TWO THOUSAND AND ONE

Annual Financial Statements for the year ended 31 December 2001 profile

HYPROP (Hyprop Investments Limited) provides its investors with the opportunity to

participate directly in the income and capital growth of a professionally-managed

Property Loan Stock Company. The group's portfolio comprises investments in Hyde Park

Corner Shopping Centre, The Glen Shopping Centre as well as prominent office buildings

located in the northern suburbs of . The market capitalisation of Hyprop at

31 December 2001 was R644 million.

The Glen Shopping Centre contents

1 strategic objectives 2 financial highlights 3 salient features 4 review of operations 10 five-year review 11 annual financial statements 30 distribution details 31 properties owned 33 notice of annual general meeting 33 share analysis 34 unitholders’ diary 34 administration 35 form of proxy inside back cover directorate strategic objectives

Hyprop’s objective is to hold a balanced portfolio of prime, strategically located retail and office property investments that will provide shareholders with sustained growth in income and capital.

The company is committed to delivering superior property returns through its active asset management programme. New investment opportunities that will contribute to the company’s performance and the selected disposal of non-strategic properties will continue to be targeted.

1 financial highlights

2001 2000

Operating income (R000) 72 058 42 754

Interest income (R000) 4 529 7 617

Interest paid (R000) (3 778) – Income before distribution to unitholders (R000) 72 729 50 643

Distribution per unit (cents) 126,36 117,00

Change (%) 8,0 9,0

Number of shares in issue (year-end) 64 719 478 43 358 756

Vacancy factor (% of lettable area) 11,0 6,0

Gross collections (rent and total recoveries) (R000) 111 675 69 097

Management fees (excluding commission paid but including asset management) (R000) 7 331 4 601

Management fees (% of gross collections) 6,6 6,7

ANALYSIS OF PERFORMANCE 2000 – 2001 (SOURCE: SAPIX/IPD South African Property Digest 2002) % %

Capital growth 11,5 14,5

Income return 12,2 11,7

Total return 23,7 26,2

Impact of developments 0,1 (0,7)

All standing investments 23,6 25,2

Fund sector returns (% pa) Standing investments only

Retail 26,1 29,8

Offices 15,9 10,6

Income return Capital growth cents % pa 4 years 2001 126,36 annualised 11,9 11,6 3 years annualised 12,8 11,8 2000 117,00 2001 11,5 12,2

2000 14,5 11,7 1999 107,52 1999 12,4 11,4

1998 96,00 1998 9,3 11,0 35 70 105 140 515203010 25 Distribution per unit Capital and income

2 salient features

gross property income by locality

2001 2002* 60% Craighall/Hyde Park 50% Craighall/Hyde Park 6% Morningside 7% Morningside 3% Rosebank 2% Rosebank 2% 2% Parktown 11% Wierda Valley 8% Wierda Valley 8% /Sunninghill 9% Rivonia/Sunninghill 6% 6% Sandton 4% 5% Midrand 0% JHB South 11% JHB South *Forecast for 2002 as at 1 January 2002

gross property income by sector

2001 2002*

38% Retail 41% Retail 51% Offices 49% Offices 10% Parking 10% Parking

*Forecast for 2002 as at 1 January 2002

lettable area by locality

2001 38% Craighall/Hyde Park 9% Morningside 3% Rosebank 4% Parktown 9% Wierda Valley 11% Rivonia/Sunninghill 6% Sandton 7% Midrand 11% JHB South

Turtle Creek Restaurant

lease expiry by gross property income

2001

20% 2002 20% 2003 19% 2004 18% 2005 22% 2006+

3 review of operations

INTRODUCTION Hyprop maintained its superior rating in the listed Hyprop Investments Limited (“Hyprop”) again property sector and was again nominated by its met its objective of sustained income growth to peers as one of the top companies in the sector combined unitholders for the seventh consecutive in terms of a survey conducted by Top 300 year. This has been achieved through earnings National Companies. that are derived from the ownership of quality real estate assets. Highlights for the year include: Hyprop provided investors with a first-class return on investment of 23,7% (2000: 26,2%) as measured • the merger with Kirchmann Hurry Properties Ltd by the SAPIX/IPD South African Property Digest 2002 (“KH Props”) as a going concern with effect from (“SAPIX/IPD”) for all property for the year 1 May 2001 that resulted in a 49% increase in ended 2001. the market capitalisation of the company SECTOR OVERVIEW AND OUTLOOK • the acquisition of an undivided one-third share The listed property sector has seen significant in The Glen Shopping Centre (“The Glen”) for a activity over the past 24 months both as a purchase consideration of R95 million, equating consequence of new funds being listed and to an initial forward yield of 12%. This modern through the merger of existing funds. Up until the regional shopping centre is situated in a last quarter of 2001 the listed property sector was prime location in the southern suburbs the best-performing asset class relative to equities of Johannesburg and bonds over recent years, with an average yearly return of 23,5%. Over the last three years • the completion of a sixth building within the lower interest rates coupled with a positive outlook Morningview Office Park in December 2001 at for property investment resulted in a number of a total cost of R17 million. The building comprises new listings that have seen the capitalisation of the 2 800 square metres of rentable area and was Property Loan Stock and Property Trust sectors grow fully let on completion. from R4,7 billion to R12, 7 billion. This increase in

“ensuring sustainable earnings growth and increased sector liquidity”

4 capitalisation and the creation of larger individual the property industry is anticipated over the short funds has contributed to higher liquidity within term. The performance of the listed property the sectors. sectors will be dictated by the prospects for economic growth, the rand exchange rate, Since November 2001, however, the fundamentals CPI targets and interest rates. in the property industry have weakened as a consequence of lower tenant demand and the Based on this scenario, the listed property sectors oversupply of office space in certain nodes due should experience a year of portfolio consolidation to new development. This will result in lower rental and some merger activity but with fewer new growth prospects within these areas until current listings being offered. The emphasis for portfolio vacancies are reduced. Whilst the demand for managers will be to concentrate on tenant retail space has also been impacted due to a slow- retention and maintaining tight cost controls. down in consumer spending, the performance of established regional shopping centres Whilst the expected recovery in the global remains encouraging. economy should positively influence ’s domestic prospects, growth in GDP is not expected The weakening in the rand exchange rate against to average more than 2,5% in 2002. Nevertheless, major currencies has led to higher yields on long- government has created a more growth-friendly dated government bonds and an increase in economic environment in its latest budget with interest rates. The direct correlation between the increased spending and tax rate reductions aimed yields on government bonds and yields on listed at enhancing the performance of the economy property portfolios has resulted in the listed property over the medium term. This, in turn, will be positive sectors currently offering good value to investors. for the property industry.

In keeping with the general economic outlook for PERFORMANCE REVIEW South Africa during 2002 no significant recovery in The financial year under review saw Hyprop actively applying its strategy of realigning the group’s portfolio and achieving its objective of sustained income and capital growth. Significant changes to the group resulted in the creation of an entity with a greater critical mass providing added resistance to market fluctuations and improved investor spread.

Operating income for the year ended 31 Decem- ber 2001 increased by 68% primarily as a conse- quence of the merger with KH Props. The decrease

Left to Right Vodacom Park, 47 Wierda Road West, Morningview Building, 31 Prince of Wales Terrace

5 review of operations

in interest received arises from the reduction in Hyprop, for the first time, took advantage of its cash, which was utilised for the KH Props merger borrowing capabilities to partly fund the KH Props and capital expenditure on new developments. merger and The Glen acquisition. The interest paid is the result of borrowing facilities being utilised in the funding of new business. As at 31 December 2001 Hyprop’s borrowings amounted to R107 million. Hyprop has borrowing Net operating income from property represents facilities totalling R300 million, spread between 80% (2000: 76%) of total income for the year Standard Bank Properties and Absa Bank Limited, under review. of which R193 million was unutilised at year-end. Hyprop continuously applies all surplus cash to its The total distribution for the year amounted to existing borrowing facilities, resulting in reduced 126,36 cents per combined unit, an increase of gearing and interest rate costs. A selection of 8% on that of the previous year of 117,00 cents per interest rate products ranging from short-term combined unit. The calculation of the earnings per overnight rates to term funding rates is utilised. combined unit is based on a weighted average At year-end Hyprop had a 14% debt-to-value of 57 599 237 combined units in issue. ratio based on the directors’ valuation of the total portfolio. The retained income increased from R5,031 million in the previous year to R5,604 million in 2001. During the year R7,979 million (2000: R3,961 million) was spent on tenant installations, motor vehicle and Vacancies by area increased from 6% in December building appurtenances. In line with the policy of 2000 to 11% in December 2001 as a consequence maintaining the quality of the property portfolio, the of the general deterioration in the office market. board has approved further expenditure of R7,350 An active marketing campaign to re-let the space million for the year ending 31 December 2002. has been implemented.

“offering prestigious shopping and office facilities”

6 2 2 PROPERTY PORTFOLIO The centre consists of 24 877 m retail and 9 151 m Retail portfolio of air-conditioned offices. The retail area comprises Hyprop achieved a total return of 26,1% in 2001 126 shops, anchored by Pick ’n Pay, Exclusive (2000: 29,8%) on its retail investment as measured Books, Woolworths, Nu Metro and an Imax Theatre. by SAPIX/IPD. With annualised returns of 26,9% over 3 years and 25,4% over 4 years, the retail portfolio In December 2001, Hyprop bought an undivided continues to deliver a strong performance. one-third share in The Glen Shopping Centre. This 2 44 800 m regional shopping centre is situated The Bureau of Market Research reported growth in a prime location in the southern suburbs of in retail sales in 2001 of 2,7% mainly due to a high Johannesburg with good access and excellent turnover increase for food and clothing retailers in exposure to the N12 freeway. December 2001. The prediction for 2002 is that the real growth in retail sales will slow down to 1,7% The centre accommodates 150 shops and is caused by shifts in consumer spending patterns. anchored by Pick ’n Pay, Woolworths and Edgars. Factors that will impact on formal retail sales in 2002 National tenants occupy 73% of the leasable include debt-averse consumers, higher transport area whilst 50% of the centre’s leases expire only cost, food and fuel prices and the continued after 2006. The centre is poised to show a strong growth of the informal sector. performance in 2002 with certain national tenants already on turnover rental, only 4 years after For the year under review, Hyprop’s investment in centre opening. retail property consisted of the Hyde Park Corner Shopping Centre. This shopping centre is the flag- Both centres have embraced e-commerce, ship of the portfolio offering prestigious shopping with each one hosting its own unique website and office facilities in a prominent location in the that is constantly upgraded to ensure effective greater Johannesburg area. Due to the specialised communication and marketing opportunities. nature of the centre, it occupies a unique position in the region’s retail and commercial sphere. The retail portfolio has a reasonable expiry profile of 12% by area for the next twelve months and good progress has already been made in the renewal of leases.

Left to Right Orpheo, the Oh Yes shop, Willoughby & Co, Imax Theatre – located in Hyde Park Corner Shopping Centre

7 review of operations

Office portfolio As a result of the merger with KH Props, Hyprop’s 2 Hyprop achieved a total return of 15,9% in 2001 office portfolio increased from 22,573 m in 2000 2 (2000: 10,6%) from its underlying office portfolio as to 84,543 m in 2001. measured by SAPIX/IPD for 2001. The annualised returns over 3 and 4 years are 16,1% and 16,6% The expanded office portfolio of Hyprop can be respectively and confirm the excellent quality summarised as follows: of Hyprop’s office portfolio. Vacancy Number of Area at year- 2 The office market in the northern suburbs of Node buildings (m ) end (%) Johannesburg is over-supplied and as a result rental Craighall/Hyde Park 11 16,598 25 levels have weakened considerably. This trend is Morningside 2 12,585 18 expected to continue in 2002 mainly because Rosebank 2 4,300 3 of the relocation of major tenants to their own Parktown 2 5,301 2 buildings approaching completion in the next Wierda Valley 4 12,155 17 12 months. The rate of new speculative commercial Rivonia 2 4,479 5 developments should decline in the course of 2002 Sandton 1 8,518 12 alleviating the negative impact of the over-supply. Midrand 3 9,787 10 Well-located office buildings that offer value for Sunninghill 1 10,820 – money in terms of good quality space, access and Total 28 84,543 13 visibility will continue to attract prospective tenants even though at reduced rental levels. In addition to proactively marketing for new tenants, Hyprop is engaged in a campaign to retain existing tenants.

“providing investors with a first-class return on investment”

8 THE FUTURE WORD OF THANKS Hyprop will continue with its strategy of actively A sincere word of thanks and appreciation to fellow managing its property assets. Where appropriate, board members, including those who resigned selected disposals will be undertaken whilst new during the year, as well as the management teams investment opportunities that will contribute to for their dedication, commitment and diligence the growth and diversification of the portfolio will towards meeting the challenge of continually be sought. achieving our goals.

The board anticipates growth in distribution to combined unitholders during the year ending 31 December 2002 notwithstanding current eco- nomic conditions. Although current forecasts PF Kirchmann indicate that it is unlikely that the growth in Chairman distribution achieved in the previous year will be maintained, the board will continue to apply all the resources at its disposal to achieve the strategic objectives set for Hyprop’s continued outperfor- mance within the listed property sectors. PG Prinsloo Managing Director

12 March 2002

Left to Right Investment Place, Belvedere Place, Atholl Ridge, Motswedi House

9 five-year review

2001 2000 1999 1998 1997 FOR THE YEAR ENDED 31 DECEMBER 2001 R000 R000 R000 R000 R000

Turnover 89 523 56 521 56 058 53 130 47 227

Operating income 72 058 42 754 35 833 29 375 31 220 Interest received 4 529 7 617 12 668 14 401 9 678 Interest paid (3 778) Abnormal items – 272 – – (4 072)

Income before distribution to unitholders 72 809 50 643 48 501 43 776 36 826 Debenture interest 72 021 49 260 46 526 41 541 36 747

Debenture interest paid 72 726 50 628 46 526 41 541 36 747 Less: Capitalised (705) (1 368) – – –

Income before taxation 788 1 383 1 975 2 235 79 Secondary tax on companies 18 13 12 10 9

Income after taxation 770 1 370 1 963 2 225 70 (Loss)/Income from associated company (51) 83(5) (12)

Net income 719 1 378 1 966 2 220 58 Dividends 146 101 93 83 74 Transfer to non-distributable reserve – 272–––

Retained (loss)/income for the year 573 1 005 1 873 2 137 (16)

Capital employed 635 123 299 596 298 319 296 446 294 309

Property investments including revaluation reserve 698 708 276 594 242 569 238 733 238 778

Net return on capital employed excluding revaluation reserve (%) 15,34 20,17 19,42 17,66 14,98

Net return on property investments excluding revaluation reserve (%) 14,29 22,21 25,00 23,02 19,35

Dividends and interest per combined unit (cents per unit) 126,36 117,00 107,52 96,00 84,92

% R million R million 25 80 100

20 80 60

15 60 40 10 40 36 826 43 776 48 501 50 643 72 809 14,98 17,66 19,42 20,17 15,34

20 47 227 53 130 56 058 56 521 89 523 5 20

1997 1998 1999 2000 2001 1997 1998 1999 2000 2001 1997 1998 1999 2000 2001 Net return on capital employed Income before distribution Turnover to unitholders

10 annual financial statements

12 approval of annual financial statements 12 declaration by the company secretary 12 auditors’ report 13 corporate governance 15 directors’ report 17 balance sheet 18 income statements 18 statement of changes in equity 19 cash flow statements 20 notes to the financial statements 30 information on subsidiary companies 30 distribution details 31 properties owned

11 approval of annual financial statements

The annual financial statements set out on pages a going concern for the foreseeable future and 15 to 30 are the responsibility of the directors. have continued to adopt the going concern basis in preparing the financial statements. The directors are responsible for selecting and adopting sound accounting practices, for The annual financial statements were approved by: maintaining an adequate and effective system of accounting records, for the safeguarding of assets, and for developing and maintaining a system of internal control that, among other things, will ensure the preparation of financial statements PF Kirchmann PG Prinsloo that achieve fair presentation. Chairman Managing Director After conducting appropriate procedures the directors are satisfied that the company will be 12 March 2002 declaration by the company secretary

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

12 March 2002 auditors’ report

Report of the independent auditors to the members AUDIT OPINION of Hyprop Investments Limited. In our opinion, the financial statements fairly We have audited the annual financial statements present, in all material respects, the financial and group annual financial statements of Hyprop position of the company and the group at Investments Limited, set out on pages 15 to 30, 31 December 2001 and the results of its operations, for the year ended 31 December 2001. These changes in equity and cash flows for the year financial statements are the responsibility of the then ended in accordance with South African company’s directors. Our responsibility is to express Statements of Generally Accepted Accounting an opinion on these financial statements based Practice, and in the manner required by the on our audit. South African Companies Act. SCOPE We conducted our audit in accordance with Statements of South African Auditing Grant Thornton Kessel Feinstein Standards. Those standards require that we plan Registered Accountants and Auditors and perform the audit to provide reasonable Chartered Accountants (SA) assurance that the financial statements are free of material misstatement. An audit includes: Johannesburg • examining, on a test basis, evidence 12 March 2002 supporting the amounts and disclosures in the financial statements, • assessing the accounting principles used and sig- nificant estimates made by management, and • evaluating the overall financial statement presentation.

We believe that our audit provides a reasonable basis for our opinion.

12 corporate governance

CORPORATE GOVERNANCE STATEMENT Non-executive directors – Messrs MS Aitken, The directors fully support the principles of good MJ Watters, WE Cesman, M Wainer and S Shaw- corporate governance established by the Code Taylor and Mrs SV Webb, as in accordance with of Corporate Practices and Conduct (“the Code”) Hyprop’s policy, represent significant unitholders at of the King Report on corporate governance board level. The same directors further represent and are committed to the implementation there significant suppliers to Hyprop. Mr PL Whewell of and have complied with the Code to the represents a significant supplier to Hyprop. following extent: Independent directors – Messrs PF Kirchmann FINANCIAL STATEMENTS (chairman) and J Bentel as defined in the Code The annual financial statements set out in this report and are not significant unitholders in Hyprop. have been prepared by the directors in accord- ance with generally accepted accounting The roles of the chairman and the managing practice. They are based on appropriate director are separated. The directors have a wide accounting policies which have been consistently range of skills but all have property experience. applied and which are supported by reasonable Four board meetings per annum are held. and prudent judgement and estimates. In addition to these, four asset management meetings are held and attended by the majority The directors of the company are responsible of members of the board. for the preparation of the annual financial statements and related financial information AUDIT COMMITTEE that fairly present the state of affairs and the The audit committee consists of the non-executive results of the company and of the group. chairman and three other directors of which two The external auditors are responsible for directors are non-executive. The committee meets independently auditing and reporting on these periodically with the group’s external auditors and annual financial statements in conformity with executive management to review accounting, generally accepted auditing standards. auditing and financial reporting matters to ensure that an effective control environment in the group GOING CONCERN is maintained. The committee also monitors The annual financial statements have been proposed changes in accounting policies, reviews prepared on the going concern basis since the the internal audit functions and discusses the directors have every reason to believe that the accounting implications of major transactions. company and the group have adequate resources in place to continue its operation for the fore- The audit committee receives a high level of co- seeable future. The auditors have concurred with operation from directors, management and staff the directors’ statements on internal control and and is satisfied that controls and systems within going concern. the group have been adhered to and, where necessary, improved during the year under review. STRUCTURE OF THE BOARD The board of directors consists of ten members.

The capacity of the directors can be categorised as follows:

Executive director – Mr PG Prinsloo, the managing director, is a salaried employee of the management company.

13 corporate governance

It will continue to monitor and appraise internal Accordingly, even an effective internal control operating structures and systems to ensure that system can provide only reasonable assurance with these are maintained and continue contributing respect to financial statement preparation and to the ongoing success of the company. asset safeguarding. Furthermore, the effectiveness of an internal control system can change EQUAL OPPORTUNITIES with circumstances. The company has committed itself to create a workplace in which all employees can enjoy equal The controls throughout the group concentrate on opportunities, irrespective of their race or gender. critical risk, and these areas are closely monitored. Continued reviews and reporting structures REVIEW OF MANAGEMENT enhance the control environment. Nothing has AND FINANCIAL CONTROLS come to the attention of the directors to indicate The directors and the audit committee continuously that a material breakdown in the controls within review the management and financial controls of the group has occurred during the year. the group to ensure that: REMUNERATION COMMITTEE

• An effective system of internal controls and The remuneration committee is chaired by accounting records of the group is maintained; PF Kirchmann, the non-executive chairman. • The assets of the group are safeguarded and The committee also comprises the managing appropriately insured. director and two other non-executive directors.

INTERNAL CONTROL The effectiveness of the internal control system is monitored through management overviews, comprehensive reviews and testing by an internal audit function which has been outsourced to the company’s external auditors.

The board of directors is responsible for the group’s systems of internal control. These systems are designed to provide reasonable, but not absolute, assurance as to the integrity and reliability of the financial statements and to safeguard, verify and maintain accountability of its assets and to select and minimise significant fraud, potential liability, loss and material misstatement while complying with applicable laws and regulations.

There are inherent limitations in the effectiveness of any system of internal control, including the possibility of human error and the circumvention or overriding of controls.

14 directors’ report

The directors have pleasure in submitting Full particulars regarding the authorised and issued their report for the group for the year ended share capital at 31 December 2001 are set out 31 December 2001. in note 4 to the financial statements, and full particulars of the debentures are set out in note 6. NATURE OF BUSINESS Hyprop Investments Limited is a property investment REVIEW OF ACTIVITIES holding company listed on the JSE Securities The results of the company and of the group and Exchange South Africa (JSE). The company, the state of their affairs are set out in the attached together with its subsidiaries, holds high-quality property investments in Hyde Park Corner Shopping financial statements and do not, in our opinion, Centre, The Glen Shopping Centre as well as require further comment. prominent office buildings in the decentralised nodes of the northern . DIRECTORATE The group’s intention is to grow and diversify The following change to the board of directors the portfolio by acquiring or developing properties were made: as and when the right opportunities arise. Resignations Effective date T Schultze 1 October 2001 CAPITAL STRUCTURE G Itzikowitz 11 March 2002 All combined units comprise one ordinary share and one debenture and may only be traded on Appointments the JSE. The return to each investor thus comprises PF Kirchmann 16 May 2001 two distinct elements: PL Whewell 16 May 2001 • a dividend on the share component of the combined unit DN Martin 16 May 2001 • interest on the debenture component of the (Alternate to PL Whewell) combined unit PG Prinsloo 1 October 2001 M Wainer 12 March 2002 The interest payable per debenture is a fixed multiple, being 499 times the dividend payable Messrs J Bentel, MS Aitken, WE Cesman, S Shaw- per ordinary share. Taylor and MJ Watters and Mrs SV Webb served as directors throughout the year under review. The terms and conditions governing the debentures Mr PJ Thurling served as alternate director are contained in the debenture trust deed. throughout the year under review. In accordance

There were no changes to the authorised number with the Articles of Association, M Wainer, J Bentel, of combined units. The following movements in PF Kirchmann and PL Whewell retire at the general the issued combined units took place during the meeting but being eligible, offer themselves for financial year: re-election. Ordinary Deben- For the year Number share Deben- ture ended combined capital tures premium 31 Dec ’01 units R000 R000 R000 Combined units in issue at 1 Jan ’01 43 358 756 434 213 759 22 790 Additional combined units issued on 25 Sep ’01 ranking pari passu from 1 May ’01 21 360 722 214 105 308 122 191 Combined units in issue at 31 Dec ’01 64 719 478 648 319 067 144 981

15 directors’ report

SECRETARY Homeways (Proprietary) Limited manages on a The secretary of the company is PG Prinsloo who day-to-day basis twenty-four buildings on behalf was appointed on 1 October 2001. of Hyprop in terms of an agreement that expires on 30 April 2004.

Business address: 3rd Floor, North Block, Hyde Park Corner Shopping Centre, The Glen Shopping Centre, where Hyprop owns an Jan Smuts Avenue, Sandton 2196 undivided one-third share, is managed on a day- Postal address: PO Box 41257, Craighall 2024. to-day basis by David Reid Property Services (Proprietary) Limited in terms of an agreement DIRECTORS’ INTEREST that expires on 30 June 2003. The interest of the directors and alternate directors in the combined units of the company as at SUBSIDIARY COMPANIES 31 December 2001 were as follows: At 31 December 2001, Hyprop owned the entire share capital of three companies, of which two are Beneficial share block companies. Details of these subsidiaries (direct and indirect) are reflected on page 30. 2001 2000 J Bentel 155 254 120 130 The rental income generated by the properties held PF Kirchmann 923 076 0 in the share block companies accrues directly to PL Whewell 185 820 0 the holding company, Hyprop Investments Limited, MS Aitken 7 125 0 which also bears the operating and administration S Shaw-Taylor 7 125 0 costs of these properties. DN Martin 14 0 Other directors 0 0 No subsidiary reflected either a profit or a loss No non-beneficial combined units were held by during the year under review. any of the directors or alternate directors. There have been no changes in the directors’ interest POST BALANCE SHEET EVENTS between the end of the financial year and the No material events or circumstances have date of this report. occurred between the end of the financial year and the date of this report. DIRECTORS’ INTEREST IN CONTRACTS No material contracts involving directors’ interest VALUATION OF PORTFOLIO were entered into in the current year other than The directors’ valuation of the total portfolio as the transactions detailed in note14 to the at 31 December 2001 was R930 million (see note financial statements. 2.6 to the financial statements). The net asset value, after borrowings, based on the directors’ valuation ADMINISTRATION AND MANAGEMENT of the total property portfolio, is R11,73 per com- Hyprop Management Company (Proprietary) bined unit, compared with the JSE price of R9,95 Limited undertakes the group’s asset management per combined unit as at 31December 2001. functions together with the day-to-day manage- ment of six office buildings and The Hyde Park Corner Shopping Centre in terms of an agreement that expires on 31 December 2002.

16 balance sheet

Group Company 2001 2000 2001 2000 FOR THE YEAR ENDED 31 DECEMBER 2001 Note R000 R000 R000 R000

ASSETS

Non-current assets 699 503 277 203 699 503 277 203

Tangible fixed assets 2 698 746 276 603 688 525 266 382 Financial assets 3 757 600 10 978 10 821

Current assets 6 807 58 418 6 807 58 418

Trade and other receivables 2 075 1 898 2 075 1 898 Cash and cash equivalents 4 732 56 520 4 732 56 520

Total assets 706 310 335 621 706 310 335 621

EQUITY AND LIABILITIES

Equity capital and reserves 63 834 63 047 63 834 63 047

Ordinary share capital 4 648 434 648 434 Non-distributable reserves 5 57 582 57 582 57 582 57 582 Retained income 5 604 5 031 5 604 5 031

Non-current liabilities 571 289 236 549 571 289 236 549

Debentures 6 319 067 213 759 319 067 213 759 Debenture premium 6 144 981 22 790 144 981 22 790 Long-term liabilities 7 107 241 – 107 241 –

Current liabilities 71 187 36 025 71 187 36 025

Trade and other payables 16 376 8 695 16 376 8 695 Taxation 19 14 19 14 Unitholders for distribution 54 792 27 316 54 792 27 316

706 310 335 621 706 310 335 621

17 income statements

Group Company 2001 2000 2001 2000 FOR THE YEAR ENDED 31 DECEMBER 2001 Note R000 R000 R000 R000

Turnover 89 523 56 521 89 523 56 521

Operating income 8 72 058 42 754 72 058 42 754 Interest received 4 529 7 617 4 529 7 617 Interest paid (3 778) – (3 778) – Reversal of provision for anticipated head lease losses – 272 – 272

Income before distribution 72 809 50 643 72 809 50 643 Debenture interest 72 021 49 260 72 021 49 260

Debenture interest paid 72 726 50 628 72 726 50 628 Less: Capitalised (705) (1 368) (705) (1 368)

Income before taxation 788 1 383 788 1 383 Secondary tax on companies 9 18 13 18 13

Income after taxation 770 1 370 770 1 370 (Loss)/Income from associate (51) 8 (51) 8

Net income 719 1 378 719 1 378

Earnings per combined unit (cents) 10 127,5 119,9 Headline earnings per combined unit (cents) 10 127,5 119,3

Weighted number of units 57 599 237 43 358 756 statement of changes in equity

Group and Company Non distri- Distri- Share butable butable capital reserve reserve Total FOR THE YEAR ENDED 31 DECEMBER 2001 R000 R000 R000 R000

Balance at 1 January 2000 434 57 310 4 026 61 770 Net income for the year 1 378 1 378 Dividends (101) (101) Reversal of provision for anticipated head lease losses 272 (272) –

Balance at 1 January 2001 434 57 582 5 031 63 047 Issue of ordinary share capital 214 214 Net income for the year 719 719 Dividends (146) (146)

Balance at 31 December 2001 648 57 582 5 604 63 834

18 cash flow statements

Group Company 2001 2000 2001 2000 FOR THE YEAR ENDED 31 DECEMBER 2001 Note R000 R000 R000 R000

CASH FLOWS FROM OPERATING ACTIVITIES 38 092 1 195 38 092 1 195

Cash generated from operations 13.2 82 750 42 157 82 750 42 157 Interest income 4 529 7 617 4 529 7 617 Finance charges (3 778) – (3 778) – Secondary tax on companies paid 13.3 (13) (22) (13) (22) Distribution to unitholders (45 396) (48 557) (45 396) (48 557)

Interest paid to unitholders 13.4 (45 305) (48 461) (45 305) (48 461) Dividends paid to unitholders 13.5 (91) (96) (91) (96)

CASH FLOWS FROM INVESTING ACTIVITIES (424 834) (34 239) (424 834) (34 239)

Net acquisition of fixed assets (424 693) (34 511) (424 693) (34 511) Proceeds arising on disposal of tangible fixed asset 16 – 16 – Acquisition of financial assets (157) – (157) – Proceeds arising on reversal of anticipated head lease losses – 272 – 272

CASH FLOWS FROM FINANCING ACTIVITIES 334 954 110 334 954 110

Issue of ordinary share capital 13.6 214 – 214 – Issue of debentures 13.6 227 499 – 227 499 – Proceeds from long-term liability 13.6 107 241 – 107 241 – Decrease/(Increase) in amounts owing by associated company – 110 – 110

NET DECREASE/(INCREASE) ON CASH AND CASH EQUIVALENTS (51 788) (32 934) (51 788) (32 934)

Cash and cash equivalents at the beginning of the year 56 520 89 454 56 520 89 454

Cash and cash equivalents at the end of the year 4 732 56 520 4 732 56 520

19 notes to the financial statements

FOR THE YEAR ENDED 31 DECEMBER 2001

1 ACCOUNTING POLICIES write down the cost, less estimated residual value by equal installments over the estimated The financial statements are prepared on the economic lives, as follows: historical cost basis, adjusted by the revaluation • Tenant installation of land and buildings, as more fully detailed Short-term lease in year of acquisition below, and incorporate the following principal Long-term lease period of lease accounting policies set out below which are • Building appurtenances consistent with those of the previous year. Carpets 5,9 years

These policies comply with South African Security equipment 3 years statements of Generally Accepted Account- Plant and equipment 6,7 years ing Practice. Air-conditioning 5 years • Motor vehicles 5 years 1.1 Basis of consolidation The consolidated financial statements 1.3 Turnover incorporate those of the company and all its Turnover comprises gross rental and interest subsidiaries. The results of any subsidiaries income. acquired are included from the effective dates 1.4 Associates of acquisition and up to the effective dates An associate is an investee, that is neither a of disposal. subsidiary nor a joint venture of the company. Differences between the consideration paid It is held as a long-term investment, and pro- for subsidiaries acquired and the fair value of vides the company with the ability to exercise their identifiable net assets at acquisition are significant influence. included with the cost of fixed properties. Investments in associate companies are ac- 1.2 Tangible fixed assets and depreciation counted for according to the equity method. Investment properties held by the group for 1.5 Joint ventures rental-producing purposes, are stated at 1997 A joint venture is a contractual arrangement valuation and subsequent additions are stated whereby two or more parties undertake an at cost. No depreciation is provided on economic activity that is subject to joint control. investment properties. Surpluses on revaluation are transferred to a non-distributable reserve. Investments in joint ventures are accounted for Independent valuations are obtained at least using proportionate consolidation on a line by every five years. In the intervening years such line basis. valuations are reviewed by the directors to 1.6 Capitalised interest ensure that no factors have arisen to render Interest on funds used to effect improvements their use and disclosure misleading and to properties, is capitalised to the cost of the to determine if any permanent decline in property from the time of disbursement until value has occurred. practical completion of the project. Depreciation is provided on all tangible fixed assets, other than investment properties, to

20 Group Company 2001 2000 2001 2000 FOR THE YEAR ENDED 31 DECEMBER 2001 R000 R000 R000 R000

2 TANGIBLE FIXED ASSETS

2.1 Cost and valuation Investment properties 687 286 269 912 677 065 259 691

Historic cost 638 754 221 380 628 533 211 159 Revaluation surplus 48 532 48 532 48 532 48 532

Building appurtenances 19 260 12 189 19 260 12 189 Tenant installations 6 724 5 816 6 724 5 816 Motor vehicles 138 128 138 128

713 408 288 045 703 187 277 824

2.2 Depreciation Building appurtenances 9 437 7 334 9 437 7 334 Tenant installations 5 125 3 989 5 125 3 989 Motor vehicles 100 119 100 119

14 662 11 442 14 662 11 442

2.3 Net carrying value Investment properties 687 286 269 912 677 065 259 691 Building appurtenances 9 823 4 855 9 823 4 855 Tenant installations 1 599 1 827 1 599 1 827 Motor vehicles 38 9 38 9

698 746 276 603 688 525 266 382

2.4 Movement for the year Capital expenditure 424 693 34 511 424 693 34 511

Investment properties 416 669 30 550 416 669 30 550 Building appurtenances 7 071 3 563 7 071 3 563 Tenant installations 908 398 908 398 Motor vehicles 45 – 45 –

Interest capitalised 705 1 368 705 1 368 Depreciation (3 255) (1 866) (3 255) (1 866)

422 143 34 013 422 143 34 013

21 notes to the financial statements

FOR THE YEAR ENDED 31 DECEMBER 2001

2.5 Tangible assets pledged as security 2.6 Property valuation The following properties have been pledged Hyprop’s total property portfolio was valued as security by means of mortgage bonds (note as follows: 7.1) to secure the borrowing facilities totalling ex KH Props portfolio – 30 September 2000 R300 million. and Hyprop’s pre-merger portfolio – 31 December 2000. Standard Bank Properties (a division of the Standard Bank of South Africa Limited) The total portfolio was valued at R751 534 000 by 1 Erf 201 Hyde Park Township RH Roper FRICS, MIV (SA) – Chartered Valuation 2 Erf 202 Hyde Park Extension 21 Township Surveyor and Registered Valuer. The directors’ 3 Erf 214 Hyde Park Extension 16 Township valuation as at 31 December 2001 of the total 4 Erf 14 Hyde Park Township portfolio (including subsequent new develop- 5 Holding 91 Hyde Park Agricultural Settlement ments and acquisitions) was R930 000 000, 6 Erf 390 Hyde Park Township using the same valuation methods as aforesaid 7 Erf 389 Hyde Park Extension 21 Township external valuer. 8 Erf 391 Hyde Park Extension 16 Township 2.7 Joint venture ABSA Bank Limited Hyprop acquired an undivided one-third share 1 Erf 325 Hyde Park Extension 56 Township in The Glen Shopping Centre comprising: 2 Erf 326 Hyde Park Extension 56 Township 1 Erf 33 Gleneagles Extension 2 3 Erf 132 Atholl Extension 12 Township 2 Portion 14 of the farm Gleneagles 102 4 Erf 133 Atholl Extension 12 Township 3 Portion 15 of the farm Gleneagles 102 5 Erf 134 Atholl Extension 12 Township 4 Portion 69 of the farm Turffontein No 100 6 Remaining extent of Erf 135 Atholl All income benefits and obligations attaching Extension 12 Township to the above passed to Hyprop on 7 Portion 1 of Erf 135 Atholl Extension 12 Township 27 December 2001. 8 Portion 3 of Erf 184 Atholl Extension 12 Township 9 Portion 4 of Erf 184 Atholl Extension 12 Township 10 Erf 6 Simba Township 11 Erf 1322 Sunninghill Extension 115 Township 12 Erf 190 Dunkeld West Extension 5 Township 13 Erf 191 Dunkeld West Extension 5 Township 14 Erf 192 Dunkeld West Extension 5 Township 15 Remaining extent of Erf 193 Dunkeld West Extension 5 Township 16 Erf 194 Dunkeld West Extension 5 Township 17 Erf 123 Craighall Park Township

22 Group Company 2001 2000 2001 2000 FOR THE YEAR ENDED 31 DECEMBER 2001 R000 R000 R000 R000

3 FINANCIAL ASSETS

3.1 Subsidiaries Shares 62 488 62 488

At cost 56 561 56 561 Write-up of investment in subsidiaries to net realisable value of underlying property interests 53 402 53 402 Less: Pre-acquisition dividends (47 475) (47 475)

Amounts owing to subsidiaries (52 267) (52 267)

10 221 10 221

3.2 Associated companies Oshbro Investments 23 (Proprietary) Limited Unlisted shares at cost – 50% interest in Oshbro Investments 23 (Proprietary) Limited – Directors’ valuation: R584 000 (2000: R575 099)

Interest in associate 584 575 584 575

Loan 563 559 563 559 Attributable share of post-acquisition profits 21 16 21 16

Murinda Investments (Proprietary) Limited Unlisted shares at cost – 50% interest in Murinda Investments (Proprietary) Limited – Directors’ valuation: R1 953 000

Interest in associate 148 148

Loan 204 – 204 – Attributable share of post-acquisition losses (56) – (56) –

732 575 732 575

3.3 Investments 25 25 25 25

Total financial assets 757 600 10 978 10 821

23 notes to the financial statements

Group Company 2001 2000 2001 2000 FOR THE YEAR ENDED 31 DECEMBER 2001 R000 R000 R000 R000

4 SHARE CAPITAL

Authorised 100 000 000 ordinary shares of one cent each 1 000 1 000 1 000 1 000

Issued 64 719 478 shares (2000: 43 358 756) 648 434 648 434

The unissued shares are under the control of the directors in terms of a resolution of members passed at the last annual general meeting. This authority remains in force until the next annual general meeting.

Combined unitholders information Combined unitholder spread at year-end date: Unitholders Combined units

Quantity % Quantity %

Public unitholders 529 97,24 25 543 688 39,47

Directors 12 2,21 1 278 414 1,98 Non-public unitholders with an interest of 5% or more 3 0,55 37 897 376 58,56

Total 544 100,00 64 719 478 100,00

Portfolio size 1 – 1 000 131 24,08 49 554 0,08 1 001 – 5 000 158 29,04 425 405 0,66 5 001 – 10 000 91 16,73 648 582 1,00 10 001 – 25 000 75 13,79 1 192 192 1,84 25 001 – 50 000 32 5,88 1 126 778 1,74 50 001 – 100 000 12 2,21 871 371 1,35 100 001 and over 45 8,27 60 405 596 93,33

Total 544 100,00 64 719 478 100,00

At year-end date, the directors were aware of the following interest of 5% or more in the share capital of the company. Number % of total of units in issue

Redefine Income Fund 15 212 680 23,5 FHP Managers (Pty) Ltd 11 910 810 18,4 The Coronation Group 10 773 886 16,6 Marriott Controlled Funds (Public unitholder) 10 020 107 15,5

24 Group Company 2001 2000 2001 2000 FOR THE YEAR ENDED 31 DECEMBER 2001 R000 R000 R000 R000

5 NON-DISTRIBUTABLE RESERVES

Realised surplus on disposal of investments properties 9 050 8 778 9 050 8 778 – Arising during the year – 272 – 272 Excess on revaluation of fixed properties over cost 48 532 48 532 48 532 48 532

57 582 57 582 57 582 57 582

6 DEBENTURES AND PREMIUM

64 719 478 (2000: 43 358 756) unsecured, unsubord- inated variable rate debentures of 493 cents each 319 067 213 759 319 067 213 759 Premium on debentures 144 981 22 790 144 981 22 790

464 048 236 549 464 048 236 549

In terms of the debenture trust deed, the interest on the debentures is a fixed multiple of 499 times the dividend declared on ordinary shares. The debentures are redeemable at their par value at the instance of the debentureholders at any time after 25 years from the date of their allotment. The right of redemption may be exercised only by special resolution of the debentureholders. The debenture trust deed is available for inspection by members or their duly authorised agents at the registered office of the company.

7 LONG-TERM LIABILITIES

7.1 Interest-bearing borrowings – non-current Loan secured in terms of a first mortgage bond 107 241 – 107 241 –

At 31 December 2001 Hyprop borrowings amounted to R107 million. Hyprop has borrowing facilities of R300 million, of which R193 million was unutilised at year-end.

The borrowing facilities are secured by means of a first mortgage bond over various Hyprop properties (note 2.5).

Interest is payable at both a fixed and floating rate. At year-end the interest rate on R15 million had been fixed at 11,1% until 2 August 2002 when the rate will revert back to a floating rate. The balance of the loan was subject to a floating interest rate which is based on the publicly quoted short-term overnight rate +1,5%.

25 notes to the financial statements

Group Company 2001 2000 2001 2000 FOR THE YEAR ENDED 31 DECEMBER 2001 R000 R000 R000 R000

7 LONG-TERM LIABILITIES (CONTINUED)

The loan is repayable on 30 June 2006 and Hyprop Investments Limited applies all surplus cash to its existing borrowing facilities to reduce gearing and interest rate costs.

7.2 Borrowing powers In terms of its articles of association, the borrowing powers of the company, excluding the debentures, are limited to 50% of the directors’ bona fide valuation of the consolidated property portfolio.

8 OPERATING INCOME

Operating income is arrived at after the following items: Income 96 – 96 – Profit on the disposal of tangible fixed assets 16 – 16 – Rental income attributable to joint venture 80 – 80 – Expenses Auditors’ remuneration 239 140 239 140 Audit fee – current year 230 123 230 123 Fees for other services 9 17 9 17

Depreciation of fixed assets 3 255 1 866 3 255 1 866 Management fee 7 331 4 601 7 331 4 601 Directors’ emoluments – For services as directors 105 36 Non-executive PF Kirchmann 9 – J Bentel 9 4 BT Jackson – 5 L Forrester – 2 G Cannings – 12 S Shaw-Taylor 8 2 SV Webb 9 – WE Cesman 9 3 G Itzikowitz 20 3 MJ Watters 14 3 MS Aitken 14 2 PL Whewell 13 –

26 Group Company 2001 2000 2001 2000 FOR THE YEAR ENDED 31 DECEMBER 2001 R000 R000 R000 R000

8 OPERATING INCOME (CONTINUED)

– For services as directors of other companies or their subsidiaries 776 545 Executive T Schultze (resigned 1 October 2001) 639 545 PG Prinsloo (appointed 1 October 2001) 137 –

Interest paid – other – 2 – 2

9 TAXATION

Secondary tax on company 18 13 18 13

18 13 18 13

No provision has been made for 2001 taxation as a result of a tax loss utilised. The tax relief arising therefrom is R1 000 720. The estimated tax loss available for set-off against future taxable income amounts to R241 090 (2000: R3 576 824).

10 EARNINGS PER COMBINED UNIT

The calculation of earnings per combined unit is based on net income after taxation after adding back debenture interest of R72 726 075 (2000: R50 628 285), totalling R73 444 664 (2000: R52 007 290). The calculation of headline earnings per combined unit is based on the above, deducting the capital profit of R0 (2000: R272 340), totalling R73 444 664 (2000: R51 734 950). The weighted average combined units in issue throughout the year was 57 599 237 (2000: 43 358 756).

11 COMMITMENTS

Authorised capital expenditure – Already contracted for 3 530 18 003 3 530 18 003 – Not yet contracted for 7 350 2 017 7 350 2 017

10 880 20 020 10 880 20 020

This expenditure will be financed out of available cash resources and banking facilities.

12 RETIREMENT BENEFITS

The group has no formal or informal arrangement whereby benefits are provided for employees on or after termination of service as all employees are employees of the management company, Hyprop Management Company (Proprietary) Limited.

27 notes to the financial statements

Group Company 2001 2000 2001 2000 FOR THE YEAR ENDED 31 DECEMBER 2001 R000 R000 R000 R000

13 NOTES TO THE CASH FLOW STATEMENTS

13.1 The following convention applies to figures other than adjustments: Outflows of cash are represented by figures in brackets. Inflows of cash are represented by figures without brackets.

13.2 Cash generated from operations Profit on ordinary activities before taxation 788 1 383 788 1 383 Adjustments 74 458 43 237 74 458 43 237

Profits arising on reversal of anticipated head lease losses – (272) – (272) Profit on sale of vehicle (16) – (16) – Loss from associates (51) – (51) – Depreciation 3 255 1 866 3 255 1 866 Interest income (4 529) (7 617) (4 529) (7 617) Interest paid 3 778 – 3 778 – Debenture interest payable to unitholders 72 726 50 628 72 726 50 628 Capitalised interest (705) (1 368) (705) (1 368)

Operating profit before working capital changes 75 246 44 620 75 246 44 620 Increase/(Decrease) in working capital 7 504 (2 463) 7 504 (2 463)

Increase in trade and other receivables (177) (179) (177) (179) (Decrease)/Increase in trade and other payables 7 681 (2 284) 7 681 (2 284)

Cash generated from operations 82 750 42 157 82 750 42 157

13.3 Secondary tax on companies paid Taxation owing at beginning of year (14) (23) (14) (23) Adjustment Per income statement (18) (13) (18) (13) Taxation owing at end of year 19 14 19 14

(13) (22) (13) (22)

13.4 Interest paid to unitholders Interest payable at beginning of year (27 261) (25 094) (27 261) (25 094) Per income statement (72 726) (50 628) (72 726) (50 628) Interest payable at end of year 54 682 27 261 54 682 27 261

(45 305) (48 461) (45 305) (48 461)

28 Group Company 2001 2000 2001 2000 FOR THE YEAR ENDED 31 DECEMBER 2001 R000 R000 R000 R000

13 NOTES TO THE CASH FLOW STATEMENTS (CONTINUED)

13.5 Dividends paid to unitholders Dividends payable at beginning of year (55) (50) (55) (50) Per statement of changes in equity (146) (101) (146) (101) Dividends payable at end of year 110 55 110 55

(91) (96) (91) (96)

13.6 Cash flows from financing and investing activities During the period ordinary shares and debentures were issued as combined units in lieu of the purchase consideration relating to the business as a going concern of KH Props. Certain long-term liabilities relating to KH Props were assumed. The effect of the above has been reflected as cash movements in the cash flow statements.

14 RELATED PARTIES AND RELATED PARTY TRANSACTIONS

Related parties with whom the company transacted during the period are: Hyprop Management Company (Proprietary) Limited 7 106 5 519 7 106 5 519 Expenditure comprising: Asset Management fee, Management fee and Letting commission Relationship: Joint management and directorial

Homeways (Proprietary) Limited 1 026 – 1 026 – Expenditure comprising: Management fee and Letting commission Relationship: Joint shareholding and directorial

Kirchmann-Hurry Construction (Proprietary) Limited 882 – 882 – Expenditure comprising: Tenant installation and building maintenance Relationship: Joint shareholding and directorial

Pikappa Property Holdings (Proprietary) Limited 79 – 79 – Expenditure comprising: Garden maintenance Relationship: Joint shareholding and directorial

The above transactions were carried out on commercial terms and conditions no more favourable than those available in similar arm’s length dealings at market-related rates.

29 information on subsidiary companies

Group Company 2001 2000 2001 2000 FOR THE YEAR ENDED 31 DECEMBER 2001 R R000 R000 R000 R000

Issued share Book value Amount owing by/(to) Name of wholly owned subsidiary capital of shares subsidiary company

Hyde Park Corner Shopping Centre (Proprietary) Limited 10 002 10 10 1 548 1 548

Hyde Park Investments Share Block (Proprietary) Limited 7 201 62 428 62 428 (62 428) (62 428)

Morningside Viewsites Share Block (Proprietary) Limited 320 50 50 8 613 8 613

62 488 62 488 (52 267) (52 267)

distribution details

Distribution 2001 2000 FOR THE YEAR ENDED 31 DECEMBER 2001 number (cents) (cents)

INTEREST ON DEBENTURES

For the year 126,107 116,766

Four months to 30 April 2001 (2000: Half year to 30 June) 27 41,617 53,892 Eight months to 31 December 2001 (2000: Half year to 31 December) 28 84,490 62,874

DIVIDENDS ON ORDINARY SHARES

For the year 0,253 0,234

Four months to 30 April 2001 (2000: Half year to 30 June) 27 0,083 0,108 Eight months to 31 December 2001 (2000: Half year to 31 December) 28 0,170 0,126

126,360 117,000

30 properties owned

2001 2000 FOR THE YEAR ENDED 31 DECEMBER 2001 R000 R000

Name and description Area (m2) of Group cost Name of company of property rentable space of properties

Hyde Park/Craighall Hyprop Investments Limited Hyde Park Corner Shopping Centre 34 414 196 372 195 075 and Hyde Park Corner Shopping Centre (Proprietary) Limited Hyprop Investments Limited Investment Place 6 246 38 037 – Bolton Gardens 1 094 5 121 – Magalieszicht View 1 186 6 099 – SBDS House 708 3 542 – Chelsea Close 868 4 095 – Draycott Place 1 665 8 211 – Westminster 1 184 5 749 – Albury Park 6 1 440 7 050 – Hydewest 1 132 5 470 – Stand 155 Dunkeld West 1 045 5 280 – Portland Place n/a 420 – Morningside Hyprop Investments Limited Morning View Office Park 10 969 41 742 31 145 and Morningside Viewsites Share Block (Proprietary) Limited Hyprop Investments Limited Motswedi House 1 616 9 045 – 50% interest in Oshbro Residential property n/a 584 575 Investments 23 (Proprietary) Limited Wierda Valley Hyprop Investments Limited 47 Wierda Road West 2 207 8 699 8 699 Linger Longer/Turtle Creek Restaurant 597 3 458 3 458 Vodacom Park 5 101 14 256 14 121 Sandton Place 3 372 18 041 – Wierda Gables 2 049 10 814 – Sandton Atholl Ridge 8 518 58 904 –

31 properties owned

2001 2000 FOR THE YEAR ENDED 31 DECEMBER 2001 R000 R000

Name and description Area (m2) of Group cost Name of company of property rentable space of properties

Parktown 60% undivided share in 31 Princess 3 012 6 607 6 607 of Wales Terrace Office Block Victoria Gate 2 355 7 649 – Rosebank Kuehne & Nagel House 3 260 10 807 10 807 Arbath 580 2 380 – Sunninghill/Rivonia ACS House 1 743 7 486 – Rivonia Gate 1 and 11 2 736 11 882 – Rivonia Service Station n/a 1 665 – Belvedere Place 10 820 51 416 – Midrand Howick Gardens 3 015 11 917 – Kernick House 3 006 14 256 – Waterfall Close 3 766 15 641 – Bryanston 50% interest in Murinda Residential property n/a 148 – Investments (Proprietary) Limited Southern suburbs of Johannesburg Hyprop Investments Limited Undivided one-third share in 14 933 95 255 – The Glen Shopping Centre

32 notice of annual general meeting

NOTICE is hereby given that the fourteenth annual A member entitled to attend and vote at the general meeting of combined unitholders of Hyprop meeting is entitled to appoint a proxy to attend, Investments Limited will be held on 20 June 2002 at speak and vote in his stead. A proxy need not 09:00 on the 3rd Floor, North Block, Hyde Park Corner be a member of the company. Shopping Centre for the following purposes: By order of the board 1 To receive and consider the annual financial state- ments for the year ended 31 December 2001.

2 To elect directors in terms of the articles of association.

3 To place the unissued combined units under PG Prinsloo the control of the directors. Secretary

4 To transact such other business as may be Johannesburg transacted at an annual general meeting. 12 March 2002 share analysis

AS AT 31 DECEMBER 2001

Open 67 346 345 886 200 270 555 614 Close 242 000 362 858 6 676 137 1 211 820 1 345 389 1 090 946 1 436 390 1 475 155 High/Low

1 150

1 050

950

850

750 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2001 2001 2001 2001 2001 2001 2001 2001 2001 2001 2001 2001

33 unitholders’ diary

Financial year-end 31 December Publication of financial results 14 March 2002 Annual general meeting 20 June 2002

DISTRIBUTIONS

Interim September 2002 Final March 2003 Annual report posted to unitholders May 2002 Interim report posted to unitholders August 2002 administration

DIRECTORS CORPORATE ADVISORS AND SPONSORS PG Prinsloo (MD) PF Kirchmann* (Chairman) Corpcapital – Corporate Finance S Shaw-Taylor* MS Aitken* MJ Watters* (a division of Corpcapital Investments WE Cesman* SV Webb* J Bentel* PL Whewell* (Proprietary) Limited) M Wainer* *Non-executive directors 2 Arnold Road Rosebank Johannesburg 2196 REGISTERED OFFICE AND BUSINESS ADDRESS Hyprop Investments Limited TRANSFER SECRETARIES Registration number 1987/05284/06 Mercantile Registrars Limited 3rd Floor North Block 11 Diagonal Street Johannesburg 2001 Hyde Park Corner Shopping Centre PO Box 1053 Johannesburg 2000 Jan Smuts Avenue Sandton 2196 PO Box 41257 Craighall 2024 TRUSTEE FOR DEBENTUREHOLDERS Telephone +27 11 325 4340 Edward Nathan & Friedland (Proprietary) Limited Fax +27 11 325 4966 4th Floor The Forum E-mail [email protected] 2 Maude Street Sandton 2146 Internet address www.hyprop.co.za PO Box 783347 Sandton 2146

COMPANY SECRETARY COMMERCIAL BANKERS PG Prinsloo Absa Bank Limited 3rd Floor North Block 1st Floor Block A Hyde Park Corner Shopping Centre Sandown Village Office Park Jan Smuts Avenue Sandton 2196 61 Gwen Lane Sandton 2196 PO Box 41257 Craighall 2024 PO Box 782991 Sandton 2146

INDEPENDENT AUDITORS Grant Thornton Kessel Feinstein (Member firm of Grant Thornton International) 137 Daisy Street cnr Grayston Drive Sandton 2196 Private Bag X28 Benmore 2010

34 form of proxy

Hyprop Investments Limited Registration number 1987/05284/06 Transfer secretaries: PO Box 1053 Johannesburg 2000

I/We (Block letters) of being a member/members of the abovementioned company, hereby appoint

of or failing him of or failing him the chairman of the meeting as my/our proxy to vote for me/us on my/our behalf at the annual general meeting of the company to be held on 20 June 2002 at 09:00 or at every adjournment of that meeting.

Signed this day of 2002

Signature Please indicate with an “X” in the appropriate space below how you wish your votes to be cast. If you return this form duly signed, without any specific directions, the proxy shall be entitled to vote as he deems fit.

In favour Against Abstain of resolution resolution from voting

1 Adoption of the annual financial statements

2 Election of directors – M Wainer – PF Kirchmann – PL Whewell – J Bentel

3 To place the unissued combined units under the control of the directors

4 To transact such other business as may be transacted at an annual general meeting

Note

A member entitled to attend and vote at the meeting is entitled to appoint aproxy, or proxies, to attend and speak, and on a poll to vote thereat in his stead. A proxy need not also be a member of the company. All proxy forms must be lodged with the company’s secretary no later than 48 hours before the time set for the commencement of the meeting or any adjournment thereof.

35 directorate From left to right – SV Webb WE Cesman

M Wainer J Bentel PL Whewell PF Kirchmann

S Shaw-Taylor MS Aitken M Watters PG Prinsloo

7464 M&D Hyprop Investments Limited 3rd Floor North Block Hyde Park Corner Shopping Centre

Hyde Park Corner Shopping Centre