2006A N N UA L R E P O R T

SECTION 1

Chairman’s report Page 2 - 3

Business philosophy

A Broader perspective

Financial performance

Board functioning

Conclusion

SECTION 2

Asset manager’s report page 4 -7

Introduction

Keydifferences

Portfolio overview

Financialoverview

Futureprospects

SECTION 3

Reportof the independentauditors page 9

Statementof directors' responsibility page 10

Directors’ report page 11 -14

Consolidatedbalancesheet page 16

Consolidated incomestatement page 17

Consolidatedstatementof changes inequity page 18

Companystatementof change inequity page 19

Consolidatedcash flow statement page 20

Accountingpolicies page 21 -25

Notes to theconsolidated financial statements page 26 -51

Countryof Incorporation SouthAfrica

Natureof business Propertydevelopmentand investmentholdingcompany

Directors BF VanNiekerk -Chairman LLS VanderWatt -ChiefExecutiveOfficer

GJOosthuizen -ExecutiveDirector NFJHaasbroek -Non-ExecutiveDirector

PTredoux -Non-ExecutiveDirector

RegisteredOffice Building A,GlenwoodOffice Park, 41SpriteAvenue,FaerieGlen,0043,Pretoria,SouthAfrica

BusinessAddress OberonStreet,GlenfieldOffice Park, MertechBuilding, FaerieGlen,0042,Pretoria,SouthAfrica

PostalAddress PostnetSuite205,PrivateBag X20009,Garsfontein,0042,Pretoria,SouthAfrica

Bankers Nedbank Limited InvestecBank Limited StandardBank Limited FirstRandBank Limited

Auditors TAG IncorporatedCharteredAccountants (S.A.)RegisteredAuditors

Secretary TSmith

Company registration 1997/000543/06

ATTACQ ANNUAL REPORT - 2006

TA B L E O F C O N T E N T S

FOR THE YEAR ENDED 30 JUNE, 2006FRANCOIS VAN NIEKERK

Chairman

2

At the conclusion of the first financial year of the restructured

Attacq Property Fund Ltd, this report is presented on behalf of

the board of Attacq to inform shareholders and other

stakeholders of the company's results and of all matters

relevant to sustained future performance.

In a short 12 year period the Atterbury Property Group

established a formative presence in the SA property industry.

Adding the Attacq Property Fund to Atterbury's extensive and

diversified national group structure accentuates not only a new

growth dimension but goes to the very core of our prolonged

business success. This and other introductory aspects are

dealt with hereunder.

The Atterbury group's business philosophy has a participative

premise in four distinct directions:

The establishment of Attacq stems from one of the core

values of the overall Atterbury business approach - a

value seen to represent one of the company's major

success differentials. From the outset the focus had been

on the best possible personnel and then specifically

individuals with such personal calibre and entrepreneurial

make-up as to show interest in a partnering relationship

with meaningful ownership rather than mere

employment.

During the past fiscal period a major restructure of the

group's development subsidiaries - being its central

business focus - was done to further improve and expand

substantive staff shareholding. The restructure basically

opened an opportunity to consolidate and effectively

utilize related business assets in a second property fund

which would complement Attfund whilst furthering certain

objectives of broader diversification.

The Atterbury business model is firmly based on a

predilection to work with partners. The successful

blending of complementary inputs not only optimizes

project outcome but distributes risk and augments the

1. BUSINESS PHILOSOPHY

1.1 Sharing with our team

1.2 Sharing with partners

development of longer term business relationships with

like-minded organisations. Much of the group's success

is attributable to an extensive array of business partners

and Attacq will follow the same approach.

Along with the above core focus of spreading wealth

amongst associates and working mostly with business

partners, it had also been a growing need to include the

wider community in sharing the benefits of Atterbury's

business progress. Consequently a highly successful

private share placement resulted in currently 174 Attacq

shareholders. The enthusiastic investor participation is

welcomed as a significant step in the company's general

advance and can well be expected to enhance Attacq's

role and contribution within the Atterbury group.

Especially in developing economies like South Africa, the

propensity of the capitalist approach to disproportionately

favour the few should, at minimum, influence the social

conscience of business in general. Since inception

Atterbury had an active social orientation and the group is

extensively involved in community upliftment and

development. Funding is mostly through shareholding

allocated to in-house social trusts.

In this context a community beneficial trust is the biggest

single shareholder in Attacq and 39.1% of all business

proceeds will, therefore, be applied directly to funding a

wide variety of community beneficial programs.

Attacq will follow the above participative business

philosophy and subscribe to the Atterbury credo of

with its subtext of also

for all South Africans.

By way of introduction and to gain a wider perspective, the

Attacq board members and other associates were asked their

individual views on Attacq, its heritage and its future:

creating better places creating

better lives

1.3 Sharing with investors

1.4 Sharing with SA communities

2. A BROADER PERSPECTIVE

Sec t i on 1 CHA IRMAN’S REPORT

EXECUTIVE DIRECTORS

NON-EXECUTIVE DIRECTORS

OTHER ASSOCIATES

CA(SA),

"The Atterbury team takes

particular pride in being recognised

amongst the best in the SA property

industry. Our objective with Attacq is the

same - to achieve accepted prominence

amongst property investment funds by

the focused application of our proven

skills and through certain innovative

initiatives for which we are currently

positioning ourselves”.

BEng(Mech),

“Atterbury established an exceptional

base of physical and non-physical

assets. The formation of Attacq

enhances our corporate ability to better

utilise these strengths toward our main

task of optimising shareholder value”.

BSc, MBA,

“The enthusiastic dedication of the

young professionals at work in Attacq

is inspiring and brings to mind the

phrase “

CA(SA)

“The formation of Attacq created an

exciting opportunity for shareholders to

capitalize on the Atterbury Group's

unique expertise and ability to optimize

shareholder value”.

CA(SA), MCom,

“Our business is unusually blessed with

solid progress over 10 years. It is a

good feeling to enjoy the industry

respect brought on not only by our

achievements but more particularly by

our business approach of unquestioned

honesty and integrity”.

Louis van der Watt;

Gideon Oosthuizen;

Neno Haasbroek;

Pierre Tredoux;

Talana Smith;

Atterbury founder, group

CEO and Attacq CEO.

executive director of

Attacq, MD of Atterbury

Investment Managers

and trustee of Mergon Trust.

executive director of

Attfund and CEO of

Sycom Property Unit Trust.

what the mind can conceive

man can achieve”

, former CEO of

Deloitte Consulting and

experienced strategic and

financial advisor.

Chairman of Atterbury Property Holdings.

Atterbury Group CFO

and Attacq company secretary.

Piet Jordaan;

Ken Reynolds;

Wouter de Vos;

BSc(Hons), TRP(SA),

“Atterbury progressed from being merely

to becoming t because the

company has the ability to attract and

retain a team of really top people. It is

our collective desire to take Atterbury to

the next level; being . This is

the legacy on which the Attacq Property

Fund was established”.

“Attacq comes from a solid base with a

strong investment portfolio. The staff's

expertise and deal making ability

promise great things going forward”.

“Over an extended period we observed

Atterbury's establishment of its unique

business branding together with a

formidable personal and professional

reputation. I expect this legacy to live

on through Attacq”.

During this first year of operations, the

Attacq Property Fund and its subsidiary

companies posted a net profit after tax

of R370m. The profit figure is largely

represented by the investment portfolio's

assessed increase in book value. In

recent years - and in line with fiscal

requirements - it had become the

accepted norm in the property industry

to reflect the fair value by which the

property holdings increased or

decreased during the year.

For the year to 30 June, 2006 the

Attacq Group's asset base grew

threefold from R600m to R1,8 billion

mostly through the acquisition of

Attfund shares. Attacq is a 44%

shareholder in Attfund and Attfund

shares currently represent some 70%

of Attacq's portfolio.

The Attacq portfolio valuation is based

on the accepted Attfund share price

and on a fair value for the buildings

carried at R441m and an average

capitalisation rate of 9,17%. The board

considers the valuation realistic and

moderate. Another differential favouring

a conservative approach is the overall

fund gearing of only 20.5%.

one of the first Atterbury employees and

current MD of Atterbury Special

Projects.

good grea

exceptional

Divisional Director of Nedbank Property

Finance.

Head of Investec Private Bank, Northern

Region.

3. FINANCIAL PERFORMANCE

The Attacq share price increased by

47.8% from an issue price of R2,76 to

R4,08 as at 30 June, 2006. In line with

the company's shorter term growth

objectives no dividend was declared.

The Atterbury Property Group's unusual

growth at first depended largely on

Louis van der Watt's entrepreneurial flair

and focussed business brilliance, but of

late increasingly on the development of

organisational capacity where high-

calibre individuals are enabled to

replicate and enhance the original

success differentials and business

values which had become an Atterbury

hallmark.

Atterbury's exceptional growth is backed,

inter alia, by dynamic flexibility and

reactive timing skills. Also by a

pronounced ability to constantly re-

engineer itself to preserve and enhance

organisational effectiveness amidst rapid

growth. This includes the acceptance of

administrative disciplines such as a

proper functioning board of directors.

The Attacq board is an established unit

enjoying a constructive interrelationship

with management. The prime objective

is to promote and conserve the best

interest of all Attacq shareholders and to

fully comply with both the letter and

spirit of all fiscal and other requirements.

The board is the focal point of corporate

governance application and as such

accountable to shareholders and other

stakeholders for the performance and

affairs of the company.

Much is expected of Attacq. Given the

proud legacy of the Atterbury Group

and the personal talent and dedicated

enthusiasm of the Attacq CEO, Louis

van der Watt and his team, this

expectation is fully justified.

Francois van Niekerk

Chairman

4. BOARD FUNCTIONING

5. CONCLUSION

3

Sec t i on 1 CHA IRMAN’S REPORT (con t i nued )

4

INTRODUCTION

KEY DIFFERENTIATORS

The Executive Directors take great pride in offering this first

Annual Report to the shareholders of the Attacq Property Fund.

It was thought appropriate to introduce the report with pertinent

comments on the background to the Fund’s formation and its

continued close association with the Atterbury Property Group

[“Atterbury”].

Atterbury was formed in 1995 and established itself over the

past twelve years as one of the leading property development

companies in South Africa. During 2002/2003, in conjunction

with our valued associates in Attfund Limited, Atterbury

participated in the formation of Attfund as co-developer and

shareholder. By the end of the 2006 financial year, this legacy

of collaboration had manifested in a significant asset for

Atterbury in the form of a 44% shareholding in Attfund.

In addition to the purely share-based Attfund asset, an ever-

increasing number of new office buildings were developed that,

once again, were of investment grade quality and offered its

owners long term value. As Attfund intensified its own focus on

regional shopping centers and secure office parks, Atterbury

identified the opportunity to start another property fund that

could complement Attfund. Attacq takes a slightly wider

investment approach across essentially four types of property

assets: commercial office buildings, large retail (by way of its

Attfund interests), smaller convenience retail and, in future,

industrial property.

In line with the management team’s inclination to seek out

opportunities where hidden upside can be realised, the Fund

set its sights on using its balance sheet to make strategic

acquisitions that would further strengthen the asset mix. The

name of the fund, Attacq Property Fund, was therefore

specifically chosen to give voice to the strategic intent of

enabling Atterbury to make clever acquisitions.

The Attacq Property Fund’s management team has set itself

the challenge of following a slightly different approach than

what the other funds in the market typically apply.

For instance, shareholders can expect that acquisitions will

often be made directly from Atterbury; which enjoys the status

as being nominated as the preferred developer to Attacq.

Atterbury will however remain an independent property

developer and will continue its own core business in the same

fashion as had been practiced with great success to date. This

pipeline of property projects from Atterbury provide Attacq with

a key differentiator, as assets would typically be acquired at an

early stage in the investment maturity cycle. This enables

Attacq to enjoy strong capital appreciation over the first 2-3

years.

Shareholders can however also expect the Fund to identify

assets for acquisition that were developed by outside parties.

Such assets would both complement the “in-house”

developments and offer good long term value. This dual

strategy will quickly widen the asset base and allow for

sustained, stable long term growth across a wide spectrum of

property classes.

Another means of ensuring that Attacq outperforms the

industry benchmark set by the listed property sector is by

taking calculated risks. By offering its balance sheet as surety

for approved development projects, Attacq will obtain a 25%

stake in such developments at cost. Close collaboration with

the property development company ensures that the risk of

participation in the actual development is mitigated. The

management of the Fund is very closely integrated with the

management and decision making processes of the property

developer.

The success recipe of Atterbury's past property development

performances will be continued; the Fund will benefit from the

pipeline of new property developments and play a pivotal role

during the financing phase.

Atterbury has built a sound reputation of collaboration and

partnership amongst its peers in property development circles.

It has been successful in difficult negotiations by ensuring that

deals are fair and profitable for both Atterbury and the

counterparty. This ethos will be transposed to Attacq, in a

manner that will allow external parties to expect the utmost of

good faith when, for instance, receiving Attacq shares as

settlement for an asset sold to Attacq.

Attacq has the almost unique characteristic of having its asset

management company owned by the major shareholders in

the Fund. This ensures a “Return on Equity” approach being

adopted by the management team as opposed to a

conventional fee-earning incentive where no real risk is taken.

The focus is therefore much more on optimizing shareholder

LOUIS VAN DER WATT

Chief Executive Officer

of Attacq

Sec t i o n 2 A S SET MANAGER’S REPORT

value; fees are rather considered a necessity, required to attract

and retain the appropriate skills to execute the task at hand.

And, as a final introductory comment, it deserves mentioning

that Atterbury has throughout its existence displayed a flair for

doing deals quickly and decisively. This culture has also been

adopted by Attacq. The owner-managed approach allows for

quick decision making that will be balanced with good

corporate governance.

Ultimately, we believe that this is one of Attacq's key

differentiators - its ability to move quickly and decisively whilst

recognizing the increased responsibility of carefully managing

the ever-increasing assets on behalf of a growing investor

community.

Property valuations were performed by an independent valuer

A de Wet (B. Proc. LLB (UP), Nat Dip in Real Estate (Unisa))

who is associated with Roode & Associates. Universally

accepted valuation practices are consequently followed and

matched with recent experience in the location and category of

the assets that needed to be valued for this reporting period.

For the individual buildings under scrutiny, the income yield

based on the values determined during the valuation process is

on average 9,17%. The Board is of the opinion that the

valuations are moderate to conservative, and welcome the

principle of remaining prudent, especially in light of the period

of high volatility that had been experienced in the listed

property sector in the period immediately preceding the

valuation process.

For this reporting period Attacq has essentially two types of

assets: firstly, directly held buildings that are mainly of

commercial nature, and secondly, its holding of 44% in Attfund

Limited (and thus, effectively, exposure to large shopping malls).

The following buildings were reported on up to June 2006:

Situated on the corner of Middle and Veale Streets in Brooklyn,

Pretoria, this 2,910 m office building is fully let with only 14% of

leases expiring within the next 12 months. Rentals achieved are

satisfactory and on par with the Brooklyn business node, which

is considered to be one of the most sought-after areas in

Pretoria. Small upgrades to facilities and signage have been

conducted. The asset is valued at R26 million.

Situated on Waterkloof Road at the junction with Crown Street

in Waterkloof, this convenience shopping center of 6,576 m

2

2

PORTFOLIO OVERVIEW

Property valuation approach and effective yield

Key Assets

Brooklyn Gardens

Waterkloof Corner

was the subject of a major re-vamp that served to improve the

image and tenant satisfaction levels, especially as far as the

improvements to the parking facilities are concerned.

Vacancies are low at 2,5% and 92% of leases expire beyond 12

months into the future. The asset is valued at R65 million.

Situated on the south-eastern corner of the busy Charles Street

/ Brooklyn Road intersection, this 1,927 m Grade A office

building is fully let with none of the leases expiring within the

next 12 months. The property and its counterpart Lord Charles

form a picturesque visual unit that has transformed the

crossing into a business destination. The asset is valued at

R26,9 million.

Lord Charles was completed during the latter part of the

reporting period and tenant leasing had barely started by June

2006. Subsequent to year-end (by end October 2006), this

4,066 m office park has only 343 m rentable space left and is

expected to perform on budget for the year ending June 2007.

The asset is valued at R46,7 million.

This brand new single-tenant office building of 4,817 m is set

to become a landmark in the vicinity of the busy Atterbury Road

off-ramp in Menlo Park, Pretoria. The Investec office for their

Northern Region holds a ten year lease over the building. The

asset is valued at R77,6 million.

When Brooklyn Square (adjacent to Brooklyn Mall in Middle

Street) was acquired during the latter half of 2005, the center

was performing under potential and both rental income and

vacancy figures were below par for the area. The center of

13,118 m has, since the start of Atterbury's involvement,

reduced its vacancy levels to 1%. It is foreseen that the center

will undergo a significant series of improvements which will

increase the value in the long run, however, in the short term

rental agreements are purposefully negotiated for shorter

periods and as such the center remains a slightly higher risk

asset. Within the next 12 month period, 25% of the leases will

expire. The asset is valued at R127 million.

The financial results reflect the income stream of Building G

(part of the DTI Campus on Nelson Mandela Road in the CBD

of Pretoria). Income is earned from 3 Government Department

tenants which hold 15 year leases. However, the bare

dominium rights to this property are not owned by Attacq

Property Fund and the asset does not contribute to the net

asset value of the Fund.

Other assets as reflected in the financial statements are not

considered part of the core portfolio and are not specifically

mentioned here. Future developments will results in these

assets either developing into investment grade buildings, or

being disposed of.

2

2 2

2

2

Lady Brooks

Lord Charles

Investec Regional Head Office, Pretoria

Brooklyn Square

Other

5

TALANA

SMITH

LUCILLE

LOUW

Executive Directors of Atterbury Investment Managers

GIDEON

OOSTHUIZEN

Sec t i on 2 AS SET MANAGER’S REPORT (con t i nued )

The table summarises the key assets by value and income

yield at these values.

Brooklyn Gardens 26,145,533 10%

Waterkloof Corner 65,867,932 8,9%

Lady Brooks 26,947,910 8,8%

Lord Charles 46,720,824 8,2%

Investec Regional Office 77,638,298 9,1%

Brooklyn Square 129,790,979 9,7%

A transaction involving three buildings (Great Westerford in

Rondebosch, Shell House in the Cape Town CBD, and

Hampton Office Park in Bryanston) was concluded during the

reporting period, but the actual legal transfer of ownership

would only be concluded by October / November 2006. These

assets are therefore not included in the financial statements but

will have a significant effect on the portfolio and will be fully

reported on in the next annual report.

Attacq's interest in Attfund Limited forms, especially for this

reporting period, a major part of the financial value of the total

portfolio. On 30 June 2006 Attacq owned 16,536 822 Attfund

shares at R75,91 per share, bringing the value of the

investment held by Attacq to R1,255 billion.

Quoting from the Attfund annual report, the Attfund “portfolio

now consists of 11 high-end, low-risk properties. Retail

property consists of 89% by area of the Fund and 87% by

income of the Fund's gross property income by 30 June 2006

with offices making up the balance.” The Attacq Board is of the

opinion that the Attfund portfolio is still fairly conservatively

valued when the quality of the assets and the strength of the

underlying fundamentals are considered. Furthermore, market

trends based on recent transactions involving similar assets

indicate that new benchmarks in terms of the capitalization

rates at which transactions are occurring, specifically for

regional shopping centers, are being set. Attfund's assets still

have a reasonable safety margin between the income yield on

its valuations and the capitalization rate that might be achieved

if its assets were to be sold in the open market.

For more detail, we refer the Attacq shareholder to the Attfund

annual report for its year ended June 2006, a copy of which

can be requested from Attacq's offices for your convenience.

The following graphs are a summary of the Attacq Property

Fund's assets (by value) displayed by geographic distribution,

as well as by asset type. Both directly held assets and Attfund

assets (regarded on a see-through basis) were considered for

this graph.

PROPERTY MARKET VALUE INCOME YIELD

Post-year end transfers

Attfund Shares

FINANCIAL OVERVIEW

Due to the fact that this reporting period is the first reflection on

the financial performance since the formation of the Fund, the

practice of comparison with previous years' performance is not

deemed sensible. Furthermore, many of the assets and

companies evident in the notes to the financial statements are

of historical origin (bearing in mind that Attacq Property Fund

Limted was formerly Atterbury Property Holdings (Pty) Ltd, the

Atterbury development group holding entity).

The following concise summary therefore serves to highlight

only pertinent information from the financial statements that

should provide the Attacq shareholder with a clear view of what

the Fund is worth and how the main financial risks are being

mitigated.

The gross value of assets on 30 June 2006 is comprised of

directly held buildings to the value of R441,3 million, Attfund

shares worth R1,255 billion, and other financial assets which

brings the total gross value of the Fund to R1,792 billion.

Gross rental income on the directly held properties is R34,3

million for the period. This figure only includes rental income

from completion date or acquisition date of the property into

the Fund. Net income before taxation was R429,7 million, which

includes a fair value adjustment of R302,7 million as well as

R116.8 million income from associates being Attfund.

The total amount of liabilities on 30 June 2006, including the

deferred tax provision for future capital gains tax and the

current portion of borrowings is R439.8 million. With Attacq's

total borrowings being R361 million and the non-current assets

R1,765 billion, the gearing is set at 20.5%. Attacq's effective

gearing is 50.2% when taking into account Attfund's gearing of

42,19%.

The board has set a guideline that between 60% and 70% of

Attacq debt has to be fixed. The table below indicates the

levels of debts fixed and the average cost of funding:

The hedging of interest rate risk is an ongoing area of focus for the

asset managers and specific attention is constantly given to this

aspect. New transactions, most notably the acquisitions of Great

Westerford, Shell House and Hampton Office Park, are designed

to improve the fixed interest ratio to meet the guideline.

6

Fixed loans 180,089,287 10,87% 50,94%

Prime-linked

Loans

(prime 12%) 173,427,677 10.67% 49,06%

353,516,964 10.77% 100%

TOTAL AVG %

INTEREST RATE

Se c t i o n 2 A S SET MANAGER’S REPORT (con t i nued )

GAUTENG

80%

WESTERN

CAPE

20%

GEOGRAPHIC

RETAIL

80%

OFFICES

20%

TYPE

Share Price

Shareholding

FUTURE PROSPECTS

The Net Asset Value for the Attacq Property Fund is R 869,7

million. The number of issued shares at on 30 June 2006 is

213,043,586, which implies a share price on financial year-end of

R4,08 per share.

The shareholding in the Fund is summarised by way of

grouping shareholders into four types:

• Community Beneficiary Organizations

• Founding Shareholders of Atterbury

• Other Atterbury group holding entities, which includes

shares held by personnel

• Other Private Investors

The shareholding reflected in the financial statements of 30 June

2006 does not include the 94,826,922 Attacq shares issued to

Mergon Trust subsequent to year end for the 5,803,045 Attfund

shares bought from Mergon Trust. The analysis of shareholders

reflect the position as at year end as well as the position after

the additional Attacq shares were issued to Mergon Trust.

As mentioned earlier, shareholders can look forward to the

inclusion of Great Westerford, Shell House and Hampton Office

Park, totalling some 65,000 m in rentable space. By the next2

reporting period these assets will be reflected in the financial

statements and the improvements that are planned to extract

more value out of the assets will be reported on.

Subsequent to year end a transaction has been concluded on

the property to be known as Centurion Gate, whereby Attacq

has already contracted to become the eventual owner of the

property which will be developed during the current reporting

period. Shareholder can expect further report on this asset

during the 2007/2008 financial year.

In order to improve the Fund's exposure to smaller

convenience retail space, Attacq will acquire a 20% stake in the

newly formed Retail Africa Property Fund (“RAP Fund”). The

transaction will be effective as from 1 September 2006. Key

properties underlying the investment are Steenberg Village in

Cape Town, Featherbrook on the West Rand, Kingfisher on the

East Rand and Sanridge in Midrand. RAP Fund has 8

properties upon inception and the developers Retail Africa will

likely be adding 9 more assets to the RAP Fund portfolio in the

foreseeable future. This acquisition is set to increase Attacq's

exposure in convenience shopping malls.

In addition to the above, the Fund is seeking to expand

strategically towards owning an industrial portfolio and some

international exposure as well. Discussions are at an early

stage, but the goal has been set to have some progress within

this current financial year, and shareholders can therefore look

forward to seeing a change in the portfolio make-up by the

advent of the next reporting period.

In conclusion, the executive directors and the asset

management team remain excited about the prospects that the

commercial property market offers investors in this country.

Sound economic policy and disciplined implementation has

laid the foundation for a prolonged period of economic growth,

which is the most important factor underpinning our conviction

that the demand for our products will remain high during the

immediately foreseeable future. We shall continue to take

decisions that protect our cash flow, ensure long term value

and, probably the most important factor in our own minds,

stocking the portfolio with assets that make us proud owners,

because we firmly believe that a beautiful building in the right

area remains the best possible risk mitigation measure an

asset manager can implement.

Yours sincerely,

Louis van der Watt Gideon Oosthuizen

Chief Executive Officer: Managing Director:

Attacq Property Fund Atterbury Investment Managers

7

COMMUNITY

12.1%

ATTERBURY

GROUP

25.8% FOUNDERS

48.4%

OTHER

INVESTORS

13.7%

BEFORE

OTHER

INVESTORS

9.5%

ATTERBURY

GROUP

17.9%COMMUNITY

39.1%

FOUNDERS

33.5%

AFTER

Section 3

Report of the independent auditors page 9

Statement of directors' responsibility page 10

Directors’ report page 11 - 14

Consolidated balance sheet page 16

Consolidated income statement page 17

Consolidated statement of changes in equity page 18

Company statement of change in equity page 19

Consolidated cash flow statement page 20

Accounting policies page 21 - 25

Notes to the consolidated financial statements page 26 - 51

FINANCIALS

TA B L E O F C O N T E N T S

To the shareholders of Attacq Property Fund Limited and its subsidiaries

We have audited the consolidated financial statements of Attacq Property Fund Limited and its subsidiaries set out on pages 10 to 51

for the year ended 30 June 2006. These consolidated financial statements are the responsibility of the Group's directors. Our

responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with statements of International Standards on Auditing. Those standards require that we plan

and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement. An audit includes

examining on a test basis, evidence supporting the amounts and disclosure in the financial statements. An audit also includes

assessing the accounting policies used and significant estimates made by management, as well as evaluating the overall financial

statement presentation.

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

In our opinion the financial statements present fairly, in all material respects, the financial position of the Group at 30 June 2006 and the

results of its operations and cashflows for the year then ended in accordance with South African Standards of Generally Accepted

Accounting Practice, and in the manner required by the Companies Act in South Africa.

Without qualifying our opinion above, we draw your attention to note 2 in the financial statements, which indicates that the Group

rectified its deviation from Generally Accepted Accounting Practice of the previous year during the year under review.

We have performed certain accounting and secretarial duties up until conversion of the Company to a public company, with the written

consent of all the shareholders.

TAG Incorporated Per: P Lombard

Chartered Accountants (SA) Pretoria

Registered Auditors 22 November 2006

SCOPE

OPINION

EMPHASIS OF MATTER

ACCOUNTING AND SECRETARIAL DUTIES

9

Sec t i on 3 AUDIT REPORT

Section 3 AUDIT REPORT ATTACQ

While operating risk cannot be fully eliminated, the Group

endeavours to minimise it by ensuring that appropriate

infrastructure, controls, systems and ethical behaviour are

applied and managed within predetermined procedures and

constraints.

The directors are of the opinion, based on the information and

explanations given by management, that the system of internal

control provides reasonable assurance that the financial

records may be relied on for the preparation of the

consolidated financial statements. However, any system of

internal financial control can provide only reasonable, and not

absolute, assurance against material misstatement or loss.

The directors have reviewed the Group's cash flow forecast for

the year to 30 June 2007 and, in the light of this review and the

current financial position, they are satisfied that the Group has

or has access to adequate resources to continue in operational

existence for the foreseeable future.

The consolidated financial statements set out on pages 9 - 51,

which have been prepared on the going concern basis, were

approved by the board on 22 November 2006 and were signed

on its behalf by:

P Tredoux BF van Niekerk

The directors are required by the South African Companies Act,

1973, to maintain adequate accounting records and are

responsible for the content and integrity of the consolidated

financial statements and related financial information included

in this report. It is their responsibility to ensure that the

consolidated financial statements fairly present the state of

affairs of the Group as at the end of the financial year and the

results of its operations and cash flows for the period then

ended, in conformity with South African Statements of

Generally Accepted Accounting Practice. The external auditors

are engaged to express an independent opinion on the

consolidated financial statements.

The consolidated financial statements are prepared in

accordance with South African Statements of Generally

Accepted Accounting Practice and are based upon appropriate

accounting policies consistently applied and supported by

reasonable and prudent judgements and estimates.

The directors acknowledge that they are ultimately responsible

for the system of internal financial controls established by the

Group and places considerable importance on maintaining a

strong control environment. To enable the directors to meet

these responsibilities, the board sets standards for internal

control aimed at reducing the risk of error or loss in a cost

effective manner. The standards include the proper delegation

of responsibilities within a clearly defined framework, effective

accounting procedures and adequate segregation of duties to

ensure an acceptable level of risk. These controls are

monitored throughout the Group and all employees are

required to maintain the highest ethical standards in ensuring

the Group's business is conducted in a manner that in all

reasonable circumstances is above reproach. The focus of risk

management in the Group is on identifying, assessing,

managing and monitoring all known forms of risk across the

Group.

10

Sec t i on 3 D IRECTORS ’

RESPONSIB IL IT IES

A N D A P P R OVA L

Section 3 DIRECTORS' RESPONSIBILITIES AND APPROVAL ATTACQ

The directors submit their report for the year ended 30 June

2006. A further report from the asset manager and a chairman's

report will also be included with the financial statements.

• The principal activities of the Group is property holding

and development through the ownership of investment

properties held by, and developments undertaken by

its subsidiaries or development partners.

• The main geographical areas where business is carried

on are Gauteng and Western Cape.

• There were no changes in the nature of the Group

during the year of assessment, other than the stripping

out of any direct operational activities and transferring

all such activities to the asset manager. Atterbury

Investment Managers (Pty) Ltd was appointed as the

asset manager of the Attacq Group. The details of the

appointment is clearly stated in the asset management

agreement.

• Net profit of the Group was R362,433,785 (2005:

R113,924,427), after deducting taxation of R58,878,632

(2005: R30,303,867)

• Attacq entered into purchase agreements with the

Momentum Group, whereby the Great Westerford

Offices, Hampton Office Park and Shell House were

bought for a total purchase price of R450 million. If

transfers take place after 30 June 2006, the purchase

price will escalate with 1% per month on such portion

of the price still outstanding until all transfers are

completed. The payment of the purchase price is

structured in such a manner that R190 million is paid

directly to Momentum Group on transfer and the

balance is payable in 5,5 year's time, with a fixed

interest rate of 12% applicable to the outstanding

balance.

FirstRand Bank Limited funded the transaction.

Atterbury Investment Managers (Pty) Ltd (Attvest) are

taking over R130 million of the outstanding price (debt)

and Attacq is issuing 34,497,435 ordinary R0.0001

1. REVIEW OF OPERATIONS

MAIN BUSINESS AND OPERATIONS

2. EVENTS SUBSEQUENT TO THE YEAR END

11

Sec t i on 3 D IRECTORS ’ REPORT

shares as consideration. The effect of these shares were not

taken into account when calculating the share price, since

they were only issued after year end.

• Attacq acquired a 20% interest in Retail Africa Property

Fund (RAPfund Limited), a property loan stock

company focusing on smaller retail shopping centres

of 15,000 square meters or less. The estimated

purchase price is R36 million.

• Attacq bought an office block in the Centurion Gate

Development directly from the developer. The

completion date of the building is set to be in March

2008. Attacq is in the process of concluding a 7 year

lease with a listed entity to take up the space of the

building.

• The Group issued 94,826,922 shares to Mergon Trust

as consideration for the 5,803,045 Attfund Limited

shares bought. The consideration price for this

transaction was R70 per Attfund share.

At the financial year end the directors' direct and indirect

interest in the Group's issued shares were as follows:

Ordinary shares

- Directly 13,886,759 150,000 - -

- Indirectly 96,376,990 270,000 12,913,572 130,000

The company's authorised share capital was 1,000,000

ordinary shares of R0.01 each. On 9 June 2006 a special

resolution was passed to authorise the increase of the

authorised share capital to 5,000,000 ordinary par value shares

of R0.01 each. The 5,000,000 ordinary par value shares were

then sub-divided into 500,000,000 ordinary par value shares of

R0.0001. During the year under review 117,435,935 ordinary

par value shares were issued.

2006 2005 2006 2005

3. DIRECTORS' INTEREST IN SHARES

4. AUTHORISED AND ISSUED SHARE CAPITAL

Beneficial Non-beneficial

R0.0001 R0.01 R0.0001 R0.01

Shares shares shares shares

Section 3 DIRECTORS' REPORT ATTACQ

The share price at year end is calculated at R4.08 per share.

The calculation is based on a net equity value of R869,7 million

and 213,043,586 issued shares.

According to the records of the Group, the only shareholders

registered as holding five percent or more of the Group's

shares at 30 June 2006, other than the shares held directly and

indirectly by directors are the following:

TTA Shares (Pty) Ltd

Atterbury Property

2006 2005

Atterbury Trust 12,726,832 100,000

11,310,621 100,000

Holdings (Pty) Ltd 16,027,253 -

On 31 January 2006 a special resolution was passed to

authorise the buyback of 13,700 ordinary shares of R0.01 par

value for a total consideration of R1,720,000.

Number of shares

R0.0001 shares R0.01 shares

12

5. FURTHER SPECIAL RESOLUTIONS

On 1 June 2006 a special resolution was passed to change the

Holding Company's name from Atterbury Property Holdings

(Pty) Ltd to Attacq Property Fund (Pty) Ltd.

On 30 June 2006 a special resolution was passed to convert

the company into a public company: Attacq Property Fund

Limited.

6. SUBSIDIARIES AND ASSOCIATE COMPANIES

Direct subsidiaries and associates

Subsidiaries

Name and nature of business Effective % held Shares

Issued Capital 2005 2005

Interactive Trading 800 (Pty) Ltd 100 100 65 100 65Investment company

Atterbury Property Johannesburg (Pty) Ltd 100 100 75 100 75(formerly known as Atterbury CityDevelopments (Pty) Ltd)Development company

Riverport Trading 143 (Pty) Ltd 100 51 67 51 67Property investment company

Atterbury Property Investments (Pty) Ltd 100 100 70 100 70Investment company

Nieuw Pivot Investments (Pty) Ltd 100 - 60 - 60Property investment company

Atterbury Property Cape Holdings (Pty) Ltd 10,000 100 66 10,000 6,625Investment company

Atterbury Property Holdings (Pty) Ltd 7,500 - 100 - 7,500(formerly known as AtterburyProperty (Pretoria) (Pty) Ltd)Development and investment company

Attstore (Pty) Ltd 100 75 75 75 75Property investment company

Lady Brooks (Pty) Ltd 1,000 100 51 1,000 510Property investment company

Lord Charles & Lady Brooks Office ParkHoldings (Pty) Ltd 1,000 100 100 1,000 1,000Property investment company

Erf 321 Hatfield Beleggings (Pty) Ltd 1,000 100 51 1,000 510Investment company

Atterbury Attfund Investments (Pty) Ltd 10,000 100 100 10,000 10,000Investment company

Highgrove Property Holdings (Pty) Ltd 1 100 - 1 -Investment company

Attcorn Property Holdings (Pty) Ltd 940 100 44 940 415Investment company

2006 2006

Sec t i on 3 D IRECTORS ’ REPORT (con t i nued ) AT TA CQ

6. SUBSIDIARIES AND ASSOCIATE COMPANIES (continued)

Direct subsidiaries and associates (continued)

Associates

Indirect subsidiaries and associates

Subsidiaries

Associates

Name and nature of business Effective % held Shares

Issued Capital 2005 2005

Parkdev (Pty) Ltd 100 - 50 - 50(formerly known as Atterbury PropertyManagement (Pty) Ltd)Operating company

Attfund Limited 38,361,952 44 17 16,536,822 6,829,374Property investment company

National Formatt Property Commercial (Pty) Ltd 100 - 50 - 50Operating company

Top Coat Property Investments 5 (Pty) Ltd 400 - 50 - 200Investment company

Atterbury Wedge (Pty) Ltd 100 - 50 - 50Property investment company

Atterbury Property One (Pty) Ltd 100 - 100 - 100(formerly known as Clearwater Dealership (Pty) Ltd)Investment company

Atterbury Parkdev Consortium (Pty) Ltd 100 - 48 - 64Investment company

Atterbury Property Cape (Pty) Ltd 90 - 67 - 60Development and investment company

Aldabri 96 (Pty) Ltd 100 100 52 100 80Property investment company

Razorbill Properties 91 (Pty) Ltd 100 100 65 100 100Investment company

Ile Plaisance (Pty) Ltd 1,000 - 43 - 650Development company

Brooklyn Square (Pty) Ltd 9,174,653 100 - 9,174,653 -Property investment company

Attcorn Property Gauteng (Pty) Ltd 100 100 44 100 100Development company

Atterbury Property Developments (Pty) Ltd 100 - 44 - 100(formerly known as Attcorn Property Cape (Pty) Ltd)Development company

Attpower Developments (Pty) Ltd 2 - 33 - 1Development company

Class A Trading (Pty) Ltd 100 - 33 - 50Development company

Erf 81 Lynwood (Pty) Ltd 100 - 22 - 33Development company

Leman Trading 2 (Pty) Ltd 100 - 17 - 50Development company

Mandela Development Corridor (Pty) Ltd 1,000 - 35 - 600Development company

Shock Proof Investments 23 (Pty) Ltd 100 - 33 - 50Development company

Bella Rosa Development (Pty) Ltd 100 - 22 - 33Development company

Superstrike Investments (Pty) Ltd 100 - 30 - 45Investment company

Rodgers Real Estate (Pty) LtdDevelopment company 100 - 33 - 50

25,736,142 6,858,862

2006 2006

13

Sec t i on 3 D IRECTORS ’ REPORT (con t i nued ) AT TA CQ

7. FIXED ASSETS

8. DIVIDENDS

9. DIRECTORS

10. SECRETARY

During the year the following developments were completed

and transferred to investment properties or buildings were

bought and brought into the commercial operations:

Lord Charles Office Park

Investec Pretoria Branch office

Brooklyn Square

Building G - DTI Campus

McCarthy Dealership

The following properties were disposed of:

Attstore

Brooklyn Park

The dividends declared and paid to members during the period

are as reflected in the attached statement of change in equity.

The directors of the Group during the accounting period and up

to the date of this report were as follows:

NFJ Haasbroek RSA

GJ Oosthuizen RSA Appointed 20 July 2006

P Tredoux RSA

LLS van der Watt RSA

BF van Niekerk RSA

The Group had no secretary during the year. TAG Incorporated

did the secretarial work with the permission of the shareholders

•

•

•

•

•

•

•

R 33,594,986

R 56,392,004

R 82,634,997

R 29,877,907

R 3,711,900

R 15,000,000

R 47,000,000

14

up until the date that the Group received confirmation from

CIPRO that the conversion to a public company was received

and processed.

In future, the secretarial function will be performed in-house.

T Smith was appointed as company secretary of the Group.

TAG Incorporated will continue in office in accordance with

section 270(2) of the Companies Act.

The Group accounted for rental income and expenditure based

on the contractual values in previous financial years. IAS 17 par

28 and 44 require lessors to account for lease income and

expenditure on the straight line basis. This deviation from

Generally Accepted Accounting Practices has been rectified

during the 2006 financial year and comparative figures restated

as referred to in note 2 of the financial statements.

BF van Niekerk

Pretoria

22 November 2006

11. AUDITORS

12. PREVIOUS DEVIATION FROM GENERALLY

ACCEPTED ACCOUNTING PRACTICES

Sec t i on 3 D IRECTORS ’ REPORT (con t i nued ) AT TA CQ

Company Group

2006 2005 2006 2005

Notes R R R R

1,372,914,898 270,907,148 1,737,266,572 565,782,306

- - 13,877,390 -

9,339,457 1,982,540 40,657,776 34,241,333

1,382,254,355 272,889,688 1,791,801,738 600,023,639

746,056,412 207,404,974 869,661,844 230,408,986

- - 9,739,965 79,270,805

189,355,071 49,282,012 384,166,551 233,922,607

446,842,872 16,202,702 528,233,378 56,421,241

636,197,943 65,484,714 912,399,929 290,343,848

1,382,254,355 272,889,688 1,791,801,738 600,023,639

Property, plant and equipment 3 - 3,339,502 23,427 17,457,044

Investment properties 4 56,836,708 - 441,289,032 166,198,698

Goodwill 5 - - 12,008,907 7,123,477

Investment in subsidiaries 6 365,273,464 141,928,511 - -

Investment in associates 7 861,064,136 777,005 1,255,310,158 5,436,310

Investments 8 4,344,807 85,973,090 4,344,807 336,418,069

Loans to subsidiaries, associates and joint ventures 9 69,529,299 37,220,240 - 30,220,027

Loans to shareholders 10 1,540,073 - 2,005,586 -

Straight line debtor 1,963,142 - 7,310,817 931,802

Other financial assets 11 12,363,269 1,668,800 14,973,838 1,996,879

Non-current assets held for sale 13

Inventory 14 - - 21,851,546 14,912,148

Trade and other receivables 5,596,720 772,070 10,404,974 14,139,261

Loans receivable 1,054,523 1,210,470 1,054,523 1,210,470

Cash and cash equivalents 2,688,214 - 7,346,733 3,979,454

Issued capital 15 314,084,948 3,312,989 314,084,948 3,312,989

Non-distributable reserve - - 56,615,912 -

Distributable reserve 431,971,464 204,091,985 498,960,984 227,095,997

Loans from shareholders 10 5,301,714 476,383 5,994,219 3,946,432

Other financial liabilities 16 65,481,934 7,591,580 297,931,107 183,446,457

Deferred tax 12 78,882,196 28,108,165 78,720,541 43,259,051

Loans from shareholders 10 413,210,289 - 413,210,289 -

Taxation 19,909,296 7,909,522 23,277,205 12,392,587

Trade and other payables 8,175,881 2,204,080 31,143,190 29,952,031

Current portion of borrowings 16 547,406 - 55,585,857 7,974,124

Bank overdraft 5,000,000 6,089,100 5,016,837 6,102,499

Loans to subsidiaries, associates and joint ventures 9 39,689,227 13,105,884 1,520,684 3,270,667

ASSETS

Non-current Assets

Current Assets

Total Assets

EQUITY AND LIABILITIES

Equity

Minority Interest

Liabilities

Non-Current Liabilities

Current Liabilities

Total Liabilities

Total Equity and Liabilities

Section 3 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006 ATTACQ

CONSOLIDATED BALANCE SHEET

16

Company Group

2006 2005 2006 2005

Notes R R R R

Gross revenue - - 27,154,160 31,506,310

Cost of revenue - - (4,731,709) (1,583,254)

Rental income 2,194,206 - 30,346,901 -

Rental income - straight line adjustment 1,963,142 - 4,014,011 -

Other income 25,565,143 - 21,953,325 13,086,390

Fair value adjustments 357,712,271 121,182,810 302,702,551 202,861,161

Operating costs (7,632,064) (1,306,565) (45,894,062) (32,072,187)

Operating profit is stated after:

Profit on disposal of property, plant and equipment - - - 3,816

Profit on disposal of subsidiaries 280,660 - 7,471,016 -

Profit on disposal of investments 547,644 - 547,644 -

Fair value adjustments 357,712,271 121,182,810 302,881,378 202,861,161

- Investment properties 4 26,958,801 - 117,329,081 50,427,229

- Investments 330,753,470 121,182,810 185,552,297 152,433,932

Excess of acquirer's interest in the net fair value

of acquiree's identifiable assets, liabilities and

contingent liabilities over cost - - 13,465,621 14,014,376

Loss on disposal of property, plant and equipment - - 407,784 -

Loss on disposal of investment properties - - 63,888 72,608

Loss on disposal of subsidiaries - - 345,979 7,254,927

Loss on disposal of associates 525,190 - - -

Loss on disposal of investments - - 5,597,115 187,340

Equity ceded to minorities on buy-back of shares - - - 327,349

Auditors' remuneration 96,106 90,735 298,241 203,880

Audit fee 41,200 42,171 193,329 89,936

Other services 54,906 48,564 104,912 113,944

Depreciation

Property, plant and equipment 3 - - 199,236 287,251

Lease rentals - - 1,622,640 3,268,246

Premises - - 1,574,372 3,233,930

Equipment - - 48,268 34,316

Income / (Loss) from associates 20 - (1,549,048) 116,774,018 427,399

Investment income 21 3,404,144 3,400,226 5,413,983 3,101,567

Finance costs 22 (4,318,721) (2,097,662) (27,990,493) (18,043,464)

Taxation 19 (68,439,844) (17,497,016) (58,878,632) (30,303,867)

Minority interest - - (8,430,268) (55,055,628)

- - 22,422,451 29,923,056

379,802,698 119,876,245 335,545,177 213,798,420

378,888,121 119,629,761 429,742,685 199,283,922

310,448,277 102,132,745 370,864,053 168,980,055

310,448,277 102,132,745 362,433,785 113,924,427

Gross profit

Operating profit

Income

Expenditure

Profit after taxation

Profit before taxation

Profit attributable to ordinary shareholders

Section 3 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006 ATTACQ

CONSOLIDATED INCOME STATEMENT

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,00

0)

(8,0

00

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0)

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are

bu

y-

back

(35

0)

(69

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50

)(7

00

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0)

Issu

eo

fsh

are

cap

ital

11

,73

93

11

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0,2

20

31

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9To

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93

10

,76

0,5

70

56

,61

5,9

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74

,05

0,5

20

(17

2,8

72

,64

4)

11

6,1

10

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81

52

,89

72

54

,42

3,7

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63

9,2

52

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8

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te(s

)1

5

56

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11

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(56

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realis

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-2

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nce

at

01

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ly2

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nce

at

01

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ly2

00

5

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nce

at

30

Ju

ne

20

06

Section 3 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006 ATTACQ

CONSOLIDATED STATEMENT OF CHANGE IN EQUITY

18

Fair

valu

ead

justm

en

t

Sh

are

cap

ital

Sh

are

Su

bsid

iari

es

Inve

stm

en

tIn

ve

stm

en

tsS

hare

of

pro

fit

Sh

are

of

Dis

trib

uta

ble

Tota

l

pre

miu

mp

rop

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ies

of

asso

cia

tes

pro

fit

of

rese

rve

s

join

tve

ntu

res

RR

RR

RR

RR

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9,7

80

4,0

16,0

20

48,1

46,1

24

-28,3

30,6

38

3,6

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40,1

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112,1

47,5

40

9,9

15

3,3

03,0

74

118,8

42,5

90

-50,1

62,2

98

2,5

79,4

16

3,5

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18

28,9

47,5

63

207,4

04,9

74

21,3

04

314,0

63,6

44

225,8

63,1

66

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16

3,7

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177,4

29,6

92

746,0

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ain

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tech

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ge

ad

justm

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t2

83

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31

64

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(46

8,4

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)-

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pro

fit

for

the

year

10

2,1

32

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51

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45

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nsfe

rto

fair

valu

ead

justm

en

t-

20

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83

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/(lo

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ofasso

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20

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1,5

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en

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(6,1

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back

(11

5)

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25

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18

90

7,4

39

95

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7,4

34

Net

pro

fit

for

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year

31

0,4

48

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73

10

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8,2

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rto

fair

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justm

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t-

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12

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7,7

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(18

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(25

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(1,5

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(25

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(77

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53

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84

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ce

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serv

es

realis

ed

36

,61

6,7

38

11

2,5

40

(36

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9,2

78

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iden

ds

paid

(82

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8,7

98

)(8

2,5

68

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8)

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are

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y-

back

(35

0)

(69

9,6

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11

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te(s

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5

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01

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nce

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30

Ju

ne

20

06

Section 3 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006 ATTACQ

COMPANY STATEMENT OF CHANGE IN EQUITY

19

Company Group

2006 2005 2006 2005

Notes R R R R

Cash generated from operating activities 27.1 20,971,322 764,457 21,801,241 31,088,855

Investment income 3,404,144 3,400,226 5,413,983 3,101,567

Finance costs (4,318,721) (2,097,662) (27,990,493) (18,043,464)

Equity income from associates - 1,915,815 - 4,280,422

Dividends paid (30,062,020) (6,162,500) (38,062,020) (6,162,500)

Taxation paid (5,666,039) - (6,966,442) (898,579)

Proceeds of disposal of subsidiaries 27.3 4,382,660 1,420,000 4,382,660 1,133,192

Proceeds of disposal of associates 251,400 - 252,300 -

Proceeds of disposal of investments 27.4 7,061,562 8,262,500 7,061,562 9,112,500

Proceeds of disposal of property, plant & - - - 277,535

Proceeds of disposal of investment property - - 62,000,000 2,627,392

Subsidiaries acquired 27.2 (31,500,625) (1,003,989) (31,500,625) -

Property, plant & equipment acquired - (3,339,502) (76,525,101) (17,860,728)

Investment properties acquired (26,538,403) - (30,238,405) (91,925,024)

Loans receivable / repaid during the year 155,947 10,683,343 537,071 79,530

Investment in associates - (1,507,760) - (5,340,856)

Investments acquired - (15,088,102) - (15,088,102)

Capital raised / (redeemed) 23,521,716 (712,811) 23,521,716 (712,811)

Loans raised 58,437,760 11,144,965 58,685,468 129,326,429

Loans from group companies 31,408,134 - 34,955,029 3,270,667

Loans to group companies (47,731,523) (9,367,716) (1,980,683) (27,179,961)

Cash at the beginning of the period (6,089,100) (4,400,364) (2,123,045) (3,209,109)

Cash acquired with subsidiaries - - 444,580 -

Cash disposed with subsidiaries - - (1,338,900) -

(15,671,314) (2,179,664) (45,803,731) 13,366,301

(46,187,459) (573,510) (64,030,538) (116,984,561)

65,636,087 1,064,438 115,181,530 104,704,324

3,777,314 (1,688,736) 5,347,261 1,086,064

(2,311,786) (6,089,100) 2,329,896 (2,123,045)

Expenditure to maintain operating capacity

Expenditure to expand operating capacity

equipment

Cash flow from operating activities

Net cash (utilised in) / from operating activities

Cash flow from investing activities

Net cash from investing activities

Cash flow from financing activities

Net cash from financing activities

Total cash movement for the period

Total cash at end of the period

20

Section 3 CONSOLIDATED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2006 ATTACQ

CONSOLIDATED CASH FLOW STATEMENT

1. PRESENTATION OF FINANCIAL STATEMENTS

1.1 INVESTMENT PROPERTY

1.2 PROPERTY, PLANT AND EQUIPMENT

Fair value

The consolidated financial statements are prepared in

accordance with South African Standards of Generally

Accepted Accounting Practice and the Companies Act of South

Africa. The consolidated financial statements have been

prepared under the historical cost convention as modified by

the revaluation of certain property, plant and equipment,

marketable securities and investment properties where

appropriate.

Accounting policies are consistent with that of the previous

year, except as stated in note 2.

Investment properties are those properties which are held for

rental revenue generation or capital appreciation, other than

owner occupied properties.

Investment property is recognised as an asset when, and only

when, it is probable that the future economic benefits that are

associated with the investment property will flow to the

enterprise, and the cost of the investment property can be

measured reliably.

Investment property is initially recognised at cost. Transaction

costs are included in the initial measurement.

Costs include costs incurred 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.

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.

The cost of an item of property, plant and equipment is

recognised as an asset when:

• it is probable that future economic benefits associated with

the item will flow to the company, and

• the cost of the item can be measured reliably.

Costs include costs incurred initially to acquire or construct an

item of property, plant and equipment and costs incurred

subsequently to add to, replace part of, or service it. If a

replacement cost is recognised in the carrying amount of an

item of property, plant and equipment, the carrying amount of

the replaced part is derecognised.

Property, plant and equipment are carried at cost less

accumulated depreciation and any impairment losses.

Depreciation is provided on all property, plant and equipment

other than freehold land, to write down the cost, less residual

value, by equal instalments over their useful lives as follows:

The gain or loss arising from the derecognition of an item of

property, plant and equipment is included in profit or loss when

the item is derecognised. The gain or loss arising from the

derecognition of an item of property, plant and equipment is

determined as the difference between the net disposal

proceeds, if any, and the carrying amount of the item.

Subsidiaries are those entities over whose financial and

operating policies the Group has control so as to obtain the

benefits from their activities.

The Group financial statements include the assets, liabilities,

income and expenses and cash flows of the holding company

and its subsidiaries. The results of the subsidiaries are included

from the effective date of

On acquisition, the Group recognises the subsidiary's

identifiable assets, liabilities and contingent liabilities at fair

value, except for assets classified as held-for-sale, which are

recognised at fair value less costs to

Inter-company balances and transactions and any resulting

unrealised gains and losses are eliminated in preparing the

group financial statements.

acquisition.

sell.

1.3 INVESTMENT IN SUBSIDIARIES

Item Useful life

• Furniture and fittings 6 years

• Office equipment 5 years

• Computer equipment 3 years

• Other fixed assets 5 years

• Computer software 2 years

• Signage 10 years

Sec t i o n 3 A CCOUNT ING POL IC IES

21

1.3 INVESTMENT IN SUBSIDIARIES (continued)

1.4 INVESTMENT IN JOINT VENTURES

1.5 INVESTMENT IN ASSOCIATES

The accounting policies of the subsidiaries are consistent with

those of the holding

Joint ventures are those entities over which the Group has joint

control established by a contractual agreement.

An investment in a joint venture, where the interests are in the

operations of the joint venture, is accounted for using the

equity method, except when the asset is classified as held-for-

sale. Under the equity method, the investment in a joint venture

is initially recognised at cost and the carrying amount is

increased or decreased to recognise the Group's share of the

profits or losses of the investee after acquisition date. The use

of the equity method is discontinued from the date of which the

Group ceases to have joint control over, or have significant

influence in, a jointly controlled

An investment in a joint venture where joint control is

maintained over the assets of the joint venture, is accounted

for using the proportionate consolidation method. The use of

the proportionate consolidation method is discontinued from

the date on which the Group ceases to have joint control over,

or have significant influence in, a jointly controlled entity.

Associates are all entities over which the Group has significant

influence but not control. Significant influence is defined as

having between 20% and 50% of the shareholding and voting

rights.

An investment in an associate is accounted for using the equity

method, except when the asset is classified as held-for-sale.

Under the equity method, the investment is initially recognised

at cost and the carrying amount is increased or decreased to

recognise the Group's share of the profits or losses of the

investee after acquisition date. The use of the equity method is

discontinued from the date the Group ceases to have signi-

ficant influence over an associate.

Impairment losses are deducted from the carrying amount of

the investment in

Distributions received from the associates reduce the carrying

amount of the

Profits and losses resulting from transactions with associates

are recognised only to the extent of unrelated investors' interest

in the associate.

The excess of the Group's interest of the net fair value of an

associate's identifiable assets, liabilities and contingent

liabilities over the cost is accounted for as goodwill, and is

included in the carrying amount of the

The excess of the Group's share of the net fair value of an

associate's identifiable assets, liabilities and contingent

liabilities over the cost is excluded from the carrying amount of

the investment and is instead included in the profit for the

period in which the investment is

company.

entity.

associate.

investment.

associate.

acquired.

1.6 FINANCIAL INSTRUMENTS

1.6.1 INITIAL RECOGNITION

1.6.2 SUBSEQUENT MEASUREMENT

1.6.3 GAINS AND LOSSES

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 assets and financial liabilities are recognised on the

Group's balance sheet when the Group becomes party to the

contractual provisions of the instrument.

Financial assets and liabilities are recognised initially at fair

value. In the case of financial assets or liabilities not classified

at fair value through profit and loss, transaction costs that are

directly attributable to the acquisition or issue of the financial

instruments are added to the fair value.

Assets carried at fair value: the change in fair value shall be

recognised in profit or loss or in equity, as appropriate.

After initial recognition financial assets are measured as

follows:

• loans and receivables and held-to-maturity investments are

measured at amortised cost using the effective interest rate

method;

• investments in equity instruments that do not have a

quoted market price in an active market and whose fair

value cannot be reliably measured, are measured at cost;

• other financial assets, including derivatives, at fair value,

without any deduction for transaction costs which may

incur on sale or other disposal.

After initial recognition financial liabilities are measured as

follows:

• financial liabilities at fair value through profit or loss,

including derivatives that are liabilities, are measured at fair

value.

• other financial liabilities are measured at amortised cost

using the effective interest rate method.

A gain or loss arising from a change in a financial asset or

liability is recognised as follows:

• a gain or loss on a financial asset or liability classified as at

fair value through profit or loss is recognised in profit or

loss.

• a gain or loss on an available-for-sale financial asset is

recognised directly in equity, through the statement of

changes in equity, until the financial asset is derecognised,

at which time the cumulative gain or loss previously

recognised in equity is recognised in profit or loss.

• financial assets and financial liabilities carried at amortised

cost: a gain or loss is recognised in profit or loss when the

financial asset or financial liability is derecognised or

impaired, and through the amortisation process.

Sec t i o n 3 A CCOUNT ING POL IC IES (con t i nued )

22

ATTACQ

1.6 FINANCIAL INSTRUMENTS (continued)

1.6.4 LOANS TO / (FROM) GROUP COMPANIES

1.6.5 TRADE AND OTHER RECEIVABLES

1.6.6 TRADE AND OTHER PAYABLES

1.6.7 CASH AND CASH EQUIVALENTS

1.6.8 BANK OVERDRAFTS AND BORROWINGS

These include loans to holding companies, fellow subsidiaries,

subsidiaries, joint ventures and associates and are recognised

initially at fair value plus direct transaction costs.

Subsequently these loans are measured at amortised cost

using the effective interest rate method, less any impairment

loss recognised to reflect irrecoverable amounts.

On loans receivable an impairment loss is recognised in profit

or loss when there is objective evidence that it is impaired. The

impairment is measured as the difference between the

investment’s carrying amount and the present value of

estimated future cash flows discounted at the effective interest

rate computed at initial recognition.

Impairment losses are reversed in subsequent periods when

an increase in the investment’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 investment at the date the impairment is

reversed shall not exceed what the amortised cost would have

been had the impairment not been recognised.

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.

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 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 change in value.

These are initially and subsequently recorded at fair value.

Bank overdrafts and borrowings are initially measured at fair

value, and are subsequently measured at amortised cost,

using the effective interest rate method. Any difference

between the proceeds (net of transaction costs) and the

settlement or redemption of borrowings is recognised over the

term of the borrowings in accordance with the Group's

accounting policy for borrowing costs.

1.7 TAX

Current tax assets and liabilities

Deferred tax liabilities and assets

Current tax 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.

Current tax assets and liabilities for the current and prior

periods are measured at the amount expected to be recovered

from or paid to the tax authorities, using the tax rates (and tax

laws) that have been enacted or substantively enacted by the

balance sheet date.

A deferred tax liability is recognised for all taxable temporary

differences, except to the extent that the deferred tax liability

arises from:

• goodwill for which amortisation is not deductible for tax

purposes; or

• the initial recognition of an asset or liability in a transaction

which:

• is not a business combination; and

• at the time of the transaction, affects neither accounting

profit nor taxable profit (tax loss).

A deferred tax liability is recognised for all taxable temporary

differences associated with investments in subsidiaries,

branches and associates, and interests in joint ventures, except

to the extent that both of the following conditions are

satisfied:

• the parent, investor or venturer is able to control the timing

of the reversal of the temporary difference; and

• it is probable that the temporary difference will not reverse

in the foreseeable future.

A deferred tax 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

differences can be utilised, unless the deferred tax asset arises

from the initial recognition of an asset or liability in a transaction

that:

• is not a business combination; and

• at the time of the transaction, affects neither accounting

profit nor taxable profit (tax loss).

A deferred tax asset is recognised for the carry forward of

unused tax losses to the extent that it is probable that future

taxable profit will be available against which the unused tax

losses can be utilised.

Deferred tax assets and liabilities are measured at the tax rates

that are expected to apply to the period when the assets are

realised or the liability is settled, based on tax rates (and tax

• the initial recognition of goodwill; or

laws) that have been enacted or substantively enacted by the

balance sheet date.

Sec t i o n 3 A CCOUNT ING POL IC IES (con t i nued )

23

ATTACQ

1.7 TAX (continued)

1.8 INVENTORIES

1.9 SHARE CAPITAL AND EQUITY

Deferred tax liabilities and assets

Deferred tax on fair value adjustment arising from use is raised

at normal rates being 29%.

Deferred tax on fair value adjustment arising through realisation

is raised at the inclusion rate of 50% of normal tax rates being

14.5%.

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 tax arises from:

• a transaction or event which is recognised, in the

same or a different period, directly in equity, or

• a business combination.

Current tax and deferred taxes are charged or credited directly

to equity if the tax relates to items that are credited or charged,

in the same or a different period, directly to equity.

Inventories are measured at the lower of cost and net realisable

value.

Net realisable value is the estimated selling price in the

ordinary course of business less the estimated costs of

completion and the estimated costs necessary to make the

sale.

The cost of inventories comprise of all costs of purchases,

costs of conversion and other costs incurred in bringing the

inventories to their present location and condition.

When inventories are sold, the carrying amount of those

inventories are recognised as an expense in the period in

which the related revenue is recognised. The amount of any

write-down of inventories to net realisable value and all losses

of inventories are recognised as an expense in the period the

write-down or loss occurs. The amount of any reversal of any

write-down of inventories, arising from an increase in net

realisable value, are recognised as a reduction in the amount of

inventories recognised as an expense in the period in which

the reversal occurs.

An equity instrument is any contract that evidences a residual

interest in the assets of an entity after deducting all of its

liabilities.

If the Group acquires its own equity instruments, those

instruments are deducted from equity. No gain or loss is

recognised in profit or loss on the purchase, sale, issue or

cancellation of the Group's own equity instruments.

Consideration paid or received shall be recognised directly in

equity.

Tax expense

Sec t i on 3 ACCOUNT ING POL IC IES (con t i nued )

24

ATTACQ

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits associated with

the transaction will flow to the Group;

• the stage of completion of the transaction at the balance

sheet date can be measured reliably; and

• the cost incurred for the transaction and the costs to

complete the transaction can be measured reliably.

When the outcome of the transaction involving the rendering of

services cannot be estimated reliably, revenue shall be

recognised only to the extent of the expenses recognised that

are recoverable.

Service revenue is recognised by reference to the stage of

completion of the transaction at balance sheet date. Stage of

completion is determined by services performed to date as a

percentage of total services to be performed.

Revenue is measured at the fair value of the consideration

received or receivable and represents the amounts receivable

for goods and services provided in the normal course of

business, net of trade discounts and volume rebates, and value

added tax.

Interest is recognised, in profit or loss, using the effective

interest rate method.

Dividends are recognised, in profit or loss, when the Group's

right to receive payment has been established.

Service fees included in the price of the product are recog-

nised as revenue over the period during which the service is

performed.

Borrowing costs that are directly attributable to the acquisition,

construction or production of a qualifying asset are capitalised

as part of the cost of that asset until such time as the asset is

ready for its intended use. The amount of borrowing costs

eligible for capitalisation is determined as follows:

• actual borrowing costs on funds specifically borrowed for

the purpose of obtaining qualifying assets less any

temporary investment of those borrowings.

• weighted average of the borrowing costs applicable to the

entity on funds generally borrowed for the purpose of

obtaining a qualifying asset. The borrowing costs

capitalised do not exceed the total borrowing costs

incurred.

The capitalisation of borrowing costs commences when:

• expenditure for the asset has occurred;

• borrowing costs have been incurred, and

• activities that are necessary to prepare the assets for its

intended use or sale are in progress.

Capitalisation is suspended during extended periods in which

active development is interrupted.

Capitalisation ceases when substantially all the activities

necessary to prepare the qualifying asset for its intended use

or sale are complete.

All other borrowing costs are recognised as an expense in the

period in which they are incurred.

1.13 BORROWING COSTS

Sec t i on 3 ACCOUNT ING POL IC IES (con t i nued )

1.10 LEASES

1.10.1 OPERATING LEASES - LESSOR

1.10.2 OPERATING LEASES - LESSEE

1.11 GOODWILL

1.12 REVENUE

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 lease income is recognised as income on the

straight line basis over the lease term.

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 the income

statement.

Operating lease payments are recognised as an expense on a

straight line basis over the lease term. The difference between

the amounts recognised as an expense and the contractual

payments are recognised as an operating lease asset. This

liability is not discontinued.

Any contingent rent is expensed in the period it is incurred.

Goodwill is initially measured at cost, being the excess of a

business combination over the Group's interest of the net fair

value of the identifiable assets, liabilities and contingent

liabilities.

Subsequently goodwill, acquired in a business combination, is

carried at cost less any accumulated impairment.

The excess of the Group's interest in the net fair value of the

identifiable assets, liabilities and contingent liabilities over the

cost of the business combination is immediately recognised in

profit or loss.

Revenue from the sale of goods is recognised when all the

following conditions have been satisfied:

• the Group has transferred to the buyer the significant risks

and rewards of ownership of the goods;

• the Group retains neither continuing managerial

involvement to the degree usually associated with owner-

ship nor effective control over the goods sold;

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits associated with

the transaction will flow to the Group; and

• the costs incurred or to be incurred in respect of the

transaction can be measured reliably.

When the outcome of a transaction involving the rendering of

services can be estimated reliably, revenue associated with the

transaction is recognised by reference to the stage of

completion of the transaction at the balance sheet date. The

outcome of a transaction can be estimated reliably when all the

following conditions are satisfied:

25

ATTACQ

Company Group

2006 2005 2006 2005

R R R R

(931,802)

43,123,939

:

Previously stated - - - 167,130,500Adjustment - - -

- - -

Previously stated - - -

Adjustment - - - 135,112

- - -

Previously stated - - - -

Adjustment - - - 931,802

- - -

Previously stated - - - -

Adjustment - - - 913,802

- - -

Previously stated - - - 51,359,031

Adjustment - - - (931,802)

- - -

Previously stated - - - 30,168,764

Adjustment - - - 135,112

- - -

.

166,198,698

43,259,051

931,802

913,802

50,427,229

30,303,876

2. CHANGES TO ACCOUNTING POLICIES

Balance sheet

Investment property

Deferred tax

Straight line debtor

Income statement

Straight line rentals

Fair value adjustments on investment properties

Taxation

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

26

The annual financial statements have been prepared in

accordance with South African Statements of Generally

Accepted Accounting Practice on a basis consistent with the

prior year except for:

IAS 17 Leases.

In previous years the Group accounted for leases as lessor

and lessee on the contractual basis. This constituted a

deviation from Generally Accepted Accounting Practices.

The Group amended its accounting policies to rectify this.

Leases are henceforth accounted for on the straight line

basis over the contractual period.

No adjustment were shown for the pre 30 June 2005 figures

as there were no companies in the group that needed IAS 17

adjustments prior to 30 June 2005.

Comparative figures have been restated. The aggregate

effect for the year ended 30 June 2005 is as follows:

Company

2006 2005

Cost/ Accumulated Carrying Cost/ Accumulated Carrying

Valuation depreciation value Valuation depreciation value

R R R R R R

Total - - - 3,339,502 - 3,339,502

Company

2006 Carrying Acquisitions Disposals/ Depreciation Carrying

value at transfers value at

beginning of end of the

the year year

R R R R R

3,339,502 - (3,339,502) - -

R R R R R

- 3,339,502 - - 3,339,502

Land and buildings - - - 3,339,502 - 3,339,502

Furniture and fittings - - - - - -

Office equipment - - - - - -

Computer equipment - - - - - -

Computer software - - - - - -

Signage - - - - - -

Motor vehicles - - - - - -

The carrying value of property, plant and equipment can be reconciled as follows:

Land and buildings 3,339,502 - (3,339,502) - -

Furniture and fittings - - - - -

Office equipment - - - - -

Computer equipment - - - - -

Computer software - - - - -

Signage - - - - -

Motor vehicles - - - - -

Land and buildings - 3,339,502 - - 3,339,502

Furniture and fittings - - - - -

Office equipment - - - - -

Computer equipment - - - - -

Computer software - - - - -

Motor vehicles - - - - -

2005 Carrying Acquisitions Disposals/ Depreciation Carrying

value at transfers value at

beginning of end of the

the year year

3. PROPERTY, PLANT AND

EQUIPMENT

27

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

28

Group

2006 2005

Cost/ Accumulated Carrying Cost/ Accumulated Carrying

Valuation depreciation value Valuation depreciation value

R R R R R R

Total 29,404 (5,977) 23,427 18,052,150 (595,106) 17,457,044

Group

2006 Carrying Acquisitions Disposals/ Depreciation Carrying

value at transfers value at

beginning of end of the

the year year

R R R R R

17,457,044 76,608,789 (93,843,170) (199,236) 23,427

R R R R R

13,203,731 17,860,728 (13,320,164) (287,251)

Land and buildings - - - 16,885,832 - 16,885,832

Furniture and fittings - - - 596,090 (326,010) 270,080

Office equipment - - - 112,653 (66,321) 46,332

Computer equipment - - - 261,352 (144,858) 116,494

Computer software - - - 30,435 (24,759) 5,676

Signage 29,404 (5,977) 23,427 - - -

Motor vehicles - - - 165,788 (33,158) 132,630

The carrying value of property, plant and equipment can be reconciled as follows:

Land and buildings 16,885,832 76,440,659 (93,326,491) - -

Furniture and fittings 270,080 138,726 (248,974) (159,832) -

Office equipment 46,332 - (42,607) (3,725) -

Computer equipment 116,494 - (89,984) (26,510) -

Computer software 5,676 - (2,484) (3,192) -

Signage - 29,404 - (5,977) 23,427

Motor vehicles 132,630 - (132,630) - -

Land and buildings

Furniture and fittings 311,010 174,908 (70,052) (145,786) 270,080

Office equipment 41,736 77,646 (43,039) (30,011) 46,332

Computer equipment 98,222 146,374 (71,655) (56,447) 116,494

Computer software 4,466 23,752 (5,107) (17,435) 5,676

Motor vehicles - 254,068 (83,866) (37,572) 132,630

2005 Carrying Acquisitions Disposals/ Depreciation Carrying

value at transfers value at

beginning of end of the

the year year

17,457,044

12,748,297 17,183,980 (13,046,445) - 16,885,832

3. PROPERTY, PLANT AND

EQUIPMENT (continued)

Company Group

2006 2005 2006 2005

R R R R

- 3,339,502 - 16,885,832

Land and buildings consist of:

Portion 469 (a portion of portion 433) of the Farm Elandspoort 357 - 3,339,502 - 3,339,502

Erven 1084 & 1166 Marshall Town - - - 378,422

Portion 4 of Erf 757, Menlo Park - - - 9,900,113

Erf 504, Brooklyn - - - 3,267,795

Land and buildings are encumbered as per note 16.

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

Company Group

2006 2005 2006 2005

R R R R

Balance at beginning of the year - - 166,198,698 13,500,000

Additions - - 128,498,650 104,971,469

Transfers 29,877,907 - 93,326,491 -

Disposals - - (64,063,888) (2,700,000)

Net gain from fair value adjustment 26,958,801 - 117,329,081 50,427,229

Reconciled as follows:

Cost 29,877,907 - 289,941,797 111,320,217

Fair value adjustment 26,958,801 - 151,347,235 54,878,481

Investment properties consist of:

Balance at beginning of the year - - 15,000,000 13,500,000

Net gain from fair value adjustment - - - 409,075

Additions - - 63,888 1,090,925

Disposals - - (15,063,888) -

Balance at end of the year - - - 15,000,000

Cost - - - 10,139,673

Fair value adjustments - - - 4,860,327

- - - 15,000,000

Balance at beginning of the year - - - -

Transfer from property, plant and equipment 3,339,502 - 3,339,502 -

Additions 26,538,405 - 26,538,405 -

Net gain from fair value adjustment 28,921,943 - 28,921,943 -

Straight line rental adjustment against fair value (1,963,142) - (1,963,142) -

Balance at end of the year 56,836,708 - 56,836,708 -

Cost 29,877,907 - 29,877,907 -

Fair value adjustments 28,921,943 - 28,921,943 -

Straight line rental adjustment against fair value (1,963,142) - (1,963,142) -

56,836,708 - 56,836,708 -

Balance at beginning of the year - - 19,601,100 -

Net gain from fair value adjustment - - 6,450,000 6,700,000

Additions - - - 13,000,000

Straight line rental adjustment against fair value - - (33,133) (98,900)

Balance at end of the year - - 26,017,967 19,601,100

Cost - - 13,000,000 13,000,000

Fair value adjustments - - 13,150,000 6,700,000

Straight line rental adjustment against fair value - - (132,033) (98,900)

- - 26,017,967 19,601,100

Balance at beginning of the year - - 47,000,000 -

Net gain from fair value adjustment - - - 16,000,000

Additions - - - 31,000,000

Disposals - - (47,000,000) -

Balance at end of the year - - - 47,000,000

Cost - - - 31,000,000

Fair value adjustments - - - 16,000,000

- - - 47,000,000

Balance at beginning of the year - - 9,477,654 -

Net gain from fair value adjustment - - 651,259 -

Additions - - 384,241 9,514,500

Straight line rental adjustment against fair value - - 36,846 (36,846)

Balance at end of the year - - 10,550,000 9,477,654

Balance at end of the year 56,836,708 - 441,289,032 166,198,698

Total value 56,836,708 - 441,289,032 166,198,698

4. INVESTMENT PROPERTIES

Fair value

Attstore

Reconciled as follows:

Building G, DTI Campus

Reconciled as follows:

Brooklyn Gardens ("Aldabri")

Reconciled as follows:

Brooklyn Park ("Aldabri")

Reconciled as follows:

FNB House ("Aldabri")

29

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

Balance at end of the year - - 77,023,374 -

Company Group

2006 2005 2006 2005

R R R R

Cost - - 9,898,741 9,514,500

Straight line rental adjustment against fair value - - - (36,846)

Fair value adjustments - - 651,259 -

- - 10,550,000 9,477,654

Balance at beginning of the year - - 52,897,073 -

Net gain from fair value adjustment - - 12,299,781 20,040,187

Additions - - 100,218 33,459,813

Straight line rental adjustment against fair value - - (429,364) (602,927)

Balance at end of the year - - 64,867,708 52,897,073

Cost - - 33,560,031 33,459,813

Straight line rental adjustment against fair value - - (1,032,291) (602,927)

Fair value adjustments - - 32,339,968 20,040,187

- - 64,867,708 52,897,073

Balance at beginning of the year - - - -

Net gain from fair value adjustment - - 2,138,100 -

Additions - - 3,711,900 -

Straight line rental adjustment against fair value - - (189,023) -

Balance at end of the year - - 5,660,977 -

Cost - - 3,711,900 -

Straight line rental adjustment against fair value - - (189,023) -

Fair value adjustments - - 2,138,100 -

- - 5,660,977 -

Balance at beginning of the year - - 20,222,871 -

Net gain from fair value adjustment - - 6,468,999 8,209,769

Transfer from property, plant and equipment - - - 12,206,231

Additions - - 65,001 -

Straight line rental adjustment against fair value - - (214,809) (193,129)

Balance at end of the year - - 26,542,062 20,222,871

Cost - - 12,271,232 12,206,231

Straight line rental adjustment against fair value - - (407,938) (193,129)

Fair value adjustments - - 14,678,768 8,209,769

- - 26,542,062 20,222,871

Balance at beginning of the year - - 2,000,000 -

Disposals - - (2,000,000) -

Additions - - - 2,000,000

Balance at end of the year - - - 2,000,000

Cost - - - 2,000,000

- - - 2,000,000

Balance at beginning of the year - - - -

Net gain from fair value adjustment - - 13,155,015 -

Transfer from property, plant and equipment - - 33,594,985 -

Straight line rental adjustment against fair value - - (55,202) -

Balance at end of the year - - 46,694,798 -

Cost - - 33,594,985 -

Straight line rental adjustment against fair value - - (55,202) -

Fair value adjustments - - 13,155,015 -

- - 46,694,798 -

Balance at beginning of the year - - - -

Net gain from fair value adjustment - - 21,257,996 -

Transfer from property, plant and equipment - - 56,392,004 -

Straight line rental adjustment against fair value - - (626,626) -

4. INVESTMENT PROPERTIES (continued)

(continued)FNB House (”Aldabri”)

Reconciled as follows:

Waterkloof Corner ("Aldabri")

Reconciled as follows:

McCarthy Dealership ("Aldabri")

Reconciled as follows:

Lady Brooks

Reconciled as follows:

Admiral Island

Reconciled as follows:

Lord Charles and Lady Brooks Office Park

Reconciled as follows:

Investec Pretoria Branch offices

30

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

Fair value adjustments - - 21,257,996 -

- - 77,023,374 -

Balance at the end of the year 28,187,871 18,547,092 - -

Company Group

2006 2005 2006 2005

R R R R

Cost - - 56,392,004 -

Straight line rental adjustment against fair value - - (626,626) -

Balance at beginning of the year - - - -

Net gain from fair value adjustment - - 30,000,000 -

Additions - - 97,634,997 -

Straight line rental adjustment against fair value - - (539,559) -

Balance at end of the year - - 127,095,438 -

Cost - - 97,634,997 -

Straight line rental adjustment against fair value - - (539,559) -

Fair value adjustments - - 30,000,000 -

- - 127,095,438 -

Valuations are based on open market value for existing use.

The properties have been mortgaged as per note 16.

Carrying value at the beginning of the year - - 7,123,477 (181)

Additions - - 4,885,430 7,123,477

- - - 181

Cost 101,696,707 3,522,019 - -

Net gain from fair value adjustment 263,576,757 138,406,492 - -

Balance at the beginning of the year 6,148,799 5,308,745 - -

Disposals (7,500) - - -

Net (loss)/gain from fair value adjustments (6,141,299) 840,054 - -

Balance at the end of the year - 6,148,799 - -

Balance at the beginning of the year 43,399,650 27,328,229 - -

Disposals (4,094,306) (1,917,770) - -

Additions 19,293,286 - - -

Net gain from fair value adjustments 35,583,282 17,989,191 - -

Balance at the end of the year 94,181,912 43,399,650 - -

Balance at the beginning of the year 18,547,092 10,000,725 - -

Net gain from fair value adjustments 9,640,779 8,546,367 - -

56,836,708 - 441,289,032 166,198,698

Carrying value at the end of the year - - 12,008,907 7,123,477

Balance at the end of the year 365,273,464 141,928,511 - -

4. INVESTMENT PROPERTIES (continued)

Investec Pretoria Branch offices (continued)

Reconciled as follows:

Brooklyn Square shopping centre

Reconciled as follows:

Atterbury Property Holdings (Pty) Ltd

Atterbury Property Cape Holdings (Pty) Ltd

Atterbury Attfund Investments (Pty) Ltd

5. GOODWILL

6. INVESTMENT IN SUBSIDIARIES

Fair value

31

The effective date of the revaluations was 30 June 2006. The

revaluations were performed by an independent valuer, A de

Wet (B.Proc.LLB (UP), Nat Dip in Real Estate (Unisa)). A de

Wet is not connected to the company and has recent

experience in location and category of the investment

property being valued.

Building G, DTI Campus, was however revalued by the

directors of the company based on the fair market value.

Excess of acquirer's interest in the net fair value of acquiree’s

identifiable assets, liabilities and contingent liabilities over

cost

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

Balance at the beginning of the year 4,690,241 2,416,979 - -

Additions 5,342,851 - - -

Net gain from fair value adjustments 890,182 2,273,262 - -

Balance at the end of the year 10,923,274 4,690,241 - -

Balance at the beginning of the year 3,189,828 1,000 - -

Additions 3,064,247 - - -

Disposals - (490) - -

Net gain from fair value adjustments 5,776,965 3,189,318 - -

Balance at the end of the year 12,031,040 3,189,828 - -

Balance at the beginning of the year 1,000 1,000 - -

Net gain from fair value adjustments 10,473,242 - - -

Balance at the end of the year 10,474,242 1,000 - -

Balance at the beginning of the year 3,003,902 2,689,733 - -

Net (loss)/gain from fair value adjustments (54,310) 314,169 - -

Balance at the end of the year 2,949,592 3,003,902 - -

Balance at the beginning of the year 75 75 - -

Additions 2,130,314 - - -

Balance at the end of the year 2,130,389 75

Balance at the beginning of the year 5,633,256 - - -

Additions 11,266,502 1,003,989 - -

Net gain from fair value adjustments 9,241,060 4,629,267 - -

Balance at the end of the year 26,140,818 5,633,256 - -

Balance at the beginning of the year 60 60 - -

Disposals (60) - - -

Balance at the end of the year - 60 - -

Balance at the beginning of the year - - - -

Additions 18,943,206 - - -

Net gain from fair value adjustments 12,421,498 - - -

Balance at the end of the year 31,364,704 - - -

Balance at the beginning of the year - - - -

Additions 100 - - -

Net gain from fair value adjustments 20,133 - - -

Balance at the end of the year 20,233 - - -

Balance at the beginning of the year - - - -

Additions 253,215 - - -

Balance at the end of the year 253,215 - - -

Balance at the beginning of the year - - - -

Additions 7,798,571 - - -

Net gain from fair value adjustments 3,057,934 - - -

Balance at the end of the year 10,856,505 - - -

Balance at the beginning of the year - - - -

Transferred from associates 940 - - -

Company Group

2006 2005 2006 2005

R R R R

- -

Balance at the end of the year 940 - - -

6. INVESTMENT IN SUBSIDIARIES (continued)

Erf 321 Hatfield Beleggings (Pty) Ltd

Lady Brooks (Pty) Ltd

Lord Charles & Lady Brooks Office Park Holdings (Pty) Ltd

Attstore (Pty) Ltd

Atterbury Property Johannesburg (Pty) Ltd

Interactive Trading 800 (Pty) Ltd

Nieuw Pivot Investments (Pty) Ltd

Highgrove Property Holdings (Pty) Ltd

Autumn Star Trading 597 (Pty) Ltd

Attcorn Property Gauteng (Pty) Ltd

Aldabri 96 (Pty) Ltd

Attcorn Property Holdings (Pty) Ltd

32

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

Company Group

2006 2005 2006 2005

R R R R

Total value 365,273,464 141,928,511 - -

Balance at the beginning of the year 67 67 - -

Additions 1,360,161 - - -

Disposals (33) - - -

Net gain from fair value adjustments 7,753,982 - - -

Balance at the end of the year 9,114,177 67 - -

Balance at the beginning of the year 57,314,541 11,414,457 - -

Additions 28,728,952 - - -

Net gain from fair value adjustments 40,601,059 45,900,084 - -

Balance at the end of the year 126,644,552 57,314,541 - -

Cost 861,064,136 865 1,138,536,140 3,046,478

Share of retained profits since acquisition - 776,140 116,774,018 2,389,832

Balance at the end of the year 861,064,136 777,005 1,255,310,158 5,436,310

Balance at the beginning of the year 415 100 415 -

Additions 525 315 525 515

Transfer to subsidiaries (940) - (940) -

Disposals - - - (100)

Balance at the end of the year - 415 - 415

Balance at the beginning of the year 251,145 1,496,648 251,145 1,496,648

Disposals (251,145) - (251,145) -

Share of retained profits for the year - (1,245,503) - (1,245,503)

Balance at the end of the year - 251,145 - 251,145

Balance at the beginning of the year 190,889 50 190,889 -

Disposals (190,889) - (190,889) -

Share of retained profits for the year - 190,839 - 190,889

Balance at the end of the year - 190,889 - 190,889

Balance at the beginning of the year 100 - 100 29

Additions/(Disposals) (100) 100 (100) (29)

Balance at the end of the year - 100 - -

Balance at the beginning of the year - - 33 33

Disposals - - (33) -

Balance at the end of the year - - - 33

Balance at the beginning of the year - - 2,693,066 2,682,684

Disposals - - (2,693,066) -

Share of retained profits for the year - - - 10,382

Balance at the end of the year - - - 2,693,066

Balance at the beginning of the year 197,371 50 197,371 50

Disposals (197,371) - (197,371) -

Share of retained profits for the year - 197,321 - 197,321

Balance at the end of the year - 197,371 - 197,371

Balance at the beginning of the year - - 40 -

Disposals - - (40) -

Additions - - - 40

Balance at the end of the year - - - 40

6. INVESTMENT IN SUBSIDIARIES (continued)

Riverport Trading 143 (Pty) Ltd

Atterbury Property Investments (Pty) Ltd

Attcorn Property Holdings (Pty) Ltd

Parkdev (Pty) Ltd

Atterbury Wedge (Pty) Ltd

Atterbury Property One (Pty) Ltd

Erf 81 Lynnwood (Pty) Ltd

Mandela Development Corridor (Pty) Ltd

National Formatt Property Commercial Consultants (Pty) Ltd

Bella Rosa Development (Pty) Ltd

7. INVESTMENT IN ASSOCIATES

Fair value

33

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

Company Group

2006 2005 2006 2005

R R R R

Balance at the beginning of the year - - 5 -

Disposals - - (5) -

Additions - - - 5

Balance at the end of the year - - - 5

Balance at the beginning of the year - - 50 -

Disposals - - (50) -

Additions - - - 50

Balance at the end of the year - - - 50

Balance at the beginning of the year - - 50 -

Disposals - - (50) -

Additions - - - 50

Balance at the end of the year - - - 50

Balance at the beginning of the year - - 50 50

Disposals - - (50) -

Balance at the end of the year - - - 50

Balance at the beginning of the year - - 1,966,111 45

Disposals - - (1,966,111) -

Additions - - - 1,966,066

Balance at the end of the year - - - 1,966,111

Balance at the beginning of the year - - - -

Transfer from other investments 861,064,136 - 649,171,662 -

Share of retained profits for the year - - 116,774,018 -

Additions - - 489,364,478 -

Balance at the end of the year 861,064,136 - 1,255,310,158 -

Balance at the beginning of the year 137,085 2,744,604 137,085 2,744,604

Share of retained losses for the year - (2,607,519) - (2,607,519)

Disposals (137,085) - (137,085) -

Balance at the end of the year - 137,085 - 137,085

The Group’s proportionate interest in associates:

Attcorn Property Holdings (Pty) Ltd - 42%

Parkdev (Pty) Ltd (formerly Atterbury Property Management (Pty) Ltd) - 50%

Atterbury Wedge (Pty) Ltd - 50%

Atterbury Property One (Pty) Ltd - 100%

Erf 81 Lynnwood (Pty) Ltd - 22%

Mandela Development Corridor (Pty) Ltd - 35%

National Formatt Property Commercial Consultants (Pty) Ltd - 50%

Bella Rosa Development (Pty) Ltd - 22%

Attpower Development (Pty) Ltd - 33%

Shock Proof Investments 23 (Pty) Ltd - 33%

Class A Trading (Pty) Ltd - 33%

Rodgers Real Estate (Pty) Ltd - 33%

Superstrike Investments (Pty) Ltd - 33%

Attfund Limited 44% -

The Group's share of the results of its associates and its share of the assets and liabilities are as follows:

Attfund Limited 2,335,866,280 2,334,757,154 173,971,600 469,218,200

Total value 861,064,136 777,005 1,255,310,158 5,436,310

2006 2005

% %

7. INVESTMENT IN ASSOCIATES (continued)

Attpower Developments (Pty) Ltd

Shock Proof Investments 23 (Pty) Ltd

Class A Trading (Pty) Ltd

Rodgers Real Estate (Pty) Ltd

Superstrike Investments (Pty) Ltd

Attfund Limited

Top Coat Property Investments 5 (Pty) Ltd

Proportion Owned

Name Assets Liabilities Revenue Profit

34

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

(1,676,755)

Company Group

2006 2005 2006 2005

R R R R

Cost 2,100 23,215,141 2,100 77,466,410

Fair value adjustment 4,342,707 62,757,949 4,342,707 258,951,659

Balance at the beginning of the year 75,245,697 41,704,935 313,925,989 172,086,942

Additions 593,814,380 6,350,000 161,290,984 6,350,000

Disposals (9,306,076) (8,323,209) (9,306,076) (9,869,501)

Net gain from fair value adjustment 201,310,135 35,513,971 183,260,765 145,358,548

Transfer to associates (861,064,136) - (649,171,662) -

Balance at the end of the year - 75,245,697 - 313,925,989

Balance at the beginning of the year 50 50 50 50

Disposals (50) - (50) -

Balance at the end of the year - 50 - 50

Balance at the beginning of the year 4,311,363 16 4,311,363 16

Additions - 5,988,102 - 5,988,102

Disposals (4,311,363) - (4,311,363) -

Net loss from fair value adjustment - (1,676,755) -

Balance at the end of the year - 4,311,363 - 4,311,363

Balance at the beginning of the year - - 11,764,687 6,676,427

Transfer to other financial assets - - (13,877,390) -

Net gain from fair value adjustment - - 2,112,703 5,088,260

Balance at the end of the year - - - 11,764,687

Balance at the beginning of the year 4,163,880 - 4,163,880 -

Net gain from fair value adjustment 178,827 4,163,880 178,827 4,163,880

Balance at the end of the year 4,342,707 4,163,880 4,342,707 4,163,880

Balance at the beginning of the year 2,250,000 - 2,250,000 -

Additions 150 2,750,000 150 2,750,000

Disposals (2,250,150) - (2,250,150) -

Net loss from fair value adjustments - (500,000) - (500,000)

Balance at the end of the year - 2,250,000 - 2,250,000

Balance at the beginning of the year 2,100 2,100 2,100 2,100

Balance at the end of the year 2,100 2,100 2,100 2,100

The Group held investments in the following companies:

Attfund Limited - 16.6%

Carty Carvenience (Pty) Ltd - 25.0%

Gosforth Park Holdings (Pty) Ltd - 12.5%

Rainprop (Pty) Ltd 1.5% 1.5%

Infotech (Pty) Ltd - 4.0%

Rainprop Development & Construction Joint Venture - 32.5%

Balance at the end of the year 4,344,807 85,973,090 4,344,807 336,418,069

2006 2005

% %

Unlisted

8. INVESTMENTS

Unlisted shares at fair value

Attfund Limited

Carty Carvenience (Pty) Ltd

Gosforth Park Holdings (Pty) Ltd

Erf 321 Hatfield Beleggings (Pty) Ltd

(right to receive rental income)

Rainprop Development & Construction Joint Venture

Infotech (Pty) Ltd

Rainprop (Pty) Ltd

Proportion Owned

35

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

Company Group

2006 2005 2006 2005

R R R R

Non-current assets 1,540,073 - 2,005,586 -

Current liabilities (413,210,289) - (413,210,289) -

Non-current liabilities (5,301,714) (476,383) (5,994,219) (3,946,432)

- Atterbury Property Cape (Pty) Ltd - 12,358,916 - -

- Attstore (Pty) Ltd (3,717,352) 1,481,078 - -

- Atterbury Attfund Investments (Pty) Ltd 14,744 6,783 - -

- Lord Charles & Lady Brooks Office Park Holdings (Pty) Ltd 18,492,150 3,397,629 - -

- Atterbury Property Johannesburg (Pty) Ltd 16,368,431 5,038,254 - -

- Riverport Trading 143 (Pty) Ltd (98,714) 1,934,835 - -

- Nieuw Pivot Investments (Pty) Ltd - 1,657,743 - -

- Interactive Trading 800 (Pty) Ltd (8,808,657) 5,632,831 - -

- Atterbury Parkdev Consortium (Pty) Ltd - 160,895 - -

- Erf 321 Hatfield Beleggings (Pty) Ltd 870,447 811,893 - -

- Atterbury Property Investments (Pty) Ltd 10,913 2,190 - -

- Lady Brooks (Pty) Ltd (304,356) (268,906) - -

- Atterbury Property Cape Holdings (Pty) Ltd 1,056,463 (1,871,432) - -

- Atterbury Property Holdings (Pty) Ltd - (5,549,719) - -

- Atterbury Investment Managers (Pty) Ltd - (638,941) - -

- Aldabri 96 (Pty) Ltd (22,168,495) (1,506,219) - -

- Attcorn Property Gauteng (Pty) Ltd 176,788 - - -

- Autumn Star Trading 597 (Pty) Ltd (3,070,969) - - -

- Highgrove Property Holdings (Pty) Ltd 28,144,592 - - -

- Attcorn Property Holdings (Pty) Ltd 4,394,771 - - -

- Rainprop Development & Construction Joint Venture (1,520,684) (3,077,002) (1,520,684) (3,077,002)

- Atterbury Wedge (Pty) Ltd - 311,286 - 311,286

- Top Coat Property Investments 5 (Pty) Ltd - (4,469) - (4,469)

- Attcorn Property Holdings (Pty) Ltd - 4,383,725 - 4,383,725

- Shockproof Investments 23 (Pty) Ltd - - - 15,864,703

- Atterbury Property One (Pty) Ltd - 1,382 - -

- Attcorn Property Gauteng (Pty) Ltd - 40,400 - 392,977

- Attpower Developments (Pty) Ltd - - - 6,838,979

- Bella Rosa Development (Pty) Ltd - - - 2,275,938

- Superstrike Investments (Pty) Ltd - 400 - 400

- Atterbury Property Developments (Pty) Ltd - (5,911) - (5,911)

- Rodgers Real Estate (Pty) Ltd - - - 152,019

- National Formatt Property Commercial Consultants (Pty) Ltd - (183,285) - (183,285)

The loans from or to subsidiaries/associates bear no interest,

are unsecured and have no fixed terms of repayment, except

as noted below:

The following loans bear interest at prime:

- Attstore (Pty) Ltd

- Autumn Star Trading 597 (Pty) Ltd

- Riverport Trading 143 (Pty) Ltd

- Atterbury Trust (5,301,714) - (5,301,714) -

- The BNF Trust (6,066,852) - (6,066,852) (1,156,683)

- LLS van der Watt - (476,383) - (476,383)

- Deut 28 Trust - - (692,505) -

- Belsize Trust (930,287) - (930,287) -

- Village Trust 1,540,073 - 2,005,586 -

- Mergon Trust (406,213,150) - (406,213,150) (2,313,366)

The loans bear no interest, have no fixed terms of repayment

and are unsecured.

The following loans bear interest at prime:

- Atterbury Trust

- Village Trust

Non-current assets 69,529,299 37,220,240 - 30,220,027

Non-current liabilities (39,689,227) (13,105,884) (1,520,684) (3,270,667)

9. LOANS TO/(FROM) SUBSIDIARIES, ASSOCIATES AND

JOINT VENTURES

10. LOANS TO/(FROM) SHAREHOLDERS

Subsidiaries

Joint ventures

Associates

36

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

Zwelinzima Holdings (Pty) Ltd 262,500 - 262,500 -

- - 13,877,390 -

Company Group

2006 2005 2006 2005

R R R R

Association for People with Disabilities 87,500 87,500 87,500 87,500

Atterbury Trust - 290,238 - 290,238

Carty Carvenience (Pty) Ltd - 725,000 - 725,000

Atterbury Property Holdings (Pty) Ltd 3,431,500 - 3,431,500 -

Atterbury Property One (Pty) Ltd 5,474,315 - 5,474,315 -

DH Booysen - - 872,257 -

Emerald Trust 2,637,592 - 2,637,592 -

Circlevest Properties (Pty) Ltd - - 1,738,312 352,577

Rainprop (Pty) Ltd 258,587 279,064 258,587 279,064

Village Trust - 24,498 - -

WDB Investment Holdings (Pty) Ltd 211,275 262,500 211,275 262,500

- Atterbury Property Holdings (Pty) Ltd

- Atterbury Property One (Pty) Ltd

- Emerald Trust

- Rainprop (Pty) Ltd

- Advance receipts - - (9,440) (123,277)

- Assessed losses - - (13,193,909) (2,066,049)

- Prepayments - - (49,472) 130,548

- Wear and Tear allowance - - 389,158 127,883

- Straight line debtor 569,311 - 1,662,621 -

- Other - - - 270,223

- Pre-production interest - - 1,221,313 -

- Bad debt allowance - - - (3,262)

- CGT on fair value adjustments 78,312,885 28,108,165 88,700,270 44,956,761

- Reversal of intercompany profit on sale of Attfund Ltd

shares 14/10/2003 - - - (33,775)

Other investments

Work-in-progress: Mapungubwe Development - - 8,945,805 -

Work-in-progress: College House Development - - 12,905,741 -

Unsold stands, - - - 14,912,148

The work-in-progress consists of the following:

. - - 21,851,546 -

Total other financial assets 12,363,269 1,668,800 14,973,838 1,996,879

78,882,196 28,108,165 78,720,541 43,259,051

- - 21,851,546 14,912,148

The balance comprises:

11. OTHER FINANCIAL ASSETS

12. DEFERRED TAX

13. NON-CURRENT ASSETS HELD FOR SALE

14. INVENTORY

Deferred tax liability

37

The loans are unsecured and indefinite. Unless specified, the

loans bear no interest except the loans below which bear

interest at prime:

The group is in the process of selling its right to receive

income from Erf 321 Hatfield Beleggings (Pty) Ltd.

Mapungubwe development: Consisting of Erven 1084 and

1166 Marshall Town. The erven is being developed in luxury

apartments known as "Mapungubwe Luxury Apartments"

situated in the financial district of Johannesburg. College

House development: Consisting of Erf 4687 Johannesburg.

The erven is being developed into residential estates.

Pledged as security for long term liabilities refer note 16.

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

Company Group

2006 2005 2006 2005

R R R R

- - - 262,985

- - - 1,854,594

- - - 12,794,569

The unsold stands are:

500,000,000 Ordinary shares of R0.0001 50,000 10,000 50,000 10,000

9,915 9,780 9,915 9,780

Share buy-back (350) (115) (350) (115)

Issue of share capital 11,739 250 11,739 250

Ordinary 21,304 9,915 21,304 9,915

Share premium 314,063,644 3,303,074 314,063,644 3,303,074

- - 48,474,013 31,689,334

- - - 5,204,794

- - 3,041,309 -

- - - 18,637,600

- - 43,628,044 -

- - 21,851,546 14,912,148

Total issued shares 21,304 9,915 21,304 9,915

314,084,948 3,312,989 314,084,948 3,312,989

Interactive Trading 800 (Pty) Ltd

14. INVENTORY (continued)

15. ISSUED CAPITAL

16. OTHER FINANCIAL LIABILITIES

Authorised

Reconciliation of issued shares in R-value issued:

Issued

Held at amortised costs

Investec Bank Limited

38

The La Verona project on the consolidated erf, comprising erf

12515 and 12516 (Stands 1 & 7). As a result of the restruc-

turing of the Group, the development is no longer undertaken

by the Group.

The Ile Plaisance (Pty) Ltd project comprising of Erven 581,

2359 and 2057 Laaiplek at Port Owen. As a result of the

restructuring of the Group, the development is no longer

undertaken by the Group.

Secured loans bearing interest at between 9% and 12.52%,

repayable in the next 64 months, in structured, balloon

payments. Secured by Cession and pledge of:

2,957,143 Attfund Limited shares held by Interactive Trading

800 (Pty) Ltd and

Suretyship by Attacq Property Fund Limited of R5,750,000

Subsequent to the restructuring of the Group, the loan no

longer forms part of the Group's liabilities.

Secured loan bearing interest at prime -1% per annum,

repayable within one year. Secured as follows:

257,143 Attfund Limited shares held by Attacq Property Fund

Limited and

Joint and several suretyship by LLS van der Watt limited to

R6,000,000

Subsequent to the restructuring of the Group, the loan no

longer forms part of the Group's liabilities.

Secured loan bearing interest at prime -1.5% per annum,

repayable from 30 June 2006 for a period of 10 years.

Secured as follows:

Mortgage bond over Erf 757/4 Menlo Park Joint and several

suretyship by Attacq Property Fund Limited limited to

R19,095,000.

Joint and several suretyship by Village Trust limited to

R9,405,000

Atterbury Property Cape (Pty) Ltd

Autumn Star Trading 597 (Pty) Ltd

Ile Plaisance (Pty) Ltd

Riverport Trading 143 (Pty) Ltd

The 286,956,420 unissued ordinary shares are under the

control of the directors in terms of resolution of members

passed at the last annual general meeting. This authority

remains in force until the next annual general meeting.

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

58,777,461 - 58,777,461 -

- - - 8,476,934

The loan was repaid during the financial year.

6,473,596 5,888,960 6,473,596 5,888,960

- - 13,049,266 14,000,000

- - 67,614,327 78,542,781

- - 15,073,787 -

- - 65,545,105 -

Company Group

2006 2005 2006 2005

R R R R

Attacq Property Fund Limited

Attstore (Pty) Ltd

Attacq Property Fund Limited

Lady Brooks (Pty) Ltd

Aldabri 96 (Pty) Ltd

Lord Charles & Lady Brooks Office Park Holdings (Pty) Ltd

Brooklyn Square (Pty) Ltd

16. OTHER FINANCIAL LIABILITIES (continued)

FirstRand Bank Limited

Nedbank Limited

Standard Bank Limited

39

Mortgage bond bearing interest between 9.25% - 9.33%.

Repayable in amounts between R196,253 - R449,315 in

periods between 104 - 176 months. Secured as follows:

Mortgage bond registered over long-term notarial lease of

and and Building G, situated on Portion 469 (a portion of

Portion 433) of the farm Elandspoort.

Cession of rental income and any right, title or interest under

any lease entered into.

Secured loan bearing interest at prime -1% per annum,

monthly repayments consist of interest only. A balloon

payment is due April 2008. Secured by 261,700 Attfund

Limited shares pledged.

Secured loan bearing interest at prime -1.25% per annum.

The repayment terms state that for the first 24 months after

completion of the development interest will be repayable and

that the total loan is repayable within 10 years after

completion. Secured as follows:

Bond over Erf 380 and Erf 381, Brooklyn

Limited suretyship from the following entities:

Attacq Property Fund Limited to the amount of R9,533,810

Mergon Trust to the amount of R3,336,190 and

BNF Trust to the amount of R1,430,000

Secured loan bearing interest at between 9.75% and 10.84%

per annum, repayable in instalments of between R248,215

and R405,815.

Secured as follows:

Bond over:

Erf 767 Brooklyn known as Brooklyn Gardens

Erf 420 Nieuw Muckleneuk known as Waterkloof Corner

Erf 499 Lynwoodridge known as FNB House

Erf 326/7; 325/1; 325/RE; 1029/RE; 1029/1; 59/2 and portion 1

(remaining extent) of Erf 60 Arcadia

Joint and several suretyship by:

Attacq Property Fund Limited to the amount of R45,738,000

Village Trust to the amount of R27,442,800

BNF Trust to the amount of R6,307,416

Mergon Trust to the amount of R12,257,784

Secured loan bearing interest at between 9.66% and 9.8% per

annum, repayable between 24 and 48 months in instalments

of between R65,835 and R65,782. Secured as follows:

Bond over Erf 504, 505 and 506/1 Brooklyn

Joint and several suretyship by Attacq Property Fund Limited

to the amount of R35,759,000.

Secured loan bearing interest at prime, repayable over a

period of 10 years in bulk capital payment of between

R3,153,500 and R11,990,000. Secured as follows:

Bond over Erf 415/RE Nieuw Muckleneuk

Joint and several suretyship by Attacq Property Fund Limited

to the amount of R72,143,025

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

R. de Bruyn - - - 320,000

Company Group

2006 2005 2006 2005

R R R R

Atterbury Property Johannesburg (Pty) Ltd

Attcorn Property Gauteng (Pty) Ltd

Riverport Trading 143 (Pty) Ltd

Executive

- - 14,320,039 -

Circlevest Properties (Pty) Ltd

GC Holtzhausen

Gustav Holtzhausen Family Trust

JA du Toit

Jaleen Family Trust

- - 1,475,404 -

- - - 4,871,410

Property previously financed by Standard Bank Limited, is

now financed by Investec Private Bank Limited.

- - 13,000,000 -

Brunswick Property Investments (Pty) Ltd - - - 15,823,871

Acceleration eMarketing (Pty) Ltd 778,283 1,702,620 778,283 1,702,620

Deut 28 Trust - - - 1,247,134

Attventure (Pty) Ltd - - 1,357,426 -

Finbez Beleggings CC - - 97,973 97,973

P.J.J. van Rensburg - - 35,529 35,529

Parkdev S.A. (Pty) Ltd - - 305,402 2,038,928

Village Trust - - - 2,372,713

VRF Holdings (Pty) Ltd - - 470,000 470,000

The loans have no fixed repayment terms. Unless specified,

the loans bear no interest.

- Acceleration eMarketing (Pty) Ltd Prime -2%

- Parkdev SA (Pty) Ltd Prime

The loan from Acceleration eMarketing (Pty) Ltd is repayable

on demand.

- within one year 5,692,237 - 43,998,206 28,152,695

- in second to fifth year inclusive 27,139,219 - 146,635,707 160,008,984

- later than 5 years 103,334,110 - 184,208,504 214,833,433

Emoluments received

- Other services - - 1,110,840 1,800,068

Non-current liabilities 65,481,934 7,591,580 297,931,107 183,446,457

Current liabilities 547,406 - 55,585,857 7,974,124

136,165,566 - 374,842,417 402,995,112

- - 1,110,840 1,800,068

16. OTHER FINANCIAL LIABILITIES (continued)

Redeemable preference shares

Unsecured liabilities

Value of minimum lease payments due

17. OPERATING LEASE RECEIVABLES

18. DIRECTORS' EMOLUMENTS

40

The 13 redeemable preference shares are redeemable within

the next 12 months at a par value of R1 as well as a premium

per share of R999,999

The long term liability is part of the joint venture as indicated

above. The terms, conditions and security is the same as

above.

Attcorn Property Gauteng (Pty) Ltd and Atterbury Property

Johannesburg (Pty) Ltd are jointly developing the luxury

apartments known as Mapungubwe with Circlevest

Properties (Pty) Ltd. The secured loan is taken out by the

three entities for the development, it bears interest at prime

-1% per annum, repayable before 31 May 2007. Secured as

follows:

Bond over Erf 1084 Marshalls Town and Erf 1166 Marshalls

Town

Joint and several suretyship by the following entities:

Attacq Property Fund Limited for the amount of R33,750,000

and the following companies to the amount of R11,250,000:

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

1,915,815

Company Group

2006 2005 2006 2005

R R R R

Local income tax - recognised in current tax for current periods 7,363,005 2,767,976 9,922,049 3,227,702

Underprovision in prior year - - - 19,906

Total deferred tax 50,774,031 14,054,454 37,260,028 26,045,384

- Current year 50,204,700 14,522,911 35,925,736 26,484,548

- Difference due to straight lining 569,331 - 1,334,292 135,112

- Decrease due to rate change - (468,457) - (574,276)

Charge for the year 10,302,808 674,586 11,696,555 1,010,875

Applicable tax rate 29.0% 29.0%

Adjusted for:

- Non-deductable expenditure - 0.1%

- Fair value adjustments - 50% (13.7%) (14.5%)

- Share of retained profits of associates - 50% - 0.2%

- Tax rate adjustment - (0.4%)

- Loss on sale of investment - 0.1%

- Adjustment of tax base - Atterbury Cape Holdings 2004 - (0.4%)

- Secondary tax on companies 2.8% 0.6%

Net reduction (10.9%) (14.3%)

Effective rate 18.1% 14.7%

Attributable share of retained profit for the year excluding

extraordinary items

Net (loss) / profit for the year - (3,464,863) 116,774,018 (1,488,416)

Less: Dividend paid - 1,915,815 -

Other dividends 116,302 - 116,302 913,934

Interest from subsidiaries, associates and joint ventures 1,300,133 1,915,815 4,041,626 1,757,471

Other interest 1,987,709 1,484,411 1,256,055 430,162

Non-current liabilities 2,093,489 1,374,002 16,271,655 14,694,179

Bank 736,995 518,757 741,023 838,290

Other interest 1,488,237 204,903 10,977,815 2,510,995

Related parties are defined as those entities with which the

Group transacted during the year and in which the following

relationship(s) exist:

• Shareholding

• Directorships

• Management

Transactions between group companies which are eliminated

on consolidation are not disclosed.

Related parties consist therefore of the following parties:

• Parkdev (Pty) Ltd (formerly known as Atterbury Property Management (Pty) Ltd)

• Atterbury Investment Managers (Pty) Ltd

68,439,844 17,497,016 58,878,632 30,303,867

- (1,549,048) 116,774,018 427,399

3,404,144 3,400,226 5,413,983 3,101,567

4,318,721 2,097,662 27,990,493 18,043,464

19. TAXATION

20. SHARE OF ASSOCIATED COMPANIES’

RETAINED PROFIT

21. INVESTMENT INCOME

22. FINANCE COSTS

23. RELATED PARTIES

Major components of the tax expense/income

Current

Deferred

Secondary tax on companies

Reconciliation of the tax expense

Dividend revenue

Relationship

23.

Interest revenue

41

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

23. RELATED PARTIES (continued)

Related party transactions and balances

Purchases from related parties

24. CONTINGENT LIABILITIES

25. CAPITAL COMMITMENTS

• Atterbury Property Holdings (Pty) Ltd

• The BNF Trust

43,000,000 43,000,000 43,000,000 43,000,000

• Mergon Trust

• Attfund Limited

• Atterbury Parkdev Consortium (Pty) Ltd

• Atterbury Property Cape (Pty) Ltd

• Rainprop (Pty) Ltd

• Attventure (Pty) Ltd

Parkdev (Pty) Ltd - 706,996 -

2005 - 117,579 -

Atterbury Investment Managers (Pty) Ltd - 842,835 -

2005 - - -

Atterbury Property Holdings (Pty) Ltd 185,977 1,353,704 3,432,529

2005 107,714 670,602 -

The BNF Trust - 11,958 (6,066,852)

2005 - 119,573 (1,156,683)

Mergon Trust - 23,917 (406,213,150)

2005 - 239,145 (2,313,366)

Atterbury Parkdev Consortium (Pty) Ltd - 3,700,000 -

2005 - - -

Attventure (Pty) Ltd - 91,301 (1,357,426)

2005 - - -

Attfund Limited 180,000 - -

2005 - - -

Atterbury Property Cape (Pty) Ltd 317,238 - -

2005 - - -

Rainprop (Pty) Ltd 42,871 - 258,587

2005 7,888 19,159 279,064

53,996,433 25,511,498 - -

946,668 Shares held by the Group in Attfund Limited were

pledged as security in respect of the obligations towards

Nedbank Limited as per note 16.

The Group's bankers have issued the following guarantees

to creditors:

Brooklyn Square (Pty) Ltd - - 150,000 -

Attacq Property Fund Limited (Building G, joint venture) - - 1,667,792 -

Aldabri 96 (Pty) Ltd - - 165,760 -

Sureties given by the Group:

Years Sales to Purchases/ Balances

services owing by/(to)

2006

2006

2006

2006

2006

2006

2006

2006

2006

2006

from

Company Group

2006 2005 2006 2005

R R R R

Attacq Property Fund Limited

42

Joint surety given in respect of loan funds advanced by

Standard Bank to Atterbury Property Johannesburg (Pty) Ltd,

Attcorn Property Gauteng (Pty) Ltd and Circlevest Properties

(Pty) Ltd as follows:

- Bond amounting to R550,000,000 and an additional amount

of R110,000,000 as additional surety over Erf 134205,

Rondebosch, Cape Town

- Bond amounting to R160,000,000 and an additional amount

of R32,000,000 as additional surety over Erf 160462,

Cape Town

- Bond amounting to R110,000,000 and an additional amount

of R22,000,000 as additional surety over Erf 17, Bryanston

East Ext 5 and Portion 2 of Erf 17, Bryanston East Ext 5

Liability for STC which would arise if Attacq Property Fund

Limited were to distribute their reserves

3,280,319 Shares (2005: 6,211,110 Shares) held by the

Group in Attfund Limited were pledged as security in respect

of the obligations towards Investec Bank Limited as per note

16.

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

30,000,000 - 30,000,000 -

50,840,000 - 50,840,000 -

1,300,000 - 1,300,000 -

5,700,000 - 5,700,000 -

711,000 - 711,000 -

20,000,000 20,000,000 20,000,000 20,000,000

30,000,000 - 30,000,000 -

3,400,000 - 3,400,000 -

9,710,000 - 9,710,000 -

25,000,000 - 25,000,000 -

78,416,000 - 78,416,000 -

6,050,000 - 6,050,000 -

5,750,000 5,750,000 5,750,000 5,750,000

6,000,000 - 6,000,000 -

Company Group

2006 2005 2006 2005

R R R R

25. CAPITAL COMMITMENTS (continued)

43

Joint surety given in respect of loan funds advanced by

Standard Bank Limited to Brooklyn Square (Pty) Ltd as

additional surety over Erf 415, Nieuw Muckleneuk.

Joint surety given in respect of loan funds advanced by First-

Rand Bank Limited to Travenna Development Company (Pty)

Ltd as additional surety over Erf 59, a portion of Erf 78 and

remaining extents of Erf 79 and 433 of Farm Elandspoort No

357 Division JR.

Surety in respect of loan funds advanced by Investec Bank

Limited for the fractional ownership development known as

"Staytus Luxury Lifestyle Collection”

Surety in respect of loan funds advanced by Nedbank Limited

for the mixed use development to be undertaken by Nulane

Investments 40 (Pty) Ltd in Worcester, Western Cape.

Surety in respect of loan funds advanced by Investec Bank

Limited for the mixed use development to be undertaken by

Cape Gannet Properties 142 (Pty) Ltd in Paarl, Western Cape.

Surety in respect of loan funds advanced by Standard Bank

Limited for the "Bella Rosa Lifestyle Village" currently under

development in Tygervalley, Western Cape.

Surety in respect of loan funds advanced by Standard Bank

Limited for the "Kraaibosch Residential Estate" currently

under development in George, Western Cape.

Surety in respect of loan funds advanced by Investec Bank

Limited to Atterbury Property Cape (Pty) Ltd.

Surety in respect of loan funds advanced by Investec Bank

Limited to Atterbury Property Developments (Pty) Ltd for

acquisition and development of "Beau Rivage”

Surety in respect of loan funds advanced by Investec Bank

Limited to Dream Weaver Trading 40 (Pty) Ltd for

development of "Le Chateau”

Surety in respect of loan funds advanced by Investec Bank

Limited to Papillio Investments 40 (Pty) Ltd for acquisition and

development of "Paradise Coast”

Surety in respect of loan funds advanced by Investec Bank

Limited to Mergon Trust for Infotech (Pty) Ltd capital

requirements.

Surety in respect of loan funds advanced by Investec Bank

Limited to Interactive Trading 800 (Pty) Ltd.

Surety in respect of loan funds advanced by Investec Bank

Limited to Autumn Star Trading 597 (Pty) Ltd for proposed

new development in Jefferys Bay, Western Cape.

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

4,622,310 - 4,622,310 -

9,095,000 - 19,095,000 -

9,533,810 - 9,533,810 -

35,759,000 - 35,759,000 -

14,000,000 - 14,000,000 -

36,843,959 - 36,843,959 -

33,750,000 33,750,000 33,750,000 33,750,000

25,102,500 - 25,102,500 -

72,143,025 - 72,143,025 -

45,738,000 45,738,000 45,738,000 45,738,000

30,000,000 - 30,000,000 -

Company Group

2006 2005 2006 2005

R R R R

1

25. CAPITAL COMMITMENTS (continued)

26. RISK MANAGEMENT

44

Surety in respect of loan funds advanced by Investec Bank

Limited to Wattchatt (Pty) Ltd.

Surety in respect of loan funds advanced by Investec Bank

Limited to Riverport Trading 143 (Pty) Ltd in respect of finance

lease agreement of Investec Pretoria Regional Offices.

Surety in respect of loan funds advanced by Investec Bank

Limited to Lady Brooks (Pty) Ltd for the development of the

"Lady Brooks Office Park" situated in Menlo Park, Pretoria.

Surety in respect of loan funds advanced by Investec Bank

Limited to Lord Charles and Lady Brooks Office Park

Holdings (Pty) Ltd for the development of the "Lord Charles

and Lady Brooks Office Park" situated in Menlo Park, Pretoria

Surety in respect of loan funds advanced by FirstRand Bank

Limited to Trevenna Development Company (Pty) Ltd for the

development of the various residential developments

situated in Lynnwood Manor, Pretoria.

Surety in respect of loan funds advanced by Nedbank Limited

to Western Breeze 41 (Pty) Ltd for the development of the

various residential developments situated in Lynnwood

Manor, Pretoria.

Surety in respect of loan funds advanced by Standard Bank

Limited to Attcorn Property Gauteng (Pty) Ltd, Atterbury

Property Johannesburg (Pty) Ltd and Circlevest Properties

(Pty) Ltd for the development of the various residential

developments situated at 1084 Marshalltown and Erf 1166

Marshalltown, Johannesburg.

Surety in respect of loan funds advanced by Standard Bank

Limited to Southern Palace Investments 310 (Pty) Ltd for the

development of residential development known as "Isibaya

House".

Surety in respect of loan funds advanced by Standard Bank

Limited to Brooklyn Square (Pty) Ltd.

Surety in respect of loan funds advanced by Standard Bank

Limited to Aldabri 96 (Pty) Ltd for the acquisition of various

commercial properties.

Joint surety given in respect of loan funds advanced by

Standard Bank Limited to Brooklyn Square (Pty) Ltd as

additional surety over Erf 415, Nieuw Muckleneuk.

The Group's risk management has been disclosed in the

asset management report in the financial statements.

Highgrove Property Holdings (Pty) Ltd

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

Company Group

2006 2005 2006 2005

R R R R

20,971,322 764,457 21,801,241 31,088,855

Profit/(loss) before taxation 378,888,121 119,629,761 429,742,685 200,215,724

Investment income (3,404,144) (3,400,226) (5,413,983) (3,101,567)

Finance costs 4,318,721 2,097,662 27,990,493 18,043,464

Depreciation - - 199,236 262,513

Loss/(profit) on disposal of property, plant and equipment - - 407,784 (3,816)

(Profit)/loss on disposal of subsidiaries (280,660) - (7,125,037) 7,254,927

Loss/(profit) on disposal of associates 525,190 - - -

(Profit)/loss on disposal of other investments (547,644) 558,869 5,049,471 187,340

Loss/(profit) on disposal of investment property - - 63,888 72,608

Fair value adjustment to investments (330,753,470) (121,182,810) (185,552,297) (152,433,932)

Fair value adjustment to investment properties (26,958,801) - (117,329,081) (51,359,031)

Non-cash item - straight line debtor (1,963,142) - (4,014,011) -

Transfer of property to inventory - - - 13,046,445

Excess of cost above fair value - - (13,465,621) (14,014,376)

Equity ceded to minorities on buy back of shares - - - 327,349

Equity income from associate - 3,464,863 (116,774,018) 1,488,416

Dividends received from associates - (1,915,815) - (1,915,815)

Decrease/(increase) in inventories - - 21,666,696 (13,865,121)

(Decrease)/increase in accounts receivable (4,824,650) (659,766) (6,754,965) (6,618,760)

Increase/(decrease) in accounts payable 5,971,801 2,171,919 (6,889,999) 33,502,487

Acquired 20% of the company 1 July 2005

Investment Property 128,975,826 - 128,975,826 -

Loans to shareholders 37,396,259 - 37,396,259 -

Straight line debtor 738,674 - 738,674 -

Trade and other receivables 401,459 - 401,459 -

Cash and cash equivalents 1,209,331 - 1,209,331 -

Loans from group companies (43,765,680) - (43,765,680) -

Loans from shareholders (1,988,762) - (1,988,762) -

Other financial liabilities (78,542,781) - (78,542,781) -

Deferred tax (6,316,988) - (6,316,988) -

Current tax payable (40,543) - (40,543) -

Trade and other payables (860,630) - (860,630) -

37,206,165 - 37,206,165 -

Minus: Other shareholders' interest and interest previously

acquired (29,743,510) - (29,743,510) -

7,462,655 - 7,462,655 -

Goodwill on acquisition (excess on acquisition) 335,916 - 335,916 -

Purchase price 7,798,571 - 7,798,571 -

Shares issued 7,798,571 - 7,798,571 -

Net cash purchase price

Acquired 40% of the company 1 July 2005

Loans to shareholders 1,871,432 - 1,871,432 -

Other financial assets 74,174,402 - 74,174,402 -

Trade and other receivables 100 - 100 -

Cash and cash equivalents 42 - 42 -

Deferred tax (9,635,112) - (9,635,112) -

Current tax payable (901,958) - (901,958) -

Trade and other payables (1) - (1) -

65,508,905 - 65,508,905 -

Minus: Other shareholders' interest and interest previously

acquired (42,379,932) - (42,379,932) -

23,128,973 - 23,128,973 -

Goodwill on acquisition (excess on acquisition) (3,835,687) - (3,835,687) -

Purchase price 19,293,286 - 19,293,286 -

Shares issued 19,293,286 - 19,293,286 -

Net cash purchase price - - - -

Aldabri 96 (Pty) Ltd

Atterbury Property Cape Holdings (Pty) Ltd

- - - -

27. NOTES TO THE CASH FLOW STATEMENT

27.1 CASH FLOW FROM OPERATING ACTIVITIES

27.2 SUBSIDIARIES ACQUIRED

Adjustments for:

Change in working capital:

45

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

Company Group

2006 2005 2006 2005

R R R R

Acquired 49% of the company 1 July 2005

Other financial assets 11,764,686 - 11,764,686 -

Trade and other receivables 93,255 - 93,255 -

Cash and cash equivalents 556,852 - 556,852 -

Loans from shareholders (811,893) - (811,893) -

Other financial liabilities (603,502) - (603,502) -

Deferred tax ( 1,395,704) - (1,395,704) -

Trade and other payables (407,145) - (407,145) -

9,196,549 - 9,196,549 -

Minus: Other shareholders' interest and interest previously acquired (4,690,240) - (4,690,240) -

4,506,309 - 4,506,309 -

Goodwill on acquisition (excess on acquisition) 836,542 - 836,542 -

Purchase price 5,342,851 - 5,342,851 -

Shares issued 3,707,284 - 3,707,284 -

Accrual 1,635,567 - 1,635,567 -

Acquired 49% of the company 1 July 2005

Investment Property 20,222,871 - 20,222,871 -

Loans to shareholders 268,906 - 268,906 -

Other financial assets 193,129 - 193,129 -

Trade and other receivables 22,235 - 22,235 -

Cash and cash equivalents 774,443 - 774,443 -

Other financial liabilities (14,000,000) - (14,000,000) -

Deferred tax (921,966) - (921,966) -

Trade and other payables (333,056) - (333,056) -

6,226,562 - 6,226,562 -

Minus: Other shareholders' interest and interest previously acquired (3,161,825) - (3,161,825) -

3,064,737 - 3,064,737 -

Goodwill on acquisition (excess on acquisition) (490) - (490) -

Purchase price 3,064,247 - 3,064,247 -

Shares issued 3,064,247 - 3,064,247 -

Net cash purchase price - - - -

Acquired 25% of the company 1 July 2005

Property, plant and equipment 61,968 - 61,968 -

Investment in subsidiaries 64 - 64 -

Loans to group companies 352,577 - 352,577 -

Other financial assets 3,045,643 - 3,045,643 -

Inventories 378,422 - 378,422 -

Trade and other receivables 404,496 - 404,496 -

Cash and cash equivalents 72,079 - 72,079 -

Loans from shareholders (6,285,388) - (6,285,388) -

Deferred tax 523,300 - 523,300 -

Trade and other payables (27,632) - (27,632) -

(1,474,471) - (1,474,471) -

Minus: Other shareholders' interest and interest previously acquired 1,474,496 - 1,474,496 -

25 - 25 -

Goodwill on acquisition (excess on acquisition) 2,130,289 - 2,130,289 -

Purchase price 2,130,314 - 2,130,314 -

Shares issued 2,130,314 - 2,130,314 -

Net cash purchase price - - - -

Acquired 8% of the company 1 July 2005

Inventories 184,850 - 184,850 -

Trade and other receivables 160,021 - 160,021 -

Cash and cash equivalents 126 - 126 -

Loans from group companies (392,977) - (392,977) -

Loans from shareholders (2,850) - (2,850) -

Deferred tax 15,246 - 15,246 -

Trade and other payables (4,493) - (4,493) -

(40,077) - (40,077) -

Minus: Other shareholders' interest and interest previously acquired 36,855 - 36,855 -

(3,222) - (3,222) -

Goodwill on acquisition (excess on acquisition) 256,437 - 256,437 -

Purchase price 253,215 - 253,215 -

Shares issued 253,215 - 253,215 -

Net cash purchase price - - - -

Erf 321 Hatfield Beleggings (Pty) Ltd

Lady Brooks (Pty) Ltd

Atterbury Property Johannesburg (Pty) Ltd

Attcorn Property Gauteng (Pty) Ltd

27.2 SUBSIDIARIES ACQUIRED (continued)

46

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

Company Group

2006 2005 2006 2005

R R R R

Acquired 56% of the company 1 July 2005

Property, plant and equipment 85,992 - 85,992 -

Investment in subsidiaries 500 - 500 -

Loans to group companies 14,064 - 14,064 -

Other financial assets 2,878,795 - 2,878,795 -

Trade and other receivables 508,516 - 508,516 -

Cash and cash equivalents 40,152 - 40,152 -

Loans from shareholders (4,383,725) - (4,383,725) -

Other financial liabilities (550,000) - ( 550,000) -

Deferred tax 465,897 - 465,897 -

Trade and other payables (411,439) - (411,439) -

(1,351,248) - (1,351,248) -

Minus: Other shareholders' interest and interest previously acquired (415) - (415) -

(1,351,663) - (1,351,663) -

Goodwill on acquisition (excess on acquisition) 1,352,188 - 1,352,188 -

Purchase price 525 - 525 -

Shares issued - - - -

Net cash purchase price 525 - 525 -

Acquired 100% of the company 1 July 2005

Investment in subsidiaries 27,317,156 - 27,317,156 -

Loans to group companies 27,878,417 - 27,878,417 -

Loans from shareholders (61,323,046) - (61,323,046) -

Trade and other payables (5,984,000) - (5,984,000) -

(12,111,473) - (12,111,473) -

Minus: Other shareholders' interest and interest previously acquired 55,368,619 - 55,368,619 -

43,257,146 - 43,257,146 -

Goodwill on acquisition (excess on acquisition) 7,186,060 - 7,186,060 -

Purchase price 50,443,206 - 50,443,206 -

Shares issued 18,943,206 - 18,943,206 -

Net cash purchase price 31,500,000 - 31,500,000 -

Acquired 17% of the company 1 July 2005

Property, plant and equipment 9,900,113 - 9,900,113 -

Trade and other receivables 395,382 - 395,382 -

Cash and cash equivalents 701 - 701 -

Loans from shareholders (3,503,369) - (3,503,369) -

Other financial liabilities (4,871,410) - (4,871,410) -

Deferred tax 57,896 - 57,896 -

Trade and other payables (2,125,057) - (2,125,057) -

(145,744) - (145,744) -

Minus: Other shareholders' interest and interest previously acquired (473,403) - (473,403) -

327,659 - 327,659 -

Goodwill on acquisition (excess on acquisition) 1,032,502 - 1,032,502 -

Purchase price 1,360,161 - 1,360,161 -

Shares issued 1,360,161 - 1,360,161 -

Net cash purchase price - - - -

Acquired 30% of the company 1 July 2005

Investment in subsidiaries 95,765,351 - 95,765,351 -

Trade and other receivables 70 - 70 -

Cash and cash equivalents 41 - 41 -

Loans from shareholders (2,190) - (2,190) -

Deferred tax (13,885,357) - (13,885,357) -

Trade and other payables 1 - 1 -

81,877,916 - 81,877,916 -

Minus: Other shareholders' interest and interest previously acquired (51,451,352) - (51,451,352) -

30,426,564 - 30,426,564 -

Goodwill on acquisition (excess on acquisition) (1,697,612) - (1,697,612) -

Purchase price 28,728,952 - 28,728,952 -

Shares issued 28,728,952 - 28,728,952 -

Net cash purchase price - - - -

Attcorn Property Holdings (Pty) Ltd

Highgrove Property Holdings (Pty) Ltd

Riverport Trading 143 (Pty) Ltd

Atterbury Property Investments (Pty) Ltd

27.2 SUBSIDIARIES ACQUIRED (continued)

47

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

Company Group

2006 2005 2006 2005

R R R R

31,500,625 1,003,989 31,500,625 -

Interactive Trading 800 (Pty) Ltd

Autumn Star Trading 597 (Pty) Ltd

Razorbill Properties 91 (Pty) Ltd

Ile Plaisance (Pty) Ltd

Atterbury Property Cape Holdings (Pty) Ltd

Acquired 15% of the company 1 July 2005 (2005: 5%)

Investment in subsidiaries 73,942,165 38,052,124 73,942,165 -

Other financial assets 143,111,060 143,111,060 143,111,060 -

Trade and other receivables 6,000,000 6,000,000 6,000,000 -

Cash and cash equivalents 68 68 68 -

Loans from group companies (35,890,040) - (35,890,040) -

Loans from shareholders (5,632,831) (5,632,831) (5,632,831) -

Other financial liabilities (35,159,383) (35,159,383) (35,159,383) -

Deferred tax (20,676,333) (20,676,333) (20,676,333) -

Current tax payable (12,161) (12,161) (12,161) -

Trade and other payables (13,017,425) (19,763,014) (13,017,425) -

112,665,120 105,919,520 112,665,120 -

Minus: Other shareholders' interest and interest previously

acquired (100,732,961) (100,621,544) (100,732,961) -

11,932,159 5,295,976 11,932,159 -

Goodwill on acquisition (excess on acquisition) (665,657) (4,291,987) (665,657) -

Purchase price 11,266,502 1,003,989 11,266,502 -

Shares issued 11,266,502 - 11,266,502 -

Net cash purchase price - 1,003,989 - -

Acquired 100% of the company at formation

Goodwill on acquisition (excess on acquisition) 100 - 100 -

Purchase price 100 - 100 -

Shares issued - - - -

Net cash purchase price 100 - 100 -

Acquired 100% of the company at July 2004

Minority interest acquired - - - (13,629,395)

Consideration paid - - - 27,703,589

Goodwill on acquisition - - - (14,074,194)

- - - -

Acquired additional 65% of the company at 30 August 2004 to

own 100% of issued shares.

Minority interest acquired - - - 5,737,864

Consideration paid - - - (12,861,341)

Goodwill on acquisition - - - 7,123,477

- - - -

Total purchase price on acquisition of subsidiaries

Loans to shareholders 1,871,432 - 1,871,432 -

Other financial assets 74,174,402 - 74,174,402 -

Trade and other receivables 100 - 100 -

Cash and cash equivalents 42 - 42 -

Deferred tax (9,635,112) - (9,635,112) -

Current tax payable (901,958) - (901,958) -

Trade and other payables (1) - (1) -

65,508,905 - 65,508,905 -

Interest sold 4,384,046 - 4,384,046 -

Profit/(loss) on sale of investment (2,009,046) - (2,009,046) -

Selling price 2,375,000 - 2,375,000 -

Net cash proceeds 2,375,000 - 2,375,000 -

27.2 SUBSIDIARIES ACQUIRED

27.3 PROCEEDS ON DISPOSAL OF SUBSIDIARIES

(continued)

48

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

27.3 PROCEEDS ON DISPOSAL OF SUBSIDIARIES (continued)

Company Group

2006 2005 2006 2005

R R R R

Atterbury Property Holdings (Pty) Ltd

(formerly known as Atterbury Property (Pretoria) (Pty) Ltd)

Nieuw Pivot Investments (Pty) Ltd

Atterbury Parkdev Consortium (Pty) Ltd

Attcorn Property Gauteng (Pty) Ltd

Investment property 2,023,847 - 2,023,847 -

Property, plant and equipment 367,845 - 367,845 -

Investment in subsidiaries 1,242,268 - 1,242,268 -

Loans to group companies 66,151 - 66,151 -

Inventories 15,605 - 15,605 -

Trade and other receivables 1,186,646 - 1,186,646 -

Cash and cash equivalents (283,379) - (283,379) -

Loans to shareholders (8,048,139) - ( 8,048,139) -

Deferred tax 2,552,638 - 2,552,638 -

Trade and other payables (527,108) - ( 527,108) -

(1,403,626) - (1,403,626) -

Interest sold (1,403,626) - (1,403,626) -

Profit/(loss) on sale of investment 1,411,126 - 1,411,126 -

Selling price 7,500 - 7,500 -

Net cash proceeds 7,500 - 7,500 -

Trade and other receivables 2,477,840 - 2,477,840 -

Cash and cash equivalents (13,399) - (13,399) -

Loans to shareholders (2,486,418) - (2,486,418) -

Deferred tax 2,266 - 2,266 -

Current tax payable 13,497 - 13,497 -

Trade and other payables 1 - 1 -

(6,213) - (6,213) -

Interest sold (3,728) - (3,728) -

Profit/(loss) on sale of investment 3,788 - 3,788 -

Selling price 60 - 60 -

Net cash proceeds 60 - 60 -

Trade and other receivables - - 200,607 -

Cash and cash equivalents - - 56 -

Loans from group companies - - (160,895) -

Loans to shareholders - - (50,166) -

Deferred tax - - 3,044 -

Trade and other payables - - 1 -

- - (7,353) -

Interest sold - - (7,353) -

Profit/(loss) on sale of investment - - 7,353 -

Selling price - - - -

Sold on loan account - - - -

Net cash proceeds - - - -

Inventories - - 184,850 -

Trade and other receivables - - 160,021 -

Cash and cash equivalents - - 126 -

Loans from group companies - - (392,977) -

Loans to shareholders - - (2,850) -

Deferred tax - - 15,246 -

Trade and other payables - - (4,493) -

- - (40,077) -

Interest sold - - (3,222) -

Profit/(loss) on sale of investment - - 256,437 -

Selling price - - 253,215 -

Paid via issue of shares - - 253,215 -

Net cash proceeds - - - -

49

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

27.3 PROCEEDS ON DISPOSAL OF SUBSIDIARIES (continued)

Company Group

2006 2005 2006 2005

R R R R

Total receipts on disposal of subsidiaries 4,382,660 1,420,000 4,382,660 1,133,192

Atterbury Property One (Pty) Ltd

Riverport Trading 143 (Pty) Ltd

Atterbury Property Cape (Pty) Ltd

Lady Brooks (Pty) Ltd

Atterbury Cape Holdings (Pty) Ltd

Loans from group companies (1,382) - (1,382) -

(1,382) - (1,382) -

Interest sold (1,382) - (1,382) -

Profit/(loss) on sale of investment 1,482 - 1,482 -

Selling price 100 - 100 -

Net cash proceeds 100 - 100 -

Investment property 9,900,113 - 9,900,113 -

Trade and other receivables 395,382 - 395,382 -

Cash and cash equivalents 701 - 701 -

Loans to shareholders (3,503,369) - (3,503,369) -

Other financial liabilities (4,871,410) - (4,871,410) -

Deferred tax 57,896 - 57,896 -

Trade and other payables (2,125,057) - (2,125,057) -

(145,744) - (145,744) -

Interest sold (48,581) - (48,581) -

Profit/(loss) on sale of investment 2,048,581 - 2,048,581 -

Selling price 2,000,000 - 2,000,000 -

Net cash proceeds 2,000,000 - 2,000,000 -

Fair value of assets disposed:

Property, plant and equipment - 127,667

Goodwill - 5,376,209

Investment in subsidiary - 10,752,419

Investment in associates - 27,097,977

Investments - 101,946

Deferred tax - 534,256

Inventories - 1,854,594

Trade and other receivables - 793,060

Shareholders' loans - (12,358,916)

Long term liabilities - (19,005,987)

Taxation - (1,179,308)

Trade and other payables - (6,823,490)

Current portion of borrowings - (2,022,678)

- - - 5,247,749

Profit/(loss) on disposal - (5,247,749)

Selling price - - - -

Fair value of assets disposed:

Investment property 7,231,741 14,758,655

Loans receivable 141,797 289,382

Trade and other receivables 137,447 280,504

Deferred tax (5,221) (10,656)

Long term liabilities (6,597,772) (13,464,842)

Trade and other payables (14,688) (29,976)

- 893,303 - 1,823,067

Profit/(loss) on disposal (323,303) (1,252,967)

Selling price - 570,000 - 570,100

Fair value of assets disposed:

Investments 1,518,833 118,246

Loans receivable 93,572 - 93,572

Trade and other receivables 5 - 5

Deferred tax (481,756) - (481,756)

Taxation (45,098) - (45,098)

- 1,085,556 - (315,031)

(Loss)/profit on disposal (235,556) 878,123

Selling price - 850,000 - 563,092

50

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

51

27.4 PROCEEDS ON DISPOSAL OF INVESTMENTS

Company Group

2006 2005 2006 2005

R R R R

Total receipts on disposal of investments 7,061,562 8,262,500 7,061,562 9,112,500

Attfund Limited

Gosforth Park Holdings (Pty) Ltd

Infotech (Pty) Ltd

Carty Carvenience (Pty) Ltd

Cost of investment 9,306,076 8,323,209 9,306,076 10,367,660

Profit/(loss) on disposal 381,029 (60,709) 381,029 (1,255,160)

Selling price 9,687,105 8,262,500 9,687,105 9,112,500

Shares issued (Attfund Limited) 9,687,105 - 9,687,105 -

Cash selling price - 8,262,500 - 9,112,500

Cost of investment 4,311,362 - 4,685,536 -

(Loss)/profit on disposal - - (374,174) -

Selling price 4,311,362 - 4,311,362 -

Shares issued - - - -

Cash selling price 4,311,362 - 4,311,362 -

Cost of investment 2,250,150 - 2,250,150 -

Profit/(loss) on disposal 500,000 - 500,000 -

Selling price 2,750,150 - 2,750,150 -

Shares issued - - - -

Cash selling price 2,750,150 - 2,750,150 -

Cost of investment 50 - 50 -

Profit/(loss) on disposal - - - -

Selling price 50 - 50 -

Shares issued - - - -

Cash selling price 50 - 50 -

Section 3 CONSOLIDATED FINANCIAL STATEMENTS ATTACQ

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

ANNUAL

MertechBuilding

Glenfield Office Park

OberonStreet

FaerieGlen

Pretoria

SouthAfrica