APEXHI ANNUAL REPORT 2005

ONE INVESTMENT • TWO OPPORTUNITIES Contents

Nature of business 3 Our track record 4 Vision, mission and objectives 5 Year at a glance 7 Highlights 9 Directors review 10 Directorate and administration 33 Profile of directors 34 Corporate governance 35 Report of the independent auditors 39 Certificate by company secretary 39 Directors report and statement of responsibility 40 Financial statements Balance sheet 42 Income statement 43 Statement of changes in equity 44 Cash flow statement 45 Notes to the financial statements 46 Analysis of unit holders 60 Details of property portfolio 61 Unit holders diary 68 Notice of annual general meeting 69 Notice of debenture holders meeting (A and B debentures) 72 Proxy form (annual general meeting) to the members Perforated Proxy form (A and B debenture holders meeting) Perforated

ONE INVESTMENT • TWO OPPORTUNITIES 1

Nature of business

LISTED PROPERTY COMPANY ApexHi Properties Limited (ApexHi ) is a property loan stock ( PLS ) company, which listed on the JSE Limited ( JSE ) in the Real Estate sector on 5 March 2001. The company offers investors a high-yielding, professionally managed portfolio of commercial, retail and industrial properties and is currently the third largest listed South African property company on the JSE, with a market capitalisation in excess of R4,0-billion.

INNOVATIVE UNIT STRUCTURE ApexHi is the first and only listed property company to offer a unique structure with separately listed A and B units, which provides two investment opportunities, within one property portfolio. The A units are entitled to receive the first 102 cents per unit, per annum, or 45% of the distributable income, whichever is greater. The A units will therefore be entitled to 45% of any annual distribution which exceeds 227 cents per unit. Since their creation in 2001 these units have been ideally suited to investors who require a low risk return. These units have to date shown no income growth but are safe, dependable, predictable and relatively high-yielding. The B units are entitled to the balance of the income once the A unit holders have been paid. These units carry more risk, but have the prospect of greater income distribution, providing those who have an appetite for risk with an attractive income return and yield sweetener . The structure has proved to be extremely successful and has promoted the trading of units, resulting in higher than average liquidity. In addition, because the two units appeal to different investor profiles, ApexHi has managed to attract investors who are risk-averse as well as those who have an appetite for risk. Investors can own either A or B units, or a combination of both, which allows the investment to be matched to individual risk profile and income requirements.

ONE INVESTMENT • TWO OPPORTUNITIES 3 Our track record

Value of property portfolio Number of properties R’000 Number 5 000 000 300

R4,0 b 244 4 000 000 250 235 209 R3,0 b 200 3 000 000 173 R2,1 b 150 2 000 000 R1,6 b 100 1 000 000 50 R0,3 b 15 0 0 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005

Lettable area Vacancy m2 % 2 500 000 25

2,0 mil 2 000 000 1,9 mil 20 19% ²

1,6 mil m 15% 1 500 000 15 14% 14% ² ² ²

1,2 mil m m m 45 247 11%

1 000 000 10 ² m 242 726 271 610 500 000 5 165 434 0,2 mil 221 208

0 0 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005

Sectoral split by lettable area Gearing as % of property portfolio % % 100 35 31,6% 30,5% 29,7% 84% 30 28,7% 80 25 60 52% 53% 20 47% 44% 40% 13,3% 40 35% 15 25%23% 25%22% 10 20 16% 18% 16% 5 0% 0 0 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005

Office Retail Industrial

Market capitalisation Distributable income R’000 R’000 5 000 000 500 000

R4,1 b R409,6 m 4 000 000 400 000 R324,4 m 3 000 000 R2,7 b 300 000 R247,1 m

2 000 000 R1,8 b 200 000 R175,5 m R1,2 b 1 000 000 100 000 R0,3 b R19,6 m 0 0 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005

Units in issue (A and B) Distributions Units Cents 250 000 000 125 120,5 c 120 200 000 000 189 776 988 173 777 398 115 110,75 c 150 000 000 131 058 795 110 106 c 101 450 900 105 100 000 000 102 c 103 c 102 c 102 c 102 c 100 50 000 000 26 171 492 90

0 0 2001 2002 2003 2004 2005 June 2002 June 2003 June 2004 June 2005

A unit B unit 2001 Represents 4 months.

4 ONE INVESTMENT • TWO OPPORTUNITIES Vision, mission and objectives

ApexHi s initial property portfolio consisted mainly of office buildings located in the inner cities of Johannesburg, Pretoria and Durban, and the portfolio provided a relatively high yield because of the perceived risk of the portfolio. The company positioned itself as a high yielding income fund which would deliver consistent income to investors through quarterly distributions. The mission of the company has been to significantly grow the size of the property portfolio with revenue enhancing purchases throughout South Africa, to spread the risk evident in the initial portfolio. Risk has been further reduced by balancing exposure to the commercial and retail properties in the portfolio. This has now been achieved: 40% of the portfolio consists of retail space, 44% office space, with the balance in industrial properties. Property fundamentals relating to the profile of properties owned by ApexHi have improved over the past four years. Growth in rentals, the reduction in vacancies, lower inflationary growth in operating costs coupled with continuously reducing interest rates on borrowings have produced growing income distributions per unit. Because of the A and B unit structure, this growth in distribution has all been to the benefit of the B units while increasing the income cover on the A units. ApexHi s better balanced portfolio and improved property fundamentals will enable the company to grow its distribution to unit holders in line with that being shown by similar listed portfolios. The R2,27 per combined unit earnings threshold to be achieved before the A units show income growth will be reached in the coming year. ApexHi s objective in the years ahead will be to grow distributions for both the A and B units.

ONE INVESTMENT • TWO OPPORTUNITIES 5

The year at a glance

July 2004 ● Sale of Albany Grove for R0,9-million ● Acquisition of Sanlam Centre Vanderbijlpark for ● Sale of Curatio for R14,1-million R40,5-million ● Sale of 78 Fox Street for R39,9-million ● Market capitalisation of R2,79-billion ● Sale of Innes Chambers for R13,0-million ● August 2004 Sale of West End Centre for R1,0-million ● Acquisition of Eerste Rivier City Centre for ● Quarterly distribution of 25,50 cents per A unit, R19,5-million and 29,50 cents per B unit ● Sale of 25% interest in Embankment Park for ● Market capitalisation of R3,59-billion R2,1-million January 2005 September 2004 ● ApexHi gains control of 19% of MICC’s issued ● Acquisition of Turfloop for R16,3-million share capital ● Quarterly distribution of 25,50 cents per A unit, ● Launch of six-months rent free Space-2-Go and 29,0 cents per B unit concept ● Sale of 6 Skietlood for R3,0-million ● Sale of Hollandia House for R0,9-million ● Market capitalisation of R2,98-billion February 2005 October 2004 ● Acquisition of Rivonia Square for R63,0-million ● Acquisition of Kathu Centre for R10,5-million ● Sale of Standard Bank Pinetown Branch for ● Acquisition of Simunye for R18,7-million R2,1-million ● Acquisition of Dikai for R9,3-million ● Sale of 76 Juta Street for R5,3-million ● Acquisition of Nedbank Nelspruit for ● Sale of Medical City for R4,5-million R51,9-million ● Sale of Bosman Building for R4,8-million ● Acquisition of Re A Hola Centre for ● Sale of Rand Central for R6,3-million R32,2-million

November 2004 March 2005 ● ● Acquisition of Woolworths, Wynberg for Acquisition of SA Eagle Krugersdorp for R2-million R10,5-million ● ● Acquisition of Besterbrown for R52,6-million Acquisition of Matsamo for R30,4-million ● Acquisition of Witbank Medical Centre for ● Acquisition of Siyabuswa for R13,9-million R24,4-million ● Acquisition of Hammanskraal for R52,2-million ● Acquisition of Sammy Marks Portion 1 for ● Sale of Main Road, Wynberg for R2,3-million R38,1-million ● Sale of Woolworths, Wynberg for R1,9-million ● Acquisition of Berea Centre for R24,0-million ● Sale of Elzella for R1,2-million ● Sale of BSW land for R1,3-million ● Quarterly distribution of 25,50 cents per A unit, and 30,50 cents per B unit December 2004 ● Market capitalisation of R3,75-billion ● Acquisition of ABSA Centurion for R6,5-million ● Acquisition of ABSA Derdepoort for April 2005 R3,1-million ● Acquisition of Devonshire Parking Garage for ● Acquisition of ABSA Hercules for R3,9-million R22,2-million ● Acquisition of ABSA Kotze Street for R3,5-million June 2005 ● Acquisition of ABSA Pretoria West for ● Sale of Edura for R12,9-million R2,9-million ● Quarterly distribution of 25,50 cents per A unit, ● Acquisition of ABSA Silverton for R5,1-million and 31,50 cents per B unit ● Sale of Centurion Value World for R31,5-million ● Market capitalisation of R4,06-billion

ONE INVESTMENT • TWO OPPORTUNITIES 7 for the year ended 30 June 2005 Highlights for the year

● ApexHi has delivered growth in distributions for the fourth consecutive year, with distributions totaling R409,6-million, comprising 102,0 cents per A unit and 120,5 cents per B unit for the year. The B unit distribution increased by 9% from 110,75 cents to 120,5 cents. ● The property portfolio has grown from R3,0-billion to R4,0-billion, following the acquisition of 25 properties for R557,1-million and the fair value adjustment of R574,0-million. The company disposed of 19 properties for R149,0-million. ● The net asset value per combined unit increased by 27%. ● The combined unit price increased by 37%. ● Market capitalisation has grown from R2,7-billion to R4,1-billion (A unit: R2,05-billion; B unit: R2,05-billion). ● Higher than average trading volumes have been maintained, with 56% of the A units being traded in the 12 months ended June 2005 and 63% of the B units being traded in the same period. ● The retail portion of the lettable portfolio has grown from 35% to 40%, while the office portion has reduced from 47% to 44%. ● The launch of ApexHi s Space-2-Go concept has innovatively addressed vacant space, provided assistance to entrepreneurs and civic organisations and created the potential for a new category of tenant in the medium to long-term. ● Vacancies reduced in the portfolio from 14% in June 2004 to 11% in June 2005. ● R28,9-million was invested in upgrades and refurbishments.

ONE INVESTMENT • TWO OPPORTUNITIES 9 Directors’ review for the year ended 30 June 2005

PROPERTY CONTEXT The property industry has experienced a year of growth and improved fundamentals. A low inflationary environment, decreased interest rates and general economic growth has resulted in the strengthening of all sectors.

Retail ApexHi s shift in balance towards retail properties was appropriately timed, with the retail sector performing well in the period under review. Retail space in the major inner cities, which are located on the ground floors of office buildings, are performing well, with improving rentals and minimal vacancies. This sector is benefiting from the transport infrastructure that exists in the inner cities, the increasing residential component in these areas and the growing take up of space by government. Retail nodes in outlying cities and towns have also performed well. Here, the CBDs are still functioning as primary shopping locations, with few regional and convenience malls available to the market. Convenience retail centres in suburban decentralised areas have also continued to perform well.

Office The major inner cities no longer house a significant, multi-tenanted commercial base. In their place, inner cities are now dominated by national, regional and local government offices, the courts, and in Johannesburg, large financial institutions and mining houses. The government precincts are slowly taking shape, and a large proportion of ApexHi s properties are located within or around these areas. ApexHi owns properties in many decentralised locations, such as Polokwane, and demand for space in these areas continues to be strong. In addition, the conversion of mothballed office space to residential space is increasing. This helps eliminate an oversupply of unattractive office space, while at the same time providing much needed accommodation in the inner cities, which in turn helps rejuvenate the inner cities and has positive benefits for the retail sector.

Industrial With improvements in the economy, demand in the industrial sector has increased dramatically, resulting in strengthened rentals and decreased vacancies.

Listed property The total annualised returns for the PLS sector to end June 2005 was 63%. ApexHi delivered an annualised total return of 51%, comprising a 14% income return and 37% capital growth, split as follows:

Capital growth* Income return* Total return A unit 28% 12% 40% B unit 46% 16% 62%

*Based on the share price at 30 June 2004. The B unit has outperformed other asset classes, with bonds offering returns of 20%, while the Alsi delivered returns of 44%.

10 ONE INVESTMENT • TWO OPPORTUNITIES Directors’ review for the year ended 30 June 2005 (continued)

Summarised operating results for the year

2005 % 2004 R’000 change R 000

Operating profit: Investment properties 537 505 28 419 851 Core portfolio 453 392 37 332 086 Additions during the year 42 772 48 815 Disposals during the year 10 109 3 489 Disposals post balance sheet 31 232 35 461 Corporate costs and administrative expenses (36 656) 65 (22 172) Profit from operations 500 849 26 397 679 Finance costs (119 244) 26 (94 478) Interest income 20 851 (2) 21 242 Investment income 7 133 Distributable profits 409 589 26 324 443 Weighted average number of units in issue 184 085 061 152 499 647 Distribution per unit (cents) 222,50 5 212,75 A unit 102,00 — 102,00 B unit 120,50 9 110,75 The 28% increase in profits from investment properties is mainly as a result of the core portfolio (representing properties held for a full year and not sold since year end) increasing by 37%. This growth was mainly as a result of the 36 acquisitions during the 2003/2004 financial year coming on stream for a full financial year, most notably the Shops for Africa portfolio. During the 2005 financial year, 25 properties were acquired at an average yield before gearing of 14%. 19 properties were sold at an average yield of 12,7%. Proceeds of R149,0-million were used to reduce floating debt currently bearing interest at 9,5%. A surplus on carrying value of R8,1-million and R9,6-million on the original cost was recorded. The 65% increase in corporate costs is mainly as a result of the increased asset management fee due to the R557,1-million acquisitions during the year and the strengthening of the ApexHi unit price. The combined unit price increased by 37% from a close of R15,70 on 30 June 2004 to a close of R21,44 on 30 June 2005. Finance costs increased by 26% as borrowings increased by 32% from R883,6-million to R1,16-billion. The weighted average all inclusive rate of the borrowings decreased from 12,01% at 30 June 2004 to 10,74% in 2005 mainly as a result of the reduction in repo-rate, reduction in ApexHi’s risk margin and the renegotiation of rates on some of the fixed-term borrowings. Despite cash balances increasing by 24% year on year, interest income reduced by 2%. During the 2004 financial year, there was a R136-million general issue of units for cash. The cash was invested in the money market until it was utilised for yield enhancing acquisitions. This resulted in abnormally high interest income for 2004. In addition, money market rates declined in line with repo-rate reductions. Investment income represents interest distributions received from the MICC investment. This yielded an annualised return of 12%.

ONE INVESTMENT • TWO OPPORTUNITIES 11

Directors’ review for the year ended 30 June 2005 (continued)

OBJECTIVES, RISK ASSESSMENT AND INVESTMENT STRATEGY In line with ApexHi s primary focus to deliver consistent returns to investors, paid in quarterly distributions, the company aims to grow the distributable income through the acquisition of new properties, the disposal of non-performing properties and through proactive property and asset management to sweat the assets . The company invests in high-yielding, revenue-enhancing properties with sound tenants and good lease profiles. The focus on quality tenants and sustainable income streams over location remains. Properties are only considered if the majority of tenants are classified as A-grade — Government departments, parastatals, national retailers and large listed companies — and if the likelihood of renewals is high. At end June 2005, some 67% of the lettable area of the portfolio was occupied by A-grade tenants.

Top 20 tenants by rental % of rentals Government (Local, Provincial, National and Parastatals) 23,8 Edcon 5,2 Nedcor 4,0 ABSA 3,0 Shoprite 2,7 JD Group 1,9 Standard Bank 1,8 Pick n Pay 1,6 Iliad 1,5 AngloGold 1,3 Foschini 1,3 Pepkor 1,3 Mr Price 1,2 Woolworths 1,2 Massmart 1,1 Relyant 1,0 Old Mutual 0,9 Truworths 0,7 Nu Clicks 0,5 Ellerines 0,4 Total 56,4 In the year under review, ApexHi took active steps to increase its weighting in the retail sector and to decrease its exposure to office and inner city properties. The strong retail environment and ApexHi s shift in balance towards this buoyant sector has benefited unit holders by capitalising on the favourable trading and market conditions. Retail currently offers stronger rental and growth opportunities and a higher demand for space, particularly in the locations that ApexHi focuses on. The acquisitions continue to be located primarily in outlying suburban areas, where properties trade at a discount to comparable properties in prime locations.

ONE INVESTMENT • TWO OPPORTUNITIES 13 Directors’ review for the year ended 30 June 2005 (continued)

ACQUISITIONS Since 1 July 2004, 25 properties were acquired, boosting the portfolio to 244 properties worth R4-billion, and with a lettable area of just under two million square metres. The properties were acquired at an average yield before gearing of 14%. The total purchase consideration of R557,1-million was settled by the issue of 11,9-million A and B units at an average combined price of R15,58 and R371-million in cash. In addition, ApexHi purchased 19% of MICC Property Income Fund s issued share capital at a cost of R86,4-million (including capitalised transaction costs of R1,4-million), settled by issue of 4 055 547 ApexHi A and B units and R9,5-million in cash. This followed the acceptance of the early settlement offer to MICC shareholders in respect of 2 744 357 MICC units plus the 10 014 502 MICC units that were acquired prior to the offer. ApexHi now owns 12 758 859 MICC units. While the investment is revenue-enhancing for ApexHi, the move does not represent a shift in focus: it is not ApexHi s policy to own units in other funds, and the move was originally planned to acquire MICC s property portfolio or part thereof. This objective is still possible, and ApexHi aims to exchange its MICC units for MICC properties.

14 ONE INVESTMENT • TWO OPPORTUNITIES Directors’ review for the year ended 30 June 2005 (continued)

The following table outlines the acquisitions during the year. Issue Purchase Date of No of price Cash price Property Location transfer units R R000 R 000 Sanlam Centre Vanderbijlpark 30-Jul-04 1 350 000 15,00 20 250 40 500 Eerste Rivier City Centre Stellenbosch 12-Aug-04 780 000 15,00 7 800 19 500 Turfloop Polokwane 03-Sep-04 268 152 15,15 12 188 16 250 Kathu Centre Kathu 07-Oct-04 276 575 14,75 6 445 10 525 Simunye Centre Hazyview 21-Oct-04 490 521 14,75 11 429 18 666 Dikai Centre Hazyview 21-Oct-04 243 286 14,75 5 667 9 258 Re A Hola Centre Botshabelo 21-Oct-04 846 265 14,75 19 719 32 201 Nedbank Centre Nelspruit 21-Oct-04 1 463 310 14,75 31 768 51 877 Besterbrown Nelspruit 24-Nov-04 52 550 52 550 Witbank Medical Centre Witbank 24-Nov-04 24 350 24 350 Sammy Marks Portion 1 Pretoria inner city 24-Nov-04 38 100 38 100 Woolworths Cape Town 25-Nov-04 55 533 13,50 1 028 2 087 Berea Centre Durban 26-Nov-04 24 000 24 000 ABSA Centurion Centurion 07-Dec-04 6 500 6 500 ABSA Derdepoort Pretoria 07-Dec-04 3 100 3 100 ABSA Hercules Pretoria 07-Dec-04 3 900 3 900 ABSA Kotze Street Johannesburg 07-Dec-04 3 500 3 500 ABSA Pretoria West Pretoria 07-Dec-04 2 900 2 900 ABSA Silverton Pretoria 07-Dec-04 5 100 5 100 Rivonia Square Sandton 15-Feb-05 4 117 647 15,30 63 000 SA Eagle Krugersdorp 17-Mar-05 10 500 10 500 Matsamo Centre Matsamo 23-Mar-05 648 742 18,75 18 245 30 409 Siyabuswa Centre Siyabuswa 23-Mar-05 289 710 18,75 8 425 13 857 Boxer Centre Hammanskraal 23-Mar-05 1 114 302 18,75 31 339 52 232 Devonshire Parking Durban Garage inner city 20-Apr-05 22 250 22 250

Total 11 944 043 15,58 371 055 557 112

ONE INVESTMENT • TWO OPPORTUNITIES 15 Directors’ review Directors’ review for the year ended 30 June 2005 (continued)

DISPOSALS The following properties were sold in the year under review: Surplus/ Surplus/ Net (deficit) on (deficit) on Selling proceeds carrying value original cost yield Property Location R 000 R 000 R 000 % 78 Fox Street Johannesburg inner city 39 890 (110) 1 658 18,70 Centurion Value World Centurion 31 498 (2) 386 14,60 Curatio Johannesburg 14 147 1 647 819 9,18 Innes Chambers Johannesburg inner city 13 040 (490) 7 820 11,80 Edura Johannesburg inner city 12 883 316 (8 975) 8,56 Rand Central Johannesburg inner city 6 327 187 387 14,14 76 Juta Street Braamfontein 5 275 4 137 3 369 1,96 Bosman Building Johannesburg inner city 4 824 1 924 2 998 14,14 Medical City Johannesburg inner city 4 483 783 1 298 14,14 6 Skietlood Isando 3 017 (83) (330) Main Rd, Wynberg Cape Town 2 284 484 585 7,50 Standard Bank Pinetown 2 126 (74) 126 Embankment Park (25%) Centurion 2 117 344 0,10 Woolworths, Wynberg Cape Town 1 915 (181) (181) BSW Land Midrand 1 297 (953) Elzella Polokwane 1 159 199 105 12,24 West End Centre Johannesburg inner city 1 000 (100) (894) 8,39 Hollandia House Johannesburg inner city 876 476 134 13,26 32 Albany Grove Durban inner city 853 (47) (47) 11,46

Total 149 011 8 113 9 602 12,70

ONE INVESTMENT • TWO OPPORTUNITIES 17

Directors’ review for the year ended 30 June 2005 (continued)

PROPERTY PORTFOLIO At 30 June 2005, the property portfolio comprised a total of 244 properties worth R4-billion, with a lettable area of 1,97-million square metres. A full schedule of properties can be found on pages 61 to 67.

Top 20 properties by value % of Property Location R 000 portfolio value Golden Walk Germiston 180 000 4 Poyntons Pretoria inner city 127 604 3 Maynard Mall Cape Town 116 000 3 Cleary Park Port Elizabeth 107 800 3 Jewel City Johannesburg inner city 82 097 2 Shoprite Park Parow 74 600 2 Standard Bank Pretoria inner city 66 962 2 Rivonia Square Sandton 63 000 2 111 Commissioner Street Johannesburg inner city 56 000 1 37 Sauer Street* Johannesburg inner city 55 550 1 11 Diagonal Street Johannesburg inner city 55 400 1 320 West Street Durban inner city 55 200 1 Alberton Mall Alberton 55 192 1 Nedbank Centre Nelspruit 53 716 1 Besterbrown Nelspruit 52 550 1 Boxer Centre Hammanskraal 52 233 1 Middestad Centre Bloemfontein inner city 51 400 1 Sammy Marks Portion 3 Pretoria inner city 48 800 1 Zanza Pretoria inner city 48 700 1 Sage Life Towers* Johannesburg inner city 44 450 1 1 447 254 33

Properties acquired during the year to 30 June 2005

*Sold but not yet transferred (refer to post balance sheet event note).

ONE INVESTMENT • TWO OPPORTUNITIES 19 Directors’ review for the year ended 30 June 2005 (continued)

SectorSectorialal spread by spread lettable area

m² % Retail 784 707 40 Office 872 107 44 Industrial 315 808 16 1 972 622 100

GeographicalGeographical spread spread by by lettable lettable area area

m² % Gauteng 1 165 118 59 KwaZulu-Natal 302 009 15 Western Cape 100 663 5 Eastern Cape 94 149 5 North West 93 689 5 Free State 73 303 4 Mpumalanga 68 552 3 Limpopo 50 388 3 Northern Cape 24 751 1 1 972 622 100

20 ONE INVESTMENT • TWO OPPORTUNITIES Directors’ review for the year ended 30 June 2005 (continued)

LOCATION BY LETTABLE AREA Retail Offices Industrial Total % of % of % of % of m2 total m2 total m2 total m2 total

Major metropolitan inner cities Johannesburg 80 419 10 231 763 27 55 949 18 368 131 19 Pretoria 46 279 6 140 155 16 186 434 10 Durban 27 898 4 116 474 13 144 372 7 Bloemfontein 23 169 3 14 911 2 38 080 2 Cape Town 1 455 21 148 2 22 603 1 179 220 23 524 451 60 55 949 18 759 620 39

Other areas Johannesburg area 133 934 17 44 820 5 93 628 30 272 382 14 Germiston 40 291 5 1 886 61 257 19 103 434 5 Braamfontein 4 931 1 82 262 10 87 193 4 Cape Town area 60 896 8 17 164 2 7 070 2 85 130 4 Port Elizabeth 27 779 4 30 412 4 15 782 5 73 973 4 Durban area 32 735 4 11 979 1 28 787 9 73 501 4 Nelspruit 35 836 5 13 838 2 49 674 2 Klerksdorp 22 145 3 20 372 2 42 517 2 Polokwane 21 211 3 16 243 2 2 250 1 39 704 2 Pretoria area 7 350 1 28 701 3 36 051 2 Pietermaritzburg 19 366 2 10 639 1 30 005 2 Alberton 26 527 3 26 527 1 Vaal Triangle 19 981 2 3 717 1 23 698 1 Kimberley 8 291 1 11 425 1 19 716 1 Other 144 214 18 54 198 6 51 085 16 249 497 13 605 487 77 347 656 40 259 859 82 1 213 002 61 Total lettable area 784 707 100 872 107 100 315 808 100 1 972 622 100

Lease expiry profile (let area) m2 400 000 22%

21% ² ² 350 000 m m 300 000 16% 17% ² ² m m 250 000 5% 381 389 359 473

² 11%

200 000 m ² 295 748

8% m 150 000 284 331 ² m 100 000 93 869

50 000 188 036 148 568 0 d n thly e 06 e 07 e 08 e 09 e 10 n n n n n n Mo d beyo n July 05 – Ju July 06 – Ju July 07 – Ju July 08 – Ju July 09 – Ju July 10 a July 10

ONE INVESTMENT • TWO OPPORTUNITIES 21

Directors’ review for the year ended 30 June 2005 (continued)

LETTING ACTIVITY Leases covering 430 110 m2 were concluded during the year under review, of which 73% (314 395 m2) represent renewals and 27% (115 715 m2) relate to new lettings. Leases covering 422 382 m2 expired during the year, of which 74% were renewed. This compares favourably to the renewal rate of 69% in the previous financial year.

Letting activity for the year under review is summarised as follows: Total Unlettable* Lettable Vacant Let area area area area area (m2)(m2)(m2)(m2)% (m2)% Portfolio as at 1 July 2004 1 960 801 40 591 1 920 210 271 610 14 1 648 600 86 Properties acquired 191 507 191 507 16 567 9 174 940 91 Properties disposed (147 023) (23 894) (123 129) (43 275) 35 (79 854) 65 Reclassification: vacant to unlettable 20 059 (20 059) (20 059) Reclassification: unlettable to vacant (4 093) 4 093 4 093 2 005 285 32 663 1 972 622 228 936 12 1 743 686 88 Decrease in vacancy (7 728) 7 728 Leases expired during year 422 382 (422 382) Total lettings during year (430 110) 430 110 — Renewals (314 395) 74 314 395 — New lettings (115 715) 115 715

Portfolio as at 30 June 2005 2 005 285 32 663 1 972 622 221 208 11 1 751 414 89

*Represents mothballed office space Vacancies have improved by 3% to 11% for the year and this equates to a net decrease in vacancies of 7 728 m2. The improved position is mainly as a result of changes in the portfolio arising from acquisitions and disposals of properties and a 10 year lease having been concluded with the Johannesburg City Council, which took the 10 514 m2 of vacant space in 61 Jorissen Street. The Council, in terms of its lease, will occupy the entire building of 18 500 m2 in time. Further lettings which contributed to the improvement were concluded with: ● The Department of Statistics which took 1 516 m2 at 85 on Field Street; ● The Department of Agriculture which took 2 505 m2 at Lakeview Terrace; ● Topics and Ideals took 1 855 m2 at Middestad; ● A college took 1 658 m2 at 43 Goldman Street; ● Subash Taylor attorneys took 1 553 m2 at 176 Schoeman Street; and ● Fruit and Veg City took 1 263 m2 at Shoprite Park, Parow. Some of the major leases that expired and were not renewed include: ● The South African National Defence Force which vacated 7 562 m2 at 15 Hartley Street. Negotiations with two listed companies are currently underway to take up the space.

ONE INVESTMENT • TWO OPPORTUNITIES 23

Directors’ review for the year ended 30 June 2005 (continued)

● The Department of Trade and Industry which vacated the entire 14 341 m2 at Zanza. However, the building has been re-let to the Department of Public Service and Administration on a five year lease. The building is in the process of being refurbished and fitted out to suit the tenant. The Department of Public Service and Administration will vacate 13 537 m2 at Batho Pele House when they move to Zanza. ApexHi has received an undertaking from South African Management and Development Institute to rent 5 000 m2 of the space being vacated.

Unlettable space 4 093 m2 of previously mothballed offices at Education Centre have been let to two colleges.

Vacancies The strong letting activity, coupled with the changes in the portfolio arising from acquisitions, disposals and mothballing, have reduced vacancies from 271 610 m2 (14%) to 221 208 m2 (11%). This vacant space however, only represents a potential 3% of annual projected rental.

Lettable area vs vacancy m2 1 000 000 2 900 000 872 107 m 2 800 000 784 707 m 700 000 600 000 500 000 400 000 315 808 m2 300 000 200 000 145 677 m2 (17%) 2 100 000 54 681 m (7%) 20 850 m2 (7%) 0 Retail Offices Industrial

Lettable area Vacancy

REFURBISHMENTS AND UPGRADES The 6 000 m2 mothballed office space in Castle Mansions has been sold and the purchaser converted the space into residential apartments. The retail space below the residential component is still owned by ApexHi, and should benefit from the residents who have moved into the apartments. The Biccard House conversion to 54 units in Braamfontein was also completed in the year under review at a cost of R4,5 million. A headlease arrangement is in place whereby the property will be leased on a return of 15% per annum on the capital outlay. The vacant office component of 66 Smal Street was recently earmarked for conversion to residential apartments on the same basis as Biccard House. The cost of the conversion to 145 apartments will be R16-million and ApexHi s return from the headlease to be entered into will be 13%. In addition, ApexHi has invested R28,9-million in refurbishments and upgrades to commercial and retail properties in the portfolio, with another R88,0-million earmarked to be spent. In Pretoria, ApexHi is currently undertaking a R37-million upgrade to the Zanza building — to be renamed Batho Pele — following the securing of a five year lease with the Department of Public Service and Administration for 14 000 m2. The refurbishment encompasses upgrades to the fa ade, lobbies, floors, lifts and toilets. ApexHi is also investing R50-million in upgrading Rivonia Square. This includes new mall floor finishes, ceilings, shop fronts, escalators and lighting. A number of A grade tenants, including Planet Fitness will be added to the Rivonia Square tenant mix. Jewel City has also benefited from an upgrade. R10-million has been spent on upgrading the security systems, access control, entrances, lobbies, toilets, lifts and additional parking bays.

ONE INVESTMENT • TWO OPPORTUNITIES 25

Directors’ review for the year ended 30 June 2005 (continued)

GEARING It is the company s policy to manage and reduce risk by fixing as much debt as possible, for as long as possible. Total gearing amounts to R1,162-billion, of which 83% — or R965,2-million — has been fixed. The floating debt of R196,8-million currently bears interest at 9,5% per annum. The all-inclusive fixed rate has reduced from 12,5% per annum at 30 June 2004 to 10,99% per annum at 30 June 2005. The reduction is partly a function of the repo-rate reduction, and partly a result of the company s reduced risk margin. Prior to the new rates, the average maturity date was four years. This has now been extended to seven years, with some rates fixed to 2015. The gearing is currently at 28,7% of the property portfolio. To capitalise on the current favourable interest rate environment, the company’s objective is to gear to 30%, although in terms of the articles of association, it is permitted to gear up to 35%. The following table outlines the new breakdown of fixed interest rates. All inclusive Maturity R 000 rate % date Fixed term loan 220 000 9,47 17 January 2007 Fixed term loan 150 000 10,69 27 July 2010 Fixed term loan 150 000 10,73 21 July 2010 Fixed term loan 70 200 12,08 28 February 2012 Fixed term loan 50 000 11,69 11 May 2015 Fixed term loan 150 000 11,52 27 February 2015 Fixed term loan 75 000 12,48 02 March 2015 Fixed term loan 100 000 12,18 02 March 2015 965 200 10,99

Since listing in the PLS sector in 2001, the average all-inclusive fixed rate has reduced, from as high as 13,15% down to the current 10,99%.

History of fixes

Weighted average all inclusive fixed rate % 13,5

13,0 13,15% 12,87% 12,85% 12,50% 12,5 12,0 11,5 11,0 10,99% 10,5 10,0 9,5 2001 2002 2003 2004 2005

ONE INVESTMENT • TWO OPPORTUNITIES 27 Directors’ review for the year ended 30 June 2005 (continued)

LIQUIDITY, TRADING VOLUMES AND SHARE PRICE ApexHi s liquidity continues to remain well above the sector average, with 59% of the company s units in issue being traded during the year. 102,7-million A units were traded, equating to 56% of the weighted average units in issue, while 116,2-million B units, equating to 63% were traded in the same period. The share price over the period increased steadily. The A unit share price climbed from 830 cents at 30 June 2004 to a high of 1 065 cents at end June 2005. The B units share price peaked at 1 079 cents at end June 2005, up from 740 cents at the end of June 2004.

Share prices and volumes traded A unit B unit Combined Weighted Value Weighted Value Weighted Value Month average R Volume R 000 average R Volume R 000 average R Volume R 000 July 2004 8,28 10 838 802 89 721 7,45 8 241 475 61 439 15,73 19 080 277 151 160 August 2004 8,56 10 689 597 91 510 8,05 6 807 758 54 803 16,61 17 497 355 146 313 September 2004 8,50 12 259 020 104 241 8,40 8 665 108 72 806 16,91 20 924 128 177 047 October 2004 8,77 7 215 044 63 308 8,59 8 143 514 69 963 17,37 15 358 558 133 271 November 2004 9,30 11 649 198 108 384 9,29 12 262 553 113 901 18,59 23 911 751 222 285 December 2004 9,59 7 533 465 72 251 9,60 5 604 207 53 822 19,19 13 137 672 126 073 January 2005 9,90 7 306 402 72 331 9,63 10 419 269 100 345 19,53 17 725 671 172 676 February 2005 10,25 4 730 908 48 497 9,86 16 800 714 165 732 20,12 21 531 622 214 229 March 2005 10,06 7 311 487 73 517 10,06 7 591 569 76 395 20,12 14 903 056 149 912 April 2005 10,03 6 695 631 67 166 10,07 8 343 876 84 053 20,10 15 039 507 151 219 May 2005 10,17 8 093 431 82 342 10,14 12 684 929 128 678 20,32 20 778 360 211 020 June 2005 10,31 8 437 540 87 009 10,29 10 676 823 109 831 20,60 19 114 363 196 840 9,34 102 760 525 960 277 9,39 116 241 795 1 091 768 18,74 219 002 320 2 052 045 Average per month 8 563 377 80 023 9 686 816 90 981 18 250 193 171 004 Weighted average units in issue 184 085 061 184 085 061 368 170 122 Tradeability 56% 63% 59%

Share price fluctuation Cents 1 200

1 000

800

600 1 Jul 1 Aug 1 Sep 1 Oct 1 Nov 1 Dec 1 Jan 1 Feb 1 Mar 1 Apr 1 May 1 Jun 2004 2004 2004 2004 2004 2004 2005 2005 2005 2005 2005 2005 A unit B unit

28 ONE INVESTMENT • TWO OPPORTUNITIES Directors’ review for the year ended 30 June 2005 (continued)

PROFESSIONAL PROPERTY AND ASSET MANAGEMENT ApexHi s asset management is outsourced to the ApexHi-Manco Trust. The Manco Trust, which after the sale by Mvelaphanda Resources of its 25% holding to the other holders, is 76% owned by Madison Property Fund Managers and 24% owned by ApexHi s executive directors. Property management is outsourced to Broll Property Group (Pty) Limited ( Broll ), which is 40% owned by Mvelaphanda. Broll has established a separate division that focuses exclusively on the ApexHi portfolio. This division is an extension of the ApexHi management team and has nine offices throughout the country to provide hands-on management of the portfolio. Each office has a regional manager, with a team of leasing specialists, administrative staff, accounting personnel and a maintenance team. The contract has recently been extended for a further five years, terminating on 30 September 2011. Board of directors

Fees paid to Broll 2005 % 2004 R’000 change R 000 Administration commission 44 022 20 36 557 Lease commission 11 821 98 5 957 Secretarial fee 2 500 2 500 Total 58 343 30 45 014 The 20% increase in administration commission is directly attributable to the growth in the portfolio whilst the 98% increase in lease commission is as a result of the increased letting activity, most notably the five year deal concluded at Zanza with the Department of Public Service and Administration and the renewal of AngloGold at 11 Diagonal Street.

Fees paid to ApexHi-Manco Trust The agreement between the company and the Manco Trust shall remain in force until 30 June 2012, after which either party may give six months written notice of termination. There are no performance-based incentive fees paid to the trust. The trust bears all salary and related costs of the management staff employed by the company, with the exception of the chief executive officer. The monthly asset management fee is equivalent to 1/12 of 0,5% per annum of: ● the market capitalisation (based on a 14-day volume weighted trading price) of the company on the last trading day each month; plus ● the aggregate of the company s borrowings on that day. An asset management fee of R22,6-million was paid to the Manco Trust in terms of the agreement for the year under review.

ONE INVESTMENT • TWO OPPORTUNITIES 29 Directors’ review for the year ended 30 June 2005 (continued)

VALUATION OF PROPERTIES BY EXTERNAL VALUERS In accordance with the company s accounting policy, the portfolio has been valued by external registered valuers as at 30 June 2005. The valuation of the portfolio at R4,05-billion has given rise to a fair value adjustment in the income statement for the year of R574,7-million, representing a 16,5% increase in value.

BOARD OF DIRECTORS There were no resignations from or additions to the board during the year under review. Subsequent to 30 June 2005, Ayesha Rehman was appointed non-executive and independent director of ApexHi. Ms Rehman is the financial manager of the Johannesburg Housing Company, and will serve on ApexHi’s audit committee. Stewart Shaw-Taylor resigned as non-executive director on 21 July 2005. Mr Shaw-Taylor, managing director of Standard Bank Properties, has been a director of ApexHi since 2001, representing Standard Bank. He has played a major role in the development and growth of ApexHi and the board thanks him for his contribution to the company.

THE PROPERTY CHARTER The draft Property Charter is attracting much debate and has focused many of the industry s brightest minds on the restructuring of South Africa s property sector. There is no doubt that this is in the long-term interests of the country and must form a vital part of the broader economic and social transformation of our country. ApexHi supports the spirit and intent of the Property Charter and continues to explore innovative ways to build on commitments already made.

INVESTING IN OUR COMMUNITIES ApexHi continues to invest skills and resources in a wide range of community and social initiatives in and around the inner city of Johannesburg. The initiatives seek to improve, in a sustainable way, the built environments and social conditions in areas where some of ApexHi s properties are to be found. ApexHi is a member of the Johannesburg Inner City Coalition, whose members comprise property owners with substantial holdings, and who are involved in projects and programmes to upgrade the inner city. Specifically, ApexHi has been, and continues to be, involved in the upgrading of Smal Street Mall, Eloff Street, and the legal precinct. Together with the Johannesburg Development Agency, ApexHi has developed an urban renewal strategy for the area immediately surrounding Jewel City, a complex in the south-eastern part of the city that houses the country s major jewellery and diamond businesses. The plan seeks to significantly enhance what is called the Jewellery District to attract additional tenants and develop the area s appeal to tourists. ApexHi also supports and works with the Johannesburg Housing Company, the leading developer and owner of social housing in Johannesburg, and with a number of other organizations who share a commitment to revitalising and utilising properties which are highly unlikely to be used for commercial use again. In addition to utilising empty space, these initiatives are delivering affordable accommodation to a high-demand market and providing additional impetus to an already vibrant retail sector. As dealt with elsewhere in this report, ApexHi has worked with partners to convert office space above ground level to residential accommodation in two buildings, and a third building has been identified for conversion in the near future.

30 ONE INVESTMENT • TWO OPPORTUNITIES Directors’ review for the year ended 30 June 2005 (continued)

ApexHi s widely publicised Space-2-Go project not only helps revitalize empty office space but directly assists approved entrepreneurs, trade unions and associated businesses, NGOs and charity organizations by providing six months rent free in designated vacant retail or office space. Launched during the course of the year under review, Space-2-Go has already attracted tenants for some 4 500 m2 of space. Tenants are only accountable for operating costs such as electricity and water, and ApexHi does not offer a tenant installation allowance. After six months, a lease agreement is signed with the tenant for 50% of the going rate, and after 12 months, the tenant will pay market related rentals.

POST BALANCE SHEET EVENTS

Acquisitions Number of Issue Initial yield Price Cash of units price before Building Location Sector R 000 R 000 issued R gearing (%) Glenrand MIB* Randburg Offices 155 000 31 000 6 048 780 20,50 12,0 Capital portfolio* Eastern Cape, Industrial/ 62 000 62 000 14,0 (12 buildings) Gauteng, office/retail KwaZulu-Natal 123 Malan Street Rustenburg Offices/retail 19 500 19 500 12,6 Sanburn Benoni Offices 15 550 15 550 13,1 Department of Education King Williams Town Offices 8 000 4 000 198 020 20,20 13,5

260 050 132 050 6 246 800 12,7

*Approval by Competition Commission required.

Disposals Surplus/ Net selling (deficit) on Selling price original cost Yield Building Location Sector R 000 R 000 % 37 Sauer Street Johannesburg inner city Offices 55 550 22 Sage Life Towers Johannesburg inner city Offices 44 450 6 650 19 30 Simmonds Street Johannesburg inner city Offices 14 400 7 100 22 Traduna Port Elizabeth inner city Offices/retail 9 000 278 13 Fabcos Johannesburg inner city Offices 7 100 4 774 8 Group 5 Wynberg, Johannesburg Industrial 6 750 3 622 11 Loveday House Johannesburg inner city Offices 2 500 (2 532) City Block Johannesburg inner city Industrial 1 200 377 13

140 950 20 269 19

ONE INVESTMENT • TWO OPPORTUNITIES 31 Directors’ review for the year ended 30 June 2005 (continued)

PRIMA TRANSACTION On 21 July 2005 it was announced that ApexHi approved the acquisition of the entire property portfolio of Prima Property Trust for a purchase price of R996,2-million, subject to Prima unit holder approval and a number of regulatory approvals. The purchase price will be settled by the issue of 37 989 144 ApexHi A units and 37 989 144 ApexHi B units at R20 per combined unit and payment of R236,4-million in cash

Portfolio after the post balance sheet event acquisitions and disposals referred to above and assuming the necessary approvals are obtained regarding the Prima transaction. At 30 June 2005 % After % Property portfolio (R 000) 4 050 042 5 165 301 Gearing (R 000) 1 162 337 1 413 814 % gearing 29 27 Number of units in issue 189 776 988 234 012 932 Number of properties 244 423 Lettable area (m2) 1 972 622 2 339 077 — Retail 784 707 40 995 750 43 — Office 872 107 44 921 774 39 — Industrial 315 808 16 421 553 18 Vacancies 221 208 240 669 — Retail 54 681 64 085 — Office 145 677 153 734 — Industrial 20 850 22 850 Vacancy (%) 11 10

FUTURE PROSPECTS ApexHi will continue to acquire yield enhancing properties in addition to the recent Prima acquisition, dispose of underperforming properties where opportunities to make significant profits present themselves and fix interest rates at lower levels. This, combined with growth in income from the existing portfolio, should ensure distributions of between R2,35 and R2,40 per combined unit for the 2006 financial year. It is anticipated that the A unit holders will participate for the first time in the increased distribution during the second half of the year. This forecast has not been reviewed or reported on by ApexHi s auditors.

APPRECIATION The directors of ApexHi would like to record their appreciation of the team at Broll, who continue to respond admirably to the growth of the portfolio. Appreciation is also extended to Madison Property Fund Managers for its invaluable advice and counsel.

32 ONE INVESTMENT • TWO OPPORTUNITIES Directorate and administration

COMPANY DETAILS AUDITORS ApexHi Properties Limited Grant Thornton (Incorporated in the Republic of South Africa) South African member of Grant Thornton (Registration number 1999/000238/06) International Third Floor, 2 Arnold Road, Rosebank, 2196 137 Daisy Street, Sandown, 2196 (PO Box 526, Parklands, 2121) (Private Bag X28, Benmore, 2010) Tel: (011) 283-0150 Fax: (011) 283-0160 Tel: (011) 322-4500 Fax: (011) 322-4545 E-mail: [email protected], Website: www.apexhi.co.za TRANSFER SECRETARIES BOARD OF DIRECTORS Ultra Registrars (Pty) Limited M Wainer (Chairman) 11 Diagonal Street, Johannesburg, 2001 G G L Leissner* (Chief Executive Officer) (PO Box 4844, Johannesburg, 2000) J F Bihl# Tel: (011) 834-2266 Fax: (011) 834-4398 W E Cesman D J Feinblum* TRUSTEES FOR DEBENTURE HOLDERS W M Kirchmann# Edward Nathan (Pty) Limited A Rehman# 150 West Street, Sandown, 2196 C van Wyk* (PO Box 783347, Sandton, 2146) Tel: (011) 269-7600 Fax: (011) 269-7899 *Executive. #Independent.

BANKERS The Standard Bank of South Africa Limited 3 Simmonds Street, Johannesburg, 2001 (PO Box 61029, Marshalltown, 2107) Tel: (011) 636-9112 Fax: (011) 631-4371

SECRETARY AND REGISTERED OFFICE Broll Property Group (Pty) Limited 2nd Floor, Broll House, 27 Fricker Road, Illovo, Johannesburg, 2196 (PO Box 1455, Saxonwold, 2132) Tel: (011) 441-4000 Fax: (011) 441-4082

CORPORATE ADVISORS AND SPONSOR Java Capital (Pty) Limited 2 Arnold Road, Rosebank, 2196 (PO Box 471917, Parklands, 2121) Tel: (011) 283-0110 Fax: (011) 283-0065

ONE INVESTMENT • TWO OPPORTUNITIES 33 Profile of directors

NON-EXECUTIVE CHAIRMAN Marc Wainer (56) 30 years experience in real estate. Currently serves on the boards of Redefine Income Fund Limited, Hyprop Investments Limited and Prima Property Trust Managers Limited. He is a director of and has a 25% interest in Madison Property Fund Managers, asset manager to various property funds. Appointed to the board on 5 March 2001.

EXECUTIVE DIRECTORS Gerald George Leo Leissner (63) CA(SA) Chief Executive Officer 41 years experience in real estate. Appointed to the board on 19 October 2000.

Deon Jeffrey Feinblum (37) BCom (Hons), MBA 14 years experience in real estate. Appointed to the board on 30 April 2003.

Colette van Wyk (37) BCompt (Hons), CA(SA) Financial Director 14 years experience in property finance. Appointed to the board on 30 April 2003.

NON-EXECUTIVE DIRECTOR Wolf Eli Cesman (63) BCom, CA(SA), H Dip Tax Law 37 years experience in real estate. Currently serves on the boards of Redefine Income Fund Limited as non-executive Chairman, Hyprop Investments Limited and Prima Property Trust Managers Limited. He is a director of and has a 25% interest in Madison Property Fund Managers, asset manager to various property funds. Appointed to the board on 5 March 2001.

INDEPENDENT NON-EXECUTIVE DIRECTORS Joseph Friedrich Bihl (68) BSc (QS), PrQS, RQS, MRICS (PM) Professional valuer and property consultant. Appointed to the board on 1 September 2003.

William Michael Kirchmann (67) RQS, MAQS Quantity surveyor and private property developer. Appointed to the board on 30 April 2003.

Ayesha Rehman (55) Dip Financial Accounting Financial manager: Johannesburg Housing Company Appointed to the board on 4 August 2005.

34 ONE INVESTMENT • TWO OPPORTUNITIES Corporate governance

ApexHi complies with the principles of the Code of Corporate Practices and Conduct set out in the King Code II on Corporate Governance ( King Code ).

In so doing, the directors recognise the need to conduct the enterprise with integrity and in accordance with generally acceptable corporate practices. This includes timely, relevant and meaningful reporting to its unit holders and other stakeholders providing a proper and objective perspective of the company.

The directors have, accordingly, established mechanisms and policies appropriate to the company’s business in keeping with its commitment to best practices in corporate governance in order to ensure compliance with the King Code. These are reviewed by the directors from time to time.

The board has adopted a policy in terms of which the company will obtain an independent report on its corporate governance standards at least once every three years and that it will implement any changes deemed necessary arising from such report.

The formal steps taken by the directors to demonstrate the company s commitment to the achievement and maintenance of internationally recognised corporate governance standards and principles are summarised as follows:

BOARD OF DIRECTORS The board of directors consists of three executive directors and five non-executive directors of which three are independent directors. The non-executive directors bring to the company a wide range of skills and experience that enable them to contribute an independent view and to exercise objective judgement in matters requiring the directors’ decisions. The chairperson is a non-executive director, whose role is independent from the chief executive officer. The performance of both the chairman and chief executive officer are evaluated annually.

All directors will be subject to retirement by rotation and re-election by ApexHi unit holders at least once every three years in accordance with the articles of association.

Board meetings are held at least quarterly, with additional meetings convened when circumstances necessitate. The board has set the strategic objectives of the company and will determine investment and performance criteria as well as be responsible for the proper management, control, compliance and ethical behaviour of the businesses under its direction. The board has established a number of committees to give detailed attention to certain of its responsibilities and which will operate within defined, written terms of reference.

Executive committee The board established an executive committee, which is responsible to the board for the monitoring and supervision of the company’s strategic objectives and key policies and implementation of the board’s instructions. It deals with all executive business of ApexHi not specifically reserved for the board. The committee consists of the executive directors and senior managers, with the chief executive officer acting as chairperson.

Audit committee The board established an audit committee whose primary objective is to provide the board with additional assurance regarding the efficacy and reliability of the financial information used by the directors to assist them in the discharge of their duties. The committee is required to provide satisfaction to the board that adequate and appropriate financial and operating controls are in place; that significant business, financial and other risks have been identified and are being suitably managed; and that satisfactory standards of governance, reporting and compliance are in operation. The committee sets the principles for recommending the use of the external auditor for non-audit services.

ONE INVESTMENT • TWO OPPORTUNITIES 35 Corporate governance

(continued)

Within this context, the board is responsible for the group’s systems of internal financial and operational control. The executive directors are charged with the responsibility of determining the adequacy, extent and operation of these systems. Comprehensive reviews and testing of the effectiveness of the internal control systems in operation are performed by external practitioners, who report to the audit committee.

The audit committee whose members are all non-executive directors, meets at least twice a year. Executives and managers responsible for finance, the internal auditors and the external auditors are in attendance.

Remuneration committee The board established a remuneration committee whose main responsibility is to monitor the remuneration policies of ApexHi and to review and approve the remuneration set for executive directors and management. Salaries are market related, determined annually and no performance-related payments are made. The remuneration committee meets annually and is made up of three non-executive directors. The financial statements accompanying this report reflect the total of executive and non-executive earnings and other benefits in accordance with the requirements of the Companies Act,1973 and the King Report.

Investment committee The board established an investment committee, made up of executive and at least three non-executive directors, one of whom acts as chairperson. The investment committee meets regularly to consider acquisitions and sales of investment properties.

Valuation committee The board established a valuation committee made up of one executive and two non-executive directors. Investment properties are fair valued annually by independent valuers. The committee appoints the independent valuers, considers and approves the valuations. The committee meets at least once a year to review the independent valuations and if necessary, will meet to review the directors valuations at the interim stage.

Board evaluation committee The board established a committee consisting of an independent non-executive director and the chief executive officer which meets annually to review and make recommendations, if necessary, on the composition and effectiveness of the board, the performance of its chairman and the appointment of independent directors.

DIRECTORS’ DEALINGS AND PROFESSIONAL ADVICE The company operates a policy prohibiting dealings in the company’s units by directors, certain managers and other parties who have access to confidential information, during periods immediately preceding the announcement of its quarterly distributions and at any other time deemed necessary by the board. The board has established a procedure for directors, in furtherance of their duties, to take independent professional advice, if necessary, at the company’s expense. All directors have access to the advice and services of the company secretary.

RISK MANAGEMENT The objective of risk management is to identify, assess, manage and monitor the risks to which the business is exposed. This is a board responsibility. The most significant risks faced by ApexHi are tenant vacancies. Further risks are total or partial destruction of the investment properties and other insurable risks in this regard such as public liability. Furthermore, the level of borrowings and the exposure to interest rate movement are carefully monitored and covered.

36 ONE INVESTMENT • TWO OPPORTUNITIES Corporate governance

(continued)

With assistance from expert risk consultants, risks are being assessed and appropriate insurance cover purchased for all material risks above pre-determined self-insured limits. Levels of cover are re-assessed annually in light of claim experience and events affecting the group, internally and externally. The board has adopted a policy in terms of which the board, at one of its quarterly meetings, will review the management of risks, including legislative requirements, within the business. The management of risk will deal with short term performance issues and general strategic issues relating to the business. Use will be made of reasonable business targets, key performance indicators or scorecards. Performance will be measured by the board against the set targets. Financial risk management is dealt with in the notes to the financial statements.

COMMUNICATION AND INVESTOR RELATIONS It is the policy of ApexHi to meet regularly with institutional shareholders and investment analysts, as well as to provide presentations on the company and its performance. The company also communicates with the broader investor community via press releases, limited radio advertising, regular e-mail investor alerts and through information contained on its website.

EMPLOYMENT EQUITY ApexHi places particular emphasis on the development and training of its people, and will endeavour to ensure that employees are offered equal opportunity and appropriate participation. This policy has been expanded beyond its employees to those organisations to whom the company outsources substantial areas relating to the management of its core business. The compliance of this policy will be reviewed annually by the audit committee.

ETHICS ApexHi is committed to promoting the highest standards of ethical behaviour amongst all its employees. This policy has been expanded beyond its employees to those organisations to whom the company outsources substantial areas relating to the management of its core business. The compliance of this policy will be reviewed annually by the audit committee.

SOCIAL AND ENVIRONMENTAL REPORTING Social The company is involved in social issues complementary to its core business and it reports on these in the Directors Review.

Environmental It is the policy of the company and Broll, to whom the company outsources the property management, to comply with the highest standards, where practical, in all matters relating to the environment whether these relate to legal or voluntary issues. Compliance is the responsibility of the chief executive officer.

ONE INVESTMENT • TWO OPPORTUNITIES 37 Corporate governance

(continued)

ATTENDANCE AT MEETINGS Number of Number of meetings meetings held attended BOARD MEMBERS M Wainer (Chairman) 44 G G L Leissner (Chief Executive Officer) 44 J F Bihl 4 4 W E Cesman 4 4 D J Feinblum 4 4 W M Kirchmann 4 4 S Shaw-Taylor 4 4 C van Wyk 4 3

EXECUTIVE COMMITTEE MEMBERS G G L Leissner (Chairman) 41 36 R Abramowitz 1 1 D J Feinblum 41 39 J A Laws 41 38 I D Nicol 41 37 F W Perkins 37 34 C van Wyk 28 23

AUDIT COMMITTEE MEMBERS W E Cesman (Chairman) 22 S Shaw-Taylor 2 2

REMUNERATION COMMITTEE MEMBERS W M Kirchmann (Chairman) 11 M Wainer 1 1 S Shaw-Taylor 1 1

INVESTMENT COMMITTEE MEMBERS M Wainer (Chairman) 14 14 W E Cesman 14 13 D J Feinblum 14 13 W M Kirchmann 8 6 G G L Leissner 14 13 S Shaw-Taylor 14 8 C van Wyk 14 10

VALUATION COMMITTEE MEMBERS S Shaw-Taylor (Chairman) 11 M Wainer 1 1 C van Wyk 1 1

BOARD EVALUATION COMMITTEE MEMBERS W M Kirchmann 1 1 G G L Leissner 1 1

38 ONE INVESTMENT • TWO OPPORTUNITIES Report of the independent auditors

TO THE MEMBERS OF APEXHI PROPERTIES LIMITED We have audited the financial statements of ApexHi Properties Limited set out on pages 40 to 59 for the year ended 30 June 2005. These financial statements are the responsibility of the company’s directors. Our responsibility is to report on these financial statements.

Scope We conducted our audit in accordance with statements of South African Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement. An audit includes: ● examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; ● assessing the accounting principles used and significant estimates made by management; and ● evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

Audit opinion In our opinion, the financial statements fairly present, in all material respects, the financial position of the company at 30 June 2005 and the results of its operations and cash flows for the year then ended in accordance with South African Statements of Generally Accepted Accounting Practice, and in the manner required by the Companies Act in South Africa.

Grant Thornton Chartered Accountants (SA) Registered Accountants and Auditors Johannesburg 4 August 2005

Certificate by company secretary

We declare that to the best of our knowledge, for the year ended 30 June 2005, the company has lodged with the Registrar of Companies all such returns as are required of a public company in terms of Section 268 G(d) of the Companies Act 1973, as amended, and all such returns are true, correct and up to date.

Broll Property Group (Pty) Limited Secretaries 4 August 2005

ONE INVESTMENT • TWO OPPORTUNITIES 39 Directors’ report and statement of responsibility

A directors’ report has not been prepared as full details of ApexHi’s operations are contained in the directors’ review. Other statutory requirements and disclosures are reflected in the aforementioned report, the financial statements, the notes thereto and the statement of corporate governance. The directors are responsible for selecting and adopting sound accounting practices, for 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 that achieve fair presentation. The financial statements presented on pages 42 to 59 have been prepared in accordance with Statements of Generally Accepted Accounting Practice in South Africa, and include amounts based on judgements and estimates made by management. The directors have also prepared other information included in the report and are responsible for both its accuracy and its consistency with the financial statements. The going concern basis has been adopted in preparing the financial statements. The directors have no reason to believe that the company will not be a going concern in the foreseeable future based on forecasts and available cash resources. These financial statements support the viability of the company. The financial statements have been audited by the independent auditors, Grant Thornton, who have unrestricted access to all financial records and related data, including minutes of the board of directors and committees of the board. The directors believe that all representations made to the independent auditors during their audit are valid and appropriate. The unqualified audit report of Grant Thornton is presented on page 39.

DIVIDENDS No dividend has been paid or declared during the period under review, as the company distributes all its income as interest on the debentures.

BOARD MEMBERS The names of the directors of the company in office at the date of this report are:

Date appointed M Wainer (Chairman) 5 March 2001 G G L Leissner (Chief Executive Officer)* 19 October 2000 J F Bihl# 1 September 2003 W E Cesman 5 March 2001 D J Feinblum* 30 April 2003 W M Kirchmann# 30 April 2003 A Rehman# 4 August 2005 C van Wyk* 30 April 2003

*Executive. #Independent.

Changes in the directorate are set out on page 30.

Interests of the directors in the units of the company are disclosed in note 24 to the financial statements.

40 ONE INVESTMENT • TWO OPPORTUNITIES Directors’ report and statement of responsibility

(continued)

SHARE AND DEBENTURE CAPITAL AND NUMBER OF UNITS IN ISSUE MOVEMENTS Number of units Share capital Debentures in issue R 000 R 000 At beginning of year 173 777 398 34 1 563 997 Movements during the year 15 999 590 4 143 996 — Property acquisitions (refer page 15) 11 944 043 3 107 496 — MICC acquisitions 4 055 547 1 36 500

At end of year 189 776 988 38 1 707 993

AUDITORS Grant Thornton were appointed on 13 February 2002 and will continue in office in accordance with Section 270(2) of the Companies Act, 1973.

The financial statements were approved by the board of directors on 4 August 2005 and are signed on its behalf by:

M Wainer Chairman

G G L Leissner Chief Executive Officer

ONE INVESTMENT • TWO OPPORTUNITIES 41 Balance sheet as at 30 June 2005

2005 2004 Note R’000 R 000

ASSETS Non-current assets 4 151 475 2 976 157 Investment properties 2 4 050 042 2 976 157 Listed investment 3 101 433 Current assets 227 268 182 570 Receivables 4 54 954 43 108 Cash at bank 172 314 139 462

TOTAL ASSETS 4 378 743 3 158 727

EQUITY AND LIABILITIES Share capital and reserves 5, 6, 7 1 201 871 531 964 Non-current liabilities 2 958 191 2 455 963 Debenture capital 8 1 707 993 1 563 997 Deferred taxation 9 87 861 8 342 Interest bearing borrowings 10 1 162 337 883 624 Current liabilities 218 681 170 800 Trade and other payables 11 110 508 77 208 Debenture interest payable 15 108 173 93 592

TOTAL EQUITY AND LIABILITIES 4 378 743 3 158 727

Net asset value per unit (cents) Number of units Share Debenture Total A unit 189 776 988 316,66 540,00 856,66 B unit 189 776 988 316,66 360,00 676,66 Total – 30 June 2005 633,32 900,00 1 533,32 A unit 173 777 398 153,06 540,00 693,06 B unit 173 777 398 153,06 360,00 513,06 Total — 30 June 2004 306,12 900,00 1 206,12

42 ONE INVESTMENT • TWO OPPORTUNITIES Income statement for the year ended 30 June 2005

2005 2004 Note R’000 R 000

Revenue 12 763 710 600 820 Property expenses (217 613) (170 645) Administrative expenses (36 656) (26 484) Letting cost amortisation (8 592) (6 012) Profit from operations 13 500 849 397 679 Finance costs 14 (119 244) (94 478) Interest income 20 851 21 242 Investment income 7 133 Profit before debenture interest 409 589 324 443 Debenture interest 15 (409 589) (324 443) Profit before capital items — Capital items 582 791 75 032 Change in fair value of investment properties 574 678 70 212 Net surplus on disposal of investment properties 8 113 4 820

Profit before taxation 582 791 75 032 Taxation 16 (77 333) (1 269) Net profit after taxation 505 458 73 763 The reconciliation between earnings and headline earnings is disclosed in note 17. Distributions, earnings and headline earnings (cents) Headline Weighted average Distribution Earnings earnings number of units per unit per unit per unit A unit 184 085 061 102,00 239,29 102,00 B unit 184 085 061 120,50 257,79 120,50 Total – year to 30 June 2005 222,50 497,08 222,50 A unit 152 499 647 102,00 126,18 102,00 B unit 152 499 647 110,75 134,93 110,75 Total — year to 30 June 2004 212,75 261,11 212,75

ONE INVESTMENT • TWO OPPORTUNITIES 43 Statement of changes in equity for the year ended 30 June 2005

Share Share Capital Fair value Accumu- capital premium reserve reserve lated Note 5 Note 5 Note 6 Note 7 loss Total R 000 R 000 R 000 R 000 R 000 R’000

Balance at 1 July 2003 26 218 318 2 381 58 226 (12 221) 266 730 Issue of ordinary shares 8 191 463 191 471 Net profit for the year 73 763 73 763 Realised accumulated net write-down of investment properties sold (1 587) 1 587 — Net surplus on disposal of investment properties 4 820 (4 820) — Transfer to fair value reserve 68 943 (68 943) — Balance at 30 June 2004 34 409 781 5 614 128 756 (12 221) 531 964 Issue of ordinary shares 4 151 556 151 560 Net profit for the year 505 458 505 458 Realised accumulated net write-up of investment properties sold 1 489 (1 489) — Net surplus on disposal of investment properties 8 113 (8 113) — Transfer to fair value reserve — investment properties 497 345 (497 345) — Increase in fair value of listed investment (net of deferred capital gains tax) 12 889 12 889 Balance at 30 June 2005 38 561 337 15 216 637 501 (12 221) 1 201 871

44 ONE INVESTMENT • TWO OPPORTUNITIES Cash flow statement for the year ended 30 June 2005

2005 2004 Note R’000 R 000

OPERATING ACTIVITIES Cash generated from operations 18 528 574 422 730 Finance costs (119 244) (94 478) Interest income 20 851 21 242 Investment income 7 133 Debenture interest paid (395 008) (298 567) Net cash generated from operating activities 42 306 50 927

INVESTING ACTIVITIES Purchase of investment properties including capitalised improvements, transaction and letting costs (646 376) (828 351) Net proceeds on disposal of investment properties 19 149 011 30 152 Purchase of listed investment (86 358) Net cash utilised in investing activities (583 723) (798 199)

FINANCING ACTIVITIES Issue of A and B units 295 556 575 939 Interest bearing borrowings raised 278 713 218 532 Net cash generated from financing activities 574 269 794 471 Net increase in cash at bank 32 852 47 199 Cash at bank at the beginning of the year 139 462 92 263 Cash at bank at the end of the year 172 314 139 462

ONE INVESTMENT • TWO OPPORTUNITIES 45 Notes to the financial statements for the year ended 30 June 2005

1. ACCOUNTING POLICIES The financial statements are prepared in accordance with and comply with South African Statements of Generally Accepted Accounting Practice and the Companies Act of South Africa, 1973. The financial statements are prepared on the historical cost basis except for investment properties and listed investments which are carried at fair value, and incorporate the following accounting policies which are consistent with those applied in the previous year. The financial statements are prepared on a going concern basis. (a) Capital items Capital items cover those amounts which are not considered to be typical of the operating business and generally include profit and loss on disposal or fair value adjustments of investment property, impairment losses and realised profits on the disposal of listed investments. (b) Financial instruments Financial instruments are initially measured at cost when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below: ● listed investments are classified as available for sale investments and are measured as stated in (f); ● trade and other receivables are stated at their cost less impairment; ● cash and cash equivalents are measured at fair value; ● equity instruments are recorded at the proceeds received, net of direct issue costs; ● debenture capital is considered to be a held-to-maturity financial instrument and is recognised at amortised cost; ● interest bearing borrowings are recognised at amortised cost; ● trade and other payables are stated at their value at initial recognition. (c) Interests in joint ventures Joint ventures are contractual arrangements whereby the company undertakes jointly controlled activities with third parties. The company s interest in a jointly controlled entity is accounted for by the proportional consolidation method. Under this method, the company includes its share of the joint venture s individual income and expenses, assets and liabilities in the relevant components of the financial statements on a line-by-line basis. (d) Investment properties Investment properties, both freehold and leasehold, are properties held for the purpose of earning rental income and for capital appreciation. Investment properties are initially recorded at cost and include transaction costs on acquisition. Subsequent expenditure is capitalised at cost. Investment properties are valued annually by independent registered valuers and adjusted to fair value as determined at balance sheet date. Any gain or loss arising from a change in the fair value of the investment property is included in net profit for the period to which it relates. Changes in fair value are transferred to a fair value reserve in the statement of changes in equity. Gains and losses on the disposal of investment properties are recognised in net profit and are calculated as the difference between the sale price and the carrying value of the property. Realised gains and losses are transferred to a capital reserve, including any prior period fair value adjustments.

(e) Letting costs (tenant installation costs and letting commissions) The tenant installation portion is capitalised to the cost of the investment property. Both components are amortised over the period of the lease.

(f) Listed investments Listed investments are classified as available for sale investments and are measured at market value at balance sheet date. Unrealised gains or losses arising from fair value adjustments are recognised directly in equity until the disposal of the investment at which time the accumulated gain or loss previously included in equity is included in the net profit or loss for the period.

46 ONE INVESTMENT • TWO OPPORTUNITIES Notes to the financial statements for the year ended 30 June 2005 (continued)

(g) Revenue recognition Revenue comprises rentals and operating cost recoveries recognised in accordance with the payment terms stipulated in the relevant lease agreements. There is no material difference between this basis and the accounting for rentals on a straight line basis in accordance with AC105/IAS17 as the company has a large number of tenants and a well balanced lease expiry profile. Municipal cost recoveries were previously classified as revenue. These recoveries are now off- set against the municipal charge to which they relate. (Note 12) Interest is accrued on a time basis, by reference to the principal outstanding and the interest rate applicable. (h) Segmental information On a primary basis the company is organised into two major business segments: ● Investment properties — Office, Retail and Industrial ● Corporate costs On a secondary basis the following geographical segments have been identified: Cities/towns categorised into: ● Major metropolitan inner cities ● Other areas of significance (i) Taxation The charge for current tax is based on the results for the period as adjusted for items which are non-assessable or disallowed. It is calculated using rates that have been enacted or substantially enacted or by the balance sheet date. Deferred income tax is provided using the comprehensive liability method for all temporary differences arising between the tax bases of assets and liabilities and their carrying values for financial reporting purposes. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction which affects neither the tax profit nor the accounting profit and is not a business combination. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability settled. Accordingly, deferred taxation on the fair value surplus on investment properties is provided at the capital gains tax rate, only to the extent that there are not sufficient tax losses to shield the charge. 2005 2004 R’000 R 000

2. INVESTMENT PROPERTIES Carrying value at beginning of year 2 976 157 2 108 938 Acquisitions during the year 590 037 793 070 Freehold investment properties 555 454 752 359 Leasehold investment properties 34 583 40 711 Carrying value of freehold investment properties sold (140 898) (25 332) Additional costs capitalised 50 068 29 269 Improvements to investment properties 28 893 21 817 Capitalised transaction costs 6 765 7 271 Capitalised tenant installation costs 20 681 6 193 Amortisation of tenant installation costs (6 271) (6 012) Change in fair value 574 678 70 212 Carrying value at end of year 4 050 042 2 976 157

ONE INVESTMENT • TWO OPPORTUNITIES 47 Notes to the financial statements for the year ended 30 June 2005 (continued)

2. INVESTMENT PROPERTIES (continued) (a) Full details of freehold and leasehold investment properties owned by the company are contained in a register of investment properties, which is open for inspection by members at the registered office of the company (refer page 61). (b) In terms of the accounting policy, the portfolio is valued annually. For the purposes of the independent valuation at 30 June 2005, the portfolio was split between: Davis Langdon Crosher James, Nigel Hill and Associates, Motseng Marriott Property Valuation Services, DDP Valuers, Asset Valuation Services and Mills Fitchet, all registered valuers in terms of Section 19 of the Property Valuers Profession Act (Act No 47 of 2000). The valuations have been undertaken using a discounted cash flow method, with discount and exit capitalisation rates determined by market evidence. (c) Investment properties are encumbered as reflected in note 10.

3. LISTED INVESTMENT 2005 2004 R’000 R 000

Cost 85 062 Capitalised transaction costs 1 296 Change in fair value 15 075 Listed investment at fair value 101 433 The listed investment comprises 12 758 859 units in MICC Property Income Fund Ltd and equates to a 19% interest in MICC.

4. RECEIVABLES Trade receivables 14 533 9 634 Less: Impairment (6 376) (5 292) 8 157 4 342 Municipal recoveries not yet billed to tenants 12 236 11 935 Municipal deposits 3 094 2 811 Other receivables 31 467 24 020 54 954 43 108

5. SHARE CAPITAL AND PREMIUM Authorised 500 000 000 (2004: 500 000 000) A ordinary shares of 0,01 of a cent each 50 50 500 000 000 (2004: 500 000 000) B ordinary shares of 0,01 of a cent each 50 50

Issued 189 776 988 (2004: 173 777 398) A ordinary shares of 0,01 of a cent each 19 17 189 776 988 (2004: 173 777 398) B ordinary shares of 0,01 of a cent each 19 17 38 34

48 ONE INVESTMENT • TWO OPPORTUNITIES Notes to the financial statements for the year ended 30 June 2005 (continued)

2005 2004 R’000 R 000

5. SHARE CAPITAL AND PREMIUM (continued) Share premium Balance at beginning of year 409 781 218 318 Premium on shares issued 152 364 191 463 Share issue expenses (808) Balance at end of year 561 337 409 781 (a) The authorised and unissued share capital is under the control of the directors who are authorised to allot and issue it to such person or persons on such terms and conditions as they may determine, the renewal of such authority being sought at the next annual general meeting of the company. (b) The right of the B ordinary shares to be repaid the nominal value of the B ordinary shares is subordinate to the right to repayment of the nominal value of the A ordinary shares. A ordinary shares and B ordinary shares rank pari passu in all other respects.

6. CAPITAL RESERVE Balance at beginning of year 5 614 2 381 Realised accumulated net write-up/(write-down) of investment properties sold 1 489 (1 587) Net surplus on disposal of investment properties 8 113 4 820 Balance at end of year 15 216 5 614

7. FAIR VALUE RESERVE Balance at beginning of year 128 756 58 226 Change in fair value of investment properties (net of deferred taxation) 497 345 68 943 Realised accumulated net (write-up)/write-down of investment properties sold — transferred to capital reserve (1 489) 1 587 Change in fair value of listed investment (net of deferred capital gains tax) 12 889 Balance at end of year 637 501 128 756

8. DEBENTURE CAPITAL Authorised 500 000 000 (2004: 500 000 000) A debentures of 540 cents each 2 700 000 2 700 000 500 000 000 (2004: 500 000 000) B debentures of 360 cents each 1 800 000 1 800 000 Issued 189 776 988 (2004: 173 777 398) A debentures of 540 cents each 1 024 796 938 398 189 776 988 (2004: 173 777 398) B debentures of 360 cents each 683 197 625 599 1 707 993 1 563 997

ONE INVESTMENT • TWO OPPORTUNITIES 49 Notes to the financial statements for the year ended 30 June 2005 (continued)

8. DEBENTURE CAPITAL (continued) (a) The debentures are irrevocably linked to the issued ordinary shares of the company and can only be sold together with the relevant linked shares. The debentures are unsecured and have been subordinated in favour of the other creditors of the company. (b) Interest accrues to the debenture holders quarterly. The interest entitlement on each debenture included in the unit will in the aggregate be not less than 95% of the company s net income for that distribution period. Net income as defined in the debenture Trust Deed excludes goodwill amortised and any exceptional items as defined. (c ) In terms of the Trust Deed, the debentures are redeemable by special resolution at the instance of the debenture holders, on five years’ notice, at any time after 25 years after the date of allotment of the relevant debentures. Full details of the class of debentures and the terms and conditions of the debentures are set out in the Trust Deed, which is available for inspection. 2005 2004 R’000 R 000

9. DEFERRED TAXATION Balance at beginning of the year 8 342 7 073 Rate change adjustment (278) Fair value adjustment of listed investment 2 186 Fair value adjustment of investment properties 81 772 10 597 Deferred tax asset on loss for tax purposes (4 161) (9 328) Balance at end of the year 87 861 8 342 Investment properties 98 853 17 670 Listed investment 2 186 Tax loss (13 178) (9 328) 87 861 8 342

10. INTEREST BEARING BORROWINGS The Standard Bank of South Africa Limited 1 162 337 883 624

Secured by first mortgage bond over investment properties with a book value of R4,0 billion (2004: R3,0 billion), cession of all rental income from properties, insurance policy proceeds and subordination of debentures. The loan, repayable on 28 February 2007, bears interest at an average rate of 10,74% p.a. (2004: 12,01% p.a.). This loan is repayable on demand under certain circumstances, the most significant being that the value of the future rental income from A-grade tenancies should not fall below 70% of the outstanding loan amount. The discounted cash flow from A grade tenancies at 30 June 2005 is R1,2-billion (2004: R986 million) In terms of its articles of association and the existing loan facility, the borrowing powers of the company, excluding the debentures, are limited to 35% of the valuation of the consolidated property portfolio. The borrowings of the company at 30 June 2005 were R1,162-billion (2004: R884-million) which is 28,7% (2004: 29,7%) of the value of the property portfolio.

50 ONE INVESTMENT • TWO OPPORTUNITIES Notes to the financial statements for the year ended 30 June 2005 (continued)

2005 2004 R’000 R 000

11. TRADE AND OTHER PAYABLES Trade payables 35 502 23 587 Municipal expenses 24 600 15 484 Tenant deposits 16 208 10 655 Value-added taxation 4 471 5 491 Other payables 29 727 21 991 110 508 77 208 12. REVENUE Rentals and operating expense recoveries 763 710 594 917 Rendering of services — 1 673 Sale of land — 4 230 763 710 600 820 Municipal cost recoveries were previously included in revenue. They are now off-set against the expense to which they relate. This change has had the effect of reducing revenue and property expenses for 2004 by R84,9-million.

13. OPERATING PROFIT Profit from operations is arrived at after taking into account the items detailed below: Auditors remuneration —Audit fees 650 643 Current year 750 750 Prior year (100) (107) —Interim review 75 75 Fees relating to non-employees —property management, accounting and secretarial fees 47 945 40 184 —asset management fees 22 649 14 754 —letting commissions 9 518 7 254 —valuation fees 704 560 —transfer secretaries fees 176 169 —sponsoring brokers 80 76 81 072 62 997 Staff costs — total packages 1 651 1 582 Number of employees at end of year* 8 7 *Salary and related costs of 7 (2004: 6) of these employees are recovered from ApexHi-Manco Trust. Directors emoluments comprise amounts charged against operating profit and amounts borne by the ApexHi-Manco Trust as follows: Distribution 2005 2004 Remuneration from ApexHi- R’000 R 000 Directors emoluments package Manco Trust Total Total — Executive directors D J Feinblum 747* 1 022 1 769 1 354 G G L Leissner 1 651# 1 022 2 673 2 215 C van Wyk 754* 1 022 1 776 1 329 6 218 4 898 *Costs recovered from ApexHi-Manco Trust. #Costs charged against operating profit.

ONE INVESTMENT • TWO OPPORTUNITIES 51 Notes to the financial statements for the year ended 30 June 2005 (continued)

2005 2004 R’000 R 000

13. OPERATING PROFIT (continued)

—Non-executive directors J F Bihl 50 42 W E Cesman (paid to Madison Property Fund Managers) 50 50 W M Kirchmann 50 50 S Shaw-Taylor (paid to Standard Bank Properties) 50 50 M Wainer (paid to Madison Property Fund Managers) 50 50 250 242

14. FINANCE COSTS Interest bearing borrowings 118 389 93 990 Loss on interest rate swap 183 488 Other 672 119 244 94 478

15. DEBENTURE INTEREST Total distributions 409 589 324 443 — First quarter 96 444 71 655 — Second quarter 100 604 76 848 — Third quarter 104 368 82 348 — Fourth quarter 108 173 93 592

Distribution per A unit (cents) 102,00 102,00 — First quarter 25,50 25,50 — Second quarter 25,50 25,50 — Third quarter 25,50 25,50 — Fourth quarter 25,50 25,50 Distribution per B unit (cents) 120,50 110,75 — First quarter 29,00 27,25 — Second quarter 29,50 27,25 — Third quarter 30,50 27,25 — Fourth quarter 31,50 29,00

Total distribution (cents) 222,50 212,75 — First quarter 54,50 52,75 — Second quarter 55,00 52,75 — Third quarter 56,00 52,75 — Fourth quarter 57,00 54,50

52 ONE INVESTMENT • TWO OPPORTUNITIES Notes to the financial statements for the year ended 30 June 2005 (continued)

2005 2004 R’000 R 000

16. TAXATION Deferred taxation (77 333) (1 269) Reconciliation of taxation charge Net profit before tax at 29% (2004: 30%) 169 009 22 510 Reduction in taxation — net capital surplus not subject to normal tax (169 009) (22 510) Rate change 278 Deferred capital gains taxation (81 772) (10 597) Deferred taxation on loss for tax purposes — current year 3 452 9 328 — prior year 709 (77 333) (1 269)

17. EARNINGS AND HEADLINE EARNINGS Reconciliation between earnings and headline earnings Net profit after taxation 505 458 73 763 Adjusted for: Change in fair value of investment properties — net of taxation (497 345) (68 943) Net surplus on disposal of investment properties (8 113) (4 820) Headline earnings — shares — Debenture interest 409 589 324 443 Headline earnings — units 409 589 324 443

18. CASH GENERATED FROM OPERATIONS Profit before taxation 582 791 75 032 Adjustments for: Finance costs 119 244 94 478 Interest income (20 851) (21 242) Investment income (7 133) Debenture interest 409 589 324 443 Non-cash items (574 199) (69 020) Letting cost amortisation 8 592 6 012 Change in fair value of investment properties (574 678) (70 212) Net surplus on disposal of investment properties (8 113) (4 820) Operating profit before working capital changes 509 441 403 691 Working capital changes 19 133 19 039 Decrease in inventories — 2 361 Increase in receivables (14 167) ( 977) Increase in payables 33 300 17 655 Cash generated from operations 528 574 422 730

ONE INVESTMENT • TWO OPPORTUNITIES 53 Notes to the financial statements for the year ended 30 June 2005 (continued)

2005 2004 R’000 R 000

19. NET PROCEEDS ON DISPOSAL OF INVESTMENT PROPERTIES Carrying value of disposals 140 898 25 332 Net surplus on disposals 8 113 4 820 149 011 30 152

20. INTEREST IN JOINT VENTURE The company has a 25% interest in Dainfern East Joint Venture, which acquired land for development. The development is now complete, all stands have been sold and transferred. The following amounts represent the company s share of the assets, liabilities, income and expenses of the joint venture and are included in the financial statements of the company: BALANCE SHEET Assets Current assets 31 270 Receivables and prepayments 1 147 Cash at bank 30 123

Total assets 31 270 Equity and liabilities Capital and reserves 31 109 Accumulated profit 7 331 7 409 Joint venture loan (7 300) (7 300) Current liabilities — 161 Trade and other payables — 161

Total equity and liabilities 31 270

INCOME STATEMENT Revenue — 4 230 Cost of sales (53) (1 995) Operating expenses (25) (538) Interest income — 74 (Loss)/profit for the year (78) 1 771

CASH FLOW INFORMATION Cash (utilised in)/generated from operating activities (93) 3 546 Cash utilised in financing activities — (5 125) Cash at beginning of year 123 1 702 Cash at end of year 30 123

There are no contingencies relating to the company s interest in the joint venture.

54 ONE INVESTMENT • TWO OPPORTUNITIES Notes to the financial statements for the year ended 30 June 2005 (continued)

2005 2004 R’000 R 000

21. CAPITAL COMMITMENTS Acquisition of investment properties 260 050 263 480 (mortgage facilities have been arranged to finance the cash portion of this commitment — refer post-balance sheet event information on page 31). Capital improvements on investment properties 88 025 4 436 348 075 267 916 22. CONTINGENT LIABILITIES AND GUARANTEES There are no material guarantees or contingent liabilities at the date of this report.

23. FINANCIAL RISK MANAGEMENT The company s financial instruments consist mainly of deposits with banks, loans from banks, accounts receivable, listed investments, debentures and accounts payable. In respect of the aforementioned financial instruments, book value approximates fair value. Exposure to interest rate, credit and liquidity risk arises in the normal course of business. INTEREST RATE RISK The company s exposure to interest rate risk and the effective interest rates on financial instruments at balance sheet date are: Weighted Less More average effective than 1 — 5 than interest rate 1 year years 5 years Total % R 000 R 000 R 000 R’000 Year ended 30 June 2005 Financial assets Listed investment 12,0 101 433 101 433 Accounts receivable 54 954 54 954 Cash at bank 4,5 — 9,5 172 314 172 314 Total financial assets 328 701 328 701 Financial liabilities Trade and other payables 110 508 110 508 Interest bearing borrowings 10,74 1 162 337 1 162 337 Debenture interest payable 108 173 108 173 Debenture capital undefined 1 707 993 1 707 993 Total financial liabilities 218 681 1 162 337 1 707 993 3 089 011

Year ended 30 June 2004 Financial assets Accounts receivable 43 108 43 108 Cash at bank 6,5 — 15,0 139 462 139 462 Total financial assets 182 570 182 570 Financial liabilities Trade and other payables 77 208 77 208 Interest bearing borrowings 12,01 883 624 883 624 Debenture interest payable 93 592 93 592 Debenture capital undefined 1 563 997 1 563 997 Total financial liabilities 170 800 883 624 1 563 997 2 618 421

ONE INVESTMENT • TWO OPPORTUNITIES 55 Notes to the financial statements for the year ended 30 June 2005 (continued)

Credit risk management Potential areas of credit risk consist of trade receivables and short-term cash investments. Trade receivables consist of a large, widespread customer base. The financial positions of these customers are monitored on an ongoing basis. All specific doubtful debts have been impaired and at year-end management did not consider there to be any material credit risk exposure that was not already covered by an impairment adjustment. It is company policy to deposit short-term cash investments with reputable financial institutions. Liquidity risk management The company monitors liquidity risk by monitoring forecast cash flows. The company s borrowings are limited by its articles of association to 35% of the directors bona fide valuation of the consolidated property portfolio. 2005 2004 R’000 R 000 Value of the property portfolio 4 050 042 2 976 157 35% thereof 1 417 515 1 041 655 Total borrowings utilised 1 162 337 883 624 Unutilised borrowings capacity 255 178 158 031 Refer notes 10 and 21.

24. DIRECTORS’ INTERESTS Interest of directors in contracts Directors emoluments are set out in note 13. The directors have certified that, other than through the ApexHi-Manco Trust (refer note 25), they were not materially interested in any transaction of any significance with the company. Interest of directors in units of the company The beneficial holdings of the directors of the company and their immediate families in the issued units of the company are detailed below. Number of A units Number of B units 2005 2004 2005 2004 Direct beneficial interest D J Feinblum 1 775 1 775 23 000 23 000 W M Kirchmann 5 000 5 000 5 000 5 000 C van Wyk 13 704 13 704 Indirect beneficial interest M Wainer — 569 034 There have been no changes in the directors interests between the end of the financial year and the date of this report.

56 ONE INVESTMENT • TWO OPPORTUNITIES Notes to the financial statements for the year ended 30 June 2005 (continued)

25. RELATED PARTY TRANSACTIONS During the year, the company, in the ordinary course of business, entered into various transactions with related parties. These transactions occurred under terms that are no more favourable than those arranged with third parties. 2005 2004 R’000 R 000 Board representation, financier and unit holder: Standard Bank Bond administration fees 2 262 1 700 Non-executive director s fees 50 50 Finance costs 118 389 87 521 Borrowings 1 162 337 883 624 Rivonia Square was purchased from Standard Bank Properties for R63,0-million settled by the issuing of 4 117 647 ApexHi A and B units at a combined price of R15,30. At the date of transfer the combined unit price was R20,07. ApexHi-Manco Trust The trust is the asset manager of the company. Certain of the directors of the company are beneficiaries and/or trustees of the trust. Asset management fee (0,5% p.a. of the market capitalisation plus borrowings of the company) 22 649 14 754 The beneficiaries of the trust at 30 June 2005 are: Madison Property Fund Managers* 76% 57% ApexHi Executive directors 24% 18% Mvelaphanda Holdings — 25% *The shareholders of Madison Property Fund Managers at 30 June 2005 are: Standard Bank Properties 30% 50% M Wainer 25% 25% W E Cesman 25% 25% S Shaw-Taylor 20% M Wainer, W E Cesman and S Shaw-Taylor were directors of ApexHi Properties Limited throughout the year. The agreement between the company and the trust shall remain in force until 30 June 2012, after which either party may give six months written notice of termination. There are no performance-based incentive fees paid to the trust. The trust bears all salary and related costs of the staff employed by the company, with the exception of the chief executive officer. Madison Property Fund Managers Commission paid — Shops for Africa acquisition 375

ONE INVESTMENT • TWO OPPORTUNITIES 57 Notes to the financial statements for the year ended 30 June 2005 (continued)

26. SEGMENTAL INFORMATION* Business segments – 30 June 2005 Total investment Corporate Land Office Retail Industrial properties costs trading Total R 000 % R 000 % R 000 % R 000 R 000 R 000 R 000 Revenue 357 233 47 354 174 46 52 020 7 763 427 283 763 710 Property expenses (105 290) 49 (100 951) 46 (11 372) 5 (217 613) (217 613) Administrative expenses (36 578) (78) (36 656) Letting cost amortisation (6 885) 80 (1 505) 18 (202) 2 (8 592) (8 592) Segment operating result 245 058 45 251 718 47 40 446 8 537 222 (36 295) (78) 500 849 Finance costs (22) (131) (94) (247) (118 997) (119 244) Interest income 397 273 18 688 20 163 20 851 Investment income 7 133 7 133 Segment operating result before debenture interest 245 433 46 251 860 47 40 370 7 537 663 (127 996) (78) 409 589 Debenture interest (409 589) (409 589) Segment operating result before capital items 245 433 251 860 40 370 537 663 (537 585) (78) Change in fair value of investment properties 262 610 281 779 30 289 574 678 574 678 Net surplus on disposal of investment properties 7 894 (83) 302 8 113 8 113 515 937 46 533 556 48 70 961 6 1 120 454 (537 585) (78) 582 791 Other information Investment properties 1 643 636 2 141 316 265 090 4 050 042 4 050 042 Other assets 20 196 21 943 3 049 45 188 283 482 31 328 701 Total assets 1 663 832 40 2 163 259 53 268 139 7 4 095 230 283 482 31 4 378 743 Total liabilities 32 930 37 091 4 344 74 365 3 102 507 3 176 872 Geographical segments – 30 June 2005 Letting cost Segment Property amorti- operating Investment % of total Revenue expenses sation result properties investment R 000 R 000 R 000 R 000 R 000 properties Major Metropolitan Inner Cities Johannesburg 148 410 (38 772) (1 089) 108 549 561 069 14 Pretoria 82 480 (18 112) (2 850) 61 518 474 967 12 Durban 74 128 (28 956) (723) 44 449 333 783 8 Cape Town 14 360 (2 065) (175) 12 120 89 400 2 Bloemfontein 18 403 (6 262) (178) 11 963 76 400 2 337 781 (94 167) (5 015) 238 599 1 535 619 38 Other areas Johannesburg area 79 967 (20 626) (250) 59 091 451 520 11 Cape Town area 41 698 (11 539) (468) 29 691 279 100 7 Germiston 35 003 (7 438) (13) 27 552 235 300 6 Nelspruit area 14 522 (2 446) 12 076 176 699 4 Port Elizabeth 31 071 (10 449) (139) 20 483 162 450 4 Braamfontein 32 147 (13 516) (944) 17 687 128 704 3 Pretoria area 19 020 (6 371) (304) 12 345 102 900 3 Polokwane 16 887 (3 977) (150) 12 760 102 650 3 Durban area 17 580 (7 615) (486) 9 479 84 930 2 Pietermaritzburg 13 298 (3 875) (19) 9 404 73 460 2 Alberton 9 655 (2 317) 7 338 62 192 2 Klerksdorp 14 283 (4 412) (5) 9 866 60 150 1 Vaal Triangle 9 490 (2 669) 6 821 48 300 1 Kimberley 6 501 (1 851) 4 650 37 700 1 Other 84 524 (24 345) (799) 59 380 508 368 12 425 646 (123 446) (3 577) 298 623 2 514 423 62 763 427 (217 613) (8 592) 537 222 4 050 042 100 *Where a property has office, rental and industrial components, it is classified to the component which generates more than 50% of the income.

58 ONE INVESTMENT • TWO OPPORTUNITIES Notes to the financial statements for the year ended 30 June 2005 (continued)

26. SEGMENTAL INFORMATION* Business segments – 30 June 2004 Total Dis- investment Corporate Land continuing Office Retail Industrial properties costs trading operations Total R 000 % R 000 % R 000 % R 000 R 000 R 000 R 000 R 000 Revenue 335 963 57 210 537 35 47 129 8 593 629 1 416 4 230 1 545 600 820 Property expenses (96 565) 57 (63 787) 37 (10 293) 6 (170 645) (170 645) Administrative expenses (23 588) (2 582) (314) (26 484) Letting cost amortisation (4 691) 78 (1 215) 20 (106) 2 (6 012) (6 012) Segment operating result 234 707 56 145 535 35 36 730 9 416 972 (22 172) 1 648 1 231 397 679 Finance costs (157) (36) (9) (202) (94 276) (94 478) Interest income 138 139 111 388 20 780 74 21 242 Investment income Segment operating result before debenture interest 234 688 56 145 638 35 36 832 9 417 158 (95 668) 1 722 1 231 324 443 Debenture interest (324 443) (324 443) Segment operating result before capital items 234 688 56 145 638 35 36 832 9 417 158 (420 111) 1 722 1 231 Change in fair value of investment properties 23 694 52 073 (5 555) 70 212 70 212 Net surplus on disposal of investment properties 2 434 2 386 4 820 4 820 260 816 53 200 097 41 31 277 6 492 190 (420 111) 1 722 1 231 75 032 Other information Investment properties 1 369 447 1 370 840 235 870 2 976 157 2 976 157 Other assets 14 072 11 867 1 925 27 864 137 586 12 475 4 645 182 570 Total assets 1 383 519 46 1 382 707 46 237 795 8 3 004 021 137 586 12 475 4 645 3 158 727 Total liabilities 21 528 17 914 3 409 42 851 2 575 514 4 378 4 020 2 626 763 Geographical segments – 30 June 2004 Letting cost Segment Property amorti- operating Investment % of total Revenue expenses sation result properties investment R 000 R 000 R 000 R 000 R 000 properties Major Metropolitan Inner Cities Johannesburg 153 674 (44 596) (1 045) 108 033 539 090 18 Pretoria 65 329 (14 545) (2 502) 48 282 319 300 11 Durban 58 821 (23 340) (251) 35 230 258 710 9 Bloemfontein 16 585 (4 886) (59) 11 640 71 650 2 Cape Town 13 905 (1 955) (117) 11 833 71 500 2 308 314 (89 322) (3 974) 215 018 1 260 250 42 Other areas Johannesburg area 80 968 (27 706) (260) 53 002 359 510 12 Cape Town area 23 142 (5 657) (183) 17 302 210 100 7 Germiston 15 045 (3 313) (10) 11 722 187 600 6 Port Elizabeth 15 473 (5 103) (13) 10 357 114 250 4 Braamfontein 30 335 (12 926) (187) 17 222 100 300 3 Pretoria area 20 862 (7 289) (280) 13 293 91 217 3 Polokwane 14 241 (3 217) (128) 10 896 85 160 3 Klerksdorp 11 211 (3 597) 7 614 63 000 2 Pietermaritzburg 12 638 (3 494) (20) 9 124 57 200 2 Durban area 10 859 (3 215) (482) 7 162 51 250 2 Alberton 2 701 (717) (227) 1 757 47 900 2 Kimberley 5 947 (1 393) 4 554 29 950 1 Vaal Triangle 1 395 (319) 1 076 7 120 0 Other 40 498 (3 377) (248) 36 873 311 350 11 285 315 (81 323) (2 038) 201 954 1 715 907 58 593 629 (170 645) (6 012) 416 972 2 976 157 100 *Where a property has office, rental and industrial components, it is classified to the component which generates more than 50% of the income. Refer directors review on page 20 for further segmental information.

ONE INVESTMENT • TWO OPPORTUNITIES 59 Analysis of unit holders for the year ended 30 June 2005

A UNITS B UNITS TOTAL Units held % Units held % Units held % Unit holding in excess of 5% of issued capital Marriott Funds 23 052 832 12 24 790 644 13 47 843 476 13 Redefine Income Fund 11 159 382 6 25 767 273 14 36 926 655 10 Stanlib 13 912 180 7 12 897 020 7 26 809 200 7 Other 141 652 594 75 126 322 051 66 267 974 645 70 189 776 988 100 189 776 988 100 379 553 976 100 Unit holder spread Public 178 612 606 94 163 968 011 86 342 580 617 90 Non-public 11 164 382 6 25 808 977 14 36 973 359 10 189 776 988 100 189 776 988 100 379 553 976 100 Number of unit holders 1 — 999 1 124 22 1 173 22 2 297 22 1 000 — 9 999 2 520 49 2 644 51 5 164 50 10 000 — 99 999 1 219 24 1 137 22 2 356 23 100 000 — 999 999 190 4 189 4 379 4 1 000 000 and above 31 1 26 1 57 1 5 084 100 5 169 100 10 253 100

60 ONE INVESTMENT • TWO OPPORTUNITIES Details of property portfolio for the year ended 30 June 2005

Lettable Balance area Vacant sheet value Province Property Location Sector (m2) (%) 30 June 2005

Gauteng 2 Rissik Street Johannesburg Office 5 515 22 386 000 3 Spartan Crescent Sandton Industrial 4 587 3 800 000 3 Sturdee Avenue Rosebank Office 3 704 10 100 000 5 Laub Street Johannesburg Industrial 15 436 6 800 000 11 Diagonal Street Johannesburg Office 32 955 32 55 400 000 17 Harrison Street Johannesburg Office 11 196 78 8 900 000 30 Simmonds Street Johannesburg Office 10 018 2 14 400 000 37 Sauer Street Johannesburg Office 26 158 55 550 000 43 Goldman Street Florida Office 1 658 2 200 000 50 Fox Street Johannesburg Office 3 584 3 500 000 52 Mimetes Road Johannesburg Industrial 7 567 8 600 000 61 Jorissen Street Braamfontein Office 19 282 4 18 754 328 64 Mimetes Road Johannesburg Industrial 5 049 48 3 800 000 111 Commissioner Street Johannesburg Office 28 473 7 56 000 000 125 Simmonds Street Braamfontein Office 4 660 9 100 000 176 Schoeman Street Pretoria Office 1 553 1 200 000 209 Smit Street Braamfontein Office 25 764 6 42 300 000 222 Smit Street Braamfontein Office 19 469 11 34 750 000 360 Pretoria Avenue Randburg Office 4 185 16 140 000 ABSA Centurion Centurion Retail 1 306 6 500 000 ABSA Derdepoort Pretoria Retail 870 3 100 000 ABSA Hercules Pretoria Retail 1 375 3 900 000 ABSA Kotze Street Johannesburg Retail 740 3 500 000 ABSA Malvern Germiston Retail 776 3 500 000 ABSA Pretoria West Pretoria Retail 866 2 900 000 ABSA Randburg Randburg Retail 1 532 8 000 000 ABSA Silverton Pretoria Retail 2 023 14 5 100 000 African City Johannesburg Retail 9 457 26 700 000 Alberton Mall Alberton Retail 16 527 1 55 192 400 Alvaro Centre Vanderbijlpark Retail 3 858 4 600 000 Annuity House Johannesburg Office 11 146 12 18 000 000 Batho Pele House Pretoria Office 20 263 15 37 700 000 Biccard House Braamfontein Office 2 605 4 500 000 Blackheath Galleries Randburg Retail 3 351 9 400 000 Business Furniture Centre Johannesburg Industrial 7 700 9 000 000 Castle Mansions Johannesburg Office 1 606 13 5 400 000 Cavaleros Malvern Germiston Office & Industrial 3 750 15 2 400 000 Chai Properties Wynberg Industrial 6 344 19 800 000 City Block Johannesburg Industrial 1 221 1 200 000 CMH Kempton Kempton Park Industrial 1 493 2 500 000 CMH Spartan Spartan Industrial 2 653 2 300 000 Corpgro Benoni Industrial 3 841 2 900 000 Curator Pretoria Office 7 978 23 000 000 Delpen Pretoria Office 5 550 15 250 000

ONE INVESTMENT • TWO OPPORTUNITIES 61 Details of property portfolio for the year ended 30 June 2005 (continued)

Lettable Balance area Vacant sheet value Province Property Location Sector (m2) (%) 30 June 2005

Gauteng Diesel Road Isando Industrial 7 273 3 700 000 (cont) Dobson Point Soweto Retail 3 063 15 5 300 000 Domus Pretoria Office 5 254 16 20 400 000 Dowerglen Plaza Edenvale Retail 3 002 13 780 000 Du Barry Centre Johannesburg Industrial 21 297 39 2 100 000 Duncan Street Pretoria Office 1 310 8 000 000 Education Centre Johannesburg Retail 5 744 12 000 000 Elna Sewing Machine Randburg Office 4 090 2 400 000 Emanzeni Pretoria Office 9 340 16 500 000 Fabcos House Johannesburg Office 4 781 30 7 100 000 Fernridge Randburg Retail 6 353 37 8 800 000 Ferreiras Alberton Alberton Retail 10 000 49 7 000 000 Ferreiras Honeydew Randburg Retail 27 000 22 600 000 Ferreiras North Riding Randburg Retail 27 146 36 500 000 Finpark Pretoria Retail 2 959 28 16 000 000 First National Bank Randfontein Retail 954 3 800 000 Geen & Richards Kempton Park Retail 1 063 4 200 000 Golden Walk Germiston Retail 34 447 1 180 000 000 Group 5 Wynberg Wynberg Industrial 14 872 6 750 000 Hatfield Forum East Pretoria Office 5 482 24 6 250 000 Horizon View Roodepoort Retail 19 845 9 38 000 000 Hudaco Park Germiston Industrial 33 077 8 18 000 000 Isando Junction Isando Retail 1 630 3 150 000 Jewel City Johannesburg Office 28 825 2 82 097 489 Kelhof Building Johannesburg Office 13 341 48 7 000 000 Kemsquare Kempton Park Retail 6 866 20 800 000 Kimberly-Clark Germiston Industrial 6 817 5 200 000 Log Square Johannesburg Industrial 17 995 4 700 000 Loveday House Johannesburg Office 4 864 100 2 500 000 Matlotlo House Johannesburg Office 10 649 17 600 000 McCarthy Centre, Turffontein Johannesburg Retail 5 935 5 948 000 McCarthy Motors Germiston Retail 4 871 7 200 000 Meadow Point Soweto Retail 4 604 10 8 300 000 Melville Properties Johannesburg Retail 1 094 7 200 000 Milady s Brakpan Retail 450 1 670 000 Mondeor Village Johannesburg Retail 2 042 7 302 000 Motor City Strydompark Randburg Retail 7 415 24 400 000 NBS Johannesburg Office 9 401 26 000 000 Nedbank Benoni Office 1 244 24 1 670 000 Nedbank Isando Office 1 125 3 150 000 Nedbank Centre Vereeniging Office 1 744 23 4 310 000 Northstate Johannesburg Office 10 833 28 10 800 000 Noswal Hall Braamfontein Office 8 422 31 8 800 000 OHM Street Industrial Park Randburg Industrial 12 708 22 600 000 Olivedale Corner Randburg Retail 6 811 18 400 000

62 ONE INVESTMENT • TWO OPPORTUNITIES Details of property portfolio for the year ended 30 June 2005 (continued)

Lettable Balance area Vacant sheet value Province Property Location Sector (m2) (%) 30 June 2005

Gauteng Opera Plaza Pretoria Office 15 002 5 38 500 000 (cont) Palm Court Roodepoort Retail 5 948 4 26 590 000 Perm Benoni Retail & Office 1 782 64 402 000 Perm Boksburg Retail & Office 1 655 32 1 420 000 Perm Kempton Park Retail & Office 3 181 10 4 150 000 Perm Krugersdorp Retail & Office 2 149 44 1 980 000 Perm Springs Office 2 011 3 640 000 Pimville Soweto Retail 3 657 15 7 700 000 Plantation Road 18 Edenvale Industrial 3 954 4 530 000 Plantation Road 20 Edenvale Industrial 4 209 5 270 000 Poyntons Pretoria Office 72 608 11 127 604 416 Prospecta Centre Randburg Retail & Office 1 995 8 3 020 000 Protea Point Soweto Retail 2 885 2 7 300 000 Rivonia Square Sandton Retail 26 419 27 63 000 000 Robot Industries Isando Retail 874 3 900 000 Royal Beech Nut Edenvale Industrial 15 272 26 600 000 S Burde Germiston Industrial 19 696 19 000 000 SA Eagle Krugersdorp Office 5 619 4 10 500 000 Sage Life Towers Johannesburg Office 14 071 44 450 000 Samancor House* Johannesburg Office 13 903 27 10 883 000 Sammy Marks Portion 1 Pretoria Retail 7 519 7 38 100 000 Sammy Marks Portion 3 Pretoria Retail 7 500 48 800 000 Sanlam Centre Vanderbijlpark Retail 18 096 12 40 500 000 Shoprite Eloff Street Johannesburg Retail 34 224 15 500 000 Shoreburg Pretoria Office 13 847 30 34 900 000 Smal Street Mall Johannesburg Retail & Office 18 105 17 36 356 634 Standard Bank Pretoria Retail & Office 21 502 4 66 962 339 Stansure House Braamfontein Office 6 251 10 500 000 Struktura, Hatfield Pretoria Office 4 037 14 8 500 000 The Pond Midrand Retail 5 501 6 9 900 000 TML House Randburg Retail & Office 6 220 60 9 230 000 Town Centre Boksburg Retail & Office 6 815 12 9 600 000 West Street Parkade Johannesburg Retail 3 333 67 4 246 000 Wholesale Housing Supplies Johannesburg Industrial 5 300 4 100 000 Wynberg 506 Wynberg Industrial 4 424 2 820 000 Wynpol 679 Wynberg Industrial 3 531 1 630 000 Zanza Pretoria Office 14 341 100 48 700 000 1 165 118 12 2 190 784 606

ONE INVESTMENT • TWO OPPORTUNITIES 63 Details of property portfolio for the year ended 30 June 2005 (continued)

Lettable Balance area Vacant sheet value Province Property Location Sector (m2) (%) 30 June 2005

KwaZulu- 4 Weightman Avenue Empangeni Retail 4 171 4 9 500 000 Natal 6 Durban Club Place Durban Office 8 832 15 20 820 000 40 Scott Street Newcastle Retail 2 312 1 8 900 000 85 on Field Durban Office 12 814 11 15 640 000 101 Lawley (Playtex) Durban Industrial 22 249 12 850 000 245 Voortrekker Road Durban Retail & Office 4 883 12 4 520 000 320 West Street Durban Retail & Office 46 129 32 55 200 000 328 Sydney Road Durban Retail & Office 7 628 22 6 500 000 423/429 Church Street Pietermaritzburg Retail 4 000 13 720 000 448 West Street Durban Retail 1 453 13 340 000 452 West Street Durban Retail 3 235 22 260 000 Argyle Centre Durban Retail 5 325 24 24 480 000 Berea Centre Durban Retail 21 877 11 14 000 000 Capital Centre Pietermaritzburg Retail 9 765 29 470 000 Devonshire Parking Garage Durban Office 800 22 250 000 Garlicks Durban Retail 10 112 16 29 600 000 Isipingo Junction Durban Retail 5 614 13 9 450 000 I-Talk House Durban Retail 4 996 14 12 000 000 Lakeview Terrace Richards Bay Retail & Office 11 490 23 29 000 000 Metro Cash & Carry Matatiele Retail 11 887 12 400 000 Nedbank Newcastle Retail & Office 14 700 35 5 400 000 Nedbank Centre, Durban Club Place Durban Office 13 049 14 810 000 Nedbank Mobeni Durban Retail & Office 929 1 130 000 Perm, Smith Street Durban Retail & Office 8 276 17 5 700 000 Perm Pietermaritzburg Retail & Office 1 603 24 2 500 000 Perm Plaza Newcastle Retail & Office 2 501 29 3 000 000 Pine Parkade* Durban Retail 2 791 1 34 170 000 Sentrachem Pinetown Industrial 7 070 10 690 000 Shell House Durban Office 12 453 35 972 924 Shepstone & Wylie Durban Office 5 535 12 360 000 Standard Bank, Longmarket Street Pietermaritzburg Office 4 743 5 450 000 Standard Bank Pietermaritzburg Retail 966 1 600 000 The Station Building Durban Office 6 645 10 18 830 000 Tolaram House Durban Office 6 920 28 580 000 Treasury House* Pietermaritzburg Retail & Office 8 928 20 720 000 Union Club Place Durban Office 5 328 3 4 250 000 302 009 13 571 062 924

64 ONE INVESTMENT • TWO OPPORTUNITIES Details of property portfolio for the year ended 30 June 2005 (continued)

Lettable Balance area Vacant sheet value Province Property Location Sector (m2) (%) 30 June 2005

Western Commissioner House Bellville Cape Town Office 3 928 15 000 000 Cape Eerste Rivier City Centre Stellenbosch Retail 6 717 5 19 500 000 Maynard Mall Cape Town Retail 24 092 1 116 000 000 Nedbank Parow Retail & Office 945 2 100 000 Parliament Towers Cape Town Office 8 726 5 24 600 000 Perm Parow Retail & Office 1 406 3 400 000 Perm Claremont Cape Town Retail & Office 3 184 10 9 500 000 Perm St Georges Mall Cape Town Office 927 3 300 000 Protea Assurance Cape Town Office 7 261 42 000 000 Sentrasure Cape Town Office 4 288 15 000 000 Shoprite Park Parow Retail 26 820 74 600 000 The Vineyard Stellenbosch Office 6 680 7 24 000 000 Twinell Cape Town Office 5 689 8 19 500 000 100 663 2 368 500 000

Eastern ABSA Uitenhage Retail 1 715 6 500 000 Cape Cadbury Port Elizabeth Industrial 15 782 12 950 000 Cleary Park Port Elizabeth Retail 23 879 11 107 800 000 Dept of Forestry King William s Town Office 3 790 3 000 000 Edufin Port Elizabeth Office 3 500 9 800 000 Fidelity Centre Port Elizabeth Office 6 680 3 6 350 000 Jet Stores Uitenhage Retail 2 077 8 5 150 000 Nedbank East London Office 1 577 3 700 000 Nedbank Port Elizabeth Retail & Office 6 454 38 3 000 000 North-End Port Elizabeth Office 8 250 8 13 550 000 Perm East London Retail & Office 3 527 30 6 000 000 Perm Uitenhage Retail & Office 4 783 7 460 000 The Arches King William s Town Retail 2 707 1 7 600 000 Traduna Mall Port Elizabeth Retail 9 428 1 9 000 000 94 149 8 201 860 000

Free State 15 Hartley Street Bloemfontein Industrial 7 902 96 3 900 000 24A Bok Street Welkom Retail 1 997 5 000 000 96 Cambridge Street Bethlehem Office 539 1 100 000 Allied Bloemfontein Office 3 828 10 6 200 000 Re A Hola Centre* Botshabelo Retail 14 762 4 32 201 858 Fedsure House Bloemfontein Retail & Office 9 703 17 12 200 000 Mega Park Bloemfontein Retail 6 045 17 400 000 Middestad Centre Bloemfontein Retail 20 447 8 51 400 000 Perm Welkom Retail & Office 1 232 15 3 500 000 Standard Bank Welkom Retail & Office 2 746 25 4 300 000 Standard Bank House Bloemfontein Retail & Office 4 102 12 6 600 000 73 303 18 143 801 858

ONE INVESTMENT • TWO OPPORTUNITIES 65 Details of property portfolio for the year ended 30 June 2005 (continued)

Lettable Balance area Vacant sheet value Province Property Location Sector (m2) (%) 30 June 2005

Mpumalanga Besterbrown Nelspruit Retail & Office 13 452 6 52 550 000 Dikai Centre Hazyview Retail 2 923 7 9 257 451 Matsamo Centre Matsamo Retail 7 577 3 30 409 800 Nedbank Centre Nelspruit Retail & Office 13 828 4 53 715 811 Perm Witbank Retail & Office 1 634 30 2 200 000 Premier Mine Cullinan Retail 172 700 000 Simunye Centre Hazyview Retail 6 531 14 18 665 182 Siyabuswa Centre Siyabuswa Retail 3 241 13 857 314 Standerton Centre Standerton Retail 5 271 9 4 350 000 Witbank Medical Centre Witbank Retail 13 923 1 24 350 000 68 552 6 210 055 558

Limpopo 101 Dorp Street Polokwane Office 5 497 27 14 000 000 105 Landdros and 106 Mark Polokwane Retail 1 386 3 400 000 106 Landdros Polokwane Retail 1 200 100 2 700 000 Acornhoek* Acornhoek Retail 5 363 5 12 100 000 Berolina Polokwane Industrial 1 647 100 2 850 000 Ellisras, Matimba Centre Lephalale Retail 890 1 650 000 Empire Place Polokwane Office 1 088 4 3 400 000 F B Motors 236 Polokwane Retail 1 200 80 3 250 000 F B Motors 343 Polokwane Retail 2 570 100 3 000 000 Herfred Polokwane Industrial 2 250 2 100 000 Jet Stores Polokwane Retail 3 320 11 700 000 Nedbank Polokwane Retail & Office 12 771 8 40 000 000 Thohoyandou Centre Thohoyandou Retail 4 431 33 6 500 000 Turfloop Polokwane Retail 6 775 6 16 250 000 50 388 22 122 900 000 North West 26 Siddle Street Klerksdorp Office 1 317 2 710 000 29 Main Street Mafikeng Retail 2 640 5 200 000 Creation Brits Industrial 28 182 26 000 000 Boxer Centre Hammanskraal Retail 9 233 2 52 232 886 Hartbeesfontein Hartbeesfontein Retail 301 770 000 Klerksdorp Game Centre* Klerksdorp Retail 10 455 1 30 400 000 Koponong Hammanskraal Retail 9 019 6 42 700 000 Perm Plaza Brits Retail & Office 1 797 17 5 500 000 The Terminus* Klerksdorp Retail 10 344 22 10 760 000 West End Centre Klerksdorp Office 20 401 40 16 280 000 93 689 12 192 552 886

66 ONE INVESTMENT • TWO OPPORTUNITIES Details of property portfolio for the year ended 30 June 2005 (continued)

Lettable Balance area Vacant sheet value Province Property Location Sector (m2) (%) 30 June 2005

Northern ABSA Jones Street Kimberley Retail 819 3 000 000 Cape Builders Market Kimberley Retail 4 424 4 300 000 Kathu Centre Kathu Retail 5 035 10 524 165 Kimberley Printing Kimberley Office 2 720 500 000 Klein Brothers Kimberley Retail 915 2 600 000 Laboria House Kimberley Office 3 500 7 300 000 Nedbank Kimberley Office 1 260 5 5 500 000 Perm Kimberley Office 5 421 3 11 900 000 Telkom Kimberley Retail 657 2 600 000 24 751 1 48 224 165

Vacant Land Erf 755 Denver Johannesburg Land 300 000 1 972 622 11 4 050 041 997

*Leasehold properties

Properties acquired during the year

ONE INVESTMENT • TWO OPPORTUNITIES 67 Unit holders’ diary

Financial year-end 30 June Annual general meeting 21 September 2005 Annual report to be posted to unit holders 17 August 2005

Distribution timetable: 2004/2005 Distribution No. 14 15 16 17 Quarter ended 30 Sept 2004 31 Dec 2004 31 Mar 2005 30 June 2005 Last date to trade cum interest 19 Nov 2004 25 Feb 2005 20 May 2005 19 Aug 2005 Units will trade ex interest 22 Nov 2004 28 Feb 2005 23 May 2005 22 Aug 2005 Record date 26 Nov 2004 4 Mar 2005 27 May 2005 26 Aug 2005 Payment date of interest distribution 29 Nov 2004 7 Mar 2005 30 May 2005 29 Aug 2005

Expected distribution timetable: 2005/2006 Distribution No. 18 19 20 21 Quarter ended 30 Sept 2005 31 Dec 2005 31 Mar 2006 30 June 2006 Last date to trade cum interest 18 Nov 2005 24 Feb 2006 19 May 2006 18 Aug 2006 Units will trade ex interest 21 Nov 2005 27 Feb 2006 22 May 2006 21 Aug 2006 Record date 25 Nov 2005 3 Mar 2006 26 May 2006 25 Aug 2006 Payment date of interest distribution 28 Nov 2005 6 Mar 2006 29 May 2006 28 Aug 2006

68 ONE INVESTMENT • TWO OPPORTUNITIES Notice to members of annual general meeting for the year ended 30 June 2005

ApexHi Properties Limited (Registration number: 1999/000238/06) Share code: APA ISIN: ZAE 000033064 APB ISIN: ZAE 000033072 Notice is hereby given that the fourth annual general meeting of members of ApexHi Properties Limited ( the company ) will be held on the Ground Floor, 2 Arnold Road, Rosebank, Johannesburg, 2196 on Wednesday, 21 September 2005 at 10:30 for the following purposes: 1. To receive and consider the annual financial statements of the company for the year ended 30 June 2005, together with the reports of the directors and auditors thereon. 2. To elect directors in accordance with the provisions of the articles of association of the company. 2.1 In terms of Article 13.2 of the Articles of Association, a director appointed subsequent to the previous annual general meeting shall retire at the following annual general meeting but shall be eligible for re-election. In accordance with this, Ms A Rehman, who was appointed on 4 August 2005, retires from office but being eligible, offers herself for re-election. 2.2 In terms of article 14.1 of the company s articles of association, Messrs D J Feinblum and M Wainer retire by rotation but, being eligible, offer themselves for re-election. Brief particulars of the qualifications and experience of the above are available on page 34 of this report. 3. To authorise the directors to determine the remuneration of the auditors for the year ended 30 June 2005. 4. To approve the payment of remuneration to the non-executive directors. 5. To approve the passing of the following special resolutions and ordinary resolutions, with or without amendment:

5.1 Special resolution number 1: Purchase of A and B units Resolved that the directors be authorised pursuant inter alia to the company s articles of association, until this authority lapses at the next annual general meeting of the company, unless it is then renewed at the next annual general meeting of the company and provided that this authority shall not extend beyond 15 months, for the company to acquire A and B units of the company, subject to the Listings Requirements of the JSE Limited ( JSE ) on the following basis: 1. the acquisition of A and B units must be effected through the order book operated by the JSE trading system and done without any prior arrangement between the company and the counter-party; 2. the company may only appoint one agent to effect repurchases on its behalf; 3. the number of A and B units which may be acquired pursuant to this authority in any financial year (which commenced 1 July 2005) may not in the aggregate exceed 20% (twenty percent) of the company s share capital, as at the date of this notice of general meeting; 4. repurchases of A and B units may not be made at a price more than 10% (ten percent) above the weighted average of the market value on the JSE of the A and B units in question for the five business days immediately preceding the repurchase; 5. repurchases may not take place during a prohibited period (as defined in the JSE Listings Requirements); 6. repurchases may only take place if, after such repurchase, the unit holder spread of the company still complies with the JSE Listings Requirements; 7. after the company has acquired A and B units which constitute, on a cumulative basis, 3% (three percent) of the number of A and B units in issue (at the time that authority from unit holders for the repurchase is granted), the company shall publish an announcement to such effect, or any other announcements that may be required in such regard in terms of the JSE Listings Requirements which may be applicable from time to time; and

ONE INVESTMENT • TWO OPPORTUNITIES 69 Notice to members of annual general meeting for the year ended 30 June 2005 (continued)

8. the company s sponsor shall, prior to the company entering the market to proceed with a repurchase of A and B units, confirm in writing to the JSE, the adequacy of the company s working capital for the purposes of undertaking the repurchase of A and B units. In accordance with the JSE Listings Requirements, the directors record that: Although there is no immediate intention to effect a repurchase of securities of the company, the directors would utilise the general authority to repurchase securities as and when suitable opportunities present themselves which opportunities may require expeditious and immediate action; The directors, after considering the maximum number of securities which may be purchased and the price at which the repurchases may take place pursuant to the buyback general authority, are of the opinion that for a period of 12 months after the date of notice of its annual general meeting: ● the company will be able to pay its debts in the ordinary course of business; ● the consolidated assets of the company fairly valued in accordance with generally accepted accounting practice, will be in excess of the consolidated liabilities of the company after the buyback; ● the share capital and reserves of the company will be adequate for the purposes of the business of the company; and ● the working capital available to the company will be adequate for the purposes of the business of the company. The following additional information, some of which may appear elsewhere in the annual report of which this notice forms part, is provided in terms of the JSE Listings Requirements for purposes of this general authority: ● Directors — page 34 ● Major beneficial shareholders — page 60 ● Directors interests in units — page 57 ● Share capital of the company — page 49

Special resolution number 2: Amendment of articles of association Resolved that the articles of association of the company be and are hereby amended by the inclusion of the following article as article 42:

Odd-lot offers If upon the implementation of any odd-lot offer made by the company in accordance with the Listings Requirements of the JSE, there are members that hold less than a specified number of shares in the company (which shares are linked to debentures issued by the company) or there are members who hold less than such specified number of shares on behalf of a person who holds the beneficial interest in such linked units ( odd-lot ), then unless such members have either elected to retain their odd-lots, to sell their odd-lots or to increase their odd-lots in accordance with the terms of the odd-lot offer made by the company, such members shall be deemed to have agreed to sell their odd-lot holdings (and the directors shall, with approval of any ordinary resolution of members passed at any general meeting of the company, be entitled to cause the odd-lots of such members to be sold on behalf of such members) on such basis as the directors may determine and the company shall account to such members for the proceeds attributable to them pursuant to the sale of such odd-lots. All unclaimed proceeds (of such sales) may be invested or otherwise made use of by the directors for the benefit of the company until claimed, provided that such proceeds unclaimed for a period of 3 (three) years from the date on which the directors caused the odd-lots to be sold may be declared forfeited by the directors for the benefit of the company.

REASON FOR AND EFFECT OF SPECIAL RESOLUTION NUMBER 2 The reason for special resolution number 2 is to amend the company s articles of association so as to provide a mechanism to facilitate the reduction in the number of registered linked unit holders holding in aggregate less than a specified number of linked units in the company and the number of holders of beneficial interests holding in aggregate less than a specified number of linked units in the company in

70 ONE INVESTMENT • TWO OPPORTUNITIES Notice to members of annual general meeting for the year ended 30 June 2005 (continued)

an equitable manner by making provision for odd-lot holders who do not accept an odd-lot offer made by the company to be deemed to have agreed to sell their odd-lot holdings. The effect of special resolution number 2 is to amend the company s articles of association accordingly.

5.3 Ordinary resolution number 1 Resolved that the unissued shares in the authorised capital of the company be and are hereby placed under the control of the directors of the company to allot or issue any such shares at their discretion subject to the provisions of the Companies Act, 1973, as amended, and the requirements of the JSE.

5.4 Ordinary resolution number 2 Resolved that, pursuant to the articles of association of the company, the directors be and they are hereby authorised, until this authority lapses at the next annual general meeting of the company, unless it is renewed at the aforementioned annual general meeting and provided that this authority shall not extend beyond 15 months, to allot and issue linked units for cash, subject to the Listings Requirements of the JSE and the Companies Act, 61 of 1973, on the following basis: (a) the allotment and issue of linked units for cash shall be made only to persons qualifying as public shareholders as defined in the Listings Requirements of the JSE and not to related parties; (b) the number of linked units issued for cash shall not in the aggregate in any one financial year of the company exceed 10% of the company s issued linked units. The number of linked units which may be issued for cash shall be based on the number of linked units in issue at the date of the application, less any linked units issued by the company during the current financial year, provided that any linked units to be issued for cash pursuant to a rights issue (announced and irrevocable and underwritten) or acquisition (concluded and announced as at the date of application) may be included as though they were linked units in issue at the date of application; (c) the maximum discount at which linked units may be issued for cash is 10% of the weighted average traded price on the JSE of those linked units over 30 days prior to the date on which the price of the issue is determined by the directors of the company; and (d) after the company has issued linked units for cash which represent, on a cumulative basis within a financial year, 5% or more of the number of linked units in issue prior to that issue, the company shall publish an announcement containing full details of the issue, including the number of linked units issued, the average discount to the weighted average traded price of the linked units over the 30 days prior to the date that the price was determined and the effect of the issue on the net asset value, earnings per share and headline earnings per share of the company. In terms of the JSE Listings Requirements, a 75% majority of the votes cast by linked unit holders present or represented by proxy at the annual general meeting must be cast in favour of ordinary resolution number 2 for it to be approved.

5.5 Ordinary resolution number 3 Resolved that any director of the company be and is hereby authorised on behalf of the company to sign any documents necessary in order to give effect to the above resolutions. 6. To transact such other business as may be transacted at an annual general meeting.

By order of the board

Broll Property Group (Pty) Limited Secretaries 4 August 2005

ONE INVESTMENT • TWO OPPORTUNITIES 71 Notice to the holders of the unsecured, variable rate subordinated A and B debentures in the company linked to the A and B ordinary shares (“debenture holders”) for the year ended 30 June 2005

ApexHi Properties Limited (Registration number: 1999/000238/06) Share code: APA ISIN: ZAE 000033064 APB ISIN: ZAE 000033072 Notice is hereby given that a meeting of debenture holders of ApexHi Properties Limited ( the company ) will be held on the Ground Floor, 2 Arnold Road, Rosebank, Johannesburg, 2196 on Wednesday, 21 September 2005 at 11:00 or immediately after the meeting of shareholders, whichever is the sooner, to ratify with or without modification, the special resolution set out below.

Special resolution: Amendment of articles of association Resolved that the debenture holders ratify and approve the amendments to the articles of association pursuant to the passing by the members of special resolution number 2 of the annual general meeting which reads as follows:

Odd-lot offers If upon the implementation of any odd-lot offer made by the company in accordance with the Listings Requirements of the JSE, there are debenture holders that hold less than a specified number of shares in the company (which shares are linked to debentures issued by the company) or there are debenture holders who hold less than such specified number of shares on behalf of a person who holds the beneficial interest in such linked units ( odd-lot ), then unless such debenture holders have either elected to retain their odd-lots, to sell their odd-lots or to increase their odd-lots in accordance with the terms of the odd- lot offer made by the company, such debenture holders shall be deemed to have agreed to sell their odd-lot holdings (and the directors shall, with approval of any ordinary resolution of debenture holders passed at any general meeting of the company, be entitled to cause the odd-lots of such debenture holders to be sold on behalf of such debenture holders) on such basis as the directors may determine and the company shall account to such debenture holders for the proceeds attributable to them pursuant to the sale of such odd-lots. All unclaimed proceeds (of such sales) may be invested or otherwise made use of by the directors for the benefit of the company until claimed, provided that such proceeds unclaimed for a period of 3 (three) years from the date on which the directors caused the odd-lots to be sold may be declared forfeited by the directors for the benefit of the company.

REASON FOR AND EFFECT OF SPECIAL RESOLUTION NUMBER 2 The reason for special resolution number 2 is to amend the company s articles of association so as to provide a mechanism to facilitate the reduction in the number of registered linked unit holders holding in aggregate less than a specified number of linked units in the company and the number of holders of beneficial interests holding in aggregate less than a specified number of linked units in the company in an equitable manner by making provision for odd-lot holders who do not accept an odd-lot offer made by the company to be deemed to have agreed to sell their odd-lot holdings. The effect of special resolution number 2 is to amend the company s articles of association accordingly.

By order of the board

Broll Property Group (Pty) Limited Secretaries 4 August 2005

72 ONE INVESTMENT • TWO OPPORTUNITIES Proxy form Annual general meeting

ApexHi Properties Limited (Registration number: 1999/000238/06) Share code: APA ISIN: ZAE 000033064 APB ISIN: ZAE 000033072

I/We (Name in block capitals) of (Address in block capitals)

being a member of ApexHi holding A units/ B units in the capital of ApexHi Properties Limited, 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 21 September 2005 at 10:30 or at any adjournment thereof as follows:

Resolutions In favour of Against Abstain 1. Adoption of annual financial statements 2. Retiring directors: 2.1 To re-elect A Rehman — appointed on 4 August 2005 2.2 To re-elect directors retiring by rotation: a) D J Feinblum b) M Wainer 3. Auditors remuneration 4. Non-executive directors remuneration 5. To pass the following resolutions: Special resolutions 5.1 To effect purchase of A and B units 5.2 To amend the Articles of Association Ordinary resolutions 5.3 To place unissued shares under the control of the directors 5.4 To issue shares for cash 5.5 To authorise directors to sign documents My/our proxy has been instructed to vote in accordance with my/our wishes as indicated by the placing of a cross in the appropriate space above. Unless so instructed, my/our proxy may vote as he/she thinks fit.

Signed at this day of 2005 Signature/s of member/s

Assisted by (if applicable)

Telephone no. Cell no. Fax no. (Please state area code)

ONE INVESTMENT • TWO OPPORTUNITIES 73 Proxy form Annual general meeting (continued)

Notes to the form of proxy 1. The completion and lodging of this form of proxy will not preclude the relevant member from attending the annual general meeting and speaking and voting in person thereat to the exclusion of any proxy appointed, should such member wish to do so. Where there are joint members of units, the vote of the first joint member who tenders a vote as determined by the order in which the names stand in the register of members, will be accepted. 2. Where there are members of any units, only that member whose name appears first in the register in respect of such units need sign this form of proxy. 3. The chairperson of the annual general meeting may reject or accept any form of proxy which is completed and/or received otherwise than in accordance with these votes, provided that, in respect of acceptances, the chairperson is satisfied as to the manner in which the member concerned wishes to vote. 4. Documentary evidence establishing the authority of a person signing this form of proxy in a respective capacity must be attached to this form of proxy unless previously recorded with the company or Ultra Registrars (Pty) Limited or waived by the chairperson of the annual general meeting. 5. Any alteration or correction made to this form of proxy must be initialled by the signatory/ies. 6. A minor must be assisted by his/her parent/guardian unless the relevant documents establishing his/her legal capacity are produced or have been registered by Ultra Registrars (Pty) Limited. 7. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies of his/her choice to attend, speak, and on a poll, vote in his/her stead. A proxy need not be a member of the company. If you are a certificated ApexHi member or an own name dematerialised ApexHi member and are unable to attend the annual general meeting of ApexHi members to be held at 10:30 on Wednesday, 21 September 2005 ( the ApexHi annual general meeting ), you should complete the form of proxy attached hereto in accordance with the instructions therein and return it to the transfer secretaries, Ultra Registrars (Pty) Limited, 11 Diagonal Street, Johannesburg, 2001 (PO Box 4844, Johannesburg, 2000) so as to be received by the company by no later than 10:30 on Monday, 19 September 2005. If you are a dematerialised ApexHi member and are not an own name dematerialised ApexHi member then your CSDP or broker, as the case may be, is obliged to advise you of the ApexHi annual general meeting pursuant to which you must instruct them as to how you wish to cast your vote at the ApexHi annual general meeting in order for them to vote in accordance with your instructions. If you wish to attend the ApexHi annual general meeting in person, please request your CSDP or broker to issue the necessary letter of representation to you. This must be done in terms of the agreement entered into between the dematerialised ApexHi member (who is not an own name dematerialised ApexHi member) and the CSDP or broker.

74 ONE INVESTMENT • TWO OPPORTUNITIES Proxy form General meeting of debenture holders

ApexHi Properties Limited (Registration number: 1999/000238/06) Share code: APA ISIN: ZAE 000033064 APB ISIN: ZAE 000033072

I/We (Name in block capitals) of (Address in block capitals)

being a debenture holder of ApexHi, holding A debentures B debentures in the capital of ApexHi Properties Limited, 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 general meeting of debenture holders to be held on 21 September 2005 at 11:00 or immediately after the meeting of shareholders, whichever is the sooner, or at any adjournment thereof as follows: Special resolution In favour of Against Abstain Ratification and approval of amendment of articles of association My/our proxy has been instructed to vote in accordance with my/our wishes as indicated by the placing of a cross in the appropriate space above. Unless so instructed, my/our proxy may vote as he/she thinks fit. Signed at this day of 2005 Signature/s of debenture holders

Assisted by (if applicable)

Telephone no. Cell no. Fax no. (Please state area code)

ONE INVESTMENT • TWO OPPORTUNITIES 75 Proxy form General meeting of debenture holders (continued)

Notes to the form of proxy 1. The completion and lodging of this form of proxy will not preclude the relevant unit holder from attending the annual general meeting and speaking and voting in person thereat to the exclusion of any proxy appointed, should such unit holder wish to do so. Where there are joint unit holders of units, the vote of the first joint unit holder who tenders a vote as determined by the order in which the names stand in the register of unit holders, will be accepted. 2. Where there are joint holders of any units, only that holder whose name appears first in the register in respect of such units need sign this form of proxy. 3. The chairperson of the annual general meeting may reject or accept any form of proxy which is completed and/or received otherwise than in accordance with these votes, provided that, in respect of acceptances, the chairperson is satisfied as to the manner in which the unit holder concerned wishes to vote. 4. Documentary evidence establishing the authority of a person signing this form of proxy in a respective capacity must be attached to this form of proxy unless previously recorded with the company or Ultra Registrars (Pty) Limited or waived by the chairperson of the annual general meeting. 5. Any alteration or correction made to this form of proxy must be initialled by the signatory/ies. 6. A minor must be assisted by his/her parent/guardian unless the relevant documents establishing his/her legal capacity are produced or have been registered by Ultra Registrars (Pty) Limited. 7. A unit holder entitled to attend and vote at the meeting is entitled to appoint one or more proxies of his/her choice to attend, speak, and on a poll, vote in his/her stead. A proxy need not be a unit holder of the company. If you are a certificated ApexHi debenture holder or an own name dematerialised ApexHi debenture holder and are unable to attend the annual general meeting of ApexHi debenture holders to be held at 11:00 or immediately after the meeting of shareholders, whichever is the sooner, on Wednesday, 21 September 2005 ( the ApexHi annual general meeting ), you should complete the form of proxy attached hereto in accordance with the instructions therein and return it to the transfer secretaries, Ultra Registrars (Pty) Limited, 11 Diagonal Street, Johannesburg, 2001 (PO Box 4844, Johannesburg, 2000) so as to be received by the company by no later than 10:30 on Monday, 19 September 2005. If you are a dematerialised ApexHi debenture holder and are not an own name dematerialised ApexHi debenture holder then your CSDP or broker, as the case may be, is obliged to advise you of the ApexHi annual general meeting pursuant to which you must instruct them as to how you wish to cast your vote at the ApexHi annual general meeting in order for them to vote in accordance with your instructions. If you wish to attend the ApexHi annual general meeting in person, please request your CSDP or broker to issue the necessary letter of representation to you. This must be done in terms of the agreement entered into between the dematerialised ApexHi debenture holder (who is not an own name dematerialised ApexHi debenture holder) and the CSDP or broker.

76 ONE INVESTMENT • TWO OPPORTUNITIES PRODUCED BY OGILVY PR