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“Innovation is the specific instrument of entrepreneurship…the act that endows resources with a new capacity to create wealth.”Peter Drucker

Annual Report 2007

Profile 1

Highlights 3

Board of directors 4

Executive directors’ review 8

Corporate governance 20

Directors’ responsibility and approval 27

Report of the independent auditors 29

Directors’ report 30

Balance sheets 32

Income statements 33

Statements of changes in equity 34

Cash flow statements 35

Notes to the financial statements 36

Linked unit prices and volume traded 54

Unitholders’ diary 54

Linked unitholder profile 55

Notice of annual general meeting of shareholders 56

Notice of annual general meeting of debentureholders 59

Form of proxy for shareholders 63

Form of proxy for debentureholders 65

Administration 67

Contents

1

Madison Property Fund Managers Holdings Limited (“Madison”),

with its operating subsidiary Madison Property Fund Managers

Limited (“Opco”), is the only property asset manager listed on

the JSE Limited. Madison is listed in the Real Estate Holdings and

Development sub-sector of the main board and is represented by

the JSE code “MDN”.

Madison is structured in the same way as a listed property loan

stock company – with linked units each comprising one share

in Madison indivisibly linked to one unsecured variable rate

debenture in Opco.

Madison has BEE participation from KwaZulu-Natal based

investment company Clearwater Capital (Proprietary) Limited

(“Clearwater”) which owns 9,6% of the total number of linked units

in issue.

The asset management of three leading listed property funds –

ApexHi Properties Limited (“ApexHi”), Hyprop Investments Limited

(“Hyprop”) and Redefine Income Fund Limited (“Redefine”)

- contributes 68% of Madison’s income. In addition to its asset

management income, Madison earns development fees, leasing

commissions and transaction and consulting fees.

Madison distributes 100% of its net operating income in the form

of interest on debentures, calculated on the basis set out in the

Debenture Trust Deed, subject to a maximum annual interest rate

of prime plus 10% on the face value of each debenture. Madison

declares distributions for the six month periods to 30 June and

31 December of each financial year.

Profile

“If opportunity doesn’t knock, build a door”

Milton Berle

p* section headline sub-headline

76cents distribution

per linked unit

section headline sub-headline p*section headline sub-headline p*

Highlights

3

76 cents distribution per linked unit

30% increase in distributions

53% total return to linked

unitholders

Significant contribution from

development and leasing

Strategic acquisition of 40% interest

in Corovest Fund Managers

4

Board of directors

Wolf Cesman (65) Executive director § BCom, CA (SA), HDipTax Non executive director of ApexHi Properties Limited, Hyprop Investments Limited and Redefine Income Fund Limited

Monica Khumalo (42) Non-executive director * § B.Juris, LLB Managing director of Mmabodiba Investments, a women’s property company

Bernard Nackan (63) Non-executive director* ‡ **

BAEcon (Wits), SEP (Stanford – USA) Member of the Collective Investment Schemes Advisory Committee, Chairman of Property Index Tracker Managers (Proprietary) Limited

5

Harish Mehta (57) Chairman BSc, MBA Chairman of Clearwater Capital, the strategic BEE stakeholder in Madison

Marc Wainer (59) Executive director Chairman of ApexHi Properties Limited, non executive director of Hyprop Investments Limited and Redefine Income Fund Limited

Michael Flax (43) Executive director B Com, CA (SA), FCMA Non-executive director of Property Index Tracker Managers (Proprietary) Limited. Alternate director of Hyprop Investments Limited

Greg Heron (42) Alternate director to Harish Mehta* † BCom, BAcc, CA (SA) Managing director of Clearwater Capital

* Independent director † Chairman of the audit and risk committee ** Member of the audit and risk committee ‡ Chairman of the remuneration committee § Member of the remuneration committee

p* section headline sub-headline6

Management

Mike Lewin (53) Group retail director

Janys Finn (43) Chief financial officer BCom, BAcc, CA (SA) Non-executive director of Property Index Tracker Managers (Proprietary) Limited Alternate director of Hyprop Investments Limited

section headline sub-headline p*7

8

Executive directors’ review

IntroductionMadison’s sound business principles and the strong underlying

property fundamentals experienced during the 2007 year

generated robust performance for the listed property funds under

Madison’s management. ApexHi, Hyprop and Redefine were

ranked within the top quartile of the sector in terms of income

growth, while Madison reported excellent distribution growth,

30% higher than its annualised maiden distribution for the 2006

financial year.

OverviewSignificant factors which influenced the listed property sector

in 2007 included the introduction of the National Credit Act as

well as interest rate increases of 200 basis points following the

200 basis point increases in 2006. This resulted in reduced

consumer spending and increased inflation. Infrastructure spend

by government, on projects such as the Gautrain and the 2010

Fifa World Cup, placed a strain on capital project resources and

increased pressure on the viability of new property developments.

On the positive side, strong demand by tenants, coupled with a

shortage in the supply of space, contributed to increased rentals.

Market volatility resulted in a yield shift and a consequential

decrease in listed property unit prices. Opportunities for

acquisitions and corporate action are emerging.

The electricity crisis being experienced in South Africa, combined

with other economic pressures will impact on turnovers of tenants,

restraining rather than contracting growth. Initiatives are being

implemented to ensure electricity backup in all the retail and

commercial properties asset managed by Madison. The availability

of power has been confirmed for the majority of developments

project managed by Madison.

The National Treasury’s publication of a discussion paper entitled

“Reforming the Listed Property Investment Sector” has formally

set the wheels in motion for a best-of-breed REIT structure to

be introduced in South Africa. In principle, Madison supports the

representations which have been made by the sector on the draft

paper and will be monitoring the progress of this process.

Financial ResultsMadison’s total distribution of 76 cents per linked unit for the year

ended 31 December 2007 was 30% higher than the annualised

maiden distribution of 39 cents per linked unit for 2006. The

total capital and income return to Madison’s linked unitholders

amounted to 53% for the year.

Management fees earned by Madison are based on enterprise

values, which comprise market capitalisation plus debt of each

fund. In a volatile market, in which linked unit prices fluctuate,

the debt, which comprises 20% of combined enterprise value, is

a stabilising factor. Madison’s development and leasing divisions

made a meaningful contribution to the positive performance

during the year.

Distributable Income statement

Year 8 months ended ended 31 Dec 2007 31 Dec 2006 R000 R000

Revenue 193 056 86 062

Other income 13 970 12 440

Total income 207 026 98 502

Administration costs (58 588) (33 562)

Profit from operations 148 438 64 940

Net interest (paid) received (198) 6 177

Realised profit on disposal

of investments 6 444 3 867

Net profit before minority interest 154 684 74 984

Attributable to minority (1 084) (880)

Net profit before taxation 153 600 74 104

Taxation 175 (4)

Distributable income 153 775 74 100

Distribution per linked

unit (cents) 76.00 36.00

9

Asset management

Asset management objectives are usually straightforward —

increase income, let vacant space, control expenses and add

value – yet the means of achieving these requires innovation

and precise timing with implementation in unison with the

property cycle at any point in time. With rental escalations of

8% per annum on average across South Africa’s commercial

property sectors, only effective asset management can ensure

income growth in excess of this figure. This has been achieved by

Madison for each of its funds under management.

Strict investment criteria, vital to the successful performance

of any property company, have been applied in order to ensure

the acquisition of quality property assets at competitive prices.

Effective interest rate management has been achieved and Madison

has successfully implemented BEE transactions for all of its listed

funds.

One of the advantages of outsourced asset management is access

to services and expertise that a single fund would otherwise not

be able to attract or afford. In this regard, Madison’s funds under

management benefit from some of the leading property minds

in South Africa. Included amongst these is Mike Lewin who has

a wealth of knowledge and experience gained from 22 years in

the retail sector, 18 as property executive of Edcon. In his position

as Madison group retail director, Mike will enhance Madison’s

retail asset management team and his responsibilities will include

overseeing and adding value to existing retail properties and new

developments for ApexHi, Hyprop and Redefine.

10

David Rice (52) Managing director

Gerald Leissner (66) Chief executive officer

2020% growth in combined distributions (excluding non-core income) for 6 months to 31 December 2007

11

20Asset management overview

ApexHi Properties Limited ApexHi has an innovative unit structure with separately listed

A, B and C units, providing three investment opportunities, with

different risk profiles, within one fund.

In terms of the debenture trust deed, quarterly interest

distributions are calculated as follows:

If the total distribution per quarter is:

Less than 75.00 cents

From 75.00 to 93.75 cents

Above 93.75 cents

% of total distribution Cents

% of total distribution

A unit 45 33.75 36

B unit 55 41.25 44

C unit Nil Balance of the interest distribution

20

Distributions for the six months ended 31 December 2007

(cents per unit)

July to Dec July to Dec

2007 2006 % increase

A unit 67.50 63.00 7.1

B unit 82.50 77.00 7.1

C unit 11.00

161.00 140.00 15.00

The sectoral spread of the property portfolio is as follows:

SectorGLA (m2)

Value (R000)

Retail 977 214 4 433 244

Office 880 325 3 122 136

Industrial 572 008 1 119 784

2 429 547 8 675 164

Investment criteria have been strictly adhered to and several

earnings enhancing acquisitions have been made. Smaller

properties have been disposed of and certain retail properties are

being expanded.

12

Pieter Prinsloo (42) Chief executive officer

20Record distribution growth of 20% for the year to 31 December 2007

13

20Asset management overview

Hyprop Investments Limited Hyprop is a property loan stock company which owns premium

quality regional and super regional shopping centres, contributing

84% of total income. In addition, Hyprop has a 37% interest in

Sycom Property Fund.

Hyprop distributed 270 cents per linked unit for the year ended

31 December 2007, an increase of 20% over the previous year’s

distributions.

The property portfolio comprises :

SectorGLA (m2)

Value (R000)

Retail 274 304 6 461 405

Office 38 885 436 390

313 189 6 897 795

Hyprop is presently growing its portfolio through development,

expansion and enhancement opportunities. Hyprop is engaged in

the development of the 50 000m2 Stoneridge Centre, a 135-room

hotel at Hyde Park Shopping Centre, 18 000m2 of additional retail

space at Canal Walk Shopping Centre and a 19 000m2 extension to

The Glen Shopping Centre.

14

Brian Azizollahoff (47) Chief executive officer

97

15

Asset management overview

Redefine Income Fund Limited Redefine has a spread of premium fixed property in prime locations

as well as investments in selected listed property securities.

Redefine distributed 51,25 cents per linked unit for the year ended

31 August 2007, an increase of 20% over the previous year’s

distributions.

The sectoral spread of the property portfolio is as follows :

SectorGLA (m2)

Value (R000)

Retail 189 625 1 309 250

Office 270 251 2 393 499

Industrial 357 964 999 300

817 840 4 702 049

The market value of Redefine’s listed property securities portfolio

at 31 August 2007 was R4,075 billion. The portfolio includes, inter

alia, significant strategic holdings in Hyprop and ApexHi and 25,1%

of Coronation International Real Estate Fund, listed on the London

Stock Exchange’s AIM.

In November 2007, Redefine issued 80 million linked units at

R6.85 per unit to a selection of broad-based BEE entities.

Development of several commercial properties is in progress

including Convention Tower, Foreshore, Cape Town.97Increase of 97% in market capitalisation for the year to 31 August 2007

16

Corovest Fund Managers Limited (“Corovest”) Madison purchased a 40% interest in Corovest (registered in the

British Virgin Isles), the management company of CIREF Limited,

for R100,15 million, effective 1 July 2007. Madison issued

11 128 000 linked units, at a price of 875 cents per unit, to

fund the acquisition of its interest in Corovest. The balance of

the purchase price of R2,78 million was paid in cash. Income

from Madison’s strategic investment in Corovest is expected

to contribute significantly to future income based on expected

growth in CIREF by way of acquisitions and developments in the

UK and Europe. CIREF is listed on the London Stock Exchange AIM

and has a market capitalisation of £107 million.

Property Index Tracker Managers (“PropTrax”) Madison acquired 50% of PropTrax which is the manager of

the Property Index Tracker Collective Investment Scheme in

Securities, an exchange traded fund which tracks the performance

of the FTSE/JSE SAPY index. PropTrax was listed on the

JSE Limited on 25 September 2007. Development Madison’s development teams, based in Johannesburg and

Cape Town, are managed and staffed by skilled and experienced

executives who are responsible for overseeing developments

undertaken on behalf of ApexHi, Hyprop and Redefine, and New

York-based international group, Lehman Brothers.

25 projects valued at R3 billion are currently being undertaken, of

which R1,5 billion is scheduled for completion during 2008.

Leasing Madison’s leasing division interfaces with property brokers in

South Africa and directly with prospective tenants to ensure the

successful leasing of vacant space in existing developments, new

developments and expansions in properties owned by ApexHi and

Redefine.

Prospects ApexHi, Hyprop and Redefine will continue to expand their

portfolios which should enhance their enterprise values and

consequently increase the asset management fees payable

to Madison. The Corovest acquisition is expected to become

earnings enhancing during the 2008 financial year. The increasing

contribution from the development and leasing divisions will

enhance Madison’s earnings.

The economic and market volatility which began in 2007 and

which is expected to continue during 2008 could provide Madison

with potential for corporate action and its managed funds with

opportunities to expand their property portfolios.

Subject to market conditions remaining stable and based on

current unit prices of the managed funds, the board anticipates

that the total distribution for the year ending 31 December 2008

will increase by between 10% and 12% compared to 2007.

Acknowledgements

The results for the year reflect the efforts and commitment

of the entire Madison team, including management and staff

directly responsible for the asset management of ApexHi, Hyprop

and Redefine. Our sincere appreciation is extended to our

management and staff, bankers, associates, corporate advisors

and to our co-directors for their wise counsel. We would also like

to thank our linked unitholders for their continuing confidence.

Wolf Cesman Marc Wainer Executive director Executive director

19 February 2008

17

Darren Wilder (39) National leasing director


Development management - Cape Town

Xander Rau (42) Development executive

Lance Hoffman (40) Development executive


Brian Goldberg (44) Development executive

Daryl Sher (38) Project manager

Ilan Kaplan (27) Analyst and Acquisitions

20

Corporate governance

IntroductionThe directors of Madison are committed to the Code of Corporate

Practice and Conduct as set out in the King II Report.

The directors recognise the need to conduct the enterprise with

integrity and accountability in accordance with generally accepted

corporate practices which includes timely and relevant reporting

to unitholders and other stakeholders.

Board of directorsThe constitution of the board of directors is set out on pages 4

and 5 of this report. The board meets quarterly and consists of six

directors including the chairman. Three directors are

non-executive, with two of them independent of management

and free from any relationship that could materially interfere

with the execution of their independent judgement. The business

experience of the non-executive directors enables them to

critically evaluate and determine strategy.

The board operates in accordance with a formal board charter

which defines its roles and responsibilities and deals with procedural

matters including board meetings, composition and remuneration.

Dealing in the company’s linked unitsDirectors must disclose to the Chairman any intention to buy or

sell linked units in Madison whether directly or indirectly. Directors

and any employee of the company who become aware of sensitive

financial information cannot directly or indirectly deal in the

company’s linked units until the information is in the public domain.

Audit and Risk CommitteeThe audit and risk committee comprises an independent

non-executive director and a non-executive director both of

whom meet the requirements as set out in the King Report and

applicable legislation. WE Cesman, an executive director, was a

member of the audit and risk committee during the year under

review but has resigned in accordance with the requirements of

the recently enacted Corporate Laws Amendment Act.

The chief financial officer and external auditors attend the meetings

by invitation. The committee meets at least three times a year and

has its own written terms of reference. Its activities include the

review of the annual financial statements prior to presentation to

the board, the review of internal control systems with reference

to the findings of the external auditors and considering any

changes in accounting policies, as well as the review of any

material audit recommendations. The committee sets the principles

for recommending the use of the external auditors for non-audit

services.

Remuneration CommitteeThe committee determines, agrees and develops the company’s

general policy on non-executive directors’ remuneration,

determines the criteria for the review of the executive directors’

performance in discharging their functions and responsibilities

and reviews the terms and conditions of executive directors’

remuneration. In addition, the committee reviews the

remuneration of all management and staff employed

by Madison.

The committee comprises two independent non-executive

directors and an executive director. The committee members

are not involved in determining their own remuneration packages.

Risk ManagementThe Board is responsible for effective risk management which

is crucial to Madison’s operations.

Management, as well as the audit and risk committee, is

involved in a continuous process of developing and enhancing

comprehensive systems for risk identification and management.

The objectives of the risk management process are to:

• determine the company’s risk tolerance;

• identify all material risks to which the company is exposed;

• monitor and assess the identified risks; and

• manage or transfer any risk that exceeds the level

of acceptable risk, or could potentially impact the

company’s operations.

Employment EquityMadison is committed to the development and training of its

employees and to the principle of equal opportunity employment.

EthicsThe directors, management and staff are required to observe the

highest ethical standards as set out in the formal code of conduct,

thereby ensuring that business practices are conducted in a

manner which, in all circumstances, is beyond reproach.

Communication and investor relationsIt is the policy of Madison to disclose all relevant and

appropriate information in the annual report and through

other communication channels to give all unitholders, potential

unitholders and other stakeholders access to relevant information.

Madison regularly meets with institutional shareholders,

investment analysts and media representatives.

21

“In the real estate business past success stories are generally not applicable to new situations. We must continually reinvent ourselves, responding to changing times with innovative new business models”

Akira Mori

Attendance at meetingsDetails of directors’ attendance at meetings are set out below:

Board Audit and risk Remuneration

Director Held Attended Held Attended Held Attended

HK Mehta 4 4

WE Cesman 4 4 3 3 1 1

M Flax 4 3

G Heron (alt) 3 3

KM Khumalo 4 4 1

B Nackan 4 4 3 3 1 1

M Wainer 4 4


Development management - Johannesburg

Mike Ruttell (50) Development executive

Rob Horsfield (57) Development executive

24

Leasing

Grant Silverman (28) Leasing executive

25

Paul Scop (47) Leasing executive

26

“Creativity is thinking up new things. Innovation is doing new things”Theodore Levitt

27

Directors’ responsibility and approval

Statement of responsibility by the board of directorsThe financial statements presented on pages 30 to 53 have been

prepared in accordance with International Financial Reporting

Standards. The directors are responsible for selecting and

adopting sound accounting practices and for maintaining a

system of internal control that, amongst other things, will ensure

the preparation, integrity and fair presentation of the financial

statements and other financial information included in this

report.

The going concern basis has been adopted in preparing the

financial statements. The directors have no reason to believe

that the company or the group will not be a going concern in

the foreseeable future based on forecasts and available cash

resources. The financial statements support the viability of

the company and the group.

The financial statements have been audited by the independent

auditors, PKF (Jhb) Inc., who were given unrestricted access

to all financial records and related data, including minutes of

all meetings of the board of directors and committees of the

board. The directors believe that all representations made to the

independent auditors during their audit are valid and appropriate.

The unqualified audit report of PKF (Jhb) Inc. is presented on

page 29.

Approval of annual financial statementsThe annual financial statements as set out on pages 30 to 53 for

the year ended 31 December 2007 were approved by the board of

directors on 19 February 2008 and are signed on their behalf by:

Harish Mehta Wolf Cesman Chairman Executive director

Declaration by company secretaryIn terms of Section 268G(d) of the Companies Act, 1973, as

amended, we hereby certify that, to the best of our knowledge and

belief, the company has lodged with the Registrar of Companies,

for the financial year ended 31 December 2007, all such returns as

are required of a public company in terms of this act and that all

such returns are true, correct and up to date.

Probity Business Services (Proprietary) Limited Company secretary 19 February 2008

“There is nothing wrong with change, if it is in the right direction.” Winston Churchill

28

Report on the financial statementsWe have audited the accompanying annual financial statements

and group annual financial statements of Madison Property Fund

Managers Holdings Limited set out on pages 30 to 53, which

comprise the directors report, the balance sheets as at

31 December 2007 and the income statements, statements of

changes in equity and cash flow statements for the year then

ended, and a summary of significant accounting policies and other

explanatory notes.

Management’s responsibility for the financial statementsManagement is responsible for the preparation and fair

presentation of these financial statements in accordance with

International Financial Reporting Standards and the Companies

Act of South Africa. This responsibility includes: designing,

implementing and maintaining internal control relevant to the

preparation and fair presentation of financial statements that

are free from material misstatement, whether due to fraud or

error; selecting and applying appropriate accounting policies;

and making accounting estimates that are reasonable in the

circumstances.

Auditor’s responsibilityOur responsibility is to express an opinion on these financial

statements based on our audit. We conducted our audit in

accordance with International Standards on Auditing. Those

standards require that we comply with ethical requirements

and plan and perform the audit to obtain reasonable assurance

whether the financial statements are free from material

misstatement.

An audit involves performing procedures to obtain audit evidence

about the amounts and disclosures in the financial statements.

The procedures selected depend on the auditor’s judgment,

including the assessment of the risks of material misstatement of

the financial statements, whether due to fraud or error. In making

those risk assessments, the auditor considers internal control

relevant to the entity’s preparation and fair presentation of the

financial statements in order to design audit procedures that

are appropriate in the circumstances, but not for the purpose of

expressing an opinion on the effectiveness of the entity’s internal

control. An audit also includes evaluating the appropriateness of

accounting policies used and the reasonableness of accounting

estimates made by management, as well as evaluating the overall

presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient

and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the annual financial statements and group annual

financial statements present fairly, in all material respects, the

financial position of Madison Property Fund Managers Holdings

Limited as of 31 December 2007, and of its financial performance

and its cash flows for the year then ended in accordance with

International Financial Reporting Standards and the requirements

of the Companies Act in South Africa.

PKF (Jhb) Inc.Director: Paul BadrickRegistration number 1994/001166/21Chartered Accountants (SA)Registered Auditors

Sandton19 February 2008

Report of the independent auditors

29

30

For the year ended 31 December 2007The directors have pleasure in submitting their report which forms

part of the audited annual financial statements of the company

and the group for the year ended 31 December 2007.

Nature of businessMadison is a property asset management company which derives

its income predominantly from the asset management of three

leading listed property funds – ApexHi Properties Limited, Hyprop

Investments Limited and Redefine Income Fund Limited. Madison

also earns development fees, leasing commissions and transaction

and consulting fees.

Share and debenture capitalThe authorised share capital is R1 000 divided into 800 000 000

ordinary shares of 0.000125 cents, each of which is linked to

one unsecured variable rate subordinated debenture in Madison

Property Fund Managers Limited of 499 cents each.

The ordinary shares and debentures trade as a linked unit on the

JSE. In terms of the Debenture Trust Deed the interest payable

on the debenture component of the linked unit is equivalent to

the net operating income for the period concerned divided by the

number of debentures in issue on the record date.

During the year, 6 500 000 linked units were issued as sign on

incentives to MN Flax and JA Finn who were appointed during

the latter part of 2006. These units were issued at 400 cents

per linked unit. A further 11 128 000 linked units were issued

at a premium of 376 cents per linked to fund the acquisition of

Madison’s 40% interest in Corovest Fund Managers Limited.

At the year end, the net asset value per linked unit amounted to

189 cents (2006: 160 cents)

Interest distributionMadison declared distribution number 2 of 36.0 cents per linked

unit for the six months ended 30 June 2007. Distribution number 3

of 40.0 cents per linked unit has been declared for the six months

ended 31 December 2007.

Directors and secretaryThe directors of the company during the year and at the date

of this report were:

WE Cesman (executive)

MN Flax (executive) (appointed 13 February 2007)

MK Khumalo (non-executive)

HK Mehta (non-executive chairman)

B Nackan (non-executive)

M Wainer (executive)

G Heron (alternate to HK Mehta)

In terms of article 15 of the company’s articles of association,

WE Cesman and MK Khumalo retire from office but, being eligible,

offer themselves for re-election.

The company secretary is Probity Business Services (Pty) Ltd.

Directors’ interestsThe interests of the directors in the linked units of Madison at 31 December 2007 were as follows:

Beneficial Total

Direct Indirect

WE Cesman 25 008 500 25 008 500

M Wainer 6 502 210 18 506 290 25 008 500

HK Mehta 6 100 000 6 100 000

MN Flax 5 253 450 5 253 450

G Heron 1 100 000 1 100 000

MK Khumalo

B Nackan 10 000 10 000

31 520 710 30 959 740 62 480 450

There has been no change in these holdings between year-end and the date of this report.

The interests of the directors in the linked units of Madison at 31 December 2006 were as follows:

Beneficial Total

Direct Indirect

WE Cesman 25 008 500 25 008 500

M Wainer 6 502 210 18 506 290 25 008 500

HK Mehta 6 100 000 6 100 000

G Heron 1 100 000 1 100 000

MK Khumalo

B Nackan 10 000 10 000

31 520 710 25 706 290 57 227 000

Directors’ report

Directors’ remunerationDetails of the directors’ emolument are set out in note 20 to the

annual financial statements.

Audit committee reportThe audit and risk committee has fulfilled its responsibilities

during the year (refer to corporate governance on page 20 for

details in this regard). The committee has furthermore satisfied

itself as to the independence of the external auditors and their

suitability for appointment for the ensuing year.

Special resolutionsA special resolution granting general authority for the repurchase

of linked units in the company was passed by unitholders at the

last Annual General Meeting and registered by the Registrar of

Companies on 23 August 2007.

Subsidiary companiesDetails of Madison’s interest in subsidiaries are set out in note 5 to

the annual financial statements.

Post balance sheet eventsThere have been no events subsequent to the balance sheet date.

Johannesburg 19 February 2008

31

32

Balance sheets At 31 December

GROUP COMPANY

Notes2007 R000

2006 R000

2007 R000

2006 R000

ASSETS

Non-current assets 500 395 415 067 108 326 108 326

Property plant and equipment 2 1 180 861 – –

Intangible assets 3 203 918 264 117 – –

Goodwill 4 111 099 111 099 – –

Interest in subsidiaries 5 – – 108 326 108 326

Investment in associate 6 86 684 – – –

Financial assets 7 82 482 38 990 – –

Trade and other receivables 8 15 032 – – –

Current assets 111 537 91 997 2 711 2 813

Loan to subsidiary 5 – – 2 711 2 813

Trade and other receivables 8 37 988 14 907 – –

Cash and cash equivalents 9 73 549 77 090 – –

Total assets 611 932 507 064 111 037 111 139

EQUITY AND LIABILITIESShare capital and reserves (686 027) (647 087) 111 037 111 139

Share capital and premium 10 104 661 104 763 104 661 104 763

Retained income (815 001) (751 850) 6 376 6 376

Other reserves 11 24 313 – –

Minority interest 2 012 2 504

Total equity (684 015) (644 583) 111 037 111 139

Non-current liabilities 1 175 331 1 062 477 – –

Debentures and debenture premium 12 1 077 184 948 100 – –

Interest bearing borrowings 13 35 117 21 669 – –

Provisions 14 3 981 16 216 – –

Deferred taxation 15 59 049 76 492 – –

Current liabilities 120 616 89 170 – –

Trade and other payables 16 18 730 7 955 – –

Provisions 14 18 698 6 462 – –

Unitholders for distribution 83 051 74 100 – –

Taxation 137 653 – –

Total equity and liabilities 611 932 507 064 111 037 111 139

33

Income statements For the year ended 31 December

GROUP COMPANY

Notes2007 R000

2006 R000

2007 R000

2006 R000

Revenue 193 056 102 013 – 8 323

Other income 13 970 16 294 – 8 068

Total income 207 026 118 307 – 16 391

Administration costs (71 251) (43 500) – (6 884)

Profit before capital items 135 775 74 807 – 9 507

Capital items (51 586) 117 399 – 884 965

Amortisation of intangible assets (60 199) (43 228) – (3 095)

Debenture discount (6 500) – –

Amortisation of debenture premium 721 – –

Changes in fair value and net profit on disposal of investments 19 14 392 6 072 – 4 133

Negative goodwill written off – 154 555 –

Profit on disposal of business – – – 883 927

Operating profit 21 84 189 192 206 – 894 472

Equity accounted results of associate 6 (10 488) 10 – –

Net profit before finance costs 73 701 192 216 – 894 472

Interest income 8 935 6 511 – 490

Finance costs (9 133) (662) – (348)

Net profit before debenture interest 73 503 198 065 – 894 614

Debenture interest (153 791) (74 100) – –

Net profit before taxation (80 288) 123 965 – 894 614

Taxation 22 17 473 (93 354) – (105 067)

Net profit for the year (62 815) 30 611 – 789 547

Attributable to:

Madison linked unitholders (63 151) 28 065

Minorities 336 2 546

(62 815) 30 611

Linked units in issue 207 628 000

Weighted average number of linked units in issue

– for earnings and headline earnings 199 664 734

– for distributable earnings 201 433 019

Distribution per linked unit (cents) 23 76.00

Earnings per linked unit (cents) 24 45.40

Headline earnings per linked unit (cents) 24 48.22

Distributable earnings per linked unit ( cents) 24 76.34

34

Statements of changes in equity For the year ended 31 December

GroupShare capital

R000

Share premium

R000

Retained income

R000

Other reserves

R000

Minority interest

R000Total equity

R000

Balance at 1 January 2006 * - 31 863 - 1 745 33 608

Recognised income and expense

Net profit for the year 28 065 2 546 30 611

Transactions with shareholders

Shares issued * 115 975 115 975

Listing expenses (11 212) (11 212)

Transactions with minorities (1 787) (1 787)

Dividends (811 778) (811 778)

Balance at 1 January 2007 * 104 763 (751 850) - 2 504 (644 583)


Loss for the year (63 151) 336 (62 815)

Fair value adjustment of cash flow hedge 27 467 27 467

Foreign currency translation reserve (3 154) (3 154)


Shares issued * *

Issue expenses (102) (102)

Transactions with minority (828) (828)

Balance at 31 December 2007 * 104 661 (815 001) 24 313 2 012 (684 015)

CompanyShare capital

R000

Share premium

R000

Retained income

R’00Total equity

R000

Balance at 1 January 2006 * - 28 607 28 607


Net profit for the year 789 547 789 547


Shares issued * 115 975 115 975

Listing expenses (11 212) (11 212)

Dividends (811 778) (811 778)

Balance at 1 January 2007 * 104 763 6 376 111 139


Shares issued * *

Issue expenses (102) (102)

Balance at 31 December 2007 * 104 661 6 376 111 037

* Less than R1 000

35

Cash flow statements For the year ended 31 December

GROUP COMPANY

Notes2007 R000

2006 R000

2007 R000

2006 R000

Cash flows from operating activities (11 442) (841 574) – (899 136)

Cash generated by operations 25 134 910 81 153 – 15 096

Investment income 8 935 6 511 – 490

Finance costs (9 133) (662) – (348)

Taxation paid 26 (486) (112 008) – (102 596)

Distributions/dividends paid (144 840) (811 778) – (811 778)

Distributions to minority (828) (4 790) – –

Cash flows from investing activities (102 815) (130 647) 102 796 349

Property plant and equipment acquired (916) (221) – (99)

Proceeds on disposal of property plant and equipment 59 14 – –

Acquisition of listed securities (233 682) – – –

Acquisition of investment in associate (100 326) – – –

Share scheme loans repaid by employees 2 713 3 898 – –

Proceeds on disposal of listed securities 229 597 14 733 – 6 409

Proceeds on disposal of interest in associate 1 000 – – –

Loans (advanced) repaid (1 260) – 102 (2 813)

Acquisition of subsidiary – – – (114 074)

Acquisition of businesses – (149 071) – –

Proceeds on disposal of business – – – 906 926

Cash flows from financing activities 110 716 1 041 740 (102) 102 418

Proceeds from issue of linked units 97 370 1 064 075 * 115 975

Linked unit issue expenses (102) (11 212) (102) (11 212)

Increase (decrease) in interest bearing liabilities 13 448 (11 123) – (2 345)

Movement in cash and cash equivalents (3 541) 69 519 – (369)

Cash and cash equivalents at beginning of the year 77 090 7 571 – 369

Cash and cash equivalents at end of the year 9 73 549 77 090 – –

* Less than R1 000

36

1. ACCOUNTING POLICIES AND BASIS OF PREPARATION

The company was incorporated in and under the laws of the

Republic of South Africa. The financial statements are presented

in South African Rand as this is the company’s functional and

presentation currency.

The consolidated annual financial statements are presented in

accordance with and comply with International Financial Reporting

Standards (IFRS) and the Companies Act of South Africa. The

financial statements, which are prepared on the historical cost

basis, as modified by the revaluation of financial assets at fair

value through profit and loss, incorporate the following accounting

policies which are consistent with those applied in the previous year.

The preparation of financial statements necessitates the use of

estimates, assumptions and judgements. These estimates and

assumptions affect the reported amounts of assets and liabilities

at the balance sheet date as well as affecting the reported

income and expense for the year. Refer to note 4 for details of

assumptions, estimates and judgements used.

1.1 Financial instruments

Financial instruments are contracts that give rise to a financial

asset of one entity, and a financial liability or equity instrument of

another entity. Financial instruments carried on the balance sheet

include listed securities, receivables, cash and cash equivalents,

debentures, financial liabilities and payables.

These instruments are measured as set out below.

1.1.1 Receivables

Receivables are measured at amortised cost less provision

for impairment. A provision for impairment is established

when there is objective evidence that the group will not be

able to collect all amounts according to the original terms of

receivables.

1.1.2 Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call

deposits and are carried in the balance sheet at amortised

cost. Cash equivalents are short-term, highly liquid

investments that are readily convertible to known amounts

of cash and which are subject to an insignificant risk of

changes in fair value.

1.1.3 Debentures

Debentures are considered to be a held-to-maturity financial

instrument and are recognised at amortised cost using the

effective interest rate method.

1.1.4 Other financial liabilities

Interest bearing liabilities, other than debentures, are recog-

nised at amortised cost using the effective interest rate

method.

1.2 Basis of consolidation

1.2.1 Business combinations

The acquisition of subsidiaries is accounted for using the

purchase method. The cost of an acquisition is measured

at the aggregate of the fair values of assets acquired,

liabilities incurred or assumed and equity instruments issued

at the date of exchange plus any costs attributable to the

acquisition

1.2.2 Interests in subsidiaries

Subsidiaries are entities over which the company has the

power to govern the financial and operating policies so as

to obtain benefits from its activities. In assessing control,

potential voting rights which are presently exercisable or

convertible are taken into account.

In the separate financial statements of the company,

investments in subsidiaries are accounted for at cost and

adjusted for impairment if applicable. The consolidated

financial statements incorporate the assets, liabilities,

income, expenses and cash flows of the group and all entities

controlled by the group. The results of subsidiaries acquired

or disposed of during the year are included in the consoli-

dated income statement from the date of acquisition or up to

the date of disposal. Intercompany transactions and balances

between group companies are eliminated on consolidation.

1.2.3 Interests in associates

Associates are companies over which the group has

significant influence but not control.

In the separate financial statements of the company,

investments in associates are accounted for at cost and

adjusted for impairment if applicable.

Associates are accounted for in the consolidated financial

statements using the equity method of accounting. Under

this method, the interest in the associate is initially

recognised at cost. The group’s share of post acquisition

profits or losses is recognised in the income statement. The

interest in the associate is adjusted for post acquisition

profits or losses, distributions received and other

adjustments to the carrying amount.

The group’s accounting policy for associates with a

September financial year end is to account for a three

month lag period in reporting their results. Any significant

transactions that occur between October and the group’s

December year end are taken into account.

1.3 Property plant and equipment

Property, plant and equipment are reflected at cost less

accumulated depreciation and impairment losses. Depreciation is

charged on the straight line basis over the estimated useful lives of

the assets as follows:

Motor vehicles 4 years

Computer equipment 3 years

Computer software 3 years

Furniture and fittings 3 years

Office equipment 4 years

The profit or loss on the disposal or retirement of an asset is

determined as the difference between the sales proceeds and

the carrying amount of the asset and is recognised as income or

Notes to the financial statements For the year ended 31 December 2007

37

expense. Carrying amounts of property, plant and equipment are

assessed annually and are reduced to their recoverable amounts

where this is lower than the carrying amount. The expected cash

flows attributable to such assets are considered in determining the

recoverable amount.

1.4 Intangible assets

Intangible assets are initially measured at cost if acquired

separately or at fair value if acquired as part of a business

combination. Intangible assets are amortised over their estimated

useful life on a straight line basis. The estimated useful lives and

residual values are reviewed annually. Impairment losses are

recognised as an expense in the income statement.

1.5 Goodwill

Goodwill represents the future economic benefits arising from

assets that are not capable of being individually identified and

separately recognised in a business combination. It is determined

as the excess of the cost of the acquisition over the group’s

interest in the net fair value of the identifiable assets, liabilities and

contingent liabilities of the subsidiary or associate at the date of

acquisition.

Goodwill is allocated to cash generating units for the purpose

of impairment testing. Impairment is determined by assessing

the recoverable amount of the cash generating unit to which

the goodwill relates. Where the recoverable amount of the cash

generating unit is less than the carrying amount, an impairment

loss is recognised.

Goodwill is carried at cost less accumulated impairment losses.

If the cost of the acquisition is less than the fair value of the net

assets of the subsidiary or associate acquired, the difference is

recognised directly in the income statement at the acquisition date.

1.6 Listed securities

Listed securities are designated by management at fair value

through profit or loss at inception.

1.7 Cash flow hedges

The group uses cash flow hedges to mitigate the risk of variability

of future cash flows arising from fluctuations in equity prices over

the hedging period. Where a cash flow hedge qualifies for hedge

accounting, the effective portion of gains or losses on remeasuring

the fair value of the hedging instrument are recognised directly

in equity in the cash flow hedging reserve until such time as the

hedged item affects profit and loss, at which point, the deferred

gains and losses are transferred to the income statement.

Gains and losses on any portion of the hedge determined to be

ineffective are recognised immediately in profit and loss. If the

forecast hedged transaction is no longer expected to occur, the

cumulative gains or losses on the hedging instrument that were

reported in equity are transferred immediately to the income

statement.

1.8 Provisions

Provisions are recognised when the company has a present legal

or con-structive obligation as a result of a past event, and it is

probable that an outflow of resources embodying economic benefit

will be required to settle the obligation, and a reliable estimate of

the amount can be made.

1.9 Revenue recognition

Revenue comprises asset management fees, management fees,

development fees and leasing commissions and excludes value

added taxation. Revenue is recognised when the services are

rendered. Interest is recognised on the effective yield basis over

the period to maturity. Other income is recognised on the accrual

basis.

1.10 Income tax

The charge for current tax is based on the results for the period

as adjusted for items which are non-assessable or disallowed. The

charge is calculated using the tax rates enacted at the balance

sheet date. Deferred taxation is provided using the balance sheet

liability method, providing for temporary differences between the

carrying amounts of assets and liabilities for financial reporting

purposes and the amounts used for taxation purposes.

A deferred tax liability is recognised on all taxable temporary

differences. 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.

Deferred taxation is calculated at the tax rates that are expected

to apply to the period when the asset is realised or the liability

settled, based on tax rates and tax laws that have been enacted or

substantively enacted at the balance sheet date.

1.11 Recently issued accounting standards

During the current year, the group adopted IFRS7 – “Financial

Instruments – Disclosure”. The International Accounting Standards

Board issued a number of standards, amendments to standards

and interpretations during 2007. These amendments will therefore

be implemented by the company, where applicable, during the

financial year ended 31 December 2008. The following are the new

standards and amendments to standards and interpretations:

• IAS 1 – Capital Disclosures

• IFRS 8 – Operating Segments

• IFRIC 10 – Interim Financial Reporting and Impairment

• IFRIC 11 – Group and Treasury Share Transactions

• IFRIC12 – Service Concession Arrangements

• IAS23 - Borrowing costs

The company is currently evaluating the impact of the above but

does not expect any significant effect on the financial statements.

Group Company

2007 R000

2006 R000

2007 R000

2006 R000

2. PROPERTY PLANT AND EQUIPMENT

Motor vehicles 195 28 – –– Cost 290 89 – – – Accumulated depreciation (95) (61) – –

Computer equipment 415 284 – –– Cost 1 008 640 – –– Accumulated depreciation (593) (356) – –

Computer software 127 31 – –– Cost 180 47 – –– Accumulated depreciation (53) (16) – –

Furniture and fittings 206 195 – –– Cost 412 325 – –– Accumulated depreciation (206) (130) – –

Office equipment 217 323 – –– Cost 537 459 – –– Accumulated depreciation (320) (136) – –

Leasehold improvements 20 – – –– Cost 22 – – –– Accumulated depreciation (2) – – –

1 180 861 – –

Reconciliation of property plant and equipment

Motor vehicles 195 28 – –– Opening balance 28 50 – 50– Additions 227 – – – – Disposals (24) – – – – On disposal of business – – – (44)– Depreciation (36) (22) – (6)

Computer equipment 415 284 – –– Opening balance 284 237 – 223– Additions 369 197 – 89– On acquisition of business – 46 – –– On disposal of business – – – (282)– Disposals – (14) – –– Depreciation (238) (182) – (30)

Computer software 127 31 – –– Opening balance 31 37 – 37– Additions 133 10 – 10– On disposal of business – – – (43)– Depreciation (37) (16) – (4)

38


Group Company

2007 R000

2006 R000

2007 R000

2006 R000

Furniture and fittings 206 195 – –– Opening balance 195 95 – 95– Additions 87 – – – – On acquisition of business – 158 – –– On disposal of business – – – (86)– Depreciation (76) (58) – (9)

Office equipment 217 323 – –– Opening balance 323 6 – 6– Additions 78 14 – –– On acquisition of business – 438 – –– On disposal of business – – – (6)– Depreciation (184) (135) – –

Leasehold improvements 20 – – –– Opening balance – – – –– Additions 22 – – –– Depreciation (2) – – –

1 180 861 – –

3. INTANGIBLE ASSETS

Management agreements for:

ApexHi Properties Limited 137 482 169 208 – –– Cost 190 359 190 359 – – – Amortisation (52 877) (21 151) – –

The agreement is in effect until at least 31 December 2012

Hyprop Investments Limited 57 702 82 432 – –– Cost 98 918 98 918 – – – Amortisation (41 216) (16 486) – –


Canal Walk Shopping Centre 8 734 12 477 – –– Cost 14 972 14 972 – – – Amortisation (6 238) (2 495) – –


203 918 264 117 – –

Movement for the year is as follows:

Balance at beginning of year 264 117 3 096 – –

Acquired during the year – 304 249 – –

Amortisation for the year (60 199) (43 228) – –

Balance at end of the year 203 918 264 117 – –

39

40

Group Company

2007 R000

2006 R000

2007 R000

2006 R000

4. GOODWILL

Arising on acquisition of subsidiaries

The ApexHi – Manco Trust 68 714 68 714 – –

Hyprop Management Company (Proprietary) Limited 38 044 38 044 – –

Canal Walk Management Company (Proprietary) Limited 4 341 4 341 – –

111 099 111 099 – –

The recoverable amount of the individual cash generating units is determined based on the value in use calculations. These cal-culations use cash flow projections based on financial budgets approved by management covering the management contract period. The growth rate per annum is estimated at 6% and the discount rate used is 6.8% to 7.8%

5. INTEREST IN SUBSIDIARIES

100% interest in Hyprop Management Company (Proprietary) Limited

– at cost 108 326 108 326

100% interest in Madison Property Fund Managers Limited 2 711 2 813

– at cost * *

– loan 2 711 2 813

The loan is unsecured, interest free and repayable on demand

111 037 111 139

Reflected as current (2 711) (2 813)

108 326 108 326

* Less than R1 000


Group Company

2007 R000

2006 R000

2007 R000

2006 R000

6. INVESTMENT IN ASSOCIATE

6.1 Corovest Fund Managers Limited

40% interest in Corovest Fund Managers Limited

Gross consideration 100 326 – – –– Net assets on acquisition 1 – – –– Intangible recognised (asset management agreement

with CIREF Limited) 100 149 – – –– Aqcuisition costs capitalised 176 – – –

Share of equity accounted results (10 488) – – –– Net profit for period 1 995 – – –

Equity accounted results due to purchase accounting – Amortisation of intangible asset (12 483) – – –

Foreign currency translation adjustment (3 154) – – –

86 684 – – –

The asset management agreement with CIREF is in effect until at least 17 May 2010.

Country of incorporation – British Virgin Islands

Functional currency – British Pound

The following is the summarised balance sheet and income statement of the associated company as per its financial statements

Current assets 427 – – –

Current liabilities 300 – – –

Revenue 2 631 – – –

Profit 1 995 – – –

6.2 Hyprop Management Company (Pty) Ltd

30% interest in Hyprop Management Company (Pty) Ltd

Gross consideration – 6 055 – –

Share of equity accounted results – 408 – –

– Prior years – 398 – –

- Net profit for the year – 10 – –

Transfer to investment in subsidiary – (6 463) – –

– – – –

Total investment in associate 86 684 – – –

41

42

Group Company

2007 R000

2006 R000

2007 R000

2006 R000

7. FINANCIAL ASSETS

7.1 Listed securities

At cost

Redefine Income Fund Limited 5 457 12 854 – –

ApexHi C units 30 202 – – –

35 659 12 854 – –

At fair value

Fair value through profit and loss 17 979 30 233 – –– Redefine Income Fund Limited 14 404 30 233 – –– ApexHi C units 3 575 – – –

Fair value though hedging reserve

– ApexHi C units 57 200 – – –

75 179 30 233 – –

Fair values are determined directly by reference to published price quotations in an active market.


Balance at beginning of the year 30 233 38 894 – 31 519

Additions 233 682 – – –

Disposals (238 413) (10 859) – (35 652)

Fair value adjustment – cash flow hedge 27 467 –

Fair value adjustment – through profit and loss 22 210 2 198 – –

Balance at the end of the year 75 179 30 233 – (4 133)

Number of units held:

Redefine Income Fund Limited 1 846 667 4 350 000 – –

ApexHi C units 8 500 000 – – –

The units in Redefine Income Fund Limited and ApexHi Properties Limited are pledged as security for borrowings (note 13). 500 000 ApexHi C units are held on behalf of ApexHi Properties Limited.

7.2 Other financial assets

Share scheme loans to employees seconded to Hyprop Investments Limited 6 043 8 757 – –

The loans are secured by a pledge and cession of 510 266 linked units in Hyprop Investments Limited held by the employees, bear interest at the rate applicable to the Standard Bank loan (note 13) and are repayable by 9 June 2012.

Other loan 1 260 – – –

The loan is unsecured, bears interest at variable rates and is repayable by mutual arrangement.

7 303 8 757 – –

Total financial assets 82 482 38 990 – –


43

Group Company

2007 R000

2006 R000

2007 R000

2006 R000

8. TRADE AND OTHER RECEIVABLES

Receivables 32 694 14 785 – –

Prepayments 20 326 122 – –

– Executives sign on incentives 20 219 –

– Other 107 122

53 020 14 907 – –

Long term portion of prepayments (15 032) – – –

37 988 14 907 – –

Madison issued 6 500 000 linked units in February 2007 as incentive bonuses to two executives. The incentives, amounting to R25,9 million, have been raised as a prepayment and will be amortised over the five year period of the executives’ contracts. The carrying amount of the prepayment at 31 December 2007 amounts to R20,2 million.

Receivables that are less than three months past due are not considered impaired. At year end, receivables of R383 000 (2006 : Rnil) were past due but not impaired. These relate to lease commissions which will be collected once all requirements relating to the leases have been properly fulfilled. The ageing analysis of these receivables is as follows:

3 to 6 months 367 – – –

6 to 9 months 16 – – –

383 – – –

The group has credit risk exposure on its receivables. The credit risk exposure on the executives sign on incentives is mitigated due to them having to repay portion of the unexpired bonus if they resign prior to the completion of the contract period.

9. CASH AND CASH EQUIVALENTS

Cash on call, bank balances and cash 73 549 77 090 – –

44

Group Company

2007 R000

2006 R000

2007 R000

2006 R000

10. SHARE CAPITAL

Authorised

800 000 000 shares of 0.000125 cents each 1 1 1 1

Issued

207 628 000 (2006 : 190 000 000) shares * * * *

Share premium 104 661 104 763 104 661 104 763

104 661 104 763 104 661 104 763

* Less than R1 000

In terms of the memorandum of association and the Debenture Trust Deed, the shares are linked to unsecured, subordinated, variable-rate debentures of 499 cents each in the ratio of one ordinary share to one debenture. This linkage means that each share may only be issued and traded as a linked unit together with the debenture with which it is linked, until such time as it is delinked in accordance with the terms of the memorandum of association and the Debenture Trust Deed.

Unissued share capital is under the control of the directors of the company subject to the provisions of the Companies Act, 1973, and the requirements of the JSE Limited.

11. OTHER RESERVES

Cash flow hedging reserve 27 467 – – –

Foreign currency translation reserve (3 154) – – –

24 313 – – –


At beginning of year – – – –

Arising during the year 38 046 – – –– Fair value of designated cash flow hedge 41 200 – – –– Foreign currency translation (3 154) – – –

Transfer to profit and loss

– Fair value of designated cash flow hedge (13 733) – – –

24 313 – – –


45

Group Company

2007 R000

2006 R000

2007 R000

2006 R000

12. DEBENTURES AND DEBENTURE PREMIUM

207 628 000 (2006 : 190 000 000) unsecured, subordinated variable rate debentures of 499 cents each

Nominal value 1 036 064 948 100 – –

Debenture premium 41 120 – – –– On debentures issued 41 841 – – –– Amortisation (721) – – –

1 077 184 948 100 – –


At beginning of the year 948 100 – – –

Issued during the year 123 305 948 100 – –

Discount amortised 6 500 – – –

Premium amortised (721) – – –

At end of year 1 077 184 948 100 – –

The debentures have the right to receive interest equivalent to the lower of the net operating income for the period divided by the number of debentures in issue on the record date and the prime rate plus 10% of the face value of the debenture.

The debenture are not subordinated. The debentures become repayable if a final court order is granted or if an effective resolution is passed for the winding up of the company or the company, among other things, commits a material breach of material obligation under the trust deed.

The debentures are redeemable at the instance of the deben-tureholder at any time after 30 June 2036. The right must be exercised by special resolution of the debentureholders. The repayment in terms of such redemption will be made at the appropriate issue price five years after the special resolution is passed.

13. INTEREST BEARING BORROWINGS

The Standard Bank of South Africa Limited 29 102 12 940 – –

The loan is secured by 1 846 667 (2005: 4 350 000) units in Redefine Income Fund Limited linked units and 8 500 000 (2005:nil) C units in ApexHi Properties Limited, bears interest at 1.5% below prime and is repayable by no later than 30 April 2010 (note 7.1)

The Standard Bank of South Africa Limited 6 015 8 729 – –

The loan is secured by 510 266 Hyprop Investments Limited linked units, bears interest at a fixed or floating rate at the election of the company and is repayable in full by no later than 30 June 2009 (note 7.2).

35 117 21 669 – –

13.1 Borrowing powers

In terms of the articles of association, the borrowing powers of the company are unlimited.

46

Group Company

2007 R000

2006 R000

2007 R000

2006 R000

14. PROVISIONS

Employee benefits – staff incentive bonuses

Due within one year 18 698 6 462 – –

Due thereafter 3 981 16 216 – –

22 678 22 678 – –


Balance at the beginning of the year 22 678 12 158 – 12 158

Incentive bonuses paid during the year (5 748) – – –

Reversal of provisions no longer required (10 011) – – –

Provisions raised during the year 15 759 10 520 – 4 132

On disposal of business – – – (16 290)

Balance at the end of the year 22 678 22 678 – –

Current provisions will be settled within 4 months of year end. The long term provisions will be settled 12 months thereafter.

15. DEFERRED TAXATION

Deferred taxation at year end comprises

Fair valuation adjustment – Intangible assets 59 136 76 594 – –

Provisions (87) (102) – –

59 049 76 492 – –


Balance at the beginning of the year 76 492 1 024 675 675

Raised on fair value of contracts on acquisition of business – 88 232 – –

On acquisition of business – (102)

Credited to the income statement (17 443) (12 662) – –

On disposal of business – – (675) (675)

Balance at the end of the year 59 049 76 492 – –

16. TRADE AND OTHER PAYABLES

Accruals 16 767 5 463 – –

Value added taxation 1 963 2 492 – –

18 730 7 955 – –

Payables are expected to be settled within 3 months of year end.


47

Group Company

2007 R000

2006 R000

2007 R000

2006 R000

17. FINANCIAL INSTRUMENTS BY CATEGORY

Assets per the balance sheet

Financial assets (these instruments carry equity price risk) 75 179 30 233 – –

– At fair value through profit and loss 17 979 30 233 – –

– At fair value through hedging reserve 57 200 – – –

Loans and receivables (these instruments carry credit risk) 133 872 100 754 – –

– Loans 7 303 8 757 – –

– Trade and other receivables 53 020 14 907 – –

– Cash and cash equivalents 73 549 77 090 – –

209 051 130 987 – –

Liabilities as per the balance sheet

Financial liabilities measured at amortised cost

– Debentures and debenture premium (these instruments carry interest rate risk) 1 077 184 948 100 – –

– Long term loans (these instruments carry interest rate risk) 35 117 21 669 – –

– Trade and other payables (these instruments have no specific risk) 18 730 7 955 – –

1 131 031 977 724 – –

18. HEDGE ACCOUNTING

Cash flow hedges

Hedge of cash flow risk associated with incentive scheme for staff seconded to ApexHi

Fair value of designated underlying position

– Bonus scheme liability (included in note 14) (13 733) – – –

Fair value of hedging instruments designated

– Investment in ApexHi C units (note 7.1) 57 200 – – –

Net balance sheet position 43 467 – – –

Fair value gain recognised on the underlying bonus scheme obligation (included in note 14 and reflected in changes in fair value of investments in the income statement) 13 733 – – –

Deferred hedging gains recycled from equity into profit and loss during the year and reflected in changes in fair value of investments in the income statement (13 733) – – –

Ineffective portion of hedging gain recognised in profit and loss during the year – – – –

Net effect on profit and loss for the year – – – –

Fair value gain recognised on the hedging instrument directly in equity 27 467 – – –

The cash flows are expected to occur in April 2008, 2009 and 2010 which is the contractual maturity date of the phantom units granted to the employees. The revaluation of these phantom units will only impact on profit and loss in these accounting periods to the extent that the employees still qualify for such options.

48

Group Company

2007 R000

2006 R000

2007 R000

2006 R000

19. CHANGES IN FAIR VALUE AND NET PROFIT

ON DISPOSAL OF INVESTMENTS

Listed securities

– unrealised gain on revaluation 22 210 2 198 – 4 133

– realised (loss) profit on disposal (8 818) 3 874 – –

Profit on disposal of 49% interest in Vunani Property Management Trust 1 000 – – –

14 392 6 072 – 4 133

20. DIRECTORS’ EMOLUMENTS

Fee for services as directors

Non-executive 353 148

HK Mehta 102 43

G Heron 35 10

MK Khumalo 93 43

B Nackan 123 52

Executive 12 976 8 628

WE Cesman

– Basic salary 1 988 1 814

– Performance bonus 3 000 2 500

4 988 4 314

M Wainer

– Basic salary 1 988 1 814

– Performance bonus 3 000 2 500

4 988 4 314

M Flax

– Basic salary 1 500 –

– Performance bonus 1 500 –

3 000 –

13 329 8 776

The above emoluments were paid by Madison Property Fund Managers Limited.

21. OPERATING PROFIT

Profit from operations is arrived at after accounting for the following charges:

Auditors remuneration 406 407 – 20

Consulting fees 246 309 – 34

Depreciation 572 413 – 49

Operating lease rentals 3 083 1 753 – 205

Profit on disposal of property plant and equipment 34 – – –

Staff costs 43 702 35 697 – 5 879


49

Group Company

2007 R000

2006 R000

2007 R000

2006 R000

22. TAXATION

22.1 Composition of tax expense

South African normal tax (17 618) (8 910) – 3 060

– Current – 3 752 – 3 735

– Adjustment to previous year (175) –

– Deferred (17 443) (12 662) – (675)

Secondary tax on companies – 101 472 – 101 347

Capital gains taxation 145 792 – 660

(17 473) 93 354 – 105 067

22.2 Tax rate reconciliation

(Loss) profit before taxation (80 288) 123 965 – 894 614

Taxation thereon at 29% (23 284) 35 950 – 259 438

Taxation effect of:

– Non deductible expenses 3 543 898 – 898

– Non taxable income (209) (44 937) – (256 629)

– Equity accounted results from associate 3 042 – – –

– Adjustment to previous year (175) – – –

– Capital gains taxation at 14.5% (145) (792) – 660

– Secondary tax on companies – 101 472 – 101 347

– Fair valuation adjustment – 876 – (675)

– Other (245) (113) – 28

Taxation per income statement (17 473) 93 354 – 105 067

23. DISTRIBUTION PER LINKED UNIT

Total distribution for the year ended 31 December 2007 (cents per linked unit)

– Distribution no. 2 for the six months ended 30 June 2007 36.00

– Distribution no. 3 for the six months ended 31 December 2007 40.00

Distribution for the 8 months ended 31 December 2007 (cents per linked unit) 39.00

Total distribution 76.00 39.00

50


Group Company

2007 R000

2006 R000

2007 R000

2006 R000

24. EARNINGS AND HEADLINE EARNINGS

Prior to its corporate restructure and listing on the JSE Limited on 7 June 2006, Madison was a private company. The income statement is therefore not comparable to that of the previous year and accordingly, no earnings reconciliation or earnings, headline earnings or distributable earnings per linked unit have been presented for the previous year.

Number of linked units in issue at year end 207 628 000

Weighted average number of linked units in issue

– for earnings and headline earnings 199 664 734

– for distributable earnings 201 433 019

Reconciliation of earnings to distributable earnings:

Net loss attributable to Madison linked unitholders (63 151)

Debenture discount 6 500

Profit on disposal of investment in associate (net of CGT) (855)

Headline loss attributable to shareholders (57 506)

Debenture interest 153 791

Headline earnings attributable to linked unitholders 96 285

Distributable earnings adjustments

– Amortisation of intangibles (net of deferred taxation) 42 007

– Amortisation of debenture premium (721)

– Equity accounted results of associate 10 488

– Amortisation of sign on incentives paid by issue of units 5 716

Distributable earnings attributable to linked unitholders 153 775

Earnings per linked unit (cents) 45.40

Headline earnings per linked unit (cents) 48.22

Distributable earnings per linked unit (cents) 76.34

51

Group Company

2007 R000

2006 R000

2007 R000

2006 R000

25. CASH GENERATED BY OPERATIONS

Income before debenture interest and taxation 73 503 198 065 – 894 614

Adjustments 79 569 (112 325) – (880 830)

– Depreciation 572 413 – 49

– Investment income (8 935) (6 511) – (490)

– Interest paid 9 133 662 – 348

– Negative goodwill written off – (154 555) – –

– Fair value adjustments – (2 198) – (4 133)

– Amortisation of intangibles 60 199 43 228 – 3 095

– Equity accounted results of associate 10 488 (10) – –

– Amortisation of sign on incentive settled by issue of units 5 716 – – –

– Provision for incentive bonuses 11 043 10 520 – 4 132

– (Profit) loss on disposal of investments (14 392) (3 874) – 96

– Debenture discount 6 500 – – –

– Amortisation of debenture premium (721) – – –

– Profit on disposal of property, plant and equipment (34) – – –

– Profit on disposal of business – – – (883 927)

Operating profit before working capital changes 153 072 85 740 – 13 784

(Decrease) increase in working capital (18 162) (4 587) – 1 312

Increase in accounts receivable (17 895) (2 130) – (1 770)

(Decrease) increase in accounts payable (267) (2 457) – 3 082

134 910 81 153 – 15 096

26. TAXATION PAID

Taxation at beginning of year (653) (6 645) – (5 813)

Charged to the income statement (excluding deferred taxation) 30 (106 016) – (105 742)

Taxation at end of year 137 653 – –

Taxation on disposal of business – – – 8 959

(486) (112 008) – (102 596)

27. OPERATING EXPENSE COMMITMENTS

Commitments in respect of leases on premises

Payable within one year 2 447 1 226 – –

Payable thereafter 1 928 1 974 – –

4 375 3 200 – –

Commitments in respect of leases for office equipment

Payable within one year 164 24 – –

Payable thereafter 385 79 – –

549 103 – –

52


28. CONTINGENT LIABILITY

Nedbank Limited advanced funds to Clearwater Property Holdings

(Proprietary) Limited, (“Clearwater“) a wholly owned subsidiary of

Clearwater Capital (Proprietary) Limited, to fund the subscribtion for

20 000 000 linked units in Madison. Madison has issued a guarantee, to a

maximum of R20 000 000, in respect of this loan. At year end, Clearwater

had met all obligations to Nedbank Limited.

29. RETIREMENT BENEFITS

90% of Madison employees are members of the Madison Group Staff

Provident Fund, Spearhead Pension Fund or Hyprop Investments Limited

Defined Contibution Provident Fund. These funds are defined contribution

funds and are subject to the Pensions Funds Act, 1956. Based on the

latest actuarial valuations, the funds are in a sound financial position.

Contributions received by the funds for the year amounted to R1,9 million.

The group’s contribution of R1,4 million for the year was included in

employee costs in the income statement.

30. FINANCIAL RISK MANAGEMENT

Financial instruments of the company consist of deposits with banks,

financial assets, debentures, long term borrowings, trade and other

receivables and trade and other payables. Exposure to credit and interest

rate risk arise in the normal course of the company’s business.

30.1 Equity price risk

The group is exposed to equity price risk through its employee phantom

share scheme. Changes in the market value of the underlying units are

directly linked to changes in the value of the obligation assumed towards

the employees of the group which is required to be settled annually in March

and April each year.

The group hedges its exposure to changes in the resulting cash flows arising

from the employee phantom share schemes which are linked to the market

price of various listed units by means of acquiring a direct investment in

the underlying unit. At contractual maturity date, the underlying units are

disposed of on the open market in order to settle the obligation towards the

participating employees.

30.2 Interest rate risk

The group is exposed to credit rate risk as it borrows funds from time

to time. This risk is managed by negotiating favourable interest rates and

investing in variable rate instruments. The risk is further managed by

investing all surplus cash against the debt.

Sensitivity analysis relating to interest rates: If interest rates increased by

2% during the year, additional interest costs of R1,6 million would have been

incurred.

30.3 Liquidity risk

Company debt funding is provided by Standard Bank of South Africa Limited.

The cash position and requirements of the group are monitored on an

ongoing basis. The group matches funding to assets on a case by case basis

where considered appropriate.

At year end, facilities amounting to R38,9 million were unutilised by the

group.

30.4 Credit risk

Credit risk relates to potential exposure on bank and call deposits and

trade receivables. The group limits its counterparty exposure arising from

money market instruments by dealing only with well established financial

institutions of high credit standing. The credit worthiness of customers is

assessed before a service agreement is concluded which is reviewed on an

ongoing basis. The majority of the group’s revenue flows are from property

funds listed on the JSE Limited. At balance sheet date, the group did not

consider there to be any significant concentration of credit risk which has

not been adequately provided for.

30.5 Currency risk

The group did not have foreign denominated receivables or liabilities at

the year end. The group’s only exposure to currency risk arises from its

investment in Corovest (note 6). Attributable income from this investment

will not be distributed to unitholders until a dividend has been declared and

paid by Corovest.

53

Group Company

2007 R000

2006 R000

2007 R000

2006 R000

31. RELATED PARTIES AND RELATED PARTY TRANSACTIONS

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions.

Related parties with whom Madison transacted during the year were:

ApexHi Properties Limited

Income comprising asset management fees 60 686 34 937Relationship: Management and directorial

Amount owing to Madison at year end 4 383 3 815

Hyprop Investments Limited

Income comprising asset and property management fees 42 450 29 848Rent paid by Madison 532 373Relationship: Management and directorial


Redefine Income Fund Limited

Income comprising asset management fees 46 640 27 805Income comprising interest distributions 866 1 923Relationship: Management, directorial and shareholder


Million Up Investments 158 (Proprietary) Limited

Income comprising dividends – 1 000Relationship: Shareholding and directorial


Clearwater Capital (Proprietary) Limited (“Clearwater”)Bank guarantee issued by Madison on behalf of Clearwater (note 28)

Relationship: Directorial and shareholder

Amount owing at year end – –

Emoluments paid to directors (note 20)

32. Segmental analysis

Asset management fees 141 537 91 444 - ApexHi Properties Limited 60 686 44 787 - Redefine Income Fund Limited 46 640 27 805 - Hyprop Investments Limited 32 539 18 852 – Other 1 672 –

Development fees 22 761 –

Leasing commissions 17 076 4 036

Property management fees 11 682 10 570

Revenue 193 056 106 050

Other income 13 970 12 257

Transaction fee 10 000

Consulting fees 2 426 10 676

Directors fees 769 870

Sundry 775 711

Total income 207 026 118 307

Unitholders’ Diary

Financial year end 31 December

Annual financial statements March 2008

Annual general meeting 28 May 2008

DistributionsFinal

– Declared 19 February 2008

– Paid 17 March 2008

Interim

– Declared August 2008

– Paid September 2008

54

Linked unit prices and volume traded

2007Closing price

(Cents)High

(Cents)Low

(Cents) Volume tradedJanuary 814 820 695 5 607 956 February 850 895 800 7 487 153 March 830 870 723 7 776 847 April 920 990 820 10 077 015 May 950 1070 906 11 846 424 June 899 940 860 4 970 761 July 887 920 855 5 640 224 August 1010 1050 850 5 035 013 September 1040 1040 988 8 203 896 October 1120 1185 1000 5 060 408 November 1000 1120 970 6 706 737 December 995 1090 961 866 016

Units traded 79 278 450

Monthly average 11 658 596

Weighted number of linked units in issue 199 664 734

Linked units traded as a percentage of weighted number of linked units in issue 39.71%

55

Linked unitholder profile Register date: 28 December 2007

Issued linked units: 207 628 000

Linked unitholder profile

Linked unitholder spreadNo. of

linked unitholders %No. of

linked units %

1 – 1 000 shares 373 0.15 308 023 0.15

1 001 – 10 000 shares 1 311 3.06 6 347 415 3.06

10 001 – 100 000 shares 654 8.19 17 012 424 8.19

100 001 – 1 000 000 shares 104 14.48 30 070 876 14.48

1 000 001 shares and over 25 74.12 153 889 262 74.12

2 467 100.00 207 628 000 100.00

Distribution of linked unitholdersNo. of


linked units %

Banks 18 0.73 34 268 870 16.50

Close Corporations 61 2.47 890 306 0.43

Collective Investment Schemes 67 2.72 31 983 798 15.40

Endowment Funds 42 1.70 2 100 328 1.01

Individuals 1 686 68.34 51 268 857 24.69

Insurance Companies 14 0.57 4 612 222 2.22

Investment Companies 14 0.57 3 335 684 1.61

Medical Aid Schemes 4 0.16 283 374 0.14

Nominees and Trusts 349 14.15 31 126 037 14.99

Other Corporations 26 1.05 507 326 0.24

Pension Funds 79 3.20 9 178 677 4.42

Private Companies 103 4.18 38 032 121 18.32

Public Companies 4 0.16 40 400 0.02

2 467 100.00 207 628 000 100.00

Public/non-public linked unitholdersNo. of


linked units %

Non-Public Shareholders 11 0.45 106 119 900 51.11

Directors of the Company holdings 10 0.41 73 486 450 35.39

Strategic Holdings (more than 10%) 1 0.04 32 633 450 15.72

Public Shareholders 2 456 99.55 101 508 100 48.89

2 467 100.00 207 628 000 100.00

Beneficial linked unitholders holding of 5% or moreNo. of

linked units %

Rand Merchant Bank (Broker Proprietary) 32 633 450 15.72

Cesman, WE 25 008 500 12.04

Wainer, M 25 008 500 12.04

Clearwater Capital (Proprietary) Limited 20 000 000 9.68

Investec 14 883 492 7.17

56

Notice of annual general meeting of shareholders

Madison Property Fund Managers Holdings Limited

(“Madison” or “the company”)

Registration number 2003/021772/06

Share code: MDN ISIN code: ZAE 000080560

Notice is hereby given that the annual general meeting of

shareholders of Madison will be held at 2 Arnold Road, Rosebank,

on Wednesday, 28 May 2008 at 10:30 for the purposes of:

• considering and adopting the annual financial statements

of the company for the year ended 31 December 2007;

• considering and, if deemed fit, adopting with or without

modification, the special and ordinary resolutions set out

below; and

• transacting any other business as may be transacted at an

annual general meeting.

Ordinary Resolution 1: Adoption of annual financial statements

“Resolved that the annual financial statements of the company

for the year ended 31 December 2007 be and are received

and adopted.”

Ordinary Resolution 2: Re-election of director

“Resolved that WE Cesman who retires by rotation in terms

of the company’s articles of association and who, being eligible,

offers himself for re-election, be re-elected as a director of

the company.”

An abridged curriculum vitae is set out on page 4 of the annual

report of which this notice forms part.

Ordinary Resolution 3: Re-election of director

“Resolved that MK Khumalo who retires in terms of the company’s

articles of association and who, being eligible, offers herself for

re-election, be re-elected as a director of the company.”

An abridged curriculum vitae is set out on page 4 of the annual

report of which this notice forms part.

Ordinary Resolution 4: Re-appointment of auditors

“Resolved that PKF (Jhb) Inc be re-appointed as the auditors

of the company.”

Ordinary Resolution 5: Unissued linked units

“Resolved that all authorised but unissued linked units of the

company be placed under the control of the directors of the

company until the next annual general meeting, with the authority

to allot and issue all or part thereof in their discretion, subject to

sections 221 and 222 of the Companies Act, 1973, as amended, and

the Listings Requirements of the JSE Limited.”

Ordinary Resolution 6: Issue of linked units for cash

“Resolved that, pursuant to the articles of association of the

company, the directors of the company be and are hereby

authorised until this authority lapses at the next annual general

meeting of the company, provided that this authority shall not

extend beyond 15 months, to allot and issue linked units for cash

subject to the Listings Requirements of the JSE Limited (“JSE”)

and the Companies Act, 61 of 1973, on the following bases:

a) the allotment and issue of linked units for cash shall be made

only to persons qualifying as public shareholders as defined

in the Listings Requirements of the JSE and not to related

parties;

b) the number of linked units issued for cash shall not in the

aggregate in the financial year of the company (which

commenced 1 January 2008) exceed 5% of the company’s

issued linked units. The number of linked units which may be

issued for cash shall be based on the number of linked units

in issue at the date of the application, less any linked units

issued by the company during the current financial year,

provided that any linked units to be issued for cash pursuant

to a rights issue (announced and irrevocable and underwritten)

or acquisition (concluded up to the date of application) may be

included as though they were linked units in issue at the date

of application;

c) the maximum discount at which linked units may be issued

for cash is 10% of the weighted average price on the JSE of

those linked units over 30 days prior to the date that the price

of the issue is agreed between the company and the party

subscribing for the linked units;

d) after the company has issued linked units for cash which

represent, on a cumulative basis within a financial year 5% or

more of the number of linked units in issue prior to that issue,

the company shall publish an announcement containing full

details of the issue, including the effect of the issue on the net

asset value and earnings per linked unit of the company; and

e) the linked units which are the subject of the issue for cash

must be of a class already in issue, or where this is not the

case, must be limited to such linked units or rights as are

convertible into a class already in issue.”

In terms of the Listings Requirements of the JSE a 75% majority

of the votes cast by shareholders present or represented by proxy

at the annual general meeting must be cast in favour of Ordinary

Resolution 6 for it to be approved.

Ordinary Resolution 7: Confirmation of directors’ remuneration

“Resolved that the remuneration of non-executive directors for

the year as set out on page 48 of the annual report of which this

notice forms part, be and is confirmed”

Ordinary Resolution 8: Signature of documentation

“Resolved that a director or the company secretary of the company

be and is hereby authorised to sign all such documentation and

do all such things as may be necessary for or incidental to effect

the implementation of Ordinary Resolution numbers 1, 2, 3, 4, 5, 6

and 7 and Special Resolution number 1, which are passed by the

shareholders with and subject to the terms thereof.”

Special Resolution 1: Linked unit repurchases

“Resolved that the directors be authorised in terms of the

company’s articles of association, until this authority lapses at

the next annual general meeting of the company unless it is then

renewed at the next annual general meeting of the company and

provided that this authority shall not extend beyond 15 months,

to enable the company or any subsidiary of the company to acquire

linked units of the company subject to the Listings Requirements

of the JSE Limited (“JSE”) and the Companies Act, 61 of 1973,

as amended, on the following bases:

57

a) the acquisition of linked units must be implemented through

the order book operated by the JSE trading system without

any prior understanding or arrangement between the company

and the counterparty;

b) the company (or any subsidiary) must be authorised to do so

in terms of its articles of association;

c) the number of linked units which may be acquired pursuant to

this authority in any financial year (which commenced

1 January 2008) may not in the aggregate exceed 20% (or

10% where the acquisitions are effected by a subsidiary) of the

company’s share capital as at the date of this notice of annual

general meeting;

d) repurchases may not be made at a price more than 10% above

the weighted average of the market value on the JSE of the

linked units in question for the five business days immediately

preceding the repurchase;

e) repurchases may not take place during a prohibited period in

compliance with paragraph 3.67 of the Listings Requirements

of the JSE, unless the dates and quantities of linked units to

be repurchased during the prohibited period have been

determined and full details thereof announced on SENS prior

to commencement of the prohibited period;

f) after the company has acquired linked units which constitute,

on a cumulative basis, 3% of the number of linked units in

issue (at the time that authority from linked unitholders

for the repurchase is granted), the company shall publish

an announcement to such effect;

g) the company’s sponsor must confirm the adequacy of the

company’s working capital for purposes of undertaking the

repurchase of linked units in writing to the JSE prior to the

company (or any subsidiary) entering the market to proceed

with the repurchase;

h) the company must remain in compliance with paragraphs 3.37

to 3.41 of the Listings Requirements of the JSE concerning

unitholder spread after such repurchase; and

i) the company (or any subsidiary) shall appoint only one agent

to effect repurchases on its behalf.”

In accordance with the Listings Requirements of the JSE,

the directors record that:

Although there is no immediate intention to effect a repurchase

of the linked units of the company, the directors would utilise

the general authority to repurchase linked units as and when

suitable opportunities present themselves, which may require

immediate action.

The directors, after considering the maximum number of linked

units that may be repurchased and the price at which the

repurchases may take place pursuant to the buyback general

authority, are of the opinion that for a period of 12 months after

the date of this annual general meeting:

• the company and the group will be able to pay its debts in the

ordinary course of business;

• the consolidated assets of the company and the group fairly

valued in accordance with International Financial Reporting

Standards, will be in excess of the consolidated liabilities of the

company and the group after the buyback; and

• the company’s and the group’s share capital, reserves

and working capital will be adequate for ordinary business

purposes.

The following additional information, some of which may appear

elsewhere in the annual report of which this notice forms part,

is provided in terms of the Listings Requirements of the JSE for

purposes of this general authority:

• Directors – pages 4 and 5;

• Major beneficial unitholders – page 55;

• Directors’ interests in linked units – page 30; and

• Capital structure of the company – page 44.

Litigation statement

In terms of section 11.26 of the Listings Requirements of the JSE,

the directors, whose names appear on pages 4 and 5 of the annual

report of which this notice forms part, are not aware of any legal

or arbitration proceedings including proceedings that are pending

or threatened, that may have or have had in the recent past (being

at least the previous 12 months) a material effect on the group’s

financial position.

Directors’ responsibility statement

The directors whose names appear on pages 4 and 5 of the annual

report of which this notice forms part, collectively and individually

accept full responsibility for the accuracy of the information

pertaining to this special resolution and certify that, to the best

of their knowledge and belief, there are no facts that have been

omitted which would make any statement false or misleading, and

that all reasonable enquiries to ascertain such facts have been

made and that the special resolution contains all information

required by the Companies Act, 61 of 1973, as amended, and the

Listings Requirements of the JSE.

Material changes

Other than the facts and developments reported on in the annual

report of which this notice forms part, there have been no material

changes in the affairs or financial position of the company and its

subsidiaries since the date of signature of the audit report and up

to the date of this notice.

Reason for and effect of Special Resolution 1

The reason for Special Resolution number 1 is to afford directors of

the company a general authority for the company (or a subsidiary

of the company) to effect a buyback of the company’s linked units

on the JSE. The effect of the resolution will be that the directors

will have the authority, subject to the Listings Requirements of

the JSE and the Companies Act, 61 of 1973, as amended, to effect

acquisitions of the company’s linked units on the JSE.

Voting, proxies and quorum

Each of Madison’s linked units comprises one ordinary share

and one debenture. Certificated and own-name dematerialised

shareholders are therefore advised that they must complete a

separate form of proxy for shareholders and for debentureholders

in order for their vote/s to be valid. The form of proxy for

58

certificated and own-name dematerialised shareholders is set

out on page 63 of the annual report and the form of proxy for

certificated and own-name dematerialised debentureholders is set

out on page 65 of the annual report.

A shareholder of the company entitled to attend, speak and vote at

the annual general meeting is entitled to appoint a proxy or proxies

to attend, speak and to vote in his stead. The proxy need not be a

shareholder of the company.

On a show of hands, every shareholder of the company present

in person or represented by proxy shall have one vote only. On

a poll, every shareholder of the company present in person or

represented by proxy shall have one vote for every share held in

the company by such shareholder.

A form of proxy is attached for the convenience of certificated

and own-name dematerialised shareholders holding shares in the

company who cannot attend the annual general meeting but wish

to be represented thereat. Such shareholders must complete and

return the attached form of proxy and lodge it with the transfer

secretaries of the company.

Dematerialised shareholders who have not elected own-name

registration in the sub-register of the company through a Central

Securities Depository Participant (“CSDP”) and who wish to attend

the annual general meeting, must instruct the CSDP or broker to

provide them with the necessary authority to attend.

Dematerialised shareholders who have not elected own-name

registration in the sub-register of the company through a CSDP

and who are unable to attend, but wish to vote at the annual

general meeting, must timeously provide their CSDP or broker

with their voting instructions in terms of the custody agreement

entered into between that shareholder and the CSDP or broker.

Such shareholders are advised that they must provide their CSDP

or broker with separate voting instructions in respect of the shares

and the debentures in terms of their linked units. Forms of proxy

may also be obtained on request from the company’s registered

office. The completed forms of proxy must be deposited at, posted

or faxed to the transfer secretaries Computershare Investor

Services (Proprietary) Limited, Ground Floor, 70 Marshall Street,

Johannesburg 2001 (PO Box 61051, Marshalltown 2107), to be

received at least 48 hours prior to the meeting. Any shareholder

who completes and lodges a form of proxy will nevertheless be

entitled to attend and vote in person at the annual general meeting

should the shareholder sub-sequently decide to do so. The annual

general meeting shall be quorate if at least three shareholders are

personally present (or if the member is a body corporate the body

corporate must be represented) throughout the meeting.

By order of the Board

Probity Business Services

(Proprietary) Limited

Company Secretary

Registered office

2 Arnold Road

Rosebank

2196

Transfer secretaries

Computershare Investor Services


Ground Floor

70 Marshall Street

Johannesburg

2001

59

Notice of annual general meeting of debentureholders

Madison Property Fund Managers Limited




Notice is hereby given that the annual general meeting of

debentureholders of Madison will be held at 2 Arnold Road,

Rosebank, on Wednesday, 28 May 2008 at 10:45 (or immediately

after the conclusion of the shareholders’ meeting, whichever is the

later)

for the purposes of:

• considering and adopting the annual financial statements

of the company for the year ended 31 December 2007;

• considering and, if deemed fit, adopting with or without

modification, the debenture resolutions set out below; and

• transacting any other business as may be transacted at

an annual general meeting.

Debenture Resolution 1: Unissued linked units

“Resolved that all authorised but unissued linked units of the

company be placed under the control of the directors of the

company until the next annual general meeting, with the authority

to allot and issue all or part thereof in their discretion, subject to

sections 221 and 222 of the Companies Act, 61 of 1973, as amended,

and the Listings Requirements of the JSE Limited.”

This resolution is classed as a debenture ordinary resolution

and as such is required to be passed by a simple majority of

debentureholders present in person or represented by proxy at the

meeting.

Debenture Resolution 2: Issue of linked units for cash

“Resolved that, pursuant to the articles of association of the

company and the Debenture Trust Deed, the directors of the

company be and are hereby authorised until this authority lapses

at the next annual general meeting of the company, provided that

this authority shall not extend beyond 15 months, to allot and issue

linked units for cash subject to the Listings Requirements of the

JSE Limited (“JSE”) and the Companies Act, 61 of 1973, on the

following bases:

a) the allotment and issue of linked units for cash shall be

made only to persons qualifying as public unitholders as

defined in the Listings Requirements of the JSE and not

to related parties;

b) the number of linked units issued for cash shall not in the

aggregate in the financial year of the company (which

commenced 1 January 2008) exceed 5% of the company’s issued

linked units. The number of linked units which may

be issued for cash shall be based on the number of linked units

in issue at the date of the application, less any linked units issued

by the company during the current financial year, provided that

any linked units to be issued for cash pursuant to a rights issue

(announced and irrevocable and underwritten) or acquisition

(concluded up to the date of application) may be included as

though they were linked units in issue at the date of application;

c) the maximum discount at which linked units may be issued

for cash is 10% of the weighted average price on the JSE of

those linked units over 30 days prior to the date that the price

of the issue is agreed between the company and the party

subscribing for the linked units;

d) after the company has issued linked units for cash which

represent, on a cumulative basis within a financial year, 5%

or more of the number of linked units in issue prior to that

issue, the company shall publish an announcement containing

full details of the issue, including the effect of the issue on the

net asset value and earnings per linked unit of the company; and

e) the linked units which are the subject of the issue for cash

must be of a class already in issue, or where this is not the

case, must be limited to such linked units or rights as are

convertible into a class already in issue.”

In terms of the Listings Requirements of the JSE a 75% majority

of the votes cast by debentureholders present in person or

represented by proxy at the annual general meeting must be cast

in favour of Debenture Resolution 2 for it to be approved.

Debenture Resolution 3: Linked unit repurchases

“Resolved that the directors be authorised in terms of the

company’s articles of association, until this authority lapses at

the next annual general meeting of the company, provided that

this authority shall not extend beyond 15 months, to enable the

company or any subsidiary of the company to acquire linked units

of the company subject to the Listings Requirements of the JSE

Limited (“JSE”) and the Companies Act, 61 of 1973, as amended,

on the following bases:

a) the acquisition of linked units must be implemented through

the order book operated by the JSE trading system without

any prior understanding or arrangement between the company

and the counterparty;

b) the company (or any subsidiary) must be authorised to do so

in terms of its articles of association;

c) the number of linked units which may be acquired pursuant

to this authority in the financial year (which commenced

1 January 2008) may not in the aggregate exceed 20% (or

10% where the acquisitions are effected by a subsidiary) of

the company’s issued linked units as at the date of this notice

of annual general meeting;

d) repurchases may not be made at a price more than 10% above

the weighted average of the market value on the JSE of the

linked units in question for the five business days immediately

preceding the repurchase;

e) repurchases may not take place during a prohibited period in

compliance with paragraph 3.67 of the Listings Requirements

of the JSE, unless the dates and quantities of linked units to

be repurchased during the prohibited period have been

determined and full details thereof announced on SENS prior

to commencement of the prohibited period;

f) after the company has acquired linked units which constitute,

on a cumulative basis, 3% of the number of linked units in

issue (at the time that authority from linked unitholders

for the repurchase is granted), the company shall publish

an announcement to such effect;

g) the company’s sponsor must confirm the adequacy of the

company’s working capital for purposes of undertaking the

60

repurchase of linked units in writing to the JSE prior to the

company (or any subsidiary) entering the market to proceed

with the repurchase;

h) the company must remain in compliance with paragraphs

3.37 to 3.41 of the Listings Requirements of the JSE

concerning unitholder spread after such repurchase; and

i) the company (or any subsidiary) shall appoint only one agent

to effect repurchases on its behalf.”

In accordance with the Listings Requirements of the JSE, the

directors record that:

Although there is no immediate intention to effect a repurchase

of the linked units of the company, the directors would utilise the

general authority to repurchase linked units as and when suitable

opportunities present themselves, which may require immediate

action.

The directors, after considering the maximum number of linked

units that may be repurchased and the price at which the

repurchases may take place pursuant to the buyback general

authority, are of the opinion that for a period of 12 months after

the date of this annual general meeting:

• the company and the group will be able to pay its debts

in the ordinary course of business;

• the consolidated assets of the company and the group fairly

valued in accordance with International Financial Reporting

Standards, will be in excess of the consolidated liabilities of

the company and the group after the buyback; and

• the company’s and the group’s share capital, reserves

and working capital will be adequate for ordinary

business purposes.

The following additional information, some of which may appear

elsewhere in the annual report of which this notice forms part,

is provided in terms of the Listings Requirements of the JSE for

purposes of this general authority:

• Directors – pages 4 and 5;

• Major beneficial unitholders – page 55;

• Directors’ interests in linked units – page 30; and

• Capital structure of the company – page 44.

Litigation statement

In terms of section 11.26 of the Listings Requirements of the JSE,

the directors, whose names appear on pages 4 and 5 of the annual

report of which this notice forms part, are not aware of any legal

or arbitration proceedings including proceedings that are pending

or threatened, that may have or have had in the recent past (being

at least the previous 12 months) a material effect on the group’s

financial position.

Directors’ responsibility statement

The directors whose names appear on pages 4 and 5 of the annual

report of which this notice forms part, collectively and individually

accept full responsibility for the accuracy of the information

pertaining to this special resolution and certify that, to the best

of their knowledge and belief, there are no facts that have been

omitted which would make any statement false or misleading, and

that all reasonable enquiries to ascertain such facts have been

made and that the special resolution contains all information

required by the Companies Act, 61 of 1973, as amended, and the

Listings Requirements of the JSE.

Material changes

Other than the facts and developments reported on in the annual

report of which this notice forms part, there have been no material

changes in the affairs or financial position of the company and its

subsidiaries since the date of signature of the audit report and up

to the date of this notice.

In terms of the Debenture Trust Deed, the resolution is classed

as a debenture special resolution and as such is required to

be passed by a majority consisting of not less than 75% of the


meeting.

Debenture Resolution 4: Signature of documentation

“Resolved that a director or the company secretary of the company

be and is hereby authorised to sign all such documentation and

do all such things as may be necessary for or incidental to the

implementation of Debenture Resolution numbers 1, 2 and 3 which

are passed by the linked unitholders with and subject to the terms

thereof.”

This resolution is classed as a debenture ordinary resolution

and as such is required to be passed by a simple majority of


meeting.

Voting, proxies and quorum

Each of Madison’s linked units comprises one ordinary share

and one debenture. Certificated and own-name dematerialised

debentureholders are therefore advised that they must complete a

separate form of proxy for shareholders and for debentureholders

in order for their vote/s to be valid. The form of proxy for

certificated and own-name dematerialised shareholders is set

out on page 63 of the annual report and the form of proxy for

certificated and own-name dematerialised debentureholders

is set out on page 65 of the annual report.

A debentureholder of the company entitled to attend, speak and

vote at the annual general meeting is entitled to appoint a proxy

or proxies to attend, speak and to vote in his stead. The proxy need

not be a debentureholder of the company.

On a show of hands, every debentureholder of the company

present in person or represented by proxy shall have one vote only.

On a poll, every debentureholder of the company present in person

or represented by proxy shall have one vote for every debenture

held in the company by such debentureholder.

A form of proxy is attached for the convenience of certificated

and ownname dematerialised debentureholders holding debentures

in the company who cannot attend the annual general meeting

but wish to be represented thereat. Such debentureholders must

complete and return the attached form of proxy and lodge it with

the transfer secretaries of the company.

Dematerialised debentureholders who have not elected own-name

registration in the sub-register of the company through a Central

Securities Depository Participant (“CSDP”) and who wish to attend

the annual general meeting, must instruct the CSDP or broker

to provide them with the necessary authority to attend.

61

Dematerialised debentureholders who have not elected own-

name registration in the sub-register of the company through

a CSDP and who are unable to attend, but wish to vote at the

annual general meeting, must timeously provide their CSDP

or broker with their voting instructions in terms of the custody

agreement entered into between that debentureholder and the

CSDP or broker. Such debentureholders are advised that they must

provide their CSDP or broker with separate voting instructions in

respect of the shares and the debentures in terms of their linked

units.

Forms of proxy may also be obtained on request from the

company’s registered office. The completed forms of proxy

must be deposited at, posted or faxed to the transfer secretaries

Computershare Investor Services (Proprietary) Limited, Ground

Floor, 70 Marshall Street, Johannesburg 2001 (PO Box 61051,

Marshalltown 2107), to be received at least 48 hours prior to

the meeting. Any debentureholder who completes and lodges a

form of proxy will nevertheless be entitled to attend and vote in

person at the annual general meeting should the debentureholder

subsequently decide to do so.

A quorum at a meeting shall:

for the purposes of considering a debenture ordinary resolution,

consist of debentureholders present in person or represented by

proxy and holding in the aggregate not less than one-tenth of the

debentures in issue; and

for the purposes of considering a debenture special resolution,

consist of debentureholders present in person or represented by

proxy and holding in the aggregate not less than the number of

the debentures in issue representing a clear majority of those

debentures in issue, which quorum, must be present throughout

the meeting.

By order of the Board

Probity Business Services


Company Secretary

Registered office

2 Arnold Road

Rosebank

2196

Transfer secretaries

Computershare Investor Services


Ground Floor

70 Marshall Street

Johannesburg

2001

p* section headline sub-headline

“Leaders need to be optimists. Their vision is beyond the present.” Rudy Giuliani

63

I/We (Name in block letters)

of (Address)

being the registered holder of shares

hereby appoint: of

or failing him/her of

or failing him/her, the chairperson of the general meeting as my/our proxy to vote for me/us on my/our behalf

at the annual general meeting of the company to be held on 28 May 2008 at 10:30 and at any adjournment thereof.

In favour Against Abstain

Ordinary Resolution 1: To receive and adopt the annual financial statements

for the year ended 31 December 2007

Ordinary Resolution 2: To re-elect WE Cesman as a director of the company

Ordinary Resolution 3: To re-elect MK Khumalo as a director of the company

Ordinary Resolution 4: To re-appoint PKF (Jhb) Inc as auditors of the company

Ordinary Resolution 5: To place the unissued linked units under the control of directors

Ordinary Resolution 6: General authority to enable the company to issue for cash up to 5%

of the authorised but unissued linked units

Ordinary Resolution 7: To confirm the remuneration of non-executive directors

Ordinary Resolution 8: To authorise the signature of documentation

Special Resolution 1: General authority to enable the company (or any subsidiary) to repurchase

linked units of the company

Signed this day of 2008

Signature

Assisted by (if applicable). Please read notes overleaf.

Form of proxy for shareholders

Madison Property Fund Managers Holdings Limited


Registration number 2003/021772/06 Share code: MDN

ISIN code: ZAE 000080560

Each of Madison’s linked units comprises one ordinary

share and one debenture. Certificated and own-name

dematerialised shareholders are therefore advised that they

must complete a separate form of proxy for certificated

and own-name dematerialised shareholders and a separate

form of proxy for certificated and own-name dematerialised

debentureholders in order for their vote/s to be valid. The


debentureholders is set out on page 65 of the annual report.

This form of proxy is for use by the holders of the company’s

certificated ordinary shares and/or dematerialised ordinary

shares held through a Central Securities Depository

Participant (“CSDP”) or broker who have selected own-

name registration and who cannot attend but wish to be

represented at the annual general meeting of the company

at the offices of Madison at 2 Arnold Road, Rosebank, or

any adjournment if required. Additional forms of proxy are

available at the company’s registered office.

Not for the use by holders of the company’s dematerialised

ordinary shares who have not selected own-name

registration. Such shareholders must contact their CSDP

or broker timeously if they wish to attend and vote at the

annual general meeting and request that they be issued with

the necessary authorisation to do so, or provide the CSDP or

broker timeously with their voting instructions should they

not wish to attend the annual general meeting but wish to be

represented thereat, in order for the CSDP or broker to vote

in accordance with their instructions.

For use at the annual general meeting on 28 May 2008 at 10:30.

Please indicate with an “X” in the appropriate spaces how you wish your votes to be cast. Unless this is done the proxy will vote as he/she thinks fit.

64

Notes to the form of proxy for shareholders

1 Each of Madison’s linked units comprises one ordinary


dematerialised shareholders are therefore advised

that they must complete a separate form of proxy for

certificated and own-name dematerialised shareholders

and a separate form of proxy for certificated and own-

name dematerialised debentureholders in order for their

vote/s to be valid. The form of proxy for certificated and

own-name dematerialised debentureholders is set out on

page 65 of the annual report.

2 This form of proxy is to be completed only by those

members who are:

• holding ordinary shares in certificated form; or

• recorded in the sub-register in electronic form in

their “own-name”.

3 Each shareholder is entitled to appoint one or more

proxies (none of whom need to be a shareholder of the

company) to attend, speak and vote in place of that

shareholder at the annual general meeting.

4 Shareholders that are certificated or own-name

dematerialised shareholders may insert the name of

a proxy or the names of two alternate proxies of the

shareholder’s choice in the space/s provided, with

or without deleting “the chairperson of the general

meeting”, but any such deletion must be initialled by the

shareholders. The person whose name stands first on the

form of proxy and who is present at the annual general

meeting will be entitled to act as proxy to the exclusion

of those whose names follow. If no proxy is named on a

lodged form of proxy, the chairperson shall be deemed to

be appointed as the proxy.

5 A shareholder’s instructions to the proxy must be

indicated by the insertion of the relevant number of

votes exercisable by the shareholder in the appropriate

box provided. Failure to comply with the above will be

deemed to authorise the proxy, in the case of any proxy

other than the chairperson, to vote or abstain from

voting as deemed fit and in the case of the chairperson

to vote in favour of the resolution.

6 A shareholder or his/her proxy is not obliged to use all

the votes exercisable by the shareholder, but the total

of the votes cast or abstained from may not exceed the

total of the votes exercisable in respect of the ordinary

shares held by the shareholder.

7 Forms of proxy must be lodged at, posted or faxed to the

transfer secretaries, Computershare Investor Services

(Proprietary) Limited, Ground Floor, 70 Marshall Street,

Johannesburg 2001 (PO Box 61051, Marshalltown 2107),

to be received at least 48 hours prior to the meeting.

8 The completion and lodging of this form of proxy will

not preclude the relevant shareholder from attending

the annual general meeting and speaking and voting in

person thereat to the exclusion of any proxy appointed

in terms hereof, should such shareholder wish to do so.

Where there are joint holders of ordinary shares, the vote

of the first joint holder who tenders a vote as determined

by the order in which the names stand in the register of

shareholders, will be accepted.

9 Where there are joint holders of any ordinary shares,

only that holder whose name appears first in the register

in respect of such shares needs sign this form of proxy.

10 The chairperson of the annual general meeting may

reject or accept any form of proxy which is completed

and/or received otherwise than in accordance with these

notes, provided that, in respect of acceptances, the

chairperson is satisfied as to the manner in which the

shareholder concerned wishes to vote.

11 Documentary evidence establishing the authority of

a person signing this form of proxy in a representative

capacity must be attached to this form of proxy unless

previously recorded by the company or Computershare

Investor Services (Proprietary) Limited or waived by the

chairperson of the annual general meeting.

12 Any alteration or correction made to this form of proxy

must be initialled by the signatory/ies.

13 A minor must be assisted by his/her parent/ guardian

unless the relevant documents establishing his/her

legal capacity are produced or have been registered by

Computershare Investor Services (Proprietary) Limited.

I/We (Name in block letters)

of (Address)

being the registered holder of debentures

hereby appoint: of

or failing him/her of

or failing him/her, the chairperson of the general meeting as my/our proxy to vote for me/us on my/our behalf

at the annual general meeting of the company to be held on 28 May 2008 at 10:45 and at any adjournment thereof.

In favour Against Abstain

Debenture Resolution 1: To place the unissued linked units under the control of directors

Debenture Resolution 2: General authority to enable the company to issue for cash

up to 5% of the authorised but unissued linked units

Debenture Resolution 3: General authority to enable the company (or any subsidiary)

to repurchase linked units of the company

Debenture Resolution 4 : To authorise the signature of documentation

Please indicate with an “X” in the appropriate spaces how you wish your votes to be cast. Unless this is done the proxy will vote as he/she thinks fit.

Form of proxy for debentureholders





Each of Madison’s linked units comprises one ordinary


dematerialised debentureholders are therefore advised that

they must complete a separate form of proxy for certificated

and own-name dematerialised shareholders and a separate


debentureholders in order for their vote/s to be valid. The


shareholders is set out on page 63 of the annual report.

This form of proxy is for use by the holders of the company’s

certificated debentures and/or dematerialised debentures

held through a Central Securities Depository Participant

(“CSDP”) or broker who have selected own-name registration

and who cannot attend but wish to be represented at the

annual general meeting of the company at the offices of

Madison at 2 Arnold Road, Rosebank, or any adjournment

if required. Additional forms of proxy are available at the

company’s registered office.

Not for the use by dematerialised debentureholders

who have not selected own-name registration. Such

debentureholders must contact their CSDP or broker

timeously if they wish to attend and vote at the annual

general meeting and request that they be issued with the

necessary authorisation to do so, or provide the CSDP or

broker timeously with their voting instructions should they

not wish to attend the annual general meeting but wish to be

represented thereat, in order for the CSDP or broker to vote

in accordance with their instructions.

For use at the annual general meeting on 28 May 2008 at 10:45.

(or immediately after the conclusion of the shareholders’ meeting, whichever is the later).

65

Signed this day of 2008

Signature

Assisted by (if applicable). Please read notes overleaf.

66

Notes to the form of proxy for debentureholders

1 Each of Madison’s linked units comprises one ordinary


dematerialised debentureholders are therefore advised

that they must complete a separate form of proxy for

certificated and own-name dematerialised shareholders

and a separate form of proxy for certificated and own-

name dematerialised debentureholders in order for their

vote/s to be valid. The form of proxy for certificated and

own-name dematerialised shareholders is set out on

page 59 of the annual report.

2 This form of proxy is to be completed only by those

members who are:

• holding debentures in certificated form; or

• recorded in the sub-register in electronic form

in their “own-name”.

3 Each debentureholder is entitled to appoint one or more

proxies (none of whom need to be a debentureholder of

the company) to attend, speak and vote in place of that

debentureholder at the annual general meeting.

4 Debentureholders that are certificated or own-name

dematerialised debentureholders may insert the name

of a proxy or the names of two alternate proxies of the

debentureholder’s choice in the space/s provided, with

or without deleting “the chairperson of the general

meeting”, but any such deletion must be initialled by the

debentureholders. The person whose name stands first

on the form of proxy and who is present at the annual

general meeting will be entitled to act as proxy to the

exclusion of those whose names follow. If no proxy is

named on a lodged form of proxy, the chairperson shall

be deemed to be appointed as the proxy.

5 A debentureholder’s instructions to the proxy must

be indicated by the insertion of the relevant number

of votes exercisable by the debentureholder in the

appropriate box provided. Failure to comply with the

above will be deemed to authorise the proxy, in the

case of any proxy other than the chairperson, to vote or

abstain from voting as deemed fit and in the case of the

chairperson to vote in favour of the resolution.

6 A debentureholder or his/her proxy is not obliged to

use all the votes exercisable by the debentureholder,

but the total of the votes cast or abstained from may

not exceed the total of the votes exercisable in respect

of the debentures held by the debentureholder.

7 Forms of proxy must be lodged at, posted or faxed to the

transfer secretaries, Computershare Investor Services

(Proprietary) Limited, Ground Floor, 70 Marshall Street,

Johannesburg 2001 (PO Box 61051, Marshalltown 2107)

to be received at least 48 hours prior to the meeting.

8 The completion and lodging of this form of proxy will not

preclude the relevant debentureholder from attending

the annual general meeting and speaking and voting in

person thereat to the exclusion of any proxy appointed

in terms hereof, should such debentureholder wish to do

so. Where there are joint holders of debentures, the vote

of the first joint holder who tenders a vote as determined

by the order in which the names stand in the register of

debentureholders, will be accepted.

9 Where there are joint holders of any debentures, only

that holder whose name appears first in the register in

respect of such debentures needs sign this form of proxy.

10 The chairperson of the annual general meeting may

reject or accept any form of proxy which is completed

and/or received otherwise than in accordance with these

notes, provided that, in respect of acceptances, the

chairperson is satisfied as to the manner in which the

debentureholder concerned wishes to vote.

11 Documentary evidence establishing the authority of

a person signing this form of proxy in a representative

capacity must be attached to this form of proxy unless

previously recorded by the company or Computershare

Investor Services (Proprietary) Limited or waived by

the chairperson of the annual general meeting.

12 Any alteration or correction made to this form of proxy

must be initialled by the signatory/ies.

13 A minor must be assisted by his/her parent/ guardian

unless the relevant documents establishing his/her

legal capacity are produced or have been registered by

Computershare Investor Services (Proprietary) Limited.

67

Company registration number Madison Property Fund Managers Holdings Limited

2003/021772/06


2005/021874/06

Registered office and business address 2 Arnold Road, Rosebank, 2196

PO Box 55266, Northlands, 2116

Cape Town business address The Spearhead, 42 Hans Strydom Avenue,

Forseshore, Cape Town

Telephone +27 11 283 0000 (Johannesburg)

+27 21 425 1000 (Cape Town)

Fax +27 11 283 0173 (Johannesburg)

+27 21 425 1010 (Cape Town)

Email [email protected]

Internet address www.madisonproperty.co.za

Commercial bankers The Standard Bank of South Africa Limited

Company secretary Probity Business Services (Proprietary) Limited

3rd Floor, JHI House, 11 Cradock Avenue, Rosebank, 2196

Telephone: +27 11 327 7146

Independent auditors PKF (Jhb) Inc.

42 Wierda Road West, Sandton, 2196

Telephone: +27 11 384 8000

Transfer secretaries Computershare Investor Services (Proprietary) Limited

70 Marshall Street, Johannesburg 2001

Telephone: +27 11 370 5000

Corporate advisor and sponsor Java Capital (Proprietary) Limited

2 Arnold Road, Rosebank, 2196

Telephone: +27 11 283 0190

Trustee for debentureholders Webber Wentzel Bowens

13th Floor, Picbel Parkade, 58 Strand Street, Cape Town, 8001

Telephone: +27 21 405 5000

Administration

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