Dipula Income Fund Limited (formerly Dipula Property Fund (Proprietary) Limited ) Dipul the company PROSPECTUS

Transcription

1 PROSPECTUS Dipula Income Fund Limited (formerly Dipula Property Fund (Proprietary) Limited ) (Incorporated in the Republic of South Africa) (Registration number 2005/013963/06) JSE code for A-linked units: DIA JSE code for B-linked units: DIB ISIN for A-linked units: ZAE ISIN for B-linked units: ZAE ( Dipula or the company ) The definitions commencing on page 7 of this prospectus have been used in these cover pages. Prepared and issued in terms of the JSE Listings Requirements and the Companies Act. A private placement of linked units in the company by way of: an offer to subscribe for A-linked units at a offer price of R8.58 per A-linked unit, which offer will raise up to R ; an offer to subscribe for B-linked units at a offer price of R5.53 per B-linked unit, which offer will raise up to R ; an offer to acquire from the sellers A-linked units at a offer price of R8.58 per A-linked unit, which offer will realise up to R ; an offer to acquire from the sellers B-linked units at a offer price of R5.53 per B-linked unit, which offer will realise up to R ; and the subsequent listing of the linked units of the company on the Real Estate Real Estate Holdings and Development sector of the JSE lists. Opening date of the private placement (09:00) Thursday, 28 July 2011 Closing date of the private placement (12:00)* Thursday, 11 August 2011 Results of the private placement released on SENS Friday, 12 August 2011 Results of the private placement published in the press Monday, 15 August 2011 Proposed listing date on the JSE (09:00) Wednesday, 17 August 2011 * Applicants should consult their broker or CSDP to ascertain the timing for submission of applications as this may vary depending on the broker or CSDP in question The private placement is an invitation to invited investors and will be constituted by the issue and/or sale of up to A-linked units at R8.58 per A-linked unit and up to B-linked units at R5.53 per B-linked unit. Each class of the linked units to be issued pursuant to the private placement will rank pari passu (both in respect of dividends and otherwise) with the existing linked units issued by Dipula. Applications must be for a minimum of A-linked units or B-linked units and in multiples of A-linked units or B-linked units thereafter. The listing of the linked units is subject to a minimum amount of R being raised in terms of the private placement, however since Redefine has underwritten the private placement in an amount up to R , the minimum amount required to be raised is R (the difference between the minimum amount required and the underwritten amount). The salient terms of the debentures forming part of the linked units are detailed in Annexure 10. There are no convertibility or redemption provisions relating to the linked units that are the subject of this private placement and no fractions of linked units will be issued. This prospectus is not an invitation to the public to subscribe for linked units in Dipula. It is issued in compliance with the JSE Listings Requirements and the Companies Act for the purpose of giving information to the public regarding Dipula and to provide information to invited investors with regards to the private placement.

2 Immediately prior to the listing: the authorised linked unit capital of Dipula will comprise shares having no par value; the issued linked unit capital (excluding treasury shares) of Dipula will comprise: A-linked units, comprising shares of no par value, each linked to an unsecured variable rate subordinated A-debenture with a face value of R4.41 each; B-linked units, comprising shares having no par value, each linked to an unsecured variable rate subordinated B-debenture with a face value of R4.41 each; and the debenture premium will amount to R nil. Immediately after the private placement and the listing: the authorised linked unit capital of Dipula will comprise shares of no par value, each of which will, on their issue, be linked to either an unsecured variable rate subordinated A-debenture with a face value of R4.41 or an unsecured variable rate subordinated B-debenture with a face value of R4.41; assuming that pursuant to the private placement the maximum number of A-linked units are issued and the maximum number of B-linked units are issued, the issued linked unit capital of Dipula will comprise: A-linked units, comprising shares of no par value, each linked to an unsecured variable rate subordinated A-debenture with a face value of R4.41 each; B-linked units, comprising shares of no par value, each linked to an unsecured variable rate subordinated B-debenture with a face value of R4.41 each; the debenture premium will amount to R nil; and there will be no linked units held in treasury. There is no intention to extend a preference on allotment to any particular company or group in the event of an over subscription of linked units pursuant to this private placement. The JSE has granted Dipula a listing in respect of up to A-linked units and up to B-linked units in the Real Estate Real Estate Holdings and Development sector of the JSE lists, in terms of the FTSE classification, under the abbreviated names Dipula A and Dipula B, JSE Codes DIA for A-linked units and DIB for B-linked units and ISIN Codes ZAE for A-linked units and ZAE for B-linked units, with effect from the commencement of business on Wednesday, 17 August 2011, subject to Dipula meeting the requirements of the JSE in respect of the requisite spread of linked unitholders. At the date of the listing, assuming the private placement is fully subscribed, the anticipated market capitalisation of Dipula will be approximately R1.39 billion. A copy of this prospectus in English, accompanied by the documents referred to under Documents available for inspection as set out in paragraph 35 of this prospectus, was registered by the CIPC on Wednesday, 27 July 2011 in terms of the Companies Act. Dipula linked units will only be capable of being traded on the JSE in dematerialised form. The directors, whose names are given on page 17 of this document, collectively and individually, accept full responsibility for the accuracy of the information given herein and certify that, to the best of their knowledge and belief, no facts have been omitted which would make any statement false or misleading, and that they have made all reasonable enquiries to ascertain such facts and that this prospectus contains all information required by law and the JSE Listings Requirements. Each of the corporate advisor, legal advisor and bookrunner, trustee for debenture holders and sponsor, independent transaction sponsor, independent reporting accountants, auditors, independent property valuers, attorneys to the prospectus, competition law advisor, transfer secretaries, underwriter and bankers, whose names are included in this prospectus, have consented in writing and have not prior to the publication of this prospectus, withdrawn their written consent to the inclusion of their names in the capacities stated and, where applicable, to their reports being included in this prospectus. An abridged version of this prospectus was released on SENS on Thursday, 28 July 2011.

3 Corporate advisor, legal advisor, bookrunner and sponsor Independent reporting accountants and auditors Attorneys to the prospectus Independent transaction sponsor Competition law advisor to Dipula A N I C H E T T Y C O M P E T I T I O N L A W Date of issue: Thursday, 28 July 2011 This prospectus is available in English only. Copies may be obtained from the company, the corporate advisor and sponsor and the transfer secretaries, at the addresses set out in the Corporate Information section of this prospectus during normal office hours from Thursday, 28 July 2011 to Thursday, 11 August

4 Offer/s in South Africa only This prospectus has been issued in connection with the private placement in South Africa only and is addressed only to persons to whom the private placement may lawfully be made. The distribution of this prospectus and the making of an offer through this private placement may be restricted by law. Persons into whose possession this prospectus comes must inform themselves about and observe any such restrictions. This prospectus does not constitute an offer of or invitation to subscribe for and/or purchase any of the linked units in the company in any jurisdiction in which such offer, subscription or sale would be unlawful. No one has taken any action that would permit a public offering of linked units in the company to occur outside South Africa. Forward-looking statements This prospectus includes forward-looking statements. Forward-looking statements are statements including, but not limited to, any statements regarding the future financial position of the company and its subsidiaries and its future prospects. These forward-looking statements have been based on current expectations and projections about future results which, although the directors believe them to be reasonable, are not a guarantee of future performance. 2

5 CORPORATE INFORMATION Registered office Dipula Income Fund Limited (Registration number 2005/013963/06) 2 Arnold Road, Rosebank, 2196 (PO Box 1731, Parklands, 2121) Corporate advisor, legal advisor and bookrunner Java Capital (Proprietary) Limited (Registration number 2002/031862/07) 2 Arnold Road, Rosebank, 2196 (PO Box 2087, Parklands, 2121) Independent reporting accountants and auditors PKF (Jhb) Inc. (Registration number 1994/001166/21) Registered Auditors 42 Wierda Road West Wierda Valley, 2196 (Private Bag X10046, Sandton, 2146) Transfer secretaries Link Market Services South Africa (Proprietary) Limited (Registration number 2000/007239/07) 13th Floor Rennie House 19 Ameshoff Street Braamfontein Johannesburg, 2001 (PO Box 4844, Johannesburg, 2000) Bankers The Standard Bank of South Africa Limited (Registration number 1962/000738/06) 3rd Floor The Firs Corner Cradock Avenue and Biermann Road Rosebank, 2196 (PO Box 8786, Johannesburg, 2000) Competition law advisor Vani Chetty Competition Law (Proprietary) Limited (Registration number 2007/009553/07) 1st Floor, 24 Hurlingham Road Illovo Boulevard, Illovo, 2132 (PO Box 52531, Saxonwold, 2132) Date and place of incorporation of the company Incorporated on 10 May 2005 in the Republic of South Africa Trustee for debenture holders and sponsor Java Capital Trustees and Sponsors (Proprietary) Limited (Registration number 2006/005780/07) 2 Arnold Road, Rosebank, 2196 (PO Box 2087, Parklands, 2121) Attorneys to the prospectus Ledwaba Mazwai Attorneys 141 Boshoff Street, New Muckleneuk Pretoria, 0181 (PO Box 11860, The Tramshed, Pretoria, 0126) Independent property valuer Broll Valuation and Advisory Services (Proprietary) Limited (Registration number 1968/003515/07) 27 Fricker Road, Illovo, 2196 (PO Box 1455, Saxonwold, 2132) Independent property valuer ALT RE Capital Management (Proprietary) Limited trading as Alternative Real Estate (Registration number 2007/030410/07) 4th Floor South Block Hyde Park Shopping Centre Hyde Park Sandton, 2196 (PO Box , Craighall, 2024) Company secretary Probity Business Services (Proprietary) Limited (Registration number 2000/002046/07) 3rd Floor The Mall Offices 11 Cradock Avenue Rosebank, 2196 (PO Box 85392, Emmarentia, 2029) Independent transaction sponsor Deloitte & Touche Sponsor Services (Proprietary) Limited (Registration number 1996/000034/07) Building 6, The Woodlands Woodmead, 2196 (Private Bag X6, Gallo Manor, 2052) 3

6 TABLE OF CONTENTS The definitions commencing on page 7 of this prospectus have been used in the following table of contents: Page Corporate information 3 Important dates and times 6 Definitions 7 SALIENT FEATURES Introduction Background to Dipula Management of Dipula Details of the private placement Nature of business and group structure Prospects Forecast statements of comprehensive income Action required Further copies of the prospectus 16 SECTION 1 INFORMATION ON THE GROUP AND LINKED UNITS Name, address and incorporation Dipula board of directors History, state of affairs and prospects of the company Linked unit capital of the company Options and preferential rights in respect of linked units Commissions paid or payable Material contracts Interests of directors and promoters Loans Linked units issued otherwise than for cash Property and subsidiaries acquired or to be acquired Preliminary expenses and issue expenses 25 SECTION 2 DETAILS OF THE OFFER Purposes of the offer Salient dates and times Particulars of the offer Minimum subscription 30 SECTION 3 STATEMENTS AND REPORTS REGULATING THE OFFER Statement as to adequacy of capital Report by directors as to material changes Statement as to listing on stock exchange Report by auditors in respect of business undertakings acquired Report by auditor where the company will acquire a subsidiary 31 4

7 SECTION 4 ADDITIONAL MATERIAL INFORMATION Forecast statements of comprehensive income Unaudited consolidated pro forma statement of financial position Historical financial information of Dipula Dividends and distributions Property and subsidiaries disposed or to be disposed South African Exchange Control Regulations Loans receivable Corporate Governance Litigation statement Government protection and investment encouragement law Advisors interests Consents Directors responsibility statement Documents available for inspection 37 Annexure 1 Details of subsidiaries 38 Annexure 2 Details of directors and management 39 Annexure 3 Salient features of the MOI 48 Annexure 4 Details of the asset management and property management functions 55 Annexure 5 Details of the property portfolio 62 Annexure 6 Independent valuations of the property portfolio 81 Annexure 7 Financial information required in terms of Regulation 79 of the Companies Act in respect of Dipula 118 Annexure 8 Report by the auditors in respect of Dipula in terms of Regulation 79 of the Companies Act 119 Annexure 9 Major linked unitholders and capital structure 121 Annexure 10 Salient features of the debenture trust deed 124 Annexure 11 Information of the underwriter 132 Annexure 12 Borrowings and loans 133 Annexure 13 Details of the acquisitions, disposals and vendors 134 Annexure 14 Financial information required in respect of the Redefine portfolio in terms of Regulation 77 of the Companies Act 137 Annexure 15 Report by the auditors in respect of the Redefine transaction in terms of Regulation 77 of the Companies Act 138 Annexure 16 Financial information required in respect of Mergence in terms of Regulation 78 of the Companies Act 139 Annexure 17 Report by the auditors in respect of the Mergence transaction in terms of Regulation 78 of the Companies Act 140 Annexure 18 Financial information required in respect of Asakhe in terms of Regulation 78 of the Companies Act 141 Annexure 19 Report by the auditors in respect of the Asakhe transaction in terms of Regulation 78 of the Companies Act 142 Annexure 20 Pro forma forecast statement of comprehensive income for the year ending 31 August Annexure 21 Independent reporting accountants limited assurance report on the forecast statements of comprehensive income of Dipula 145 Annexure 22 Group accounting policies 148 Annexure 23 Unaudited consolidated pro forma statement of financial position of Dipula 150 Annexure 24 Independent reporting accountants limited assurance report on the unaudited consolidated pro forma statement of financial position of Dipula 154 Annexure 25 Independent reporting accountants review report on value and existence of the assets and liabilities acquired 156 Annexure 26 Historical financial information of Dipula 157 Annexure 27 Independent reporting accountants report on the historical financial information of Dipula 176 Annexure 28 Corporate Governance Statement 178 Page The private placement application form linked units (blue) Attached 5

8 IMPORTANT DATES AND TIMES The definitions commencing on page 7 of this prospectus apply to these important dates and times: 2011 Abridged prospectus released on SENS on Opening date of the private placement (09:00) Abridged prospectus published in the press on Closing date of the private placement (12:00) (2) Results of private placement released on SENS on Results of private placement published in the press on Notification of allotments Listing of the linked units on the JSE (09:00) Accounts at CSDP or broker updated and debited in respect of dematerialised linked unitholders (3) Thursday, 28 July Thursday, 28 July Friday, 29 July Thursday, 11 August Friday, 12 August Monday, 15 August Monday, 15 August Wednesday, 17 August Wednesday, 17 August Notes: 1. These dates and times are South African dates and times and are subject to amendment. Any such amendment will be released on SENS and published in the press. 2. Invited investors may only receive linked units in dematerialised form and must advise their CSDP or broker of their acceptance of the private placement in the manner and cut-off time stipulated by their CSDP or broker. 3. CSDP s effect payment on a delivery-vs-payment basis. 6

9 DEFINITIONS In this prospectus and the annexures hereto, unless the context indicates otherwise, references to the singular include the plural and vice versa, words denoting one gender include the others, expressions denoting natural persons include juristic persons and associations of persons and vice versa, and the words in the first column have the meanings stated opposite them in the second column, as follows: A-debentures A-linked units A-linked unitholder or Dipula A-linked unitholder Alternative Real Estate application form Asakhe Asakhe acquisition agreement Asakhe portfolio Asakhe transaction asset management agreement asset manager auditors B-debentures unsecured subordinated variable rate A-debentures in Dipula which have a nominal value of R4.41 each and which are indivisibly linked to ordinary shares in the ratio of one A-debenture for every one ordinary share held; Dipula A-linked units, comprising one share indivisibly linked to one A-debenture; the registered holders of A-linked units; ALT RE Capital Management (Proprietary) Limited (Registration number 2007/030410/07) trading as Alternative Real Estate, a private company incorporated in accordance with the laws of South Africa, one of the independent property valuers, full details of which are set out on page 3 and whose summary valuation report on the Asakhe portfolio and the Redefine portfolio is set out in Annexure 6; the blue application form in respect of the private placement which is attached to, and forms part of, this prospectus; Asakhe Realty Investment Fund (Proprietary) Limited (Registration number 2005/040926/07), a private company duly incorporated in accordance with the laws of South Africa; the agreement between, Standard Bank Properties, Dipula and Safika dated 24 June 2011 in terms of which the Asakhe transaction will be effected as detailed in paragraph 11.2; collectively, the properties numbered , as set out in Annexure 5 which were acquired pursuant to the Asakhe transaction; the acquisition by Dipula of the entire issued share capital of and claims against Asakhe in terms of the Asakhe acquisition agreement; the management agreement concluded between Dipula and the asset manager dated 24 June 2011 in terms of which the asset manager will provide asset management services to the group, the salient details of which are set out in Annexure 4; The Dipula Asset Management Trust, (Master s Reference No. IT8900/06), a trust established in accordance with the laws of South Africa, the trustees of which are Saul Gumede and Hosia Kgauane Malekane; PKF (Jhb) Inc. (Registration number 1994/001166/21), a limited liability partnership incorporated in accordance with the laws of South Africa, full details of whom are set out on page 3; unsecured subordinated variable rate B-debentures in Dipula which have a nominal value of R4.41 each and which are indivisibly linked to shares in the ratio of one B-debenture for every share held; 7

10 B-linked units B-linked unitholder or Dipula B-linked unitholder Dipula B-linked units, comprising one share indivisibly linked to one B-debenture; the registered holders of B-linked units; board or the directors the board of directors of Dipula, particulars of whom are set out in Annexure 2 to the prospectus; Broll Valuation Services Broll Valuation and Advisory Service (Registration number 1968/003515/07), a private company duly incorporated in accordance with the laws of South Africa, one of the independent property valuers, full details of which are set out on page 3 and whose summary valuation report on the Dipula portfolio and the Mergence portfolio is set out in Annexure 6; business day certificated linked unitholders certificated linked units CIPC common monetary area Companies Act or Act CPI CSDP debenture trust deed or the deed dematerialisation dematerialised linked units dematerialised linked unitholders dematerialised own-name linked unitholders any day other than a Saturday, Sunday or official public holiday in South Africa; linked unitholders who hold certificated linked units; linked units that have not been dematerialised and which are evidenced by certificates or other physical documents of title; the Companies and Intellectual Property Commission; collectively, South Africa, the Kingdoms of Swaziland and Lesotho, and the Republic of Namibia; the Companies Act, 2008 (Act 71 of 2008), as amended; consumer price index, showing the average price level of a basket of goods and services, as determined by Statistics South Africa, bought by a typical consumer or household changes over time, as published by Statistics South Africa from time to time; a Central Securities Depository Participant appointed by a linked unitholder for purposes of, and in regard to, dematerialisation and to hold and administer linked units or an interest in linked units on behalf of a linked unitholder; the debenture trust deed entered into between Dipula and the trustee for debenture holders recording the terms and conditions of the debentures, the salient features of which are set out in Annexure 10; the process whereby certificated linked units are replaced by electronic records of ownership under Strate and recorded in the sub-register of linked unitholders maintained by a CSDP or broker; linked units which have been dematerialised and incorporated into Strate and which are no longer evidenced by physical documents of title; linked unitholders who hold dematerialised linked units; linked unitholders who hold dematerialised linked units and who have instructed their CSDP to hold their linked units in their own name on the sub-register (the list of linked unitholders maintained by the CSDP and forming part of the Dipula linked unit register); Dijalo Dijalo Property Services (Proprietary) Limited (Registration number 1999/000088/07), a private company duly incorporated in accordance with the laws of South Africa; Dijalo Asset Management Dipula or company Dijalo Asset Management Services (Proprietary) Limited (Registration number 2005/00307/07), a private company duly incorporated in accordance with the laws of South Africa; Dipula Income Fund Limited (formerly Dipula Property Fund (Proprietary) Limited) (Registration number 2005/013963/06), a public company duly incorporated in accordance with the laws of South Africa, the linked unit capital of which is to be listed on the JSE; 8

11 Dipula debentures or debentures Dipula debenture holders or debenture holders Dipula linked units or linked units Dipula linked unitholders or linked unitholders Dipula Property Trust collectively, the A-debentures and the B-debentures; the registered holders of Dipula debentures; collectively, the Dipula A-linked units and the Dipula B-linked units; collectively, the Dipula A-linked unitholders and the Dipula B-linked unitholders; Dipula Property Investment Trust (Master s reference number IT7743/06), a trust established in accordance with the laws of South Africa; Dipula portfolio collectively, the properties numbered 1 90 as set out in Annexure 5; documents of title Emerald Fire Investments emigrant Exchange Control Regulations GLA government group IFRS independent property valuers independent reporting accountants or PKF industrial portfolio invited investors issue price or offer price Java Capital linked unit certificates, certified transfer deeds, balance receipts and any other documents of title to linked units acceptable to the board; Emerald Fire Investments (Proprietary) Limited, (Registration number 2005/023375/07), a private company duly incorporated in accordance with the laws of South Africa; an emigrant from South Africa whose address is outside the common monetary area; the Exchange Control Regulations of South Africa issued under the Currency and Exchanges Act, 1933 (Act 9 of 1933), as amended; the gross lettable area, being the total area of a property that can be rented to a tenant; the government of South Africa; collectively, the company and its subsidiaries from time to time; International Financial Reporting Standards; collectively, Broll Valuation Services and Alternative Real Estate; PKF (Jhb) Inc. (Registration number 1994/001166/21), a limited liability partnership incorporated in accordance with the laws of South Africa, full details of which are set out on page 3; collectively, the properties set out in Annexure 5 which are detailed as being in the industrial sector; those private clients, selected financial institutions and retail investors who have been invited to participate in the private placement; the price at which the linked units are to be issued by Dipula pursuant to the private placement being R8.58 and R5.53 per A-linked unit and per B-linked unit, respectively; collectively, Java Capital (Proprietary) Limited (Registration number 2002/031862/07) and Java Capital Trustees and Sponsors (Proprietary) Limited (Registration number 2006/005780/07), private companies duly incorporated in accordance with the laws of South Africa, full details of which are set out on page 3; JHI or the property manager Topeka Trading 4 (Proprietary) Limited (Registration number 2007/021131/07), a private company duly incorporated in accordance with the laws of South Africa, trading as JHI; Jibar Johannesburg inter-bank agreed rate; 9

12 JSE JSE Listings Requirements King III last practical date JSE Limited (Registration number 2005/022939/06), licensed as an exchange under the Securities Services Act, 2004 (Act 36 of 2004), and a company duly incorporated in accordance with the laws of South Africa; the JSE Listings Requirements, as issued by the JSE from time to time; the Code of Corporate Practices and Conduct in South Africa representing principles of good corporate governance as laid out in the King Report, as amended from time to time; the last trading date before the practical finalisation of this prospectus, being 21 July 2011; listing the proposed listing of the linked units of Dipula in the Real Estate Real Estate Holdings and Development sector of the JSE lists; listing date Wednesday, 17 August 2011, being the proposed date of listing of Dipula linked units on the JSE in terms of the approval granted by the JSE, subject to Dipula meeting the JSE Listings Requirements in respect of the requisite spread of linked unitholders and an overall minimum amount of R being raised in terms of the private placement; m 2 square metres; Madison Property Fund Managers MAP MAPF MAPIT Mergence Mergence acquisition agreement Mergence portfolio Mergence transaction MOI net asset value or NAV non-resident office portfolio press private placement A-linked units private placement B-linked units Madison Property Fund Managers (Proprietary) Limited (Registration number 2003/021772/07), a private company duly incorporated in accordance with the laws of South Africa; Mergence Africa Properties (Proprietary) Limited (Registration number 2005/005391/07), a private company duly incorporated in accordance with the laws of South Africa; Mergence Africa Property Fund (Proprietary) Limited (Registration number 2006/016706/07), a private company duly incorporated in accordance with the laws of South Africa; Mergence Africa Property Investment Trust (Master s reference number IT11263/2003), a trust established in accordance with the laws of South Africa; collectively, MAPF and MAPIT; the agreement between, MAP, Dipula and Redefine dated 28 June 2011 in terms of which the Mergence transaction will be effected as detailed in paragraph 11.1; collectively, the properties numbered as set out in Annexure 5 which were acquired pursuant to the Mergence transaction; the acquisition by Dipula of the entire issued share capital of and claims against MAP in terms of the Mergence acquisition agreement; the memorandum of incorporation of Dipula; the net asset value of the group from time to time; a person whose registered address is outside the common monetary area and who is not an emigrant; collectively, the properties set out in Annexure 5 which are detailed as being in the office sector; collectively, the Business Day and Beeld newspapers; up to A-linked units to be issued and/or sold pursuant to the private placement; up to B-linked units to be issued and/or sold pursuant to the private placement; 10

13 private placement or placement private placement price private placement units property management agreement property portfolio prospectus R or Rand the offer to invited investors to subscribe for or purchase up to private placement A-linked units and up to private placement B-linked units prior to the listing; the offer price of R8.58 in respect of the private placement A-linked units or the offer price of R5.53 in respect of the private placement B-linked units, as the case may be; collectively, the private placement A-linked units and the private placement B-linked units; the management agreement concluded between Dijalo Asset Management, Madison Property Fund Managers, Dipula and JHI dated 7 December 2010 in terms of which JHI will provide property management services to Dipula, the salient details of which are set out in Annexure 4; collectively, the Asakhe portfolio, the Dipula portfolio, the Mergence portfolio and the Redefine portfolio specific of details of which are described in Annexure 5; this prospectus dated 28 July 2011 and the annexures thereto, which have been prepared in compliance with the JSE Listings Requirements and the Companies Act; the South African Rand, the lawful currency of South Africa; Redefine Redefine Properties Limited (Registration number 1999/018591/06), a public company duly incorporated in accordance with the laws of South Africa and listed on the JSE; Redefine acquisition agreement the agreement between, Redefine, MAPF and Java Capital dated 24 June 2011 in terms of which the Redefine transaction will be effected as detailed in paragraph 11.3; Redefine portfolio Redefine transaction retail portfolio collectively, properties numbered as set out in Annexure 5 which were acquired pursuant to the Redefine transaction; the acquisition by Java Capital (in its capacity as trustee for the time being of MAPIT) of 15 property letting enterprises or leasehold rights to the extent that the properties have not been transferred into the name of Dipula prior to the date of the listing, in terms of the Redefine acquisition agreement; collectively, the properties set out in Annexure 5 which are detailed as being in the retail sector; Safika Safika Holdings (Proprietary) Limited (Registration number 1996/01693/07), a private company duly incorporated in accordance with the laws of South Africa; SARB South African Reserve Bank; sellers collectively, MAP (in respect of A-linked units and B-linked units) and Dijalo (in respect of A-linked units and B-linked units); SENS shares South Africa The Standard Bank of South Africa Limited the Securities Exchange News Service of the JSE; ordinary shares in Dipula with no par value and which are indivisibly linked to either A-debentures or B-debentures, as the case may be, in the ratio of one share for every one debenture held; the Republic of South Africa; The Standard Bank of South Africa Limited (Registration number 1962/000738/06), a public company duly incorporated in accordance with the laws of South Africa; 11

14 Standard Bank Properties Strate transaction costs transfer transfer date transfer secretaries or Link Market Services trustee for debenture holders underwriting agreement Standard Bank Properties (Proprietary) Limited (Registration number 1957/000858/07/07), a private company duly incorporated in accordance with the laws of South Africa; Strate Limited (Registration number 1998/022242/06), a public company duly incorporated in South Africa, which is a registered in terms of the Securities Services Act (Act 36 of 2004), as amended, and which is responsible for the electronic settlement system on the JSE; the costs and expenses incurred or to be incurred in respect of the Mergence transaction, the Asakhe transaction, the Redefine transaction, the private placement and the listing, as set out in paragraph 12; the registration of transfer of the relevant immovable property into the name of the purchaser in the relevant deeds registry office; the date of registration of transfer at the relevant deeds registry office; Link Market Services South Africa (Proprietary) Limited (Registration number 2000/007239/07), a private company duly incorporated in accordance with the laws of South Africa, full details of which are set out on page 3; Java Capital Trustees and Sponsors (Proprietary) Limited (Registration number 2006/005780/07), incorporated in accordance with the laws of South Africa, full details of which are set out on page 3; the agreement between Dipula and Redefine, dated 27 June 2011 in terms of which Redefine agreed to underwrite R860 million of the private placement, further details of which are set out in paragraphs 6 and of the prospectus; and VAT Value-added Tax levied in terms of the Value-added Tax Act 1991 (Act 81 of 1991), as amended. 12

15 SALIENT FEATURES The information set out in this section of the prospectus is an overview and is not intended to be comprehensive. It should be read in conjunction with the information contained in the other sections of this prospectus. The definitions commencing on page 7 of this prospectus apply mutatis mutandis to the salient features. 1. INTRODUCTION Dipula is a property loan stock company. It owns a diversified property portfolio of retail, industrial and office properties comprising 175 investment properties from which rental income streams will be derived. 2. BACKGROUND TO DIPULA Dipula was established in 2006 with the aim of investing in commercial real estate. The company acquired an initial portfolio of R300 million in the same year. Since formation Dipula has been prudently growing its property portfolio. Prior to the listing Dipula merged with Mergence and in the process grew the value of its asset base to R1.4 billion. The acquisition of the Redefine portfolio and Asakhe which will be implemented immediately prior to the listing will increase the value of the group s property portfolio to approximately R2.1 billion. The property management and asset management functions are performed externally by highly competent teams whose details are set out in Annexure 2 to this prospectus. The company holds a diversified portfolio of properties throughout South Africa. 3. MANAGEMENT OF DIPULA 3.1 The asset management function of the group is undertaken by the asset manager. The salient details of the asset management agreement and details of the asset management function are set out in Annexure The property management function of the group is outsourced on market related terms with JHI. The salient details of the property management agreement and details of the property management function are set out in Annexure DETAILS OF THE PRIVATE PLACEMENT 4.1 An offer to subscribe for and/or acquire up to A-linked units and up to B-linked units at an issue price of R8.58 and R5.53, respectively, which will be made by way of a private placement by the company and the sellers to invited investors, which offer may raise up to the R The minimum amount which, in the opinion of the directors, must be raised pursuant to the private placement is R unless the sellers elect or agree to sell less private placement units, however since Redefine has underwritten the private placement by an amount up to R , the minimum amount to be raised is R (the difference between the minimum amount required and the underwritten amount) to be utilised, inter alia, for the purposes set out in paragraph 13.1 of the prospectus. The private placement is conditional upon this minimum amount being received and on the minimum spread requirements of the JSE being satisfied by not later than 48 hours prior to the listing. 4.3 The linked units issued pursuant to the private placement are not convertible or redeemable. 4.4 There are no fractions of linked units being issued pursuant to the private placement. 4.5 The private placement is being partially underwritten by Redefine for an amount up to R NATURE OF BUSINESS AND GROUP STRUCTURE 5.1 Nature of business Dipula is a South African registered property loan stock company. Its business is long term property investment in South Africa. The financial year end of the group is 31 August. 13

16 5.2 Group structure Dipula Asakhe 100% 100%* Dipula Property Trust MAPF 100% 100% Emerald Fire Investments MAPIT 100%# 100% 100% 100% 100% Asakhe portfolio Dipula portfolio Mergence portfolio Redefine portfolio * Dipula is the sole capital and income beneficiary of the Dipula Property Trust. # MAPF is the sole capital and income beneficiary of the MAPIT. 6. PROSPECTS 6.1 Dipula is a well diversified property fund with a retail bias. It aims to achieve dependable, sustainable growth through a focus on quality of income and tight cost management. 6.2 Rental escalations in the existing portfolio, at approximately 8.4%, are in excess of current inflation. Average rentals are low with scope for positive reversions on renewal. The group is exposed to the high growth segments of the economy. This is particularly so in Dipula s retail portfolio where the group enjoys significant exposure to the lower income households that are expected to be the primary driver behind the anticipated growth in consumer spending over the next few years. The industrial portfolio is well located in established industrial areas with good access to highways and power supply. Offices are well located, principally in Johannesburg s Northern suburbs. 6.3 Prospects for acquisitive growth are considered good. The rapid growth of most existing listed property funds coupled with consolidation in the listed property sector in the past few years has led to existing listed property funds disposing of smaller assets. Dipula is well positioned to prudently exploit these opportunities as well as to exploit opportunities to acquire property currently in private hands. Dipula will leverage off its status as a black managed fund to acquire government and parastatal tenanted properties where opportunities arise. Acquisitions will only be considered if they are yield enhancing and the group will not embark on any speculative development activity. 6.4 The A- and B-linked unit structure provides different risk and reward profiles for different investors. The A-debenture is bond like in nature, with distributions increasing at 5% per annum until 31 August 2017 and then at the lower of 5% per annum or in line with the prevailing CPI rate. The distributions on the A-debentures rank ahead of the distributions on the B-debentures and the group s distributable income would need to fall by approximately 40% from current levels for the distribution payments on the A-debenture to be at risk. 6.5 The holders of the B-debentures receive the residual distributable income after the payment of the distributions on the A-debentures. As a result the B-debentures offer greater scope for growth in income distributions. By way of example, if the distributable income of the group was to grow by 8% from the forecast distributable earnings on the B-linked units would grow by almost 12%. 7. FORECAST STATEMENTS OF COMPREHENSIVE INCOME 7.1 Set out below are the forecast statements of comprehensive income of the group ( the forecasts ) for the year ending 31 August 2011 and the year ending 31 August

17 7.2 The assumptions on which the forecasts are based are detailed in paragraph 22 of the prospectus. Forecast Forecast for the for the year ending year ending 31 August August 2012 R R Revenue Gross property rental income Contracted Uncontracted Straight-line rental income adjustment Other income (recoveries) Total revenue Expenses Property operating expenses ( ) ( ) Adjustment from straight-line rental income ( ) ( ) Asset management fee ( ) ( ) Administrative expenses ( ) ( ) Operating profit Finance income Finance expenses ( ) ( ) Profit before debenture interest Debenture interest ( ) ( ) Debenture interest to A-linked unitholders ( ) ( ) Debenture interest to B-linked unitholders ( ) ( ) Profit after debenture interest Fair value adjustment on investment property ( ) Restructuring costs ( ) Loss for the year before taxation ( ) Taxation Loss for the year after taxation ( ) Other comprehensive income Total comprehensive income ( ) Attributable to: Equity holders of parent ( ) Non-controlling interest Loss for the year after taxation ( ) Reconciliation between loss, headline (loss)/earnings and distributable earnings Loss for the year ( ) Adjusted for: Debenture interest (Loss)/earnings/Headline (loss)/earnings (linked units) ( ) Adjusted for: Straight-line rental income adjustment ( ) ( ) Adjustment from straight-line rental income Fair value adjustment on investment property (net of tax) Restructuring costs Distributable earnings (linked units)

18 Forecast Forecast for the for the year ending year ending 31 August August 2012 R R Actual number of A-linked units in issue Actual number of B-linked units in issue Weighted average number of A-linked units in issue Weighted average number of B-linked units in issue Distribution per A-linked unit (cents) Distribution per B-linked unit (cents) Forward yield based on R8.58 issue price per A-linked unit 9.25% Forward yield based on R5.53 issue price per B-linked unit 10.73% Loss per share (cents) (400.70) Headline loss per share (cents) (362.44) (Loss)/earnings per A-linked unit (cents) (334.02) (Loss)/earnings per B-linked unit (cents) (350.85) Headline (loss)/earnings per A-linked unit (cents) (295.77) Headline (loss)/earnings per B-linked unit (cents) (312.59) ACTION REQUIRED Applications for private placement units must be made by invited investors in accordance with paragraph 15.5 of this prospectus on the blue application form accompanying this prospectus. Applications for private placement units can only be made for dematerialised linked units and must be submitted through a CSDP or broker in accordance with the agreement governing the relationship between the applicant and the CSDP or broker by the cut-off time stipulated by the CSDP or broker. If you are in any doubt as to what action to take, you should consult your broker, attorney or other professional advisor immediately. Applications for private placement units may only be made for a minimum of A-linked units or B-linked units and in multiples of A-linked units or B-linked units thereafter. Fractions of linked units will not be issued. Linked units will only be capable of being traded on the JSE in dematerialised form. 9. FURTHER COPIES OF THE PROSPECTUS Copies of the prospectus may be obtained between 08:30 and 17:00 on business days from Thursday, 28 July 2011 to Thursday, 11 August 2011 at the following places: Dipula Income Fund Limited 2 Arnold Road, Rosebank, 2196 Java Capital 2nd Floor, 2 Arnold Road, Rosebank, 2196 Link Market Services 13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein, Johannesburg, 2001 An abridged version of this prospectus was released on SENS on Thursday, 28 July 2011 and will be published in the press on Friday, 29 July

19 Dipula Income Fund Limited (formerly Dipula Property Fund (Proprietary) Limited ) (Incorporated in the Republic of South Africa) (Registration number 2005/013963/06) JSE code for A-linked units: DIA JSE code for B-linked units: DIB ISIN for A-linked units: ZAE ISIN for B-linked units: ZAE ( Dipula or the company ) SECTION 1 INFORMATION ON THE GROUP AND LINKED UNITS 1. NAME, ADDRESS AND INCORPORATION Dipula Income Fund Limited (Registration number 2005/013963/06) was incorporated as a private company on 10 May 2005 and as confirmed by the CIPC converted to a public company on 23 June The names, registration numbers, places of incorporation, dates of incorporation, nature of business and issued capital of all the Dipula subsidiaries, are set out in Annexure 1 to this prospectus. 2. Dipula board of directors The board of Dipula is currently as follows: 2.1 Zanele Joyce Matlala (Independent Non-Executive Chairperson) Izak Smolly Petersen (Chief Executive Officer) Nyangeni Saul Gumede (Executive Director) Brigitte de Bruyn (Financial Director) Brian Hilton Azizollahoff (Independent Non-Executive Director) Elias (Eltie) Links (Independent Non-Executive Director) Younaid Waja (Independent Non-Executive Director) 2.2 Directors of Dipula subsidiaries Post the effective date of each of the Mergence transaction and the Asakhe transaction, the boards of the Dipula subsidiaries will be constituted as follows: MAPF I S Peterson N S Gumede B de Bruyn J Junkoon Asakhe I S Peterson N S Gumede B de Bruyn J Junkoon 17

20 Emerald Fire Investments I S Peterson N S Gumede B de Bruyn J Junkoon A summary of the experience and qualification of the directors of Dipula and Dipula s subsidiaries is set out in Annexure 2. Annexure 2 also contains the following information: details of directors and executive management including, inter alia, their qualifications and experience; directors interests in transactions, property acquired or to be acquired and securities; directors emoluments; linked unit options granted to directors; terms of office; directors declarations; and directors other directorships and partnerships. 2.3 Dipula advisors The names and business addresses of Dipula s auditors, attorneys, bankers, corporate and legal advisor and company secretary are set out in the corporate information section detailed on page Borrowing powers The borrowing powers of the group have not been exceeded during the three years preceding the last practicable date. Details of borrowing powers of the company exercisable by the directors of Dipula and all subsidiaries and the manner in which such borrowing powers may be varied is set out in Annexure 3 to this prospectus. None of the loans listed in Annexure 12 to this prospectus have any redemption or conversion rights attaching to them. As at the last practicable date, Dipula has undertaken no off-balance sheet financing and has no outstanding loans receivable. 2.5 Asset management The asset management function of the group is undertaken by the asset manager. The salient details of the asset management agreement are set out in Annexure 4 and details of the asset manager are set out in Annexure Property management The property management function of the group is outsourced on market related terms to JHI. The salient details of the property management agreement are set out in Annexure 4 and details of the property manager are set out in Annexure HISTORY, STATE OF AFFAIRS AND PROSPECTS OF THE COMPANY 3.1 General description of the business Dipula is a South African registered property loan stock company. Its business is long-term property investment in South Africa. The company owns a diversified property portfolio of retail, industrial and office properties comprising 175 investment properties from which rental income streams will be derived. The financial year-end of the group is 31 August. Dipula will seek to grow through earnings enhancing acquisitions targeting property assets of between R10 million and R70 million. The company which is South African based has built a geographically and sectorially well diversified property portfolio. Dipula will focus on income growth whilst remaining disciplined with the company s cost management and prudent interest rate risk management. 3.2 Incorporation, history and nature of business Dipula was established in 2006 with the aim of investing in commercial real estate. The company acquired an initial portfolio of R300 million in the same year. Since formation Dipula has been prudently growing its property 18

21 portfolio. In 2011 Dipula merged with Mergence and in the process grew its asset base to R1.4 billion. Property management is outsourced and the asset management function is performed externally by a highly competent team. The company holds a diversified portfolio of properties throughout South Africa. The company converted from a private company named Dipula Property Fund (Proprietary) Limited to a public company named Dipula Income Fund Limited with effect from Thursday, 23 June Group structure Dipula Asakhe 100% 100%* Dipula Property Trust MAPF 100% 100% Emerald Fire Investments MAPIT 100%# 100% 100% 100% 100% Asakhe portfolio Dipula portfolio Mergence portfolio Redefine portfolio * Dipula is the sole capital and income beneficiary of the Dipula Property Trust. # MAPF is the sole capital and income beneficiary of the MAPIT. 3.4 Analysis of the property portfolio The group s property portfolio, valued in aggregate at R2.1 billion at 28 February 2011, will consist of 175 properties with an effective GLA of m 2. Full details of the property portfolio of the group are set out in Annexure 5. The analysis of the property portfolio of Dipula is provided in the graphs and tables below. Gross rentals as utilised in the graphs and tables below have been extracted from the forecast statements of comprehensive income set out in paragraph 22 of the prospectus Sectoral profile 19

22 3.4.2 Geographic profile Tenant profile * less than 1% Tenant profile Based on GLA Total Retail Industrial Office A 50.4% 61.7% 26.8% 53.1% B 13.2% 8.0% 18.5% 19.3% C 36.4% 30.3% 54.7% 27.6% Tenant profile 100.0% 100.0% 100.0% 100.0% Based on revenue Total Retail Industrial Office A 52.4% 59.2% 26.7% 53.2% B 15.2% 11.2% 16.0% 22.6% C 32.4% 29.6% 57.3% 24.2% 100.0% 100.0% 100.0% 100.0% For the pie chart above the following key is applicable: A. Large national tenants, large listed tenants, government and major franchisees. These include, inter alia, Pick n Pay, Shoprite, Absa Bank and The South African Revenue Service. B. National tenants, listed tenants, franchisees and medium to large professional firms. These include, inter alia, Autozone, Nandos, Foschini, Pepkor and Lewis Stores. C. Other (approximately 627 tenants). 20

23 3.4.4 Vacancy profile Lease expiry profile Total Total Retail Retail Industrial Industrial Office Office To 31 August GLA GR* GLA GR* GLA GR* GLA GR* Vacancy 7.9% 7.4% 7.5% 9.6% % 6.1% 5.4% 5.0% 14.6% 13.3% 6.1% 4.4% % 24.5% 29.4% 25.6% 22.2% 23.7% 28.3% 25.4% % 24.1% 22.0% 23.2% 20.7% 19.3% 29.5% 27.3% % 15.5% 12.2% 11.1% 10.4% 13.4% 15.6% 24.5% % 8.2% 8.6% 8.7% 10.8% 17.5% 1.5% 2.1% 2016 and beyond 13.5% 21.6% 15.0% 26.4% 13.8% 12.8% 9.4% 16.3% * GR = gross rental revenue 100% 100% 100% 100% 100% 100% 100% 100% Rental escalations and rental per square metre The annualised weighted average rental escalation by GLA in the property portfolio as at 28 February 2011 is as follows: Sector % Retail 8.1 Industrial 8.7 Office 8.7 Total property portfolio 8.4 The annualised weighted average rental per square metre in the property portfolio as at 28 February 2011 is as follows: Sector R/m 2 Retail Industrial Office Total property portfolio The average property yield in the property portfolio as at 28 February 2011, on an annualised basis, is 10.4% Valuation reports The Dipula portfolio and the Mergence portfolio was valued by Broll Valuation Services with a valuation date as at 28 February 2011 and their summary valuation report is presented in Annexure 6. The Asakhe portfolio and the Redefine portfolio was valued by Alternative Real Estate with a valuation date as at 28 February 2011 and their summary valuation report is presented in Annexure 6. 21

24 3.5 Material changes in the business of Dipula There have been no material changes in the business of the group during the past three years. 3.6 Prospects Dipula is a well diversified property fund with a retail bias. It aims to achieve dependable, sustainable growth through a focus on quality of income and tight cost management. Rental escalations in the existing portfolio, at approximately 8.4%, are in excess of current inflation. Average rentals are low with scope for positive reversions on renewal. The group is exposed to the high growth segments of the economy. This is particularly so in Dipula s retail portfolio where the group enjoys significant exposure to the lower income households that are expected to be the primary driver behind the anticipated growth in consumer spending over the next few years. The industrial portfolio is well located in established industrial areas with good access to highways and power supply. Offices are well located, principally in Johannesburg s Northern suburbs. Prospects for acquisitive growth are considered good. The rapid growth of most existing listed property funds coupled with consolidation in the listed property sector in the past few years has led to existing listed property funds disposing of smaller assets. Dipula is well positioned to prudently exploit these opportunities as well as to exploit opportunities to acquire property currently in private hands. Dipula will leverage off its status as a black managed fund to acquire government and parastatal tenanted properties where opportunities arise. Acquisitions will only be considered if they are yield enhancing and the group will not embark on any speculative development activity. The A-linked unit and B-linked unit structure provides different risk and reward profile for different investors. The A- debenture is bond like in nature, with distributions increasing at 5% per annum until 31 August 2017 and then at the lower of 5% per annum or in line with the prevailing CPI rate. The distributions on the A-debentures rank ahead of the distributions on the B-debentures and the group s distributable income would need to fall by approximately 40% from current levels for the distribution payments on the A-debenture to be at risk. The holders of the B-debentures receive the residual distributable income after the payment of the distributions on the A-debentures. As a result the B-debentures offer greater scope for growth in income distributions. By way of example, if the distributable income of the group was to grow by 8% from the forecast distributable earnings on the B-linked units would grow by almost 12%. 3.7 Material commitments, lease payments and contingent liabilities Refer to Annexure 26, note 14 to the financial statements for the year ended 31 August 2010 for details of the company s contingent liabilities. Save for the transactions detailed in paragraph 11 of this prospectus and Annexure 9 to this prospectus there have been no material changes to the material commitments, lease payments and contingent liabilities of the company since the year ended 31 August Turnover, profit/loss and dividend history As required in terms of Regulation 79 (sub-regulation 3) (g) of the Companies Act particulars of: the gross turnover; the profits (before and after tax) or losses; the aggregate dividends paid; the dividends paid in cents per linked units; and the dividend cover for each year, for Dipula in the preceding 3 years, being 31 August 2010, 31 August 2009 and 31 August 2008, are contained in Annexure 7. The financial information presented in Annexure 7 has been extracted from the audited financial statements of Dipula for the years ended 31 August 2010, 31 August 2009 and 31 August LINKED UNIT CAPITAL OF THE COMPANY Details of the linked unitholders holding more than 3% of the issued linked unit capital and the linked units issued since the company s incorporation as well as the capital structure on listing are included in Annexure 9 to this prospectus. Also included in Annexure 9 are the rights attaching to the linked units. Annexure 3 contains the salient features of the MOI. 22

25 Annexure 10 contains the following salient terms relating to the debentures issued: class of debentures; terms and conditions of debentures; whether debentures are secured or unsecured; and any other important terms and conditions. 5. OPTIONS AND PREFERENTIAL RIGHTS IN RESPECT OF LINKED UNITS Details of the options and preferential rights in respect of the linked units are set out in Annexure COMMISSIONS PAID OR PAYABLE Other than capital raising fee payable to Java Capital in respect of the private placement and an underwriting fee of R24 million payable to Redefine in respect of their underwriting commitment of R , no other commissions, discounts or brokerages have been paid nor have any other special terms been granted in connection with the issue or sale of any securities, linked units or debentures in the capital of the company or any of its subsidiaries, in the three years preceding the date of this prospectus. The capital raising fee payable to Java Capital is based on 2.5% on the first R of capital raised and 1.0% of capital raised in excess of R , with the aggregate fee being capped at R15 million. Save as set out in this paragraph, there have been no other commissions paid or payable in respect of underwriting by the group in the three years preceding the date of this prospectus. Salient details of the underwriter are set out in Annexure 11. The company has not paid any material technical or secretarial fees during the three years preceding the issue of this prospectus. Save for the asset management and property management agreements referred to in paragraphs 2.5 and 2.6, the company is not subject to any royalty agreements or other management agreements. The company has not paid any commission or consideration other than in the normal course of business during the three years preceding the date of this prospectus. The company has not entered into any promoters agreements during the three years preceding the date of this prospectus. 7. MATERIAL CONTRACTS Material contracts, which have been entered into by the group during the two years preceding the last practicable date, other than in the ordinary course of business, are: the asset management agreement referred to in paragraph 2.5, the salient features of which are set out in Annexure 4; the property management agreement referred to in paragraph 2.6, the salient features of which are set out in Annexure 4; the loan agreements, the salient details of which are set out in Annexure 12; the Mergence acquisition agreement, the details of which are set out in paragraph 11.1 of this prospectus; the Asakhe acquisition agreement, the details of which are set out in paragraph 11.2 of this prospectus; the Redefine acquisition agreement, the details of which are set out in paragraph 11.3 of this prospectus; and the underwriting agreement, details of which are set out in paragraph of this prospectus. Save for those contracts listed above, the company has not entered into any other material contract, being a contract entered into otherwise than in the ordinary course of business, within the two years prior to the date of this prospectus or at any time containing an obligation or settlement that is material to the company or its subsidiaries at the date of this prospectus. 8. INTERESTS OF DIRECTORS AND PROMOTERS Details of the directors interests in the company and emoluments are set out in paragraph 3 and paragraph 6, respectively, of Annexure 2 to this prospectus. 23

26 9. LOANS 9.1 Details of loans and borrowings advanced to the company at the last practicable date are set out in Annexure At the last practicable date, the company has no loan capital outstanding. 9.3 As at the last practicable date, Dipula has undertaken no off-balance sheet financing. 9.4 None of the loans listed in Annexure 12 have any redemption or conversion rights attaching to them. 10. LINKED UNITS ISSUED OTHERWISE THAN FOR CASH Other than the issuance of linked units to MAP pursuant to the Mergence transaction as detailed in paragraph 11.1, no other linked units were issued or agreed to be issued by the company or any of its subsidiaries during the past three years otherwise than for cash. 11. PROPERTY AND SUBSIDIARIES ACQUIRED OR TO BE ACQUIRED 11.1 Mergence transaction With effect from 1 August 2011, Dipula acquired all the shares in issue and claims against MAPF held by MAP from MAP for an aggregate purchase consideration of R settled by the issue to MAP of A-linked units and B-linked units issued at the issue price, such issue to be effected at least 2 business days before the listing date. Dipula acquired all the issued shares in issue and claims against MAPF held by Redefine for R to be discharged in cash within 7 business days of the listing date. MAPF s sole assets are its beneficial interest in and claims against MAPIT which in turn owns the Mergence portfolio and, subsequent to the implementation of the Redefine transaction, the Redefine portfolio Asakhe transaction Dipula has entered into an agreement with Standard Bank Properties and Safika to acquire 100% of the shares and claims in Asakhe with effect from the later of 1 July 2011 or three business days after the last of the conditions precedents have been fulfilled. Asakhe s sole asset is its shares and claims against Emerald Fire Investments, which houses the property portfolio. Following the purchase of the shares and claims in Asakhe. It has been agreed that Emerald Fire Investments will dispose of the Sturdee property, (being Portion 1 of Erf 105 Rosebank Township, Registration Division IR, Province of Gauteng, measuring 2 188m² and Remaining Extent of Erf 105 Rosebank Township, Registration Division IR, Province of Gauteng, measuring 1 529m²) and the remainder of portion 3 of Erf 287 Horizon View Township, Registration Division I.Q., the province of Gauteng, measuring square metres (the excluded properties ). The total purchase consideration payable is an amount equivalent to: R ; less R relating to the tenant installation costs in respect of the Virgin Active property; less an amount equal to any interest bearing borrowings of Emerald Fire Investments on the effective date which will be approximately R ; less the breakage costs being any and all costs, expenses or damages that Asakhe will become liable for as a result of or in relation to the unwinding of any interest rate hedges, fixes or the like to which Asakhe is a party as at the date of listing of Dipula and/or in relation to the early settlement of the abovementioned interest bearing borrowings, which will be approximately R ; plus or minus the amount determined to be paid by Dipula under the adjustment account which equates to the net working capital of Emerald Fire of approximately R ; plus any proceeds received by Asakhe in respect of the sale of the excluded properties (which proceeds shall include amounts received by Asakhe from the purchasers of the excluded properties net of all costs incurred by Asakhe in regard to the sale of the excluded properties and net of any taxes payable in respect of such disposal). As a term of the Asakhe acquisition agreement, Standard Bank Properties and Safika have agreed to provide Dipula a R rental guarantee. The rental guarantee will be paid by way of set-off against the purchase consideration provided that this method of payment is for convenience only and is not intended to alter the income nature of this rental guarantee. The Asakhe transaction is conditional upon Dipula securing the required funding for the acquisition, which will occur on the closing of the private placement. 24

27 11.3 Redefine transaction Redefine has entered into an agreement with Mergence, whereby Mergence will purchase immovable property and the businesses relating to said properties from Redefine at an aggregate purchase consideration of R payable in cash with effect from the listing date. If 15 business days prior to the date of listing of Dipula, any of the properties have not been lodged for transfer into the name of Mergence, then as part of the sale of business Redefine shall grant Mergence leasehold rights over those properties that have not yet been lodged for transfer and the purchase consideration for the business in respect of which the properties have not transferred will be reduced by R100 per property. The lease in terms of the leasehold rights shall be perpetual and include all rights normally associated with the ownership of properties. Mergence shall be liable for all costs and expenses of any nature relating to the property. The businesses will be transferred on the date of registration of the relevant immovable properties into the name of Mergence or the date of transfer of the leasehold rights to Mergence. Redefine and Mergence will continue to take all steps to procure the transfer of the properties into the name of Mergence as soon as possible after the date of listing of Dipula. On the date of registration of the Mergence s leasehold rights against the title deeds of the property, the purchase consideration of R100 is payable to Redefine. Set out in Annexure 13 are details of any immovable property and/or fixed assets and/or business undertakings which have been acquired within the past three years or are in the process of being or are proposed to be acquired by the company and/or any of its subsidiaries (or which the company and/or any of its subsidiaries has an option to acquire). Other than in respect of the acquisitions detailed in Annexure 13, no other properties or subsidiaries have been acquired by the group within the past three years. The names and addresses of the vendors in respect of any such assets acquired by the company and/or its subsidiaries and the consideration received or to be received by each of them is detailed in Annexure PRELIMINARY EXPENSES AND ISSUE EXPENSES The preliminary and issue expenses (excluding VAT) relating to the Mergence transaction, the Asakhe transaction, the Redefine transaction, the listing and the private placement which have been incurred by the company within the previous 3 years or that are expected to be incurred are set out below: R Corporate advisor and sponsor fees payable to Java Capital initial fee Valuation fees payable to Broll Valuation Services in respect of the Dipula portfolio and the Mergence portfolio Valuation fees payable to Alternative Real Estate in respect of the Asakhe portfolio and the Redefine portfolio Independent reporting accountants fee payable to PKF (Jhb) Inc Auditors review of interim numbers payable to PKF (Jhb) Inc Legal fees payable to Ledwaba Mazwai Attorneys Legal fees payable to Vani Chetty Competition Law (Proprietary) Limited Transaction sponsor fees payable to Deloitte & Touche Sponsor Services (Proprietary) Limited JSE Documentation fee Listing fees Competition Commission fees (large merger) for Dipula/Mergence merger and acquisition of the Asakhe portfolio and the Redefine portfolio Due diligence fees payable to Veritas Projects in respect of the Asakhe portfolio and the Redefine portfolio Announcements Printing costs Marketing costs Transfer secretaries Company secretary Capital raising fee payable to Java Capital Underwriting fee payable to Redefine

28 SECTION 2 DETAILS OF THE OFFER 13. PURPOSES OF THE OFFER 13.1 The main purposes of the private placement and the listing are to: provide South African investors, both institutional and private, the opportunity to participate in the income streams and future capital growth through an investment in Dipula; provide an additional source of capital to fund the growth aspirations of the group; fund the Asakhe transaction, the Redefine transaction and the Mergence transaction; repay a portion of loans which are currently outstanding; and defray the preliminary expenses referred to in paragraph In compliance with the JSE Listings Requirements and the Companies Act, the purposes of this prospectus are to: provide invited investors with the relevant information regarding the group, its property portfolio and its directors and management; provide invited investors with details of the group s strategy and vision; enable Dipula to obtain a listing of its entire issued linked unit capital on the JSE and set out the salient dates and terms of the listing; and provide details of the private placement. The listing is being preceded by the private placement in order to afford invited investors the ability to participate in the equity of Dipula. The capital raised in terms of the private placement will be used as outlined in paragraph 13.1 above. 14. SALIENT DATES AND TIMES Opening date of the private placement (09:00) Closing date of the private placement (12:00) (2) Results of the private placement released on SENS on Results of the private placement published in the press on Notification of allotments Listing of the linked units on the JSE (09:00) Accounts at CSDP or broker updated and debited in respect of dematerialised linked unitholders (3) 2011 Thursday, 28 July Thursday, 11 August Friday, 12 August Monday, 15 August Monday, 15 August Wednesday, 17 August Wednesday, 17 August Notes: 1. These dates and times are South African dates and times and are subject to amendment. Any such amendment will be released on SENS and published in the press. 2. Invited investors may only receive linked units in dematerialised form and must advise their CSDP or broker of their acceptance of the private placement in the manner and cut-off time stipulated by their CSDP or broker. 3. CSDP s effect payment on a delivery-vs-payment basis. 15. PARTICULARS OF THE OFFER 15.1 Particulars of the private placement The private placement comprises of: an offer to subscribe for A linked units at a offer price of R8.58 per A linked unit, which offer will raise up to R ; an offer to subscribe for B linked units at a offer price of R5.53 per B linked unit, which offer will raise up to R ; an offer to acquire from the sellers A linked units at a offer price of R8.58 per A-linked unit, which offer will realise up to R ; and an offer to acquire from the sellers B-linked units at a offer price of R5.53 per B linked unit, which offer will realise up to R , raising in aggregate up to R

29 The private placement is being partially underwritten by Redefine for an amount up to R The directors have made due and careful enquiry to confirm that the underwriter can meet its commitments in terms of the private placement. The directors will not increase the number of linked units offered in terms of the private placement Participation in the private placement Only invited investors may participate in the private placement. The linked units will only be issued in dematerialised form. There will be no certificated linked units issued. Invited institutional investors Invited institutional investors are to provide Java Capital, the bookrunner, with their irrevocable indications of interest by 12:00 on Thursday, 11 August Invited institutional investors will be informed of their allocated linked units, if any, on or from Monday, 15 August 2011, when the collated applications will be provided to the transfer secretaries and Strate. Invited institutional investors must make the necessary arrangements to enable their CSDP to make payment for the allocated linked units on the settlement date. The allocated linked units will be transferred, on a delivery-versus-payment basis, to successful institutional applicants on the settlement date, which is expected to be Wednesday, 17 August Selected private clients Selected private clients are to provide Java Capital, the bookrunner, with their completed application forms by 12:00 on Thursday, 11 August Selected private clients will be informed of their allocated linked units, if any, on or from Monday, 15 August Selected private clients must make the necessary arrangements to enable their CSDP or broker, as the case may be, to make payment for the allocated linked units on settlement date. The allocated linked units will be transferred, on a delivery-versus-payment basis, to successful private client applicants on the settlement date, which is expected to be Wednesday, 17 August Invited retail investors Invited retail investors are to provide Java Capital, the bookrunner, with their completed application forms by 12:00 on Thursday, 11 August Invited retail investors will be informed of their allocated linked units, if any, on or from Monday, 15 August Invited retail investors must make the necessary arrangements to enable their CSDP or broker, as the case may be, to make payment for the allocated linked units on settlement date. The allocated linked units will be transferred, on a delivery-versus-payment basis, to successful retail applicants on the settlement date, which is expected to be Wednesday, 17 August Parties who may not participate in the private placement The following categories of persons may not participate in the private placement: any person who may not lawfully participate in the private placement; and/or institutional and retail investors who have not been invited to participate and persons acting on behalf of a minor or a deceased estate Conditions to which the private placement and the listing are subject the achievement of a public spread of linked unitholders acceptable to the JSE, being a minimum of 300 public A-linked unitholders and a minimum of 300 public B-linked unitholders holding not less than 20% of the A-linked unit issued capital and not less than 20% of the B-linked unit capital of the company, respectively; and a minimum amount being the R (referred to in paragraph 16) being raised pursuant to the private placement unless the sellers elect or agree to sell less private placement units Applications Acceptance No applications will be accepted after 12:00 on Thursday, 11 August Friday, 12 August 2011 will be reserved for auditing the application spreadsheets and correcting any potential clerical errors. 27

30 Minimum number and multiples Applications must be for a minimum of 1000 A-linked units or a minimum of B-linked units and in multiples of 1000 A-linked units or B-linked units thereafter Applications irrevocable Applications submitted by invited investors are irrevocable and may not be withdrawn once received by Java Capital Copies of applications Copies or reproductions of the application form will be accepted at the discretion of the directors of the company Alterations Any alterations on the application form must be authenticated by full signature Receipts Receipts will not be issued for applications, application monies or supporting documents received Evidence of capacity to apply Other than as detailed in the application form, no documentary evidence of capacity to apply need accompany the application form, but the company reserves the right to call upon any applicant to submit such evidence for noting, which evidence will be held on file with Dipula or the transfer secretaries or returned to the applicant at the applicant s risk Reservation of rights The directors of the company reserve the right to accept or refuse any applications, either in whole or in part, or to abate any or all applications (whether or not received timeously) in such manner as they may, in their sole and absolute discretion, determine Issue and allocation of the private placement units All private placement units applied and subscribed for/purchased in terms of this prospectus will be issued at the expense of the company. All of the private placement units will be allotted subject to the provisions of the MOI and the deed and each class will rank pari passu in all respects, including dividends, with any existing issued linked units. There are no convertibility or redemption provisions relating to the linked units. The bases of allocation of the private placement units, based on irrevocable indications of interest and applications accepted by the company in accordance with paragraph 15.5 above, will be determined by the bookrunner in its sole discretion, after consultation with the company. It is intended that notice of the allocations will be given on or from Monday, 15 August Successful applicants accounts with their CSDP or broker will be credited with the allocated private placement units on the settlement date on a delivery-versus-payment basis Payment and delivery of linked units No payment should be submitted with the application form delivered to the bookrunner, Java Capital. Applicants must make the necessary arrangements to enable their CSDP or broker to make payment for the allocated private placement units on the settlement date, which is expected to be Wednesday, 17 August 2011, in accordance with each applicant s agreement with their CSDP or broker. The allocated private placement units will be transferred, on a delivery-versus-payment basis, to successful invited investors on the settlement date, which is expected to be Wednesday, 17 August The applicant s CSDP or broker must commit to Strate to the receipt of the applicant s allocation of private placement units against payment on Wednesday, 17 August

31 On the settlement date, the applicant s allocation of private placement units will be credited to the applicant s CSDP or broker against payment during the Strate settlement runs, prior to the opening of the market. The CSDP or broker concerned will receive and hold the dematerialised linked units on the applicants behalf Representation Any person applying for or accepting the private placement units shall be deemed to have represented to the company that such person was in possession of a copy of this prospectus at that time. Any person applying for or accepting the private placement units on behalf of another: shall be deemed to have represented to the company that such person is duly authorised to do so and warrants that such person and the purchaser for whom such person is acting as agent is duly authorised to do so in accordance with all relevant laws; guarantees the payment of the private placement price; and warrants that a copy of this prospectus was in the possession of the purchaser for whom such person is acting as agent Applicable law The private placement, applications, allocations and acceptances will be exclusively governed by the laws of South Africa and each applicant will be deemed, by applying for private placement units, to have consented and submitted to the jurisdiction of the Courts of South Africa in relation to all matters arising out of or in connection with the private placement Strate and the trading of linked units on the JSE Linked units may only be traded on the JSE in electronic form (dematerialised linked units) and will be trading for electronic settlement in terms of Strate immediately following the listing. Strate is a system of paperless transfer of linked units. If any applicant has any doubt as to the mechanics of Strate, the applicant should consult with his CSDP or broker or other appropriate advisor and is also referred to the Strate website at for more information. Some of the principal features of Strate are as follows: electronic records of ownership replace linked units certificates and physical delivery of certificates; trades executed on the JSE are settled within five business days; all investors owning dematerialised linked units or wishing to trade their linked units on the JSE are required to appoint either a CSDP or a broker to act on their behalf and to handle their settlement requirements; and the CSDP s or broker s nominee company, holding linked units on their behalf, will be the linked unitholder (member) of the company and not the investor. Subject to the agreement between the investor and the CSDP or broker (or the CSDP s or broker s nominee company), generally in terms of the rules of Strate, the investor is entitled to instruct the CSDP or broker (or the CSDP s broker s nominee company), as to how it wishes to exercise the rights attaching to the linked units Over-subscription The maximum number of linked units that can be subscribed for and/or purchased in terms of the private placement is A-linked units and B-linked units. In the event of an over subscription, private placement units will be allocated and issued at the discretion of the directors. Factors to be considered by the company in allocating private placement units include: achieving the JSE spread requirements for public linked unitholders, being a minimum of 300 public A-linked unitholders and a minimum of 300 public B-linked unitholders holding not less than 20% of the issued A-linked unit capital and not less than 20% of the issued B-linked unit capital of the company, respectively; and promoting liquidity, tradeability and an orderly after-market in the linked units of the company Simultaneous issues No linked units of the same class are issued or to be issued simultaneously or almost simultaneously with the issue of linked units for which application is being made. 29

32 15.13 South African Exchange Control Regulations The relevant exchange control provisions are set out in paragraph 27 of the prospectus Underwriting The private placement will be underwritten for an amount up to R by Redefine. Subject to the listing being implemented by 31 August 2011, Redefine will partially underwrite the private placement. Redefine will be obliged to subscribe for the private placement units not subscribed for by invited investors at the issue price Debenture premium Refer to Annexure 9 for further information regarding the debenture premium. 16. MINIMUM SUBSCRIPTION In the opinion of the directors, a minimum amount of R is required to be raised by the private placement for the purposes set out in paragraph 13.1 of the prospectus unless the sellers elect or agree to sell less private placement units. However since Redefine has undertaken to underwrite the private placement by an amount of up to R , the minimum amount to be raised is in fact R (the difference between the minimum amount to be raised and the underwritten amount). No other proceeds or resources (other than those raised via the private placement) are to be used to settle any other amounts. 30

33 SECTION 3 STATEMENTS AND REPORTS REGULATING THE OFFER 17. STATEMENT AS TO ADEQUACY OF CAPITAL The directors of the company are of the opinion that the working capital available to the applicant and its subsidiaries is sufficient for the group s present requirements, that is, for at least the next 12 months from the date of issue of this prospectus. 18. REPORT BY DIRECTORS AS TO MATERIAL CHANGES Save for the Mergence transaction, the Asakhe transaction and the Redefine transaction there have been no other material changes in the financial or trading position of the group between the previous financial reporting period being 31 August 2010 and the last practicable date. There have been no material changes in the business of the group during the five years preceding the last practicable date. There has been no change in the trading objects of the group during the five years preceding the last practicable date. 19. STATEMENT AS TO LISTING ON STOCK EXCHANGE Subject to the achievement of a spread of public linked unitholders acceptable to the JSE, being a minimum of 300 public A-linked unitholders and a minimum of 300 public B-linked unitholders holding not less than 20% of the issued A-linked unit capital and not less than 20% of the issued B-linked unit capital of the company, respectively, the JSE has granted Dipula approval for the listing of up to A-linked units and up to B-linked units with effect from the commencement of business on Wednesday, 17 August 2011 in the Real Estate Real Estate Holdings and Development sector of the JSE lists under the abbreviated names Dipula A and Dipula B, JSE Codes DIA for A-linked units and DIB for B-linked units and ISIN Codes ZAE for A-linked units and ZAE for B-linked units, respectively. It is anticipated that the listing will be effective as from the commencement of trade of the JSE on Wednesday, 17 August REPORT BY AUDITORS IN RESPECT OF BUSINESS UNDERTAKINGS ACQUIRED In terms of Regulation 77 of the Companies Act, the auditor is required to prepare a report in respect of the profits and losses of the business undertakings acquired by Dipula, through Mergence, for the three financial years preceding the date of the prospectus and the assets and liabilities of the business undertakings at the last date to which the financial statements of the business undertaking were made out. In this regard, Mergence has concluded the Redefine acquisition agreement and accordingly Annexure 15 sets out the auditors report thereon. In terms of the Redefine acquisition agreement, 15 property letting enterprises are to be purchased for a total consideration of approximately R395 million. Further details on these properties are set out in Annexure REPORT BY AUDITOR WHERE THE COMPANY WILL ACQUIRE A SUBSIDIARY In terms of Regulation 78 of the Companies Act, the auditor is required to prepare a report in respect of the profits and losses of an entity and its subsidiaries whose shares are acquired by Dipula, such that the entity becomes a subsidiary of Dipula, for the three financial years preceding the date of the prospectus and the assets and liabilities of the entity and its subsidiaries whose shares are acquired by Mergence at the last date to which the financial statements of the business undertaking were made out. Annexure 16 sets out the profits and losses of Mergence for the financial years ended 31 August 2010, 31 August 2009 and 31 August 2008 and the assets and liabilities of Mergence as at 31 August Annexure 17 sets out the auditors report in respect of the Mergence transaction. Annexure 18 sets out the profits and losses of Asakhe for the financial years ended 31 December 2010, 31 December 2009 and 31 December 2008 and the assets and liabilities of Asakhe as at 31 December Annexure 19 sets out the auditors report in respect of the Asakhe transaction. 31

34 SECTION 4 ADDITIONAL MATERIAL INFORMATION 22. FORECAST STATEMENTS OF COMPREHENSIVE INCOME Set out below are the forecast statements of comprehensive income of the group ( the forecasts ) for the year ending 31 August 2011 and the year ending 31 August 2012 ( forecast periods ). The forecasts have been prepared on an aggregated basis for the entire property portfolio. The forecasts have been prepared on the assumption that the effective date of the Mergence transaction, the Asakhe transaction and the Redefine transaction will be 1 August 2011 and on the following bases: the forecast for the year ending 31 August 2011 includes: actual figures for 9 months to 31 May 2011 and forecast figures for the remainder of the year ending 31 August 2011 in respect of Dipula; forecast figures from 1 August 2011 to 31 August 2011 in respect of Mergence, Asakhe and the Redefine portfolio; and the forecast for the year ending 31 August 2012 includes forecast figures for the entire year for Dipula, Mergence, Asakhe and the Redefine portfolio. A pro forma forecast for the year ending 31 August 2011 which provides an analysis of the components of the forecast, being the Dipula portfolio, the Mergence portfolio, the Asakhe portfolio and the Redefine portfolio, is set out in Annexure 20. The forecasts, including the assumptions on which they are based and the financial information from which they are prepared, are the responsibility of the directors of Dipula. The forecasts must be read in conjunction with the independent reporting accountants limited assurance report thereon which is attached as Annexure 21. The forecasts have been prepared in compliance with IFRS and in accordance with the Dipula group s accounting policies as set out in Annexure

35 Forecast Forecast for the for the year ending year ending 31 August August 2012 R R Revenue Gross property rental income Contracted Uncontracted Straight-line rental income adjustment Other income (recoveries) Total revenue Expenses Property operating expenses ( ) ( ) Adjustment from straight-line rental income ( ) ( ) Asset management fee ( ) ( ) Administrative expenses ( ) ( ) Operating profit Finance income Finance expenses ( ) ( ) Profit before debenture interest Debenture interest ( ) ( ) Debenture interest to A-linked unitholders ( ) ( ) Debenture interest to B-linked unitholders ( ) ( ) Profit after debenture interest Fair value adjustment on investment property ( ) Restructuring costs ( ) Loss for the year before taxation ( ) Taxation Loss for the year after taxation ( ) Other comprehensive income Total comprehensive income ( ) Attributable to: Equity holders of parent ( ) Non-controlling interest Loss for the year after taxation ( ) Reconciliation between loss, headline (loss)/earnings and distributable earnings Loss for the year ( ) Adjusted for: Debenture interest (Loss)/earnings/Headline (loss)/earnings (linked units) ( ) Adjusted for: Straight-line rental income adjustment ( ) ( ) Adjustment from straight-line rental income Fair value adjustment on investment property (net of tax) Restructuring costs Distributable earnings (linked units)

36 Forecast Forecast for the for the year ending year ending 31 August August 2012 R R Actual number of A-linked units in issue Actual number of B-linked units in issue Weighted average number of A-linked units in issue Weighted average number of B-linked units in issue Distribution per A-linked unit (cents) Distribution per B-linked unit (cents) Forward yield based on R8.58 issue price per A-linked unit 9.25% Forward yield based on R5.53 issue price per B-linked unit 10.73% Loss per share (cents) (400.70) Headline loss per share (cents) (362.44) (Loss)/earnings per A-linked unit (cents) (334.02) (Loss)/earnings per B-linked unit (cents) (350.85) Headline (loss)/earnings per A-linked unit (cents) (295.77) Headline (loss)/earnings per B-linked unit (cents) (312.59) Notes and assumptions: The forecasts incorporate the following material assumptions in respect of revenue and expenses that can be influenced by the directors: Dipula s management s forecasts for the year ending 31 August 2011 and the year ending 31 August 2012 are based on information derived from the property manager, historical information and work performed by the independent property valuers; Dipula will not acquire or dispose of any properties during the forecast periods other than those being acquired of in terms of the Mergence transaction, the Asakhe transaction and the Redefine transaction; contracted revenue is based on existing lease agreements, whilst uncontracted revenue amounts to 3% for the year ending 31 August 2011 and 27% for the year ending 31 August 2012; all existing lease agreements are valid; turnover rental (rental income based on the actual turnover of the tenant) has only been forecast for those tenants who have previously been subject to turnover rental clauses; current vacant space has been forecast on a property-by-property basis and has been assumed to remain vacant unless it is deemed probable that such space will be let; leases expiring during the forecast periods have been forecast on a lease-by-lease basis, and in circumstances where discussion with the lessee has proven positive are forecast to be let at current market rates; Dipula s management s forecast property operating expenditure has been determined based on their review of historical expenditure, where available, and discussion with the property manager; and the fair value adjustment in respect of the year ending 31 August 2011 relates to the actual fair value adjustment recognised in Dipula s reviewed interim results for the six months ended 28 February No fair value adjustments to investment properties, other than the adjustment as a result of amortised lease escalations, have been provided for in respect of the year ending 31 August The forecasts incorporate the following material assumptions in respect of revenue and expenses that cannot be influenced by the directors: the effective date of the Mergence transaction, the Asakhe transaction and the Redefine transaction is 1 August 2011; interest-bearing borrowings of R760 million which has been advanced by the Standard Bank of South Africa Limited, will incur interest at a melded interest rate of 8.79%; it has been assumed that in terms of the private placement, private placement A-linked units and private placement B-linked units are issued at R8.58 and R5.53 per private placement A- and B-linked unit respectively, raising gross proceeds of R1.39 billion. Of the total private placement units, the sellers will offer private placement A-linked units and private placement B-linked units for sale in order to settle 34

37 loans against their interest in Dipula. It is assumed that of the total private placement units, private A-linked units and private placement B-linked units are issued at R8.58 and R5.53 per private placement A- and B-linked unit, respectively, raising gross proceeds of R1.087 billion. R284 million of the proceeds will be utilised to pay amounts owing to Redefine by Dipula and Mergence, R169 million will be used to fund the Asakhe transaction, R395 million will be used to fund the Redefine transaction, R123 million will be used to partly settle loans from The Standard Bank of South Africa Limited, R109 million will be used to pay listing costs and break fees for breaking fixes in respect of restructuring debt advanced by The Standard Bank of South Africa Limited and the balance of R7 million being surplus cash; there will be no unforeseen economic factors that will affect the lessees abilities to meet their commitments in terms of existing lease agreements; other income is in respect of the interest earned on undisclosed earnings until the distributions on the A- and B-linked units are actually paid; the amount recognised as the tax line item for the year ending 31 August 2011 relates to the tax on the fair value adjustment recognised in Dipula s reviewed interim results for the six months ended 28 February 2011; and consumption based recoveries are consistent with the independent property valuers property income statements. Material items of expenditure within the property expenses line item include R in rates and taxes, R in electricity, R in property management expenses and R in security in respect of the year ending 31 August 2011; and R in rates and taxes, R in electricity, R in property management expenses and R in security in respect of the year ending 31 August Property expenses, straight-line adjustments, the asset management fee and the administrative fees are expected to increase by more than 15% from historical costs due to the increase in the size of the company as a result of the Mergence transaction, the Redefine transaction and the Asakhe transaction with effect from 1 August In addition electricity expenses have been assumed to increase in line with the guidance issued by Eskom of increases in the region of 25%. There are no material properties, being a property constituting 15% or more of the value or revenue of the property portfolio. 23. UNAUDITED CONSOLIDATED PRO FORMA STATEMENT OF FINANCIAL POSITION Annexure 23 contains the unaudited consolidated pro forma statement of financial position of Dipula. The independent reporting accountants limited assurance report on the unaudited consolidated pro forma statement of financial position of Dipula is set out in Annexure 24. The independent reporting accountants review report on the value and existence of the assets and liabilities acquired by the company is set out in Annexure HISTORICAL FINANCIAL INFORMATION OF DIPULA Annexure 26 contains the historical financial information of Dipula for the year ended 31 August 2010 and the six month interim period ended 28 February The historical financial information is the responsibility of the directors of Dipula. Annexure 27 contains the independent reporting accountants report on the historical financial information of Dipula. 25. DIVIDENDS AND DISTRIBUTIONS No dividends have been declared by Dipula to date. The directors do not intend to declare dividends but rather make interest distributions on the linked units. It is the directors intention to make semi-annual interest distributions, which are expected to be declared for the periods ended 28 February and 31 August. These interest distributions will be payable by the end of May and November, respectively. Any interest distributions remaining unclaimed for a period of three years from the declaration date thereof may be forfeited by resolution of the directors for the benefit of Dipula. There are no arrangements in terms of which future dividends or interest distributions are waived or agreed to be waived. 26. PROPERTY AND SUBSIDIARIES DISPOSED OR TO BE DISPOSED Set out in Annexure 13 are details of material immovable property, fixed assets, shares in subsidiaries or businesses disposed of in the 3 years preceding the last practicable date or to be disposed of in the first six months after commencement of the listing. 35

38 Other than respect of the disposals detailed in Annexure 13, no other properties or subsidiaries have been disposed of by the group during the past three years and no properties are intended to be disposed of in the first six months after the listing, other than in the ordinary course of the asset management of the group. 27. SOUTH AFRICAN EXCHANGE CONTROL REGULATIONS The following summary is intended as a guide and is, therefore, not comprehensive. If you are in any doubt hereto, please consult your professional advisor Emigrants from the common monetary area A former resident of the common monetary area who has emigrated from South Africa may use blocked Rand to purchase linked units in terms of the private placement All payments in respect of subscriptions for linked units by emigrants using blocked Rand must be made through an authorised dealer in foreign exchange Linked unit certificates issued in respect of linked units purchased with blocked Rand in terms of this prospectus will be endorsed non-resident. Linked unit certificates will be placed under the control of the authorised dealer through whom the payment was made. Statements issued to dematerialised linked unitholders will be restrictively endorsed as NON-RESIDENT If applicable, refund monies in respect of unsuccessful applications, emanating from blocked Rand accounts, will be returned to the authorised dealer administering such blocked Rand accounts for the credit of such applicant s blocked Rand account No residents of the common monetary area may, either directly or indirectly, be permitted to receive an allocation as employees of any offshore subsidiaries Applicants resident outside the common monetary area A person who is not resident in the common monetary area should obtain advice as to whether any government and/or legal consent is required and/or whether any other formality must be observed to enable an application to be made in terms of the private placement This prospectus is accordingly not a placement in any area or jurisdiction in which it is illegal to make such a placement. In such circumstances this prospectus is provided for information purposes only. All linked unit certificates issued to non-residents of South Africa will be endorsed non-resident in terms of the Exchange Control Regulations. Statements issued to dematerialised linked unitholders will be restrictively endorsed as NON-RESIDENT. 28. LOANS RECEIVABLE Details of loans granted by the company at the last practicable date are set out in Annexure CORPORATE GOVERNANCE The company s corporate governance statement is set out in Annexure LITIGATION STATEMENT There are no legal or arbitration proceedings which may have, or have during the twelve months preceding the date of this prospectus, had a material effect on the financial position of the group. Dipula is not aware of any proceedings that would have a material effect on the financial position of the group in respect of companies that will form part of the group upon the implementation of the Asakhe transaction and the Mergence transaction, which are pending or threatened against the group. 31. GOVERNMENT PROTECTION AND INVESTMENT ENCOURAGEMENT LAW The company does not benefit from any government protection or investment encouragement law. 36

39 32. ADVISORS INTERESTS None of the advisors, whose names are set out on page 3 of this prospectus, hold any linked units in or have agreed to acquire any linked units in the company at the date of this prospectus. 33. CONSENTS Each of the corporate advisor, legal advisor and bookrunner, trustee for debenture holders and sponsor, independent transaction sponsor, independent reporting accountants, auditors, independent property valuers, attorneys to the prospectus, competition law advisor, transfer secretaries, underwriter and bankers have consented in writing to act in the capacities stated and to their names appearing in this prospectus and have not withdrawn their consent prior to the publication of this prospectus. The independent reporting accountants, auditors and the independent property valuers have consented to the inclusion of their reports in the form and context in which they are included in the prospectus, which consent has not been withdrawn prior to the publication of this prospectus. 34. DIRECTORS RESPONSIBILITY STATEMENT The directors, whose names are set out in page 17 of this prospectus, collectively and individually, accept full responsibility for the accuracy of the information given and certify that to the best of their knowledge and belief there are no facts the omission of which would make any statement false or misleading and that they have made all reasonable enquiries to ascertain such facts and that this prospectus contains all information required by law and the JSE Listings Requirements. 35. DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents, which have been submitted to the CIPC, will be available for inspection at the company s registered office at any time during normal business hours from 08:30 to 17:00 for a period of 14 days from the date of this prospectus: the memoranda of incorporation of the company and its subsidiaries; the debenture trust deed; the signed reports by the independent reporting accountants and auditors, the texts of which are set out in Annexure 15, Annexure 17, Annexure 19, Annexure 21, Annexure 24, Annexure 25 and Annexure 27; the written consents referred to in paragraph 33 above; the summary valuation reports prepared by the independent property valuers set out in Annexure 6; the detailed valuation reports prepared by the independent property valuers; the agreements referred to under Material contracts in paragraph 7 above; and the audited annual financial statements of Dipula for the years ended 31 August 2010, 31 August 2009 and 31 August Signed at Johannesburg by Izak Petersen on his behalf and on behalf of all of the directors of the company on 21 July 2011 in terms of powers of attorney granted by them. Izak Petersen a director under and in terms of a power of attorney executed on 12 July

40 Annexure 1 DETAILS OF SUBSIDIARIES The following table indicates the subsidiaries of Dipula as at the last practicable date: Place, date of incorporation/ establishment Issued Amount and registration/ share Effective owing to masters reference Date became Nature of capital/ holding parent Subsidiary number subsidiary business Donation by Dipula company (R) (%) (R) Dipula South Africa 1 July 2011 Property investment * Property 5 July 2006 deriving rental Trust (Masters reference revenue IT7743/2006) MAPF South Africa 1 August 2011 Property investment May 2006 deriving rental (Registration revenue number 2006/016706/07) MAPIT South Africa 1 August 2011 Property investment September 2006 deriving rental (Masters reference revenue IT11263/2003) Asakhe South Africa 13 August 2011 ß Property investment November 2005 deriving rental (Registration revenue number 2005/040926/07) Emerald Fire South Africa 13 August 2011 ß Property investment Investments 1 July 2005 deriving rental (Registration revenue number 2005/023375/07) Unless otherwise specified, all shares are ordinary shares. * Dipula is the sole income and capital beneficiary. MAPF is the sole income and capital beneficiary. ß refer to paragraph 11.2 of the prospectus. 38

41 Annexure 2 DETAILS OF DIRECTORS AND MANAGEMENT 1. DETAILS OF DIRECTORS AND MANAGEMENT 1.1 The full names, ages, nationalities, business addresses, qualifications and functions of the board are set out below: Names and age Zanele Joyce Matlala (48) Business address Sandton Place, 68 Wierda Road East, First Floor Block B, Wierda Valley, 2196 Qualification CA(SA) Function Independent Non-Executive Chairperson Names and age Izak Smolly Petersen (38) Business address Office Suite 300, Killarney Mall Office Towers, Killarney 2093 Qualification B. Com., PGDA, CA(SA) Function Chief Executive Officer Names and age Brigitte de Bruyn (37) Business address Office Suite 300, Killarney Mall Office Towers, Killarney 2093 Qualification B. Com., BAcc, CA(SA) Function Financial Director Names and age Nyangeni Saul Gumede (55) Business address 6th Floor, Block D, Sunnyside Office Park, 2 Carse O'Gowrie Road, Parktown 2193 Qualification B. Com., CPM Function Executive Director Names and age Brian Hilton Azizollahoff (50) Business address 54 Melrose Boulevard, 4th Floor, Melrose Arch 2076 Qualification BA (NY), MBA (Wits) Function Independent Non-Executive Director Names and age Elias (Eltie) Links (65) Business address Carl Cronje Drive, Tygervalley, Bellville, 7535 Qualification B. Com., M.Com (Economics), M.A. (Economics), PhD (Economics) Function Independent Non-Executive Director Names and age Younaid Waja (59) Business address 48 Helium Avenue, Extension 5, Lenasia, 1827 Qualification B. Com., Hons, B.Compt, CA(SA), HDip Tax Law Function Independent Non-Executive Director All directors are South African nationals. 1.2 Experience and expertise of the directors of Dipula Zanele Matlala Zanele is currently the chief financial officer at Merafe Resources. From 2006 to October 2010, she held the position of group financial director of Kagiso Trust Investments. Prior to that she spent four years with the 39

42 Development Bank of Southern Africa, initially as an investments executive and ultimately in the capacity of chief financial officer. During her three and a half years with the Industrial Development Corporation, she headed up the wholesale venture capital funds team after being promoted from the project and structured finance area. After completing her articles with Arthur Andersen & Co, she was responsible for due diligence and other special investigations in addition to statutory audits in her role as audit supervisor Izak Petersen Izak is the co-founder of Dipula and is a qualified Chartered Accountant. He was previously employed at Deloitte and at PSG Investment Bank. After a short stint at a boutique structured finance and asset management company in Cape Town Izak co-founded the Mergence Group which is involved in asset management, property and Equity Derivative structuring and broking. Izak has served and continues to serve as an executive committee member of various industry bodies. Izak currently holds directorships in various Mergence-related companies Brigitte de Bruyn Prior to joining Dipula, Brigitte held the position of Financial Director at Grapnel Property Group (Proprietary) Limited from January She served her articles at Deloitte & Touche Audit Division from 1996 to In 1999 she gained international working experience while working for Deloitte and Touche Los Angeles and thereafter joined the Deloitte & Touche Special Services Group from 1999 to December 2005 where she held various positions. In 2004, she was promoted to a senior manager role and to the Executive Committee of the Special Services Group. In 2005, she was awarded the prestigious Manager of the Year award Saul Gumede Saul is the co-founder of Dipula and has a Certified Property Manager (CPM ) issued by the Institute of Real Estate Management (USA). After completing a Bachelor of Commerce (Accounting), he joined Deloitte and Touche and completed his articles in Thereafter, Saul worked for Old Mutual Properties holding various positions including accountant, financial manager, regional investment manager (managing a team of investments analysts responsible for property acquisitions) and regional property manager managing the Johannesburg region of R3.2 billion. In 1990, Saul joined SEBO, a Bopthuthatswana government pension property portfolio valued at R800 million, and held the position of assistant general manager. In 1998, Saul founded Dijalo Property Services and held the position of CEO. Dijalo Property Services provides property management, facility management, broking and leasing, development facilitation, property consulting and property valuations to the property and financial industry at large. Dipula Property Fund was established in 2006 where Saul served as an asset manager and CEO Brian Azizollahoff Brian has almost 25 years experience in the property industry. He served as CEO of Redefine from 2003 until the merger with ApexHi Properties Limited and Madison Properties Fund Managers Limited in Brian also served on the executive and investment committees on the Redefine board. While serving on Redefine s board he was involved in all corporate activity and responsible for debt and capital markets, certain joint ventures, marketing and investor relations, human resources and legal. Brian has recently resigned from Redefine to form Capstone Properties Eltie Links Eltie is a trained economist and taught economics at both undergraduate and graduate level in South Africa. He also distinguished himself as a senior diplomat in the South African Foreign Service. South Africa s membership of multi-lateral financial institutions were all being renegotiated during the early part of the nineties and Eltie played a strategic role in most of these negotiations. Chief among these were the re-entry into the World Bank and International Monetary Fund, the African Development Bank and the African Caribbean and Pacific Group of Countries. But primary amongst these negotiations were those with the European Union in the mid nineties. The now well known, Trade, Development and Cooperation (TDCA) was the major part of the agreements with the Europeans. Others included the Wines and Spirits Agreement, the Science and Technology Agreement and the membership of the Lome Convention. Since retiring from public service, Eltie continued to play a role in the trade and economic arena, especially at the academic institutions. He helped to create the now established Investment and Trade Policy Centre at Pretoria University and continues to publish and lecture on international trade issues. He is also a strategic resource for Nepad in the area of Intra- Africa trade. He has recently been appointed by President Jacob Zuma as a member of the BBBEE Advisory Council. 40

43 1.2.7 Younaid Waja Younaid is a chartered accountant and has been practicing as a tax and business consultant since October 1991 having just left the tax and business consulting division of Arthur Andersen and Co. He served with Arthur Andersen for 9 years. Prior to joining Arthur Andersen, Younaid had spent 3 years in the auditing division of Deloitte Haskins and Sells (now Deloitte & Touche). From 1996 to 2007 he was a senior partner and executive chairman of APF Chartered Accountants Inc., a consortium of black auditing and accounting firms. During his professional career he served as chairman of the Public Accountants and Auditors Board (PAAB) (now IRBA); vice president of the Association for the Advancement of Black Accountants of Southern Africa (ABASA) and executive member of the Black Business Council (BBC). Younaid currently serves as a member of the board of directors and board committees of various public sector and listed companies. He has gained extensive experience as a director, a member of audit committees, risk committees and investment committees in sectors such as: Telecommunications; Property Investments and Management, Asset Management, Gaming, Motor and Transportation, Facilitation of Economic Growth and Sate Owned Entities. 2. DETAILS OF THE KEY INDIVIDUALS OF THE ASSET MANAGER 2.1 The full names, ages, nationalities, business addresses and qualifications of the key individuals of the asset manager are set out below: Names and age Izak Smolly Petersen (38) Business address Office Suite 300. Killarney Mall Office Towers. Killarney 2093 Qualification B. Com., PGDA, CA(SA) Names and age Nyangeni Saul Gumede (55) Business address 6th Floor, Block D, Sunnyside Office Park, 2 Carse O Gowrie Road, Parktown, 2193 Qualification B. Com., CPM Names and age Brigitte de Bruyn (37) Business address Office Suite 300. Killarney Mall Office Towers. Killarney 2093 Qualification B. Com., BAcc, CA(SA) Names and age Jay Junkoon (47) Business address Office Suite 300. Killarney Mall Office Towers. Killarney 2093 Qualification BA LLB 2.2 All key individuals are South African nationals. 2.3 Experience and expertise of the key individuals of the asset manager Izak Petersen Izak is the Chief Executive Officer of Dipula and an executive of the asset manager his experience and qualifications is detailed in paragraph 1 above Saul Gumede Saul is an executive director of Dipula and an executive of the asset manager his experience and qualifications are set out in paragraph 1 above. 41

44 2.3.3 Brigitte de Bruyn Brigitte is the Financial Director of Dipula and an executive of the asset manager her experience and qualifications are set out in paragraph 1 above Jay Junkoon Jay holds a BA LLB degree from the University of the Witwatersrand, has worked as a legal advisor for a courier industry and later joined JHI Real Estate in 1989 as a property manager, progressing to property services director in In 1999 he was redeployed to source new property services business for JHI in several African countries. He established and managed branch and joint-venture operations in Tanzania, Mozambique and Lesotho. After 17 years at JHI, Jay decided to move into property asset and portfolio management, and joined the Dipula Property Trust and MAPIT. Jay has served for a number of years as a councillor on the SAPOA National council. He was chairman of the SAPOA Property Managers Committee, and is currently a member of the SAPOA Education and Training Committee. He served a two year term as councillor on the Services SETA and a two year term as vice-chair of the Property Chamber of the Services SETA. Jay is a part-time lecturer at the University of Witwatersrand and lectures a postgraduate master s course in property management. 2.4 Business address of the asset manager: 2 Arnold Road Rosebank, Beneficial interest held by the asset manager or its key individuals in Dipula The holdings of linked units in Dipula by Mr S Gumede and Mr I Petersen are set out in paragraph 3 below. 2.7 Major beneficiaries of the asset manager Economic interest Name of the beneficiary in asset manager (%) Dijalo 45 MAP 45 B de Bruyn 5.0 J Junkoon 5.0 Total DIRECTORS INTERESTS IN SECURITIES Currently Saul Gumede holds shares in Dipula (a 39.73% interest) through his holdings in Dijalo. Pursuant to the Mergence transaction detailed in paragraph 11 of the prospectus but before listing, the following directors will hold, directly and indirectly, the following interests in linked units. 3.1 A-linked units Director Beneficially held Directly Indirectly Total % N S Gumede I S Petersen Total B-linked units Director Beneficially held Directly Indirectly Total % N S Gumede I S Petersen Total

45 The following directors will beneficially hold, directly or indirectly, the following interests in linked units on the listing date assuming the private placement is fully subscribed for: 3.3 A-linked units Director Beneficially held Directly Indirectly Total % N S Gumede I S Petersen Total B-linked units Director Beneficially held Directly Indirectly Total % N S Gumede I S Petersen Total To the extent that any such director acquires linked units in Dipula pursuant to the private placement, an announcement will be published on SENS detailing the directors dealings. 4. DIRECTORS INTERESTS IN TRANSACTIONS AND PROPERTY ACQUIRED OR TO BE ACQUIRED 4.1 Other than Izak Petersen who has an interest in the Mergence transaction as a shareholder of Mergence Africa Holdings (Proprietary) Limited and Izak Petersen, Brigitte de Bruyn and Saul Gumede who have a direct and/or indirect beneficial interest in the asset manager, no directors of the company, including a director who resigned within the last 18 months, has or had any interest, direct or indirect, in transactions entered into by the company during the current or immediate preceding financial year or during any earlier financial year and which remain in any respect outstanding or unperformed. 4.2 Other than as disclosed above in this paragraph 4, no director or promoter has had any material beneficial interest, direct or indirect, in Dipula or in any material acquisition of the company and no amount has been paid in the three years preceding the last practicable date, or is proposed to be paid to any promoter. 5. DIRECTORS AND PROMOTERS MATERIAL BENEFICIAL INTERESTS None of the directors have received of any material beneficial interest in the promotion of the company and its properties during the 3 years preceding the prospectus. This includes a partnership, company, syndicate or other association. 6. DIRECTORS EMOLUMENTS The anticipated emoluments of the directors for the year ending 31 August 2012 to be paid by Dipula are set out in the table below: Commission, Bonuses Pension Other gain or and other Basic Director s Other Expense scheme material profit sharing performance Director salaries fees fees allowances contributions benefits arrangements payments Total R 000 R 000 R 000 R 000 R 000 R 000 R 000 R 000 R 000 Executive directors I S Petersen* B de Bruyn* N S Gumede* Non-executive directors Z J Matlala B H Azizollahoff E Links Y Waja Total * Mr Petersen and Mr Gumede and Ms de Bruyn are remunerated by the asset manager out of the fee which it receives from the group pursuant to the terms of the asset management agreement. * The executive directors bonuses will be determined at the asset manager s discretion. 43

46 6.1 No expense allowances, pension scheme contributions, other material benefits, commission, gain or profit sharing arrangements or bonuses and other performance payments were paid to the directors. 6.2 No amount has been paid to any director of the company in cash or securities or otherwise to induce him to become or to qualify him as a director. 6.3 No amount has been paid or is payable to any third party in lieu of directors fees. 6.4 The directors fees will not be varied as a consequence of the private placement or the listing. 7. LINKED UNIT OPTIONS TO DIRECTORS No linked unit options have been issued to any directors in terms of any linked unit option scheme. 8. TERMS OF OFFICE Other than Saul Gumede, who was appointed in 2005, all other directors were appointed with effect from 20 May No service contracts have been signed and accordingly as regards the executive directors, each of them will be subject to one months notice period and any applicable labour law from time to time. The appointment of the executive directors and non-executive directors is indefinite but remains subject to all applicable law (including common law) and the provisions of the company s MOI. Save for any entitlement which may result from an effective linked unitholding and the exercise of those rights pursuant to ordinary corporate action, no person has any contractual or other right relating to the appointment of any particular director or number of directors. 9. DIRECTORS DECLARATIONS None of the directors have: been a director of a company that has been put into liquidation or been placed under business rescue proceedings or had an administrator or other executor appointed during the period when he was (or within the preceding 12 months had been) one of its directors, or alternate directors or equivalent position; either themselves or any company which he was a director or an alternate director or officer at the time of the offence, been convicted in any jurisdiction of any criminal offence, or an offence under legislation relating to the Companies Act; been removed from an office of trust, on grounds of misconduct, involving dishonesty; been convicted of an offence resulting from dishonesty, fraud theft, perjury, misrepresentation or embezzlement; been adjudged bankrupt or sequestrated in any jurisdiction; been a party to a scheme of arrangement or made any other form of compromise with your creditors; been found guilty in disciplinary proceedings, by an employer or regulatory body, due to dishonest activities; has had any court grant an order declaring him to be a delinquent or placed such director under probation in terms of section 162 of the Companies Act and/or 47 of the Close Corporations Act, 1984 (Act No. 69 of 1984); been barred from entry into any profession or occupation; or been convicted in any jurisdiction of any criminal offence, or an offence under legislation relating to the Companies Act. 10. ADDITIONAL INFORMATION ON DIRECTORS 10.1 The company secretary has not been allotted any linked units No director has traded in Dipula linked units No loans have been made or security furnished by Dipula to any of its subsidiaries to any directors or managers or any associate of any director or manager. The subsidiaries in the group are funded by variable rate loans from Dipula. 11. RELATIONSHIP INFORMATION 11.1 Currently, none of the directors, promoters, asset manager or property manager have any beneficial interests, direct or indirect, in relation to any property held by the group nor are they contracted to become a tenant of any part of the property of the group. 44

47 11.2 There is no relationship between any parties mentioned in paragraph 1 of this annexure and another person that may conflict with a duty to the group The directors and promoters do not have a material beneficial interest in the acquisition or disposal of any properties of the company during the preceding 2 years. 12. DIRECTORS OTHER DIRECTORSHIPS AND PARTNERSHIPS The table below lists the companies and partnerships of which each director of Dipula is currently a director or partner as well as the companies and partnerships of which each director of Dipula was a director or partner over the five years preceding this prospectus. Director Current directorships/partnerships Past directorships/partnerships Zanele Matlala Merafe Resources Limited, Merafe Chrome and Incwala Resource (Proprietary) Limited, Alloys (Proprietary) Limited, Merafe Ferrochrome Mbuyu Biotechnology (Proprietary) and Mining (Proprietary) Limited, Limited, Export Credit Insurance Kagiso Media Limited, Business Partners Corporation, The Development Bank of Chamsah Properties cc, Mithasi Investments cc. South Africa, Gold Reef Resorts Limited, Infrastructure Finance Corporation Limited, Metropolitan Holdings Limited Izak Petersen Mergence Africa Holdings (Proprietary) Limited, Mergence Investment Mangers Mergence Africa Capital (Proprietary) Limited, (Proprietary) Limited Mergence Africa Properties (Proprietary) Limited, Mergence Africa Property Fund (Proprietary) Limited, Penny Mergence (Proprietary) Limited, Greenworks (Proprietary) Limited, Risk Flow (Proprietary) Limited, Risk Flow Holdings (Proprietary) Limited, Mergence Africa Property Fund Management Trust Brigitte de Bruyn None Grapnel Property Group (Proprietary) Limited, Grapnel Property Investments (Proprietary) Limited Saul Gumede Dijalo Property Services (Proprietary) Limited, DDP Valuers and Dinaledi Facilities Dijalo Facility Management (Proprietary) Limited, Management, DDP Holdings and Dijalo Valuations (Proprietary) Limited, Bokamoso Home Loans Dijalo Property Management (Proprietary) Limited, Dijalo Asset Management (Proprietary) Limited, Dijalo Property Brokers (Proprietary) Limited, Dijalo Consulting (Proprietary) Limited, Dijalo Investments (Proprietary) Limited, Dipula Asset Management Trust, Dijalo Holdings (Proprietary) Limited, Dijalo Property Holdings (Proprietary) Limited, Dijalo Property Fund (Proprietary) Limited, Dipula Holdings (Proprietary) Limited, Dipula Property Investment Trust, Dijalo Employee Share Trust, Magakabye Property Services (Proprietary) Limited, Guma Investments (Proprietary) Limited, Africa at work: A Rural Development and Consulting services, Pareto Limited, Tsima Properties, Mmilo Developments, Ikusasalethu Investments, Curaprop, Bokamaoso Funds 45

48 Director Current directorships/partnerships Past directorships/partnerships Brian Azizollahoff Wraypex (Pty) Ltd, Ambit Properties, Ampros Property Enyilea Property Investments (Pty) Ltd, Managers, Apexhi Properties, Biccard Velocity Trading (Pty) Ltd, Street Properties, Boray Investments, VT International Limited, Cape Gannet Properties 261, Leonardo International Limited, Contrier Investments, Counterpoise Grastroment Trading cc. Investments, Dipula Property Fund, Contner Investments cc. Drumcliffe Investments, Enyuka Property Investments, Gastromont Trading, Kovacs Investments 201, Marble Gold 168, Mergence Africa Property Fund, Portass Investments, Portion 65 Rivonia Ext 3, Portion 68 Rivonia Ext 3, Propziz Properties, Redefine Properties, Redefine Properties, Opco, Rollon Investments, Terminus Klerksdorp, To Keep Investments, Tudear Investments, Upper East Side Hotel, Wraypex, Yormy Props, Spearhead Property Holdings, Oryx Properties Ltd, (Incorporated In Namibia) Kinsale Investments, Advance Enterprises, Allysum Investments, Amaprop Townships, Ambridge Properties, Ampros, Anglo American Properties, Anglo American Property Fund Managers, Apexhi Properties, Bruma Lake Owners Association, Bruma Lake Property Ventures, Bryanston Hobart, Car fair properties, Cormorant Properties, Erf 824 Kyalami Estate, Fishermans Village, Foord Compass, Grayston Ridge Properties, Home 841 Investments, Kenilworth Centre, Lanaria Properties, Lundy Investments, Main Street Properties, Meteor Industrial Property Holdings, Moneyline 1549, Ninth Stage Investments, Northmead Centre Properties, Ownhold Investments 190, Oxborne, Randburg Waterfront, Randburg Waterfront Property Ventures, Silver Lakes Homeowners Association, Summit Park Properties, Tanglewood Village Homeowners Association, Townview Estates, Vicjun Investments Eltie Links Afrisam (Proprietary) Limited, None Freeworld Coatings Limited, Business Partners, Juta Limited, The Du Toit Group and Terrasan Limited Younaid Waja Public Investment Corporation, Pareto Limited, Lefatshe Technologies (Proprietary) Blue IQ Investment Holdings (Proprietary) Limited, Limited, APF Chartered Accountant Inc, Supplier Park Development Company Financial Services Board: Insider Trading (Proprietary) Limited, Directorate, Department of Justice, Automotive Industry Development Centre Greater Johannesburg Metropolitan (Proprietary) Limited, Council The Innovative Hub Management Company (Proprietary) Limited, Imperial Holdings Limited, Real Africa Holdings Limited, Telkom SA Limited, Associated Motor Holdings Limited 46

49 13. DETAILS OF THE PROPERTY MANAGER 13.1 Business address of the property manager JHI Place, 2 Norwich Close, Sandton, South Africa Private Bag X45, Benmore, Directors of the property manager Marna van der Walt E R Goodman Johann Boshoff Gordon Hulley James Ernst Wellsted Arnold Meyer 13.3 Benefcial interest held by the property manager or its directors in Dipula Neither the property manager nor any of its directors hold any interests in Dipula Major shareholders of the property manager Name of the shareholder % of shares held Nevada Trading (Proprietary) Limited t/a JHI Registration number 2007/014372/07 100% Total 100% 47

50 Annexure 3 SALIENT FEATURES OF THE MOI APPOINTMENT, QUALIFICATION, REMUNERATION AND BORROWING POWERS OF DIRECTORS Extracts from the MOI of the company providing for the appointment, qualification, remuneration and borrowing powers, interests of directors and dividends are set out below: ISSUE OF SHARES AND VARIATION OF RIGHTS 5. Issue of shares and variation of rights 5.1 The company is authorised to issue (two billion) ordinary shares, of the same class, which ranks pari passu in respect of all rights and entitles the holder to: vote on any matter to be decided by the shareholders of the company and to 1 vote in the case of a vote by means of a poll at every general meeting or annual general meeting; participate proportionally in any distribution made by the company (which shall, for the sake of clarity, exclude any distributions made in respect of A debentures and/or B debentures); and receive proportionally the net assets of the company upon its liquidation. 5.2 The board shall not have the power to: increase or decrease the number of authorised shares of any class of the company s shares; or reclassify any classified shares that have been authorised but not issued; or classify any unclassified shares that have been authorised but not issued; or determine the preferences, rights, limitations or other terms of any shares, and such powers shall only be capable of being exercised by the shareholders by way of a special resolution of the shareholders. 5.3 An ordinary share in the share capital of the company shall only be issued simultaneously with either: an A debenture issued in terms of the debenture trust deed entered into between the trustee for the holders of debentures in the company for the time being and the company as amended from time to time and such ordinary share once issued with an A debenture shall only be sold or otherwise disposed of together with such A debenture as an A linked unit; a B debenture issued in terms of the debenture trust deed entered into between the trustee for the holders of debentures in the company for the time being and the company as amended from time to time and such ordinary share shall only be sold or otherwise disposed of together with such B debenture as a B linked unit. 5.4 The authorisation and classification of shares, the creation of any class of shares, the conversion of one class of shares into one or more other classes, the consolidation of securities, the sub-division of securities, the change of the name of the company, the increase of number of shares, and the variation of any preferences, rights, limitations and other terms associated with each class of shares as set out in this Memorandum of Incorporation may be changed only by an amendment of this Memorandum of Incorporation by special resolution of the shareholders save if such an amendment is ordered by a court in terms of section 16(1)(a) of the Act. 5.5 The variation of any preference, rights limitations and other terms associated with any class of shares as set out in this Memorandum of Incorporation may be enacted only by an amendment of this Memorandum of Incorporation by special resolution of the shareholders and such amendments shall not be implemented without a special resolution taken by the holders of shares in that class at a separate meeting. In such instances the holders of such shares will be allowed to vote at the meeting of ordinary shareholders, provided however that their votes may not carry any special rights or privileges and they shall be entitled to one vote for each share that they hold, provided that their total voting rights at such a general meeting or annual general meeting, may never be more than 25% of the total voting rights of all shareholders at such a meeting. 48

51 5.6 No shares may be authorized in respect of which the preferences, rights, limitations or any other terms of any class of shares may be varied in response to any objectively ascertainable external fact or facts as provided for in sections 37(6) and 37(7) of the Act and the powers of the board are limited accordingly. 5.7 Subject to sections 40(5) to 40(7) of the Act, the company may only issue shares which are fully paid up and freely transferable and only within the classes and to the extent that those shares have been authorised by or in terms of this Memorandum of Incorporation. 5.8 All issues of shares for cash and all issues of options and convertible securities granted or issued for cash must, in addition, be in accordance with the JSE Listings Requirements. 5.9 All securities of the company for which a listing is sought on the JSE and all securities of the same class as securities of the company which are listed on the JSE must, notwithstanding the provisions of section 40(5) of the Act but unless otherwise required by the Act, only be issued after the company has received the consideration approved by the board for the issuance of such securities Subject to what may be authorized by the Act, the JSE Listings Requirements and at meetings of shareholders in accordance with clause 1.12, and subject to clause 1.11, the board may only issue unissued shares if such shares have first been offered to existing ordinary shareholders in proportion to their shareholding on such terms and in accordance with such procedures as the board may determine, unless such shares are issued for the acquisition of assets by the company Notwithstanding the provisions of clauses 1.2, 1.10 and 1.12, any issue of shares, securities convertible into shares, or rights exercisable for shares in a transaction, or a series of integrated transactions shall, in accordance with the provisions of section 41(3) of the Act, require the approval of the shareholders by special resolution if the voting power of the class of shares that are issued or are issuable as a result of the transaction or series of integrated transactions will be equal to or exceed 30% (thirty percent) of the voting power of all the shares of that class held by shareholders immediately before that transaction or series of integrated transactions Notwithstanding the provisions of clause 1.10, the shareholders may at a general meeting authorise the directors to issue shares of the company at any time and/or grant options to subscribe for shares as the directors in their discretion think fit, provided that such transaction(s) has/have been approved by the JSE and comply with the JSE Listings Requirements Except to the extent that any such right is specifically included as one of the rights, preferences or other terms upon which any class of shares is issued or otherwise provided in this Memorandum of Incorporation, no shareholder shall have any pre-emptive or other similar preferential right to be offered or to subscribe for any additional shares issued by the company. 23. Composition and powers of the board of directors 23.1 In addition to the minimum number of directors, if any, that the company must have to satisfy any requirement in terms of the Act to appoint an audit committee and a social and ethics committee, the board must comprise at least 4 directors and the shareholders shall be entitled to determine such maximum number of directors as they from time to time shall consider appropriate All directors shall be elected by an ordinary resolution of the shareholders at a general or annual general meeting of the company Until 1 or more directors have been so elected, each incorporator of the company shall, in terms of section 67(1) of the Act, serve as a director of the company. Where the company was already incorporated at the effective date of the Act, every person holding office as a director, prescribed officer, company secretary or auditor of the company immediately before the effective date will, as contemplated in item 7(1) of Schedule 5 to the Act, continue to hold that office In any election of directors: the election is to be conducted as a series of votes, each of which is on the candidacy of a single individual to fill a single vacancy, with the series of votes continuing until all vacancies on the board have been filled; and in each vote to fill a vacancy: each vote entitled to be exercised may be exercised once; and 49

52 the vacancy is filled only if a majority of the votes exercised support the candidate, provided only that, in the event that the company only has 1 shareholder, the provisions of this clause 23.4 will not apply and the election of directors shall take place in such manner as the shareholder shall determine The company shall only have elected directors and there shall be no appointed or ex offıcio directors as contemplated in section 66(4) of the Act Apart from satisfying the qualification and eligibility requirements set out in section 69 of the Act, a person need not satisfy any eligibility requirements or qualifications to become or remain a director or a prescribed officer of the company The directors shall rotate in accordance with the following provisions of this clause 23.7: at the first annual general meeting of the company convened in accordance with the provisions of clause 17.5 all the directors shall retire from office, and at each subsequent annual general meeting referred to in clause /3 of the directors for the time being, or if their number is not 3 or a multiple of 3, the number nearest to 1 /3, but not less than 1 /3, shall retire from office, provided that if a director is appointed as managing director or as an employee of the company in any other capacity, he or she shall not, while he or she continues to hold that position or office, be subject to retirement by rotation and he or she shall not, in such case, be taken into account in determining the rotation or retirement of directors; the directors to retire in every year shall be those who have been longest in office since their last election, but as between persons who became directors on the same day, those to retire shall, unless they otherwise agree among themselves, be determined by lot; a retiring director shall be eligible for re-election; the company, at the general meeting at which a director retires in the above manner, or at any other general meeting, may fill the vacancy by electing a person thereto, provide that the company shall not be entitled to fill the vacancy in accordance with clause 22; if at any meeting at which an election of directors ought to take place the offices of the retiring directors are not filled, unless it is expressly resolved not to fill such vacancies, the meeting shall stand adjourned and the further provisions of this Memorandum of Incorporation, including clauses to (inclusive) will apply mutatis mutandis to such adjournment, and if at such adjourned meeting the vacancies are not filled, the retiring directors, or such of them as have not had their offices filled, shall be deemed to have been re-elected at such adjourned meeting The board shall, through its nomination committee constituted in terms of clause 29, provide the shareholders with a recommendation in the notice of the meeting at which the re-election of a retiring director is proposed, as to which retiring directors are eligible for re-election, taking into account that director s past performance and contribution. Sufficient time shall be allowed between the date of such notice and the date of the general meeting or annual general meeting at which the re-election of the director is to be proposed to allow nominations to reach the company s office from any part in the Republic. Directors may be re-elected at a general meeting provided that the meeting is not conducted in terms of section 60 of the Act The board has the power to: fill any vacancy on the board on a temporary basis, as set out in section 68(3) of the Act, or appoint a director as an addition to the board provided that such appointment must be confirmed by the shareholders, in accordance with clause 23.2, at the next annual general meeting of the company, as required in terms of section 70(3)(b)(i) of the Act; and exercise all of the powers and perform any of the functions of the company, as set out in section 66(1) of the Act, and the powers of the board in this regard are only limited and restricted as contemplated in this clause The directors may at any time and from time to time by power of attorney appoint any person or persons to be the attorney or attorneys and agent(s) of the company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the directors in terms of this Memorandum of Incorporation) and for such period and subject to such conditions as the directors may from time to time think fit. Any such appointment may, if the directors think fit, be made in favour of any company, the members, directors, nominees or managers of any company or firm, or otherwise in favour of any fluctuating body of persons, whether 50

53 nominated directly or indirectly by the directors. Any such power of attorney may contain such provisions for the protection or convenience of persons dealing with such attorneys and agents as the directors think fit. Any such attorneys or agents as aforesaid may be authorised by the directors to sub-delegate all or any of the powers, authorities and discretions for the time being vested in them Save as otherwise expressly provided herein, all cheques, promissory notes, bills of exchange and other negotiable or transferable instruments, and all documents to be executed by the company, shall be signed, drawn, accepted, endorsed or executed, as the case may be, in such manner as the directors shall from time to time determine All acts performed by the directors or by a committee of directors or by any person acting as a director or a member of a committee shall, notwithstanding that it shall afterwards be discovered that there was some defect in the appointment of the directors or persons acting as aforesaid, or that any of them were disqualified from or had vacated office, be as valid as if every such person had been duly appointed and was qualified and had continued to be a director or member of such committee If the number of directors falls below the minimum number fixed in accordance with this Memorandum of Incorporation, the remaining directors must as soon as possible and in any event not later than 3 months from the date that the number falls below such minimum, fill the vacancy/ies in accordance with clause or convene a general meeting for the purpose of filling the vacancies, and the failure by the company to have the minimum number of directors during the said 3 month period does not limit or negate the authority of the board of directors or invalidate anything done by the board of directors while their number is below the minimum number fixed in accordance with this Memorandum of Incorporation The directors in office may act notwithstanding any vacancy in their body, but if after the expiry of the 3 (three) month period contemplated in clause 23.13, their number remains reduced below the minimum number fixed in accordance with this Memorandum of Incorporation, they may, for as long as their number is reduced below such minimum, act only for the purpose of filling vacancies in their body in terms of section 68(3) of the Act or of summoning general meetings of the company, but not for any other purpose A director may hold any other office or place of profit under the company (except that of auditor) or any subsidiary of the company in conjunction with the office of director, for such period and on such terms as to remuneration (in addition to the remuneration to which he may be entitled as a director) and otherwise as a disinterested quorum of the directors may determine A director of the company may be or become a director or other officer of, or otherwise interested in, any company promoted by the company or in which the company may be interested as shareholder or otherwise and (except insofar as otherwise decided by the directors) he shall not be accountable for any remuneration or other benefits received by him as a director or officer of or from his interest in such other company. 25. Directors compensation and financial assistance 25.1 The company may pay remuneration to the directors for their services as directors in accordance with a special resolution approved by the company s shareholders within the previous 2 years, as set out in section 66(8) and (9) of the Act, and the power of the company in this regard is not limited or restricted by this Memorandum of Incorporation Any director who: serves on any executive or other committee; or devotes special attention to the business of the company; or goes or resides outside South Africa for the purpose of the company; or otherwise performs or binds himself to perform services which, in the opinion of the directors, are outside the scope of the ordinary duties of a director, may be paid such extra remuneration or allowances in addition to or in substitution of the remuneration to which he may be entitled as a director, as a disinterested quorum of the directors may from time to time determine The directors may also be paid all their travelling and other expenses necessarily incurred by them in connection with: the business of the company; and attending meetings of the directors or of committees of the directors of the company. 51

54 25.4 The board may, as contemplated in section 45 of the Act, authorise the company to provide financial assistance to a director, prescribed officer or other person referred to in section 45(2), and the power of the board in this regard is not limited or restricted by this Memorandum of Incorporation. 26. Managing director 26.1 The directors may from time to time appoint 1 or more of their body to the office of managing director for such term and at such remuneration as they may think fit, and may revoke such appointment subject to the terms of any agreement entered into in any particular case, provided that the period of office of a managing director appointed in terms of an agreement shall be for a maximum period of 5 years at any one time. A director so appointed shall be subject to retirement in the same manner as the other directors except during the period of his agreement, and his appointment shall terminate if he ceases for any reason to be a director Subject to the provisions of any contract between himself and the company, a managing director shall be subject to the same provisions as to disqualification and removal as the other directors of the company The directors may from time to time entrust to and confer upon a managing director for the time being such of the powers exercisable in terms of this Memorandum of Incorporation by the directors as they may think fit, and may confer such powers for such time and to be exercised for such objects and purposes, and upon such terms and conditions, and with such restrictions, as they think expedient; and they may confer such powers either collaterally with or to the exclusion of and in substitution for all or any of the powers of the directors in that behalf, and may from time to time revoke, withdraw, alter or vary all or any of such powers. 28. Borrowing powers 28.1 Subject to the provisions of clause 28.3, all other provisions of this Memorandum of Incorporation, and to the extent applicable, the debenture trust deed, the directors may from time to time: borrow for the purpose of the company such sums as they think fit; secure the payment or repayment of any such sums or any other sum, as they think fit, whether by the creation and issue of debentures, mortgage or charge upon all or any of the property or assets of the company; make such regulations regarding the issue and transfer of debentures (subject to clauses 1.3 and 7.9) and all such other matters incidental to the debentures as the directors think fit No special privileges as to: allotment of shares in the company; or the attending and voting at general meetings; or the appointment of directors, or otherwise, shall be given to the holders of debentures of the company except with the sanction of the shareholders in general meeting The directors shall procure (but as regards subsidiaries of the company only insofar as by the exercise of voting and other rights or powers of control exercisable by the company they can procure) that the aggregate principal amount at any one time outstanding in respect of moneys so borrowed or raised by: the company (other than by way of the debentures); and all the subsidiaries for the time being of the company (excluding moneys borrowed or raised by any of such companies from any other of such companies but including the principal amount secured by any outstanding guarantees or suretyships given by the company or any of its subsidiaries for the time being for the share capital or indebtedness of any other company or companies whatsoever and not already included in the aggregate amount of the moneys so borrowed or raised), shall not exceed the aggregate amount at that time authorised to be borrowed or secured by the directors of the company s listed holding company (if any) in respect of that holding company. 52

55 32. Distributions 32.1 Subject to the provisions of the Act, and particularly section 46 of the Act, the company may make a proposed distribution if such distribution: is pursuant to an existing legal obligation of the company, or a court order; or is authorised by resolution of the board, provided that such distribution complies with the JSE Listings Requirements Distributions may be declared either free of or subject to the deduction of income tax and any other tax or duty in respect of which the company may be chargeable The directors may from time to time declare and pay to the shareholders such interim distributions as the directors consider to be justified by the profits of the company No larger distribution shall be declared by the company in general meeting than is recommended by the directors, but the company in general meeting may declare a smaller dividend All unclaimed distributions will be invested in an interest bearing account for the benefit of the company until claimed, provided that distributions unclaimed for a period of 3 (three) years from the date on which they were declared may be declared forfeited by the directors for the benefit of the company. The directors may at any time annul such forfeiture upon such conditions (if any) as they think fit. All unclaimed monies, other than distributions, that are due to shareholder/s shall be held by the company in trust for an indefinite period until lawfully claimed by such shareholder/s Any distribution, interest or other sum payable in cash to the holder of a share may be paid by cheque or warrant sent by post and addressed to: the holder at his registered address; or in the case of joint holders, the holder whose name appears first in the Securities Register in respect of the share, at his registered address; or such person and at such address as the holder or joint holders may in writing direct Every such cheque or warrant shall: be made payable to the order of the person to whom it is addressed; and be sent at the risk of the holder or joint holders The company shall not be responsible for the loss in transmission of any cheque or warrant or of any document (whether similar to a cheque or warrant or not) sent by post as aforesaid A holder or any one of two or more joint holders, or his or their agent duly appointed in writing, may give valid receipts for any distributions or other moneys paid in respect of a share held by such holder or joint holders When such cheque or warrant is paid, it shall discharge the company of any further liability in respect of the amount concerned A distribution may also be paid in any other way determined by the directors, and if the directives of the directors in that regard are complied with, the company shall not be liable for any loss or damage which a shareholder may suffer as a result thereof Any distribution may be paid wholly or in part: by the distribution of specific assets; or by the issue of shares, debentures or securities of the company or of any other company; or in cash; or in any other way which the directors or the company in general meeting may at the time of declaring the distribution determine Where any difficulty arises in regard to such distribution, the directors may settle that difficulty as they think expedient, and in particular may fix the value which shall be placed on such specific assets on distribution. 53

56 32.14 The directors may: determine that cash payments shall be made to any shareholder on the basis of the value so fixed in order to secure equality of distribution; and vest any such assets in trustees upon such trusts for the benefit of the persons entitled to the distribution as the directors deem expedient All dividends must be made payable to shareholders registered as at a date subsequent to the date of declaration of the dividend or the date of confirmation of the dividend, whichever is the later date. CONDITIONS Any special conditions which apply to the company and the requirements, if any, additional to those prescribed in the act for their alteration are: There are no special conditions which apply to the company. The provisions of the MOI of each of the company s subsidiaries with regard to the qualification of directors, remuneration of directors and any power enabling the directors to vote remuneration to themselves or any members of the board is set out below: The company shall only have elected directors and there shall be no appointed or ex offıcio directors as contemplated in section 66(4) of the Act Apart from satisfying the qualification and eligibility requirements set out in section 69 of the Act, a person need not satisfy any eligibility requirements or qualifications to become or remain a director or a prescribed officer of the company The company may pay remuneration to the directors for their services as directors in accordance with a special resolution approved by the company s shareholders within the previous 2 years, as set out in sections 66(8) and (9) of the Act, and the power of the company in this regard is not limited or restricted by this Memorandum of Incorporation. 54

57 Annexure 4 DETAILS OF THE ASSET MANAGEMENT AND PROPERTY MANAGEMENT FUNCTIONS 1. ASSET MANAGEMENT 1.15 Salient features of the asset management agreement Set out below are the salient features of the asset management agreement: The asset manager shall be an independent contractor and not an agent (save to the extent expressly authorised in terms of this agreement) employee or partner of Dipula The asset manager shall not have the authority to represent Dipula and to contract in the name of and for the benefit of Dipula except where such authority is expressly conferred upon it in terms of this agreement and when so representing Dipula, the asset manager will act in the best interests of Dipula The remuneration payable by Dipula to the asset manager for all asset management and operational management services rendered by it in terms of this agreement shall be a monthly fee equivalent to 1 /12 th of 0.3% of the aggregate of the market capitalisation and the borrowings of Dipula This agreement shall commence on the date on which Dipula is listed on the JSE Main Board and, subject to certain provisions will continue indefinitely unless terminated by either party by giving 3 years written notice, which notice may only be delivered to the other party on or after the fourth anniversary of the commencement date Linked unitholders of Dipula in general meeting may pass an ordinary resolution in terms of which they cancel the asset management agreement and opt not to observing the 3 year written notice (as they are entitled to do in terms of the Listing Requirements of the JSE) in which case, the agreement shall terminate on the 30th day from the date of the passing of such resolution, provided that such cancellation shall be subject to the payment by way of compensation for the relinquishment of an income-generating asset, the net present value of the forecast asset management fees for the remaining term of the agreement Dipula shall be entitled to purchase the business conducted by the asset manager by giving 12 twelve months written notice to the asset manager (the exercise notice ) which exercise notice may not be given within the first 6 years of this appointment, on the following terms: the acquisition shall be subject to Dipula complying with the requirements of the JSE Listings Requirements and without derogating from the generality of the aforegoing, that Dipula procure a fairness opinion from an independent advisor should the JSE rule that the transaction is a related party transaction and requires a fairness opinion; the assets shall be delivered to Dipula against payment of the purchase price; if applicable, Dipula shall bear the costs of any VAT payable in respect of the acquisition of the business; the business shall be acquired voetstoots with effect from the expiry of the 12 month period (the effective date ); the purchase price of the business shall be the fair market value thereof to be agreed between the parties or, failing agreement, to be determined by an independent merchant bank agreed upon between the parties or, failing agreement, appointed by the JSE approved sponsors of the company at the time. The independent merchant bank in determining fair value may call on all or any of the parties to make written representation in regard to the value of the business and furnish any such representation to the remaining parties. Whether or not any party makes any representations, the independent merchant bank shall be entitled to consult with any of the parties or with any other person. In determining fair value the independent merchant bank shall act as expert and not as arbitrator. Notwithstanding anything to the contrary, the fair value shall not be less than the compensation that would be payable in terms of paragraph above. 55

58 1.16 Details of the asset manager Other clients The asset manager does not provide asset management services to any other listed companies The asset manager shall perform the following asset management services: Formalise a strategic plan for the property portfolio and make recommendations regarding portfolio re-engineering, streamlining and risk balancing within the portfolio Scrutinise the maintenance plan prepared by each property manager and revise the program and budget in terms of affordability, if the asset manager deems it necessary Perform quarterly performance analysis of property managers and for the property portfolio as a whole in terms of performance against budgets and relevant industry benchmarks, with a focus on gross revenue growth, expense control and management of a comprehensive utility cost program (i.e. actual recoveries to actual costs) Risk and exposure analysis on a semi-annual basis and review of the perceived potential and current risks to which each property is or might be exposed and to which Dipula is or might be exposed and reporting thereon Building lifecycle forecasting and revision of the business plan for each property on an annual basis Make recommendations regarding improvements to the property portfolio and more specifically regarding upgrades, renovations, developments, selling of assets and acquisitions on a quarterly basis Conduct viability and feasibility studies to appraise upgrades, development and acquisition opportunities Have prepared, if required by Dipula, annual property valuations for multi and single tenant buildings Manage marketing strategy at property management level to include target market identification, compilation of tenant mix, tenant procurement and selection of objectives Make use of market research and available surveys, together with market intelligence to ensure that the property managers implement at property level, a relevant marketing strategy for all rentable premises, including rent reviews with lease renewals Advising on long-term loan funding structures, maintaining debt to open market value ratios and implementing approved interest rate hedging strategies Managing the appointment process and assessing the performance of property managers against agreed industry benchmarks. Constant reviewing and advising on any contractual issues relating to property managers The asset manager shall prepare and deliver to Dipula prior to the commencement of each financial year a strategic plan for approval by Dipula. The strategic plan will be reviewed half yearly and the progress in implementation shall be reported upon quarterly to Dipula within 60 days after the end of each quarter, unless Dipula agrees otherwise The asset manager shall from time to time recommend general strategies to maximise the performance of the property portfolio and strategies with regard to property acquisitions, property disposals, funding the expansion of the property portfolio and interest rate strategies in respect of the liabilities of Dipula. The asset manager will also recommend such other strategies to Dipula which it deems to be in the best interests of Dipula The asset manager shall market the group to investors, analysts, bankers, financiers, the press and the investment community generally The asset manager shall cause to be conducted or use available research into the state and relative investment merits of the various sectors and geographical localities of the property market. Such research shall be made available to the Dipula board The asset manager shall, in addition to the asset management services rendered, manage the operational management of Dipula. 56

59 2. PROPERTY MANAGEMENT 2.1 Salient features of the property management agreement Set out below are the salient features of the property management agreement: The property manager engagement commenced with effect from 1 December 2010 and is valid until 30 November Should the asset management agreement be cancelled or terminated for whatever reason then the property management agreement shall be terminated upon the expiry of 60 days written notice to JHI Management fee JHI shall be paid a monthly management fee (plus VAT on such fee) on the last day of every calendar month equal to: % of the property income (including VAT collections) which is received in respect of any property in which there is a single tenant in terms of a fully repairing lease (i.e. a lease in terms of which a tenant is liable for the maintenance and all operating costs and expenses in respect of the leased premises); % of the property income (including VAT collections) which is received in respect of any property in which there is a single tenant in terms of a lease which is not a fully repairing lease; % of the property income (including VAT collections) which is received in respect of any property in which there is more than one tenant; Notwithstanding the monthly management fees stipulated above, an additional monthly management fee of 0.2% of the property income (including VAT collections) which is received in respect of any property situated in the provinces of Mpumalanga, Limpopo, North West and the Northern Cape will be payable to JHI; the percentage on the existing property portfolio as set out in Annexure F of the property management agreement. Property income referred to above means all monies collected by or received by JHI, including (but not limited to) all rentals, accommodation revenue, rentals for premises for hire, garaging, parking bays, servants quarters, showcases and storage space, additional charges payable by tenants for amortisation of capital additions to the premises for hire, forfeited deposits in excess of that required for repairs or replacements, shares of participation in the profits of turnover of any tenant, agterskots, signage revenues, all monies received or recovered from tenants of the properties in respect of the Properties and all VAT collections Commission leases with new tenants JHI shall be paid a commission (plus VAT on such commission) at 80% of the rate set out in Annexure D of the property management agreement in respect of leases initiated and concluded by JHI with new tenants of the properties Commission renewals and letting of additional space JHI shall be paid a commission (plus VAT on such commission) at 30% of the commission rate as set out in Annexure D of the property management agreement in respect the renewal of leases or the conclusion of further leases negotiated with existing tenants or the leasing of additional areas with existing tenants of the properties Letting by third party agent If an outside agent or a bona fide JHI agent is successful in procuring a new tenant for one of the properties, then that agent will be entitled to be paid commission by the asset manager calculated at 100% of the commission rate set out in Annexure D of the property management agreement Lease fees JHI shall be entitled to charge tenants a reasonable and market-related fee for the preparation of new leases and renewals as well as for the early termination of leases by tenants. The maximum fees chargeable must be approved by the asset managers from time to time. 57

60 2.2 Details of the property manager Overview of the property manager JHI is a well established property services company with more than a century of experience. The current portfolio under management comprises the following: approximately R40 billion of asset value; approximately 959 buildings; in excess of tenants; approximately 6.7 million m 2 under management. The table below gives an overview of the largest contracts secured by JHI within the last three years. Group Start date Duration Value Sanlam Properties 1 January years R137 million Pangbourne Group Retail 1 February months R16.8 million Pangbourne Group Commercial 1 February years R67.6 million Duties of the property manager The collection of rent and other charges due by the tenants and the prompt following up of late payments utilising its best endeavours to ensure that no more than 5% of all amounts due remain outstanding by the 25th of each month Enforcement of the landlord s rights against defaulting tenants The rendering of a detailed monthly income and expenditure statement and rent roll to the asset managers in an agreed format Sending every tenant a statement for each month, to be posted by JHI by the 24 th of each preceding month, indicating the rent and all other charges due by such tenant The vetting and procuring of credit approvals in respect of all new tenants, notwithstanding that such tenants may be introduced by a third party broker, the negotiation of rentals, refurbishment allowances and all other terms and conditions for both new and existing tenants on terms and conditions agreed with the asset managers in writing The letting of accommodation in the properties for such rentals and upon such terms and conditions as both JHI and the asset managers may determine in accordance with the policies determined by the asset managers and JHI from time to time The commencement of lease negotiations (on terms approved by the asset managers) at least six months prior to the expiry of existing leases, unless instructed otherwise by the asset managers in writing JHI shall use its best endeavours to ensure that all vacant space is expeditiously let. If this requires using other agents or using any form of advertising or promotion, JHI will do so at its cost except for payment of commission which shall be payable by the asset managers. JHI shall use its best endeavours to ensure that leases and other documents are signed expeditiously by tenants with a view to endeavouring to procure that not more than 10% of the total leases due for renewal at any time shall be outstanding (i.e. unsigned) at any time JHI shall negotiate the renewal of leases, the conclusion of further leases with the existing tenants and the leasing of additional areas with existing tenants JHI undertakes to ensure that the lease agreements are presented for signature to the asset managers within a period of 21 (twenty-one) days after: the tenants have signed the lease agreements and all other related documentation; all necessary FICA documentation has been furnished and all other formalities are fully completed and complied with by the tenants; 58

61 the tenants have paid the stamp duty (if any) and all other costs payable in terms of the lease agreements and have paid the required deposits or furnished the required guarantees or other securities JHI shall use its best endeavours to ensure that no tenant is in occupation without a signed lease agreement (except in situations beyond the control of JHI) and without the prior written approval of the asset managers The drawing up of agreements of leases complying with FICA requirements and attending to the stamping thereof and ensuring that the lease agreement so utilised has been approved by the asset manager Manage and control the tenant installation process Supervise the provision of services by third party service providers, including, but without being limited to, providers of security, cleaning and parking management services, other than where the asset managers (and not JHI) appoints third party service providers Inspection of the premises after a tenant has vacated, before refunding any deposits and the recovery of the cost of reinstating the premises (if applicable) Timeously dealing with all reasonable tenant complaints and requirements Ensuring that good tenant 6 relations are maintained and implementing a process to ensure quarterly communication with the 10 (ten) largest retail, commercial and industrial tenants per JHI regional office Ensuring that all tenants are informed of all rules, regulations and notices issued by the asset managers The marketing and letting of vacant areas, which includes advertising, liaising with other agents, ensuring vacant premises are in good and attractive state of repair and showing the premises to prospective tenants The preparation of leasing strategies with regard to vacant space and the implementation thereof Preparation of tender documentation and management of the tender process in respect of letting (particular Government accommodation) and service providers The preparation of a 3 (three) year rolling plan for maintenance of the properties Efficient and proper maintenance of the properties, subject to certain limits Routine inspection of all the Buildings (and the completion of a detailed inspection report) with a view to ensuring the continued maintenance thereof and that authorised capital expenditures are carried out, subject to certain limits Retain responsibility for audits and inspections regarding compliance requirements and ensure that any requirements are carried out, in respect of national building regulations, including local authority laws and Occupational Health and Safety Act Appointment of any service companies as required for the efficient property management of the properties subject to the asset managers having the right to approve such appointments Conclusion of contracts which it considers necessary for or incidental to the proper management and administration of the properties with suppliers of services to buildings at competitive rates having due regard to the quality of service provided Ensuring the necessary procurement, from broad-based black economic empowerment suppliers in terms of the Broad Based Black Economic Empowerment Act and Property Sector Transformation Charter Exercise in such manner as it deems fit all the rights of the asset managers under any contracts to which the asset managers is party from time to time including, but without being limited to all leases Purchase, lease or otherwise acquire any movable assets required in connection with the properties, subject to certain limits. 59

62 Supervision of the caretakers, building and other employees in respect of the properties, cleaning and security staff in respect of the properties (not covered by service providers) all of whom shall be in the employ of JHI (on behalf of the asset managers and at the expense of the asset managers), or in the case of the out sourcing of this function, in the employ of the service provider Adequate staffing of the buildings and ensuring that such staff are directed and supervised from time to time. Any appointments or terminations must be approved by the asset managers in writing in advance The payment of salaries and wages, keeping of detailed staff duty schedules and other records and the rendering of all statutory returns to State Departments and all other competent authorities Ensure that all funds of Dipula are deposited into Dipula s bank account on a daily basis. JHI shall be entitled to withdraw from any amounts standing to the credit of such account: any remuneration and other amounts; and sufficient funds to enable JHI to pay the expenses of the property portfolio At the end of each calendar month, JHI shall submit to the asset managers a reconciled statement of all funds collected during such calendar month and any payments made and account to the asset managers for any amount owing to Dipula Surplus funds to be invested in accordance with the directions of the asset managers The co ordination of minor renovations. This includes, working closely with the asset mangers architects, determining specifications and scope of work, and overall supervision of the contractors Payment of all property expenses timeously, including without limitation, stamp duties and relevant property taxes Optimise the payment and recovery (if applicable) of all utilities including but not limited to rates, refuse, sewerage, water and electricity Prior to the commencement of each financial year, JHI shall prepare a budget of total anticipated income (including a detailed projected rental schedule per property, but excluding all head office and/or administration centre budges) and a budget of total anticipated expenditure (including repairs and maintenance, all monthly and/or immediately following 36 (thirty six) month period (or such other period as may be agreed) which shall be submitted to the asset managers for approval prior to the commencement of such financial year. The budget shall include detailed budgeting assumptions per building in terms of the strategy for each building and explanatory notes highlighted the broad terms, exceptions and unusual circumstances, if applicable. If required by the asset managers, JHI shall revise that budget from time to time and shall re submit the revised budget to the asset managers for approval The preparation of a half yearly detailed forecast of anticipated income and expenditure for such property Preparation of monthly income and expenditure accounts for each property with comparison to budget or forecast together with explanations on variances Managing the process of insurance claims processing and settling Co ordinating the process of rates and tax objections, including the appointment of professionals, at the cost of the asset managers Co ordinating the process of replacement costing for insurance purpose, including the appointment of professionals, at the cost of the asset managers Manage the approval and authorisation processes to correct levels of authority Co ordinating the process of instituting or defending any legal proceedings which arise in the ordinary course of the business in connection with the properties at the cost of the asset managers. 60

63 Co ordinating the process of instituting or defending any legal proceedings which arise in the ordinary course of the business in connection with the properties at the cost of the asset managers and in so doing co ordinating the process of instructing attorneys and counsel and take legal advice on any matter arising in the ordinary course of the business in connection with the properties, at the cost of the asset managers, including the appointment of attorneys and counsel, provided hat senior counsel may only be instructed with the prior written approval of the asset managers Ensure that the necessary skills, competencies and sufficient number of staff are allocated to ensure the proper and smooth running of the properties, including but without limitation, the negotiation and conclusion of leases The asset managers may with the consent of JHI and, from time to time, add to the duties set out or relieve JHI of any specific function or duty. 61

64 Annexure 5 DETAILS OF THE PROPERTY PORTFOLIO The table below sets out details of the property portfolio for the Dipula group as at the last practicable date: Difference between Property valuation Registered Vacancy valuation amount legal Approximate Average (% of Effective as at and description Freehold/ Tenure of age of rental Rentable rentable date of Purchase 28 February acquisition No. Property name (Erf number) Physical address Region Sector Leasehold leasehold buildings per m 2 area area) acquisition price 2011 cost 1 (years) (R/m 2 ) (m 2 ) (R) (R) (R) 1 26 Siddle Street Erf and 28 North West Office Freehold N/A 30 years % 25/04/ ( ) Klerksdorp Siddle Street Klerksdorp 2 29 Main Street Erf Main Street North West Retail Freehold N/A 35 years % 25/04/ Mafikeng Mafikeng Mafikeng Kent Avenue Erf Kent Gauteng Office Freehold N/A 35 years % 18/05/ Ferndale Avenue Randburg 4 39 Oxford Street Erf Oxford Street Eastern Cape Retail Freehold N/A 20 years % 25/04/ East London East London East London 5 41 and 43 Erf /43 Gauteng Retail Freehold N/A 50 years % 30/04/ (46 281) Pretoria Street Kempton Park Pretoria Road Kempton Park Kempton Park Johannesburg 6 6 Old Erf Old Gauteng Retail Freehold N/A 20 years % 11/01/ ( ) Pretoria Road Halfway House Pretoria Road Ext 58 Richards Drive Halfway House Midrand 7 96 Cambridge Erf Cambridge Free State Office Freehold N/A 18 years % 25/04/ Street Bethlehem Road Bethlehem 8 A & M Wescen Rem of 2727 Corner West and Gauteng Retail Freehold N/A 30 years % 30/04/ ( ) Kempton Park Kempton Park Central Streets Kempton Park 62

65 Difference between Property valuation Registered Vacancy valuation amount legal Approximate Average (% of Effective as at and description Freehold/ Tenure of age of rental Rentable rentable date of Purchase 28 February acquisition No. Property name (Erf number) Physical address Region Sector Leasehold leasehold buildings per m 2 area area) acquisition price 2011 cost 1 (years) (R/m 2 ) (m 2 ) (R) (R) (R) 9 ABSA Derdepoort Ptn 15 of 62 Baviaanspoort Gauteng Retail Freehold N/A 35 years % 30/04/ ( ) Stand 200 Road, East Lynne East Lynne Pretoria 10 ABSA Hercules Erf van der Gauteng Retail Freehold N/A 44 years % 30/04/ ( ) Pretoria Gardens Hoff Street Hercules, Pretoria 11 ABSA Erf 1741 Corner Burger and Gauteng Retail Freehold N/A 25 years % 25/04/ Krugersdorp Erf 1742 Monument Streets Erf 1743 Krugersdorp Erf 1799 Krugersdorp 12 ABSA Malvern Erven Jules Street Gauteng Retail Freehold N/A 25 years % 25/04/ Erf 850 Malvern Erf 852 Erf 853 Malvern 13 ABSA Silverton Sectional Title 177 de Boulevard Gauteng Retail Freehold N/A 37 years % 25/04/ Unit Isabellahof Street c/o Pretoria Rd Silverton, Pretoria 14 African Glass Ptn 1 of Park Avenue Gauteng Industrial Freehold N/A 10 years % 30/04/ Centurion Rooihuiskraal North Rooihuiskraal Ext 31 Extension African Magnets Erf 866 5/7 Gauteng Industrial Freehold N/A 33 years % 30/04/ ( ) Duncanville Duncanville Leeuwenhoek Road Vereeniging 16 Alcom House Erf 65 of 65 Rivonia Road Gauteng Office Freehold N/A 30 years % 12/2/ ( ) Rivonia Ext 3 Extension Rivonia 17 Aliwal North Erf Somerset Eastern Retail Freehold N/A 30 years % 25/04/ ( ) Edgars Aliwal North Street Erf 103 Cape Aliwal North 18 Alvaro Centre Erf President/ Gauteng Retail Freehold N/A 36 years % 25/04/ ( ) Vanderbijl Park Kruger Street Vanderbijlpark 63

66 Difference between Property valuation Registered Vacancy valuation amount legal Approximate Average (% of Effective as at and description Freehold/ Tenure of age of rental Rentable rentable date of Purchase 28 February acquisition No. Property name (Erf number) Physical address Region Sector Leasehold leasehold buildings per m 2 area area) acquisition price 2011 cost 1 (years) (R/m 2 ) (m 2 ) (R) (R) (R) 19 Attie Fourie Place Section 1 and 50 Attie Fourie Gauteng Retail Freehold N/A 14 years Vacant % 25/04/ ( ) Vanderbijlpark Section 2 Street Civic Centre Von Park Vanderbijlpark 20 Barberton Erf de Villiers Mpumalanga Retail Freehold N/A 25 years % 25/04/ Ellerines Barberton Street Barberton 21 Beacon Centre Erf Beaconsfield Gauteng Retail Freehold N/A 30 years % 25/04/ Vereeniging Vereeniging Avenue Vereeniging 22 Beaconsfield Erf Beaconsfield Gauteng Retail Freehold N/A 30 years % 25/04/ ( ) Vereeniging Vereeniging Avenue Vereeniging 23 Beares Centre Erf 2491 and 9 Bears Street Northern Retail Freehold N/A 35 years % 25/04/ Town Talk Erf 976 Kuruman Cape Kuruman Kuruman 24 Bears Erf Bjorseth KwaZulu- Retail Freehold N/A 25 years % 02/03/ ( ) Amanzimtoti Amanzimtoti Crescent Natal Amanzimtoti 25 Bernie Street Erven 417 c/o Bernie Street Gauteng Industrial Freehold N/A 20 years % 06/02/ and 418 and Hilton Road Kya Sands Kya Sand Extention Bethal Sanlam Erf 1537 Bethal cnr Eeufees & Mpumalanga Retail Freehold N/A 20 years % 25/04/ Mark Street Bethal 27 Boardwalk Place Erf Boardwalk Gauteng Office Freehold N/A 14 years % 23/02/ Midrand Grand Central Midrand Halfway House 28 Buffalo Corner Erf Eastern Cape Retail Freehold N/A 60 years % 25/04/ East London East London Buffalo Street East London 29 Church Street West Rem of 472 Church Street Gauteng Retail Freehold N/A 41 years % 30/04/ ( ) Pretoria Stand 1549 Pretoria West Pretoria West Pretoria 64

67 Difference between Property valuation Registered Vacancy valuation amount legal Approximate Average (% of Effective as at and description Freehold/ Tenure of age of rental Rentable rentable date of Purchase 28 February acquisition No. Property name (Erf number) Physical address Region Sector Leasehold leasehold buildings per m 2 area area) acquisition price 2011 cost 1 (years) (R/m 2 ) (m 2 ) (R) (R) (R) 30 Citizens RE of Erf Voortrekker Gauteng Retail Freehold N/A 30 years % 25/04/ ( ) Vereeniging Vereeniging Street Remainder Vereeniging of Erf CMH Kempton Erf Gauteng Retail Freehold N/A 30 years % 25/04/ Kempton Park Jubilee Street Kempton Park 32 Deco Distributors Erf Leon Bartel Str Free State Industrial Freehold N/A 12years % 14/02/ ( ) Bloemfontein Erf Ext 126 Bloemfontein Ext Ellerines Erf Beare Street Northen Retail Freehold N/A 35 years % 25/04/ Kuruman Kuruman Kuruman Central Cape Russels Kuruman 34 FNB Florida Erf Goldman Street Gauteng Retail Freehold N/A 10 years % 25/04/ Florida Florida 35 Geen and Richards Erf 1838 and 22 Palm Street Limpopo Retail Freehold N/A 20 years Vacant % 25/04/ ( ) Phalaborwa Erf 1935 Phalaborwa Phalaborwa 36 Hartbeesfontein Portion Voortrekker North West Retail Freehold N/A 40 years % 25/04/ of Farm Street Hartebeesfontein Hartbeesfontein 37 Hazelwood Place Erven 65 & Dely Road Gauteng Office Freehold N/A Erf % 31/01/ ( ) Pretoria Hazelwood Hazelwood 25 years Pretoria Erf years 38 Hobhouse Erf Emily North West Retail Freehold N/A 32 years % 25/04/ Klerksdorp Klerksdorp Hob House Klerksdorp 39 Howick Mews Erf Gauteng Office Freehold N/A 18 years % 24/04/ Vorna Valley Howick Close Waterfall Park Vorna Valley Midrand Ext 21 65

68 Difference between Property valuation Registered Vacancy valuation amount legal Approximate Average (% of Effective as at and description Freehold/ Tenure of age of rental Rentable rentable date of Purchase 28 February acquisition No. Property name (Erf number) Physical address Region Sector Leasehold leasehold buildings per m 2 area area) acquisition price 2011 cost 1 (years) (R/m 2 ) (m 2 ) (R) (R) (R) 40 Kleynhans Corner Erf Theo Mpumalanga Retail Freehold N/A 20 years % 25/04/ ( ) White River White River Kleynhans Street White River 41 Kotze Place Erf Kotze Street Gauteng Retail Freehold N/A 30 years % 25/04/ Hillbrow Johannesburg Braamfontein 42 Kruger Corner Erf President Gauteng Retail Freehold N/A 30 years % 25/04/ ( ) Vanderbijpark Vanderbijl Park Kruger Street Vanderbijl Park 43 Mafikeng Centre Erf Shippard Street North Retail Freehold N/A 31 years % 25/04/ Nirelle Mafikeng Mafikeng West 44 Main Reef 69 Erf Main Reef Road Gauteng Retail Freehold N/A 30 years % 25/04/ ( ) Randfontein Randfontein Randfontein 45 Markem Offices Erf 173, 174, 21 Margaret Gauteng Office Freehold N/A 30 years % 04/12/ Kempton Park 175 & 273 Avenue Kempton Park Kempton Park Ext 7 46 Mellis Park Ptn 1 of 334 Portion Gauteng Office Freehold N/A 15 years % 31/01/ ( ) Rivonia Ext 20 Rivonia Road Ext 20 Rivonia 47 Metcash Portion 10 of 49 Crownwood Gauteng Office Freehold N/A 35 years % 01/11/ Erf 25 Road Theta Ptn 10 Extension 1 Erf 25 Theta Ext 1 Township Johannesburg 48 Metro Giyani Erven 43, 45, Stand BA 43, Limpopo Retail Freehold N/A 25 years % 05/03/ BA Giyani 44 and 46 Giyanigiyani Business Districts E

69 Difference between Property valuation Registered Vacancy valuation amount legal Approximate Average (% of Effective as at and description Freehold/ Tenure of age of rental Rentable rentable date of Purchase 28 February acquisition No. Property name (Erf number) Physical address Region Sector Leasehold leasehold buildings per m 2 area area) acquisition price 2011 cost 1 (years) (R/m 2 ) (m 2 ) (R) (R) (R) 49 Metro Portion 1 of Ptn of Farm Limpopo Retail Freehold N/A 30 years % 05/03/ Koringpunt the farm Zebediela Zebedielas Location 123 Koringpunt Limpopo S E Metro Malaita Portion 24 of B 66/08 Mpumalanga Retail Freehold N/A 30 years % 05/03/ the Farm Sekhukhuni Sts Vleeschboom 869 Malaitasekhukhuni 51 Milady s Brakpan Erf Voortrekker Gauteng Retail Freehold N/A 50 years vacant % 25/04/ ( ) Brakpan Street Brakpan Gauteng 52 Montrose Place Erf 1332 Waterfall Gauteng Office Freehold N/A 18 years % 19/06/ Vorna Valley Parkbekker Road Vorna Valley Ext 21 Midrand 53 Nedbank Centre Erf Merriman Gauteng Retail Freehold N/A 30 years % 25/04/ Vereeniging Vereeniging Avenue Vereeniging 54 Nemisa Building Erf Girton Road Gauteng Office Freehold N/A 16 years % 21/12/ Parktown Parktown 55 Odendaalsrus Erf van der Free State Retail Freehold N/A 21 years % 25/04/ ( ) Centre Odendaalsrus Vyver Street Ellerines Odendaalsrus 56 OK Express Erf Pretoria Road Gauteng Retail Freehold N/A 40 years % 30/04/ Centre Kempton Park Kempton Park Kempton Park 57 Old Mutual Erf 8302 Horwood Street Mpumalanga Office Freehold N/A 15 years % 08/02/ Secunda Secunda between Ext 25 Lourens Muller and Heunis Strs Secunda Mpumalanga 67

70 Difference between Property valuation Registered Vacancy valuation amount legal Approximate Average (% of Effective as at and description Freehold/ Tenure of age of rental Rentable rentable date of Purchase 28 February acquisition No. Property name (Erf number) Physical address Region Sector Leasehold leasehold buildings per m 2 area area) acquisition price 2011 cost 1 (years) (R/m 2 ) (m 2 ) (R) (R) (R) 58 Palm Street 1 Erf Palm Street Limpopo Retail Freehold N/A 25 years % 25/04/ Phalaborwa Phalaborwa Phalaborwa 59 Palm Street Mall Erf Palm Street Limpopo Retail Freehold N/A 25 years % 25/04/ Phalaborwa Phalaborwa Phalaborwa 60 Perm Building Erven Gauteng Retail Freehold N/A 30 years % 25/04/ ( ) Boksburg Erf 409 and Commissioner Erf 410 Street measuring Boksburg Boksburg 61 Perm Building Erf Voortrekker Gauteng Office Freehold N/A 30 years % 30/04/ ( ) Kempton Kempton Park Street Kempton Park 62 Pretoria Street Erf Pretoria Road Gauteng Retail Freehold N/A 40 years % 30/04/ ( ) Barnetts Kempton Park Kempton Park Kempton Park 63 Princess Erf 1321 & 55 Princess Street Gauteng Retail Freehold N/A 50 years % 25/04/ Geenrich 1322 Benoni Benoni Benoni 64 Princess Jones Erf 7554 Corner Tom Jones Gauteng Retail Freehold N/A 50 years vacant % 25/04/ ( ) Benoni Benoni and Princess Avenue Benoni 65 Sandhaven Erf 305 Corner Pongola Gauteng Office Freehold N/A 18 years % 23/01/ Office Park Eastgate Crescent and Ext 17 Katherine Streets Eastgate Ext 17 Sandton 66 Score Erf 1 Corner Freedom Drive Gauteng Retail Freehold N/A 10 years % 31/05/ Braamfisherville Bram Fischerville and Amandla Blvd Braam Fischerville 67 Score Evaton Erf Chief Bambatha Gauteng Retail Freehold N/A 30 years % 31/05/ Evaton West Street, Evaton West Ext 11 Ext Score Ivory Park Ptn. 1 Erf nd October Avenue Gauteng Retail Freehold N/A 15 years % 31/05/ Ivory Park Ivory Park Ext 8 Ext 8 68

71 Difference between Property valuation Registered Vacancy valuation amount legal Approximate Average (% of Effective as at and description Freehold/ Tenure of age of rental Rentable rentable date of Purchase 28 February acquisition No. Property name (Erf number) Physical address Region Sector Leasehold leasehold buildings per m 2 area area) acquisition price 2011 cost 1 (years) (R/m 2 ) (m 2 ) (R) (R) (R) 69 Score Tsakane Erf Corner Bbazima Gauteng Retail Freehold N/A 15 years % 31/05/ Tsakane Ext and Tsakane Street Tsakane Ext 5 Ekurhuleni 70 Score Vosloorust Erf 6258 Sam Sekoti Avenue Gauteng Retail Freehold N/A 15 years % 31/05/ Vosloorus Ext 2 Vosloorus 71 Sloane Park Ptn 1 of Libertas Road Gauteng Office Freehold N/A 17 years % 31/05/ ( ) Bryanstan Bryanston Corner Main Road Ext 16 and Ad Sloane Street Bryanston Ext 16 Sandton 72 Standard Bank Erf Bjorseth KwaZulu- Retail Freehold N/A 15 years vacant % 25/04/ ( ) Amanzimtoti Amanzimtoti Crescent Natal Amanzimtoti 73 Standard Bank Erf 440 & 262 Gauteng Retail Freehold N/A 50 years % 25/04/ Boksburg Erf 441, Commissioner Erf 442 Street Boksburg Boksburg 74 Standard Bank Erf Voortrekker Gauteng Retail Freehold N/A 20 years % 25/04/ Brakpan Brakpan Road Brakpan 75 Standard Bank Erf 1921 Church Square Eastern Cape Retail Freehold N/A 130 years % 25/04/ Grahamstown Grahamstown Grahamstown 76 Standard Bank Erf Main Street Eastern Cape Retail Freehold N/A 110 years % 25/04/ Humansdorp Humansdorp Humansdorp 77 Standard Bank Erf 1655, 39 Human Street Gauteng Retail Freehold N/A 30 years % 25/04/ Krugersdorp Erf 1601 Krugersdorp Erf 1600 Erf 1654 Krugersdorp, 78 Standard Bank Erf 254 corner Main and North West Retail Freehold N/A 81 years % 25/04/ Mafikeng Mafikeng Robinson Streets Mafikeng 79 Standard Bank Erf 230 4a Loch Street Gauteng Retail Freehold N/A 6 years % 25/04/ Meyerton Meyerton Meyerton 69

72 Difference between Property valuation Registered Vacancy valuation amount legal Approximate Average (% of Effective as at and description Freehold/ Tenure of age of rental Rentable rentable date of Purchase 28 February acquisition No. Property name (Erf number) Physical address Region Sector Leasehold leasehold buildings per m 2 area area) acquisition price 2011 cost 1 (years) (R/m 2 ) (m 2 ) (R) (R) (R) 80 Standard Bank Erf 16 Kirchoffer Free State Retail Freehold N/A 25 years % 25/04/ Sasolburg Sasolburg Boulevard Sasolburg 81 Standard Bank Erf 1554 Etienne Rossouw Mpumalanga Retail Freehold N/A 20 years % 30/04/ Secunda Secunda Street Secunda 82 Standard Bank Erf 92, 10 van Rign Street Gauteng Retail Freehold N/A 25 years % 25/04/ Vanderbijlpark Erf 93 Vanderbijlpark Vanderbijl Park 83 Town Talk Erf 60 Mkuze Main Street KwaZulu- Retail Freehold N/A 20 years % 25/04/ Mkuze Shopping Mkuze Natal Centre 84 Town Talk Erf 157 Main Road and Limpopo Retail Freehold N/A 30 years % 25/04/ ( ) Modjadjiskloof Duivelskloof Botha Street Modjadjiskloof 85 Town Talk Erf 8 Corner Danie Joubert Limpopo Retail Freehold N/A 30 years % 25/04/ Tzaneen Tzaneen and Agatha Street Tzaneen 86 Trentyre Benoni Erf 1523, 49 Lake Avenue Gauteng Retail Freehold N/A 25 years % 25/04/ ( ) Erf 1525 and Benoni Erf 1527 Province of Gauteng 87 Tzaneen Ellerines Erf 52 Tzaneen Joubert and Limpopo Retail Freehold N/A 30 years % 25/04/ (18 822) Agatha Streets Tzaneen 88 Volksrust Erf Joubert Street KwaZulu- Retail Freehold N/A 33 years % 25/04/ Ackermans Volksrust Volksrust Natal 89 Voortrekker Street Erf 1161 and 21 Voortrekker Gauteng Retail Freehold N/A 50 years % 25/04/ ( ) Benoni Town Talk Erf 1162 Benoni Street Benoni 90 Witbank Erf Neven Street Mpumalanga Office Freehold N/A 10 years % 25/04/ Hosken House Witbank X60 Witbank 70

73 Difference between Property valuation Registered Vacancy valuation amount legal Approximate Average (% of Effective as at and description Freehold/ Tenure of age of rental Rentable rentable date of Purchase 28 February acquisition No. Property name (Erf number) Physical address Region Sector Leasehold leasehold buildings per m 2 area area) acquisition price 2011 cost 1 (years) (R/m 2 ) (m 2 ) (R) (R) (R) 91 1 Killarney Rem of No 1 Killarney Western Industrial Freehold N/A 15 years % 11/04/ ( ) Milnerton Erf Avenue corner Cape Milnerton Koebery and Killarney Avenues Killarney Gardens Milnerton 92 1 President Erf President Gauteng Retail Freehold N/A 25 years Vacant % 25/04/ ( ) Street Germiston Street Germiston Ext 8 Germiston Sixth Erven 125,138, 139 Sixth Gauteng Industrial Freehold N/A 30 years % 07/06/ Street 139, Wynberg Street Wynberg Sandton 94 24A Bok Street Erf a Bok Street Free State Retail Freehold N/A 28 years % 25/04/ ( ) Welkom Welkom Voortrekker Erf 11012, 30 Voortrekker Western Retail Freehold N/A 45 years % 11/06/ ( ) Edgars Rem of Road Cape Bellville Rem of Bellville Bellville 96 31/33 Third Erf 416 Springs 31 and 33 Third Gauteng Retail Freehold N/A 35 years % 25/04/ ( ) Street, Springs Erf 417 Springs Street, Springs Erf 418 Springs Erf 419 Springs Scott Street Ptn 1 of Erf /42 Scott KwaZulu-Natal Retail Freehold N/A 13 years % 25/04/ Newcastle and Street Ptn 2 of Erf 444 Newcastle Newcastle 98 5th Avenue Erf 338 Wynberg 326 6th Avenue Gauteng Industrial Freehold N/A 34 years % 25/04/ ( ) Corner Wynberg Wynberg 99 9 Grenville Rem of Erf Grenville Western Cape Industrial Freehold N/A 50 years % 11/06/ Avenue, Epping Cape Town Avenue, Epping 100 ABSA Secunda Erf 4780 Tropsch Plane Mpumalanga Retail Freehold N/A 20 years % 25/04/ Secunda Ext 11 Secunda 71

74 Difference between Property valuation Registered Vacancy valuation amount legal Approximate Average (% of Effective as at and description Freehold/ Tenure of age of rental Rentable rentable date of Purchase 28 February acquisition No. Property name (Erf number) Physical address Region Sector Leasehold leasehold buildings per m 2 area area) acquisition price 2011 cost 1 (years) (R/m 2 ) (m 2 ) (R) (R) (R) 101 Alberton Rem Portion 2 corner Voortrekker Gauteng Retail Freehold N/A 15 years % 07/06/ ( ) Crossing of Erf 732 Road and Ring New Redruth Road West New Redruth Alberton 102 Amethyst Erf Amethyst Street Gauteng Retail Freehold N/A 41 years % 12/05/ Erf 1263 Carletonville Carletonville Carletonville Ext 2 Extension Arbeid Street Erf Arbeid Street Gauteng Industrial Freehold N/A 22 years % 07/06/ Strijdompark Strijdompark Ext 9 Ext Casey s Auto Erf 198 Springs ² 140 2nd Street Gauteng Retail Freehold N/A 20 years % 25/04/ Springs Erf 199 Springs Springs Erf 200 Springs Erf 201 Springs Erf 202 Springs Erf 203 Springs Rem Ext of Erf 1794 Springs 105 Cavaleros Ptn 143 of 7 Geldenhuis Road Gauteng Industrial Freehold N/A 55 years % 25/04/ Malvern Farm Malvern East Elandsfontein Germiston, Checkers Nigel Ptn 1 of Erf 1568 corner Main and Gauteng Retail Freehold N/A 35 years % 25/04/ Nigel Hendrik Verwoerd Streets, Nigel 107 Citizens Springs Erf 1982 Springs 4th Avenue Gauteng Retail Freehold N/A 25 years % 25/04/ ( ) Erf 528 Springs Springs Erf 529 Springs Erf 530 Springs Erf 531 Springs Erf Eastgate Minis Erven 277, 278, 11 and 13 Delphi Gauteng Industrial Freehold N/A 15 years % 07/06/ Eastgate Ext 18 Street, Eastgate Ext 18, Sandton 72

75 Difference between Property valuation Registered Vacancy valuation amount legal Approximate Average (% of Effective as at and description Freehold/ Tenure of age of rental Rentable rentable date of Purchase 28 February acquisition No. Property name (Erf number) Physical address Region Sector Leasehold leasehold buildings per m 2 area area) acquisition price 2011 cost 1 (years) (R/m 2 ) (m 2 ) (R) (R) (R) 109 Ellerines Erf Scott Street KwaZulu-Natal Retail Freehold N/A 16 years % 25/04/ Newcastle Newcastle Newcastle 110 Fastfood Corner RE of Erf 1746 corner 9th Avenue Gauteng Retail Freehold N/A 25 years % 25/04/ (95 373) Springs Selection Park and 2nd Street Selection Park Springs 111 Geen & Richards Ptn 3 of 6 West Street Gauteng Retail Freehold N/A 45 years % 25/04/ Erf 2770 Kempton Park Kempton Park and Ptn 4 of Erf Goodyear Erf Pretoria Road Gauteng Retail Freehold N/A 50 years % 25/04/ Kempton Park Kempton Park Kempton Park 113 Humcor Erf Borax Street Gauteng Industrial Freehold N/A 35 years % 25/04/ Alrode Ext 7 Alrode Ext 7 Alberton 114 Mauriso Court Erf Knox Street Gauteng Retail Freehold N/A 60 years % 25/04/ ( ) Germiston Georgetown Germiston 115 Nedbank Erf Oxford Eastern Cape Retail Freehold N/A 60 years % 25/04/ ( ) Building King William s Street East London Town East London 116 Nedbank Erf 335 corner Monteer Gauteng Office Freehold N/A 40 years % 25/04/ Building Isando Ext 1 Road and Isando Brewery Street Isando Ext New Road Offices Portion 1 of 30 New Road Gauteng Office Freehold N/A 21 years % 07/06/ Erf 56 Midrand Randjespark Randjiespark Johannesburg 118 P n P Kroonstad Erf 6864 corner President Free State Retail Freehold N/A 30 years % 07/06/ Kroonstad and Truter Streets Ext 63 Kroonstad 73

76 Difference between Property valuation Registered Vacancy valuation amount legal Approximate Average (% of Effective as at and description Freehold/ Tenure of age of rental Rentable rentable date of Purchase 28 February acquisition No. Property name (Erf number) Physical address Region Sector Leasehold leasehold buildings per m 2 area area) acquisition price 2011 cost 1 (years) (R/m 2 ) (m 2 ) (R) (R) (R) 119 Pep Nigel Erf 163 Nigel 28 Hendrik Gauteng Retail Freehold N/A 40 years % 25/04/ Verwoerd Street Nigel 120 Perm Building Erf King Oxford Eastern Cape Retail Freehold N/A 60 years % 25/04/ East London William s Town Street, East London 121 Perm Building Erf 317 Springs, 74 3rd Street Gauteng Office Freehold N/A 40 years vacant % 25/04/ ( ) Springs Erf 318 Springs Springs Erf 319 Springs 122 Perm Plaza Ptn 1 of Erf Scott Street KwaZulu-Natal Retail Freehold N/A 19 years % 25/04/ Newcastle Newcastle Newcastle 123 Range Road Rem of portion 5 Range Way Western Cape Industrial Freehold N/A 20 years % 07/06/ ( ) Blackheath 270, the farm Blackheath Wimbledon 454 Kuils River 124 Saficon Driehoek Ptn 1 of Erf Rose Innes Gauteng Industrial Freehold N/A 50 years % 25/04/ ( ) Germiston Ext 4 Road and Erf 864 Germiston Germiston Ext Saficon Germiston Erf President Street Gauteng Retail Freehold N/A 45 years % 25/04/ ( ) President Street Germiston, Erf 477 Germiston Germiston, Erf 478 Germiston 126 Sales House Erven 1203 corner Fraser Gauteng Retail Freehold N/A 35 years % 07/06/ ,1205 and Bree Streets Johannesburg Johannesburg 127 Sandvale Erf Sandvale Gauteng Industrial Freehold N/A 30 years % 25/04/ ( ) Centre Isandovale Road, Isando 128 SARS Building Rem of Erf 14 Graaf Street Free State Office Freehold N/A 10 years % 25/04/ Welkom Welkom Welkom 129 Selbourne House Ptn 3 of Erf 3251 corner First and Free State Office Freehold N/A 25 years % 25/04/ Bloemfontein Bloemfontein Selbourne Streets Bloemfontein 74

77 Difference between Property valuation Registered Vacancy valuation amount legal Approximate Average (% of Effective as at and description Freehold/ Tenure of age of rental Rentable rentable date of Purchase 28 February acquisition No. Property name (Erf number) Physical address Region Sector Leasehold leasehold buildings per m 2 area area) acquisition price 2011 cost 1 (years) (R/m 2 ) (m 2 ) (R) (R) (R) 130 Shoprite Erf 1223 corner Edwards Gauteng Retail Freehold N/A 35 years % 07/06/ Westonarea Westonarea Avenue and Allen Street Westonaria District Randfontein 131 Sifon Park Erven 385, Sifon Street Gauteng Industrial Freehold N/A 25 years % 07/06/ , 388, 389 Robertville and 390 Ext 10 Robertville Ext Standard Bank Erf 119 Isando corner Kram Gauteng Retail Freehold N/A 50 years % 25/04/ Isando and Monteer Roads, Isando 133 Standard Bank Ptn 3 of Erf Scott Street KwaZulu-Natal Retail Freehold N/A 37 years % 25/04/ Newcastle Newcastle, Ptn 4 Newcastle of Erf Newcastle Ptn 5 of Erf 435 Newcastle 134 Supermart Ptn 2 of Erf Allen Street KwaZulu-Natal Retail Freehold N/A 37 years % 25/04/ Newcastle and Newcastle Ptn 3 of Erf 330 Newcastle 135 Trentyre Erf th Avenue Gauteng Retail Freehold N/A 25 years % 25/04/ Alberton Alberton Alberton 136 Vana Road Erven 75, 76, 77 corner Vana Gauteng Industrial Freehold N/A 35 years % 07/06/ Jupiter Ext 3 Drive and Pero Road Jupiter Ext 3 Germiston 137 Victoria and Erf Victoria Gauteng Retail Freehold N/A 50 years % 25/04/ ( ) Knox Streets Germiston Street, Germiston Germiston Erf 140 Germiston Erf 141 Germiston 75

78 Difference between Property valuation Registered Vacancy valuation amount legal Approximate Average (% of Effective as at and description Freehold/ Tenure of age of rental Rentable rentable date of Purchase 28 February acquisition No. Property name (Erf number) Physical address Region Sector Leasehold leasehold buildings per m 2 area area) acquisition price 2011 cost 1 (years) (R/m 2 ) (m 2 ) (R) (R) (R) 138 Welkom High Erf c/o Stateway Free State Retail Freehold N/A 45 years % 25/04/ Park Building Welkom and Bok Street Sanlam Business Centre, Welkom 139 Wynberg 506 Erf th Street Gauteng Industrial Freehold N/A 29 years % 25/04/ Wynberg Wynberg 140 Wynpol 679 Erf 15 Wynberg corner Thora Gauteng Industrial Freehold N/A 35 years % 25/04/ Crescent and 4th Street Wynberg 141 Zeolite Park Erf Zeolite Street Gauteng Retail Freehold N/A 50 years % 12/05/ ( ) Carletonville Carletonville Carletonville Ext ( ) Alert Stand Western Gauteng Industrial Freehold N/A 28 years % 01/07/ City West Boulevard City West Johannesburg 143 Anderbolt Portion 1 of 246 Francis Road Gauteng Industrial Freehold N/A 15 years % 01/07/ McCarthy Erf 246 Dormehl Anderbolt Anderbolt Ext 64 Boksburg 144 Atlas Road Portion 3 Atlas/Dunswart Gauteng Retail Freehold N/A 8 years % 01/07/ Erf 453 Road, Anderbolt Anderbolt Boksburg Ext Belle Hombre Portion 280 corner Boom Gauteng Retail Freehold N/A 15 years % 01/07/ Farm and Potgieter Daspoort Streets No. 319 Marabstad Pretoria 146 Carrier/ Erf M4 Mandy Gauteng Industrial Freehold N/A 20 years % 01/07/ Metraclark Reuven Road Reuven Johannesburg 76

79 Difference between Property valuation Registered Vacancy valuation amount legal Approximate Average (% of Effective as at and description Freehold/ Tenure of age of rental Rentable rentable date of Purchase 28 February acquisition No. Property name (Erf number) Physical address Region Sector Leasehold leasehold buildings per m 2 area area) acquisition price 2011 cost 1 (years) (R/m 2 ) (m 2 ) (R) (R) (R) 147 Dauphin Erf Bunsen Street Gauteng Industrial Freehold N/A 24 years % 01/07/ Seatings: Industria Industria Industria Johannesburg 148 Emsure: Erf 8410 corner Alston Gauteng Office Freehold N/A 15 years % 01/07/ Benoni Benoni and Rothsay Streets 149 Giyani Erf 84 Giyani Magistrate Limpopo Retail Deed of N/A 7 years % 01/07/ Street, Giyani grant 150 Horison Office Erf 243 No 4/6 Kingfisher Gauteng Office Freehold N/A 13 years % 01/07/ Park Horizon Park Street, Horison Park, Roodepoort 151 Jasco Building Erf Delphi Street Gauteng Industrial Freehold N/A 21 years % 01/07/ Eastgate, Ext 18 Eastgate Ext 18 Sandton 152 Johnson Wax Erf 469 Fairland 192 Amit Street Gauteng Office Freehold N/A 20 years % 01/07/ Fairlands Johannesburg 153 Kopanong Erf Malatsi Street Gauteng Retail Freehold N/A 7 years % 01/07/ Ivory Park Ivory Park Ext 13 Thembisa 154 Nedcor Building: Erf 13 and 14 corner Jack and Gauteng Retail Freehold N/A 48 years % 01/07/ Germiston Germinston Victoria Street Germiston 155 Planet Fitness Portion 3 of 33 Tibouchina Gauteng Retail Freehold N/A 11 years % 01/07/ Montana Erf 2596 Street Zambesi Montana Ext 59 Drive, Montana Park, Pretoria 156 Seatings Erf 63 and Bunsen Street Gauteng Industrial Freehold N/A 24 years % 01/07/ Industria Industria Johannesburg 157 Standard Bank Erf Beit Street Gauteng Retail Freehold N/A 20 years % 01/07/ Doornfontein Doornforntein Andsiemart Road Doornfontein Johannesburg 77

80 Difference between Property valuation Registered Vacancy valuation amount legal Approximate Average (% of Effective as at and description Freehold/ Tenure of age of rental Rentable rentable date of Purchase 28 February acquisition No. Property name (Erf number) Physical address Region Sector Leasehold leasehold buildings per m 2 area area) acquisition price 2011 cost 1 (years) (R/m 2 ) (m 2 ) (R) (R) (R) 158 Stanley Tools Erf Granville Gauteng Industrial Freehold N/A 23 years % 01/07/ Robertville Avenue, Robertville Ext 10 Roodepoort 159 Robertville: Erf 381/ Anvil Gauteng Industrial Freehold N/A 23 years % 01/07/ Anvil Road Robertville Road, Robertville Roodepoort 160 Virgin Active Erf Re 3/ van Santen Gauteng Retail Freehold N/A 6 years % 01/07/ Horison View Horizon View Drive, Horizon View, Roodepoort Pretoria Erf Pretoria Gauteng Office Freehold 3 N/A 27 years % 01/07/ Avenue Ferndale Avenue Randburg Johannesburg 162 Absa Erf Ondekkers Gauteng Office Freehold 3 N/A 13 years % 01/07/ Horizon Park Horison Park Road, Jorison Park, Roodepoort 163 Agency 1 Erf 1087 corner Witkoppen Gauteng Office Freehold 3 N/A 13 years % 01/07/ Sunninghill and Leeukop Drives Ext 64 Sunninghill Johannesburg 164 Bruma Ptn 17 (Ptn of 20 Rulberg Close Gauteng Office Freehold 3 N/A 15 years % 01/07/ Boulevard Ptn2) of Erf 201 Bruma Bruma Johannesburg 165 College House Erf Peter Placek Gauteng Office Freehold 3 N/A 12 years % 01/07/ ( ) Lyme Park Lyme Park Johannesburg 166 Enel R/e of Ptn 106 Somerset Office Gauteng Office Freehold 3 N/A 20 years % 01/07/ (68 330) of Erf Park, 5 Liberts Bryanston Ext Road, Bryanston Johannesburg 167 Finance House Ptn 1 of 25 Ernest Gauteng Office Freehold 3 N/A 20 years % 01/07/ Erf 204 Bruma Oppenheimer Drive, Bruma Johannesburg 78

81 Difference between Property valuation Registered Vacancy valuation amount legal Approximate Average (% of Effective as at and description Freehold/ Tenure of age of rental Rentable rentable date of Purchase 28 February acquisition No. Property name (Erf number) Physical address Region Sector Leasehold leasehold buildings per m 2 area area) acquisition price 2011 cost 1 (years) (R/m 2 ) (m 2 ) (R) (R) (R) 168 Sanburn Erf Woburn Gauteng Office Freehold 3 N/A 30 years % 01/07/ ( ) Building Benoni Avenue, Benoni 169 Waterview Corner Sections Ernst Gauteng Office Sectional N/A 21 years % 01/07/ ,14,15,17 Oppenheimer title and 18 Drive, Bruma Waterview Johannesburg Corner Bram Erf 149 B 233 Bram Fischer Gauteng Retail Freehold 3 N/A 20 years % 01/07/ ( ) Fisher Drive Kensington Drive, Randburg Johannesburg Beyers Erf Beyers Naude Gauteng Retail Freehold 3 N/A 20 years % 01/07/ Naude Drive Blackheath Drive, Northcliff Blackheath Johannesburg 172 Blackheath Erf 264 corner Beyers Gauteng Retail Freehold 3 N/A 30 years % 01/07/ Galleries Blackheath Naude Drive and Mountain View Avenue, Blackheath Johannesburg 173 BMW Ptn 7 of 146 South Gauteng Retail Freehold 3 N/A 21 years % 01/07/ ( ) Erf 146 Boulevard Bruma East Gate Office Park Bruma Johannesburg 174 Norwood Centre Erf Grant Gauteng Retail Freehold 3 N/A 40 years % 01/07/ (98 628) Ellerines Norwood Avenue Norwood Johannesburg 175 Palm Court R/e of Erf 887 corner J G Strydom Gauteng Retail Freehold3 N/A 20 years % 01/07/ Weltevreden and Fern Roads Park Ext 1 Weltervreden Park, Johannesburg Total

82 Notes: 1. The difference between the valuation amounts and acquisition costs is due to changes in the market value of the properties. Further to this is that the value attributed by each valuer is an open market value while the acquisition costs are negotiated values. 2. The Asakhe portfolio was acquired pursuant to the Asakhe transaction. Details of the Asakhe transaction, including inter alia, the calculation of the total purchase price are set out in paragraph 11.2 of the prospectus. The difference between the purchase price and the valuation amount represents the difference between the total purchase for the Asakhe portfolio and the total valuation amount for the Asakhe portfolio. 3. As disclosed in paragraph 11.3 of the prospectus at the listing date, the company, through Mergence, will either have taken transfer of the ownership of the properties or acquire leasehold rights over those properties that have not been lodged for transfer. 4. The properties numbered 1 90 are properties which constitute the Dipula portfolio. 5. The properties numbered are properties which constitute the Mergence portfolio. 6. The properties numbered are properties which constitute the Asakhe portfolio. 7. The properties numbered are properties which constitute the Redefine portfolio. 80

83 Annexure 6 INDEPENDENT VALUATIONS OF THE PROPERTY PORTFOLIO VALUATION & ADVISORY SERVICES 27 FRICKER ROAD ILLOVO JOHANNESBURG 2196 PO BOX 1455 t f e w SAXONWOLD 2132 SOUTH AFRICA broll@broll.co.za The Directors Dipula Income Fund Limited 2 Arnold Road Rosebank July 2011 Dear Sirs INDEPENDENT VALUERS REPORT OF THE PROPERTIES HELD BY DIPULA INCOME FUND LIMITED ( DIPULA ) & MERGENCE AFRICA PROPERTY FUND (PROPRIETARY) LIMITED ( MERGENCE ) AND THEIR SUBSIDIARIES 1. INTRODUCTION In accordance with your instruction of 13th January 2011, we confirm that we have visited and inspected the 14181(One Hundred and Forty One properties listed in the attached schedule ( the properties ) during January 2011 (Section (a) (iii)) and have received all necessary details required to perform a valuation in order to provide you with our opinion of the Market Values of each of the properties as at 28th February 2011 (Section (c)) This summary valuation report has been prepared for inclusion in the prospectus as required in terms of the provisions of Section 13: Property Companies, of the Listing Requirements of the JSE Limited. The full valuation reports are available for inspection at the registered office of Dipula. The valuation of each of the properties has been carried out by the nominated property valuer, Broll Valuation & Advisory Services (Proprietary) Limited ( BVA ) and the valuation process has been overseen by Roger Hunting, Registered Professional Valuer No 115/1. Employees of the property valuer having relavant qualifications have inspected each of the properties and careful consideration has been given to all matters pertaining to the requirements for the purposes of the valuations. Formal valuation reports have been compiled for each of the properties and these reports have been issued to the nominated representatives of Dipula. Each of the reports submitted includes commentary on the nature of the properties, locality, tenancy, risk profile, forward rent projections and earning capability and exposure to future expenses and property risk. 81

84 The detailed reports have further addressed the tenancy income capability and expenditure for each property and tenant. Historic expenditure profile as well as future expenditure increases have been considered. The value thus indicates our opinion of the fair market value for each of the properties and the salient issues which have a bearing on the individual property values are summarised in the attached schedules marked Appendix A. 2. BASIS OF VALUATION The valuation is based on the open market value. Market value means the best price, at which the sale of an interest in a property may reasonably be expected to have been completed, unconditionally for a cash consideration on the date of valuation, assuming: a willing seller and a willing buyer in a market; that, prior to the date of valuation, there had been a reasonable period (having regard to the nature of the property and the state of the market) for the proper marketing of the property, for the agreement of price and terms and for the completion of the sale; that the state of the market, level of values and other circumstances Ire, on any earlier assumed date of exchange of contracts, the same as on the date of the valuation. (Section (d)) 3. VALUE METHODOLOGY Market Values have been derived primarily by adopting the discounted cash flow method of valuation in terms of which properties are valued by discounting the expected future net income for a specific cash flow period (in this case 5 years) at an appropriate discount rate (or total rate of return) to give the present value of the expected net income cash flow. In preparing our valuations we have used the Australian developed Cougar System for the generation of cash flows and net present values and in our calculations we have adopted the information data contained in the projected income and expenditure which you have provided to us. (Section (d)) VALUATION ASSUMPTIONS Provisions have been made for the letting up of space presently vacant within a sensible time frame at the then estimated market rental and for the adjustment of passing rentals, upwards or downwards, in cases where such rentals differ from our estimates of current market rentals for comparable space. Our estimates are current market rentals are based on our research of the latest available market letting transactions in the areas where the properties are situated. Where such information is either unavailable or of limited application we have relied on our general knowledge of the market and have also, where appropriate, had regard to rental statistics published by recognized organizations. (Section (f)) INSPECTIONS, AREAS AND DIMENSIONS All the properties were inspected in January No measured surveys have been carried out by us and we have relied on the floor areas provided by the nominated representatives of Dipula and Mergence. We have assumed that these are correct unless otherwise stated in the valuation report for a specific property. SOURCES OF INFORMATION (a) Source of information and verification (Section (a) (xiii)) Information on the properties regarding rental income, recoveries, turnovers and other income detail has been provided to us by the current owners and their managing agents. Each valuation is based on the information which has been supplied to us or which we have obtained in response to our enquiries. We have relied on this information provided as being correct and complete and there being no undisclosed matters which would affect each valuation. We have further compared certain expenditures given to me to market norms of similar properties and the historic expenditure levels of the properties themselves. Historical contractual expenditures and municipal services are compared to the past performance of the properties in order to assess potential expenditure going forward. (b) Full disclosure This valuation has been prepared on the basis that full disclosures of all information and factors that may affect the valuation have been made to us. We have to the best of our ability researched the market as well as taken the steps detailed in paragraph c below. 82

85 (c) Leases (Section (a)(ix)) In preparing our cash flows we have had regard to the tenancy schedules provided and also to our assessment of current market rentals and escalation rates for the various elements of accommodation. Sub section 13.23(ix) provides that the summary of the valuation report to be included in the pre-listing statement/ prospectus or circular must include a high level summary of the actual tenant s leases or sub leases. We interpret this to be an Executive Summary in the form of an overview of the standard lease document adopted to formalise occupancies in the portfolio of properties rather than a detailed audit of each individual lease. We have not carried out a full lease audit on each of the properties in the combined portfolio, but for the purposes of compliance with our interpretation of the requirements of sub section 13.23(ix) we have selected a random sample of properties in each of the portfolios and requested sight of the leases held by tenants in those properties for inspection. The purpose of the inspection being to compare and verify the rentable areas and monthly rentals recorded therein with those shown in the tenancy schedules provided by the client or its representative. We wish to record that the latter information has been adopted by us in the calculation of the market values of the properties in each of the portfolios. For the purposes of random sampling of the Dipula Portfolio we chose 10 properties having 51 tenants occupying an approximate aggregate rentable area of m² which equates to 16.07% of the total rentable area of the portfolio producing a monthly rental of around R , ex VAT. We also chose 10 properties in the Mergence Portfolio having 65 tenants occupying an approximate aggregate rentable area of m² which equates to 21.77% of the total rentable area of the portfolio producing a monthly rental of around R , ex VAT As a general statement it can be said that the results of an audit of leases in each of the portfolios confirms that most occupancies are formalized by the conclusion of written documentation, signed by both landlord and tenant, stating the respective rights and obligations of the parties, including clauses which confirm the essential term of lease which are the premises, the term and the monthly rental. Attached for your perusal is a lease audit analysis spread sheet which records our findings in respect of the leases perused on each of the properties selected on a random basis. In summary our findings are as follows. Around 3.0% of the lease occupancy information requested could not be produced for inspection, but we have ascertained that in the main these occupancies relate to expired leases where tenants are holding over on a monthly basis and there is no correspondence to verify the lease rentals recorded in the tenancy schedules. We have expressed an opinion as to the nature and extent of the discrepancies in documentation which are classified as material. (d) Expenses In estimating property expenses we have relied on the budgets which have provided for the forward 12 months commencing 1st March 2011 and thereafter we have generally assumed a growth rate of 7% per annum compound. (e) Lessee s credibility In arriving at our valuation, cognizance has been taken of the lessee s security and rating. In some cases this has influenced the capitalisation rate by way of a risk consideration. (f) Mortgage bonds, loans, etc. The properties have been valued as if wholly-owned with no account being taken of any outstanding monies due in respect of mortgage bonds, loans and other charges. No deductions have been made in our valuation for costs of acquisition. The valuation is detailed in a completed state and no deductions have been made for retention or any other set-off or deduction for any purposes which may be made at the discretion of the purchaser when purchasing the properties. (g) Calculation of areas All areas quoted within the detailed valuation reports are those stated in the information furnished and verified where plans were available. To the extent that plans were not available, reliance was placed on the information submitted by the managing agents. 83

86 (h) Title Deeds Copies of the Title Deeds of the properties have been provided to us and we have taken account of the conditions contained therein in the preparation of our valuations. (Section (a) (xiii)) Metro Giyani: It was noted that Erf 45 is not registered in the name of Dipula Property Investment Trust. Investigations revealed that the transfer of this erf was omitted in error during the transfer process into Dipula Property Investment Trust. This has been reverted to the attorneys for correction. Refer to report for further commentary. Saficon Germiston and Driehoek: We have not seen Notarial Leases which are registered over these two properties in favour of Durban Corporation, however these would have lapsed and as such do not impact on the value of the property. The valuation of the properties has further been based on information obtained from the local authorities, from a physical inspection of the properties as well as detailed research on property sales and lettings within the areas in which the properties are situated. Where appropriate, we have satisfied ourselves that the information on which we have based our valuations is accurate. 4. MATERIAL CONTRAVENTION OF STATUTORY REQUIREMENTS We are not aware of any material contravention of any statutory requirement relating to the properties. 5. PROPERTIES HELD FOR DEVELOPMENT To the best of our knowledge and belief none of the properties valued are held specifically for the purposes of future development. (Section 13.26) 6. BRIEF DESCRIPTION The improvements at the properties are well built with robust traditional materials and finishes. The leases tend to be of a general contractual rental nature with provision for the recovery of services consumed by the lessee s and turnover rental from various retail outlets. The current net annual rental and the estimated future net annual rentals at specified dates and for specified periods are included in the cash flows prepared for each individual property. Annual monthly rental escalations are market related. 7. UNLET SPACE The Mergence portfolio comprises properties having retail, industrial, commercial and mixed use accommodation and has a total rentable area of approximately m². At the date of valuation approximately m² or 13.17% of the rentable area is vacant with the highest vacancy rate being 21.59% in the Mixed Use Sector. Assumptions have been made in our valuations as to the likely letting up tempo of vacant accommodation in the affected properties and the estimated loss of income during the letting up periods of the affected properties is reflected in the DCF cash flows. The Dipula portfolio comprises properties having retail, industrial, commercial and mixed use accommodation and has a total rentable area of approximately m². At the date of valuation approximately m² or 16.97% of the rentable area is vacant with the highest vacancy rate being 26.86% in the Mixed Use Sector. Assumptions have been made in our valuations as to the likely letting up tempo of vacant accommodation in the affected properties and the estimated loss of income during the letting up periods of the affected properties is reflected in the DCF cash flows. The extent of the letting up period has been considered for each of the properties in consultation with the representatives of Mergence and Dipula and also on the basis of discussions with property brokers in the localities of the affected properties and other reliable sources. However, the lengths of the periods adopted for valuation purposes are estimates and those periods may increase or decrease, as the case may be, according to market conditions at the time 8. VALUATION QUALIFICATIONS Qualifications are usually detailed as a consequence of: leases under negotiation that have not yet been formalised; leases of a large nature where the premises are difficult to re-let; specialised properties; large exposure to a single tenant; potential tenant failure due to over-rent; expenses required for major repairs; maintenance or other exposure to maintain the lettability of the building; contingent expropriations or servitudes that may be enforced; poor lease recordals whereby the lease may be disputed or rendered invalid. 84

87 We have, to the best of our knowledge, considered all of these aspects in the valuation of all the properties. There are in our opinion no properties that are prejudiced in value by the influence of the above factors. BVA is however not responsible for the competent daily management of these properties that will ensure that this status is maintained, or for the change of any laws, services by local authority or economic circumstances that may adversely impact on the integrity of the buildings or the tenant profile. (Section (e)) 9. OPTIONS OR BENEFIT/DETRIMENT OF CONTRACTUAL ARRANGEMENTS To our knowledge there are no contractual arrangements on the properties other than the leases as detailed in the report that have a major benefit or are detrimental to the fundamental value base of the properties. (Section (g)). 10. OPTIONS OR BENEFIT/DETRIMENT OF CONTRACTUAL ARRANGEMENTS We have been informed that offers to purchase have been received by Dipula and Mergence for Hazelwood Place, Pretoria. We have had sight of the Offer to Purchase and note that it is conditional at the date of valuation. In the circumstances no account of the proposed offer price has been taken into account in our valuation of the property at the date of valuation and the property has been valued on the basis of vacant possession and occupation at that date INTRA-GROUP LEASES Having inspected all the tenant schedules and it is noted that there are no intra-group leases. However, we are unable to provide a categorical undertaking that Dipula or Mergence have no interest in any other tenant in any of the properties. (Section (a) (xi)) 12. CURRENT STATE OF DEVELOPMENT There are no properties which are currently being developed. 13. EXTERNAL PROPERTY None of the properties are situated outside the Republic of South Africa. (Section 13.28) 14. ALTERNATIVE USE FOR A PROPERTY We have valued the properties in accordance with their existing use which represents their market value. (Section 13.27). Thus alternative use values have not been reported for any of the properties. 15. OTHER GENERAL MATTERS AND VALUATION SUMMARY A full valuation report is available on a property by property basis detailing tenancy, town planning, valuer s commentary, expenditure and other details. As mentioned previously, this has been given to the directors of Dipula & Mergence. (Sections and 13.31) 16. OTHER COMMENTS Our valuation excludes any amounts of Value-added Tax, transfer duty, or securities transfer duty. 17. CAVEATS We list below the general principles upon which valuations and reports undertaken by Broll Valuation and Advisory Services (Proprietary) Limited in South Africa are normally prepared and confirm that such principles shall apply in respect of the property forming the subject of this valuation report, unless specifically mentioned otherwise: (a) Full Disclosure The valuation has been prepared on the basis that full disclosure of all information and factors which may affect the valuation, has been made to ourselves and we cannot accept any liability or responsibility whatsoever for the valuation, unless such full disclosure has been made. 85

88 (b) Freehold and Leasehold Title In the case of both Freehold and Leasehold properties we have inspected the relevant Title Deed documents made available to us. Where, as a result of our inspections, some points have caused us concern as to the Title, we have referred specifically to them in the relevant detailed Valuation Reports. Where the Title Deeds were not available we have assumed that good title can be shown and that the property is not subject to any unusual or especially onerous restrictions, encumbrances or outgoings. (c) RICS Valuation Standards All valuations are carried out in accordance with the requirements of the RICS Valuation Standards Sixth Edition ( the Red Book ), modified as appropriate to reflect South African conditions and are undertaken by appropriately qualified valuers as defined therein. (d) Valuation Basis All valuations are made on the appropriate basis and in accordance with the provisions and definitions of the Red Book unless otherwise specifically agreed and stated. The specific basis of valuation adopted in relation to a particular instruction and the definition thereof is detailed in this Report. No allowances or deductions are made in our valuations for any expenses of realisation either for acquisition or disposal. It should be noted that our valuations are based upon the facts and evidence available at the date of valuation. It is therefore recommended that valuations be periodically reviewed. (e) Mortgage Bonds, Loans or Other Charges The properties have been valued as if wholly owned with no account being taken of any outstanding monies due in respect of mortgage bonds, loans or other charges. No deductions have been made in our valuations for the cost of acquisition or disposal of the asset. Our valuations exclude Value-added Tax. (f) Calculation of Areas All areas quoted within the Valuation Reports are as supplied. (g) Plans All plans included within the Valuation Reports are supplied for the purpose of identification only and are not necessarily to scale. (h) Outgoings It is assumed, except where otherwise stated, that the properties are subject to the normal landlord s outgoings and that there are no onerous restrictions or unusual covenants of which we have no knowledge. (i) Property Boundaries The farm or stand boundaries, as indicated to us by the instructing client or appointed agent, or the boundaries as indicated on plans supplied by others are assumed to be the legal extent of the property. We do not take responsibility for any variation of these boundaries either by extension or omission, and the resultant inclusion or omission of any improvements as a result of any such variations. (j) Town planning (Sections 13.23(a)(vi) and (vii)) Full town planning details and title deeds have been supplied in the detailed valuation reports including conditions and restrictions and the properties have been checked against such conditions. This is to ensure that they comply with town planning regulations and title deeds. There do not appear to be any infringements of local authority regulations or deeds by any of the property. The valuation has further assumed that the improvements have been erected in accordance with the relevant Building and Town Planning Regulations and on inspection it would appear that the improvements are in accordance with the relevant town planning regulations for these properties. There is no contravention of any statutory regulation, or town planning local authority regulation or contravention of title deed relating to any of the properties which infringement could decrease the value of the properties as stated. (k) Site Conditions Unless specifically requested, we do not carry out investigations on site in order to determine the suitability of ground conditions and services, nor do we undertake environmental, archaeological, or geo-technical surveys. Unless notified to the contrary, our valuations are on the basis that these aspects are satisfactory and also that the properties are clear of underground mineral or other workings, or other hazardous or noxious substances. 86

89 (l) Structural Condition In preparing our valuations we have had regard to the apparent state and condition of the improvements at the properties but have not carried out structural surveys of the same and have not inspected those areas of the improvements which were covered, unexposed or inaccessible and neither have we arranged for the testing of electrical and mechanical equipment such as that installed in connection with reticulation of wiring for artificial lighting and power, heating, air conditioning and ventilation systems, elevators or any other engineering services at the property. Unless otherwise stated in our reports the valuation assumes that the services and structures are in a satisfactory state of repair and condition. (m) Materials of Construction The valuations assume that no deleterious or hazardous materials or techniques were used in the construction of the improvements at the property or have since been incorporated by way of extensions or additions thereto. (n) Contamination In preparing our valuations we have assumed that no contaminative or potentially contaminative use is, or has been, carried out at the property. Unless specifically instructed, we do not undertake any investigation into the past or present uses of either the property or any adjoining or nearby land, to establish whether there is any potential for contamination from these uses and assume that none exist. However, should it subsequently be established that such contamination exists at any of the properties or on any adjoining land or that any of the properties have been, or is being put to, a contaminative use, then the value which we have reported may be detrimentally affected. (o) Statutory Notice and Unlawful Use We have assumed that the properties and their values are unaffected by any statutory notice, and that neither the condition of the properties, nor their use, nor their intended use, is or will be unlawful. (p) Certificate of Compliance We have assumed that the seller will, at his own expense, provide a Certificate of Compliance in terms of SANS , Code of Practice for Wiring premises, issued by an accredited person certifying that the electrical installation of the premises is reasonably safe. (q) High voltage electricity supply apparatus & Mobile Phone Installations Research findings which have been the subject of media coverage in the last few years indicate that the health of the public occupying buildings located in close proximity to high voltage electrical supply equipment installations may be put at risk due to the presence of electromagnetic fields and radiation. Public perception may, therefore, affect marketability and future value of a property so located. (r) Synergistic Value We have not reflected in our valuations any element of synergistic value or special purchaser value which could possibly be realised by merger of the freehold and leasehold interests or by sale to an owner or occupier of an adjoining property. (s) Town Planning Enquiries We have made verbal enquiries within the Town Planning and other Municipal authorities in respect of the properties and our valuations have been based upon the information supplied to us by the relevant authority whether verbally or in writing. (t) Confidentiality These valuations are prepared in the knowledge that they will be included in the pre-listing statement/prospectus/ listing particulars to be published in accordance with requirements of the Johannesburg Stock Exchange. (u) Non-Publication Neither the whole nor any part of this valuation report, nor any reference thereto may be included in any published document, circular or statement, nor published in any way (other than in the pre-listing statement/prospectus/ listing particulars issued by the Johannesburg Stock Exchange) without the written approval of Broll Valuation and Advisory Services (Proprietary) Limited as to the form or context in which it may appear and an acknowledgement that Broll Valuation and Advisory Services (Proprietary) Limited were the professional valuers. 87

90 18. MARKET VALUE DIPULA We are of the opinion that the aggregate market value of the Dipula properties as at 28 February 2011 is R (Seven Hundred and Ninety-Six Million, Five Hundred and Eighty Thousand Rand), excluding VAT. A summary of the individual valuations and details of each of the properties is attached. MERGENCE We are of the opinion that the aggregate market value of the Mergence properties as at 28 February 2011 is R (Five Hundred and Eighty-Seven Million, Two Hundred Thousand Rand), excluding VAT. A summary of the individual valuations and details of each of the properties is attached. COMBINED VALUE Thus, the combined value of the Dipula and Mergence properties is an aggregate value as at 28 February 2011 of R (One Billion, Three Hundred and Eighty-Three Million, Seven Hundred and Eighty Thousand Rand), excluding VAT. To the best of our knowledge there have been no material changes in circumstances between the date of the valuation and the date of the valuation report which would affect the valuation. For the sake of record, we confirm that the valuations of each of the property assets comprising the Dipula and Mergence properties are subject to the Caveats listed above. In conclusion, we confirm that the valuations have been carried under the supervision of a Registered Professional Valuer in the employ of this company. We trust we have acted in accordance with your instructions and should be glad to respond to any queries you might have relating to content of this letter. Yours faithfully, for Broll Valuation & Advisory Services (Proprietary) Limited ROGER HUNTING MRICS Dip T.P. MIV(SA) Professional Valuer 88

91 PROPERTY SCHEDULE African Markem Board- 6 Old Africa Magnet Deco Offices Perm walk Trentyre Pretoria Bernie Glass Duncan- Distri- CMH Kempton Building 295 Kent Alcom Place, Howick Benoni Road Street Centurion ville butors Kempton Park Kempton Avenue House Midrand Mews Valuation Date 2011/02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/28 Portfolio Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Title Deed T19474/2008 T2558/2008 T16814/2007 T13378/2007 T41746/2008 T3959/2007 T48255/2008 T162486/2006 T41747/2008 T65942/2007 T19456/2007 T9655/2007 T52526/2007 Number Address 6 Old Corner 13 Park 5/7 16 Leon Margaret Ave, Kent 65 Rivonia 10 Waterfall 49 Lake Pretoria Bernie Street Avenue Leeuwenhoek Bartel Jubilee St, Kempton Voortrekker Avenue Road Board- Office Park Avenue Road and Hilston North Road Street, Kempton Park Street walk Benoni Road, Oos-Einde, Park Kempton Street Kya Sand Bloemfontein Park Registration Erven Erf 433 Erf 417 Ptn 1 of RE Erf 866 Erf Ptn 26, 27 Erf 173, 174, 175 Erf 2690 Erf 977 Erf 65 Erf 47 Erf 1342 Description 1523, 1525 Halfway and 418 Kya Erf 2839 Duncanville, Bloemfontein and 39 of and 273 Kempton Ferndale, Rivonia Grand Vorna & 1527 House Sand Ext 44 Rooihuiskraal Vereeniging Ext 126 Erf 2772, Kempton Park Randburg Extension 3 Central Valley Benoni Extension 58, Extension 31, Kempton Park Extension 5, Extension Midrand Centurion Park Midrand 21, Midrand Property Retail Retail Industrial Industrial Industrial Industrial Retail Office Office Office Office Office Office Type Region Gauteng Gauteng Gauteng Gauteng Gauteng Free State Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Major Trentyre McCarthy N/a Vacant * see value 2 887m² McCarthy Ekurhuleni Rakoma and Alcom National Medpro Tenants (Pty) Ltd Value Car affecting GCJ Metro Associates Matomo Youth Pharmamatters Marketing cc Municipality CC (Pty) Ltd Development ceutical Agency Date of 2011/01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/24 Physical Inspection Zoning Business 1 Commercial Industrial 1 Industrial 2 Industrial 1 General Industrial Special Business Zone 1 Business Zone 1 Special Business 4 Business 1 Special Tenure Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Age of 25 years ~20 years ± 20 years ~10 years ~33 years 12 Years ± 30 years ± 30 years ± 30 years ~35 years ~30 years ~14 years ~18 years Buildings Rentable Areas (m²) Vacancy: Actual at Val date (m²) Actual % 0.00% 42.71% 7.63% % 0.00% 0.00% 0.00% 21.67% 77.44% 0.00% 0.00% 0.00% 41.51% Net Income Year 1 R R R R R R R R R R R R R before TI and Capex at 28/02/

92 (continued) African Markem Board- 6 Old Africa Magnet Deco Offices Perm walk Trentyre Pretoria Bernie Glass Duncan- Distri- CMH Kempton Building 295 Kent Alcom Place, Howick Benoni Road Street Centurion ville butors Kempton Park Kempton Avenue House Midrand Mews Net Income Year 1 R R R R R R R R R R R R R after TI and Capex at 28/02/2012 Market R R R R R R R R R R R R R Value 28th February 2011 Value We have Various assumptions We have Various African Assumed lease We have We have We have Various Various Mun Market Medpro Affecting assumed a on take up and assumed a assumptions Magnet renewed assumed a assumed a assumed a assumptions assumptions Value too high Pharma- Matters 2-month relet periods 1 month nil on take up (Proprietary) 1 month nil 1 month nil 1 month nil on take up on take up Certain ceutical, who vacancy income at and relet Limited income at income at income at and relet and relet shadeports are occupy between lease end to periods expired on lease end to lease end to lease end to periods periods situated on 1 071m², assumed future source new 28th February source a source a source a Erf 50 Grand are vacating leases amounting tenants African new tenant new tenant new tenant Central at the end of to a 3.25% vacancy Magnet did with a tenant for retail. Extension 14. the lease term. in perpetuity not occupy the installation For the Various Various property, but leased allowance of vacant assumptions assumptions some small areas to R250/m 2 offices we on take up on take up individual have and relet and relet manufacturing assumed that periods periods tenants. These sub- 1 unit lessees only occupy permanently approximately 50% vacant and of the space 3 sections to be let over the next 2 years with a tenant installation allowance of R200/m 2. Sources Of Brokers Own Own Own Own Own Own Own Own Own Own Own Own Information and sales database and database, database and database and database and database, database, database, database and database and database and database and information recent yields and information information Rode, recent lettings recent lettings information information information information sourced from lettings at information sourced from sourced from SAPOA and at property, at property, sourced from sourced from sourced from sourced from brokers as to property sourced from brokers as brokers as to information Rode, Rode, brokers as brokers as brokers as brokers as market rentals and brokers as to market market sourced from SAPOA and SAPOA and to market to market to market to market and yields information to market rentals and rentals and brokers as to information information rentals and rentals and rentals and rentals and sourced from rentals and yields yields market sourced from sourced from yields yields yields yields brokers as to yields rentals and brokers as brokers as market rentals yields to market to market rentals and rentals and yields yields 90

93 (continued) 41 and 43 OK Pretoria Pretoria A & M Express Street Voortrekker Standard Street, Wescen Centre Barnetts Princess Street Score Score 26 Siddle Bank Kempton Kempton Milady s Kempton Kempton Geenrich Score Benoni Score Braam- Howick Street Mafikeng Park Park Brakpan Park Park Benoni Tsakane Town Talk Ivory Park fisherville Vosloorust Valuation 2011/02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/28 Date Portfolio Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Title Deed T41031/2008 T1254/2008 T41748/2008 T41749/2008 T19476/2008 T41751/2008 T41750/2008 T19473/2008 T4103/2007 T19472/2008 T13379/2007 T4204/2007 T4104/2007 Number Address 26 and 28 Corner Main 41 and 43 Corner West Pretoria 33 Pretoria 55 Princess Corner 19 Voortrekker Umnotho Amandla Sam Sekoati Siddle and Pretoria and Voortrekker Street Street Avenue Mbazima Street Street Boulevard Ave Street, Robinson Road Central Streets Street Kempton Kempton and Klerksdorp Streets, Kempton Kempton Park Park Tsakane Mafikeng Park Park Street Registration Erf 1989 Remaining Erf 2778 RE 2727 Erf 903 Erf 2563 Erf 2568, Erven 1321 Erf Erven 1161 Ptn 1 of Erf 1 Erf 6258 Description Klerksdorp Extent Kempton Kempton Brakpan Kempton Kempton and 1322 Tsakane and 1162 Erf 6921 Braam- Vosloorus of Erf 254 Park Park Park Park Benoni Benoni Ivory Park fisherville Ext 9 Mafikeng Extension 8 Property Office Office Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Type Region North-West North-West Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Major 658m² 1 071m² John Craig N/a N/A OK Express Barnetts Ellerines T/A Score Ellerines Score Score Score Tenants Mutual & Public Geen and Supermarkets and R V Supermarkets Supermarket Supermarket, Federal Prosecutor Richards (Proprietary) Marinescu (Pty) Ltd, Cashbuild Limited trading as Pick n Pay Date of 2011/01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/19 Physical Inspection Zoning Business 1 Commercial Business Business Business 1 N/a Business Zone 1 Business As per the Business 2 Community Business Business Zone 1 Zone 2 Title Deed Facility the use zone of the Erf shall be business Tenure Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Age of 30 Years 81 Years ± 50 years ± 30 years 50 years ± 40 years ± 40 years 50 Years ~15 years 50 years ~15 years ± 10 years ± 15 years Buildings Rentable Areas (m²) Vacancy: Actual at (m²) Val date Actual % 49.96% 0.00% 0.00% 0.00% % 0.00% 0.00% 0.00% 0.00% 24.69% 0.00% 0.00% 0.00% 91

94 (continued) 41 and 43 OK Pretoria Pretoria A & M Express Street Voortrekker Standard Street, Wescen Centre Barnetts Princess Street Score Score 26 Siddle Bank Kempton Kempton Milady s Kempton Kempton Geenrich Score Benoni Score Braam- Howick Valuation Street Mafikeng Park Park Brakpan Park Park Benoni Tsakane Town Talk Ivory Park fisherville Vosloorust Net Income Year 1 R R R R R R R R R R R R R before TI and Capex at 28/02/2012 Net Income Year 1 R R R R R R R R R R R R R after TI and Capex at 28/02/2012 Market Value R R R R R R R R R R R R R th February 2011 Value Assumed Various We have We have 1 month We have We have 1 month Property is 1 month Various We have We have Affecting lease renewed assumptions assumed a assumed a vacancy assumed a assumed a vacancy currently vacancy assumptions assumed a assumed a Matters on take up 1 month nil 1 month nil between 1 month nil 1 month nil between leases closed up and not between on take up 1 month 1 month and relet periods income at income at leases income at income at which amounts trading as a leases for and relet nil income nil income lease end to lease end to which lease end to lease end to to 1.64% vacancy supermarket. ground floor periods at lease end at lease end source a new source a new amounts to source a new source a new over the life of However, the shops and to source a to source a tenant tenant 2.7% vacancy tenant tenant the property at lease runs three to six new tenant new tenant over the life market rental until 2014 months for of the property of R35/m 2 and Score are first floor at market rental still obligated offices/ of R40/m 2 to pay the rent. storerooms Various which amounts assumptions on to 4.87% take up and relet vacancy over periods the life of the property Sources Of Own Own Own Own Brokers and Own Own Brokers and Own Brokers and Own Own Own Information database and database and database, Rode, database, Rode, a sale database, Rode, database, Rode, a sale database and a sale database and database and database and information information SAPOA and SAPOA and SAPOA and SAPOA and information information information information sourced from sourced from information information information information sourced from sourced from sourced from sourced from brokers as to brokers as to sourced from sourced from sourced from sourced from brokers as to brokers as to brokers as to brokers as to market rentals market rentals brokers as to brokers as to brokers as to brokers as to market rentals market rentals market rentals market rentals and yields and yields market rentals market rentals market rentals market rentals and yields and yields and yields and yields and yields and yields and yields and yields 92

95 (continued) Buffalo Beares Town Talk Nedbank 39 Oxford Aliwal Corner Centre Ellerines Odendaalsrus Mkuze Bears Geen and Centre Score Street, East North East Town Talk Kuruman Centre Shopping Volksrust Aman- Richards Vereeniging Evaton London Edgars London Kuruman Russels Ellerines Centre Ackermans zimtoti Phalaborwa Valuation 2011/02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/28 Date Portfolio Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Title Deed T40837/2008 T13376/2007 T2197/2008 T28630/2008 T2196/2008 T1253/2008 T1252/2008 T8240/2008 T19053/2008 T167163/2005 T9943/2007 T41035/2008 Number Address 12 Merriman Chief 39 Oxford Somerset 40 Buffalo Beare Street Beare Street 47 van der Main Street 61 Joubert 13 Bjorseth 25 Palm Avenue Bambatha Street Street Street Vyfer Street Street Cresent Avenue Street (corner President Street), Odendaalsrus Registration Erf 1405, Erf Erf Re Erf 103 Erf Erf 976 and Erf 1061 Erf 192 Ptn 4 of Ptn 2 of Erf 2352, Erf 1835 Description Vereeniging Evaton East Aliwal East RE 2491 Kuruman Odendaalsrus Erf 60 Erf 142, Aman- Phalaborwa West Ext 1 London North London Kuruman Mkuze Volksrust zimtoti Ext 1 Property Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Retail Type Region Gauteng Gauteng East London Aliwal North East London Kuruman Kuruman Free State KwaZulu- Mpuma- KwaZulu- Limpopo Natal langa Natal Major Nedbank Score Ellerines Jet Stores Ellerines JDG Ellerines 720m² Destto Pepkor Bedtime Vacant Tenants Limited Supermarkets Furnishers Furnishers Trading Furnishers Mr Chen Dept Of Retail Slumbers (Trading) Stastistics Limited (Pty) Ltd SA Ackermans Date of 2011/01/ /01/ /01/ /01/ /01/27 unable to unable to 2011/01/ /01/ /01/ /01/ /01/25 Physical inspect inspect Inspection Zoning Business 1 not Business Business Business Business Business Business Business General General Business 2 available Zone 1 Zone 1 Zone 1 Zone 1 Zone 2 General Business Commercial Tenure Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Age of ~30 years ~30 years +20 Years + 30 Years + 60 Years + 35 Years + 35 Years 21 Years ~20 years ~33 years ~25 years + 20 Years Buildings Rentable Areas (m²) Vacancy: Actual at Val date (m²) Actual % 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 31.75% 0.00% 0.00% 32.44% % Net Income Year 1 R R R R R R R R R R R R before TI and Capex at 28/02/

96 (continued) Buffalo Beares Town Talk Nedbank 39 Oxford Aliwal Corner Centre Ellerines Odendaalsrus Mkuze Bears Geen and Centre Score Street, East North East Town Talk Kuruman Centre Shopping Volksrust Aman- Richards Vereeniging Evaton London Edgars London Kuruman Russels Ellerines Centre Ackermans zimtoti Phalaborwa Net Income after Year 1 R R R R R R R R R R R R TI and Capex at 28/02/2012 Market Value R R R R R R R R R R R R th February 2011 Value Various Various We have We have Various We have Assume the Vacant area Various Various Various Property is Affecting assumptions assumptions assumed a assumed the assumptions assumed a tenant to 335m² assumptions assumptions assumptions currently Matters on take up and on take up and 1 month nil tenant will on take up 1 month nil renew assumed only on take up on take up on take up vacant, relet periods relet periods income at renew at and relet income at let from and relet and relet and relet assumed lease end to lease expiry periods lease end to periods periods periods letting from source a new with a 10% source a April 2011 tenant escalation on new tenant for 3 years at the rental market levels they are currently paying Sources Of Own Own Own Own Own Own Own Own Own Own Own Own Information database and database and database and database and database and database and database and database and database and database and database and database and information information information information information information information information information information information information sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals and yields and yields and yields and yields and yields and yields and yields and yields and yields and yields and yields and yields 94

97 (continued) Kleynhans, Standard Corner Mafikeng Perm Princess Standard Standard ABSA Bank Barberton Bethal White Hartbees- Hobhouse Centre Building Jones, Bank Bank Krugers- FNB Krugers- Ellerines Sanlam River fontein Klerksdorp Nirelle Boksburg Benoni Boksburg Brakpan dorp Florida dorp Valuation 2011/02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/28 Date Portfolio Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Title Deed T6596/2008 T6597/2008 T6598/2008 T60849/2008 T41032/2008 T1256/2008 T19484/2008 T19483/2008 T19475/2008 T19477/2008 T19481/2008 T19478/2008 T19480/2008 Number Address 100 Corner 13 Theo Corner Van 19 Emily 20 Shippard Tom to 640 Corner of 12 Goldman 39 Human De Villiers of Vuyisile Kleynhans Niekerk and Hobhouse Street, Commissioner Jones Commissioner Voortrekker Burger and Road, Street, Street, Mini and Street Eenheid Street, Mafikeng Street Street Street Road Monument Florida Krugersdorp Barberton Chris Hani Streets, Klerksdorp Streets, Streets Hartbees- Krugersdorp fontein Registration Remaining Erf 1537, Erf 1287 Remaining Erf 1978 Erf 2598 Erven 408, Erf 7554 Erven 440, Erf 3460 Erven 1741, Erf 1015, Erven 1600, Description Extent of Bethal White Extent of Klerksdorp Mafikeng 409 and Benoni 441 and Brakpan 1742, 1743 Florida 1601, 1654, Erf 2827 River Portion /442 and Barberton of the Farm Boksburg Boksburg Krugersdorp Krugersdorp Hartbeesfontein, IP Property Retail Retail Retail Retail Retail Retail Retail/ Retail/ Retail/ Retail/ Retail/ Retail/ Retail/ Type Office Office Office Office Office Office Office Region Mpumalanga Mpumalanga Mpumalanga North-West North-West North-West Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Major Ellerines Shoprite Furnisher & 301m² 577m² 830m² N/A N/A Standard Standard Absa FNB Standard Tenants Appliance Ellerines ANS Bank Bank Bank Bank Bank Warehouse Furnishers Creations cc Date of 2011/02/ /01/ /01/ /02/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/27 Physical Inspection Zoning Business 1 Business 1 Business 1 Agricultural Business 1 Business Business 1 Business 2 Business 1 Business 1 Business 1 Business 1 Business 1 Tenure Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Age of 25 Years 20 Years 20 Years 40 Years 32 Years 31 Years 30 years 50 Years 50 Years 20 Years 25 Years 10 Years 30 Years Buildings Rentable Areas (m²) Vacancy: Actual at Val date (m²) Actual % 0.00% 0.00% 63.10% 0.00% 0.00% 0.00% 82.72% % 34.10% 0.00% 10.82% 0.00% 5.12% Net Income Year 1 R R R R R R R R R R R R R before TI and Capex at 28/02/

98 (continued) Kleynhans, Standard Corner Mafikeng Perm Princess Standard Standard ABSA Bank Barberton Bethal White Hartbees- Hobhouse Centre Building Jones, Bank Bank Krugers- FNB Krugers- Ellerines Sanlam River fontein Klerksdorp Nirelle Boksburg Benoni Boksburg Brakpan dorp Florida dorp Net Income Year 1 R R R R R R R R R R R R R after TI and Capex at 28/02/2012 Market Value R R R R R R R R R R R R R th February 2011 Value Various Various Majority Assumed Assumed Assumed 1 to 6 1 months 1 months 1 months Various Various Various Affecting assumptions periods of Property lease leases leases months vacancy vacancy vacancy assumptions assumptions assumptions Matters on take up assumptions currently renewed renewed renewed vacancy between between between on take up on take up on take up and relet on take up and vacant between leases for leases for leases for and relet and relet and relet relet periods Various leases for ground floor ground floor ground floor periods periods periods assumptions ground floor shop and shop and which on take up shops and 6 to 12 6 to 12 amounts to and relet periods 12 months months for months for 1.64% vacancy for upper floor upper floor upper floor over the life offices which offices which offices which of the amounts to amounts to amounts to property 13.10% vacancy 13.66% vacancy 7.66% vacancy over the life of over the life of over the life of the property the property the property Sources of Own Own Own Own Own Own Brokers Brokers Brokers Brokers Own Own Own Information database and database and database and database and database and database and and a sales and a sales and a sales and a sales database and database and database and information information information information information information information information information sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals and yields and yields and yields and yields and yields and yields and yields and yields and yields 96

99 (continued) Standard Arbeid Standard Standard Bank Standard 139 Sixth 5th Avenue Street, Bank Bank Aman- Old Mutual Bank 29 Main ABSA Saficon Street, corner Strydom Eastgate Humansdorp Sasolburg zimtoti Secunda Secunda Street Malvern Humcor Driehoek Wynberg Wynberg Park Minis Valuation 2011/02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/28 Date Portfolio Dipula Dipula Dipula Dipula Dipula Dipula Dipula Mergence Mergence Mergence Mergence Mergence Mergence Title Deed T28362/2008 T8241/2008 T19051/2008 T2163/2008 T6600/2008 T1255/2008 T19487/2008 T19548/2008 T19552/2008 T73598/2007 T40779/2008 T28923/2007 T73596/2007 Number Address Main Street Kirchoffer 10 Bjorseth Corner of Ettienne 29 Main 585 Jules 9 Borax 32 Rose 139 Sixth 326 6th 11 Arbeid 11 and 13 Humansdorp Boulevard Cresent Horwood Rossouw Street, Street Street Innes Rd Steet Avenue Avenue Delphi and Street Mafikeng Street Pichlerplein Streets Registration Re Erf 202 Erf 16, Erf 2631 Erf 8302, Erf 1554, Erf 2586 Erf 848, 572 Alrode 863, 864 Erven 125, Erf 338 Erf 260 Erf 277 and Description Humansdorp Sasolburg, Amanzimtoti Secunda Secunda Mafikeng 850, 853 Germiston 38 and Wynberg, Strijdom 278 Eastgate Extension 25 Malvern Ext Wynberg, Sandton Park Extension 18, Sandton Extension 9, Sandton Randburg Property Retail/ Retail/ Retail/ Retail/ Retail/ Retail/ Retail/ Retail/ Industrial Industrial Industrial Industrial Industrial Type Office Office Office Office Office Office Residential Industrial Region Humansdorp Freestate Mpumalanga Mpumalanga North-West Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Major Standard The Standard Vacant Old Mutual Standard 1000 m² Absa Eskom Refri-Cab Top Car Leopont Hot Dot Muga Tenants Bank Bank of SA Ltd Bank UNISA Bank Holdings, S.A.F Pty Ltd Auto 595 Print CC Designs CC, Holland Body Properties Datatrak (Pty) Ltd SA (Pty) Ltd Date of 2011/01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/21 Physical Inspection Zoning Business Business General Special Business 2 Business Business 1 Industrial 2 Waiting for Industrial 1 Industrial Commercial Special Zone 1 General Commercial and zoning from Residential 1 council Tenure Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Waiting for Freehold Freehold Freehold Freehold confirmation of leasehold Agreement Age of +110 Years ~25 years ~15 years 15 Years 20 Years 35 Years +25 Years ±35 years ±50 years ~30 years ~34 years ~22 years ~15 years Buildings Rentable Areas (m²) Vacancy: Actual at Val date (m²) Actual % 0.00% 0.00% % 16.26% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 50.00% 97

100 (continued) Standard Arbeid Standard Standard Bank Standard 139 Sixth 5th Avenue Street, Bank Bank Aman- Old Mutual Bank 29 Main ABSA Saficon Street, corner Strydom Eastgate Humansdorp Sasolburg zimtoti Secunda Secunda Street Malvern Humcor Driehoek Wynberg Wynberg Park Minis Net Income Year 1 R R R R R R R R R R R R R before TI and Capex at 28/02/2012 Net Income Year 1 R R R R R R R R R R R R R after TI and Capex at 28/02/2012 Market R R R R R R R R R R R R R Value 28th February 2011 Value We have Various Various Various Various Assumed We have Eskom lease Single Various Various See report. Various Affecting assumed a assumptions assumptions assumptions assumptions leases assumed a expiring in tenanted assumptions assumptions Various assumptions Matters 1 month nil on take up on take up on take up on take up renewed 1 month 2011, left with lease on take up on take up assumptions on take up income at and relet and relet and relet and relet nil income 1 month until 2014 and relet and relet on take up and relet lease end. periods periods periods periods at lease end. vacant periods periods and relet periods thereafter periods relet. S.A.F expiring in 2014 Sources Of Own Own Own Own Own Own Own Own Own Own Own Own Own Information database and database and database and database and database and database and database and database and database and database and database and database and database and information information information information information information information information information information information information information sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals and yields and yields and yields and yields and yields and yields and yields and yields and yields and yields and yields and yields and yields 98

101 (continued) Selbourne 31/33 Victoria Range SARS House, Third Fastfood and Knox Road New Road Building Bloem- ABSA Sales Street, Citizens Corner Geen & Streets, Alberton Checkers Blackheath Offices Welkom fontein Secunda House Springs Springs Springs Richards Germiston Crossing Nigel Valuation 2011/02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/28 Date Portfolio Mergence Mergence Mergence Mergence Mergence Mergence Mergence Mergence Mergence Mergence Mergence Mergence Mergence Title Deed T43769/2007 T73794/2007 T8246/2008 T8245/2008 T167239/2005 T 28920/2007 T19558/2008 T19559/2008 T19556/2008 T40776/2008 T19550/2008 T28921/2007 T40778/2008 Number Address Range Rd, 30 NEW Corner Corner First Tropsch Corner Bree 31/33 4th Avenue Corner 6 West 132 Victoria 57 Cavaleros Blackheath ROAD Graaf and Street and Plane Street and Third 9th Avenue Street Street, Clintonweg Drive and Tulbagh Selbourne Fraser Street and Kempton Germiston Pero Road Streets, Avenue, Street 2nd Park Welkom Bloemfontein Street Registration Farm 454 Portion 1 Remainder Ptn 3 of Erf 4780, Erven Erf 416 Erven 528 Remaining Ptn 3 and 4 139, 140, 732 Ptn 2, Ptn 9 (REM) Description Ptn 270 of Erf 56, of Erf 14 Erf 3251 Secunda 1203, 1204, 419 Springs 532 and extent of of New Redruth and 98 Wimbledon Randjespark Welkom Bloem- Extension , Erf 1982 Erf 1746 Kempton Germiston farm 192 Extension 11, fontein Johannes- Springs Selection Park Bultfontein Midrand burg Park, and Ptn 1 Springs of 1568, Ptn 2 of 320, Ptn 3 of 320, Nigel Property Industrial Office Office Office Office Retail Retail Retail Retail Retail Retail Retail Retail Type Region Western Cape Gauteng Free State Free State Mpumalanga Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Major Shoprite Genop 2 519m² 1 188m² Absa Edcon (Pty) Dounglong Nelson s Chickenland Geen & JDG Blue Storm Shoprite Tenants Checkers Healthcare SARS Dept of Bank Ltd, trading International Butchery t/a Nandos Richards Trading Trading Pty Ltd (Pty) Ltd Public Works as Jetmart Trade, Ellerines Furnishers (Pty) Ltd Date of 2011/01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/19 Physical Inspection Zoning Industrial Special Business Business Business 1 General Business 1 Business 1 Business 2 Business 1 Waiting for Business 1 Business 1 Zone 1 Type A zoning from council Tenure Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Age of ±20 years ~21 years 10 Years 25 Years 20 Years ~35 years ~35 years ~25 years ~25 years ±45 years ±50 years ±15 years ±35 years Buildings Rentable Areas (m²) 99

102 (continued) Selbourne 31/33 Victoria Range SARS House, Third Fastfood and Knox Road New Road Building Bloem- ABSA Sales Street, Citizens Corner Geen & Streets, Alberton Checkers Blackheath Offices Welkom fontein Secunda House Springs Springs Springs Richards Germiston Crossing Nigel Vacancy: Actual at Val date (m²) Actual % 20.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 43.17% 0.00% 44.50% 2.43% 0.00% Net Income Year 1 R R R R R R R R R R R R R before TI and Capex at 28/02/2012 Net Income Year 1 R R R R R R R R R R R R R after TI and Capex at 28/02/2012 Market Value R R R R R R R R R R R R R th February 2011 Value Offices are Various Assumed Major tenant Various Various Various Various Various Assumed Vacant Various We have Affecting currently vacant. assumptions on leases on monthly assumptions assumptions assumptions assumptions assumptions 1 month Space, assume assumptions assumed Matters Assumed tenant take up and renewed lease on on take up on take up on take up on take up on take up nil income let in Aug on take up 1 month will vacate at relet periods R111/m² and relet and relet and relet and relet and relet after lease 2011 and and relet vacant after lease end 07/2011 (above market). periods periods periods periods periods ends to source May 2012 periods expiry and then period Assumed new new tenant of nil income before lease from securing a new tenant. September 2012 at R605/m² Sources Of Own Own Own Own Own Own Own Own Own Own Own Own Own Information database and database and database and database and database and database and database and database and database and database, database and database and database and information information information information information information information information information Rode, SAPOA information information information sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from and information sourced from sourced from sourced from brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to sourced from brokers as to brokers as to brokers as to market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals brokers as to market rentals market rentals market rentals and yields and yields and yields and yields and yields and yields and yields and yields and yields market rentals and yields and yields and yields and yields s 100

103 (continued) Saficon Nedbank Perm Welkom 1 President Casey s Goodyear Germiston Nedbank Perm Standard Building Building High Park Cavaleros Street, Auto Kempton President Sandvale Building Building Bank East East Alberton 40 Scott Malvern Germiston Springs Park Street Centre Isando Springs Isando London London Building Street Valuation Date 2011/02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/28 Portfolio Mergence Mergence Mergence Mergence Mergence Mergence Mergence Mergence Mergence Mergence Mergence Mergence Mergence Title Deed T40774/ T19553/ T19557/ T40775/ T19551/ T19488/ T19485/ T19486/ T19555/ T2194/ T2195/ T8248/ T19057/ Number and 2008 T11087/ 2009 Address 7 Geldenhuis 1 President 140 2nd 79 Pretoria 476, 477, 3 Sandvale 42 Monteer 74 Third Steet 5 Kram Street Corner Oxford Corner 44 Scott Street Rd, Malvern Street, Street Road 478 Road Road Union and Street East Stateway East Germiston Kempton Germiston Oxford London and Bok Park Streets Streets, Welkom Registration Ptn 143 of 1630 Erven 198 Erf President Erf 146 Erf 335 Erf 317 Erf 119 Erf Erf Erf Remaining Description Farm Germiston 203 and re of Kempton Street Isandovale Isando 319 Isando East East and extent of Elandsfontein 90 Ext 8 Erf 1794 Park Ext 1 Springs London London Welkom Ptn 1 of Springs Erf 447 and Ptn 2 of Erf 444, Newcastle Property Retail/ Retail/ Retail/ Retail/ Retail/ Retail/ Retail/ Retail/ Retail/ Retail/ Retail/ Retail/ Retail/ Type Industrail Industrial Industrial Industrial Industrial Industrial Office Office Office Office Office Office Office Region Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng East London East London Free State KwaZulu- Natal Major Shave and Vacant Super N/a Pibo IT Solutions N/A Nedbank Vacant Standard Nedbank Pep Stores, 2 558m² Jet Stores Tenants Gibson Group Group Bank African Bank Dept of Trading and Dept. of Public (Proprietary) Public Works Works Limited Date of 2011/01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/25 Physical Inspection Waiting Business 2 Business 1 Business 1: Waiting for Business 1 Business 2 Business 1 Business 2 Business Business Business General for zoning Zone 5 zoning from Zone 1 Zone 1 Type B Commercial 1 Zoning from council council Tenure Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Age of ±55 years ±25 years ~20 years ±50 years ±45 years 30 Years 40 years ~40 years 50 years +60 years +60 years 45 Years ~13 years Buildings Rentable Areas (m²) Vacancy: Actual at Val date (m²) Actual % 16.51% % 0.00% 0.00% 48.78% % 0.00% % 0.00% 0.00% 11.00% 5.73% 2.76% 101

104 (continued) Saficon Nedbank Perm Welkom 1 President Casey s Goodyear Germiston Nedbank Perm Standard Building Building High Park Cavaleros Street, Auto Kempton President Sandvale Building Building Bank East East Alberton 40 Scott Malvern Germiston Springs Park Street Centre Isando Springs Isando London London Building Street Net Income Year 1 R R R R R R R R R R R R R before TI and Capex at 28/02/2012 Net Income Year 1 R R R R R R R R R R R R R after TI and Capex at 28/02/2012 Market Value R R R R R R R R R R R R R February 2011 Value We assumed Assumed Various Assumed We have 1 month 1 month Various 1 month We have Various Assumed Various Affecting the vacant space to be let assumptions 1 month nil assumed the vacancy vacancy assumptions vacancy assumed assumptions vacant space assumptions Matters will let up in by August on take up income after vacant space between between on take up between 1 month on take up of 200m² on take up Aug and Oct 2011 and relet lease ends to will be let in leases which leases which and relet leases which vacant after and relet let from and relet periods source new June and amounts to amounts to periods amounts to expiry periods 1 Nov 2011 periods tenant October % 1.83% 1.64% vacancy into vacancy into vacancy into perpetuity perpetuity perpetuity. Sources Of Own Own Own Own Own Brokers Brokers Own Brokers Own Own Own Own Information database and database and database and database, database and and Sales and Sales database and and Sales database and database and database and database and information information information Rode, SAPOA information information information information information information sourced from sourced from sourced from and sourced from sourced from sourced from sourced from sourced from sourced from brokers as to brokers as to brokers as to information brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to market rentals market rentals market rentals sourced from market rentals market rentals market rentals market rentals market rentals market rentals and yields and yields and yields brokers as to and yields and yields and yields and yields and yields and yields market rentals and yields 102

105 (continued) Attie Proudfoot Main Fourie Sandhaven Sloane Nemisa 96 Witbank Reef 69 Kotze Place, Beacon Mellis Montrose Office Street, Office Cambridge Hosken Rand- Place, Alvaro Vander- Centre Park Place Park Byranston Metcash Building Street House fontein Hillbrow Centre bijlpark Vereeniging Valuation 2011/02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/28 Date Portfolio Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Title Deed T13386/ T79412/ T9656/ T9657/ T62652/ T80852/ T8239/ T6599/ T19482/ T19479/ T40851/ ST41037/ T40835/ Number Address 334 Rivonia Waterfall Corner Corner Corner 21 Girton 96 Cambridge 6 Neven 69 Main 69 Kotze 82 President 50 Attie 14 Road Office Park Pongola Sloane Crownwood Road Street, Street Reef Road Street Kruger Fourie Beaconsfield Crescent and and Libertas and Amethyst Bethlehem Street Street Avenue Katherine Streets Roads Street Registration Portion 1 Erf 1995 Portion 6 Portion 1 Erf 25 Erf 96 Erf 397 Portion 9 Erf 425 Erf 4959, Erf 82, Section Erf 545, Description of Erf 334, Vorna Valley of Erf 305, of Erf 4311, Ptn 10, Parktown Bethlehem of Erf 5060 Rand- Johannes- Vanderbijl- Nos 1 and Vereeniging Rivonia Extension 21, Eastgate Bryanston Theta Ext 1 Witbank fontein burg park 2, of the Extension 20 Midrand Extension Extension Extension scheme known 17 Sandton as Von Park Property Type Office Office Office Office Office Office Office Office Retail Retail Retail Retail Retail Region Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Free State Mpulanga Gauteng Gauteng Gauteng Gauteng Gauteng Major Trellicor Financial and Synaq Nycomed Metcash Broadcasting 539m² Indwe Akhona IBET JDG Vacant Ellerine Tenants (Pty) Ltd Fiscal (Pty) Ltd (Pty) Ltd Trading School Mutual & Risk Furnishers (Pty) Trading t/a Joshua Commission of SA Federal Services Ltd (Pty) Ltd Doore Furnishers (Pty) Ltd Date of 2011/01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/25 Physical Inspection Zoning Business 4 Special Business 4 Business 4 Commercial 2 Business 4 General Business 1 Business 4 Business 1 Business 1 Business 1 Business 1 Business 1 Tenure Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Sectional Title Freehold Age of ~15 years ~18 years ~18 years ~17 years ± 35 years ~16 years 18 Years 10 Years 30 Years ~30 years ~36 years ~14 years ~30 years Buildings Rentable Areas (m²) Vacancy: Actual at Val date (m²) Actual % 0.00% 29.07% 34.62% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% % 0.00% Net Income Year 1 R R R R R R R R R R R R R before TI and Capex at 28/02/

106 (continued) Attie Proudfoot Main Fourie Sandhaven Sloane Nemisa 96 Witbank Reef 69 Kotze Place, Beacon Mellis Montrose Office Street, Office Cambridge Hosken Rand- Place, Alvaro Vander- Centre Park Place Park Byranston Metcash Building Street House fontein Hillbrow Centre bijlpark Vereeniging Net Income Year 1 R R R R R R R R R R R R R after TI and Capex at 28/02/2012 Market Value R R R R R R R R R R R R R th February 2011 Value Various Various Various The majority Metcash Various Assumed Various Various Various Various Various Various Affecting assumptions assumptions assumptions of the expire only assumptions lease assumptions assumptions assumptions assumptions assumptions assumptions Matters on take up and on take up and on take up and landscaped in 2017 on take up and renewed on take up and on take up and on take up and on take up and on take up and on take up and relet periods relet periods relet periods gardens along relet periods relet periods relet periods relet periods relet periods relet periods relet periods with a number of shade-net parking facilities, are located on the adjacent erf, being the Remaining Extent of Erf Various assumptions on take up and relet periods Sources Of Own Own Own Own Own Own Own Own Own Own Own Own Own Information database and database and database and database and database and database and database and database and database and database and database and database and database and information information information information information information information information information information information information information sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals and yields and yields and yields and yields and yields and yields and yields and yields and yields and yields and yields and yields and yields 104

107 (continued) Kruger Beaconsfield Corner Palm Town Furniture Ellerines Perm Standard Mauriso Palm Street Talk Town City Citizens Vander- Plaza Bank Court Metro Metro Street 1 Mall Modjadjis- Talk Tzaneen Vereeniging Vereeniging bijlpark Newcastle Newcastle Germiston Koringpunt Malaita Phalaborwa Phalaborwa kloof Tzaneen Ellerines Valuation 2011/02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/28 Date Portfolio Dipula Dipula Dipula Mergence Mergence Mergence Dipula Dipula Dipula Dipula Dipula Dipula Dipula Title Deed T40836/ T40834/ T40833/ T19056/ T19055/ T19549/ T8604/ T8603/ T41035/ T41036/ T40838/ T40831/ T40830/ Number Address 15 Beaconsfield Scott 96 Scott 2 High Street D3606 R Palm 22 Palm Botha Street 78 Agatha 80 Agatha Avenue Voortrekker President Street Street Mogoto Maliata Avenue Avenue West (R36) Street Street Street Kruger Street Registration Erf 1208, Remaining Erf 53, Ptn 1 of Ptns 3, Ptn 1 of Ptn 24 of Erf 1950 Erf 1838 Remainder Portion Portion 4 Description Vereeniging extent Vander- Erf 439, and 5 of George- Farm Farm Phala- Phala- of Erf and 3 of Erf 52 of Erf 487, bijlpark Erf 435, town Zebedielas Vleesch- borwa borwa Duivels- of Erf 8 Tzaneen Vereeniging Newcastle Newcastle Location, boom, Ext1 kloof Tzaneen No 123 K.S. No. 869 K.S. Property Retail Retail Retail Retail/ Retail/ Retail/ Retail Retail Retail Retail Retail Retail Retail Type Office Office Residential Region Gauteng Gauteng Gauteng KwaZulu- KwaZulu- Gauteng Limpopo Limpopo Limpopo Limpopo Limpopo Limpopo Limpopo Natal Natal Major Ellerine JDG Relyant Nedbank Standard Chunky s Metro Metro Gateway Degswa Ellerines Ellerines Ellerines Tenants Furnishers Trading Trading Limited Bank Construction Christian Furnishers Furnishers Furnishers (Pty) Ltd (Pty) Ltd (Pty) Ltd & Centre t/a Ellerines Distribution Date of 2011/01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/24 Physical Inspection Zoning Business 1 Business 1 Business 1 General General Waiting for Unknown Non Urban Business 2 Business 2 Business 1 Business 1 Business 1 Commercial 2 Commercial 2 zoning from council Tenure Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Age of ~30 years ~30 years ~30 years ~19 years ~37 years ±60 years +/- 30 Years +/- 30 Years +/- 25 Years +/- 25 Years +/- 30 Years +/- 30 Years +/- 30 Years Buildings Rentable Areas (m²) Vacancy: Actual at Val date (m²) Actual % 0.00% 0.00% 0.00% 43.39% 0.00% 0.00% 0.00% 0.00% 67.91% 29.34% 0.00% 0.00% 0.00% 105

108 (continued) Kruger Beaconsfield Corner Palm Town Furniture Ellerines Perm Standard Mauriso Palm Street Talk Town City Citizens Vander- Plaza Bank Court Metro Metro Street 1 Mall Modjadjis- Talk Tzaneen Vereeniging Vereeniging bijlpark Newcastle Newcastle Germiston Koringpunt Malaita Phalaborwa Phalaborwa kloof Tzaneen Ellerines Net Income Year 1 R R R R R R R R R R R R R before TI and Capex at 28/02/2012 Net Income Year 1 R R R R R R R R R R R R R after TI and Capex at 28/02/2012 Market Value R R R R R R R R R R R R R February 2011 Value Various Various Various Various Various For the Various Various Various Various Various Various Various Affecting assumptions assumptions assumptions assumptions assumptions retail tenants, assumptions assumptions assumptions assumptions assumptions assumptions assumptions Matters on take up and on take up and on take up and on take up and on take up and we have on take up on take up on take up on take up on take up on take up on take up relet periods relet periods relet periods relet periods relet periods assumed and relet and relet and relet and relet and relet and relet and relet 1 month vacant periods periods periods periods periods periods periods after expiry then let up Sources of Own Own Own Own Own Own Own Own Own Own Own Own Own Information database and database and database and database and database and database and database and database and database and database and database and database and database and information information information information information information information information information information information information information sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals and yields and yields and yields and yields and yields and yields and yields and yields and yields and yields and yields and yields and yields 106

109 (continued) Standard Amethyst 30 Standard Bank Standard Erf 1263 Voortrekker, Metro ABSA ABSA Hazelwood ABSA Church Street Bank Vanderbijl Bank Ellerines Supermart Carletonville Edgars Giyani Derdepoort Silverton Place Pretoria Hercules West Pretoria Meyerton Park Grahamstown Newcastle Newcastle Extension 2 Belville Valuation 2011/02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/28 Date Portfolio Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Dipula Mergence Mergence Mergence Mergence Title Deed TG16861/ T41754/ ST41030 T13377/ T41752/ T41753/ T41033/ T40832/ T28631/ T19058/ T19054/ T44534/ T43767/ Number 1997GZ 2008 of TG16863/ 1997GZ TG16867/ 1997GZ Address S De 15/ Van 472 4A Loch 10 Van Rign High Street 54 Scott 27 Allen 4 Amethyst Voortrekker E30 41 Baviaans- Boulevard Dely Der Hoff Church Street Street Grahamstown Street Street Street, Road 31.7 poort Street Road Street Street Carletonville Bellville Road Registration Erven Ptn 15 of Section Erven 65 Erf 52, Remaining Erf 230 Erf 92 & 93 Re Erf 1921, Remaining Ptn 2 Erf , 11009, Description 43,44,45 Erf 200, No 1, of the and 80 Pretoria extent of Meyerton Vanderbijl Erven 1922 extent of and 3 of Carletonville 11012, and 46 East Lynn, scheme Hazelwood Gardens, Erf 1549, Park and 1923 Erf 514, Erf 330, Ext 2 Bellville Giyani-Ba Pretoria known as Pretoria Pretoria Pretoria Newcastle Newcastle Isabellahof (404/2001) Property Retail Retail/ Retail/ Retail/ Retail/ Retail/ Retail/ Retail/ Retail/ Retail Retail Retail Retail Type Office Office Office Office Office Office Office Office Region Limpopo Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Grahamstown KwaZulu- KwaZulu- Gauteng Western Natal Natal Cape Major Metro ABSA ABSA Vacant ABSA Vacant The Standard The Standard Standard Ellerines Edgars 420m² Edcon Tenants Bank Of Bank of SA Bank Furnishers Consolidated Ellerine Pty Ltd South Africa Stores Furnishers Ltd Limited Jetmart Date of 2011/01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/19 Physical Inspection Zoning Unknown Special Special Erf 65 General Business 1 Business 1 Business 1 Business General General Business 1 Central Business Special- Business Zone 1 Commercial Commercial Business Professional 2 1 Consultant Erf 80 Business 1 Tenure Freehold Freehold Sectional Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Title Age of +/- 25 Years ~35 years ~37 years Erf ~44 years ~41 years ~6 years ~25 years +130 Years ~16 years ~37 years 41 Years ±45 years Buildings years Erf years 107

110 (continued) Standard Amethyst 30 Standard Bank Standard Erf 1263 Voortrekker, Metro ABSA ABSA Hazelwood ABSA Church Street Bank Vanderbijl Bank Ellerines Supermart Carletonville Edgars Giyani Derdepoort Silverton Place Pretoria Hercules West Pretoria Meyerton Park Grahamstown Newcastle Newcastle Extension 2 Belville Rentable Areas (m²) Vacancy: Actual at Val date (m²) Actual % 0.00% 0.00% 41.01% % 22.25% % 0.00% 25.70% 0.00% 0.00% 0.00% 0.00% 0.00% Net Income Year 1 R R R R R R R R R R R R R before TI and Capex at 28/02/2012 Net Income Year 1 R R R R R R R R R R R R R after TI & Capex at 28/02/2012 Market Value R R R R R R R R R R R R R February 2011 Value Property is Various Various See report Various Various Various Various We have Various Various Assumed We have Affecting located on assumptions assumptions Valuation assumptions assumptions assumptions assumptions assumed assumptions assumptions all tenants assumed Matters Erf 45, on take up and on take up and Commentary. on take up and on take up and on take up and on take up and a 1 month on take up and on take up and renew a 1 month however relet periods relet periods Various relet periods relet periods relet periods relet periods nil income relet periods relet periods nil income no record assumptions at lease end. at lease end or Title Deed on take up and to source new information relet periods tenants relating to this property can be found. Sources of Own Own Own Own Own Own Own Own Own Own Own Own Own Information database and database and database and database and database and database and database and database and database and database and database and database and database and information information information information information information information information information information information information information sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from sourced from brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals market rentals and yields and yields and yields and yields and yields and yields and yields and yields and yields and yields and yields and yields and yields 108

111 (continued) Trentyre Zeolite Park 1 Killarney, Shoprite 24A Bok PnP Wynberg 506 Wynpol 679 Alberton Vana Road Sifon Park Carletonville Milnerton 9 Grenville Pep Nigel Westonaria Street Kroonstad Valuation 2011/02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/ /02/28 Date Portfolio Mergence Mergence Mergence Mergence Mergence Mergence Mergence Mergence Mergence Mergence Mergence Mergence Title Deed Number T40853/ T40852/ T19547/ T28924/ T28922/ T44535/ T24904/ T43768/ T40777/2 T228898/ T8247/ T13657/ & T3849/2006 Address 56 Sixth Corner Thora 33 Hendrik Cavaleros Potsdam 9 28 Corner 24A Bok Corner Truter Street Crescent and Potgieter Drive and Sifon Street Zeolite Street, Road, Grenville Ave, Hendrik Edwards Street, and Fourth Street Street Pero Road Robertville Carletonville Killarney Epping Verwoerd Strt Avenue and Welkom President Allen Street Streets, Kroonstad Registration Erf 506 Erf ,76,77 Erf Erf /09/ /01/09 163, 164 Erf 1223 Erf 130 Erf 6864 Description Wynberg, Wynberg, Alberton Jupiter Robertville Carletonville Nigel Westonaria Welkom & 6865 Sandton Sandton Ext 3 Ext 10 Ext 2 Kroonstad Ext 63 Property Type Industrial Industrial Industrial Industrial Industrial Industrial Industrial Industrial Retail Retail Retail Retail Region Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Western Cape Western Cape Gauteng Gauteng Free State Free State Major Tenants Frontline Nicholas SI Tyres Dpmt N/a 1071m² Vacant Cape Pep Retail Shoprite 908m² 3766m² Marketing Heinzelmann Public Works, Carletonville Coaters Limited Edcon (Jet) Pick n Pay Services CrushPro CC CV Joints & Propshafts Date of Physical Inspection 2011/01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/ /01/26 Zoning Industrial 3 Industrial Industrial 2 Industrial 1 Industrial 1 Industrial General General Business Business Business Business Industrial Industrial 1 & 2 Type B Tenure Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Freehold Age of Buildings ~29 years ~35 years ±25 years ±35 years ±25 years 50 Years ±15 years ±50 years ±40 years 35 Years 28 Years 30 Years Rentable Areas (m²) Vacancy: Actual at Val date (m²) Actual % 0.00% 0.00% 0.00% 0.00% 30.65% 0.00% % 0.00% 0.00% 0.00% 0.00% 0.54% Net Income before Year 1 R R R R R R R R R R R R TI and Capex at 28/02/2012 Net Income after Year 1 R R R R R R R R R R R R TI & Capex at 28/02/2012 Market Value R R R R R R R R R R R R February

112 (continued) Trentyre Zeolite Park 1 Killarney, Shoprite 24A Bok PnP Wynberg 506 Wynpol 679 Alberton Vana Road Sifon Park Carletonville Milnerton 9 Grenville Pep Nigel Westonaria Street Kroonstad Value Affecting Matters Various Various Single Dept of Assumed Major Property We have We have Various Assumed Assumed assumptions assumptions tenanted Public Works a take up tenant on currently assumed a assumed assumptions all tenants all tenants on take up and on take up and expiring in we have made period of monthly lease vacant, 1 month 1 month on take up and renew renew relet periods relet periods July 2011, specific renewal 18 months assumed assume nil income vacant after relet periods assume to for another for the vacant vacated for 6 months at lease end to expiry renew 5 years and space and 3 months to let source new CrusPro CC 1 month (Sept 2011 tenants. left 1 month nil income to Nov 2011), And inserted nil income after lease then relet. a definite after lease ends to source renewal ends to source new tenant for the training new tenant Academy Sources Of Information Own Own Own Own Own Own Own Own Own Own Own Own database and database and database and database and database, database and database and database and database and database and database and database and information information information information recent lettings information information information information information information information sourced from sourced from sourced from sourced from at property sourced from sourced from sourced from sourced from sourced from sourced from sourced from brokers as to brokers as to brokers as to brokers as to and information brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to brokers as to market rentals market rentals market rentals market rentals sourced from market rentals market rentals market rentals market rentals market rentals market rentals market rentals and yields and yields and yields and yields brokers as to and yields and yields and yields and yields and yields and yields and yields market rentals and yields 110

113 INDEPENDENT VALUER S PROPERTY VALUATION REPORT Attention: The Directors Dipula Income Fund Limited 2 Arnold Road Rosebank July 2011 Sir/Madam, RE: INDEPENDENT VALUER S REPORT ON THE PORTFOLIO OF PROPERTIES TO BE ACQUIRED BY DIPULA INCOME FUND LIMITED (KNOWN AS THE ASAKHE PORTFOLIO AND THE REDEFINE PORTFOLIO) AS DETAILED IN THE SUMMARY SCHEDULE ATTACHED AND FOR WHICH THERE ARE DETAILED INDIVIDUAL VALUATION REPORTS HELD BY DIPULA INCOME FUND LIMITED. 1. INTRODUCTION I, Mrs M J Clark, a duly authorised Professional Associate Valuer, registered without restriction in terms of Section 19 of the Property Valuers Professional Act, 2000 (Act No. 47 of 2000), of 4 th Floor, South Block, Hyde Park Shopping Centre, Hyde Park, Sandton do hereby certify that to the best of my knowledge, I have valued the properties as at 28 th February 2011 in order to determine their value on discounted cash flow basis as at the dates specified below: Total Value of the Properties: R (Seven hundred and twenty-four million seven and twenty thousand Rand) Set out below in the summary schedule are particulars relating to the properties, as detailed in the prospectus to be dated on or about 28 July 2011, to which this report is attached and the values that I have attributed to them. 2. BASIS OF VALUATION All properties have been valued using the Discounted Cash Flow Approach, which values the contracted income and then reverts to market related rentals. All of which are discounted at the appropriate discount rate. 3. ASSUMPTIONS The considerations applied to the market value of the properties, which is based on the International Valuations Standards Authority definition of the same, are as follows: Not all of the properties were fully let at the effective date of valuation. Properties numbered 5, 6, 7, 23, 26, 31 and 34 reflect certain vacancies. Our assumptions are reflective of the micro-economy surrounding these properties. In all instances we have allowed for a number of months after the valuation date within which no income is budgeted for and then we have assumed certain tenancies at market-related rentals. The period decided for the vacancies is based on our physical inspection of the immediate surrounds and the vacancies (if any) evident in surrounding buildings. We have referenced published documentation from the SAPOA/IPD data-base (Vacancy Surveys). Horison Office Park, where Telkom recently vacated a large part of the office park, has certain vacancies which are covered by a rental guarantee for 12 months from the date of transfer of the property, during which it is assumed that tenants will be sourced. In each of the valuations we have allocated provisions for Repairs and Maintenance. With regards the un-let components (as at the effective date of the valuation) in addition to the non-income producing months allocated in the cash flows, we have further provided for tenant installation costs, where appropriate, and commissions payable to brokers. In addition to all of this we have also allocated default vacancy provisions as a percentage of the annualised gross incomes generated by the properties valued for the Fund when considering the residual values of the properties. Rentals used in our Discounted Cash Flow valuations are based on the terms and conditions contracted in the leases. On expiry of same, we have assumed that they will revert to market-related rentals. The market-related rentals have been determined by comparing similar buildings in comparable areas to the properties valued. Due consideration to the extent of the lettable areas, their location within the buildings and profile of tenant has been applied in the determination of the reversionary market rentals. The market rentals have also been compared with the fundamentals listed in various published indices including the South African Property Owners Association (SAPOA/IPD) index. The buildings have been valued according to their existing use. No alternative use for the properties has been considered in determining their value. 111

114 4. VALUATION QUALIFICATIONS Qualifications are usually detailed as a consequence of: specialized properties; large exposure to single tenant; leases which are under negotiation but which have not yet been formalized; potential tenant failure due to over-rent; expenses required for major repairs; etc. I have considered the various factors mentioned above and, to the best of my knowledge, there are no properties which are prejudiced in value by them. The valuer is however not responsible for the competent daily management of the properties that will ensure that this status is maintained, or for the change of any laws, services by the local authority or economic circumstances which may adversely affect the properties or the sustainability of the income from them. 5. RELATED PARTY LEASES All the tenant schedules were inspected and a sample of the leases and there were no significant related party leases which would materially impact the value of the portfolio. 6. CURRENT STATE OF DEVELOPMENT The properties are all developed and occupied by tenants. There are some vacancies as referred to above. 7. EXTERNAL PROPERTY All the properties are located within the Republic of South Africa and are all within the Gauteng Province with the exception of Property Numbered 8 which is in the Limpopo Province. 8. SOURCES OF INFORMATION Information relating to the properties have been obtain and, where applicable, verified, from: 8.1 Property Managers; 8.2 Our physical inspection of the properties, confirming the nature of improvements and the tenancies reflected in the lease schedules; 8.3 A sample lease audit being undertaken by ourselves; 8.4 Dipula Income Fund; 8.5 Deeds Office; and Surveyor General s Office & Local Authorities for verification of the Title Deeds, Erf diagrams, Municipal Valuations and Town Planning conditions; 8.6 The Sellers; 8.7 SAPOA/IPD Index with regards to vacancy surveys, comparable market rentals, operating expense profiles, annualised rental and expense growth plus the Discount and Capitalisation Rate surveys; 8.8 Property brokers. 9. TOWN PLANNING RESTRICTIONS/CONDITIONS AND MATERIAL CONTRAVENTIONS OF STATUTORY REQUIREMENTS Full town planning details and title deeds have been supplied, where they were made available, in the detailed valuation reports including conditions and restrictions and the properties have been checked against such conditions. This is to ensure that they comply with town planning regulations and title deeds. There do not appear to be any major infringements of local authority regulations or deeds by any of the properties where we were able to obtain the town planning information. We were unable to confirm the planning status of Properties Numbered 3 and 6 due to a lack of information recorded by the respective Municipalities. Belle Ombre Plaza is a shopping centre and the Municipality has the zoning of the property recorded as Undetermined which would require a Consent use for the current use to be in accordance with the Town Planning. However, we did confirm that the rates and taxes charged do reflect their business status. We reserved our right to amend the valuations in the event that the properties do not conform to the town planning regulations. The valuation has further assumed that the improvements have been erected in accordance with the relevant Building and Town Planning Regulations and on inspection it would appear that the improvements are in accordance with the relevant town planning regulations apart from Properties Numbered 3 and 6 as discussed above. There is an encroachment issue in respect of Property Numbered 10 which the sellers are currently sorting out. 112

115 The title deeds were inspected for all of the properties and there were no particularly onerous conditions which impacted on the current use of the properties. Property Numbered 6 is subject to a Deed of Grant and we verified the area by way of the Surveyor s General diagram of the property. Property Numbered 19 is to be sub-divided and the valuation is only based on the part of the property to be retained. 10. LEASES Our valuation has been based upon a sample lease audit and the physical inspection of all properties confirming the actual tenant leases supplied to us by the owners and managing agents. We were not provided with the approved building plans and no physical measurements of the areas of the properties were made. Contractual escalations range from 0% to 11% (averaging around 9%) going forward and virtually all rentals detailed in this report are from existing contractual leases. In respect of single-tenanted buildings, expenses are usually paid directly by the tenant, while the landlord is responsible for expenses in multi-tenanted buildings, with certain expenses or increases in expenses being recovered from the tenants. The portfolio is tenanted by large companies and organizations such as Ekurhuleni Metropolitan Municipality, McCarthy, Virgin Active, Planet Fitness and Barloworld Motors as detailed in the Schedule as well as small-medium enterprises. 11. BRIEF DESCRIPTION The portfolio comprises properties which are of a commercial, industrial or retail nature. 12. SPARE LAND Generally the land area available is fully utilised as per the Town Planning regulations by the buildings on the properties and there is no vacant land with the exception of Properties Numbered 10 and 11. Property Numbered 10 has some spare bulk originally intended for a petrol station and Property Numbered 11 has a large yard area which is integral to the use as a truck dealership. No value has been attributed to these areas. 13. OTHER COMMENTS To my knowledge there are no contractual arrangements on the properties other than the leases, as detailed in the reports that have a major benefit or are detrimental to the fundamental value base of the properties. The valuations exclude any amounts of Value-added Tax, Transfer Duty, or duty on shares in the event of a company transaction. A full valuation report is available on a property by property basis detailing tenancy, town planning, valuer s commentary, expenditure and other details. This has been given to the directors of Dipula Income Fund Limited. 14. CAVEATS 14.1 Full Disclosure This valuation has been prepared on the basis that full disclosures of all information and factors that may affect the valuation have been made to us Leases Our valuations have been based on an inspection of all the major leases, or offers to lease, where applicable, for each property in the portfolio and where there are multiple tenants then we have inspected a further sample of the leases. The leases were checked back to the rent rolls provided and no major discrepancies were discovered, 14.3 Lessee s credibility The lessee s security and rating has been taken into account when determining the discount rates used. 113

116 14.4 Mortgage bonds, loans, etc. The property has been valued as if wholly owned with no account being taken of any outstanding monies due in respect of mortgage bonds, loans and other charges. No deductions have been made in the valuation for costs of acquisition. The valuation is detailed in a complete state and no deductions have been made for retention or any other set-off or deduction for any purposes which may be made at the discretion of the purchaser when purchasing the property Calculation of areas All areas indicated in the valuation reports have been verified from the leases where possible. Approved building plans were not available for the buildings in respect of internal configuration. The buildings generally appeared to have the stated square meterage as per the rent rolls provided but this could only be verified by re-measurement by a professional. The reported square meterage is therefore considered to be as correct as possible without a remeasurement exercise being undertaken Structural condition The properties have been valued in their existing state. I have not carried out any structural surveys, nor inspected those areas that are unexposed or inaccessible, neither have I arranged for any testing of any electrical or other services. 15. CONCLUSION I confirm that to the best of my knowledge and belief there: 15.1 are no options held by any third parties to purchase any of the property, with the exception of Property Numbered 25. where the tenant has an option to buy the property prior to 30 th November 2011 at a certain price; and 15.2 have been no material changes between the date of the valuations and the Last Practicable Date in any circumstances relating to the properties, which would affect the valuation thereof. I confirm that I have no pecuniary interest that would conflict with a proper valuation of the property by the Fund, other than normal professional fees. With 15 years experience in property valuation, the undersigned is qualified to express an opinion on the value of the property. Yours faithfully ALTERNATIVE REAL ESTATE M J Clark BA (Hons), MSc Professional Associated Valuer (Registration Number: 4456/1) (Registered without restriction in terms of The Property Valuers Act, No. 47 of 2000) 4 th Floor, South Block, Hyde Park Shopping Centre, Hyde Park, Sandton 114

117 Ref Legal Inspection Land extent Lettable area No. Property Physical address Suburb City/Town Region Sector description date (m 2 ) GLA (m 2 ) Tenure 1. Alert: City West 26 Western Boulevard City West Johannesburg Gauteng Industrial Erf 13, City West 16/05/ sqm sqm Freehold 2. Atlas 427 Atlas Road Anderbolt Boksburg Gauteng Office/Retail Bank Portion 3 of Erf 453, 17/05/ sqm sqm Freehold Anderbolt Ext Belle Ombre Corner Boom and Potgieter Marabastad Pretoria Gauteng Retail Portion 280 (a Portion 18/05/ sqm sqm Freehold Street of portion 12) of Farm Dasport 319 JR 4. Dauphin 12 Bunsen Street Industria Johannesburg Gauteng Industrial Erf 65, Industria 16/05/ sqm sqm Freehold 5. Emsure Corner Elston and Rothsay Benoni Benoni Gauteng Office Erf 8410, Benoni 17/05/ sqm sqm Freehold Street 6. Giyani 1st Road Giyani Limpopo Retail/Retail Warehouse Erf 84, Giyani BA 15/05/ sqm sqm Deed of Grant 7. Horison Office Park 6 Kingfisher Street Horison Park Roodeport Gauteng Office Erf 243, Horison Park 13/05/ sqm sqm Freehold 8. Jasco 12 Delphi Street Eastgate Ext 18 Sandton Gauteng Industrial Erf 282, 283 and 19/05/ sqm sqm Freehold 284 Eastgate Ext Johnson Wax 192 Smit Street Fairlands Johannesburg Gauteng Office Erf 496, Fairland 19/05/ sqm sqm Freehold 10. Kopanong Corner Riverside and Malatsi Ivory Park Thembisa Gauteng Retail Erf 18162, Ivory Park 14/05/ sqm sqm Freehold Ext Anderbolt McCarthy 246 Francis St, Corner Anderbolt Boksburg Gauteng Industrial Portion 1 of Erf 246, 17/05/ sqm sqm Freehold Dormehl and 14th Avenue Anderbolt Ext Carrier/Metraclark 14 Mandy Road Reuven Johannesburg Gauteng Industrial Erf 11, 12, 13, 14 and 16/05/ sqm sqm Freehold 15 Reuven 13. Nedbank 168 Victoria Street, Germiston Gauteng Office/Retail Bank Erf 13 and 14 Germiston 17/05/ sqm 996 sqm Freehold Corner Jack 14. Planet Fitness 33 Tibouchina Street Montana Park Pretoria Gauteng Retail/Industrial Gym Portion 3 of Erf 2596, 15/05/ sqm sqm Freehold (off Zambezi Drive) Montana Park Ext Robertville Anvil Road Robertville Roodeport Gauteng Industrial Erf 381 and 13/05/ sqm sqm Freehold Ext , Robertville Ext Seatings 14 Bunsen Street, Industria Johannesburg Gauteng Industrial Erf 63 & 64, Industria 16/05/ sqm sqm Freehold 17. Standard Bank 49 Beit Street and Doornfontein Johannesburg Gauteng Office/Retail Bank Erf 657, Doornfontein 16/05/ sqm sqm Freehold Siemert Road 18. Stanley Tools 289 Granville Ave Robertville Roodeport Gauteng Industrial Erf 434, Robertville 13/05/ sqm sqm Freehold Ext Virgin Active 38 Van Santen Drive Horison View Roodeport Gauteng Retail/Industrial Gym Portion 3 (a portion of 13/05/ sqm sqm Freehold portion 2) of Erf 287, Horison View (part to be subdivided) Pretoria Avenue 360 Pretoria Avenue Randburg Johannesburg Gauteng Office Erf 716, Ferndale 16/05/ sqm sqm Freehold 21. Absa Horizon Park Corner Park Lane and Horison Park Roodeport Gauteng Office Erf 245, Horison Park 13/05/ sqm sqm Freehold Kingfisher Road 115

118 Ref Legal Inspection Land extent Lettable area No. Property Physical address Suburb City/Town Region Sector description date (m 2 ) GLA (m 2 ) Tenure 22. Agency 1 3 Leeuwkop Drive Sunninghill Johannesburg Gauteng Office Erf 1087, 19/05/ sqm sqm Freehold Corner Witkoppen Sunninghill Ext Bruma Boulevard 20 Zulberg Close Bruma Johannesburg Gauteng Office Ptn 17 (a Ptn of Ptn 2) 12/05/ sqm sqm Freehold of Erf 201, Bruma 24. College House 26 Peter Place Lyme Park Johannesburg Gauteng Office Erf 26, Lyme Park 11/05/ sqm sqm Freehold 25. Enel Somerset Office Park, Bryanston Johannesburg Gauteng Office Rem extent of Ptn 10 12/05/ sqm 272 sqm Freehold 5 Libertas Road of Erf 5181, Bryanston Ext Finance House 25 Ernest Oppenheimer Ave Bruma Johannesburg Gauteng Office Ptn 1 of Erf 204, Bruma 12/05/ sqm sqm Freehold 27. Sanburn Building 68 Woburn Ave Benoni Benoni Gauteng Office and Retail Erf 7946, Benoni 17/05/ sqm sqm Freehold 28. Waterview Corner 2 Ernest Oppenheimer Drive Bruma Johannesburg Gauteng Office Sections 2, 3, 4, 13, 14, 12/05/ sqm sqm Sectional Title 15, 17, 18 of Waterview Corner, Scheme 133/ Bram Fisher Drive 225 Bram Fischer Drive Randburg Johannesburg Gauteng Specialised Retail Erf 149, Kensington B 19/05/ sqm sqm Freehold Beyers Naude Drive 274 Beyers Naude Drive, Blackheath Johannesburg Gauteng Specialised Retail Erf 326, Blackheath 13/05/ sqm sqm Freehold Northcliff 31. Blackheath Galleries corner Beyers Naude Drive Blackheath Johannesburg Gauteng Retail Erf 264, Blackheath 13/05/ sqm sqm Freehold and Mountain View Ave 32. BMW 146 South Boulevard, Bruma Johannesburg Gauteng Specialised Retail Ptn 7 of Erf 146, Bruma 12/05/ sqm sqm Freehold East Gate Office Park 33. Norwood Centre 74 Grant Ave, Corner Norwood Johannesburg Gauteng Retail, Office and Erf 142, Norwood 12/05/ sqm 468 sqm Freehold Ellerines William and Grant Ave Residential 34. Palm Court corner JG Strydom and Weltevreden Johannesburg Gauteng Office and Retail Remaining extent of 18/05/ sqm sqm Freehold Cornelius Road Park Erf 887 Weltevredenpark Extension 1 *Approx. ages highlighted in red are best guesses taken from Windeed, otherwise the approx age is either from info on the buildings or from the town planning approved zoning 116

119 Assumed Average Weighted Lease Reversionary perpetual Actual monthly rental average Ref Net income Discount Discount void/ vacancy Valuation rate/m 2 GLA lease No. Property Physical address (forecast year 1) Cap rate rate rate vacancy levels (DCF) (1 st month) escalation 1. Alert: City West 26 Western Boulevard R % 17.00% 15.50% 5.00% 0.00% R R % 2. Atlas 427 Atlas Road R % 15.00% 14.00% 5.00% 0.00% R R % 3. Belle Ombre corner Boom and Potgieter Street R % 14.00% 13.00% 5.00% 0.00% R R % 4. Dauphin 12 Bunsen Street R % 16.00% 15.50% 10.00% 0.00% R R % 5. Emsure Corner Elston and Rothsay Street R % 16.50% 15.50% 10.00% 67.17% R R % 6. Giyani 1st Road R % 16.50% 15.50% 10.00% 8.65% R R % 7. Horison Office Park 6 Kingfisher Street R % 16.00% 14.00% 10.00% 70.20% R R % 8. Jasco 12 Delphi Street R % 16.00% 15.50% 5.00% 0.00% R R % 9. Johnson Wax 192 Smit Street R % 15.50% 15.00% 5.00% 0.00% R R % 10. Kopanong Corner Riverside and Malatsi R % 16.00% 15.00% 5.00% 0.00% R R % 11. Anderbolt McCarthy 246 Francis St, Corner Dormehl and 14th Avenue R % 15.00% 14.50% 5.00% 0.00% R R % 12. Carrier/Metraclark 14 Mandy Road R % 15.50% 14.50% 5.00% 0.00% R R % 13. Nedbank 168 Victoria Street, corner Jack R % 16.00% 15.50% 15.00% 0.00% R R % 14. Planet Fitness 33 Tibouchina Street (off Zambezi Drive) R % 14.00% 14.00% 0.00% 0.00% R R % Robertville Anvil Road R % 15.50% 15.00% 5.00% 0.00% R R % 16. Seatings 14 Bunsen Street, R % 16.00% 15.50% 10.00% 0.00% R R % 17. Standard Bank 49 Beit Street and Siemert Road R % 16.00% 15.00% 5.00% 0.00% R R % 18. Stanley Tools 289 Granville Ave R % 15.50% 15.00% 5.00% 0.00% R R % 19. Virgin Active 38 Van Santen Drive R % 14.00% 14.00% 0.00% 0.00% R R % Pretoria Avenue 360 Pretoria Avenue R % 14.00% 13.50% 10.00% 0.00% R R % 21. Absa Horizon Park Corner Park Lane and Kingfisher Road R % 14.50% 14.00% 5.00% 0.00% R R % 22. Agency 1 3 Leeuwkop Drive cnr Witkoppen R % 14.00% 13.50% 5.00% 0.00% R R % 23. Bruma Boulevard 20 Zulberg Close R % 16.00% 15.50% 5.00% 4.40% R R % 24. College House 26 Peter Place R % 15.00% 13.00% 10.00% 0.00% R R % 25. Enel Somerset Office Park, 5 Libertas Road R % 14.00% 13.50% 5.00% 0.00% R R % 26. Finance House 25 Ernest Oppenheimer Ave R % 16.00% 15.50% 10.00% 10.33% R R % 27. Sanburn Building 68 Woburn Ave R % 15.50% 14.50% 10.00% 0.00% R R % 28. Waterview Corner 2 Ernest Oppenheimer Drive R % 16.00% 15.50% 10.00% 0.00% R R % Bram Fisher Drive 225 Bram Fischer Drive R % 16.00% 15.00% 5.00% 0.00% R R % Beyers Naude Drive 274 Beyers Naude Drive, Northcliff R % 14.00% 13.50% 10.00% 0.00% R R % 31. Blackheath Galleries corner Beyers Naude Drive & Mountain View Ave R % 15.00% 14.00% 5.00% 7.80% R R % 32. BMW 146 South Boulevard, East Gate Office Park R % 16.00% 15.00% 5.00% 0.00% R R % 33. Norwood Centre Ellerines 74 Grant Ave, Corner William and Grant Ave R % 14.50% 13.00% 2.50% 0.00% R R % 34. Palm Court Corner JG Strydom & Cornelius Road R % 15.00% 14.00% 10.00% 6.91% R R % Total R

120 Annexure 7 Financial information required in terms of regulation 79 of the Companies Act in respect of dipula In terms of Regulation 79 of the Companies Act, this annexure includes the historical profits of Dipula for the preceding three financial years being 31 August 2010, 2009 and 2008 and its statement of financial position as at 31August The historical profits and statement of financial position have been restated to take into account the early adoption of IAS 12 relating to deferred taxation. Extract from the statement of comprehensive income of Dipula Financial Financial Financial year ended year ended year ended 31 August 31 August 31 August R R R Gross turnover Profit/(Loss) before tax Profit/(Loss) after tax Dividends declared/paid Extract from the statement of financial position of Dipula 31 August 2010 R Assets Non-current assets Investment property Loans to related parties 100 Prepaid interest Municipal deposits Current assets Trade and other receivables Prepaid interest Cash and cash equivalents Total Assets Equity and Liabilities Equity Share capital 100 Non-distributable reserve Accumulated losses ( ) Liabilities Non-current liabilities Interest bearing liabilities Deferred taxation Tenant deposits Current liabilities Loans from related parties Interest bearing liabilities Trade and other payables Total equity and liabilities

121 Annexure 8 REPORT BY THE AUDITORS IN RESPECT OF DIPULA IN TERMS OF REGULATION 79 OF THE COMPANIES ACT The Directors Dipula Income Fund Limited 2 Arnold Road Rosebank July 2011 Dear Sirs Auditors report ON THE FINANCIAL INFORMATION OF DIPULA IN TERMS OF REGULATION 79 OF THE COMPANIES ACT We have agreed to provide a report on Dipula s financial information included in Annexure 7 for purposes of complying with Regulation 79 of the Companies Act 71 of 2008 (the Act ). In terms of Regulation 79 of the Act, a company issuing a prospectus is required to provide financial information comprising of the following: the profits and losses for the three financial years preceding the date of the prospectus; and the assets and liabilities as at the last date to which the annual financial statements were made out, collectively (the regulation 79 financial information). PKF (JHB) Inc is the appointed auditor of Dipula. We have audited the annual financial statements of Dipula for the years ended 31 August 2010, 2009 and We have expressed an unqualified audit opinion in respect of the Dipula s annual financial statements in respect of the aforementioned periods. Our audits were conducted in accordance with International Standards on Auditing and the financial statements prepared in accordance with International Financial Reporting Standards. We have not performed any audit procedures subsequent to our audit opinion dated 5 November 2010, in respect of the year ended 31 August Extraction of financial information The regulation 79 financial information detailed in Annexure 7 is an extraction from Dipula s annual financial statements for each of the three years ended 31 August 2010, 2009 and 2008, adjusted for the early adoption of IAS 12. As a result of the Regulation 79 financial information being an extraction from annual financial statements where unqualified audit opinions have been issued, PKF (Jhb) Inc. can report the following: the financial information is free from material misstatement and has been prepared on a basis consistent with the Act; the trade debtors and creditors include no material amount that is not a trade account; the provision for doubtful debts appear to be adequate; and all inter company profits have been eliminated. Material changes in the assets and liabilities In accordance with Regulation 79 (4)(b)(v), PKF (Jhb) Inc. is required to include a statement in its report, as to whether there have been any material changes in the assets and liabilities of Dipula since the date of the latest available financial statements. Our engagement was undertaken in accordance with the International Standards on Related Services applicable to agreed-upon procedures engagements. The procedures were performed solely to assist you in complying with regulation 79 (4)(b)(v) of the Companies Act. The following procedures were performed: Review the latest available management accounts of Dipula. Review minutes of the board of directors of Dipula since the financial year end. Obtain a letter of representation from Dipula management confirming that there have been no significant changes to the financial position of the company since the financial year end. 119

122 Based on the aforementioned procedures the following has come to our attention: There has been a material change in the value of the investment properties due to fair value adjustments made to reflect external valuations. Other than the above, nothing has come to our attention that would indicate that there has been a material change in the assets and liabilities of Dipula since its last financial year end outside of the normal course of business for a property company. Because the above procedures do not constitute either an audit or a review made in accordance with International Standards on Auditing or International Standards on Review Engagements, we do not express any assurance on the procedures. Had we performed additional procedures or had we performed an audit or review of the financial statements in accordance with International Standards on Auditing or International Standards on Review Engagements, other matters might have come to our attention that would have been reported to you. Our report is solely for the purpose of complying with Regulation 79(4)(b)(v) and for your information. This report relates only to the items specified above, and does not extend to any financial statements of Dipula. We hereby consent to the inclusion of this letter in its entirety in the prospectus to be issued on or about 26 July Yours faithfully PKF (Jhb) Inc. Per Rudi Huiskamp Director Chartered Accountants (SA) Registered Auditors 42 Wierda Road West Wierda Valley,

123 Annexure 9 MAJOR LINKED UNITHOLDERS AND CAPITAL STRUCTURE 1. CONTROLLING AND MAJOR LINKED UNITHOLDERS 1.1 Currently Dipula has issued shares, of which are held by Dijalo and of which are held by Redefine. On and with effect from the 2 nd business day prior to the date of listing (in terms of a resolution of the board of directors of Dipula): Dipula will issue further shares, the result of such issue being that Dijalo will hold A-linked units and B-linked units, for a consideration of R1 so as to ensure Dijalo holds the appropriate number of linked units on the listing date; and Dipula Property Trust will acquire the shares currently held by Redefine for a consideration of R (which consideration will be paid in cash within two business days after the date of the listing) constituting those shares as treasury shares. 1.2 Pursuant to the Mergence transaction detailed in paragraph 11.3 of the prospectus Dijalo will issue to MAP A linked units and B-linked units at least two business days before the listing date. 1.3 Set out below are the names of linked unitholders, that, directly or indirectly, are expected to be beneficially interested in 3% or more of the issued linked units of Dipula immediately after the private placement and the listing assuming that the private placement is fully subscribed for. Name of the Number of % of A-linked Number of % of B-linked linked unitholder A-linked units units in issue B-linked units units in issue Dijalo Mergence Total There is no controlling linked unitholder of Dipula at the last practicable date. 2. AUTHORISED AND ISSUED LINKED UNIT CAPITAL 2.1 The authorised and issued linked unit capital of Dipula immediately before the private placement and the listing are as follows: R Stated capital Authorised shares of no par value Issued shares of no par value Debenture capital Issued A-debentures of R4.41 each B-debentures of R4.41 each

124 2.2 Assuming that all of the private placement units will be subscribed for, the authorised and issued linked unit capital of the company after the private placement and the listing will be as follows: R Stated capital Authorised shares of no par value Issued shares of no par value Debenture capital Issued A-debentures of R4.41 each* B-debentures of R4.41 each* * Net of transaction costs in respect of issuing debenture capital in terms of IAS No linked units are currently held in treasury as at the last practicable date. 2.4 The linked units of the company are not listed on any other stock exchange. 3. RIGHTS ATTACHING TO LINKED UNITS, SHARES, AND DEBENTURES 3.1 Extracts of the company s MOI relating to rights attaching to shares are set out in Annexure All the authorised and issued shares are of the same class and rank pari passu in every respect and accordingly, no shares have any special right to dividends, capital or profits or any other right, including redemption rights and rights on liquidation or distribution of capital assets. 3.3 In accordance with the company s MOI, during any vote at any general meeting every person present in person or by proxy (or, if a body corporate, duly represented by an authorised representative) shall, on a show of hands, have one vote and, on a poll, have that proportion of the total votes in the company which the aggregate amount of the nominal value of the linked units held by that member bears to the aggregate of the nominal value of all the linked units issued to the company. 3.4 Any variation in rights attaching to shares will require the consent of shareholders in a general meeting in accordance with the company s MOI. 3.5 Only such members that are registered in the company s register on the day when a distribution is declared or on such other day as may be determined by the board as the last date for registration for the distribution, will be entitled to receive the distribution so declared. 4. ALTERATIONS OF LINKED UNIT CAPITAL 4.1 Other than as set out in paragraph 1.1 of this annexure there have been no other issues or offers of securities of the applicant and/or its subsidiaries during the preceding three years. None of the abovementioned issues of linked units by Dipula have been issued at a premium or discount. 4.2 Save for Asakhe and the Redefine portfolio, there are no other assets or properties that will be acquired out of the proceeds of the private placement. 4.3 Other than as set out in paragraph 1.1 of this annexure no share repurchases have been undertaken by Dipula or any of its subsidiaries in the past three years. 4.4 The company was incorporated on 10 May 2005 with an authorised share capital of R1 000 consisting of authorised shares of R1 each. Dipula s share capital of R1 000 was increased on 23 June 2011 from shares of R1 each to shares and converted to shares of no par value, by special resolution. There have been no other sub-divisions or consolidations of shares during the three years preceding the date of issue of this prospectus. Other than as provided in this paragraph, there have been no alterations to the authorised shares in the three years prior to the issue of this prospectus. 122

125 5. OPTIONS AND PREFERENTIAL RIGHTS IN RESPECT OF LINKED UNITS 5.1 There are no preferential conversion and/or exchange rights in respect of any of the linked units. 5.2 No options or preferential right of any kind was or is proposed to be given to any person to subscribe for linked units of the company. 5.3 There are no contracts or arrangements, either actual or proposed, whereby any option or preferential right of any kind has been or will be given to any person to subscribe for any linked units in the company. 6. AUTHORISATIONS 6.1 The issue or disposal of the authorised but unissued shares will be under the control of the directors subject to the provisions of section 38 of the Companies Act and the JSE Listings Requirements. Shareholders have passed the requisite resolutions providing the directors authority to issue linked units for cash subject to the provisions of the JSE Listings Requirements. 6.2 The special resolutions for the creation of the share capital and debentures of Dipula have been duly passed by the requisite majority of members. The requisite directors resolutions have been passed authorising the issue of the shares and debentures in Dipula. 6.3 The following issues of linked units by the company have occurred prior to the listing: on 10 June 2011, shares were issued to Dijalo and Redefine, the Dipula shareholders at the time; and A-linked units and B-linked units were issued to Dijalo. 123

126 Annexure 10 SALIENT FEATURES OF THE DEBENTURE TRUST DEED Java Capital Trustees and Sponsors (Proprietary) Limited has been appointed as the first trustee of the debenture trust deed. Extracts from the debenture trust deed of the company providing for the appointment, qualification, remuneration, borrowing powers, interests of trustees and interest payments are set below. 6. Trustee s fees 6.1 In consideration for the services to be rendered by the trustee to the company in terms of this deed, the trustee shall be entitled to such fee as is agreed between the company and the trustee from time to time. 6.2 In addition to the aforementioned fees, the company shall pay the trustee: a reasonable fee for arranging and attending meetings of debenture holders (unless requisitioned by or otherwise called at the instance of the debenture holders); for undertaking exceptional work not normally undertaken by trustees; and all travelling and other expenses and disbursements of any nature which the trustee may reasonably incur in carrying out his duties in terms hereof (notwithstanding the appointment of a liquidator or any judgment which the trustee or one or more of the debenture holders may obtain). 7. Creation and issue of debentures 7.1 The directors may, by resolution, create and issue debentures subject to the provisions contained in this deed. 7.2 Debentures may only be issued (subject to compliance with the Listings Requirements of the JSE, to the extent that the debentures are listed on the JSE or the regulations applicable to any other exchange on which the debentures are listed): by way of a rights issue to the debenture holders at the relevant time; as the consideration for any permitted acquisition; in order to raise cash to be used solely: as the consideration for permitted acquisitions; and/or for the development or maintenance of any immovable property already held or to be acquired by the company or any of its subsidiaries; and/or to reinstate the cash holdings of the company or any of its subsidiaries; and/or to replace and/or repay funding made available to the company and/or its subsidiaries by third parties other than debenture holders; and/or in terms of an incentive scheme duly approved and adopted by the company. 7.3 The debentures shall be allotted and issued by the company: to such subscribers and on such dates as the directors may deem fit; and on condition that: payment in full of the subscription price (including any premium) for the debentures has been received by the company or the subscription price has been credited as fully paid; and until unlinking occurs, on the basis indicated in clauses 8.2 and The debentures when allotted: shall rank pari passu in all respects from the date of allotment thereof; shall be held subject to the terms and conditions of this deed, which terms and conditions shall be binding on the company, the trustee, each debenture holder and anyone claiming title through the company or a debenture holder or the trustee, and will not be subject to any other terms whatsoever unless agreed to by debenture holders by way of a special resolution in terms of the provisions of this deed. 7.5 For so long as there are both A and B linked units in issue, no A debentures may be issued if, as a result, there will be more A debentures in issue then B debentures. 7.6 The debentures shall be unsecured. 124

127 7.7 All debentures issued in terms of this deed shall, upon the winding up of the company, irrespective of their date of issue, rank pari passu in all respects with regard to payment of interest and repayment of capital but, for the purpose of proving claims against the company, the trustee shall claim separately for the amounts due to the debenture holders of each specific issue of debentures in terms of this deed. 7.8 The debenture holders of each class of debenture shall be entitled, by special resolution, to agree to any variation or modification of any of the rights of the debenture holders in respect of that class of debenture, in each case subject to the consent of the company. The debenture holders of each class of debentures shall similarly be entitled, by special resolution, to bind the debenture holders of each class of debenture to any arrangement or compromise made or to be made between the company and the debenture holders of those debentures or any of them. The provisions of this clause 7.8 (i) shall always be subject to the provisions of the Act and (ii) provide additional rights to the extent that their existence is consistent with the Act. 7.9 The company may issue debentures at a price which is lower or higher than the nominal value thereof, and nothing in this deed shall be construed as limiting the ability of the company to do so. 10. Distributable earnings 10.1 Each debenture in issue on a record date shall confer on the holder thereof the right to receive interest in respect of the income period concerned (unless otherwise agreed between the company and the relevant debenture holders) on the basis set out in this clause 7 (unless otherwise agreed between the company and the relevant debenture holder/s) Each A debenture shall confer on the debenture holder thereof the right to receive interest, as follows: Financial years ending 31 August 2011 and 31 August For the income period ending 31 August 2011, a distribution equivalent to 57% of the total distributable income for that period (PBT T S in clause 10.3); For the income period ending 29 February 2012, a distribution of cents each per A debenture ( the first 2012 distribution ); For the income period ending 31 August 2012, a distribution of cents per A debenture ( the second 2012 distribution ) Financial years ending 31 August 2013 to 31 August For the first income periods, a distribution per A debenture equivalent to 105% of the first distribution in respect of the immediate preceding financial year For the second income periods, a distribution per A debenture equivalent to 105% of the second distribution in respect of the immediate preceding financial year Financial years ending 31 August 2018 until repayment of the A debentures For the first income period for the financial year ending 31 August 2017 and for the financial years thereafter until repayment of the A debentures, a distribution per A debenture equivalent to the prior year s fixed distribution for the first income period per A debenture, escalated by an amount equal to the lesser of 5% or the most recently available CPI figure For the second income period for the financial year ending 31 August 2017 and for the financial years thereafter until repayment of the A debentures, a distribution per A debenture equivalent to the prior year s fixed distribution for the second income period in the prior year per A debenture, escalated by an amount equal to the lesser of 5% or the most recently available CPI figure The payment of interest referred to in clauses , and is not guaranteed by the company in the event that the interest available for payment for any particular income period is less than the amount required to make the payment of interest as determined in clauses , and , and in such event the interest payment in respect to the A debenture for such income period shall be the amount of interest available for distribution, apportioned pro rata to each A debenture in issue on the record date concerned. In the event that the interest payment for any income period is less than the amount provided in clauses , and , the difference in the amount paid and that which would have been payable in terms of the applicable sub-clause in clause 10 had the requisite amount of interest being available, shall not accrue or accumulate to the holders of the A debentures and there shall be no right to claim any shortfall In determining the interest distributions with reference to any prior period s distribution, the prior period s distribution shall be the determined or calculated distribution for the equivalent period in the prior year, whether or not such amount was paid having regard to the availability of funds. 125

128 10.3 Each B debenture shall confer on the debenture holder thereof the right to receive interest in respect of each income period in accordance with the following formula: D = PBT T S A n where: D = the distribution per B debenture for the income period concerned; PBT = not less than 99.9% of the profits of the company before taxation and before distributions to debenture holders determined in accordance with the applicable accounting standards and then adjusted to eliminate capital profits and capital losses and to reverse all non-cash items (other than accruals for short-term receivables and payables) brought to account in the determination of PBT, which non-cash items may include, for example: the straight-lining of leases; the revaluation of any property or other investments; fair value adjustments to issued linked units, investments and derivatives; the write-off, amortisation or impairment of any intangible asset including goodwill, eliminate cost and/or expenses incurred in respect of: (i) the acquisition or disposal of a capital asset; (ii) the raising or settlement of any debt or other funding and (iii) the entering into, re-negotiation or early termination of any interest rate hedging arrangement; T = any normal taxation (including deferred taxation) relating to the income period concerned, but excluding any normal taxation (including deferred taxation) in respect of: capital profits or losses and/or, non-cash items eliminated from PBT for purposes of the above formula; and any PBT not distributed as D; S = secondary tax on companies ( STC ) or the like relating to the period concerned; A = the aggregate distribution payable to the holder of the A debentures for the income period concerned; n = the number of B debentures in issue on the record date for the income period concerned. In the event of the directors being in any doubt as regards the determination of the distributable earnings for the income period in question, the directors shall refer the matter to an appropriate independent advisor appointed by the board, acting as expert and not as arbitrator, whose decision shall be final and binding, in the absence of manifest error, on the board. In the event of a dispute as to the appropriateness of the advisor, the chairman of the board shall determine the advisor The directors of the company shall for the purposes of calculation, be entitled in their discretion (subject to the Act and, if the linked units, debentures and/or ordinary shares are listed on the JSE or any other exchange, the Listings Requirements of the JSE or the regulations applicable to the relevant exchange) to ignore or round off downward fractions of a cent in effecting payment of any interest on the debentures. Interest shall be paid by no later than 4 (four) months after the designated date in question or if the debentures are listed on the JSE or on any other exchange, such shorter period prescribed in terms of the Listings Requirements of the JSE or the regulations applicable to any other exchange on which the debentures are listed If the directors, in consultation with the company s auditors, decide that the distribution to holders could be deemed to be excessive from the perspective of the applicable fiscal legislation and/or practice at the time, the directors can recommend to the trustee, in the interest of holders, to limit the interest to an agreed maximum percentage with the balance available for distribution to be paid out as a dividend (net of any secondary tax on companies, dividend tax, South African income tax and other direct taxes) If the company changes the date upon which its financial year ends, the company shall be and it is hereby authorised to change the dates by reference to which the record dates are determined and the dates from which interest is calculated, falls due, accrues and/or becomes payable, provided that: the rights of the debenture holders to interest on their debentures shall not be diminished or adversely affected by such changes; the changes are approved by the trustee, which approval shall not unreasonably be withheld or delayed; and the company shall forthwith notify debenture holders of the changes made by notice or, if the linked units, debentures and/or ordinary shares are listed on an exchange, on SENS (if listed on the JSE) or on any other news service of the relevant exchange, and in such other manner prescribed by the relevant exchange Only debenture holders registered as such on a relevant record date shall be entitled to the payment of interest. In that regard, to the extent that the linked units, debentures and/or ordinary shares are listed on an exchange: 126

129 the company shall, not less than fifteen business days before any record date (or such shorter period as may be permitted or prescribed by the JSE and/or the relevant exchange), publish a notice of such record date on SENS and/or on any other news service of the relevant exchange and in at least one English Johannesburg daily newspaper and such other publications as may be required by the JSE or the relevant exchange on which the debentures are listed, provided that if the JSE or such other exchange dispenses with any such notice requirement, the company shall also, with the consent of the trustee, be entitled to dispense therewith; and provided that the prior written approval of the JSE (or the relevant exchange on which the debentures are listed) has been obtained, the directors of the company may, in their sole discretion, close the register for a period not exceeding ten business days subsequent to each record date Any interest not paid on the due date therefor, shall bear interest from such date up to the date of payment (excluding date of payment), calculated and compounded on a daily basis at the prime rate plus 2%. 12. Repayment, redemption and purchase of debentures 12.1 The debentures shall become repayable: forthwith, subject to clauses 12 and , if a final order of a competent court is made or an effective resolution is passed for the winding up of the company; or if the provisions of clause 13 come into effect Upon the debentures becoming repayable in terms of clause 12.1 above, each debenture holder shall be entitled to receive: the nominal value of the debentures held by the holder; plus any interest determined in accordance with clauses 10.2 and 10.3 accrued and unpaid on the debentures held by such holder, whether due and payable or not, calculated for the period commencing on the day immediately following the last day of the last income period and ending on the day immediately preceding the date of repayment of the debentures (both days inclusive) together with, if applicable, any interest payable in terms of clauses 10.2 and Subject to clause 13.4 below, the debentures shall be redeemable as follows: all of the debentures shall be redeemable at the instance of the debenture holders, notwithstanding the date on which any of the debentures are issued, by debenture special resolution passed on or within 90 days after: August 2041 (the election date ); or the 10 th anniversary of the election date; or every 10 th anniversary of the election date thereafter, which approval shall (provided that the linked units, debentures and/or ordinary shares are listed on the JSE) be granted in accordance with the relevant provisions of the Listings Requirements of the JSE applicable to a specific repurchase of debentures; upon the passing of the debenture special resolution referred to in clause , the debentures shall be redeemed by the company at their nominal value on the last Friday (or if that day is not a business day, the immediately preceding business day) in August of the 5 th year after the year in which the debenture special resolution is passed. Any redemption so made by the company shall have the effect of cancelling the debentures redeemed, which shall be deemed to have been repaid in full by the company. Such debentures may not be re allotted or re issued; and the procedure to be followed by the company in regard to the redemption shall be determined by the company at the appropriate time and be approved by both the trustee, whose approval shall not unreasonably be withheld or delayed, and the JSE, if the debentures are at the time listed on the JSE and/ or such other exchange on which the debentures are listed; not less than 6 weeks notice of redemption shall be given to all debenture holders prior to any redemption being effected For as long as the debentures are listed on the JSE, any redemptions of debentures shall be effected in accordance with the timetable determined in terms of the Listings Requirements of the JSE Subject to clause 12.6, the company or its nominee shall have the right at any time (subject to compliance with the Listings Requirements of the JSE and the Act) to purchase debentures. Purchases shall not be made by the company 127

130 or its nominee at a price that is higher than the market price. Any purchase so made by the company shall have the effect of cancelling the debentures purchased, which shall be deemed to have been repaid in full by the company. Such debentures may not be re allotted or re issued. The company shall advise the trustee of any such repurchase The company may not purchase any debentures if as a result of such purchase the number of A debentures in issue will exceed the number of B debentures in issue. 13. Summary repayment of debentures 13.1 Subject to clause 12, the debentures, together with interest thereon and any other monies repayable in terms of this deed, shall become repayable immediately on the happening of any of the following events: the company fails to pay any monies due by it in terms of this deed on the due date thereof and thereafter persists in such failure for a further twenty-one business days after receipt by it of a written notice from the trustee, given in the manner prescribed in clause 31, demanding that such payment be made; the company commits: a material breach of any material obligation under this deed, which cannot be remedied; or a breach of any obligation under this deed, which cannot be remedied, and fails, within twenty one business days after receipt by it of a written notice from the trustee, given in the manner prescribed in clause 27.2 requiring it to do so, to initiate and thereafter to pursue reasonable steps designed to prevent its recurrence; or any breach of any obligation under this deed, which can be remedied, and fails within twenty one business days or such longer period as may reasonably be required in the circumstances, after receipt by it of a written notice from the trustee, given in the manner prescribed in clause 31, requiring the breach to be remedied, to remedy the breach; the company: disposes of or attempts to dispose of the whole or substantially the whole of its undertaking or the whole or the greater part of its assets; or offers or agrees to enter into any general composition or compromise or arrangement with all its creditors; or defaults or threatens to default in the payment of its liabilities generally; provided that the above clauses shall not apply if the event in question: in the reasonable opinion of the trustee, does not adversely affect the interests of the debenture holders; or is sanctioned by a debenture special resolution; an order is made placing the company under final judicial management; or any material assets of the company are attached under a writ of execution issued out of any court of competent jurisdiction in the Republic of South Africa as a result of a final judgment against the company and the writ is not satisfied or set aside within twenty one business days after the attachment has come to the notice of the board of directors of the company; or the company ceases to carry on its business; or the company defaults in the discharge of any liability which is material in relation to the business of the company and concerning which no bona fide dispute between the company and the creditor in question exists For the purposes of clauses 12.1 and 13.1: an order of court shall not be deemed to be final unless, being appealable, the period for noting such appeal has lapsed without an appeal being noted or having been noted, the appeal is dismissed, abandoned or not proceeded with within the period prescribed by the Rules of Court as extended, if at all, by the Court; and any attachment referred to in clause shall be deemed to have come to the notice of the board of directors of the company, within twenty one business days of being made, unless the contrary shall be shown. The period of twenty-one business days referred to in clause shall be extended, pending any proceedings begun to set aside that writ or remove the attachment, until twenty one business days after a final and unappealable judgment refusing that setting aside or removal. The term writ of execution in clause does not include a writ of attachment ad fundandam jurisdictionem or ad confirmandam jurisdictionem. 128

131 13.3 Upon the happening of any of the events referred to in clause 13.1, the trustee may, in its discretion, require the debentures together with interest accrued thereon, to be repaid in accordance with the provisions of clause 12.1 immediately upon the fulfilment of the conditions contained in clause 15.3, and may, in addition, enforce the powers contained in this deed by giving written notice to the company, in the manner prescribed in clause 31, to that effect and the trustee shall be bound to give such notice if required to do so by a debenture special resolution. The trustee shall further be entitled to take legal action to enforce the provisions hereof The trustee shall be entitled, before carrying out the directions of debenture holders, to require that the debenture holders furnish it with sufficient monies to enable it to meet the expense of giving effect to such directions Notwithstanding any provisions of this deed to the contrary and without limiting the provisions of clause 9.3, the trustee shall have a discretion not to act in terms of clause 7.3 if, on receipt by the company of the notice referred to in clause 31 the default or breach complained of is remedied in such manner that, in the trustee s sole and absolute opinion, the debenture holders will not be prejudiced by non enforcement of the trustee s rights in terms of clause The trustee shall not be required to take any steps to ascertain whether any event, upon the happening of which the debenture is liable to become repayable, shall have occurred and unless and until the trustee shall have knowledge or shall have been served with express written notice of such happening in the manner prescribed in clause 31, the trustee shall be entitled to assume that no such event has taken place Subject to the provisions of section 123 of the Act, the trustee shall not be responsible for any loss to any other person resulting from the exercise or non exercise of the powers, authorities or discretions vested in the trustee in terms of this deed A debenture holder shall not be entitled to enforce his rights under this deed, but all rights of enforcement shall vest in the trustee in accordance with the provisions of this deed. 15. Subordination 15.1 The rights of debenture holders to repayment shall be subordinated to the claims of the unsubordinated creditors in the manner set out below If in the reasonable opinion of the auditor of the company, the company is trading in insolvent circumstances in contravention of any law ( insolvent circumstances ) and the auditor gives the trustee notice in writing to that effect, the debentures shall ipso facto immediately upon receipt by the trustee of such notice be converted into subordinated debentures subordinated to the claims of the unsubordinated creditors The trustee shall notify each debenture holder as soon as possible after receiving such written notification from the auditor. If the company ceases to be trading in insolvent circumstances and the auditor gives a certificate to the trustee to that effect stating that in its opinion insolvent circumstances are unlikely to arise in the short-term, the company and the trustee shall take such reasonable steps to render the debentures unsubordinated If the debentures become subordinated as contemplated in clause 15.2 above and/or if the debentures become repayable in accordance with clause , that repayment shall be made after settlement of the claims of the unsubordinated creditors, who shall be entitled to receive payment in full of their claims of whatever nature before the debenture holders receive any repayment. In order to ensure the fulfilment of the provisions of this clause 15.4: the trustee shall be the only person entitled to make and prove claims on behalf of debenture holders and such claims shall be made and proved in the name of the trustee; any debenture holder claim made or proved by the trustee shall be subject to the condition that no amount shall be paid in respect thereof if and to the extent that such payment would result in the reduction of any amount due to the unsubordinated creditors ( proved conditional claims ); and if the liquidator is unable to or not prepared to accept claims proved subject to the provisions set out in clause then: the trustee shall make or prove claims for the full amount due to the debenture holders; and any amounts paid in respect of the debentures to the trustee pursuant to clause together with the amounts payable to the unsubordinated creditors shall be held by the trustee in trust: for distribution, subject to clause , amongst the unsubordinated creditors in the winding-up as if the claims in respect of the debentures had been subordinated as aforesaid (and the trustee may perform such fiduciary function by repaying to 129

132 the liquidator the amount due to the unsubordinated creditors for distribution by the liquidator accordingly or in any other equitable manner, and the trustee shall not be bound to supervise such distribution); and only the balance (if any) after the claims of the unsubordinated creditors shall have been satisfied, paid or provided for in full, shall be distributed by the trustee amongst the debenture holders If the debentures become subordinated as contemplated in clause 15.2 above and repayable in terms of clause , then: the company shall, within ten business days after the date on which the trustee gives notice to the company in terms of clause 31] (the notice date ) compile from its records a list of unsubordinated creditors as at the notice date (the list ) showing the nature and amount of their claims; within twenty business days after the notice date, the company shall notify all persons on the list in writing by ordinary mail that the debentures are to be repaid and that any objections thereto are to be received by the trustee within a further period of twenty business days from the date on which such notification is posted (the further period ). The company shall be deemed to have notified all unsubordinated creditors even though it fails to notify, inadvertently or otherwise, any particular unsubordinated creditor or creditors. The trustee shall not be obliged to take account of any objections received after the expiry of the further period; if an objection referred to in clause is received, the company shall in its discretion, either: settle the claim of the unsubordinated creditor concerned; or secure the payment of the unsubordinated creditor s claim in any manner reasonably required by the unsubordinated creditor concerned; the auditors of the company shall report to the trustee in respect of compliance by the company with the provisions of clauses to No payment in respect of the debentures shall be made in terms hereof unless the auditors report indicates proper compliance with such provisions, whereafter repayment shall be made to debenture holders Nothing contained in clause 15.5 shall preclude the trustee from making application to wind up the company, in which event the provisions of clause 15.4 shall apply Each debenture holder hereby authorises and directs the trustee on his behalf to take such action as may be necessary or appropriate to effect the subordination provided for in this clause 12 and appoints the trustee as his agent for such purpose If, after the debentures become subordinated and for so long as they so continue to be subordinated, this deed is amended in any manner that affects the vested rights of unsubordinated creditors (and for this purpose any amendment to this clause 12 and clauses 12.1 to 12.3 and 13 shall be deemed to affect those vested rights): the terms of this deed prior to such amendment having been effected shall nevertheless continue in force in respect of any amounts owing to unsubordinated creditors on the date on which the amendment becomes effective; and this deed, as amended, shall apply to unsubordinated creditors in respect of the amounts owing to them which arose after the date upon which the amendment became effective This clause 12 shall constitute a contract for the benefit of the unsubordinated creditors and shall be capable of acceptance by any or all of them. 24. Meetings 24.1 For so long as the debentures are linked to ordinary shares, then any debenture resolutions will be passed at meetings of linked unitholders convened and governed on the basis set out in the Memorandum of Incorporation and the Act for meetings of shareholders In the event that the linked units are delinked, the provisions of the Memorandum of Incorporation and the Act in respect of meetings of shareholders shall apply mutatis mutandis to meetings of debenture holders All debenture holders, every director, the secretary of and the attorney to the company and every other person authorised in writing by the company, may attend and speak at meetings of debenture holders An ordinary resolution and/or special resolution duly passed at a meeting duly convened and held in accordance clauses 25.1 or 25.2 above shall be binding upon the debenture holders, the company and trustee. 130

133 25. The company s obligations The company: 25.1 shall permit the authorised representative of the trustee to inspect the register at all times and shall, on request, furnish the trustee with copies thereof or extracts therefrom, free of charge; 25.2 shall each year send to the trustee and each of the debenture holders a copy of the company s annual financial statements, together with all other documents which the company is required by law or by the Listings Requirements of the JSE, from time to time to send to its debenture holders; 25.3 shall conduct its affairs in a proper and businesslike manner and shall not, without the prior sanction of a special resolution of the debenture holders: alienate the undertaking of the company or the whole or the greater part of the assets of the company; alter any of the rights attaching to the ordinary shares in the company; 25.4 shall not, without the prior sanction of an ordinary resolution of the debenture holders, pass any ordinary or special resolution at a meeting of members of the company: if the interest or any part of the interest remains in arrear and unpaid for a period of six months after the due date of payment of such interest; or if any resolution is proposed which directly affects the interests of the debenture holders, including a resolution for the winding-up of the company or for the reduction of its capital; 25.5 shall keep all accounting and other records that are necessary for its business, and shall have prepared each year such audited balance sheets and income statements as are required by law; 25.6 shall pay to the trustee such fee as the company and the trustee may agree upon from time to time, as remuneration for their ordinary services as such; 25.7 shall pay the trustee on demand all travelling and other expenses or disbursements of any nature which the trustee may reasonably incur in carrying out their duties in terms hereof, notwithstanding the appointment of a liquidator or any judgment which the trustee or one or more of the debenture holders may obtain; 25.8 shall not, without the prior sanction of a special resolution, amend the provisions of its articles of association in relation to the borrowing powers of the company exercisable by the directors. 131

134 Annexure 11 INFORMATION ON THE UNDERWRITER Details in respect of the underwriter, Redefine as at the last practicable date are set out below. 1. CORPORATE INFORMATION Redefine Place of incorporation: Pretoria, Gauteng, South Africa Date of incorporation: 26 August 1999 Registration number: 1999/018591/06 2. NAMES OF THE DIRECTORS Redefine directors Dines Gihwala* (Chairman) Marc Wainer (Chief Executive Officer) Andrew Konig (Financial Director) Greg Heron* Monica Khumalo* Gerald Leissner# Harish Mehta* Bernard Nackan* Diana Perton* David Rice * Independent non-executive # Non-executive 3. NAME OF THE COMPANY SECRETARY Probity Business Services (Proprietary) Limited (Registration number 2000/002046/07) 4. BANKERS The Standard Bank of South Africa Limited 5. AUTHORISED AND ISSUED CAPITAL R 000 Share capital Authorised ordinary shares of 0.1 cent each Issued ordinary shares of 0.1 cent each Less: treasury shares (6) Share premium Debenture capital Issued debentures of 180 cents each Less: treasury debentures (10 578)

135 Annexure 12 BORROWINGS AND LOANS 1. LOANS PAYABLE 1.1 The following material loans were made to the company and its subsidiaries as at the last practicable date: Amount Interest rate Security Terms and conditions of Lender Value of loan outstanding repayment or renewal (R) R million The Standard Tranche A: Trance A: Tranches A, Existing mortgage bonds over Trance A will be repayable on the Bank of R R B and C: the DPIT, MAPIT and Emerald 5th anniversary of the listing date. South Africa R month Jibar Fire portfolios to remain in Limited Tranche B: Tranche B: plus costs (0.97%) place and additional covering Tranche B will be repayable on the R plus reserving mortgage bonds to be registered 4th anniversary of the listing date. costs (0.32%) over the following: Tranche C: Tranche C: plus risk R over the Tranche C will be repayable on the R R margin (1.1% Redefine portfolio of 2 nd anniversary of the listing date. or 1.2%)* properties; and R additional mortgage bonds to be registered over the DPIT portfolio of properties. Unlimited interlinking suretyship (to effect full crosscollateralisation between the three different portfolios owned 100% by Dipula to be signed between all of the following: Dipula DPIT; MAPIT MAPF; Emeral Fire Investments. Total * The risk margin will be dependent on the loan-to-value on drawdown: 1.2% per annum if the loan-to-value on drawdown is between 40% and 45% (both inclusive). 1.1% per annum if the loan-to-value on drawdown is below 40%. 1.2 A R transaction structuring fee is payable on drawdown of the loan. 1.3 The loans were granted to facilitate the acquisition of the investment properties within the property portfolio. 1.4 None of the loans have any conversion or redemption rights. 1.5 The borrowing powers of the directors have not been exceeded during the past three years. There are no exchange control or other restrictions on the borrowing powers of the company or any of its subsidiaries. 2. LOANS RECEIVABLE 2.1 No material loans were made by the company or its subsidiaries as at the last practicable date. 2.2 No loans have been made or security furnished by Dipula or any of its subsidiaries for the benefit of any director, manager or any associate of any director or manager. 3. MATERIAL INTER-COMPANY LOANS On listing there will be the following inter-group loans: 3.1 a loan of R will be payable by MAPF to Dipula; 3.2 a loan of R will be payable by the Dipula Property Trust to Dipula; and 3.3 a loan of R will be payable by MAPIT to MAPF. All the abovementioned loans will bear interest at a variable rate (calculated at mutatis mutandis the rate set out in the debenture trust deed to calculate the debenture interest payable to A- and B-debenture holders) and are repayable on demand. 4. DEBENTURES Details of the debentures which were issued or which will be issued by the company as at the last practicable date are as follows: 4.1 No debentures are payable within 12 months. 4.2 Debentures have been created in terms of the debenture trust deed the salient features of which are set out in Annexure The number, class and value of the debentures issued or to be issued are set out in paragraph 2 of Annexure No debentures have been issued by way of conversion or replacement of debentures previously issued. 133

136 Annexure 13 DETAILS OF THE ACQUISITIONS, DISPOSALS AND VENDORS 1. MATERIAL ACQUISITIONS The table below sets out the material acquisitions within the three years preceding the last practicable date and proposed acquisitions of (or options over) businesses, property, fixed assets and/or securities: Goodwill/ Cost Intangible of asset Date of assets paid to vendor Entity Names of acquisition Loans for and Date of (if purchased Amount Nature of which beneficial by Dipula Consideration (R) incurred manner acquisition within paid for interest acquired Name of Address of shareholders and/or its Linked to finance in which by the preceding goodwill acquired the asset vendor vendor of vendor* subsidiary unit portion Cash portion acquisition accounted for vendor 3 years) by vendor Shares in and Dipula Redefine Redefine Place, Listed entity 1 August N/A N/A N/A N/A claims against 2 Arnold Road, with various 2011 MAPF Rosebank, 2196 shareholders MAP 60 Riviera Road, Mergence 1 August N/A N/A N/A N/A Killarney Mall, Africa 2011 A-linked units 3 rd floor, Office Holdings at R8.58 per suite 300, (Proprietary) A-linked unit Killarney, 2196 Limited and B-linked units at R5.53 per B-linked unit (table continued on next page) 134

137 (continued) Goodwill/ Intangible Cost of asset Date of assets paid to vendor Entity Names of acquisition Loans for and Date of (if purchased Amount Nature of which beneficial by Dipula incurred manner acquisition within paid for interest acquired Name of Address of shareholders and/or its Consideration (R) to finance in which by the preceding goodwill acquired the asset vendor vendor* of vendor* subsidiary Share portion Cash portion acquisition accounted for vendor 3 years) by vendor Shares in and Dipula Standard 3rd Floor The Standard 13 August N/A N/A N/A claims against Bank The Firs Bank of 2011* (the purchase Asakhe Properties South Africa price is calculated (Proprietary) Limited as set out in Limited paragraph 11.2 The Bunang of the prospectus) Trust (26.625%) Safika 89 Central Street Aurora Assets Holdings 1 st Floor Pty Ltd (9.250%) (Proprietary) Safika House The Macozoma Limited Houghton, 2198 Family Trust (26.625%) Standard Bank of South Africa (18.750%) Liberty Holdings (6.250%) Richard Chauke (6.250%) Sothomela Ndukwana (Late Estate) (6.250%) Immovable MAPF Redefine Redefine Place Listed entity 1 August N/A N/A N/A property Properties 2 Arnold Road with various 2011 letting Limited Rosebank unitholders business and 2196 leasehold rights (if applicable) * Refer to paragraph 11.2 of the prospectus. 135

138 1.1 Save for Izak Petersen s interest in the Mergence transaction through his holding in MAP, no other promoter or director or proposed director (or any partnership, syndicate or other association in which a promoter or director or proposed director had an interest) had any beneficial interest, direct or indirect in any transaction relating to any of the assets detailed in this annexure. 1.2 The following guarantees and/or warranties have been given by each of the vendors in respect of the assets sold by them: No restraints of trade have been given by any of the vendors. There are no liabilities for accrued taxation that will be settled in terms of agreements with vendors. 1.3 Set out below is a reconciliation between the amounts paid for the shares in MAPF and Asakhe and the proportionate value of the net assets of the company attributable to such shares acquired: Mergence Asakhe transaction transaction R 000 R 000 Amount paid for shares in company Proportionate value of net assets of company attributable to shares acquired ( ) ( ) Goodwill No director or promotor has any beneficial interest, direct or indirect, in any transcations. 1.5 No cash or securities have been paid or any benefit given within the three preceding years of this prospectus or is proposed to be paid or given to any promoter (not being a director). 1.6 The assets referred to in this annexure have been transferred into the name of Dipula and have not been ceded or pledged to any third party. 1.7 Other than in respect of the Mergence transaction, no other securities will be issued to the vendors of any property acquired or to be acquired. 2. MATERIAL DISPOSALS There were no material disposals within the three years preceding the last practicable date and there are not expected to be any proposed disposals of businesses, properties, fixed assets and/or securities within 6 months of listing. 136

139 Annexure 14 FINANCIAL INFORMATION REQUIRED IN RESPECT OF THE REDEFINE PORTFOLIO IN TERMS OF REGULATION 77 OF THE COMPANIES ACT In terms of Regulation 77 of the Companies Act this annexure includes the historical profits of the Redefine portfolio for the preceding three financial years, being 31 August 2010, 2009 and 2008, and its statement of financial position as at 31August For purposes of this annexure, profit has been determined as the difference between rental income (excluding the effects of lease straight lining) and direct property expenses. Profits of the Redefine portfolio Notes R R R Rental income ApexHi properties Ambit properties Outward properties Direct property expenses 1 ( ) ( ) ( ) ApexHi properties 2 ( ) ( ) Ambit properties 3 ( ) ( ) Outward properties 4 ( ) ( ) Profit before tax Profit after tax Notes to profits of the Redefine portfolio: (In the 2009 financial year Redefine acquired properties from ApexHi Properties Limited ( ApexHi ), Ambit Properties Limited ( Ambit ) and Outward Investments (Pty) Ltd ( Outward ). The historic profits relating to these properties have been split for the 2008 and 2009 financial years as the information was derived from different sources for these periods.) 1. Rental income and direct costs for the 2010 year is for a 12-month period ended 31 August 2010 for all properties on a consolidated basis. 2. Rental income and direct costs for ApexHi for 2008 year is for a 12-month period ended 30 June Rental income and direct costs for ApexHi for the 2009 year is for a 14-month period ended 31 August 2009 which has been annualised for comparative purposes. 3. Rental income and direct costs for Ambit for the 2008 year is for a 12-month period ended 30 September Rental income and direct costs for Ambit for the 2009 year is for an 11-month period ended 31 August 2009 which has been annualised months for comparative purposes. 4. Rental income and direct costs for Outward for the 2008 and 2009 years are for 12-month periods ended 31 August. 5. Taxation has been calculated at 28% of the net profit before tax. Assets and liabilities in respect of the Redefine portfolio 31 August 2010 R ASSETS Non-current assets Investment property Total assets LIABILITIES Net asset value

140 Annexure 15 REPORT BY THE AUDITORS IN RESPECT OF THE REDEFINE TRANSACTION IN TERMS OF REGULATION 78 OF THE COMPANIES ACT The Directors Dipula Income Fund Limited 2 Arnold Road Rosebank July 2011 Dear Sirs AGREED UPON PROCEDURES IN RESPECT OF THE PROPERTIES TO BE ACQUIRED FROM REDEFINE PROPERTIES LIMITED We have performed the procedures agreed with you and enumerated below with respect to the financial information required in respect of the Redefine Portfolio in terms of regulation 77 of the Companies Act, 71 of 2008 (the Act ), as set out in Annexure 14 to the prospectus to be issued to prospective Dipula linked unitholders on or about 26 July 2011 (the prospectus ) ( the regulation 77 financial information ). Our engagement was undertaken in accordance with the International Standards on Related Services applicable to agreed-upon procedures engagements. The procedures were performed solely to assist you in complying with regulation 77 of the Act. The following procedures were performed: Obtain the rental income and direct property costs related to the Properties included in the Redefine Portfolio for the financial periods ended 31 August 2010, 2009 and Ensure the arithmetical accuracy of the aforementioned financial information. Select a sample of Properties included in the Redefine Portfolio and obtain the valuation reports at 31 August 2010 to ensure satisfactory existence and valuation of the Properties. Select a sample of Properties from the financial information and trace rental income to signed lease agreements for the financial years ended 31 August 2010, 2009 and Select a sample of Properties from the financial information and perform analytical review procedures on the direct expenditure for the financial years ended 31 August 2010, 2009 and 2008 by investigating material variances. Findings We report our findings below: Except for the items identified below, the above procedures were satisfactorily performed and no significant issues or unadjusted misstatements have been identified. Exceptions We were unable to obtain the financial information for the Ambit Properties Limited ( Ambit ) and Outward Investments (Pty) Ltd ( Outward ) properties for the 2008 financial period and we were therefore unable to perform the agreed-upon procedures relating to these properties for the 2008 financial period. The information presented in Annexure 13 for the Ambit and Outward properties for the 2008 financial period was collated by the management of Dipula and based on their best estimates for the specific properties. Because the above procedures do not constitute either an audit or a review made in accordance with International Standards on Auditing or International Standards on Review Engagements, we do not express any assurance on the procedures. Had we performed additional procedures or had we performed an audit or review of the financial statements in accordance with International Standards on Auditing or International Standards on Review Engagements, other matters might have come to our attention that would have been reported to you. Our report is solely for the purpose set forth in the first paragraph of this report and for your information. This report relates only to the items specified above, and does not extend to any financial statements of Redefine Properties Limited. We hereby consent to the inclusion of this letter in its entirety in the prospectus to be issued on or about 18 July PKF (Jhb) Inc. Per Ian Vorster Director Chartered Accountants (SA) Registered Auditors 42 Wierda Road West Wierda Valley,

141 Annexure 16 FINANCIAL INFORMATION REQUIRED IN RESPECT OF MERGENCE IN TERMS OF REGULATION 78 SECTION OF THE COMPANIES ACT In terms of Regulation 78 of the Companies Act this annexure includes the historical profits of Mergence for the preceding three financial years being 31 August 2010, 2009 and 2008 and its statement of financial position as at 31August The historical profits and statement of financial position have been restated to take into account the early adoption of IAS 12 relating to deferred taxation. Extract from the statement of comprehensive income of Mergence: Financial year ended Financial year ended Financial year ended 31 August August August 2010 Gross turnover Profit/(Loss) before tax ( ) ( ) Profit/(Loss) after tax ( ) ( ) Total profit or loss attributable to: The owners of the parent ( ) ( ) Non-controlling interest Extract from the statement of financial position of Mergence 31 August 2010 R ASSETS Non-current assets Investment property Municipal deposits Current assets Trade and other receivables Total assets EQUITY AND LIABILITIES Equity Share capital 100 Non-distributable reserve Accumulated loss ( ) Liabilities Non-current liabilities Other financial liabilities Tenant deposits Current liabilities Loans from related parties Trade and other payables Bank overdraft Total liabilities Total equity and liabilities

142 Annexure 17 REPORT BY THE AUDITORS IN RESPECT OF THE MERGENCE TRANSACTION IN TERMS OF REGULATION 78 OF THE COMPANIES ACT The Directors Dipula Income Fund Limited 2 Arnold Road Rosebank July 2011 Dear Sirs Auditors report ON THE FINANCIAL INFORMATION OF MERGENCE IN TERMS OF REGULATION 78 SECTION OF THE COMPANIES ACT We have agreed to provide a report on Mergence s financial information included in annexure 16 for purposes of complying with Regulation 78 of the Companies Act 71 of 2008 (the Act ). In terms of Regulation 78 of the Act, a company issuing a prospectus is required to provide financial information in respect of a subsidary that it will aquire, comprising of the following: the profits and losses for the other juristic person in respect of the three financial years preceding the date of the prospectus; and the assets and liabilities as at the last date to which the annual financial statements were made out, collectively ( the regulation 78 financial information ). In terms of the Mergence transaction Dipula will aquire the entire issued share capital of and claims against Mergence. PKF (JHB) Inc is the appointed auditor of Mergence. We have audited the annual financial statements of Mergence for the years ended 31 August 2010, 2009 and We have expressed an unqualified audit opinion in respect of Mergences s annual financial statements in respect of the aforementioned periods. Our audits were conducted in accordance with International Standards on Auditing and the financial statements prepared in accordance with International Financial Reporting Standards. We have not performed any audit procedures subsequent to our audit opinion dated 5 November 2010, in respect of the year ended 31 August The regulation 78 financial information detailed in Annexure 16 is an extraction from Mergence s annual financial statements for each of the three years ended 31 August 2010, 2009 and 2008, adjusted for the early adoption of IAS 12. In terms of Regulation 78(3) of the Companies Act, 71 of 2008, the pro forma effect of the the above transaction on Dipula would be to consolidate 100% of Mergence of the profits and losses and the assets and liabilities Mergence. This has been reflected in Annexue 16. Yours faithfully PKF (Jhb) Inc. Per Rudi Huiskamp Director Chartered Accountants (SA) Registered Auditors 42 Wierda Road West Wierda Valley,

143 Annexure 18 Financial information required in respect of Asakhe in terms of regulation 78 of the companies act As required in terms of Regulation 78 of the Companies Act, the following are the historical profits/(losses) after taxation of Asakhe and its subsidiary in the preceding three financial years. 31 December December December 2008 Profit/(Loss) after taxation ( ) As required in terms of Regulation 78 to the Companies Act, the following are the assets and liabilities of Asakhe and its subsidiary as at 31 December 2010, being the latest dates to which the annual financial statements were made out. Group 31 December 2010 R ASSETS Non-current assets Investment properties Investments in subsidiary Loans to subsidiary Straight-line lease income adjustment Current assets Trade and other receivables Cash and cash equivalents Total assets EQUITY AND LIABILITIES Shareholders interest Share capital Non-distributable reserve Retained income Non-current liabilities debentures Linked unitholders interest Non-current liabilities Borrowings Deferred tax Current liabilities Trade and other payables Total liabilities Total equity and liabilities

144 Annexure 19 REPORT BY THE AUDITORS IN RESPECT OF THE ASAKHE TRANSACTION IN TERMS OF REGULATION 78 OF THE COMPANIES ACT The Directors Dipula Income Fund Limited 2 Arnold Road Rosebank July 2011 Dear Directors Report of the auditor in connection with the prospectus to be issued by Dipula Income Fund Limited ( Dipula ) in connection with the acquisition of the shares in and claims against Asakhe Realty Fund (Proprietary) Limited ( Asakhe ) KPMG Inc is currently the appointed registered auditor of Asakhe. We have been advised that you intend to issue a prospectus in respect of Dipula and that you require our report in accordance with Regulation 78 of the Companies Act, 71 of 2008, in respect of the Asakhe transaction. We have audited the annual financial statements of Asakhe and the group annual financial statements of Asakhe for each of the three years ended 31 December 2010, 31 December 2009 and 31 December 2008, which comprise the statement of financial position at 31 December 2010, 31 December 2009 and 31 December 2008 for each of the three years, and the statements of comprehensive income, changes in equity and cash flow for each of the years then ended, and the notes to the financial statements, which include a summary of significant accounting policies and other explanatory notes as well as the directors report. We have expressed an unqualified audit opinion in respect of the group annual financial statements for the years ended 31 December 2010, 31 December 2009 and 31 December Our audit reports form part of the group annual financial statements of Asakhe for those periods. Our audits were conducted in accordance with International Standards on Auditing, issued by the Auditing Practices Board. We have not performed any audit procedures subsequent to our audit opinions in respect of the years ended 31 December 2010, 31 December 2009 and 31 December Annexure 18 which details the historical profits and losses, assets and liabilities of Asakhe is an extraction from the group annual financial statements for each of the three years ended 31 December 2010, 31 December 2009 and 31 December The assets and liabilities of Asakhe for the year ended 31 December 2010 are detailed in Annexure 18 and extracted from the group annual financial statements for the year ended 31 december Copies of the group annual financial statements of Asakhe for each of the three years ended 31 December 2010, 31 December 2009 and 31 December 2008, are available at the registered offices of Dipula. In terms of Regulation 78(3) of the Companies Act, 71 of 2008, the pro forma effect of the above Asakhe transaction on Dipula would be to consolidate 100% of the profits and losses and assets and liabilities of Asakhe. This has been reflected in Annexure 18. Yours faithfully KPMG Inc Per M Fouché Chartered Accountants (SA) Registered Auditor Director 142

145 Annexure 20 PRO FORMA FORECAST STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDING 31 AUGUST 2011 Set out below is a pro forma forecast for the year ending 31 August 2011 which provides an analysis of the components of the consolidated forecast for the year ending 31 August 2011, being the Dipula portfolio, the Mergence portfolio, the Asakhe portfolio and the Redefine portfolio. The pro forma forecast for the year ending 31 August 2011 has been prepared on the assumption that the effective date of the Mergence transaction, the Asakhe transaction and the Redefine transaction will be 1 August 2011 and on the following bases: actual figures for 9 months to 31 May 2011 and forecast figures for the remainder of the year ending 31 August 2011 have been used in respect of the Dipula portfolio; and forecast figures from 1 August 2011 to 31 August 2011 have been used in respect of the Mergence portfolio, the Asakhe portfolio and the Redefine portfolio. The key assumptions underpinning the preparation of the pro forma forecast set out in this annexure, are set out below the pro forma forecast. Forecast for the Dipula portfolio and Forecast for Forecast for Consolidated the Mergence the Asakhe the Redefine forecast portfolio portfolio portfolio for the for the for the for the year ending year ending year ending year ending 31 August 2011 R R R R Revenue Gross property rental income Contracted Uncontracted Straight-line rental income adjustment Other income (recoveries) Total revenue Expenses Property operating expenses ( ) ( ) ( ) ( ) Adjustment from straight-line rental income ( ) ( ) ( ) ( ) Asset management fee ( ) (82 543) ( ) ( ) Administrative expenses ( ) (36 042) (42 419) ( ) Operating profit Finance income Finance expenses ( ) ( ) ( ) ( ) Profit before debenture interest Debenture interest ( ) ( ) ( ) ( ) Profit after debenture interest Fair value adjustment on investment property ( ) ( ) Restructuring costs ( ) ( ) Loss before taxation ( ) ( ) Taxation Loss for the year after taxation ( ) ( ) Other comprehensive income Total comprehensive loss ( ) ( ) 143

146 Notes and assumptions: The pro forma forecast incorporates the following material assumptions in respect of revenue and expenses that can be influenced by the directors: Dipula s management s forecast for the year ending 31 August 2011 is based on information derived from the property manager, historical information and work performed by the independent property valuers; Dipula will not acquire or dispose of any properties during the forecast periods other than those being acquired of in terms of the Mergence transaction, the Asakhe transaction and the Redefine transaction; contracted revenue is based on existing lease agreements, whilst uncontracted revenue amounts to 3% for the year ending 31 August 2011; all existing lease agreements are valid; turnover rental (rental income based on the actual turnover of the tenant) has only been forecast for those tenants who have previously been subject to turnover rental clauses; current vacant space has been forecast on a property-by-property basis and has been assumed to remain vacant unless it is deemed probable that such space will be let; leases expiring during the forecast periods have been forecast on a lease-by-lease basis, and in circumstances where discussion with the lessee has proven positive are forecast to be let at current market rates; Dipula s management s forecast property operating expenditure has been determined based on their review of historical expenditure, where available, and discussion with the property manager; and the fair value adjustment in respect of the year ending 31 August 2011 relates to the actual fair value adjustment recognised in Dipula s reviewed interim results for the six months ended 28 February No fair value adjustments to investment properties, other than the adjustment as a result of amortised lease escalations, have been provided for in respect of the year ending 31 August The pro forma forecast incorporates the following material assumptions in respect of revenue and expenses that cannot be influenced by the directors: the effective date of the Mergence transaction, the Asakhe transaction and the Redefine transaction is 1 August 2011; interest-bearing borrowings of R760 million which has been advanced by the Standard Bank of South Africa Limited, will incur interest an all-in rate of 8.79%; it has been assumed that in terms of the private placement, private placement A-linked units and private placement B-linked units are issued at R8.58 and R5.53 per private placement A- and B-linked unit, respectively, raising gross proceeds of R1.39 billion. Of the total private placement units, the sellers will offer private placement A-linked units and private placement B-linked units for sale in order to pay for their stake in Dipula. It is assumed that of the total private placement units, private placement A-linked units and private placement B-linked units are issued at R8.58 and R5.53 per private placement A- and B-linked unit, respectively, raising gross proceeds of R1.087 billion. R284 million of the proceeds will be utilised to pay amounts owing to Redefine by Dipula and Mergence, R169 million will be used to fund the Asakhe transaction, R395 million will be used to fund the Redefine transaction, R123 million will be used to partly settle loans from The Standard Bank of South Africa Limited, R109 million will be used to pay listing costs and break fees for breaking fixes in respect of restructuring debt advanced by The Standard Bank of South Africa Limited and the balance of R7 million being surplus cash; there will be no unforeseen economic factors that will affect the lessees abilities to meet their commitments in terms of existing lease agreements; other income is in respect of the interest earned on loans advanced to the participants under the Dipula unit purchase trust; the amount recognised as the tax line item for the year ending 31 August 2011 relates to the tax on the fair value adjustment recognised in Dipula s reviewed interim results for the six months ended 28 February 2011; and consumption based recoveries are consistent with the independent property valuers property income statements. Material items of expenditure within the property expenses line item include the following: rates and taxes the Dipula and Mergence portfolios (R ), the Asakhe portfolio (R ), the Redefine portfolio (R ); electricity the Dipula and Mergence portfolios (R ), the Asakhe portfolio (R ), the Redefine portfolio (R ); property management expenses the Dipula and Mergence portfolios (R ), the Asakhe portfolio (R ), the Redefine portfolio (R ); and security the Dipula and Mergence portfolios (R ), the Asakhe portfolio (R95 485), the Redefine portfolio (R ). There are no material properties, being a property constituting 15% or more of the value or revenue of the property portfolio. 144

147 Annexure 21 INDEPENDENT REPORTING ACCOUNTANTS LIMITED ASSURANCE REPORT ON THE FORECAST STATEMENTS OF COMPREHENSIVE INCOME OF DIPULA The Directors Dipula Income Fund Limited 2 Arnold Road Rosebank July 2011 Dear Sirs, INDEPENDENT REPORTING ACCOUNTANTS LIMITED ASSURANCE REPORT ON THE FORECAST STATEMENTS OF COMPREHENSIVE INCOME OF DIPULA INCOME FUND LIMITED ( DIPULA ) We have examined the forecast statements of comprehensive income, the forecast vacancy profile by sector and by gross lettable area, and the forecast lease expiry profile based on existing lease agreements (collectively, forecast information ) for the year ending 31 August 2011 and the year ending 31 August 2012, as set out in paragraph 22 and Annexure 20 of the prospectus to prospective Dipula linked unitholders to be dated on or around 26 July 2011 ( the prospectus ). DIRECTORS RESPONSIBILITY The directors are responsible for the forecast information, including the assumptions and notes on which it is based, and for the financial information from which it has been prepared. This responsibility, arising from compliance with the Listings Requirements of the JSE Limited, includes: determining whether the assumptions, barring unforeseen circumstances, provide a reasonable basis for the preparation of the forecast information; whether the forecast information has been properly compiled on the basis stated; and whether the forecast information is presented on a basis consistent with the accounting policies of the company. REPORTING ACCOUNTANTS RESPONSIBILITY Our responsibility is to provide a limited assurance report on the forecast information prepared for the purpose of complying with the Listings Requirements of the JSE Limited and for inclusion in the prospectus to Dipula unitholders. We conducted our limited assurance engagement in accordance with the International Standard on Assurance Engagements applicable to The Examination of Prospective Financial Information and the SAICA Circular entitled the reporting accountants responsibilities in terms of section 13 of the Listings Requirements of the JSE Limited. This standard requires us to obtain sufficient appropriate evidence as to whether or not: management s best-estimate assumptions on which the forecast information is based are not unreasonable and are consistent with the purpose of the information; the forecast information is properly prepared on the basis of the assumptions; the forecast information is properly presented and all material assumptions are adequately disclosed; and the forecast information, is prepared and presented on a basis consistent with the accounting policies of the company for the period concerned. In a limited assurance engagement, the evidence-gathering procedures are more limited than for a reasonable assurance engagement and, therefore, less assurance is obtained than in a reasonable assurance engagement. We believe our evidence obtained is sufficient and appropriate to provide a basis for our limited assurance conclusion. INFORMATION AND SOURCES OF INFORMATION In arriving at our conclusion, we have relied upon forecast financial information prepared by management of Dipula and other information from various public, financial and industry sources. 145

148 The principal sources of information used in arriving at our conclusion are as follows: Management-prepared forecasts for the year ending 31 August 2011 and the year ending 31 August Discussions with the management of Dipula regarding the forecasts presented. Discussions with management of Dipula regarding the prevailing market and economic conditions. Discussions with the property managers with regard to the forecast expenses. Lease agreements for a sample of the leases for the Dipula properties as set out below. Valuation reports in respect of the Dipula prepared by the external property valuer. Acquisition agreements and supplier service agreements. Indicative debt terms from bankers. PROCEDURES In arriving at our conclusion we have performed the following procedures: Rental income: Selections were made from the forecast contracted rental income streams per the profit forecast for the Dipula properties. The total coverage obtained was obtained was 75% and 74% of the forecast contracted rental income for the year ending 31 August 2011 and the year ending 31 August 2012, respectively. For that same sample of properties, forecast recoveries were compared to historical recoveries and the forecast operating expenditure for reasonableness. The terms of the leases were considered so as to ensure that the basis of the recoveries was correct. Existing lease agreements that will expire during the period under review were discussed individually with the property managers. Unless the existing tenant has indicated that it intends to vacate the premises, it has been assumed that the existing tenant will renew the lease agreement and the resultant uncontracted rental income has been included in the forecast (13.6(a) (iii)). Space that is currently vacant has been excluded from the forecast except where the property manager has demonstrated that the vacant space is in the process of being let but that the lease agreement in that regard had not been signed on the date of posting the prospectus. The vacancy levels per the forecast model were compared to the historical vacancy levels in the existing Dipula properties for reasonableness. Uncontracted rental income comprises 2% and 27% of the total forecast revenue for the year ending 31 August 2011 and the year ending 31 August 2012, respectively. EXPENSES For a sample of properties, forecast expenses were compared to the historical expenses. Explanations were obtained for any significant differences. The total expenses tested amounted to 90% and 88% of the total forecast expenses for the year ending 31 August 2011 and the year ending 31 August 2012, respectively. The detailed forecast expenditure was reviewed to ensure that all material expenditure items, as required by paragraph 13.6(a)(v) of the Listings Requirements, were disclosed. PORTFOLIO EXPENSES The forecast interest expense, property management fees and other portfolio expenses were assessed for reasonableness and, where applicable, recalculated. APPLICATION OF ACCOUNTING POLICIES We ascertained that the existing accounting policies of Dipula have been consistently applied in the preparation of the forecast information. MODEL REVIEW In order to ensure that the forecast model for the property income and expenses was accurate and reliable, we performed a high level review to determine the consistency and mathematical accuracy of the model. 146

149 VACANCY PROFILE AND LEASE EXPIRY PROFILE We reviewed each property worksheet prepared by management to ascertain that the vacancy profile and the lease expiry profile included in the model was derived from the correct sources. We compared the vacancy profile and lease expiry profile included in paragraph and of the prospectus to the vacancy profile and lease expiry profile in the model and found them to be in agreement. ACCURACY OF THE INFORMATION We have relied upon and assumed the accuracy and completeness of the information provided to us in writing, or obtained through discussions from the management of Dipula. While our work has involved an analysis of historical financial information and consideration of other information provided to us, our assurance engagement does not constitute an audit or review of historical financial information conducted in accordance with International Standards on Auditing or International Standards on Review Engagements. Accordingly, we do not express an audit or review opinion thereon and assume no responsibility and make no representations in respect of the accuracy or completeness of any information provided to us, in respect of the forecast information and relevant information included in the prospectus of Dipula. CONCLUSION Based on our examination of the evidence obtained, nothing has come to our attention that causes us to believe that: (i) the assumptions, barring unforeseen circumstances, do not provide a reasonable basis for the preparation of the forecast information; (ii) the forecast information has not been properly compiled on the basis stated; (iii) the forecast information has not been properly presented and all material assumptions are not adequately disclosed; (iv) the forecast information is not presented on a basis consistent with the accounting policies of the company. Actual results are likely to be different from the forecast, since anticipated events frequently do not occur as expected and the variation may be material; accordingly no assurance is expressed regarding the achievability of the forecast. Our report and the conclusion contained herein is provided solely for the benefit of the board of directors of Dipula and prospective unitholders of the issuer for the purpose of their consideration of the transaction. This letter is not addressed to and may not be relied upon by any other third party for any purpose whatsoever. CONSENT We consent to the inclusion of this report, which will form part of the prospectus, to be issued on or about 26 July 2011, in the form and context in which it will appear. Yours faithfully PKF (Jhb) Inc. Per Ian Vorster Director Chartered Accountants (SA) Registered Auditors 42 Wierda Road West Wierda Valley,

150 Annexure 22 GROUP ACCOUNTING POLICIES ACCOUNTING POLICIES The principal accounting policies of the group and the company, which are consistent with those adopted in the previous financial period, conform to International Financial Reporting Standards in the manner required by the Companies Act in South Africa. 1. Basis of preparation The financial statements are prepared on the historical-cost basis, except for investment property, derivative financial instruments and financial instruments, designated as financial instruments at fair value through profit or loss, which are measured at fair value. Basis of consolidation Subsidiaries are those entities over whose financial and operating policies the group has the ability to exercise control, so as to obtain benefits from their activities. The results of subsidiaries acquired or disposed of during the period are included in the consolidated income statement from the effective dates of acquisition and to the effective dates of disposal. The consolidated financial statements incorporate the assets, liabilities and the results of the operations and cash flows of the company and its subsidiaries. Intra-group transactions and balances have been eliminated. The accounting policies of the subsidiaries are consistent with those of the holding company. Investment properties Investment properties are those held either to earn rental income or for capital appreciation or both. Investment properties are initially recorded at cost and include transaction costs directly attributable to acquisition. Subsequent expenditure relating to investment properties is capitalised when it is believed that the value or income generating ability of properties is being enhanced. Properties are valued annually by independent external experts on property valuation, with resulting revaluation gains or losses included in net profit or loss for the period. Gains and losses from the revaluation or disposal of investment properties are transferred, net of provisions for income tax on capital gains or losses, to a non-distributable reserve. Impairment The carrying amounts of the group s assets are reviewed at each statement of financial position date, with impairment losses recognised where carrying amounts exceed amounts reasonably recoverable. Financial instruments Financial instruments are initially measured at fair value, which, except for financial instruments measured at fair value through profit or loss and derivatives, include transaction costs. Financial instruments include cash and cash equivalents, investments in listed property securities and trade receivables and payables. Subsequent to initial recognition, financial instruments are measured as follows: Trade receivables: Stated at amortised cost using the effective interest rate method net of impairment losses. Investments: Cash and cash equivalents: Financial liabilities: Trade payables: Designated as available for sale and carried at fair value, being the quoted bid price at the statement of financial position date, through profit or loss. Carried at fair value. Non-derivative financial liabilities, not at fair value through profit or loss, are measured at amortised cost using the effective interest rate method. Carried at amortised cost using the effective interest rate method. 148

151 Cash and cash equivalents Cash and cash equivalents comprise cash resources available to the group and company on demand and include funds available on access facilities. Tax Current tax comprises tax payable calculated on the basis of the expected taxable income for the period, using the tax rates enacted at the statement of financial position date. Deferred tax is provided using the statement of financial position liability method, based on temporary differences. Temporary differences are differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount at statement of financial position date of assets and liabilities, using tax rates enacted or substantively enacted at the statement of financial position date. The effect on deferred tax of any changes in tax rates is recognised in the income statement. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Revenue Revenue comprises basic rental, recovery of rates and operating costs, excluding Value-added Tax. Rental income under operating leases is recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the rental income over the lease period. Provisions Provisions are recognised when the group has present legal or constructive obligations arising from past events, from which outflows of economic benefits are probable, and where reliable estimates can be made of the amount of the obligations. Where the effect of discounting is material, provisions are discounted. The discount rate is a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Goodwill and negative goodwill Goodwill is any excess of the cost of an acquisition over the group s interest in the fair value of the identifiable assets and liabilities acquired. Goodwill is carried at cost, less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis over its estimated useful life. 149

152 Annexure 23 UNAUDITED CONSOLIDATED PRO FORMA STATEMENT OF FINANCIAL POSITION of dipula Set out below is the unaudited consolidated pro forma statement of financial position of the group which is based on the reviewed statement of financial position of Dipula as at 28 February 2011 (as set out in Annexure 26) after adjusting for the Mergence transaction, the Asakhe transaction, the Redefine transaction and the private placement (collectively, the adjustments ), on the bases set out in the notes to the unaudited consolidated pro forma statement of financial position below. It has been assumed that the adjustments took place on 28 February The unaudited consolidated pro forma statement of financial position is the responsibility of the directors of Dipula and is provided for illustrative purposes only to illustrate the effects on Dipula s financial position following the adjustments. Due to the nature of the unaudited consolidated pro forma statement of financial position, it may not fairly present the group s financial position after the adjustments. The independent reporting accountants report on the unaudited consolidated pro forma statement of financial position is set out in Annexure 24. The independent reporting accountants report on the value and existence of the assets and liabilities to be acquired by the group is set out in Annexure 25 to this prospectus. The unaudited consolidated pro forma statement of financial position has been prepared in accordance with IFRS, The Guide on Pro form Financial Information, issued by SAICA and the accounting policies of Dipula which are set out in Annexure 22. Set out below is the unaudited consolidated pro forma statement of financial position of the group as at 28 February 2011: 150

153 Set out below is the unaudited consolidated pro forma statement of financial position of the group as at 28 February Note 1 Note 2 Note 3 Note 4 Note 5 Note 6 Note 7 Note 8 Note 9 Note 10 Note 11 Note 12 Fair value Pro forma adjustment in financial effects respect of after the Subscription properties Fair value Mergence of linked units, acquired in adjustment transaction, consolidation terms of the in respect of the Asakhe of Mergence Asakhe Asakhe properties Redefine transaction, and settlement transaction consolidated acquired in portfolio Transaction the Redefine Unaudited consolidated of Redefine Consolidated and after fair terms of the after fair costs and transaction and pro forma statement of Dipula Mergence shares and Mergence Asakhe consolidation value Redefine Redefine value restructuring Private the private financial position before before loans and Dipula transaction of Asakhe adjustment transaction transaction adjustment costs placement placement R R R R R R R R R R R R R Assets Non-current assets Investment property Goodwill and intangible assets Loans to related parties Prepaid interest Municipal deposits Current assets Trade and other receivables Prepaid interest Cash and cash equivalents Total assets Equity and liabilities Equity ( ) ( ) Stated capital (14 567) - ( ) Non-distributable reserve ( ) ( ) ( ) Accumulated profit / (loss) ( ) ( ) ( ) ( ) ( ) ( ) ( ) 151

154 Note 1 Note 2 Note 3 Note 4 Note 5 Note 6 Note 7 Note 8 Note 9 Note 10 Note 11 Note 12 Fair value Pro forma adjustment in financial effects respect of after the Subscription properties Fair value Mergence of linked units, acquired in adjustment transaction, consolidation terms of the in respect of the Asakhe of Mergence Asakhe Asakhe properties Redefine transaction, Unaudited consolidated and settlement transaction consolidated acquired in portfolio Transaction the Redefine pro forma statement of of Redefine Consolidated and after fair terms of the after fair costs and transaction and financial position Dipula Mergence shares and Mergence Asakhe consolidation value Redefine Redefine value restructuring Private the private (continued) before before loans and Dipula transaction of Asakhe adjustment transaction transaction adjustment costs placement placement R R R R R R R R R R R R R Liabilities Non-current liabilities Debenture capital ( ) ( ) Interest bearing liabilities ( ) ( ) Deferred taxation Tenant deposits Total non-current liabilities ( ) ( ) Current liabilities ( ) ( ) Loans from related parties ( ) Interest bearing liabilities Trade and other payables ( ) Total equity and liabilities Number of A-linked units Number of B-linked units NAV per A-linked unit NAV per B-linked unit Tangible NAV per A-linked unit Tangible NAV per B-linked unit

155 Notes and assumptions to the unaudited consolidated pro forma statement of financial position: 1. Extracted from the reviewed interim results of Dipula at 28 February The interim results were reviewed by PKF (Jhb) Inc. 2. Extracted from the reviewed interim results of Mergence at 28 February The interim results were reviewed by PKF (Jhb) Inc. 3. Represents the following: Conversion of Dijalo s shareholder loans into variable rate loans and the subsequent issue of linked units in Dipula through the issue of A-linked units and B-linked units to Dijalo at R8.58 per A-linked unit and at R5.53 per B-linked unit. The acquisition of all the issued shares of and claims against MAPF for a purchase price of R163 million and the settlement of the purchase price through the issue of A-linked units and B-linked units to MAP at R8.58 per A-linked unit and at R5.53 per B-linked unit. The settlement of Redefine s shares and claims in Dipula and Mergence for R284 million. It is assumed that the recoverable amount of the goodwill arising as a result of the acquisition of Mergence is in excess of its carrying amount of R23 million. 4. Represents the consolidated financial position of Mergence and Dipula before the Asakhe transaction, the Redefine transaction, transaction costs, break fees and capital raised from the private placement. 5. Represents the acquisition of the Asakhe portfolio pursuant to the Askahe transaction in terms of which Dipula will effectively acquire the investment properties. These amounts have been extracted from the audited results of Asakhe for the financial year ended 31 December The financial year end results were audited by KPMG Inc. 6. Represents the following: The fair value adjustment in respect of the Asakhe portfolio. The aggregate fair value of the properties comprising the Asakhe portfolio is assumed to be R , based on the valuations prepared by Alternative Real Estate as detailed in Annexure 6. Deferred taxation has been recognised on the fair value adjustment at 14%. The consolidation of Asakhe and recognition of the purchase price payable. The disposal of two excluded properties by Asakhe as set out in paragraph 11.2 of the prospectus. The proceeds relating to these disposals of R21.4 million has been assumed to be used to settle interest bearing liabilities. Taxation has been raised on the realised profits of R1.1 million. It is assumed that the recoverable amount of the goodwill arising as a result of the acquisition of the Asakhe portfolio is in excess of its carrying amount of R14.2 million. 7. Represents the consolidated financial position of Asakhe after the fair value, value adjustment and disposal of the excluded properties, as set out in note 6 above. 8. Represents the acquisition of the Redefine portfolio pursuant to the Redefine transaction. The purchase consideration paid on acquisition is R Represents the recognition of the fair value adjustment in respect of the Redefine portfolio. The aggregate fair value of the properties comprising the Redefine portfolio is assumed to be R , based on the valuations prepared by Alternative Real Estate as detailed in Annexure 6. Deferred taxation has been recognised on the fair value adjustment at 14%. 10. Represents the sub-total of the Redefine portfolio acquired, after recognition of the fair value adjustment set out in note 9 above. 11. Represents non-recurring transaction costs of the private placement and listing of R as well as the costs associated with breaking the fixes in respect of the interest-bearing debt advanced by The Standard Bank of South Africa Limited to Dipula and Mergence of R The transaction costs have been capitalised to stated capital and debenture capital in terms of IAS 39: Financial Instruments: Recognition and Measurement. The costs associated with breaking the fixes have been expensed. 12. Represents the proceeds raised in terms of the private placement and the deployment of the proceeds raised. It has been assumed that in terms of the private placement, private placement A-linked units and private placement B-linked units are issued at R8.58 and R5.53 per private placement A- and B-linked unit, respectively, raising gross proceeds of R1.087 billion. It is assumed that R284 million of the proceeds will be utilised to pay amounts owing to Redefine by Dipula and Mergence, R169 million will be used to fund the Asakhe transaction, R395 million will be used to fund the Redefine transaction, R123 million will be used to partly settle loans from The Standard Bank of South Africa Limited, R109 million will be used to pay listing costs and break fees for breaking fixes in respect of restructuring debt advanced by The Standard Bank of South Africa Limited and the balance of R7 million being surplus cash. (This excludes additional units of private placement A-linked units and private placement B-linked units which the sellers will offer for sale.) 153

156 Annexure 24 INDEPENDENT REPORTING ACCOUNTANTS LIMITED ASSURANCE REPORT ON THE UNAUDITED CONSOLIDATED PRO FORMA STATEMENT OF FINANCIAL POSITION OF DIPULA The Directors Dipula Income Fund Limited 2 Arnold Road Rosebank July 2011 Dear Sirs, INDEPENDENT REPORTING ACCOUNTANTS LIMITED ASSURANCE REPORT ON THE UNAUDITED CONSOLIDATED PRO FORMA STATEMENT OF FINANCIAL POSITION OF DIPULA PROPERTY FUND LIMITED ( DIPULA ) We have performed our limited assurance engagement in respect of the unaudited consolidated pro forma statement of financial position set out in Annexure 23 to the prospectus to prospective Dipula linked unitholders to be dated on or about 26 July 2011 (the prospectus ). The unaudited consolidated pro forma statement of financial position has been prepared in accordance with the requirements of the JSE Limited ( JSE ) Listings Requirements, for illustrative purposes only, to provide information about how the transaction might have affected the reported historical financial information presented, had the transaction been undertaken at the date of the pro forma statement of financial position being reported on. DIRECTORS RESPONSIBILITY The directors are responsible for the compilation, contents and presentation of the unaudited consolidated pro forma statement of financial position contained in the prospectus and for the financial information from which it has been prepared. Their responsibility includes determining that: the unaudited consolidated pro forma statement of financial position has been properly compiled on the basis stated; the basis is consistent with the accounting policies of Dipula; and the pro forma adjustments are appropriate for the purposes of the unaudited consolidated pro forma statement of financial position disclosed in terms of the JSE Listings Requirements. REPORTING ACCOUNTANTS RESPONSIBILITY Our responsibility is to express our limited assurance conclusion on the unaudited consolidated pro forma statement of financial position included in the prospectus to Dipula unitholders. We conducted our assurance engagement in accordance with the International Standard on Assurance Engagements applicable to Assurance Engagements Other Than Audits or Reviews of Historical Financial Information and the Guide on Pro Forma Financial Information issued by SAICA. This standard requires us to obtain sufficient appropriate evidence on which to base our conclusion. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the pro forma financial information, beyond that owed to those to whom those reports were addressed by us at the dates of their issue. SOURCES OF INFORMATION AND WORK PERFORMED Our procedures consisted primarily of comparing the unadjusted financial information with the source documents, considering the pro forma adjustments in light of the accounting policies of Dipula, considering the evidence supporting the pro forma adjustments and discussing the adjusted pro forma financial information with the directors of the company in respect of the transaction that is the subject of the prospectus. 154

157 In arriving at our conclusion, we have relied upon financial information prepared by the directors of Dipula and other information from various public, financial and industry sources. While our work performed has involved an analysis of the historical published audited financial information and other information provided to us, our assurance engagement does not constitute an audit or review of any of the underlying financial information conducted in accordance with International Standards on Auditing or International Standards on Review Engagements and, accordingly, we do not express an audit or review opinion. In a limited assurance engagement, the evidence-gathering procedures are more limited than for a reasonable assurance engagement and therefore less assurance is obtained than in a reasonable assurance engagement. We believe our evidence obtained is sufficient and appropriate to provide a basis for our conclusion. CONCLUSION Based on our examination of the evidence obtained, nothing has come to our attention, which causes us to believe that, in terms of Sections 8.17 and 8.30 of the JSE Listings Requirements: the unaudited consolidated pro forma statement of financial position has not been properly compiled on the basis stated; such basis is inconsistent with the accounting policies of Dipula; the adjustments are not appropriate for the purposes of the unaudited consolidated pro forma statement of financial position as disclosed. CONSENT We consent to the inclusion of this report, which will form part of the prospectus, to be issued on or about 26 July 2011, in the form and context in which it will appear. Yours faithfully PKF (Jhb) Inc. Per Ian Vorster Director Chartered Accountants (SA) Registered Auditors 42 Wierda Road West Wierda Valley,

158 Annexure 25 INDEPENDENT REPORTING ACCOUNTANTS REVIEW REPORT ON VALUE AND EXISTENCE OF THE ASSETS AND LIABILITIES ACQUIRED The Directors Dipula Income Fund Limited 2 Arnold Road Rosebank July 2011 Dear Sirs REVIEW CONCLUSION ON THE ASSETS AND LIABILITIES ACQUIRED BY dipula income fund limited ( Dipula ) Introduction We have reviewed the assets and liabilities acquired by Dipula reflected in the following adjustment columns: the Mergance transaction; the Asakhe consolidated after fair value adjustment; and the Redefine after fair value adjustment, (collectively the adjustment columns ) of the pro forma statement of financial position included in Annexure 23 to the prospectus to be issued to prospective Dipula linked unitholders on or about 26 July 2011 (the prospectus ). The directors are responsible for the compilation, contents and preparation of the adjustment columns of the unaudited pro forma statement of financial position. Our responsibility is to express a review conclusion on the value and existence of the assets and liabilities acquired reflected in the adjustment columns in accordance with the accounting policies adopted by the issuer and the recognition and measurement criteria of IFRS. Scope of review We conducted our review in accordance with International Standards on Review Engagements 2400, Engagements to review financial statements. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the assets and liabilities acquired by Dipula reflected in the adjustment columns are free of material misstatement. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the assets and liabilities acquired by Dipula reflected in the adjustment column of the pro forma statement of financial position included in Annexure 23 to the prospectus are not fairly presented, in all material respects, in accordance with the accounting policies adopted by the company, International Financial Reporting Standards and in the manner required by the Companies Act of South Africa. PKF (Jhb) Inc. Per Ian Vorster Director Chartered Accountants (SA) Registered Auditors 42 Wierda Road West Wierda Valley,

159 Annexure 26 HISTORICAL FINANCIAL INFORMATION OF DIPULA These are extracts from the audited financial statements of Dipula for the year ended 31 August 2010 and the reviewed statement of financial position of Dipula as at 28 February 2011 and should be read in conjunction with the independent reporting accountants report provided in Annexure 27. These extracts are the responsibility of the board of Dipula. Nature of business The company is a property holding and investment company. There has been no change in the nature of the business of the company or in the nature of the property, plant and equipment and any change in policy regarding the use thereof. Share capital 100 ordinary shares were issued at a par value of R1 each on incorporation. Debentures and linked units No debentures have been issued as at 31 August Dividends No dividends were declared in respect of the year ended 31 August Subsequent events Other than as disclosed in this prospectus to which this historical financial information is attached, no material fact or circumstance has occurred between the latest financial year end being 31 August 2010 and the date of this prospectus. Schemes involving staff There are no schemes involving staff members. COMMENTARY Revenue increased by 2% between 2009 and 2010 due to tough market conditions. Finance costs during this period remained fairly stable between the two years as a result of our conservative management of interest rates. Total comprehensive income was up 85% thanks to good growth in the fair value of the property portfolio which was up by 4.5% year on year. The company showed accumulated losses due to the current high gearing levels due to funding being provided in the form of fairly high yielding shareholder loans. 157

160 STATEMENT OF FINANCIAL POSITION Group 28 February 31 August 31 August Notes R R R Assets Non-current assets Investment property Loans to related parties Prepaid interest Municipal deposits Current assets Trade and other receivables Prepaid interest Cash and cash equivalents Total assets EQUITY AND LIABILITIES Equity Share capital Non-distributable reserve Accumulated losses ( ) ( ) ( ) Liabilities Non-current liabilities Loans from related parties Interest bearing liabilities Deferred taxation Tenant deposits Current liabilities Loans from related parties Interest bearing liabilities Trade and other payables Total liabilities Total equity and liabilities Net asset value per share Tangible net asset value per share

161 ACCOUNTING POLICIES FOR THE YEAR ENDED 31 AUGUST Presentation of Annual Financial Statements The annual financial statements have been prepared in accordance with International Financial Reporting Standards and the Companies Act of South Africa. The annual financial statements have been prepared on the historical cost basis, except for investment properties which are carried at fair value through profit and loss and certain financial instruments, which are measured using fair value or amortised cost models, and incorporate the principal accounting policies set out below. The preparation of the annual financial statements necessitates the use of estimates, assumptions and judgements. These estimates and assumptions affect the reported amounts of assets and liabilities at the reporting date as well as affecting the reported income and expense for the year (refer to note 1.1). These accounting policies are consistent with the previous period. 1.1 Basis of consolidation The consolidated annual financial statements incorporate the annual financial statements of the company and all entities, including special purpose entities, which are controlled by the company. Control exists when the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The results of subsidiaries are included in the consolidated annual financial statements from the effective date of acquisition to the effective date of disposal. Adjustments are made when necessary to the annual financial statements of subsidiaries to bring their accounting policies in line with those of the group. All intra-group transactions, balances, income and expenses are eliminated in full on consolidation. Non-controlling interests in the net assets of consolidated subsidiaries are identified and recognised separately from the group s interest therein, and are recognised within equity. Losses of subsidiaries attributable to non-controlling interests are allocated to the non-controlling interest even if this results in a debit balance being recognised for non- controlling interest. Transactions which result in changes in ownership levels, where the group has control of the subsidiary both before and after the transaction are regarded as equity transactions and are recognised directly in the statement of changes in equity. The difference between the fair value of consideration paid or received and the movement in non-controlling interest for such transactions is recognised in equity attributable to the owners of the parent. Where a subsidiary is disposed of and a non-controlling shareholding is retained, the remaining investment is measured to fair value with the adjustment to fair value recognised in profit or loss as part of the gain or loss on disposal of the controlling interest. 1.2 Significant judgements and sources of estimation uncertainty In preparing the annual financial statements, management is required to make estimates and assumptions that affect the amounts represented in the annual financial statements and related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the annual financial statements. Significant judgements include: Trade receivables and trade payables Normal trade credit terms in South Africa have been judged to be equal to 60 days. Where trade receivables and payables are settled beyond the normal trade credit terms, the transaction is deemed to include a financing arrangement. The resulting trade receivable or trade payable is discounted from the date of settlement to day 60 using an appropriate discount rate. The group assesses its trade receivables and trade payables for impairment at each balance sheet date. In determining whether an impairment loss should be recorded in profit or loss, the group makes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from a financial asset. Fair value estimation The property portfolio is valued annually. Investment properties are valued at least annually by management and by external valuators from time to time. 159

162 The majority of valuations have been undertaken on an open market basis with consideration given to the future earnings potential and applying an appropriate capitalisation rate to a property. The remaining valuations have been based on the discounted cash flow of future income streams. Taxation Judgement is required in determining the provision for income taxes due to the complexity of legislation. There are many transactions and calculations for which the ultimate taxation determination is uncertain during the ordinary course of business. The group recognises liabilities for anticipated taxation audit issues based on estimates of whether additional taxes will be due. Where the final taxation outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income taxation and deferred taxation provisions in the period in which such determination is made. The group recognises the net future taxation benefit related to deferred income taxation assets to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred income taxation assets requires the group to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing taxation laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the group to realise the net deferred taxation assets recorded at the end of the reporting period could be impacted. 1.3 Investment property Investment property is initially recognised at cost. Transaction costs are included in the initial measurement. Costs include costs incurred initially and costs incurred subsequently to add to, or to replace a part of, or service a property. If a replacement part is recognised in the carrying amount of the investment property, the carrying amount of the replaced part is derecognised. Fair value Subsequent to initial measurement investment property is measured at fair value. A gain or loss arising from a change in fair value is included in net profit or loss for the period in which it arises. These gains and losses are transferred to non-distributable reserves. 1.4 Financial instruments Initial recognition and measurement Financial instruments are recognised initially when the group becomes a party to the contractual provisions of the instruments. The group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement. Financial instruments are measured initially at fair value, except for equity investments for which a fair value is not determinable, which are measured at cost and are classified as available-for-sale financial assets. For financial instruments which are not at fair value through profit or loss, transaction costs are included in the initial measurement of the instrument. Subsequent measurement Financial instruments at fair value through profit or loss are subsequently measured at fair value, with gains and losses arising from changes in fair value being included in profit or loss for the period. Loans and receivables are subsequently measured at amortised cost, using the effective interest method, less accumulated impairment losses. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in equity until the asset is disposed of or determined to be impaired. Interest on available-for-sale financial assets calculated using the effective interest method is recognised in profit or loss as part of other income. Dividends received on available-for-sale equity instruments are recognised in profit or loss as part of other income when the group s right to receive payment is established. Financial liabilities at amortised cost are subsequently measured at amortised cost, using the effective interest method. 160

163 Impairment of financial assets At each reporting date the group assesses all financial assets, other than those at fair value through profit or loss, to determine whether there is objective evidence that a financial asset or group of financial assets has been impaired. For amounts due to the group, significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy and default of payments are all considered indicators of impairment. Impairment losses are recognised in profit or loss. Impairment losses are reversed when an increase in the financial asset s recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to the restriction that the carrying amount of the financial asset at the date that the impairment is reversed shall not exceed what the carrying amount would have been had the impairment not been recognised. Reversals of impairment losses are recognised in profit or loss except for equity investments classified as availablefor-sale. Where financial assets are impaired through use of an allowance account, the amount of the loss is recognised in profit or loss within operating expenses. When such assets are written off, the write off is made against the relevant allowance account. Subsequent recoveries of amounts previously written off are credited against operating expenses. Loans to/(from) related parties These include loans to and from holding companies, fellow subsidiaries, subsidiaries, joint ventures and associates and are recognised initially at fair value plus direct transaction costs. Loans to related parties are classified as loans and receivables. Loans from related are classified as financial liabilities measured at amortised cost. Trade and other receivables Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the asset s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in profit or loss within operating expenses. When a trade receivable is uncollectable, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against operating expenses in profit or loss. Trade and other receivables are classified as loans and receivables. Trade and other payables Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method. Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initially and subsequently recorded at fair value. 1.5 Taxation Income tax assets and liabilities Income taxation for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset. Income taxation liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the taxation authorities, using the taxation rates (and taxation laws) that have been enacted or substantively enacted by the end of the reporting period. 161

164 Deferred taxation assets and liabilities A deferred taxation liability is recognised for all taxable temporary differences, except to the extent that the deferred taxation liability arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction, affects neither accounting profit nor taxable profit/(tax loss). A deferred taxation asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised. A deferred taxation asset is not recognised when it arises from the initial recognition of an asset or liability in a transaction at the time of the transaction, affects neither accounting profit nor taxable profit/(tax loss). A deferred taxation asset is recognised for the carry forward of unused taxation losses and unused Secondary taxation on companies credits to the extent that it is probable that future taxable profit will be available against which the unused taxation losses and unused Secondary taxation on companies credits can be utilised. Deferred taxation assets and liabilities are measured at the taxation rates that are expected to apply to the period when the asset is realised or the liability is settled, based on taxation rates (and taxation laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred tax on the fair value adjustment of investment property has been provided for on the income tax rate. Taxation expenses Current and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the extent that the taxation arises from: a transaction or event which is recognised, in the same or a different period, to other comprehensive income; a transaction or event which is recognised, in the same or a different period, directly in equity; or a business combination. Current taxation and deferred taxes are charged or credited to other comprehensive income if the taxation relates to items that are credited or charged, in the same or a different period, to other comprehensive income. Current taxation and deferred taxes are charged or credited directly to equity if the taxation relates to items that are credited or charged, in the same or a different period, directly in equity. 1.6 Leases A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership. Operating leases lessor Operating lease income is recognised as an income on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments is recognised as an operating lease asset. This asset is not discounted. Initial direct costs incurred in negotiating and arranging operating leases are added to the carrying amount of the leased asset and recognised as an expense over the lease term on the same basis as the lease income. Income for leases is disclosed under revenue in profit or loss. 1.7 Impairment of assets The group assesses at each end of the reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the group estimates the recoverable amount of the asset. If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cashgenerating unit to which the asset belongs is determined. The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use. If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss. 162

165 1.8 Provisions and contingencies Provisions are recognised when: the group has a present obligation as a result of a past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and a reliable estimate can be made of the obligation. The amount of a provision is the present value of the expenditure expected to be required to settle the obligation. Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement shall be recognised when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement shall be treated as a separate asset. The amount recognised for the reimbursement shall not exceed the amount of the provision. Provisions are not recognised for future operating losses. If an entity has a contract that is onerous, the present obligation under the contract shall be recognised and measured as a provision. Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed in note Fixed Property Revenue Fixed property revenue comprises gross rent and operating expense recoveries from the letting of property net of value added tax. Property revenue reflects income recognised on a straight line basis over the period of the lease. Interest is recognised, in profit or loss, using the effective interest rate method Borrowing costs Borrowing costs are recognised as an expense in the period in which they are incurred. 163

166 NOTES TO THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST New standards and interpretations 2.1 Standards and interpretations effective and adopted in the current year In the current year, the group has adopted the following standards and interpretations that are effective for the current financial year and that are relevant to its operations: Standards IFRS 1: First-time Adoption of International Financial Reporting Standards Measurement of the cost of investments in subsidiaries, jointly controlled entities and associates when adopting IFRS for the first time Annual periods beginning on or after 1 January 2009 IFRS 2: Share-based Payment Amendment relating to vesting conditions and cancellations Clarification of scope of IFRS 2 and IFRS 3 revised Annual periods beginning on or after 1 January 2009 and 1 July 2009, respectively IFRS 3: Business Combinations Amendments to accounting for business combinations Annual periods beginning on or after 1 July 2009 IFRS 5: Non-current Assets Held for Sale and Discontinued Operations Plan to sell the controlling interest in a subsidiary Amendments resulting from IFRIC 17 for assets held for distribution to owners Annual periods beginning on or after 1 July 2009 IFRS 7: Financial Instruments: Disclosures Presentation of finance costs Amendment dealing with improving disclosures about financial instruments Amendments enhancing disclosures about for value and liquidity risk Annual periods beginning on or after 1 January 2009, 1 January 2009 and 1 January 2009, respectively IFRS 8: Operating Segments New standard on segment reporting (replaces IAS 14) Annual periods beginning on or after 1 January 2009 IAS 1: Presentation of Financial Statements Amendments to the structure of the financial statements Annual periods beginning on or after 1 January 2009 IAS 10: Events after the Reporting Period Dividends declare after the end of the reporting period Amendment resulting from the issue of IFRIC 17 Annual periods beginning on or after 1 January 2009 and 1 July 2009, respectively IAS 16: Property, Plant and Equipment Recoverable amount definitions Accounting for sale of assets held for rental 164

167 Annual periods beginning on or after 1 January 2009 IAS 18: Revenue Costs of originating a loan Annual periods beginning on or after 1 January 2009 IAS 19: Employee Benefits Curtailments and negative past service cost Plan administration costs Replacement of term fall due Guidance on contingent liabilities Annual periods beginning on or after 1 January 2009 IAS 20: Accounting for Government Grants and Disclosure of Government Assistance Government loans with a below-market rate of interest Consistency of germinology with other IFRSs Annual periods beginning on or after 1 January 2009 IAS 23: Borrowing Costs Amendment requiring capitalisation only model Components of borrowing costs Annual periods beginning on or after 1 January 2009 IAS 27: Consolidated and separate financial statements Amendments dealing with measurement of the cost of investments when adopting IFRS for the first time Consequential amendments from changes to Business Combinations Measurement of subsidiary held for sale in separate financial statements Annual periods beginning on or after 1 January 2009 IAS 28: Investments in Associates Consequential amendments from changes to Business Combinations Required disclosures when investments in associates are accounted for at fair value through profit or loss Impairment of investment in associates Annual periods beginning on or after 1 January 2009 IAS 29: Financial Reporting in Hyperinflationary Economics Description of measurement basis in financial statements Consistency of terminology with other IFRSs Annual periods beginning on or after 1 January 2009 IAS 31: Interests in Joint Ventures Consequential amendments from changes to Business Combinations Required disclosures when interests in jointly controlled entities are accounted for at fair value Annual periods beginning on or after 1 January 2009 IAS 32: Financial Instruments: Presentation Certain financial instruments will be classified as equity whereas prior to these amendments they would have been classified as financial liabilities 165

168 Annual periods beginning on or after 1 January 2009 IAS 34: Interim Financial Reporting Earnings per share disclosures in interim financial reports Annual periods beginning on or after 1 January 2009 IAS 36: Impairment of Assets Disclosure of estimates used to determine recoverable amount Annual periods beginning on or after 1 January 2009 IAS 38: Intangible Assets Advertising and promotional activities Unit of production method of amortisation Annual periods beginning on or after 1 January 2009 Additional consequential amendments arising from revised IFRS 3 Measuring the fair value of an intangible asset acquired in a business combination Annual periods beginning on or after 1 January 2009 IAS 39: Financial Instruments: Recognition and Measurement Reclassification of derivatives into or out of the classification of at fair value through profit or loss Designating and documenting hedges at the segment level Applicable effective interest rate on cessation of fair value hedge accounting Annual periods beginning on or after 1 January 2009 Clarifies two hedge accounting issues Inflation in a financial hedged item A one-sided risk in a hedged item Annual periods beginning on or after 1 July 2009 Amendments for embedded derivatives when reclassifying financial instruments Annual periods beginning on or after 30 June 2009 IAS 40: Investment Property Property under construction or development for future use as investment property Consistency of terminology with IAS 8 Investment property held under lease Annual periods beginning on or after 1 January 2009 IAS 41: Agriculture Discount rate for fair value calculations Additional biological transformation Examples of agricultural produce and products Point-of-sale costs Annual periods beginning on or after 1 January 2009 Interpretations IFRIC 9: (amended) Reassessment of Embedded Derivatives Scope of IFRIC 9 and revised IFRS 3 166

169 Annual periods beginning on or after 1 July 2009 IFRIC 12: Service Concession Arrangements Annual periods beginning on or after 1 January 2008 IFRIC 13: Customer Loyalty Programmes Annual periods beginning on or after 1 July 2008 IFRIC 14: IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interactions Annual periods beginning on or after 1 January 2008 IFRIC 15: Agreements for the Construction of Real Estate Annual periods beginning on or after 1 January 2009 IFRIC 16 (amended) Hedges of a Net Investment in a Foreign Operation Amendment to the restriction on the entity the entity that can hold hedging instruments Annual periods beginning on or after 1 October July 2009 IFRIC 17: Distributions of Non-Cash Assets to Owners Annual periods beginning on or after 1 July 2009 IFRIC 18: Transfer of Assets from Customers Annual periods beginning on or after 1 July 2009 The directors anticipate that the adoption of these standards and interpretations in future periods will have no material impact on the financial statements of the company. 3. Financial assets by category The accounting policies for financial instruments have been applied to the line items below: Group 31 August 2010 Loans and Non-financial R receivables instruments Total Investment property Loan to related party Municipal deposits Prepaid interest (current and long term) Trade and other receivables Cash and cash equivalents Group 31 August 2009 Loans and Non-financial R receivables instruments Total Investment property Loan to related party Municipal deposits Trade and other receivables Cash and cash equivalents

170 4. Financial liabilities by category The accounting policies for financial instruments have been applied to the line items below: Group 31 August 2010 Financial liabilities Non-financial R at amortised cost instruments Total Loans from related parties (short and long term) Interest bearing liabilities Deferred taxation Trade and other payables Tenant deposits non current Group 31 August 2009 Financial liabilities Non-financial R at amortised cost instruments Total Loans from related parties (short and long term) Interest bearing liabilities Deferred taxation Trade and other payables Tenant deposits non current Investment property 31 August August 2009 Cost/ Accumulated Carrying Cost/ Accumulated Carrying R Valuation depreciation value Valuation depreciation value Investment property at fair value Reconciliation of investment property Group 31 August 2010 Straight line Opening Net lease Net tenant income Fair value balance Additions commission installations accrual adjustment Total Investment property ( ) ( ) Reconciliation of investment property Group 31 August 2009 Straight line Opening Net lease Net tenant income Fair value R balance Additions commission installations accrual adjustment Total Investment property The effective date of the investment property valuation was 31 August Valuations were performed by management, reviewed and approved by certain directors common to both Dipula Property Investment Fund (Proprietary) Limited and Redefine Properties Opco (Proprietary) Limited (previously Outward Investments (Proprietary) Limited). The valuation was based on open market values for existing use. Pledged as security Carrying value of assets pledged as security: Group 31 August 31 August R R Investment property used as security for a mortgage bond in favour of Standard Bank Property Advisory Services (a division of The Standard Bank of South Africa Limited) refer note

171 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Group 31 August 31 August R R 6. Loans to/(from) related parties Shareholder loans receivable Dipula Properties Opco (Proprietary) Limited (previously Outward Investments (Proprietary) Limited) The loan is unsecured, interest free and repayable on demand. Dijalo Property Services (Proprietary) Limited The loan is unsecured, interest free and repayable on demand Shareholder loans payable Dijalo Property Services (Proprietary) Limited ( ) ( ) R bears interest at a fixed rate of 11.5% per annum and is repayable on 21 January The loan is secured by second mortgage bond over The Dipula Property Investment Trust property portfolio. Interest is payable monthly in arrears. R (2009: R ) is unsecured, bears interest at a fixed rate of 10.29% per annum and is repayable on 31 August Interest is payable monthly in arrears. R (2009: R ) is unsecured, bears interest at a fixed rate of 14.43% per annum and is repayable on 31 August Interest is payable monthly in arrears. R (2009: R ) is unsecured, bears interest at the prime overdraft rate less 1% and has no fixed terms of repayment. Interest is payable monthly in arrears. Redefine Properties Opco (Proprietary) Limited ( ) ( ) (previously Outward Investments (Proprietary) Limited) The above loan is unsecured, bears interest at the prime overdraft rate less 2.2% and has no fixed terms of repayment. Interest is payable monthly in arrears. ( ) ( ) Non-current assets Non-current liabilities ( ) Current liabilities ( ) ( ) ( ) ( ) 169

172 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Group 31 August 31 August R R 7. Trade and other receivables Trade receivables Prepayments Sundry debtors Trade and other receivables past due but not impaired At 31 August 2010, R528,735 (2009: R675,161) were past due but not impaired. The ageing of amounts past due but not impaired is as follows: days days days and over Trade and other receivables impaired As of 31 August 2010, trade and other receivables of R (2009: R ) were impaired and provided for. Reconciliation of provision for impairment of trade and other receivables: Opening balance Provision for impairment Amounts written off as uncollectable ( ) The maximum exposure to credit risk at the reporting date is the fair value of each class of loan mentioned above. The group does not hold any collateral as security. The following factors were considered in determining the amount of the impairment: an individual account by account assessment based on past credit history; extent/level of security held such as deposits and/or bank guarantees; and any prior knowledge of debtor insolvency or other risk Maximum exposure to credit risk Total debtors less impairment provision Less: Deposits included in trade and other payables paid by tenants (limited to the trade debtor balance as at reporting date) ( ) ( ) 8. Cash and cash equivalents Cash and cash equivalents consist of: Bank balances

173 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Group 31 August 31 August R R 9. Share capital Authorised 1000 Ordinary shares of R1 each The unissued ordinary shares are under the control of the directors in terms of a resolution of members passed at the last annual general meeting. This authority remains in force until the next annual general meeting. Issued 100 Ordinary shares of R1 each Interest bearing liabilities Held at amortised cost Standard Bank Property Finance and Advisory Services (a division of The Standard Bank of South Africa Limited) The above loan is made up of a various loans with the following terms and conditions: R bears interest at a fixed rate of 10.27% per annum and is repayable on 5 June Interest is payable monthly in arrears. R bears interest at stepped fixed rates ranging from 9% currently to 13.93% in 2015 and is repayable on 1 April 2015 Interest is payable monthly in arrears. R bears interest at a fixed rate of 13.42% per annum and is repayable on 6 May Interest is payable monthly in arrears. R bears interest at the prime overdraft rate less 1% and is repayable on 2 April Interest is payable monthly in arrears. R bears interest at a fixed rate of 10.27% per annum and is repayable on 29 July Interest is payable monthly in arrears. The above loans are all secured by first mortgage bond over The Dipula Property Investment Trust property portfolio (refer note 5). Non-current liabilities At amortised cost Current liabilities At amortised cost

174 NOTES TO THE ANNUAL FINANCIAL STATEMENTS Group 31 August 31 August R R 11. Deferred taxation Deferred tax liability Deferred taxation Reconciliation of deferred taxation liability: At beginning of the year Fair value adjustment on investment property Straight-line lease adjustment Computed tax loss ( ) ( ) Provision for doubtful debts ( ) Balance at year end comprises: Fair value adjustment to investment Property Straight lining of leases Provision for doubtful debts ( ) ( ) Computed tax loss ( ) ( ) Trade and other payables Trade payables Value-added Taxation Other payables Tenant deposits Accrued expenses Operating leases Minimum lease payments receivable receivable within one year receivable within two to five years receivable later than five years Minimum lease payments comprise contractual rental income and operating expense recoveries due in terms of signed lease agreements on investment properties. These figures exclude the straight line rental adjustments. 14. Contingent liabilities Guarantees totalling to R (2009: R ) have been issued on the group s behalf by The Standard Bank of South Africa Limited to various municipal councils in lieu of deposits for services. 172

175 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 15. Related parties Relationships Shareholder companies The Dipula Property Investment Fund (Pty) Ltd is owned 51% by Dijalo Property Services (Pty) Ltd and 49% by Redefine Properties Opco (Pty) Ltd (previously Outward Investments (Pty) Ltd) Special purpose entity consolidated: The Dipula Property Investment Trust Group 31 August 31 August R R Related party balances Loan accounts Owing to related parties (refer note 6) Dijalo Property Services (Proprietary) Limited Redefine Properties Opco (Proprietary) Limited (previously Outward Investments (Proprietary) Limited) Loan accounts Receivable from related parties (refer note 6) Dijalo Property Services (Proprietary) Limited Redefine Properties Opco (Proprietary) Limited (previously Outward Investments (Proprietary) Limited) 16. Risk management Financial risk management Formalisation of a risk management framework is the responsibility of the group and the board of directors. The framework ensures: risk taking within levels acceptable to the trust as a whole; efficient liquidity management and control of funding assets; improved risk management and control; and efficient allocation of capital across activities to maximise returns of income streams. Whilst the board of directors is ultimately responsible for the management of risk, the board relies on management to operate within the control structures and frameworks, established by the board and has delegated the responsibility for implementation of the risk framework to functions within operating units. The group s risk management framework is summarised below. Key responsibilities lie with the following management bodies and committees: * Board of directors: responsible for the strategic direction, supervision and control of the entity and for defining the entity s tolerance for risk. The nature of key risks to which the entity is exposed are categorised as follows: Liquidity risk The group maintains sufficient cash and ensures that funds remain available through an adequate amount of credit facilities. The group manages its liquidity requirements by monitoring forecast cash flows. The table below analyses the group s financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. 173

176 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 16. Risk management (continued) Group No fixed At 31 August 2010 Less than 1 Between 1 Between 2 repayment R year and 2 years and 6 years terms Interest bearing borrowings Loans from related parties Trade and other payables Tenant deposits No fixed At 31 August 2009 Less than 1 Between 1 Between 2 repayment R year and 2 years and 6 years terms Interest bearing borrowings Loans from related parties Trade and other payables Tenant deposits Interest rate risk As the group has no significant interest-bearing assets, the group s income and operating cash flows are substantially independent of changes in market interest rates. An interest rate sensitivity analysis is set out below. This analysis indicates the financial assets and liabilities sensitive to interest rate fluctuations and the statement of comprehensive income and tax effects of possible changes in the rates to which the financial assets and liabilities are linked. At 31 August 2010, if interest rates on loans from related parties (refer note 6) had been 1% higher/lower with all other variables held constant, post-tax profit for the year would have been R (2009: R ) lower/higher, mainly as a result of higher/lower interest expense on floating rate borrowings. The resulting tax effect would have been R (2009: R ). At 31 August 2010, if interest rates on interest bearing liabilities (refer note 10) had been 1% higher/lower with all other variables held constant, post-tax profit for the year would have been R (2009: R ) lower/higher, mainly as a result of higher/lower interest expense on floating rate borrowings. The resulting tax effect would have been R (R69 739). At 31 August 2010, if interest rates on cash and cash equivalents (refer note 8) had been 1% higher/lower with all other variables held constant, post-tax profit for the year would have been R8 646 (2009: R39 773) lower/higher, mainly as a result of higher/lower interest expense on floating rate borrowings. The resulting tax effect would have been R5 764 (2009: R26 515). Credit risk Credit risk relates to potential exposure on trade receivables, municipal deposits and bank balances. The group limits its counterparty exposure arising from bank balances by dealing only with well established financial institutions of high credit standing. Ongoing credit evaluation of the financial position of customers is performed. Refer note 6 for further details regarding credit exposure. Loans are only advanced to parties known to the directors where recoverability is assured. At the reporting date, the group did not consider there to be any significant concentration of credit risk which has not been adequately provided for. 174

177 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 16. Risk management (continued) Capital rate management The group s objectives when managing capital are to safeguard the group s ability to continue as a going concern in order to provide returns for beneficiaries, shareholders and benefits for other stakeholders. The group sets the amount of capital in proportion to risk. The group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. Consistent with others in the industry, the trust monitors capital on the basis of the debt-to-equity ratio. This ratio is calculated as net debt equity. Net debt is calculated as total interest bearing debt (as shown in the statement of financial position) less cash and cash equivalents. The gearing at 31 August 2010 and 2009, respectively, was as follows: Total borrowings Group 31 August 31 August Notes R R Loans from related parties Interest-bearing borrowings Less: Cash and cash equivalents 8 ( ) ( ) Net debt Total equity Debt : Equity ratio 7:1 10:1 17. Restatement of historic financial statements due to early adoption of IAS 12 The adjustment relates to a restatement of deferred taxation due to the early adoption of IAS R R R Effect on deferred taxation balance: Previously reported Effect of adoption of IAS 12 ( ) ( ) ( ) Currently reported Effect on profit for the year: Previously reported Effect of adoption of IAS Currently reported

178 Annexure 27 INDEPENDENT REPORTING ACCOUNTANTS REPORT ON THE HISTORICAL FINANCIAL INFORMATION OF DIPULA The Directors Dipula Income Fund Limited 2 Arnold Road Rosebank July 2011 Dear Sirs INDEPENDENT REPORTING ACCOUNTANTS REPORT ON THE HISTORICAL FINANCIAL INFORMATION OF DIPULA INCOME FUND LIMITED ( DIPULA ) Introduction At your request we present our independent reporting accountants report on the statements of financial position of Dipula at 31 August 2010 and 28 February 2011 ( historical financial information ), for the purposes of complying with the Listings Requirements of the JSE Limited (the JSE Listings Requirements ) and for inclusion in the prospectus dated on or about 26 July 2011 ( prospectus ). We are the independent auditor of Dipula. Responsibility of the directors The directors of Dipula are responsible for the compilation, contents and preparation of the prospectus in accordance with the JSE Listings Requirements. The directors are also responsible for the fair presentation in accordance with International Financial Reporting Standards of the historical financial information contained therein to which this independent reporting accountants report relates. Responsibility of the independent reporting accountants Our responsibility is to express an audit opinion on the statement of financial position of Dipula at 31 August 2010 and a review opinion on the statement of financial position at 28 February 2011 and 31 August 2009 based on our audit of the statement of financial position at 31 August 2010 and our review of the statement of financial position at 28 February 2011 and 31 August 2009 included in Annexure 26 to the prospectus. Statement of financial position at 31 August 2010 Scope of the audit We conducted our audit of the statement of financial position at 31 August 2010 in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the statement of financial position is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial information. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial information, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial information in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial information. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Audit opinion on the statement of financial position at 31 August 2010 In our opinion, the historical financial information for the year ended 31 August 2010, included in the prospectus presents fairly, in all material respects, the financial position of Dipula for the year ended 31 August 2010 in accordance with International Financial Reporting Standards and in the manner required by the Companies Act of South Africa (Act 61 of 1973) and the JSE Listings Requirements. 176

179 Scope of the review We conducted our review of the statement of financial position at 28 February 2011 and 31 August 2009 in accordance with the International Standards on Review Engagements 2400, Engagements to review financial statements. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the historical financial information is free of material misstatement. A review is limited primarily to enquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit in respect of the statement of financial position at 28 February 2011 and 31 August 2009 and, accordingly, we do not express an audit opinion. Review conclusion on the statement of financial position at 28 February 2011 and 31 August 2009 Based on our review nothing has come to our attention that causes us to believe that the statement of financial position of Dipula at 28 February 2011 and 31 August 2009 is not fairly presented, in all material respects, for the purposes of the prospectus, in accordance with International Financial Reporting Standards and in the manner required by the Companies Act, 61 of 1973, and the JSE Limited Listings Requirements. PKF (Jhb) Inc. Per Rudi Huiskamp Partner Chartered Accountants (SA) Registered Auditors 42 Wierda Road West Wierda Valley,

180 Annexure 28 CORPORATE GOVERNANCE STATEMENT Dipula is fully committed to and compliant with, where practical for an organisation of this size and nature, the principles of the Code of Corporate Practices and Conduct set out in the King Report on Corporate Governance ( King III ). In so doing, the directors recognise the need to conduct the enterprise with integrity and provide effective leadership based on an ethical foundation. This includes timely, relevant and meaningful reporting to its linked unitholders and other stakeholders providing a proper and objective perspective of the company and its activities, direct the strategy and operations of the company to build a sustainable business and consider short and long-term impacts of the strategy on the economy, society and the environment. The board will ensure that the group is seen to be a responsible corporate citizen through the implementation of the corporate governance policies provided below. Dipula currently does not have a nomination committee as it is the board s view that this committee is currently not necessary. The development and implementation of nomination policies as would have been undertaken by a nomination committee, will be undertaken by the risk and audit committee and the board as whole, respectively. The company will consider the formation of the said committee in due course and as the need arises. 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 King III. The board will review these from time to time. The formal steps taken by the directors are summarised below: 1. BOARD OF DIRECTORS The board of directors consists of 3 executive directors and 4 independent non-executive directors. The Chairperson is an independent non-executive director whose role is separate from that of the Chief Executive Officer ( CEO ). The board will ensure that there is an appropriate balance of power and authority on the board, such that no one individual or block of individuals can dominate the board s decision taking. The non executive directors are individuals of calibre credibility and have the necessary skills and experience to bring judgment to bear independent of management, on issues of strategy, performance, resources, transformation, diversity and employment equity, standards of conduct and evaluation of performance. The board will be responsible for the strategic direction of the company and will set the values to which the company will adhere and will formulate a code of ethics in this regard which will be clearly articulated to the group as a whole, as provided below. The board has appointed a CEO and will establish a framework for delegation of authority and will ensure that the role and function of the CEO will be formalised and the CEOs performance evaluated against specified criteria. The current board s size, diversity of professional expertise and demographics make it a highly effective board with regards to Dipula s current strategies. The board shall ensure that in appointing successive board members the board as a whole will continue to reflect, whenever possible, a diverse set of professional and personal backgrounds. The information needs of the board will be reviewed annually and directors will have unrestricted access to all company information, records, documents and property to enable them to discharge their responsibilities sufficiently. Efficient and timely methods of informing and briefing board members prior to board meetings will be developed and in this regard steps have been taken to identify and monitor key risk areas, key performance areas and non-financial aspects relevant to Dipula. In this context, the directors will be afforded information in respect of key performance indicators, variance reports and industry trends. The board will establish a formal orientation programme to familiarise incoming directors with the company s operations, senior management and its business environment, and to induct them in their fiduciary duties and responsibilities. Directors will receive further briefings from time to time on relevant new laws and regulations as well as on changing economic risks. Directors will ensure that they have a working understanding of applicable laws. The board will ensure that the company complies with applicable laws and considers adherence to non-binding industry rules and codes and standards. In deciding whether or not non-binding rules shall be complied with, the board will factor the appropriate and ethical considerations that must be taken into account. New directors with no or limited board experience will receive development and education to inform them of their duties, responsibilities, powers and potential liabilities. A succession plan for the CEO and other executive directors will be developed by the board and reported on during the 2012 Annual General Meeting. 178

181 The board will disclose details in the integrated report of how it discharged its responsibilities to establish an effective compliance framework and process. The board will also participate in the external asset manager and external property manager s establishment of process and compliance framework policies and the risk and audit committee will report on its implementation to the board. The board will appraise the chairperson s performance and ability to add value on an annual or such other basis as the board may determine. The chairperson, or a sub-committee appointed by the board, will appraise the performance of the CEO, the asset manager and the property manager, at least annually. No executive directors hold service contracts. All directors will be subject to retirement by rotation and re-election by Dipula linked unitholders at least once every three years in accordance with the company s memorandum of incorporation ( MOI ). The board will develop a charter setting out its responsibilities for the adoption of strategic plans, monitoring of operational performance and management, determination of policy and processes to ensure the integrity of the company s risk management and internal controls, communication policy and director selection, orientation and evaluation. The group member companies shall adopt the governance framework, policies, processes and procedures as set by Dipula s board in consultation with the directors of Dipula s various subsidiaries. Board meetings will be held at least quarterly, with additional meetings convened when circumstances necessitate. The board will set the strategic objectives of the company and determine investment and performance criteria as well as being responsible for the sustainability, proper management, control, compliance and ethical behaviour of the businesses under its direction. The board will establish a number of committees to give detailed attention to certain of its responsibilities and which will operate within defined, written terms of reference. The board is composed of and will continue to be composed of independently minded individuals who will assess each transaction on its merits. The board will determine a policy for detailing the manner in which a director s interest in transactions is to be determined and the interested director s involvement in the decision making process. Real or perceived conflicts will be disclosed to the board and managed in accordance with the predetermined policy used to assess a director s interest in transactions. Independent directors will not undergo rigorous review of independence after 9 years of serving as the company s director as all non-executive directors independence will be reviewed from time to time. Unless directors acquire newly attained interest in the company, the company does not believe that the passage of time leads to a lack of independence. The board as a whole and individual directors will have their overall performance periodically reviewed in order to identify areas for improvement in the discharge of individual director s and the board s functions on an annual basis. This review will be undertaken by the Chairperson and, if so determined by the board, an independent service provider. An overview of the appraisal process, results and action plan will be disclosed in the group s integrated report. Nominations for the reappointment of a director will only occur after the evaluation of the performance and attendance of the director. The board will determine a policy for detailing the procedures for appointments to the board. Such appointments to be formal and transparent and a matter for the board as a whole assisted where appropriate by the risk and audit committee. The service agreement in terms of the external asset manager has been appointed provides that appointments by the asset manager of any executives must be approved by the company. In this regard board will provide input in management appointments. The board has delegated certain functions to the risk and audit committee, the remuneration committee and the investment committee. The board is conscious of the fact that such delegation of duties is not an abdication of the board members responsibilities. The various committees terms of reference shall be reviewed annually and such terms of reference will be disclosed in the group s integrated report. External advisors and executive directors who are not members of specific committees shall attend committee meetings by invitation, if deemed appropriate by the relevant committees. 2. RISK AND AUDIT COMMITTEE The board in accordance with the requirement set out in Dipula s MOI has established a risk and audit committee comprising 3 independent non-executive directors, of whom one shall be the chairperson. The audit committee is comprised of Younaid Waja (the chairperson) Eltie Links, and Brian Azizollahoff. All of the members are financially literate (and the board will ensure that any future appointees will be financially literate). The committee s primary objective will be 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 will be required to provide satisfaction to the board that adequate and appropriate financial and operating controls are 179

182 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 risk and audit committee will be responsible for overseeing the integrated report, in this regard the risk and audit committee will have regard to all factors and risks that may impact on the integrity of the integrated report, the board will review and comment on the financial statements and the disclosure of sustainability issues included in the integrated report. Further the risk and audit committee will have general oversight over and report on the sustainability issues, will review the integrated report to ensure that the information contained therein is reliable and does not contradict the financial aspects of the report and will oversee the provision of assurance over sustainability issues. The risk and audit committee will review the content of the group s interim results and will engage external auditors to provide assurance on the summarised financial information. Within this context, the board is responsible for the group s systems of internal, financial and operational control. The executive directors will be 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 will be performed by the appointed asset and property managers and accompanied by external audits conducted by external practitioners, whose work will be overseen by and reported to the risk and audit committee. These systems are designed to provide reasonable, but not absolute, assurance as to the integrity and reliability of the financial statements, to safeguard, verify and maintain accountability of its assets and to identify and minimise significant fraud, potential liability, loss and material misstatement while complying with applicable laws and regulations. An audit committee charter is to be prepared and reported to the board. The risk and audit committee will meet at least three times a year. Executives and managers responsible for finance and the external auditors will be in attendance. The risk and audit committee will review the finance function of the company on an annual basis. The risk and audit committee may authorise engaging for non-audit services with the appointed external auditors or any other practising firm of auditors, after consideration of the following: the essence of the work to be performed may not be of a nature that any reasonable and informed observer would construe as being detrimental to good corporate governance or in conflict with that normally undertaken by the accountancy profession; the nature of the work being performed will not affect the independence of the appointed external auditors in undertaking the normal audit assignments; the work being done may not conflict with any requirement of generally accepted accounting practice or principles of good corporate governance; consideration to the operational structure, internal standards and processes that were adopted by the audit firm in order to ensure that audit independence is maintained in the event that such audit firm is engaged to perform accounting or other non-audit services to its client base. Specifically: the company may not appoint a firm of auditors to improve systems or processes where such firm of auditors will later be required to express a view as to the functionality or effectiveness of such systems or processes; the company may not appoint a firm of auditors to provide services where such firm of auditors will later be required to express a view on the fair representation of information the result of these services to the company; the total fee earned by an audit firm for non-audit services in any financial year of the company, expressed as a percentage of the total fee for audit services, may not exceed 35% without the approval of the board; a firm of auditors will not be engaged to perform any management functions (e.g. acting as curator) without the express prior approval of the board. A firm of auditors may be engaged to perform operational functions, including that of bookkeeping, when such firm of auditors are not the appointed external auditors of the company and work is being performed under management supervision. The audit committee may delegate the approval of the appointment of a firm of auditors for non-audit services to management when the cumulative total budgeted cost for an assignment or assignments does not exceed R from the date of the last report-back of the use of the appointed external auditors or any other practising firm of auditors, to the audit committee. Management shall report back on the use of the appointed external auditors or any other practising firm of auditors at meetings of the audit committee. Information relating to the use of non-audit services from the appointed external auditors of the company shall be disclosed in the notes to the annual financial statements. Separate disclosure of the amounts paid to the appointed external auditors for non-audit services as opposed to audit services, shall be made in the annual financial statements. The audit committee must consider on an annual basis and satisfy itself of the appropriateness of the expertise and experience of the financial director and the company must confirm this by reporting to linked unitholders in its annual report that the audit committee has executed this responsibility. The audit committee has satisfied itself of the appropriateness of the expertise and experience of the financial director, Brigitte de Bruyn. 180

183 With regards to the appointment of directors, the risk and audit committee will undertake background and reference checks before the appointment of directors. The board shall make full disclosures regarding individual directors to enable linked unitholders to make their own assessment of the directors. The risk and audit committee will report at the company s annual general meeting how it has discharged its duties during the financial year to be reported on. 3. RISK MANAGEMENT AND INTERNAL CONTROLS Risk and internal controls management will be the responsibility of the risk and audit committee. The company has outsourced the asset management and property management services to an external asset manager and property manager ( management ) which will be responsible for the implementation of risk management and internal controls processes subject to oversight of the risk and audit committee. The risk and audit committee will participate in the management s process of formulating and implementing the risk management plan and will report the plan adopted by management to the board. The objective of risk management is to identify, assess, manage and monitor the risks to which the business is exposed, including, but not limited to, information technology risk. The board will be responsible for ensuring the adoption of appropriate risk management policies by management. The board will also ensure that there are processes in place between itself and management enabling complete, timely, relevant, accurate and accessible risk disclosure to linked unitholders. The most significant risks faced by Dipula are tenant vacancies and termination or non-renewal of management contracts for property portfolios under management. 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 will need to be carefully monitored and covered. With assistance from management, or if considered appropriate, expert risk consultants, risks will be assessed and appropriate insurance cover purchased for all material risks above pre-determined self-insured limits. Levels of cover will be re-assessed annually in light of claims experiences and events affecting the group, internally and externally. To enable the risk and audit committee to meet its responsibilities, the risk and audit committee will set standards and management will implement systems of internal control and an effective risk-based internal audit, comprising policies, procedures, systems and information to assist in: safeguarding assets and reducing the risk of loss, error, fraud and other irregularities; ensuring the accuracy and completeness of accounting records and reporting; the timely preparation of reliable financial statements and information in compliance with relevant legislation and generally accepted accounting policies and practices; increasing the probability of anticipating unpredictable risk; and The board will provide comment in the integrated report on the effectiveness of the system and process of risk management. The board will ensure that management considers and implements the appropriate risk responses and IT strategy. 4. REMUNERATION COMMITTEE The executive directors are employees of and paid by the asset manager. Accordingly the remuneration committee s only responsibility will be for determining non-executive directors and directors committee fees which will be approved by special resolution of the linked unitholders. No non-executive or executive directors hold service contracts. The remuneration committee is comprised of Brian Azizollahoff (chairman), Zanele Matlala and Saul Gumede. 5. INVESTMENT COMMITTEE The board will appoint an investment committee. The investment committee is comprised of Brian Azizollahoff (chairperson), Izak Petersen, Saul Gumede and Brigitte de Bruyn. The committee is not comprised of a majority of independent non-executive directors as recommended in King III due to the current number of non-independent directors. The board will amend the composition of the committee to bring it in line with the King III recommendation that it be made up of a majority of independent non-executive directors when appropriate. The investment committee will meet when necessary to consider acquisitions, development and sales of investment properties. The board of directors will determine the committee s authority level. 181

184 6. DIRECTORS DEALINGS AND PROFESSIONAL ADVICE The company will operate a policy of prohibiting dealings by directors, the company secretary and certain other managers in periods immediately preceding the announcement of its interim and year-end financial results, any period while the company is trading under cautionary announcement and at any other time deemed necessary by the board. The board will establish a procedure for directors, in furtherance of their duties, to take independent professional advice, if necessary, at the company s expense. All directors will have access to the advice and services of the company secretary. 7. THE COMPANY SECRETARY The company secretary, who is not a director of the company or any of its group members, will provide the board as a whole and directors individually with detailed guidance as to how their responsibilities should be properly discharged in the best interest of the company. The company secretary will provide a central source of guidance and advice to the board, and within the company, on matters of ethics and good corporate governance and will assist with the appointment of directors to the board. The company secretary will be subjected to an annual evaluation by the board. The company secretary shall maintain an arms-length relationship with the board. 8. COMMUNICATION It will be the policy of Dipula to meet regularly with institutional linked unitholders, private investors and investment analysts, as well as to provide presentations on the company and its performance and shall promote a stakeholder inclusive approach in operating the company. The board appreciates that linked unitholder perceptions affect the company s reputation and in this regard will establish policy for the engagement of the company s stakeholders. The board will encourage shareholders to attend annual general meetings. 9. INTEGRATED REPORTING The group s annual report and accounts include detailed reviews of the company, together with a detailed review of the financial results and financing positions. In this way the boards seek to present a balanced and understandable assessment of the group s position and prospects. The group will establish comprehensive management reporting disciplines which include the preparation of monthly management accounts, detailed budgets and forecasts. Monthly results, the financial position and cash flows of operating units will be reported against approved budgets and compared to the prior period. Any profit and cash flow forecasts and working capital levels published by the company (including those appearing in this prospectus) are reviewed regularly. Sustainability reporting and disclosure shall be integrated with the company s financial reporting. The financials will state the company s positive and negative impacts and detail whatever steps have been taken to ameliorate the negative impacts. The board will ensure the integrity of the group s integrated report. 10. ETHICS As previously stated Dipula has outsourced its asset management and property management services and has no employees. However Dipula is committed to promoting the highest standards of ethical behaviour amongst all persons involved in the group s operation, to this extent, a Code of Ethics for the company is to be adopted and an ethics committee will be established within 2 years of Dipula being converted to a public company. The board will ensure that the asset manager and the property manager adopt corporate citizenship policies. The board will ensure that the company s performance and interaction with its stakeholders is guided by the Constitution and the bill of rights as provided in the Constitution. The board will consider the impact of its property holding business on the environment, society and the economy. The board and the executive management will be assessed annually on the basis provided in paragraph 1 above, and including its adherence to corporate citizenship principles and ethics performance. 11. BUSINESS RESCUE The board will consider business rescue proceedings or other turn-around mechanisms as soon as the company is financially distressed as defined in the Companies Act. In this regard the board will ensure the company s solvency and liquidity is continuously monitored, a suitable practitioner will be appointed in the event that business rescue is adopted and the practitioner will be required to provide security for the value of the assets of the company. 182 PRINTED BY INCE (PTY) LTD Ref. No. W2CF12520

185 Dipula Income Fund Limited (formerly Dipula Property Fund (Proprietary) Limited ) (Incorporated in the Republic of South Africa) (Registration number 2005/013963/06) JSE code for A-linked units: DIA JSE code for B-linked units: DIB ISIN for A-linked units: ZAE ISIN for B-linked units: ZAE ( Dipula or the company ) THE PRIVATE PLACEMENT APPLICATION FORM TO BE COMPLETED BY INVITED INVESTORS An offer to subscribe for A-linked units and B-linked units in Dipula ( private placement units ) at an issue price of R8.58 and R5.53 ( private placement price ), respectively ( the private placement ), to invited investors in terms of the prospectus which was registered by the Companies and Intellectual Property Commission on Wednesday, 27 July 2011 (the prospectus ). Successful applicants will be advised of their allotment of private placement units on or from Monday, 15 August Please refer to the instructions overleaf before completing this application form. Dematerialised linked units The allocated private placement units will be transferred to successful invited investors in dematerialised form only. Accordingly, all successful invited investors must appoint a Central Securities Depository Participant ( CSDP ) directly, or a broker, to receive and hold the dematerialised linked units on their behalf. Should a linked unitholder require a physical linked unit certificate for its Dipula linked units, it will have to rematerialise its Dipula linked units following the listing and should contact its CSDP or broker to do so. As allocated private placement units will be transferred to successful invited investors on a delivery-versus-payment basis, payment will be made by your CSDP or broker on your behalf. Invited investors should complete this application form in respect of the private placement and hand deliver, fax, post or it to: If delivered by hand or by courier: If posted: Attention: Warren Lawlor Attention: Warren Lawlor Java Capital (Proprietary) Limited Java Capital (Proprietary) Limited 2nd Floor PO Box Arnold Road Parklands, 2121 Rosebank, 2196 If faxed: If ed: Attention: Warren Lawlor Dipula@javacapital.co.za In the event that this application form is submitted through a broker, the broker must stamp this application form. This application form must be received by no later than 12:00 on Thursday, 11 August Invited investors must contact their CSDP or broker and advise them that they have submitted the application form as instructed above. Pursuant to the application, invited investors must make arrangements with their CSDP or broker for payment to be made as stipulated in the agreement governing their relationship with their CSDP or broker, in respect of the private placement units allocated to them in terms of the private placement by the settlement date, expected to be Wednesday, 17 August Conditions precedent The private placement is subject to: raising a minimum capital amount of R1.39 billion; and achieving a spread of linked unit holders in respect of both the A-linked unit capital and B-linked unit capital acceptable to the JSE Limited. Reservation of rights The directors of Dipula reserve the right to refuse any application(s), either in whole or in part, or to pro rate any or all application(s) (whether or not received timeously) in any manner as they may, in their sole and absolute discretion, determine. The directors of Dipula reserve the right to accept or reject, either in whole or in part, any private placement application form should the terms contained in the prospectus, of which this private placement application form forms part, and the instructions herein not be properly complied with. Applications must be for a minimum of A-linked units or B-linked units per invited investor. Allocations of the private placement units will only be made in multiples of A-linked units and B-linked units.