proxy. shall be decided on a poll.

3. Forms of proxy must be lodged with, posted or faxed to,

the company’s transfer secretaries to be received by no

later than 10:00 on Monday, 16 October 2006.

4. The completion and lodging of this form of proxy by shareholders holding certificated combined units, CSDP’s nominee companies, brokers’ nominee companies and shareholders who have dematerialised their combined units and who have elected own-name registration in the sub-register through a CSDP or broker, will not preclude the relevant shareholder from attending the annual Computershare Investor Services 2004 general meeting of shareholders and speaking and voting (Proprietary) Limited in person thereat to the exclusion of any proxy appointed 70 Marshall Street in terms thereof. Johannesburg, 2001 5. Documentary evidence establishing the authority of a PO Box 61051 person signing this form of proxy in a representative or Marshalltown, 2107 other legal capacity (Such as a power of attorney or other South Africa written authority) must be attached to this form of proxy unless previously recorded by Pangbourne. Fax number : +27 11 370 5390 Pangbourne Properties Limited 83 Annual Report 2006

pangbourne properties limited (“pangbourne”) Incorporated in the Republic of South Africa (Registration No. 1987/002352/06) Share code: PAP ISIN ZAE: 000005252

Form of Proxy for Pangbourne Debenture Holders

For use only by Pangbourne debenture holders holding certificated combined units, Central Securities Depository Participants’ (“CSDPs”) nominee companies, brokers’ nominee companies and debenture holders who have dematerialised their combined units and who have elected own-name registration, at the general meeting of debenture holders of Pangbourne to be held in the Conference Room, 3rd Floor, Pangbourne House, 382 Jan Smuts Avenue, Craighall, Johannesburg, 2196 at 10:30 on Wednesday, 18 October 2006 or immediately after the conclusion of the annual general meeting of shareholders, whichever is the later, which will take place at the same venue, on the same day at 10:00 (“the general meeting of debenture holders”).

Pangbourne debenture holders who have already dematerialised their combined units through a CSDP or broker must not complete this form of proxy and must provide their CSDP or broker with their voting instructions.

I/We (BLOCK LETTERS PLEASE)

of

Telephone work ( ) Telephone home ( )

being the holder/s or custodians of debentures hereby appoint (see note 1 overleaf):

1. or failing him/her

2. or failing him/her

3. the chairman of the general meeting of debenture holders,

as my/our proxy to act for me/us at the general meeting of debenture holders for the purpose of considering and, if deemed fit, passing, with or without modification, the resolutions to be proposed thereat and at each adjournment or postponement thereof, and to vote for and/or against and/or abstain from voting in respect of the Pangbourne debentures registered in my/our name (see note 2 overleaf) as follows:

Please indicate with an X In favour of Against Abstain

1. Ordinary Resolution number 1: to pass the resolutions passed by shareholders

and generally to act as my/our proxy at the said general meeting of debenture holders. If no directions are given, the proxy holder will be entitled to vote or abstain from voting, as the proxy holder deems fit.

Signed at on 2006

Signature Assisted by (where applicable)

Each debenture holder is entitled to appoint one or more proxies (who need not be a debenture holder/s of Pangbourne) to attend, speak and vote in place of that debenture holder at the general meeting of debenture holders.

Please read the note on the reverse side hereof. Pangbourne Properties Limited 84 Annual Report 2006

Notes 1. A debenture holder may insert the name of a proxy or the 5. Documentary evidence establishing the authority of a names of two alternative proxies of the debenture person signing this form of proxy in a representative or holder’s choice in the space/s provided, with or without other legal capacity (such as a power of attorney or other deleting “the chairman of the annual general meeting of written authority) must be attached to this form of proxy debenture holders”, but any such deletion must be unless previously recorded by Pangbourne. initialled by the debenture holder. The person whose 6. Any alteration or correction made to this form of name stands first on the form of proxy and who is present proxy must be initialled by the signatory/ies. at the meeting of debenture holders will be entitled to act as proxy to the exclusion of those whose names follow. 7. On a show of hands, every debenture holder shall have only one vote, irrespective of the number of 2. A debenture holder’s instructions to the proxy must be shares he/she holds or represents, provided that a indicated by the insertion of the relevant number of votes proxy shall, irrespective of the number of debenture exercisable by that debenture holder in the appropriate holders he/she represents, have only one vote. box provided. So as to provide for voting on a show of hands or on a poll, as the case may be, debenture holders 8. On a poll, every Pangbourne debenture holder are requested to complete the form of proxy by stating present in person or represented by proxy shall the number of shares held by them. Failure to comply have one vote for every Pangbourne share held by with the above will be deemed to authorise the proxy to such debenture holder. vote or abstain from voting at the general meeting of debenture holders as he/she deems fit in respect of all the 9. A resolution put to the vote shall be decided on a debenture holder’s votes exercisable thereat. A debenture show of hands, unless before or on the declaration holder or proxy is not obliged to use all the votes of the results of the show of hands a poll shall be exercisable by the debenture holder or his/her proxy, but demanded by the chairman of the meeting, or the total of the votes cast and in respect of which by any debenture holder present in person or abstention is recorded may not exceed the total of the by proxy. votes exercisable by the debenture holder or proxy. 10. If a poll is demanded, the resolution put to the vote 3. Forms of proxy must be lodged with, posted or faxed to, shall be decided on a poll. the company’s transfer secretaries to be received by no later than 10:30 on Monday, 16 October 2006. 4. The completion and lodging of this form of proxy by debenture holders holding certificated combined units, Computershare Investor Services 2004 CSDP’s nominee companies, brokers’ nominee companies (Proprietary) Limited and debenture holders who have dematerialised their 70 Marshall Street combined units and who have elected own-name Johannesburg, 2001 registration in the sub-register through a CSDP or broker, PO Box 61051 will not preclude the relevant debenture holder from Marshalltown, 2107 attending the general meeting of debenture holders and South Africa speaking and voting in person thereat to the exclusion of any proxy appointed in terms thereof. Fax number : +27 11 370 5390 Pangbourne Properties Limited ibc Annual Report 2006 analysis of unitholdings

Number of 2006 2005 Public and non-public unitholders Units held Interest % Units held Interest %

Public 4 344 141 420 067 58,03 107 969 374 62,10 Non-public 41 102 299 698 41,9 81 003 869 37,90

Directors 6 5 502 000 2,26 7 402 400 4,49 Marriott Unit Trust and Marriott Asset Management 8 11 818 930 4,85 26 687 526 14,18 Stanlib Investment Solutions 11 34 821 442 14,29 25 680 860 6,81 Old Mutual Life Assurance Company (South Africa) Limited 15 28 151 267 11,55 19 103 116 6,23 Transnet Staff Defined Benefit Fund 1 22 006 059 9,02 ̶ ̶

4 385 243 719 765 100,00 188 973 270 100,00 The following unitholders held, directly or indirectly, at 30 June 2006, in excess of 5% of the units in issue:

2006 2005

Units held Interest % Units held Interest %

Transnet Staff Defined Benefit Fund 22 006 059 9,0 ̶ ̶ Marriott Unit Trust and Marriott Asset Management ̶ ̶ 26 687 526 14,12 Stanlib Investment Solutions 34 821 442 14,3 25 680 860 13,59 Old Mutual Life Assurance Company (South Africa) Limited 28 151 267 11,6 19 103 116 10,11 Panya Investments (Pty) Limited 12 376 238 5,1 ̶ ̶

unitholders’ diary

30 June Financial year-end

August 2006 Publication of financial results September 2006 Publication of annual financial statements 16 October 2006 Final dividend and interest paid 18 October 2006 Annual general meeting February 2007 Publication of interim results February 2007 Interim dividend and interest declared April 2007 Interim dividend and interest paid June 2007 Final dividend and interest declared

advisors and consultants

Banker Debenture Holders’ Trustee Auditors Absa Bank Limited Steinway Trustees (Proprietary) Limited Deloitte & Touche PO Box 782991, Sandton, 2146 PO Box 37597, Overport, 4067 Private Bag X6, Gallo Manor, 2052 61 Gwen Lane, Sandown, 2196 The Manor House, 14 Nuttall Gardens Deloitte Place, The Woodlands Office Park Morningside, 4001 20 Woodlands Drive, Woodmead. Merchant Bankers and Sponsor Standard Bank of South Africa Limited Transfer Secretaries Corporate Law Advisors and Consultants PO Box 61344, Marshalltown, 2107 Computershare Investor Services 2004 Edward Nathan (Proprietary) Limited 3 Simmonds Street, Johannesburg, 2001 (Proprietary) Limited PO Box 783347, Sandton, 2146 70 Marshall Street, Johannesburg, 2001 150 West Street, Sandton, 2196 PO Box 61051, Marshalltown, 2107

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