INTEGRATED ANNUAL REPORT 2013 About this report This integrated annual report presents Attacq Limited’s financial, operational, social and environmental performance for the 2013 financial year. The Company obtained formal approval from the JSE to list on 14 October 2013, therefore this is the Company’s first integrated report. Integrated reporting is a process and we acknowledge some areas might require improvement and/or refinement, and we are working towards producing a more integrated report in the future. The Company reports in accordance with International Financial Reporting Standards (IFRS) and the South African Companies Act 71, of 2008. As far as possible, the Company has applied the principles contained in the King Report on Corporate Governance for South Africa 2009 (King III). The content of this report is intended to provide stakeholders with the information necessary to evaluate the Company’s performance over the past year and to assess its ability to create and sustain value in the short, medium and long term. The 2013 financial year refers to the period from 1 July 2012 to 30 June 2013. Attacq will be listed on the JSE in South Africa under the share code ATT and the Company reports in line with the JSE’s Listings Requirements. This integrated annual report contains forward looking statements that, unless otherwise indicated, reflect the Company’s expectations as at 30 June 2013. Actual results may differ materially from the Company’s expectations if known and unknown risks or uncertainties affect its business, or if estimates or assumptions prove inaccurate. The Company cannot guarantee that any forward looking statement will materialise and, accordingly, readers are cautioned not to place undue reliance on any forward looking statements. The Company disclaims any intention and assumes no obligation to update or revise any forward looking statement even if new information becomes available, as a result of future events or for any other reason, other than as required by the JSE Listings Requirements. Creativity is a wonderful thing. 2 CONTENTS About this report 02 Overview A History of Achievements 04 Highlights 06 Background and Profile 06 Group Structure 08 Footprint 10 Financial Indicators 12 Business Model and Strategy 13 Strategy Flowchart 14 Board of Directors and Governance Structure 15 Executive Management and Reporting Structure 19 Our Stakeholders 20 Performance and Strategic Review Chairman’s Report 21 Chief Executive Officer’s Report 23 Financial Director’s Report 26 Operational Review 30 Corporate Governance Governance Report 46 Material Risks 51 Remuneration Report 53 Transformation, Social and Ethics Report 54 Application of Principles in the King Code 56 Shareholder Analysis 61 Audited Consolidated Annual Financial Statements for the year ended 30 June 2013 Directors’ Responsibilities and Approval 65 Company Secretary Report 66 Independent Auditor’s Report 67 Report of the Audit and Risk Committee 68 Directors’ Report 69 Statement of Financial Position 78 Statement of Comprehensive Income 80 Statement of Changes in Equity 81 Statement of Cash Flows 82 Accounting Policies 84 Notes to the Annual Financial Statements 94 Audited Company Annual Financial Statements for the year ended 30 June 2013 Directors’ Responsibilities and Approval 181 Company Secretary Report 182 Independent Auditor’s Report 183 Report of the Audit and Risk Committee 184 Directors’ Report 185 Statement of Financial Position 193 Statement of Comprehensive Income 194 Statement of Changes in Equity 195 Statement of Cash Flows 196 Accounting Policies 198 Notes to the Annual Financial Statements 206 Notice of Annual General Meeting 252 Proxy Form 261 Glossary 265 Corporate Information 268 3 A HISTORY OF ACHIEVEMENTS Converted to Commenced construction on Atterbury is formed a public company Bagatelle – Mall of Mauritius 1994 2006 2009 2005 2008 Attacq is formed Acquired Waterfall development rights 4 West Hills Mall, Accra, Ghana Accra Mall, Accra, Ghana 32.5% of Atterbury Africa acquired 25% of Atterbury Property acquired 2012 2011 2013 Sale of Attfund Retail to Hyprop Rights offer of R580 million heavily oversubscribed Acquired interest in MAS Internalisation of asset manager Secured 264 595m² in Waterfall developments Acquired 75% interest in retail fund Abacus Acquired Garden Route Mall Listing on the JSE Buyback of Waterfall Development Company’s shares in Attacq 5 HIGHLights – 2013 • CAGR in NAV per share of more than 20% since 2005 • NAV growth year-on-year of 15.9% • Total assets grew to R13.35 billion • The 1.75 million m² Waterfall pipeline gained momentum with 264 595 m² under construction • Received formal approval to list on the JSE on 14 October 2013 • Broke ground on the largest single phase super regional mall in South Africa, the Mall of Africa • Internalisation of the Asset and Property Manager on the direct property portfolio • Consolidated the international portfolio via increased shareholding in MAS What we build, builds us. BACKGROUND & ProfiLE Attacq is a leading South African capital growth fund in the geographically. In the long-term, the Group’s investment real estate sector. It has consistently delivered growth in strategy is to invest 70% by value in South Africa, 20% by capital to its investors through its strategic property holdings value in other parts of Africa and 10% by value internationally and developments. Attacq has grown gross assets to outside of Africa. R13.35 billion with an initial gross asset value of R600 million as at 30 June 2005. Attacq is driven by a passionate entrepreneurial spirit, brought to life by a committed and enthusiastic team. A proactive and Attacq focuses on sustainable capital appreciation hands-on management approach, coupled with a positive through the development and ownership of a balanced outlook and belief in the future of South Africa, has built the portfolio of properties with contractual income streams. Company to the highly regarded industry force it is today. Capital appreciation is supplemented by development and redevelopment profits made within the Company. The top management structure is relatively young by industry standards, but well respected with an in-depth The business of the Group is undertaken in two focus areas: understanding of the dynamics of the property market, investments and developments. Investments comprise coupled with a proven delivery capability. The multi- completed buildings held directly or indirectly. The current disciplinary team boasts a wide range of professionals target is to have 65% of the portfolio in investments and including engineers, chartered accountants, lawyers, 35% in developments. Attacq diversifies its investments bankers and investment managers. 6 EXECUTIVE MANAGEMENT From left: Morné Wilken – Chief Executive Officer, Melt Hamman – Financial Director, Helena Austen – Head of Legal Department, Peter de Villiers – Head of Africa and International Investments, Nicolle Weir – Head of Property and Asset Management and Talana Smith – Company Secretary. Photographed at Brooklyn Bridge, Pretoria 7 Group structure Property and Investment Holdings International Africa (excluding Africa) (excluding South Africa) - MAS (21.1%) - Bagatelle – Mall of Mauritius, Port Louis, - Karoo I (36.8%) and Karoo II (39.9%) Mauritius (41.8%) - Nova Eventis, Leipzig, Germany (19.7%) - Bagatelle Office, Port Louis, Mauritius - Bishopsgate, Birmingham, England (30%) (41.8%) - Caltongate, Edinburgh, Scotland (26.3%) - Atterbury Africa • Achimota, Accra, Ghana (24.4%) • Accra Mall, Accra, Ghana (15.3%) • West Hills Mall, Accra, Ghana (14.6%) • Waterfall Mall, Lusaka, Zambia (8.1%) LEGEND Vacant land In process or to be developed with expected completion date Accounted for as an investment in associate Accounted for as an investment 79.4% effective shareholding in Building A; 100% effective shareholding in Building B Undivided share Held for sale % Attacq’s effective shareholding in a property (other than in respect of associates) In the process of being disposed GP Gauteng province EC Eastern Cape province NW North West province WC Western Cape province Caltongate, Edinburgh, Scotland 8 Developments - Club Retail, Pretoria, GP (40.0%) – Apr 2014 - Lynnwood Bridge – Phase III, South Africa Pretoria, GP (100%) – May 2014 - Newtown and Majestic Development, Johannesburg, GP Office and Retail Portfolio (62.5%) – Oct 2014 Mixed Use Portfolio - Mall of Namibia – The Grove, Windhoek, Namibia (31.3%) – - Garden Route Mall, George, - Aurecon Building, Pretoria, Oct 2014 WC (80.0%) GP (79.4%) - Waterfall, Johannesburg, GP - Brooklyn Mall, Pretoria, - Woodmead North Office Park, • Waterfall land (84.7%) GP (18.8%) Johannesburg, GP (42.4%) • Cell C Campus (84.7%) – - Glenfair Boulevard, Pretoria, - Great Westerford, Cape Town, Dec 2013 GP (100%) WC (50.0%) • Group 5 (84.7%) – Jan 2014 - Mooirivier Mall, Potchefstroom, - Lynnwood Bridge, Pretoria, • Waterfall Corner (84.7%) – NW (75%) GP (100%) Apr 2014 - Mill Square, Stellenbosch, - Brooklyn Bridge and Lewis • Waterfall Lifestyle (84.7%) – WC (60%) – May 2014 House, Pretoria, GP (25%) June 2014 - Eikestad Mall, Stellenbosch, - Club 1, Pretoria, GP (40.0%) • MB Technologies warehouse WC (60%) - Atterbury House, Cape Town, (84.7%) – Dec 2013 - Andringa Walk, Stellenbosch, WP (100%) • Mall of Africa (84.7%) – Apr 2016 WC (75%) • City Lodge (84.7%) – Nov 2014 - De Ville, Cape Town, • Maxwell Office Park (42.4%) WC (100%) - Attacq building – Dec 2013 - Wingspan (34.2%) - Golder & Associates building – -