Final Results

24 December 2013

SOUTH AFRICAN PROPERTY OPPORTUNITIES PLC

('SAPRO' or the 'Group')

Final results for the year ended 30 June 2013

South African Property Opportunities plc (AIM: SAPO), an investment company established to invest in real estate opportunities in South Africa, announces its final results for the year ended 30 June 2013.

A copy of the results announcement will be available on the Company's website at www.saprofund.com

For further information please contact:

Paul Fincham/Robert Naylor +44 (0) 20 7886 2500

Panmure Gordon

Ian Dungate/David Parnell + 44 (0) 1624 692600

Galileo Fund Services Limited

Chairman's Statement

I am pleased that the Company has achieved some meaningful sales, including post the balance sheet date. Also in line with strategy, the Company has further reduced its debt levels. The results have however been adversely affected by the fall in the Rand and some falls in asset values.

Since the year end a distribution of 10 pence per share was made and I would expect further distributions as sales complete.

Performance

During the course of the year audited Net Asset Value per share ("NAV") has reduced from 87 pence to 69 pence (note 17). The fall reflects a loss per share of 18.76 pence (2012: 20.80 pence), comprising primarily a foreign exchange loss of £8.7million (14 pence per share), a loss on the acquisition of associates of £1.49million (2.4 pence per share) and operating costs of £1.479million (2.4 pence per share).

EPRA NAV is 69 pence per share (2012: 87 pence) reflecting certain costs and valuation adjustments that are not included in the NAV.

The weakening of the South African Rand has had a significant impact on the Company's performance (in Sterling terms) and moved from ZAR12.83/£ as at 30 June 2012 to ZAR 15.05/£ at the year end. Since the year end the Rand has moved to ZAR 16.37/£. The Company does not hedge currency exposure.

Our costs for 2013 were £1,479,000 as compared with £1,600,000 for 2012. As reported in January 2013, the Board has implemented cost savings in a range of areas, including service providers and the Board itself. The Investment Managers fees for 2014 are contracted to be £290,000 plus performance fees of 1.5% of net sales proceeds. Other service providers and directors agreed fee reductions as well. Because our financial year runs from July 1 to June 30, these reductions will primarily appear in our 2014 financial statements.

Valuations

There have been further valuation declines during the year with weak demand for the development properties. For assets that we continue to hold as of the date of this report the fall in rand terms has been 8.2%. The Manager's Report provides further information on the reasons for these declines.

Asset Sales

The two largest sales announced during the year, Longland and Sandton, both involved intensive negotiations with our partners whose objectives were generally different from those of the Company. Group Five and the Executive Directors handled these negotiations well and the board views the prices achieved as satisfactory.

Key disposal events were as follows:

· Longland: the Longland sale announced in November 2012 completed in July 2013 with proceeds, net of taxes and expenses of ZAR102 million (£6.8 million) received, with a small and final adjustment for further accruals yet to be finalised.

· Sandton (Starleith & Wedgewood): the sale announced in September 2012 is expected to complete in early 2014 with proceeds of circa ZAR120million (£7.8 million) due.

· Gosforth Park: a sale of part of this asset completed in the year with proceeds of ZAR16.6million (£1.1 million) received.

· Hughes: the sale of this asset completed post year end at a price of ZAR5.3million (£0.4 million).

· Kyalami: a sale of this asset for ZAR26million (£1.7million) has been contracted with deposit received post year end and the balance due over the next 9 months.

Debt levels

Debt levels reduced to ZAR25.4 million (£1.7 million) during the year (2012: ZAR112.1million (£8.7 million)) and since the period end have fallen further to ZAR15.5million (£0.9 million).

Outlook

While our sale progress has been good, the valuation falls across the residual portfolio reflect both limited market demand for development sites and also the difficulties which landowners in South Africa continue to experience with utilities and Government processes. A number of the assets require further management work to improve consents and facilities before they are realistically saleable. Your board and manager continue to focus on these, with a view to continuing to deliver the agreed strategy of disposing of the portfolio.

I would like to thank my board colleagues and our investment manager and other advisers for their efforts which have delivered this progress.

David Hunter

Chairman

23 December 2013

Report of the Investment Manager

Executive Summary

Whilst the overall market remained under pressure, it is encouraging to see a modest market improvement over the first six months of 2013, with GDP achieving a 3% level from the lows of 1.2% earlier in the year and inflation declining to 5.5% from 5.9% recorded in December 2012. Socio-economic and political uneasiness remains a concern for the economy as a whole. Labour unrest and spiralling operating costs pose a threat to the growth of the property sector. There are conflicting signs, which in an uninspiring economy will make the next 6 months a further period of challenge.

The retail property sector continued to dominate the sectors performance whilst industrial property further improved in a number of key aspects, despite a very sluggish start in the six months to December 2012. Commercial office space continues to bear the brunt of the market woes and is further exacerbated by new development activity.

Sustainability remains a core issue to investment returns over the lifecycle of a property asset. Operating costs for a typical asset increased by 6.0% for the six month period to June 2013. Property taxes on typical assets, which constitute about 21.0% of the total operating costs, registered a strong 10.5% growth following new municipal price increases. Electricity, which contributes 33.0% to the costs, posted a growth of 4.3%.

Our outlook to ensure further divestment of the portfolio at market valuations remains buoyed by the current state of the various negotiations on a number of the unsold assets and we remain hopeful that traction on these will flow through over the next half year. Our mandate remains clear and we are committed to delivering as such.

Notable achievements and challenges during the year

Fund, Sector and Activity Analysis

Activity Analysis graph depicts the current status of activity within the total portfolio.

Embedded images removed - please refer to the Company's website www.saprofund.com for Portfolio Analysis describing the portfolio mix of the different assets by valuation as at 30 June 2013

Progress Achieved

The focus and achievement of closing a number of transactions, both prior to 30 June 2013 and then subsequently to the date of this report are pleasing to report. On the various planning and zoning issues however, we have had mixed results. Whilst we have seen steady progress on certain of the assets, others are taking longer than originally planned and this is somewhat frustrating. Local council and municipality red tape and bureaucracy are the major sources of our frustration yet we remain committed to finding a speedy and effective resolution to these issues.

I am pleased to note that we managed to settle matters amicably with our fellow shareholders on the African Renaissance asset and thus avoided a long and protracted legal process. Such settlement has resulted in SAPRO owning 100% of the equity with the ability to now deliver on the mandate.

The Investment Manager is pleased to report on the following achievements during the period and up to the date of this report;

· The Wedgewood and Starleith transactions exchanged on 30 June 2013 with transfer on both anticipated in early 2014.

· The successful sale and share buyback transaction on the Longland properties was concluded on 2 July 2013. Purchase consideration of £6.8 million (ZAR 101.8 million) has largely been settled and distributed with a small and final adjustment account for further accruals yet to be finalised. This process is underway and should be concluded shortly.

· A successful sale transaction in respect of the Kyalami residential asset was concluded in July 2013. Such a deal comprised of both a share buyback of our 10% project partners and then the sale of the asset to a reputable third party developer. The conditional elements to this deal have technically been achieved and we expect certification to this effect to be issued shortly which will then render the total deal unconditional.

· A sale of shares transaction in relation to the Hughes asset was further concluded in August 2013. The purchase consideration of £352,000 (ZAR 5.3 million) has been settled.

· Conditional sale offers continue to be signed with assets like Acacia Park, Imbonini and Kindlewood on an on-going basis. On Kindlewood, we have 18 units remaining to sell; of which 7 units are awaiting transfer. This will leave a residual 11 units to sell. Should the 7 units sold achieve transfer then we are anticipating a further reduction in the debt facility to approximately £133,000 (ZAR2m) by end of January 2014.

· The reduction of the overall debt profile of the portfolio from £8.7m to £1m (ZAR112.1m to R15.5m) is equally seen as a milestone.

Looking ahead, we remain optimistic about making further significant progress in the year to 30 June 2014. Certain of the assets requiring rights and zoning approvals may require some time to ensure they are optimally "ready for sale".

Portfolio overview

Further negotiations on other assets listed below are well advanced with a number of interested parties which we hope will maintain the existing momentum.

Some of the approvals pertaining to the relevant property rights and zoning requirements have taken longer than anticipated despite our intense focus in these areas. Electricity, right of way access and environmental renewals remain a feature of our day to day activity to ensure each asset can be brought to market at the appropriate value and in the shortest time period.

It should further be noted that we are awaiting transfer on a further nine assets (seven for Kindlewood and two for Sandton) and these should be closed shortly.

The latest asset classification table is provided here below;

*Given a change in South African law it became necessary to re-submit applications for zoning and approval purposes, hence the current classification.

Embedded images removed - please refer to the Company's website www.saprofund.com for a chart describing the sector mix of the portfolio as at 30 June 2013.

Review by Property Sector

Commercial

The office sector continued to register high vacancy levels (12.6% overall) with recent office development activity placing pressure on rental levels and the lower grade office space. Provincial offices were the worst performing segment registering 2.5% negative capital growth and a total return of only 2.3%. In terms of occupancy, inner city office continues to register low occupancy levels with the areas recording 22.8% vacancy rate for the first half of the year.Rentals have remained sluggish during the period. Sustainability is the most significant factor in any move decision with rising electricity, water and rate costs starting to spiral as predicted.

SAPRO Assets in this Sector:

Retail

The retail sector outperformed other sectors on the back of strong capital growth and stable vacancies. Super regional shopping centers registered the strongest capital value growth in the listed sector, which was 6.7%; the income return was 3.3%. Regional and community shopping centers registered impressive base rental growth of 4.5% and 6.1% respectively over the six months to June 2013, though this does not yet reflect in strengthening capital value growth or returns.

Year on year retail sales returned a volatile performance but ended the year very healthily at levels last seen some eighteen months prior.

SAPRO Assets in this Sector:

Industrial

The industrial sector's impressive performance (9.1% total return) for the six months of the year was underpinned by high capital growth and low vacancy rates averaging 2.8% for the 6 months to 30 June 2013, which is 1.6% less than the 2012 annual average. This occupancy level compensated for relatively low base rental growth in this segment at R35.3/m2 versus R34.6/ m2 in the six months ending December 2012.

The industrial production figures show a very slow and negative start to the second half of the year with Q4 significantly outperforming in May and June 2013.

Embedded images removed - please refer to the Company's website www.saprofund.com for chart showing South Afican industrial production percentage change year on year.

A weakening Rand has however impacted on import figures over the past few months and with global uncertainty prevailing we continue to see a fluctuating cycle as opposed to one of any steady stability.

SAPRO Assets in this Sector:

Residential

Given only moderate economic activity and floundering consumer confidence, residential property fundamentals continue to struggle.

Residential rentals reflected moderate to weak growth. Nationally, nominal market rentals on flats and houses grew by 5% and 3% respectively, whereas those on townhouses showed no growth. Given consumer inflation of around 6% over the period, this implies that in real terms all categories of residential property rentals are contracting.

On a positive note, the value of new mortgage loans granted for residential dwellings and flats has in recent months started to grow again. The seeming recovery might be explained by low and steady interest rates, but also by the continued recent growth in disposable incomes.

The affordable and low cost sectors of this market continue to show slower demand.

SAPRO Assets in this Sector:

Debt Levels and Refinancing Arrangements

Debt levels within the Group continued to decline during the year from ZAR112.1m (£8.7m) at 30 June 2012 to ZAR25.4m (£1.67m) at 30 June 2013 and to ZAR15.5m (£1m) at 30 September 2013. At Kindlewood, given the volume of sales over the past few months and the number of units that are currently in the transfer process, it is anticipated that the current debt levels will reduce further in the first half of 2014 .

Below is a table that represents the movement in debt levels year on year as well as the Company's share of debt as it currently stands:

Valuations

The total value of the portfolio has declined on a consolidated basis given that a number of assets were sold. Such sales represent 91.2% of total value decline. The remaining 8.8% change reflects a negative adjustment to market values.

In separating out the true value decline (as opposed to reductions due to sales movement) we can report that the following assets were negatively affected by the Broll valuation exercise and we provide the rationale therefore;

On a portfolio basis, the Broll valuation as at 30 June 2013 totalled ZAR492,7m representing a decrease of ZAR73,1m over the six month period since December 2012 and ZAR627,5m for the full period. Such decrease takes into account the sales that have occurred during the period.

Portfolio Management

African Renaissance

Description: Comprises a 146 hectare vacant development site (mainly residential and commercial rights) east of Pretoria. SAPRO held 100% as at 30 June 2013, given the share buyback settlement with the existing partners.

Action taken or underway:In the year to 30 June 2013 we managed to achieve an amicable settlement with our partners which resulted in SAPRO owning 100% of the equity.

Further work has been done on the affordable layout design and we are now focused on trying to reduce some of the servicing cost aspects to make the scheme more affordable and marketable.

A retail development scheme has seen many iterations of redesign over the year and is currently being marketed.

Sales progress: The retail site continues to attract interest and we are locked in advanced negotiation with two prospective purchasers for the site. Indicative negotiated pricing appears in line with market valuations.

Interest on the residential site picked up during the year and there are still a number of interested parties albeit at prices below the current Broll valuation level. We have received one unconditional cash offer but this has not been accepted given the price offering.

Strategy: Move the current negotiations to a closed deal on both the retail and residential sites.

Brakpan

Description: Comprises two vacant development stands totalling 6.64 hectares with approximately 25,000 square metres of developable commercial bulk situated to the east of Johannesburg. SAPRO held 50% as at 30 June 2013.

Action taken or underway: The traffic impact assessment process has been completed and was submitted during the year. Our submission has been approved by the local authority yet they have asked that we extend our analysis to further routes and intersections which we are now busy with. The town planner is currently preparing the remaining application documents for submission.

Sales progress: We continue to market the asset with our project partner being the most likely source of acquisition. It is likely that both he and the neighbouring properties/developers will in any event object to any applications and so due process will take longer than anticipated.

Strategy: Focus remains on obtaining the approvals. Without this, no sale will take place. Continue to market the Brakpan site in parallel.

Clayville

Description: Comprises 49 hectares of vacant land located in Olifantsfontein north of Johannesburg. SAPRO held 100% as at 30 June 2013.

Action taken or underway: As was the case in our previous report, electricity supply issues continue to impede the marketability of this asset. This year saw the focus shift to trying to secure our service level agreements with the local authorities despite the electricity issues. Whilst we are far advanced on these aspects we have yet to conclude on these agreements. We are constantly engaging with council to progress solutions. Under new legislation a new environmental approval is now required which we have been progressing during the year. We feel this should be secured by calendar year end.

Sales progress:We have been in discussion with a few interested parties over the period culminating in our support for a tender process award. Unfortunately the Cape Town based developer was not awarded the preferred bidder status and as such we are back to the drawing board. During the year we received a firm offer to purchase at values in excess of the Broll valuation.

Strategy: The focus must remain on finding resolution to the existing electricity supply issues. We further believe that we ought to investigate the benefits of carving the site into smaller more marketable and affordable components in order to sell off to a wider developer/end-user audience. This is being investigated and discussed with management.

Emberton

Description: Comprises 16.5 hectares of vacant development land (mainly zoned residential with certain commercial rights) in Hillcrest, north of Durban. SAPRO held 100% as at 30 June 2013.

Action taken or underway: Whilst the objections from neighbouring estates and other concerned rate payers remain in place on this site, we have concluded that the best course of action is to negotiate on lowering the approved density levels with council to ameliorate some of the concerns of the neighbouring estate. Once we conclude on this aspect we will then work with the local authority to deal with the outstanding objections and ought to be in a position to secure a firm developmental opportunity by calendar year end. This should then improve our negotiating position with the interested purchasers mentioned here below. As a result of the above, intensive efforts have been placed on an entire redesign of the original site development plan and these are now being submitted to the local authorities for their review and approval.

Sales progress: During the year we received a firm offer to purchase at values in excess of the Broll valuation. Unfortunately, the purchaser reneged on his purchase obligations and so the agreement was rendered null & void. We are however involved in intensive negotiations with the neighbouring property (potential purchasers or objectors) and we will pursue these discussions optimistically. 

Strategy: Continue with current negotiations while progress is made on the planning permissions.

Gosforth Park

Description: Comprises the residual 3.7 hectare portion of an original 42 hectare proclaimed industrial and commercial site south east of Johannesburg. SAPRO held 100% as at 30 June 2013.

Action taken or underway: Approximately 90% of the total land available for sale has been sold. Some of the conditions of sale pertained to an infrastructure upgrade. These matters have been implemented and concluded. The total debt facility which assisted in financing such infrastructure works was also settled during the year.

Sales progress: "Portion 24" constitutes the remaining land to be sold and measures approximately 36,000 square metresm2. We are currently in negotiations with an interested purchaser for this remaining site.

Strategy: Focus on concluding final land sale component at market values.

Hughes

This property has been sold. Gross receipts of R5.3m (£0.4m) have been received.

Acacia Park

Description: Comprises twenty-two sectional title mini-industrial units on a serviced stand in Imbonini Phase I. SAPRO held 100% as at 30 June 2013.

Action taken or underway: During the year no further units were sold. Currently 3 units remain and two of these are tenanted out. We have decided to hold one unit as empty and the others as leased to ensure we attract both the end user and investor markets.

The surrounding embankment that collapsed following heavy floods has been fully rectified and signed off. On-going maintenance and some minor latent defects following initial construction are being attended to.

Sales progress: Sales progress during the year has been slow as a result of a readjustment of the price point. Following on from the debt facility being settled it was felt that we no longer needed to discount the remaining units to the same extent.

Strategy: Evaluate slower sales with the appropriate pricing point.

Imbonini Phase I

Description: Comprises a 36 hectare zoned industrial estate in Ballito north of Durban. SAPRO held 100% as at 30 June 2013.

Action taken or underway: Negotiations with our project partners were finalised and SAPRO now own 100% of Acacia Park and Imbonini Phase I and II.

Sales progress: There has been some progress during the period and despite a few deals falling through, a number of smaller transactions were concluded on during the period. One sale occurred during the year. Approximately 20% of this phase is still to be sold. One further offer is under consideration at present.

Strategy: To continue to find buyers at market related values and to follow up on the electrical rebate with the local municipality. Such rebate will take time to procure.

Imbonini Phase II

Description: Comprises a 77 hectare site in close proximity to Imbonini Phase I and currently zoned industrial following our compliance with the DFA requirements. SAPRO held 100% as at 30 June 2013.

Action taken or underway: All planning requirements have been met. The DFA approval was also achieved as per expectation.

The share buyback arrangement negotiated with our project partners was successfully concluded in January 2013. SAPRO now owns 100% of the asset.

Sales progress:The size and valuation of the land parcel limits its marketability. We continue to market to national developers and institutional funds, but recent activity further South has seen significant developable bulk come to market in direct competition with this site despite the difference in location.

Strategy: The approach of dividing the land parcel into smaller components is now under review and being assessed. Servicing can then be done on a piece-meal basis which may help affordability. In parallel, the focus on finding a single purchaser will continue.

Kindlewood

Description: Comprises two adjoining projects (Kindlewood phases 1 and 2) with a combined area of 5.3hectares. Phase one comprises forty-one completed upper income single family homes in a gated suburban community north of Durban. Twenty three of the forty-one houses have been sold. Phase 2 is a difficult site due to the gradient of the land. SAPRO held 89% as at 30 June 2013.

Action taken or underway: Despite tough market conditions a number of sales have been concluded to the date of this report. 10 sales were made during the year and 7 of these sales are now awaiting transfer. On Phase II we continue to market the property to interested developers but the land topography remains a limiting factor.

Sales progress:Should the above units transfer successfully, then 11 units remain for sale from the original 41 units.

Strategy: Continue to sell completed houses at achievable prices and find a developer interested in acquiring the Phase 2 site.

Kyalami

Description: Comprises an 8.9 hectare residential site in Kyalami, north of Johannesburg. SAPRO held 90% as at 30 June 2013.

Action taken or underway: The asset was conditionally sold in August 2013. The sale transaction comprised two stages; the buyback of our partners 10% stake at a lower than market valuation and then the sale to a 3rd party.

Sales progress:All the conditions have now been technically achieved and we are awaiting the issuance of a section 101 certificate for the deal to migrate to an unconditional status. We have received two of the three tranche payments. The final tranche payment will be made 12 months after receiving the Section 101 certification.

Strategy: To focus on procuring the Section 101 certification.

Lenasia

Description: Comprises a 13 hectare commercial development site in Lenasia, south of Johannesburg. SAPRO held 100% as at 30 June 2013.

Action taken or underway: The traffic impact issues were conditionally approved by the local authority during the year. The Johannesburg Roads Association is now attending to the re-design aspects surrounding the conditions imposed. The issues pertaining to right of way (access) continue to progress and have conditionally been granted based on the preparation and submission of a township application. We have commenced with this accordingly.

Sales progress: There are two interested purchasers in negotiation yet at levels below Broll valuation. Electricity remains a core issue for this site and may take some time to secure.

Strategy: We can phase the land so as to get an early sale of the one portion which has electricity capacity, however that in turn creates significant uncertainty for the land portion without electricity as this may take some time to procure. Our focus thus remains on procuring electricity and site access to escalate purchase price to market values.

Lilianton/Driefontain

Description: Comprises 11.0 hectares of vacant development land (mainly residential with future plans to rezone a portion for commercial rights) east of Johannesburg. SAPRO held 100% as at 30 June 2013.

Action taken or underway: We have completed all approvals for the site, yet have held back on proclamation of the site to avoid increased rates and taxes.

Sales progress:In this location, developers are traditionally developing smaller density projects which approximate a quarter of our rights currently in place. As such this has made marketing the site unsuccessful to date.

Strategy: Potential opportunity is to pursue sub-division into smaller land parcels (but this takes substantial time). Such activity will allow us to market to a wider developer audience.

Longland

This property was sold in October 2012. Net proceeds of ZAR102.3m (£6.8m) have been received.

The final account reconciliation is now underway for some of the reserved provisions and accruals. We anticipate this will be finalised by calendar year end.

Starleith

This asset has been sold. Net proceeds of ZAR19m (£1.3m) are anticipated during the first quarter of 2014. The asset is awaiting transfer.

Waltloo

This asset was sold in a previous reporting period.

Wedgewood

This asset has been sold. Net proceeds of ZAR19m (£1.3m) are anticipated by end of October 2013. The asset is awaiting transfer.

Group Five Property Developments (Pty) Limited

Investment Manager

23 December 2013

Report of the Directors

The Directors hereby submit their annual report together with the audited consolidated financial statements of South African Property Opportunities plc (the "Company") and its subsidiaries (the "Group") for the year ended 30 June 2013.

The Company

The Company is incorporated in the Isle of Man and holds a portfolio of property interests in South Africa.

Currency and debt

The Group does not hedge its exposure in its Rand assets and liabilities. Debt facilities are typically secured on individual properties and are Rand denominated.

Divestment strategy

Following a strategic review the Company intends to dispose of the Group's portfolio where acceptable returns can be generated and return excess capital to shareholders.

Results and dividends

The results and position of the Group at the year end are set out on pages 22 to 47 of the financial statements.

The Directors intend to manage the Group's affairs to achieve shareholder returns through capital growth rather than income, and accordingly there can be no certainty that any dividend will be paid. However the Directors reserve the right to make dividend distributions to holders of Ordinary Shares if and when it is considered appropriate. The Directors do not intend to declare a dividend at this time (2012: £nil).

Directors

The Directors who served during the year and up to the date of this Report were as follows:

Directors and other interests

Save as disclosed above and as detailed in note 8, none of the Directors had any interest during the year in any material contract for the provision of services which was significant to the business of the Company.

Independent auditor

BDO LLP replaced PricewaterhouseCoopers LLC as auditors during the period and, being eligible, has indicated its willingness to continue in office.

Corporate governance

The Directors recognise the importance of sound corporate governance. The Directors are responsible for overseeing the effectiveness of the internal controls of the Company designed to ensure that proper accounting records are maintained, that the financial information on which business decisions are made and which is issued for publication is reliable and that the assets of the Group are safeguarded.

The Board has established the following committees with specific areas of responsibility.

Audit Committee

The Audit Committee comprises David Saville (Chairman), David Hunter and Stephen Coe. The Audit Committee meets at least twice a year and is responsible for ensuring that the financial performance of the Group is properly reported on and monitored, including reviews of the annual and interim financial statements, results announcements, internal control systems and procedures and accounting policies.

Nomination Committee

The Nomination Committee comprises David Saville (Chairman) and David Hunter. The Nomination Committee is responsible for ensuring that the Board consists of members with the range of skills and qualities to meet its principal responsibilities in a way which ensures that the interests of stakeholders are protected and promoted, and the requirements of the AIM rules are complied with.

Remuneration Committee

The Remuneration Committee comprises David Saville (Chairman), David Hunter and Stephen Coe. The Remuneration Committee meets as required and is responsible for determining and agreeing the remuneration for all members of the Board.

Management Engagement Committee

The Management Engagement Committee comprises John Chapman (Chairman), David Hunter and Craig McMurray. The Management Engagement Committee meets as required and is responsible for reviewing the performance of the Investment Manager and for ensuring that the Company's management contract is competitive and reasonable for the Company's shareholders. It is also responsible for reviewing the performance of other third party service providers.

On behalf of the Board

David Saville

Director

23 December 2013

Directors' Biographies

The Company has a board of five Directors, all of whom are independent of the Company's Investment Manager and other service providers. Details of the Directors are as follows:

David Hunter - Chairman

David Hunter is a UK-based property fund consultant. For twenty years up to 2005 he was a leading property fund manager ultimately responsible for €10bn of property assets across Europe for Arlington Property Investors. David is a fellow of the Royal Institution of Chartered Surveyors, a former President of the British Property Federation, and a member of the Bank of England Property Forum.

John Chapman 

John Chapman is a member of the New York State Bar and the CFA Institute. He is currently a director of a number of other quoted investment funds.

Craig McMurray

Craig McMurray is the managing director of Bridgehead Capital Management (Pty) Limited, a real estate company managing commercial property in South Africa including Bridgehead Real Estate Fund Limited. Previously Craig was head of Credit Projects at Standard Bank of South Africa Limited.

David Saville

David Saville is an Isle of Man based property fund manager currently managing a number of property sector investment vehicles with investments predominantly in the UK and Australia. From 1992 to 2001 David was the Managing Director of Saville Gordon Estates Plc, which he was instrumental in repositioning as a FTSE 250 property company specialising in industrial property. David is a member of the Royal Institution of Chartered Surveyors. 

Stephen Coe

Stephen qualified as a Chartered Accountant with Price Waterhouse in 1990 and remained in audit practice, specialising in financial services, until 1997. From 1997 to 2003 he was a director of the Bachmann Group of fiduciary companies and Managing Director of Bachmann Fund Administration Limited, a specialist third party fund administration company. From 2003 to 2006 Stephen was a director with Investec in Guernsey and Managing Director of Investec Trust (Guernsey) Limited and Investec Administration Services Limited. He became self employed in August 2006 and is a director of a number of listed and unlisted investment funds and offshore companies including Raven Russia Limited, European Real Estate Investment Trust Limited, Kolar Gold Limited, Trinity Capital PLC and Weiss Korea Opportunity Fund Ltd. (and serves as Chairman of the Audit Committee for these companies). He has been involved with offshore investment funds and managers since 1990 with significant exposure to property, debt, emerging markets and private equity investments.

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

The Directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards ("IFRSs") (as adopted by the European Union). In preparing those financial statements it is the Directors' responsibility to:

· select suitable accounting policies and then apply them consistently;

· make judgements and estimates that are reasonable and prudent;

· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business; and

· prepare financial statements which give a true and fair view of the state of affairs of the Group and of the profit or loss of the Group for that period.

The Directors confirm that they have complied with the above requirements in preparing the financial statements.

The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the Group's transactions and disclose with reasonable accuracy at any time the financial position of the Group. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

On behalf of the Board

David Saville

Director

23 December 2013

Independent auditor's report to the members of South African Property Opportunities plc

We have audited the financial statements of South African Property Opportunities plc for the year ended 30 June 2013 which comprise the consolidated income statement, the consolidated statement of comprehensive income, the consolidated balance sheet, the consolidated statement of changes in equity and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards ('IFRSs') as adopted by the European Union.

This report is made solely to the Company's members as a body, in accordance with Section 80C of the Isle of Man Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, and the Company's members as a body for our audit work, for this report, or for the opinion we have formed.

Respective responsibilities of directors and auditor

As explained more fully in the statement of directors' responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable Isle of Man company law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Financial Reporting Council's (FRC's) Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the FRC's website at www.frc.org.uk/apb/scope/private.cfm

Opinion on the financial statements

In our opinion the financial statements:

• give a true and fair view of the state of the group's affairs as at 30 June 2013 and of its loss for the year then ended;

• have been properly prepared in accordance with IFRSs as adopted by the European Union.

BDO LLP

BDO LLP

Chartered Accountants

London

United Kingdom

23 December 2013

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

Consolidated Income Statement

Consolidated Statement of Comprehensive Income

Consolidated Balance Sheet

The financial statements were approved and authorised for issue by the Board of Directors on 23 December 2013 and signed on its behalf by:

David Hunter David Saville

Director Director

Consolidated Statement of Changes in Equity

Consolidated Cash Flow Statement

Notes to the Financial Statements

1 General information

South African Property Opportunities plc (the "Company") was incorporated and registered in the Isle of Man under the Isle of Man Companies Acts 1931 to 2004 on 27 June 2006 as a public limited company with registered number 117001C. On 7 January 2011 with the approval of Shareholders in general meeting, the Company was re-registered as a company under the Isle of Man Companies Act 2006 with registered number 006491v. South African Property Opportunities plc and its subsidiaries' (the "Group") investment objective is to achieve capital growth from the development and subsequent sale of a portfolio of real estate assets in South Africa.

The Company's property activities are managed by Group Five Property Developments (Pty) Limited ("Group Five") ("the Investment Manager"). The Company's administration is delegated to Galileo Fund Services Limited (the "Administrator"). The registered office of the Company is Millennium House, 46 Athol Street, Douglas, Isle of Man, IM1 1JB.

Pursuant to a prospectus dated 20 October 2006 there was an authorisation to place up to 50 million shares. Following the close of the placing on 26 October 2006, 30 million shares were issued at a price of 100p per share.

The shares of the Company were admitted to trading on the AIM Market of the London Stock Exchange ("AIM") on 26 October 2006 when dealings also commenced. On the same date the shares of the Company were admitted to the Official List of the Channel Islands Stock Exchange (the "CISX").

As a result of a further fundraising in May 2007, 32,292,810 shares were issued at a price of 106p per share, which were admitted to trading on AIM on 22 May 2007.

The Company's agents and its Investment Manager perform all functions, other than those carried out by the Board's executive and non-executive directors. The Group has two executive directors.

Financial year end

The financial year end of the Company is 30 June in each year.

2 Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented unless otherwise stated.

2.1 Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. The financial statements have been prepared under the historical cost convention. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates (see note 2.2). It also requires management to exercise its judgement in the process of applying the Group's accounting policies.

These financial statements have been prepared on a going concern basis, which assumes that the Group will be able to meet its liabilities as and when they fall due for the foreseeable future. See note 2.2 for further information.

Future changes in accounting policies

IASB (International Accounting Standards Board) and IFRIC (International Financial Reporting Interpretations Committee) have issued the following standards and interpretations with an effective date after the date of these financial statements.

These standards have not been early adopted by the Group and the directors do not expect that the adoption of the standards listed below will have a material impact on the future financial statements of the Group.

*Effective date deferred pending finalisation of the impairment and classification and measurement requirements.

2.2 Critical accounting estimates and assumptions

Management makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are addressed below.

(a) Going concern

These financial statements have been prepared on a going concern basis, which assumes that the Group will be able to meet its liabilities as and when they fall due for the foreseeable future.

The Directors have prepared forecasts that indicate that the Group will be able to meet its financial obligations from existing cash resources and the projected sales proceeds from sale of inventory.

(b) Estimated impairment of inventory, investment in associates and loans to associates

The Group obtains third party semi-annual valuations performed by Broll (Broll represent CBRE under the terms of a network agreement whereby Broll represent CBRE in those sub-Saharan markets where CBRE do not have a presence of their own. Together with South Africa this includes Nigeria and Ghana). These are used in conjunction with the strategic plan for each development in order to determine any impairment of inventory, investments in associates and loans to associates.

The determination of valuations of inventory requires the use of estimates such as future cash flows from developments along with discount rates applicable to those assets, or estimates such as a comparison of the inventory against similar assets. These estimates are based on local market conditions existing at the date of the statement of financial position.

The continuing volatility in the global financial system is reflected in the turbulence in real estate markets across the world. The resulting low level of transaction volumes continued this year. The third party valuers have used their market knowledge and professional judgement and have not relied solely on historical transaction comparables. In these circumstances, there is a greater degree of uncertainty than exists in a more active market in estimating the market values of inventory.

During the year there were impairment charges in relation to inventory (see note 13), and reversal of Impairment charges in relation to loans due from associates (see note 11.2).

(c) Estimated impairment of goodwill

The Group tests annually for whether goodwill has suffered any impairment, in accordance with the accounting policy stated in note 2.7. The recoverable amount of the cash generating unit has been determined using fair value less cost to sell. This calculation requires the use of estimates, see note 12 for further details.

2.3 Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ("the functional currency"). The consolidated financial statements are presented in Pound Sterling, which is the Company's functional and the Group's presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated income statement.

 (c) Group companies

The results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

(ii) income and expenses for each income statement are translated at average exchange rates; and

(iii) all resulting exchange differences are recognised as a separate component of equity.

On consolidation, exchange differences arising from the translation of the net investment in foreign operations are taken to other comprehensive income. When a foreign operation is partially disposed or sold, exchange differences that were recorded in equity are recognised in the income statement as part of the gain or loss on sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

2.4 Revenue and expense recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of inventory in the ordinary course of the Group's activities and rental income received or receivable in relation to operating leases. Revenue is shown net of value added tax.

The Group recognises revenue from the sale of inventory on the transfer of the risks and rewards of ownership, which is when all the contractual conditions of sale have been met.

Operating lease income in respect of rents is recognised in the income statement on a straight-line basis over the period of the lease and relates to leases in which a significant portion of the risks and rewards of ownership are retained by the Group, as lessor, and are classified as operating leases.

Interest income is recognised in the financial statements on a time-proportionate basis using the effective interest method.

Interest expense for borrowings is recognised in the financial statements using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability and of allocating the interest income or interest expense over the period.

Expenses are accounted for on an accruals basis.

2.5 Basis of consolidation

Subsidiaries

Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. The Group also assesses existence of control where it does not have more than 50% of the voting power but is able to govern the financial and operating policies by virtue of de-facto control. De-facto control may arise in circumstances where the size of the Group's voting rights relative to the size and dispersion of holdings of other shareholders give the Group the power to govern the financial and operating policies, etc.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of acquiree's identifiable net assets.

Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.

Transactions and non-controlling interests

The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group.

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised gains/losses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

Associates

Associates are those entities in which the Group has a significant influence, but no control, generally accompanying a shareholding of between 20 per cent. and 50 per cent. of the voting rights. Associates are accounted for using the equity method of accounting and are initially recognised at cost. The Group's investment in associates includes goodwill identified on acquisition, net of any accumulated impairment loss. The consolidated financial statements include the Group's share of its associates' profits or losses, after adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases. When the Group's share of losses exceeds its interest in an associate, the carrying amount of that interest (including any long-term investment) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the associate.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of the associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

2.6 Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker is the person or group that allocates resources to and assesses the performance of the operating segments of an entity. The Group has determined that its chief operating decision-maker is the Board of the Company.

The Board reviews the Group's internal reporting in order to assess performance and allocate resources. Based on this internal reporting to the Board, it has been determined that there is only one operating segment, property development in the Republic of South Africa.

2.7 Intangible assets

Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the identifiable net assets (including intangible assets) of the acquired subsidiary.

Goodwill is carried at cost less accumulated impairment losses. Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of value in use and the fair value less costs to sell. Any impairment is recognised immediately as an expense and is subsequently not reversed.

2.8 Financial assets and financial liabilities

The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, and available for sale. The classification depends on the purpose for which the financial assets were acquired. The Board determine the classification of its financial assets at initial recognition.

At 30 June 2013 and 2012 the Group did not have any financial assets at fair value through profit or loss or available for sale. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date which are classified as non-current assets. The Group's loans and receivables comprise 'loans due from associates', 'trade and other receivables' and 'cash at bank' in the balance sheet (notes 11.2, 14 and 15).

The Group classifies its financial liabilities in the following categories: at fair value through profit or loss and other liabilities. At 30 June 2013 and 2012 the Group did not have any financial liabilities at fair value through profit or loss. Other liabilities comprise 'loans from third parties', 'trade and other payables' and 'borrowings' in the balance sheet (notes 18, 19 and 20).

2.9 Inventories

Land and buildings that are being developed for future sale are classified as inventory at their deemed cost, which is the carrying amount at the date of classification. Building costs and borrowing costs in relation to inventory are capitalised. Land and building for development is subsequently carried at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less selling expenses.

2.10 Loans and receivables

Loans and receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, 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 due according to the original terms of the receivables.

Significant financial difficulties of the counterparty, probability that the counterparty will enter bankruptcy or financial reorganisation, and default in payments are considered indicators that the amount to be received is impaired. Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, interest income is recognised using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss.

2.11 Cash and cash equivalents

Cash and cash equivalents comprise cash deposited with banks and other short-term highly liquid investments with original maturities of three months or less.

2.12 Trade and other payables

Trade and other payables are recognised initially at fair value and subsequently at amortised cost using the effective interest method.

2.13 Taxation

The Company is resident for taxation purposes in the Isle of Man and is subject to income tax at a rate of zero per cent. The Group is liable for tax in the Republic of South Africa on the activities of its subsidiaries and associates.

The tax expense represents the sum of the tax currently payable, which is based on taxable profits for the year. The Group's liability is calculated using tax rates enacted or substantially enacted at the balance sheet date.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that they probably will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

2.14 Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

Borrowing costs directly attributable to assets in the course of construction are capitalised.

2.15 Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.

2.16 Dividends

Dividends are recognised as a liability in the year in which they are declared and approved.

3 Risk management in respect of financial instruments

The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk and interest rate risk), credit risk and liquidity risk. The financial risks relate to the following financial instruments: loans and receivables and other liabilities as detailed in note 2.8.

Foreign currency risk

Foreign currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. The Group's operations are conducted in jurisdictions which generate revenue, expenses, assets and liabilities in currencies other than Pound Sterling ("the functional currency of the Company"). As a result the Group is subject to the effects of exchange rate fluctuations with respect to these currencies. The currency giving rise to this risk is the South African Rand.

The Group's policy is not to enter into any currency hedging transactions.

The table below summarises the Group's exposure to foreign currency risk in respect of its financial instruments:

At 30 June 2013, had the Pound strengthened/weakened by 5 per cent. against the South African Rand, with all other variables held constant, the impact on equity of the above financial instruments would be an increase/decrease of £95,000 (30 June 2012: 5 per cent. currency movement, increase/decrease £201,000).

Included in the income statement is a foreign exchange loss of £8,709,948 (2012: loss £9,583,188) which includes a loss of £8,677,949 (2012: loss £9,555,041) arising on the translation of the loan from the Company to its direct subsidiary, SAPSPV Holdings RSA (Pty) Limited; a loan which is denominated in South African Rand. On consolidation, the corresponding foreign exchange gain (2012: gain) arising on translation of this loan in SAPSPV Holdings RSA (Pty) Limited from the functional currency of South African Rand to the presentation currency of Pound Sterling is included in the foreign currency translation reserve within equity.

Credit risk

Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Group.

The carrying amounts of financial assets best represent the maximum credit risk exposure at the balance sheet date. This relates also to financial assets carried at amortised cost.

At the reporting date, the Group's financial assets exposed to credit risk amounted to the following:

The Group manages its credit risk by monitoring the creditworthiness of counterparties regularly. Cash transactions and balances are limited to high-credit-quality financial institutions. Loans due from associates related to project investments in land.

Included within loans due from associates at 30 June 2012 were loans which have been impaired, see note 11.2. The market value of the inventory held by these associates was considered when determining the impairment in the loans. These loans have since been repaid during the current year.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its obligations as they fall due. The Group currently manages its liquidity risk by maintaining sufficient cash and banking facilities as indicated by its cashflow forecasts. The Group's liquidity position is monitored by the Board of Directors (see note 2.2(a)).

The residual undiscounted contractual maturities of financial liabilities are as follows:

Interest rate risk

Interest rate risk is the risk that the value of financial instruments will fluctuate due to changes in market interest rates. The Group is exposed to interest rate risk from the cash held in interest bearing accounts at floating rates or short term deposits of one month or less, on loans due from associates, loans from third parties and on borrowings. The Company's Board of Directors monitor and review the interest rate fluctuations on a continuous basis and act accordingly.

During the year ended 30 June 2013 should interest rates have decreased by 100 basis points, with all other variables held constant, the shareholders' equity and profit for the year would have been £Nil (2012: 100 basis points, £99,000) lower.

Capital risk management

The Company's primary objective when managing its capital base is to safeguard its ability to continue as a going concern whilst disposing of the Group's portfolio where acceptable returns can be generated and returning excess capital to shareholders.

Capital comprises share capital (see note 16) and reserves.

No changes were made in respect of the objectives, policies or processes in respect of capital management during the years ended 30 June 2012 and 2013.

4 Segment Information

The entity is domiciled in the Isle of Man. All of the reported revenue, £13,807,000 (2012: £3,493,058) arises in South Africa.

The total of non-current assets other than financial instruments is £7,130,047 (2012: £7,571,793) and all of these are located in South Africa.

Revenue of £10,579,170 (ZAR: 146,626,243) was derived from single external customers attributable to the Gosforth development (30 June 2012: £1,605,220 (ZAR 19,753,200) attributable to the sale of Waltloo).

5 Operating leases

The Group leases out certain parts of its inventory under operating leases whilst it is in the process of seeking a buyer. The future minimum lease payments receivable by the Group under non-cancellable leases are as follows:

6 Cost of sales

7 Investment Manager's fees

Annual fees

The Investment Manager was entitled to a management fee of £500,000 per annum payable monthly in arrears. This fee was reduced to £290,000 per annum from 18 March 2013. Management fees for the year ended 30 June 2013 paid to Group Five Property Developments (Pty) Limited were £429,175 (ZAR 5,948,333) (30 June 2012: £500,090 (ZAR 6,153,908)).

During the year, pursuant to the investment management agreements the Investment Manager was also entitled to recharge to the Group any costs and disbursements reasonably incurred by it in the performance of their duties, including costs of travel save to the extent that such costs are staff costs or other internal costs of the Investment Manager.

Sales fee

The Investment Manager was entitled to a sales fee of up to 3 per cent. of the gross proceeds on disposal of the Group's projects (such fee is net of external brokerage costs incurred). This fee has been eliminated under the new investment management agreement dated 18 March 2013. These fees were payable on sale and were considered when determining the net realisable value of inventory in prior periods (see note 13). Sales fees payable for the year ended 30 June 2013 payable to Group Five Property Developments (Pty) Limited amounted to £214,735 (ZAR 2,976,202) (30 June 2012: £13,579 (ZAR 167,097)).

Performance fees

The Group accrued a performance fee due to the Investment Manager based upon the market value of the portfolio which only became payable on the eventual sale of these assets so long as the sales values were better than certain agreed benchmarks. Under the new investment management agreement the performance fee is now calculated based on 1.5% on the net proceeds of the sale of each asset. The reduction in performance fees considered in the assessment of the net realisable value of inventory for the year ended 30 June 2013 amounted to £57,265 (ZAR 793,692) (30 June 2012: reduction £151,464 (ZAR 1,863,854)).

8 Other administration fees and expenses

Included within other administration fees and expenses are the following:

Directors' remuneration

The maximum amount of basic remuneration payable by the Company by way of fees to the Non-executive Directors permitted under the Articles of Association is £200,000 per annum. All Directors are each entitled to receive reimbursement of any expenses incurred in relation to their appointment. The Non-executive Directors (excluding the Chairman) were entitled to receive an annual fee of £40,000 each and the Chairman £75,000. From 1 July 2012 David Saville reduced his annual fee from £40,000 to £20,000. From 1 April 2013 the Chairman reduced his annual fee to £40,000, Stephen Coe reduced his annual fee to £35,000 and David Saville reduced his annual fee to £15,000. Stephen Coe was also entitled to additional remuneration of £30,000 in December 2011 for his work.

Executive Directors' fees

The Executive Directors received annual basic salaries of £40,000. From 1 April 2013 John Chapman reduced his annual basic salary to £30,000. Pursuant to the terms of their service agreements, Craig McMurray and John Chapman are entitled to incentive payments of, respectively, 1.5 per cent. and 0.5 per cent. of all sums distributed to shareholders. Their services agreements also provide for payments of the same percentages, following termination of their employment, for distributions paid or payable from cash generated during their employment.

All directors' remuneration and fees

Total fees and basic remuneration (including VAT where applicable) paid to the Directors for the year ended 30 June 2013 amounted to £218,250 (30 June 2012: £288,667) and was split as below. Directors' insurance cover amounted to £37,161 (30 June 2012: £42,517).

9 Income tax expense

The tax on the Group's profit before tax is higher than the standard rate of income tax in the Isle of Man of zero per cent. The differences are explained below:

There are tax losses carried forward in the underlying subsidiaries of £31,060,925 (ZAR: 467,616,000) (30 June 2012: £29,177,327 (ZAR: 374,278,000)). There is no expiry date for the carrying forward of these losses. Tax losses are not carried as deferred tax assets in the consolidated balance sheet until the losses have been approved by the South African Revenue Service and the realisation of the related tax benefit through future taxable profits is probable.

10 Basic and diluted loss per share

Basic loss per share is calculated by dividing the loss attributable to equity holders of the Group by the weighted average number of shares in issue during the year.

The Company has no dilutive potential ordinary shares; the diluted earnings per share is the same as the basic earnings per share.

11 Investments in and loans to associates

11.1 Investments in associates

The Group's share of the results of its associates, all of which are unlisted, and its aggregated assets (including goodwill) and liabilities, is as follows:

The Group's stake in Blue Waves Properties 2 (Pty) Limited was sold to its partners for ZAR 5.3 million (£352,000).

The Group acquired the 50% stake in Imbonini Park (Pty) Limited and Imbonini Park (Phase 2) (Pty) Limited during the period (note 23).

11.2 Loans due from associates

12 Intangible assets

The above goodwill relates entirely to the Group's investment in the shares of Living 4 U Developments (Pty) Ltd (the African Renaissance development). The recoverable amount of this cash generating unit has been determined using fair value less cost to sell. The recoverable amount has been assessed as £6,904,666 (ZAR 103,948,359). The key assumption used to determine the fair value less cost to sell is the third party valuation of the land held and is valued at £7,844,674 (ZAR 118,100,000) at 30 June 2013. Considering all factors within the calculation of the recoverable amount of this cash generating unit, the recoverable amount would have to fall by £165,326 (ZAR 2,488,958) before impairment would be required.

13 Inventories

Current assets

During the year, the Group capitalised costs of £766,000 (ZAR 10,618,000) (30 June 2012: £279,831 (ZAR 3,443,483)), in order to develop these assets for future re-sale, and accordingly they were classified as inventory. Borrowing costs of £Nil (ZAR Nil) (30 June 2012: £27,768 (ZAR 341,705)) have been included in the capitalised costs.

At 30 June 2013 the net realisable values of Brakpan, Driefontein, Emberton, Gosforth, Kindlewood, Kyalami, Lenasia, Imbonini and Imbonini phase 2 were lower than cost, therefore, their inventory values have been impaired to a value of £21,963,104 (ZAR 330,650,145) (30 June 2012: Brakpan, Driefontein, Emberton, Kindlewood, Kyalami, Lenasia, Starleith and Wedgewood were impaired to a value of £30,398,192 (ZAR 389,938,890)). Net realisable value has been assessed using valuations determined by Broll less estimated selling expenses.

The Directors consider all inventories to be current in nature. It is not possible to determine with accuracy when specific inventory will be realised, as this will be subject to a number of issues such as availability of finance for purchasers and delays due to obtaining permits.

Security

At 30 June 2013, there is one first rank mortgage secured over the inventory held by Kindlewood which totals £4,071,791 (ZAR 61,300,000) (30 June 2012: Clayville, Driefontein, Kindlewood and Lenasia £11,973,614 (ZAR 153,593,930)) (See note 20).

14 Trade and other receivables

The fair value of trade and other receivables approximates their carrying value.

15 Cash at bank

Included within the bank deposit balances figure is an amount of £55,621 (ZAR 837,370) (30 June 2012: £63,440 (ZAR 813,790)) represented by bank guarantees retained by the bank under fixed deposit (detailed below). This is the only figure excluded from the above balances for analysing the movements of cash and cash equivalents in the cash flow statement.

Bank guarantees

The subsidiary SAPSPV Holdings RSA (Pty) Ltd has a contingent liability of £55,575 (ZAR 836,671) in connection with senior debt obligations of its subsidiary Imbonini Park (Pty) Ltd.

16 Share capital

The holders of Ordinary Shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.

Business Venture Investments No 1269 (Pty) Limited (the Wedgewood development) has issued preference shares ZAR 100 to its minority holders. The holders of the preference shares are entitled to the first ZAR 22,000,000 (£1,461,328) in dividends declared by Business Venture Investments No 1269 (Pty) Limited.

17 Net asset value ("NAV") per share

The NAV per share is calculated by dividing the net assets attributable to equity holders of the Group by the number of ordinary shares in issue.

The Group publishes an adjusted NAV that is calculated in accordance with the guidelines of the European Public Real Estate Association ("EPRA"). The primary difference between EPRA and IFRS is that, in general, under IFRS the Group's development properties are classified as inventory and held at cost while EPRA permits the incorporation of open market valuations. In order to produce the EPRA numbers the Group has retained Broll's Johannesburg office to conduct semi-annual valuations. The EPRA numbers incorporate the Broll valuations and are net of tax.

The below figures also take into consideration any profit share agreements with development partners, commission due on sale of properties (see note 7) and incentive fees due to the Executive Directors (see note 8).

18 Loans from third parties

The loans from third parties are as follows:

* in relation to its 50 per cent. interest in subsidiary company, Madison Park Properties 40 (Pty) Limited, and the Brakpan development.

** in relation to its 25 per cent. interest in subsidiary company, Breeze Court 31 (Pty) Limited, and the Starleith development.

All of the above loans are unsecured and carry no fixed terms of repayment.

The fair value of these loans approximate their carrying value.

19 Trade and other payables

The fair value of trade and other payables approximates their carrying value.

20 Borrowings

Current liabilities

Terms and debt repayment schedule

* relates to the Kindlewood development, a mortgage bond has been registered over the Kindlewood property. This facility was subject to certain sales targets which were tested on 30 September 2013. Such sales targets were met and will be reviewed again at the end of March 2014.

** related to SAPSPV Holdings RSA (Pty) Limited, secured by the Group's investments in the Starleith, Wedgewood and Clayville projects as security for the facility and a mortgage bond has been registered over the Clayville property. This facility was repaid in full and not renewed.

*** related to the Gosforth development; mortgage bonds have been registered over the Lenasia and Driefontein properties. This facility was repaid in full and not renewed.

The fair value of the borrowings approximate their carrying value.

21 Contingent liabilities and commitments

As at 30 June 2013 the Group has contingent liabilities which have corresponding bank guarantees. See note 15 for further details.

22 Related party transactions

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

The Investment Manager, Group Five Property Developments (Pty) Limited, and the Directors of the Company are considered to be related parties by virtue of their ability to make operational decisions for the Group. Fees in relation to the Investment Manager are disclosed in note 7 and fees in relation to the Directors are disclosed in note 8.

Group Five Property Developments (Pty) Limited is a related party to Group Five Construction (Pty) Limited, which is a partner in the Wedgewood and Starleith developments. There is a loan in respect of the Starleith development which is disclosed in note 18.

Related party transactions with associates are disclosed in note 11.

The principal subsidiary undertakings within the Group as at 30 June 2013 are:-

* this also represents the percentage of ordinary share capital and voting rights held - 2013

** the Group controls the company by means of direct control of the board

*** the group acquired 35% of the shares in Living 4 U Developments (Pty) Limited during the period for a consideration of £332,000 (ZAR 5,000,000)

The following companies were deregistered during the year and therefore no longer form part of the Group:

23 Acquisition of Subsidiaries

On 28 February, the Group acquired for £66 (ZAR 1,000),from its project partners, the 50% shareholding not already held by the Group of Imbonini Park (Pty) Limited and Imbonini Park (Phase 2)(Pty) Ltd, as a result the group now owns 100% of these developments and has control. This acquisition was undertaken so that the group is in a position to negotiate the terms of any disposals without recourse to its former project partners.

In accordance with IFRS 3 Business Combinations, the acquisition date fair value of the equity interest in the associates was re-measured, resulting in a loss of £1,539,000 being recognised in the income statement, net of negative goodwill of £47,000 arising on the subsequent bargain purchase as detailed below.

As at the date of acquisition Imbonini Park (Pty) Limited had fair value net assets of £47,034 (ZAR 640,690) and Imbonini Park (Phase 2) (Pty) Limited had a net deficit of £843 (ZAR 11,493) made up as follows

Revenue and profit and Loss of Imbonini Park (Pty) Limited and Imbonini Park (Phase 2)(Pty) Ltd for the full year and for the period from acquisition are as follows

24 Post balance sheet events

A return of Capital of 10 pence per share was made to Shareholders in August 2013. Total funds returned to shareholders was £6,236,910.

Subsequent to the year end the Group the following developments have taken place in respect of the Group's property portfolio

Longland: The sale of the Longland asset, announced on 6 November 2012, has been completed and proceeds of R102 million (£6.8 million) has now been received with a small and final adjustment for further accruals outstanding.

 Sandton: The sale conditions referred to in the announcement of 14 September 2012 have now either been satisfied or waived, and the Company expects to receive substantially all of the Sandton sale proceeds of circa R120 million (£7.8 million) in the first quarter of 2014.

Gosforth Park: The final R16.6million (£1.1 million) tranche of the announced sale price has now been received. A portion of that amount was used to repay a bank loan facility. The Company is endeavouring to sell the remaining portion of the Gosforth Park asset.

Hughes: SAPRO has sold its stake in this asset to its partners for R5.3million (£0.4 million), in line with the Broll valuation and that transaction has completed.

Kyalami: The Company has bought out its partner's stake and simultaneously sold the entire asset for R26million (£1.7 million), 7% below the Broll valuation. A deposit has been received and the remainder will be received on a phased basis over the next twelve months.

Emberton: The contracted sale announced on 13 March 2013 has fallen through due to the financial failure of the counterparty. Discussions continue with alternative interested parties.