PRIVATE PLACEMENT MEMORANDUM 1

MAS plc Previously Mergon Property Holdings Limited (Incorporated in the Isle of Man) (Registration number 2893V) (Registered as an external company in the Republic of South Africa) (Registration number 2010/000338/10) JSE share code: MSP SEDOL: B4LFGHO ISIN: IM00B4LFGH00 (“MAS” or “the Company”)

PRIVATE PLACEMENT MEMORANDUM The definitions commencing on page 11 of this private placement memorandum have, where appropriate, been used on this cover page. MAS has its primary listing on the Euro-MTF market of the LuxSE and a secondary listing on the Alt X of the JSE. Accordingly the private placement memorandum has been prepared and issued in terms of the LuxSE Listings Requirements, the JSE Listings Requirements and the South African Companies Act. This private placement memorandum relates to a private placement of up to 62 516 280 shares of no par value in the capital of MAS at an issue price of €1.00, thereby raising up to €62 516 280 or approximately R600 million (before private placement expenses). Opening date of private placement (09:00) CET

Monday, 15 August

Closing date of private placement (12:00)* CET

Friday, 26 August

Proposed listing date (09:00) CET – – –

Friday, 2 September

Applicants can obtain application forms to subscribe for shares pursuant to the private placement by contacting the Company secretary. Applicants should consult their broker or CSDP to ascertain the timing for submission of applications as this may vary depending on the broker or CSDP in question. Shareholders that take up shares in terms of the private placement must not sell their shares until the shares are updated to their respective custody accounts held with their CSDP or broker which is expected to be on the proposed listing date.

The private placement is by invitation only to applicants and will be constituted by the issue of up to 62 516 280 shares of no par value at €1.00 per share. The shares to be issued pursuant to the private placement will rank pari passu with all other shares issued by MAS. There are no convertibility or redemption provisions relating to the shares that are the subject of this private placement and no fractions of securities will be issued. This private placement memorandum is not an invitation to the public to subscribe for shares in MAS. It is issued in compliance with the LuxSE Listings Requirements, the JSE Listings Requirements and the South African Companies Act for the purpose of providing information to the public regarding MAS and to provide information to select investors with regards to the private placement. A potential investor should consult with its own legal, business and tax advisers to determine the appropriateness and consequences of an investment in the Company. This private placement memorandum does not constitute an offer to buy or to subscribe for, or the solicitation of an offer to buy or subscribe for, shares in MAS in any jurisdiction in which such offer or solicitation is unlawful. In particular the shares in MAS have not been, and will not be, registered under the Securities Act or qualified for sale under the laws of any state of the United States or under the applicable laws of any of Canada, Australia or Japan and, subject to certain exceptions, may not be offered or sold in the United States or to, or for the account or benefit of, US persons (as such term is defined in Regulation S under the Securities Act) or to any national, resident or citizen of Canada, Australia or Japan. Neither this private placement memorandum nor any copy of it may be distributed directly or indirectly to any persons with addresses in the United States of America (or any of its territories or possessions), Canada, Australia or Japan, or to any corporation, partnership or other entity created or organised under the laws thereof, or in any other country outside the IOM and the Republic of South Africa where such distribution may lead to a breach of any legal or regulatory requirement. In the United Kingdom, this document is being distributed only to and is directed only at persons (i) who are investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) or (ii) who are high net worth entities falling within Article 49 of the Order, and (iii) other persons to whom it may otherwise lawfully be communicated. Any person in the United Kingdom who is not one of the abovementioned persons should not act or rely on this private placement memorandum or any of its contents. The issued share capital of the Company currently comprises of 20 173 271 shares of no par value. The Company has a market capitalisation of €20 173 271 or approximately R193 612 968. After the private placement the issued share capital of the Company shall comprise of up to 82 689 551 shares of no par value (assuming the private placement is fully subscribed). After the private place-

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PRIVATE PLACEMENT MEMORANDUM

ment the market capitalisation of MAS will be €82 689 551 or approximately R793 612 968 (assuming the private placement is fully subscribed). No shares are held in treasury. The shares issued at €1.00 per share are not offered at a premium but rather at the current market value of the share. There is no intention to extend a preference on allotment to any particular company or group in the event of an over subscription of shares pursuant to this private placement. However, final allocations will be at the discretion of the directors of MAS or the bookrunner. The private placement constitutes a primary offer to the public of listed securities as contemplated in terms of section 99(3)(a)(i) of the South African Companies Act. As required by that section, the private placement is made in accordance with the requirements of the JSE. It is not necessary for this private placement memorandum to be filed or registered with the Companies and Intellectual Properties Commission nor is it intended that it will be so filed or registered. The directors of MAS, whose names are given in page 3 of this document, collectively and individually, accept full responsibility for the accuracy of the information given herein and certify that, to the best of their knowledge and belief, no facts have been omitted which would make any statement false or misleading, and that they have made all reasonable enquiries to ascertain such facts and that this private placement memorandum contains all information required by law, the South African Companies Act and the LuxSE Listings Requirements. This document constitutes the “offering document” for the purposes of section 45 of the Isle of Man Companies Act 2006 and is prepared in compliance with the requirements of that section. It is not necessary for this document to be filed or registered with any governmental or public body, authority or agency in the IOM either on, before or after the date of its publication and it is not intended that this document will be filed with the Registrar of Companies in the IOM pursuant to section 45(5) of the Companies Act 2006. This document further constitutes a prospectus in terms of the LuxSE Listings Requirements for purposes of listing new shares of the Company on the Euro-MTF market of the LuxSE. In this document an indicative exchange rate of €1 : R9.5975 has been used. Applicants should note that the shares in MAS are Euro-denominated shares and therefore the Rand-denominated subscription consideration raised in terms of the private placement for shares shall be converted from Rand to Euro at the closing spot exchange rate on the closing date of the private placement, and therefore certain figures stated in this private placement memorandum, including, inter alia, the number of issued shares and the market capitalisation of MAS may vary from the actual figures on listing of the private placement shares, dependent on movements in the exchange rate. The directors do not believe that any such variations will be material, however in the event that same is material MAS will announce same on the LuxSE website and SENS. In line with exchange control approval obtained by the Company from the SARB, the shares will only be allotted and issued to the applicants on listing date of the private placement shares and will only be issued on market as listed shares.

Warning Statement: MAS is a Closed-Ended Investment Company and is not subject to approval in the IOM and investors are not protected by any statutory compensation arrangements in the event of the Company’s failure. The Isle of Man Financial Supervision Commission does not vouch for the fi nancial soundness of the Company or for the correctness of any statements made or opinions expressed with regard to it. Potential investors must be advised of the risk of investing in an entity listed on the Euro-MTF market and the Alt X . The Euro-MTF market is not an EU-Regulated Market, as defi ned in the European Directive 2004-39-EC, and is outside the scope of certain EU regulations such as, the IAS Regulation, the Prospectus Directive and the Transparency Directive. Applicants should also carefully consider the entire contents of this private placement memorandum before deciding whether or not to subscribe for shares in MAS and should consult with their own legal, business and tax advisers to determine the appropriateness and consequences of an investment in the Company. There may be risks of which the directors are not aware. Applicants should consider carefully whether investment in MAS is suitable for them, in the light of their personal circumstances and the fi nancial resources available to them. Applicants should pay particular attention to the risk factors contained in Annexure 11.

Corporate adviser, sponsor and bookrunner

South African legal adviser

Luxembourg legal adviser

Isle of Man independent auditors

A member of Maitland Legal

Date of issue: 1 August 2011 This private placement memorandum is available in English only. Copies may be obtained from the Company, the Luxembourg legal adviser, JSE sponsor and the transfer secretaries at the addresses set out in the “Corporate Information” section of this private placement memorandum during normal office hours from Monday, 1 August 2011.

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PRIVATE PLACEMENT MEMORANDUM

CORPORATE INFORMATION Directors of MAS

Directors of the investment adviser

L Nakos (Managing Director) M Levy (Financial Director) J Jansen*# G Oosthuizen* R Spencer*#

L Nakos (Managing Director) P Goosen (Executive Director, Corporate and Legal) D Joubert* M Levy (Financial Director) G Oosthuizen* P Faure (Alternate to P Goosen) L van der Watt (Alternate to G Oosthuizen) F van Niekerk (Alternate to D Joubert)

*non-executive #independent

*non-executive

Company secretary Helen Margaret Cullen (Chartered Secretary (ACIS) and associate of the Society of Trust and Estate Practitioners) Office: + 44 (0) 1624 625000 Direct Line: + 44 (0) 1624 653703 Fax: +44 (0) 1624 626037 E-mail: [email protected]

Registered office and postal address of the Company and dates of incorporation and registration In the Isle of Man MAS plc (Registration number 2893V) 25 Athol Street Douglas Isle of Man, IM1 1LB

Registered office and postal address of the investment adviser MAS Property Advisors Limited (Registration number 3542V) 25 Athol Street Douglas Isle of Man, IM1 1LB

Luxembourg legal adviser M Partners (Registration number 494024) 56, rue Charles Martel L-2134 Luxembourg Member of Maitland Legal

Date of incorporation in Isle of Man: 3 July 2008 In South Africa Emwil House West 15 Pony Street Tijger Vallei Office Park Silver Lakes, 0081 (Private Bag X35, Lynnwood Ridge, 0040)

South African legal adviser Cliffe Dekker Hofmeyr Inc. (Registration number 2008/018923/21) 1 Protea Place Sandton, 2196 (Private Bag X7, Benmore, 2010)

Date of registration as an external company in South Africa: 8 January 2010

Corporate adviser and bookrunner

Sponsor

Java Capital (Proprietary) Limited (Registration number 2002/031862/07) 2 Arnold Road, Rosebank, 2196 (P O Box 2087, Parklands, 2121)

Java Capital Trustees and Sponsors (Proprietary) Limited (Registration number 2006/005780/07) 2 Arnold Road, Rosebank, 2196 (P O Box 2087, Parklands, 2121)

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PRIVATE PLACEMENT MEMORANDUM

Isle of Man independent auditors

Transfer secretaries

KPMG Audit LLC (Registration number 617L) Heritage Court 41 Athol Street Douglas Isle of Man, IM99 1HN

Computershare Investor Services (Proprietary) Limited (Registration number 2004/003647/07) Ground Floor 70 Marshall Street Johannesburg, 2001 (P O Box 61051, Marshalltown 2107)

CREST Registrar and Paying Agent (ensuring financial service in Luxembourg) Computershare Investor Services (IOM) Limited (Registrar number 003287V) International House, Castle Hill Victoria Road Douglas Isle of Man, IM2 4RB

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PRIVATE PLACEMENT MEMORANDUM

TABLE OF CONTENTS The definitions commencing on page 11 of this private placement memorandum have been used in the following table of contents. Corporate information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3&4 Salient features . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Important dates and times . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Private placement memorandum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

SECTION 1 Information on the MAS group 1

History and background of the company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

2

Objective of the private placement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

3

Subscription commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

4

Directors and employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

5

Investment objectives, strategy and prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

6

Group structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

7

Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

8

Investment adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

9

Property portfolio information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

10

Properties acquired or to be acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

11

Share capital of the company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

SECTION 2 Details of the private placement 12

Purpose of the private placement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

13

Time and date of the opening and the closing of the private placement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

14

Details of the private placement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

15

Anti-money laundering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

16

Terms, conditions and payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

17

Oversubscription . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

18

Reservation of rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

19

Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

20

Minimum subscription . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

21

Issue of private placement shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

22

Future capital raising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

23

Listing statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

SECTION 3 Financial information of MAS 24

Forecast financial information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

25

Unaudited consolidated pro forma statement of financial position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

26

Historical financial information and auditors report on MAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

27

Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

28

Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

29

Borrowing powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

30

Material commitments, lease payments and contingent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

31

Adequacy of capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

32

Material changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

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PRIVATE PLACEMENT MEMORANDUM

TABLE OF CONTENTS CONTINUED

SECTION 4 Additional material information

6

33

Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

34

South African exchange control regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

35

Material contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

36

Commissions paid or payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

37

Amounts paid or payable to promoters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

38

Advisers’ interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

39

Government protection and investment encouragement law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

40

Code of corporate practice and conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

41

Directors’ responsibility statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

42

Litigation statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

43

Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

44

Preliminary expenses and issue expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

45

Documents available for inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Annexure 1

Details of directors of MAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Annexure 2

Details of the subsidiaries of MAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Annexure 3

Details of the investment adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

Annexure 4

Details of the property portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Annexure 5

Major shareholders and capital structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Annexure 6

Salient features of the articles of association of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Annexure 7

Unaudited consolidated pro forma statement of financial position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

Annexure 8

Historical financial information of MAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

Annexure 9

Loans and borrowing powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101

Annexure 10

Statement of corporate practice and conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

Annexure 11

Risk factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

PRIVATE PLACEMENT MEMORANDUM

SALIENT FEATURES The salient features provide an outline of the information contained in this private placement memorandum and are not intended to be comprehensive. The salient features should be read in conjunction with the other sections of this private placement memorandum. The definitions commencing on page 11 of this private placement memorandum apply to this salient features section.

1.

2.

INCORPORATION AND HISTORY 1.1

MAS was incorporated in the IOM on 3 July 2008 under the name of Mergon Property Holdings Limited. The Company changed its name to MAS plc on 4 March 2009.

1.2

MAS listed on the Euro-MTF market on 12 August 2009, where it has its primary listing, and on the Alt X on 31 August 2009, where it has its secondary listing.

1.3

The Company completed the acquisition of the ALDI Portfolio in December 2009, the DPD portfolio in January 2010 and Metchley Hall in June 2010.

1.4

MAS was registered as an external company in South Africa on 8 January 2010.

1.5

The Company completed a capital raising in April 2010 on the Euro-MTF market and the JSE pursuant to which the Company issued 10 079 126 shares, to selected institutions, high net worth individuals and business associates, at €1.00 per share, in terms of a private placement in Europe, the IOM and South Africa.

OVERVIEW OF MAS 2.1

Introduction The Company has been established to invest primarily in the high quality office, retail, industrial and other property sectors initially in the UK, Germany and Switzerland. The Company’s objective is to provide shareholders with an opportunity to invest in a long term Closed-Ended Investment Company with an infinite life for investors seeking European investment opportunities that yield stable returns and portfolio diversification. MAS is subject to IOM corporate law and according to such law the Company is not required to include a specific objects clause in its articles of association. The object of the Company can be determined by its board of directors and the object as aforementioned in this paragraph has been accepted by the directors as the objective of the Company.

2.2

Investment strategy Whilst the board recognises the importance of capital growth in the Company’s investment portfolio, the principal focus will be to acquire properties that will result in the creation of a portfolio that has good yield qualities with strong and reliable internal cash flows. The Company’s aim is to deliver a reliable and growing dividend return to its shareholders with the ultimate objective of sustaining a dividend yield of no less than 7% on capital invested. To achieve this, the Company will aim to invest no less than 80% of its capital into transactions that will enable it to accumulate a portfolio of well-located, good quality commercial properties at attractive yields. The Company will focus on acquiring properties with long-term lease covenants. Where properties with shorter-term leases are acquired, such investments will be selected so that the income reduction risk to the Company of leases terminating without renewal is spread over time. The Company will invest the balance of its capital in properties that stand to benefit from active asset management, including opportunities where development or refurbishment is required, in order to create the possibility of achieving a better overall return for the portfolio. However, the Company is not a speculative property developer, therefore when acquisitions are made that require an element of active asset management, there will be a strong focus on risk mitigation. Such risk mitigation strategies may include, but are not limited to, securing tenancy agreements prior to conclusion of the purchase. As part of the approach in managing its cash resources, the Company may also consider providing mezzanine finance on property transactions where there is ample realisable security to cover the loan.

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PRIVATE PLACEMENT MEMORANDUM

2.3

The investment adviser The investment adviser is an IOM incorporated company set up specifically to provide dedicated investment advisory services to the Company. The investment adviser will provide investment advisory services to the Company in terms of an investment advisory agreement, further details of which are set out in Annexure 3 of the private placement memorandum.

2.4

Borrowings The terms of the Company’s bank borrowings will be determined on a project by project basis and the Company will be advised by the investment adviser in this regard. The final decision in each case will be subject to the approval of the independent directors. It is anticipated that property acquisitions, together with the related debt funding, will be made through SPVs. It is the intention of the Company that acquisitions will be geared such as to achieve an appropriate balance between the risk of carrying debt and the enhancement of earnings through gearing and protection will be acquired against unforeseen increases in short term interest rates. It is not intended that total gearing on the portfolio will exceed 70% of total assets in the portfolio.

2.5

Dividend policy The Company aims to provide an investment to shareholders that maximises shareholder value by adopting a high income distribution policy. It is the Company’s intention to distribute on a semi-annual basis all of its revenue profits, subject to applicable laws and periodic repayment obligations under any amortising loan facilities. Other than in unforeseen and exceptional circumstances, it is not the intention to retain income for investment purposes. Where funds are required to grow the investment portfolio, the Company will ordinarily look to achieve this by raising fresh funds from shareholders or the market.

2.6

Prospects The directors of the Company believe that the Company has excellent prospects on the basis of: 2.6.1

the Aldi Portfolio already acquired;

2.6.2

the DPD Property already acquired;

2.6.3

Metchley Hall already acquired;

2.6.4

the potential acquisition pipeline;

2.6.5

current market conditions; and

2.6.6

access to future deal flow.

As a result of which the directors believe MAS will achieve the dividend yield in line with the Company’s expectations detailed above.

3.

PRIVATE PLACEMENT 3.1

The salient features of the private placement are as follows: Offer price per share Number of shares offered in terms of the private placement Total amount to be raised Minimum value of subscription amount in Europe and IOM for existing shareholders Minimum value of subscription amount in Europe for new investors who are not “qualified investors”

up to 62 516 280 up to €62 516 280 (approximately R600 million) €100 €50 000

Minimum value of subscription amount in Europe for new “qualified investors”

€500

Minimum value of subscription amount in IOM for new investors

€500

Minimum value of subscription amount in South Africa for existing shareholders and new investors Last day to trade for existing shareholders to be recorded on the share register to be entitled to participate in the private placement Record date for existing shareholders to participate in the private placement

8

€1.00

R1 000 Thursday, 4 August 2011 Friday, 12 August 2011

PRIVATE PLACEMENT MEMORANDUM

Opening of the private placement at 09:00 (CET) on

Monday, 15 August 2011

Closing of the private placement at 12:00 (CET) on

Friday, 26 August 2011

Results of the private placement released on the LuxSE website and SENS Notification of allotments

Monday, 29 August 2011 Wednesday, 31 August 2011

Payment of subscription amounts and accounts at CSDP, banks or broker updated on or before 12:00 (CET) on

Friday, 2 September 2011

Listing of private placement shares on Euro-MTF market and Alt X at commencement of trade on

Friday, 2 September 2011

Refund of any over-subscriptions for applicants subscribing for certificated shares

Monday, 5 September 2011

Note: The above dates are subject to change. Any such change will be announced on the LuxSE website (http://www.bourse.lu/Accueil.jsp) and SENS. Payment in respect of dematerialised shareholders will be on a delivery versus payment basis 3.2

3.3

3.4

The purpose of the private placement 3.2.1 The purpose of the private placement is to: 3.2.1.1

raise additional capital to fund the acquisition of further properties;

3.2.1.2

enhance the size of the free float of shareholders on both the Euro-MTF market and the Alt X, in order to create liquidity in the share;

3.2.1.3

to enable Sanlam and Atterbury to invest their committed capital of R100 million each (as to which, refer to paragraph 3.4 below); and

3.2.1.4

provide existing shareholders with the opportunity to subscribe for additional shares in MAS.

3.2.2

It is intended that the capital raised through the private placement will be applied to fund new property acquisitions, being those identified as the potential acquisition pipeline, or similar investments.

3.2.3

The directors retain discretion to determine the final allocation of the private placement proceeds, which will be subject to the approval of the independent directors.

Details of the private placement 3.3.1 The private placement shares will be offered for subscription to existing shareholders in proportion to their existing shareholding in MAS and in compliance with the pre-emptive rights set out in the articles of association of MAS (an extract of which is attached hereto in Annexure 6). The prescribed period for the offer to existing shareholders pursuant to the pre-emptive rights will run concurrently with the offer to third parties from the opening date of the private placement. For the sake of clarity, the rights of existing shareholders under the pre-emptive rights do not constitute warrants and will not be listed or separately traded on either of the Euro-MTF market or Alt X. To the extent that the private placement is not fully subscribed by existing shareholders the private placement shares will be offered to select institutions, high net worth individuals and business associates, in South Africa, Europe and the IOM. 3.3.2

Existing shareholders and those select institutions, high net worth individuals and business associates that have been invited to apply should do so by completing the private placement application forms which will be provided to them in accordance with the provisions of this private placement memorandum and the instructions contained in the private placement application forms.

3.3.3

No offer will be made to the public in respect of the private placement. The private placement is open to applicants only.

3.3.4

Applicants should note that Rand-denominated subscription consideration will be converted from Rand to Euro at the closing spot exchange rate on the closing date of the private placement and that the private placement shares will only be issued on market as listed shares.

Commitments under private placement As at the date of issue of this private placement memorandum MAS has received binding subscription undertakings in an aggregate amount of R200 million. The undertakings are from Sanlam and Atterbury and each has undertaken to invest an amount of R100 million in the share capital of MAS by way of subscription for MAS shares in terms of the private placement.

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PRIVATE PLACEMENT MEMORANDUM

4.

FUTURE CAPITAL RAISINGS It is the intention of the Company to raise additional capital in the coming years. The expansion of the capital base will be undertaken to exploit continued investment opportunities for the construction of the Company’s overall portfolio. The Company will endeavour to give all MAS shareholders an equal opportunity to subscribe for additional shares in MAS, provided that same makes commercial sense and subject to regulatory requirements. A detailed announcement will be made to shareholders in this regard at an appropriate date.

5.

MIGRATION OF JSE ALTX LISTING TO MAIN BOARD The Company’s current JSE listing is on the Alt X. MAS recognises the constraints this places on potential institutional investors and is intent on migrating its listing to the JSE’s Main Board as soon as circumstances will allow it to do so and same may be approved by the JSE.

6.

10

FINANCIAL INFORMATION 6.1

Anticipated returns The Company’s aim is to deliver a reliable and growing dividend return to its shareholders with the ultimate objective of sustaining a dividend yield of no less than 7% on capital invested. This expectation is based on the directors’ assessment of prevailing market conditions. If, in the Company’s view, circumstances change in future to make this expectation inappropriate as a medium to long term objective, this will be communicated to shareholders.

6.2

Financial information 6.2.1 The forecast financial information of MAS is presented in paragraph 24 of section 3. 6.2.2

The unaudited consolidated pro forma statement of financial position of MAS is presented in Annexure 7.

6.2.3

Extracts of the audited historical financial information for the years ended 28 February 2011, 2010 and 2009 for MAS, the preparation of which is the responsibility of the directors, are presented in Annexure 8.

PRIVATE PLACEMENT MEMORANDUM

IMPORTANT DATES AND TIMES(1) 2011 Abridged private placement memorandum published on the LuxSE website and SENS

Monday, 1 August

Announce capital raising on SENS and LuxSE

Monday, 1 August

Last day to trade for existing shareholders to be recorded on the share register to be entitled to participate in the private placement Record date for existing shareholders to participate in the private placement Opening date of the private placement at 09:00 (CET) on Closing date of the private placement at 12:00 (CET) on Results of the private placement released on the LuxSE website and SENS Notification of allotments

Thursday, 4 August Friday, 12 August Monday, 15 August Friday, 26 August Monday, 29 August Wednesday, 31 August

Payment of subscription amount and accounts at CSDP, banks or broker updated on or before 12:00 (CET) on Friday, 2 September Listing of private placement shares on Euro-MTF market and Alt X at commencement of trade on Friday, 2 September Posting of share certificates in respect of certificated shareholders that subscribed for shares in terms of the private placement on or about

Friday, 2 September

Accounts at CSDP, banks or broker updated in respect of dematerialised shareholders that subscribed for shares in terms of the private placement on (2)

Friday, 2 September

Refund of any over-subscriptions for applicants subscribing for certificated shares

1. 2.

Monday, 5 September

All references to time are CET. These dates and times are subject to amendment. Any such amendment will be released on the LuxSE website and SENS. Payment in respect of dematerialised shareholders will be on a delivery versus payment basis.

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PRIVATE PLACEMENT MEMORANDUM

DEFINITIONS In this private placement memorandum and the annexures hereto, unless the context indicates otherwise, references to the singular include the plural and vice versa, words denoting one gender include the other genders, expressions denoting natural persons include juristic persons and associations of persons and vice versa, and the words in the first column have the meanings stated opposite them in the second column, as follows:

“Aldi Portfolio”

the portfolio of retail properties situated in Germany, the details of which are set out in paragraph 9 and Annexure 4;

“allocated shares”

MAS shares allocated to the applicant in terms of the private placement;

“Alt X”

the Alternative Exchange of the JSE, the exchange where MAS has its secondary listing;

“applicants”

existing shareholders and new investors;

“Atterbury”

Atterbury Investment Holdings Limited, a company incorporated in accordance with the laws of the Republic of South Africa with its registered address at The Atterbury Building, Lynnwood Bridge, 4 Daventry Street, Lynnwood Manor, Pretoria, South Africa;

“bps”

basis points;

“business day”

any day other than a Saturday, Sunday or official public holiday in any of the IOM, Luxembourg and/or South Africa;

“the board” or “the directors”

the board of directors of MAS, particulars of whom are set out in Annexure 1;

“certificated shares”

shares which have not yet been dematerialised, title to which is represented by a share certificate or other document of title;

“certificated shareholders”

shareholders who have elected to hold their MAS shares in certificated format;

“CET”

Central European time (which at the last practicable date is the same as South African time);

“CHF”

Swiss Franc, the official currency of Switzerland;

“Clearstream”

Clearstream Banking S.A., a clearing and settlement house in Luxembourg;

“Clearstream system”

a clearing and settlement environment for security transactions to be settled and transfer of ownership to be recorded electronically, managed by Clearstream;

“Closed-Ended Investment Company”

means a company with a capital structure in which investors have no right against the company to redeem their investment and where the realisation by a shareholder of his investment occurs through the sale of shares to third parties;

“common monetary area”

collectively, South Africa, the Kingdoms of Swaziland and Lesotho, and the Republic of Namibia;

“Companies and Intellectual Property Commission” the South African Companies and Intellectual Property Commission established by section 185 of the South African Companies Act; “CPI”

12

the weighted annual average consumer price index for all areas;

PRIVATE PLACEMENT MEMORANDUM

“CREST”

the relevant system (as defined in the CREST Regulations) for the paperless settlement of share transfers and the holding of shares in uncertificated form in respect of which Euroclear UK and Ireland Ltd is the operator (as defined in CREST Regulations) in accordance with which securities may be held and transferred in uncertificated form;

“CREST Regulations”

the Isle of Man Uncertificated Securities Regulations 2006;

“Crest Registrar” or “IOM transfer secretaries”

Computershare Investor Services (IOM) Limited or such other CREST Registrar as may be appointed by the Company from time to time;

“CSDP”

a Central Securities Depository Participant appointed by a shareholder for purposes of, and in regard to, dematerialisation and to hold and administer securities or an interest in securities on behalf of a shareholder;

“current portfolio”

the property portfolio held by the Group, collectively the ALDI Portfolio, the DPD Property and Metchley Hall, described in Annexure 4;

“custody agreement”

the agreement which regulates the relationship between the CSDP, bank or broker and each beneficial holder of dematerialised shares;

“dematerialisation”

the process whereby certificated shares are replaced by electronic records of ownership under Strate and recorded in the sub-register of shareholders maintained by a CSDP or broker;

“dematerialised shares”

shares which have been incorporated into the CREST or Strate systems and which are no longer evidenced by certificates or other physical documents of title;

“dematerialised own-name shares”

shareholders who hold dematerialised shares and who have instructed their CSDP to hold their shares in their own name on the sub-register (the list of shareholders maintained by the CSDP and forming part of MAS’ share register);

“dematerialised shareholders”

shareholders who have elected to hold their shares in dematerialised format;

“directors of the investment adviser”

the board of directors of the investment adviser;

“documents of title”

share certificates, certified transfer deeds, balance receipts and any other documents of title to shares acceptable to the board;

“DPD Property”

the logistics and office property situated in Switzerland, the details of which are set out in paragraph 9 and Annexure 4;

“emigrant”

an emigrant from South Africa whose address is outside the common monetary area;

“Euribor”

the relevant reference rate provided by leading banks in the European interbank market;

“Euro” or “€”

Euro, the currency of the member states of the European Union that have adopted the single currency in accordance with the Treaty establishing the European Community (signed in Rome in 1957) as amended by the Treaty on European Union (signed in Maastricht on 7 February 1992);

“Euro-MTF market”

the Euro-MTF market of the Luxembourg Stock Exchange, the exchange where MAS has its primary listing;

“Europe”

all the Member States of the European Union;

“exchange control regulations”

the Exchange Control Regulations of South Africa, 1961 as amended,

13

PRIVATE PLACEMENT MEMORANDUM

made in terms of Section 9 of the South African Currency and Exchange Act, No 9 of 1933, as amended; “Exclusive Holdings Limited”

an IOM-based property investment advisory and management business. Exclusive Holdings Limited is a shareholding partnership between the Sanlam Group, a major South African financial services firm (through its business unit Sanlam International Investment Partnerships) and the Argosy and Attventure Groups and Salt Properties Limited in the IOM;

“existing shareholders”

existing MAS shareholders in South Africa, Europe and IOM;

“GBP” or “£”

Pounds Sterling, the official currency of the United Kingdom;

“GLA”

the gross lettable area, being the total area of a property that can be rented to a tenant;

“high water mark”

has the meaning as described in Annexure 3;

“hurdle benchmark”

the benchmark above which the net asset value per share must rise for performance fees to become due to the investment adviser;

“independent directors”

the independent directors, namely J Jansen and R Spencer;

“investment adviser”

MAS Property Advisors Limited, a company incorporated in accordance with the laws of the IOM with registration number 3542V and a wholly owned subsidiary of Exclusive Holdings Limited;

“investment advisory agreement”

the agreement concluded between the Company, MAS (BVI) and the investment adviser dated 17 August 2009 in terms of which the investment adviser will provide investment advisory services to the Group, the salient details of which are set out in Annexure 3;

“IOM”

Isle of Man;

“IOM independent auditors”

KPMG Audit LLC, registration number 617L, registered accountants and auditors in the IOM;

“issue price”

the price at which the shares are to be issued by MAS pursuant to the private placement, being €1.00 per share;

“Java Capital”

collectively, Java Capital (Proprietary) Limited (Registration number 2002/031862/07) and Java Capital Trustees and Sponsors (Proprietary) Limited (Registration number 2006/005780/07), full details of which are set out in the inside front cover;

“JSE”

JSE Limited, (Registration number 2005/022939/06), a public company registered and incorporated in South Africa and licensed as an exchange under the Securities Services Act, 2004 (Act 36 of 2004), as amended;

“JSE Listings Requirements”

the JSE Listing Requirements, as issued by the JSE from time to time;

“last practicable date”

the last trading date before the practical finalisation of this private placement memorandum, being 22 July 2011;

“LIBOR”

the London Inter Bank Offer Rate;

“listing date”

Friday, 2 September 2011, being the date of listing of the private placement shares in terms of the approval granted by the LuxSE and JSE;

“logistics properties”

comprising the DPD Property in Buchs, Zurich;

“LTV”

loan to value;

14

PRIVATE PLACEMENT MEMORANDUM

“LuxSE”

the Luxembourg Stock Exchange;

“LuxSE Listings Requirements”

the Rules and Regulations of the Luxembourg Stock Exchange;

“MAS” or “the Company”

MAS plc, (Registration number 2893V in the IOM), a public limited company incorporated in accordance with the laws of the IOM and registered as an external company in South Africa;

“MAS (BVI)”

MAS (BVI) Holdings Limited, a private company incorporated in accordance with the laws of the British Virgin Islands with registration number 1514048 and registered address at Midocean Chambers, Road Town Tortola, British Virgin Island, and a wholly owned subsidiary of MAS;

“MAS group” or “the Group”

collectively MAS and the subsidiaries and any company controlled by any of the subsidiaries;

“Metchley Hall”

the property situated near the University of Birmingham, UK, the details of which are set out in paragraph 9 and Annexure 4;

“net asset value”

the most recently calculated net asset value of the Company (valuations by independent external valuers will be conducted on an annual basis, with interim half-yearly valuations provided by the directors);

“net initial yield”

the net initial rents generated by a property expressed as a percentage of its gross acquisition price;

“new investors”

those specifically identified individuals, selected financial institutions and business associates of MAS in South Africa, IOM and Europe to whom the offer under the private placement will addressed and made;

“non-resident”

a person whose registered address is outside the common monetary area and who is not an emigrant;

“the Order”

article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended;

“participants”

participants in the share incentive scheme, details of which are set out in paragraph 7 of Annexure 5;

“potential acquisition pipeline”

the pipeline of potential acquisitions as detailed in paragraph 9.3;

“private placement”

the private placement by MAS of up to 62 516 280 shares at €1.00 per share to applicants, thereby raising €62 516 280 or approximately R600 million (assuming the private placement is fully subscribed);

“private placement application forms”

the application forms in respect of the private placement sent to applicants invited to participate in the private placement;

“private placement memorandum”

this private placement memorandum dated 1 August 2011 and the annexures thereto;

“private placement shares”

the 62 516 280 MAS shares offered for subscription in terms of the private placement;

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PRIVATE PLACEMENT MEMORANDUM

“qualifi ed investors”

means investors as defined in terms of article 2(1)(e) of the Prospectus Directive (2003/71/EC) and includes: i.

legal entities which are authorised or regulated to operate in the financial markets, including: credit institutions, investment firms, other authorised or regulated financial institutions, insurance companies, collective investment schemes and their management companies, pension funds and their management companies, commodity dealers, as well as entities not so authorised or regulated whose corporate purpose is solely to invest in securities; and

ii.

natural persons who meet at least two of the following conditions, being (i) investors who have carried out transactions of a significant size on securities markets at an average frequency of, at least, ten per quarter over the previous four quarters, (ii) investor’s whose securities portfolio exceeds €0.5 million and (iii) investors who work or have worked for at least one year in the financial sector in a professional position which requires knowledge of securities investment;

“R” or “ZAR”

South African Rand, the official currency of South Africa;

“retail portfolio”

comprising the portfolio of six Aldi stores in Baden-Württemberg;

“SA government”

the government of the Republic of South Africa;

“Sanlam”

Sanlam Investment Management, which is a division of Sanlam Life Insurance Limited, a company incorporated in accordance with the laws of the Republic of South Africa with its registered address at 55 Willie van Schoor Avenue, Bellville 7530, South Africa;

“SARB”

the South African Reserve Bank;

the “Securities Act”

the United States Securities Act of 1933, as amended;

“SENS”

the Securities Exchange News Service of the JSE;

“shareholders” or “MAS shareholders”

registered holders of MAS shares;

“shares” or MAS shares”

ordinary shares of no par value in the share capital of MAS;

“significant shareholders”

applicants who, prior to or following admission or a transfer of shares, have holdings of 25% or more of the issued share capital of MAS;

“South Africa”

the Republic of South Africa;

“South African Companies Act”

the Companies Act of South Africa, 2008 (Act 71 of 2008), as amended;

“SPV”

special purpose vehicle;

“sq ft”

square feet;

“sq m”

square metre;

“Strate”

Strate Limited (Registration number 1998/022242/06), a public company duly incorporated in South Africa, which is a registered central securities depositary and which is responsible for the electronic settlement system on the JSE;

“Strate system”

a clearing and settlement environment for security transactions to be settled and transfer of ownership to be recorded electronically, managed by Strate;

“student residential property”

comprising Metchley Hall;

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PRIVATE PLACEMENT MEMORANDUM

“subsidiaries”

collectively, MAS (BVI), MAS (IOM) Holdings Limited, MAS Mezzi Limited, Golden Cross Properties Limited, Metchley Hall Limited, European Property Holdings S.à.r.l., Petrusse Capital S.à.r.l., Inventive Captial S.à.r.l., Egerkingen Capital S.à.r.l., and Magliaso Capital S.à.r.l.;

“South African transfer secretaries”

Computershare Investor Services (Proprietary) Limited (Registration number 2004/003647/07), registered and incorporated in South Africa; and

“UK”

United Kingdom of Great Britain and Northern Ireland.

17

PRIVATE PLACEMENT MEMORANDUM

MAS plc Previously Mergon Property Holdings Limited (Incorporated in the Isle of Man) (Registration number 2893V) (Registered as an external company in the Republic of South Africa) (Registration number 2010/000338/10) JSE Share code: MSP SEDOL: B4LFGHO ISIN: IM00B4LFGH00 (“MAS” or “the Company”)

PRIVATE PLACEMENT MEMORANDUM SECTION 1 – INFORMATION ON THE MAS GROUP 1.

2.

HISTORY AND BACKGROUND OF THE COMPANY 1.1

Incorporation and history MAS was incorporated in the IOM on 3 July 2008 under the name of Mergon Property Holdings Limited. The Company changed its name to MAS plc on 4 March 2009. MAS listed on the Euro-MTF market on 12 August 2009, where it has its primary listing, and on the Alt X on 31 August 2009, where it has its secondary listing. MAS was registered as an external company in South Africa on 8 January 2010. The Company completed a capital raising in April 2010 on the Euro-MTF market and the JSE pursuant to which the Company issued 10 079 126 shares, to selected institutions, high net worth individuals and business associates, at €1.00 per share, in terms of a private placement in Europe, the IOM and South Africa.

1.2

Overview of MAS The Company has been established to invest primarily in the high quality office, retail, industrial and other property sectors initially in the UK, Germany and Switzerland. The Company’s objective is to provide shareholders with an opportunity to invest in a long term Closed-Ended Investment Company with an infinite life for investors seeking European investment opportunities that yield stable returns and portfolio diversification. MAS is subject to IOM corporate law and according to such law the Company is not required to include a specific objects clause in its articles of association. The object of the Company can be determined by its board of directors and the object as aforementioned in this paragraph has been accepted by the directors as the objective of the Company.

OBJECTIVE OF THE PRIVATE PLACEMENT The main objectives of the private placement are to:

3.

2.1

raise additional capital to fund the acquisition of further properties;

2.2

enhance the size of the free float of shareholders on both the Euro-MTF market and the Alt X, in order to create liquidity in the share;

2.3

to enable Sanlam and Atterbury to invest their committed capital of R100 million each (as to which, refer to paragraph 3 below); and

2.4

provide existing shareholders with the opportunity to subscribe for additional shares in MAS.

SUBSCRIPTION COMMITMENTS As at the date of issue of this private placement memorandum MAS has received binding subscription undertakings in an aggregate amount of R200 million. The undertakings are from Sanlam and Atterbury and each has undertaken to invest an amount of R100 million in the share capital of MAS by way of subscription for MAS shares in terms of the private placement.

18

PRIVATE PLACEMENT MEMORANDUM

4.

DIRECTORS AND EMPLOYEES A summary of the details of directors, experience and expertise, directors’ interests, remuneration, term of office, directors’ declarations and previous directorships of the directors is set out in Annexure 1. The Company has no employees.

5.

INVESTMENT OBJECTIVES, STRATEGY AND PROSPECTS 5.1

Investment objectives The Company’s objective is to provide shareholders with an opportunity to invest in a Closed-Ended Investment Company with an infinite life as a vehicle for investors seeking European investment opportunities in an asset class that seeks to yield stable returns and which provides portfolio diversification into property assets. The Company aims to provide an investment to shareholders that maximises shareholder value by adopting a high income distribution policy. The Company aims to distribute semi-annually all distributable core income taking into account various factors including the Company’s operating results and current and anticipated operating cash needs. Other than in exceptional circumstances, it is not the intention to retain revenue profits for re-investment purposes. Where funds are required to grow the investment portfolio, the Company will ordinarily look to achieve this by raising fresh funds from shareholders or the market. It should be noted that an investment in European commercial property should neither be considered as a short term investment, nor for either capital growth or income generation alone. The total return over time should be assessed as the aggregate return delivered by the blend between the income yields and capital appreciation. Historically, important characteristics of an investment in European commercial property in developed markets with large economies is the low correlation of its returns to equities and low volatility.

5.2

Investment strategy Whilst the board recognises the importance of capital growth in the Company’s investment portfolio, the principal focus will be to acquire properties that will result in the creation of a portfolio that has good yield qualities with strong and reliable internal cash flows. The Company’s aim is to deliver a reliable and growing dividend return to its shareholders with the ultimate objective of sustaining a dividend yield of no less than 7% on capital invested. To achieve this, the Company will aim to invest no less than 80% of its capital into transactions that will enable it to accumulate a portfolio of well-located, good quality commercial properties at attractive yields. The Company will focus on acquiring properties with long-term lease covenants. Where properties with shorter-term leases are acquired, such investments will be selected so that the income reduction risk to the Company of leases terminating without renewal is spread over time. The Company will invest the balance of its capital in properties that stand to benefit from active asset management, including opportunities where development or refurbishment is required, in order to create the possibility of achieving a better overall return for the portfolio. However, the Company is not a speculative property developer, therefore when acquisitions are made that require an element of active asset management, there will be a strong focus on risk mitigation. Such risk mitigation strategies may include, but are not limited to, securing tenancy agreements prior to conclusion of the purchase. As part of the approach in managing its cash resources, the Company may also consider providing mezzanine finance on property transactions where there is ample realisable security to cover the loan. Until the Company’s balance sheet can, in the directors’ opinion, accommodate larger transactions, lot sizes per property will be tempered in order to minimise concentration risk on a single asset. Equally, very small lot sizes will be avoided as the fixed costs of single property transactions become disproportionately high. Properties will be acquired using SPVs in order to maximise the tax and borrowing benefits available in each jurisdiction and the Company will seek to acquire a wide exposure to a diversified tenant base in order to reduce risk to any single tenant. It should however be noted that although certain transactions may expose the Company initially to a particular tenant or property, this risk will be diversified as the investment portfolio is constructed through the acquisition of further properties as more capital is invested. Investments will be made with a view to holding over the long term, but may be disposed of earlier and the funds so generated will be re-invested if this is deemed to be advantageous to the long term investment performance of the Company. Rental yields will vary depending primarily on the location of the property, the strength of the tenant and the lease terms. Rental yields also change in line with the macro economic circumstances prevailing at any particular point in time. In the current market cycle, the Company will aim to secure strong tenants with long leases and cash flow positive lease terms.

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PRIVATE PLACEMENT MEMORANDUM

Escalations of rentals will be negotiated on a per property basis. It is the objective of the Company to acquire either CPI linked or fixed escalation clauses. Importantly the Company will consider the terms of the debt to ensure that it has positive net cash flows through the combination of both rental escalations and fixed/hedged debt interest expense. The board, with the advice of the investment adviser, intends to spread the termination of leases so that income at risk is minimised. The Company will be managed to maximise the use of available tax reliefs and allowances. The Company intends to raise further equity capital in order to support further acquisitions. Any uninvested proceeds of a placing will be invested by the board in appropriate securities or appropriate liquid instruments. 5.3

Currency hedging The reference currency of the Company is Euros, but due to the fact that the Company will be investing in property outside of the Eurozone, there will always be a proportion of the Company’s assets, income and expenses that exposes the Company to currency translation differences. It is currently not the Company’s intention to attempt to remove, through currency hedging contracts or other techniques, currency translation differences that may arise by virtue of the fact that investment properties are acquired and held outside the Eurozone whilst the Company’s functional currency is Euro. However, in circumstances of currency volatility the Company may decide to take a more active position in relation to currency hedging. Considering the advice of the investment adviser, the Company may endeavour to protect the Euro denominated performance of the Company’s assets by hedging the impact to adverse currency movements. This will either be done by purchasing currency options, which will provide a level of protection against falling valuations of assets denominated in non-Euro countries caused by depreciating non-Euro currencies, or direct currency swaps. It is important to note though, that due to some uncertainty around the timing and exact amounts of future cash flows, whether through property acquisitions or sales, rental receipts and other property transactions, it would not be possible to create a perfect currency hedge and therefore the Company will always be exposed to currency translation volatility which may have a significant positive or negative impact on the Euro-denominated returns of the Company. In consultation with the investment adviser, the directors may decide to forward purchase certain currencies, in particular in a jurisdiction in which there is a committed acquisition. Similarly, the Company may actively adjust its currency hedges to lock-in currency gains in non-Euro dominated portions of the overall portfolio. The Company will not take speculative positions on currency exchange contracts. Any such contracts will only be taken as hedges, taking into account the Company’s current debt portfolio and cash holdings and the near to medium term expected debt portfolio and cash holdings.

5.4

Interest rate hedging The Company will adopt a dynamic interest rate hedging policy depending on prevailing market conditions. The Company will utilise interest rate derivative products (primarily interest rate swaps) in the following circumstances: 5.4.1

to reduce the volatility of interest rate fluctuations, thus enhancing certainty of interest rate expenses and resultant internal cash flows; and

5.4.2

to reduce overall portfolio cost of debt by taking a view on short term and long term interest rates and prevailing market trends. In the current environment, the Company may look to take advantage of currently low interest yields.

The Company will generally hedge a substantial portion of its debt, and may increase this to 100% should the directors believe that this is in the best interests of the Company. The Company will not take speculative positions on interest rate contracts. Any such contracts will only be taken as hedges, taking into account the Company’s current debt portfolio and cash holdings and the near to medium term expected debt portfolio and cash holdings. The investment adviser will advise the Company throughout on interest rate management and will execute trades to implement the Company’s instructions. 5.5

20

Borrowings The terms of the Company’s bank borrowings will be determined on a project by project basis and the Company will be advised by the investment adviser in this regard. The final decision in each case will be subject to the approval of the independent directors. It is anticipated that property acquisitions, together with the related debt funding, will be made through SPVs. It is the intention of the Company that acquisitions will be geared such as to achieve an appropriate balance between the risk of carrying debt and the enhancement of earnings through gearing and protection will be acquired against unforeseen increases in short term interest rates. It is not intended that total gearing on the portfolio will exceed 70% of total assets in the portfolio.

PRIVATE PLACEMENT MEMORANDUM

5.6

Investment process The Company will be advised by the investment adviser on all investment and potential investment decisions. The investment adviser will be responsible for sourcing new investment opportunities that fall within the parameters of the Company’s objectives and policies, will compile a report based on its analysis of the relevant factors and will present each proposed investment opportunity to the Company. Following a decision in principle to acquire an investment by the Group, the investment adviser shall ensure that all necessary due diligence is carried out and the investment adviser will be responsible for negotiating the terms of investment. The directors will at all times retain the final sanction over all investment and divestiture decisions.

5.7

Prospects The directors of the Company believe that the Company has excellent prospects on the basis of: 5.7.1

the Aldi Portfolio already acquired;

5.7.2

the DPD Property already acquired;

5.7.3

Metchley Hall already acquired;

5.7.4

the potential acquisition pipeline;

5.7.5

current market conditions; and

5.7.6

access to future deal flow.

As a result of which, the directors believe MAS will achieve the dividend yield in line with the Company’s expectations detailed above.

6.

GROUP STRUCTURE The MAS group structure is set out below:

MAS plc (IOM Company)

MAS (BVI) Holdings Limited (BVI Company)

MAS (IOM) Holding Limited (IOM Company)

MAS Propety Advisors Limited (IOM Company)

European Property Holding S.à.r.l. (Luxembourg Company)

MAS Mezzi Limited (IOM Company)

Golden Cross Properties Limited (IOM Company)

Inventive Capital S.à.r.l. (Luxembourg Company)

Magliaso Capital S.à.r.l. (Luxembourg Company)

German properties

Petrusse Captial S.à.r.l. (Luxembourg Company)

Egerkingen Capital S.à.r.l. (Luxembourg Company)

Swiss properties

Metchley Hall Limited (IOM Company)

UK properties

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PRIVATE PLACEMENT MEMORANDUM

7.

SUBSIDIARIES Details of the subsidiaries of MAS are set out in Annexure 2.

8.

INVESTMENT ADVISER The investment adviser is an IOM incorporated company set up specifically to provide dedicated investment advisory services to the Company. The investment adviser will provide investment advisory services to the Company in terms of an investment advisory agreement, further details of which are set out in Annexure 3.

9.

PROPERTY PORTFOLIO INFORMATION 9.1

The property portfolio of the MAS group The property portfolio of MAS was valued in aggregate at €30.20 million at 28 February 2011 and comprises of eight properties with an effective GLA of 15 560m2. Property specific details of each property comprising the property portfolio, appear in Annexure 4.

9.2

Current portfolio The current portfolio of MAS comprises the Aldi Portfolio, DPD Property and Metchley Hall. 9.2.1

Analysis of the existing properties portfolio An analysis of the existing properties in respect of portfolio, geographic, vacancy, lease expiry and rental escalation profiles is provided below: 9.2.1.1

Portfolio profile by rentable area

by gross rentals

1 704

0.0%*

5 699

8 157

Aldi Portfolio

DPD Property

Metchley Hall

58.1%

Aldi Portfolio

41.9%

DPD Property

Metchley Hall * less than 1%

9.2.1.2

Geographic profile by rentable area

by gross rentals

1 704

0.0%*

5 699

Germany

8 157

Switzerland

UK

58.1%

Germany

41.9%

Switzerland

UK * less than 1%

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PRIVATE PLACEMENT MEMORANDUM

9.2.1.3

Vacancy, lease expiry and rental escalation profile The vacancy, lease expiry and rental escalation in respect of existing properties for the year ended 28 February are set out below:

Sector

Retail

Logistics

Student residential

8 157

5 699

1 704

Average rentable escalation

1.78% of the original rent per annum (from year 6)

100% of Swiss CPI

100% of UK RPI

Vacancy

0%

0%

Not yet tenanted

Lease expiry

Dec 2029, plus 2x 5 year tenant options on “triple net” terms

Nov 2024

Sep 2014

Rentable area m

9.2.1.4

2

Average property yield The average property yield in respect of the retail properties for the year ended 28 February 2011, on an annualised basis, is 7.28%. The average property yield in respect of the logistics properties for the year ended 28 February 2011, on an annualised basis, is 6.00%. There is no rental yet receivable on the student residential property and hence there is no average property yield. The average property yield in the current portfolio, excluding the student residential property, for the year ended 28 February 2011, on an annualised basis, is 6.47%. The average property yield in the current portfolio, including the student residential property, for the year ended 28 February 2011, on an annualised basis, is 5.79%.

9.2.1.5

Weighted average rental The weighted average rental per square metre in respect of the retail properties for the year ended 28 February 2011 was €89.75. The weighted average rental per square metre in respect of the logistics properties for the year ended 28 February 2011 was €178.44. There is no weighted average rental per square metre in respect of the student residential property for the year ended 28 February 2011. The overall weighted average rental per square metre in the current portfolio for the year ended 28 February 2011 was €112.41.

9.2.2

Aldi portfolio Full details of the Aldi portfolio are set out in Annexure 4 however a summary of the Aldi portfolio is set out below:

Property name

Type

Rentable area (m 2)

Aldi Portfolio, Baden Württemberg Germany

Retail 8 068sq m warehouse (20yr triple net)

Purchase price

Project net income

Net yield

€10 463 300

€732 108

6.98%

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PRIVATE PLACEMENT MEMORANDUM

Aldi is one of Germany’s strongest and most successful retail companies. Aldi, short for “Albrecht Discount”, is a discount supermarket chain based in Germany. The chain is made up of two separate groups, ALDI Nord (North – operating as ALDI MARKT) and ALDI Süd (South – operating as ALDI SÜD) which operate independently from each other within specific market boundaries, Aldi’s German operations currently consist of Aldi Nord’s 35 individual regional companies with about 2 500 stores in Northern and Eastern Germany, and Aldi Süd’s 31 regional companies with 1 600 stores in Western and Southern Germany, Internationally, Aldi Nord operates in Denmark, France, the Benelux countries, the Iberian Peninsula and Poland, while Aldi Süd operates in countries including the United States, Ireland, the United Kingdom, Hungary, Greece, Switzerland, Austria, Slovenia (operating as Hofer in Austria and Slovenia) and Australia. According to a survey conducted in 2002 by the German market research institute Forsa, 95% of bluecollar workers, 88% of white-collar workers, 84% of public servants and 90% of self-employed Germans shop at Aldi. The Aldi group operates about 8 078 individual stores worldwide. The lease agreement that the Company has secured with Aldi is a “triple net lease”. A triple net lease (NetNet-Net or NNN) is a lease agreement on a property where the tenant or lessee agrees to pay all real estate taxes, building, insurance, and maintenance (the three “Nets”) on the property in addition to any normal fees that are expected under the agreement (rent, etc.). In such a lease, the tenant or lessee is responsible for all costs associated with the repair and maintenance of the property for the duration of the lease. For this investment, Aldi will not only maintain the property internally as with an internally repairing lease, but also the roof and external cladding etc. The Company (the landlord) thus only pays the annual municipal rates on the property. In addition, the leases are for a fixed period of twenty years following which Aldi has two further five year options to renew their occupancy. These locations are prized by Aldi due to their excellent demographics and trading volumes. In order to protect these stores as trading centres, Aldi have requested that they be offered the opportunity to again renew the lease for a further five year period following the German statutory maximum of thirty years (twenty + 2x five year options). The usual escalation clauses for retail properties in Germany involve an escalation of the rent by 50% to 75% of the annual movement of the consumer price index, i.e. should the CPI increase by 10%, the rent would escalate by 5% to 7.5%. Historically the German CPI has been relatively low, and thus time for rent review to rent review has been around four to five years. In addition these review clauses usually apply from year six of the rental contract. The Company has negotiated a fixed rental uplift of 1.78% per annum from year six (but based on a year one index) thus securing a certain income stream to the company for the next twenty years. This allows the Company to plan its revenue cash flows, interest and debt amortisation payments with precision to maximise cash returns to our shareholders. Importantly the Company has secured an 80% loan to value senior debt facility against this transaction; 75% of this loan has been fixed at a cost of 4.2% and 25% has been hedged through an interest-rate cap of 4%, allowing a benefit to be obtained whilst the interest rate environment remains low. 9.2.3

DPD Property Full details of the DPD Property are set out in Annexure 4 of the private placement memorandum, however a summary of the DPD Property is set out below:

Property name

Type

Rentable area (m 2)

DPD Property

Logistics 5 699 sq m & office (15yrs +2 x 5yr options)

Purchase price

Project net income

Net yield

CHF20 535 433

CHF1 304 000

6.35%

DPD (Dynamic Parcel Distribution) is a German parcel delivery company. It has more than 500 depots in more than 40 countries. The company was founded in 1977 in Aschaffenburg. In its first year of operation over 1.4 million parcels were shipped and by 1980 this figure has risen to 7 million. Today 2 million parcels are shipped every day and DPD is majority owned by GeoPost, a subsidiary of the French postal company La Poste. DPD is one of Europe’s B2B parcel delivery services. The UK carrier Parceline was acquired by La Poste in 2001. It was rebranded as DPD in March 2008. The Irish Parcel service Interlink was rebranded to DPD in 2008.

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PRIVATE PLACEMENT MEMORANDUM

The Company has acquired a purpose build office and logistics centre created for DPD to consolidate their Swiss operations and establish their Swiss headquarters. DPD have taken a fifteen year fully repairing and insuring lease on the property. The property comprises a 20 000 sq m piece of land, with planning permission to build 15 000 sq m of property. The initial building has a net lettable area of 5 699 sq m with room to expand to meet the requirements of the tenant. The lease is at an initial yield of 6.35% and escalates annually at 100% of the Swiss CPI; and thus “inflation proof”. In addition the Company has secured an 65% loan to value floating facility on this property at a margin of 90 basis point above Euribor; 70% of this debt has been fixed at an all in cost of finance for fifteen years at a rate of 2.76%, plus the margin of 90 basis points, with a forward starting hedge in June 2010. 9.2.4

Metchley Hall MAS has acquired a student residential property development site in Birmingham, England. The development is projected to be completed by September 2011 with a gross development cost of circa £4.1 million. This development is progressing in-line with expectation. A three year nomination agreement has been entered into with the University of Birmingham, in which the university guarantees occupancy levels of at least 97%. The property is well located being approximately 300 metres from the new university hospital and only half a mile from the University of Birmingham itself. The property is to provide accommodation of up to 67 rooms. Birmingham is the UK’s second largest student city, with three Universities (Aston, Birmingham and Birmingham City) and two University Colleges (Newman and University College Birmingham) home to over 60 000 higher education students. There is a significant undersupply of well located, modern student accommodation, making this development particularly attractive for the student population. In addition, Birmingham is the second largest economy in the UK and is a national hub for conferences, retail and events along with an established high tech, research and development sector, supported by its three universities.

9.3

Potential acquisition pipeline MAS has identified opportunities to acquire well located properties in each of the three markets identified above. MAS is at different stages of due diligence and negotiation on a number of properties, including some well advanced negotiations. These properties have not been contractually acquired and the conclusion of acquisitions remain subject to completion of the due diligence process. To the extent that MAS does not complete on these acquisitions, the directors are confident that properties with similar characteristics will be acquired. Illustrated below is a selection of these opportunities.

Analysis of the potential acquisition pipeline Core

Advantage

Property

Logistics, Germany

High street, Glasgow

Industrial, Glasgow

Edinburgh 3-star Industrial, UK Hotel

Site opportunity, Edinburgh

Location

Berlin, Germany

Glasgow, UK

Glasgow, UK

Edinburgh, UK

Lewes, England

Edinburgh, UK

Sector

Logistics

Retail

Industrial

Development

Industrial + planning change

Development

Tenant

Neckermann

HMV/EMI

Howden Group plc

Major international hotel group

Mixed/ Sandton Property Group

N/a

Expected completion

Sep-11

Sep-11

Sep-11

May-13

Sep-11

Aug-11

Purchase price/ development cost

EUR 32 275 000

GBP 5 000 000

GBP 6 000 000

GBP 11 000 000

GBP 7 000 000

GBP 3 000 000

Lease term

7.5 years

4 years

7 years

20 years

3 years

N/a

Annual rental

EUR 2 743 375

GBP 375 000

GBP 595 000

GBP 800 000

GBP 560 000

N/a

Escalations

1.5% per annum fi xed

Upwards only

Option to review in 2013

Upwards only

N/a

N/a

Expected debt 50-60% LTV terms

50% LTV

30% LTV

65% loan to development cost

Nil

Nil

Expected interest costs

Margin – 250 bps

Margin – 300 bps

Margin – 300 bps

N/a

N/a

Margin – 150 bps

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PRIVATE PLACEMENT MEMORANDUM

9.3.1

Berlin logistics Location The Berlin region was rated as the second most active leasing market for logistics real estate in 2010 with around 356 000 sq m of rented area throughout the year. As a result of an extended period of limited new developments, Brieselang currently lacks large logistics space that has up-lift potential. Berlin is also among the top logistics regions in Germany and boasts attractive German and Pan-European transport networks with direct accesses to the most important transport corridors in Europe, in particular to the countries of Central and Eastern Europe. In addition Berlin is located in the centre of the federal waterways and has developed into a transhipment hub for Europe as a whole. Brieselang is located approximately 35 km to the west of Berlin city centre with excellent access to the “Berliner Ring “(motorway A-10), which is only a few minutes away from the property by car. The property can be seen from the A-10 motorway. The large metropolitan regions in Germany as well as the neighbouring Poland are accessible within a short commute. The property is located in the GVZ Berlin West. This logistics hub was created in 2000 by the privately owned WWZ Havelland and the GVZ Wustermark (owned by the state of Brandenburg) who joined up and rebranded into GVZ Berlin West. A high-performance road connection serves the property via the A-10 motorway (approximately three kilometers) and the federal four-lane motorway B-5 (approximately six kilometres) as well as a national rail connection (Berlin-Hamburg and Berlin-Hannover). The location provides a tri-modal connection with direct railway access and the inland harbour Brieselang. Income There is strong medium term rental income from Neckermann, an international e-commerce company. This industry has excellent potential for growth. Neckermann and its logistics contractor Fiege have occupied the building since its construction in 1997. Neckermann services around 60% of the German market with larger brown and white ware as well as furniture from this location in Berlin. The attractions of this property include its strategic location in the centre of Europe with excellent access into the cosmopolitan area of Berlin (over six million potential customers), the fast connections to Hamburg and the North Sea harbours as well as to the producers in Eastern Europe and excellent access to labour. Rental The lease has recently been renewed until June 2018 with a five year tenant-extension option. The current rent of €3.50 per sq m is slightly below the €3.65 per sq m per month market rent for the location and the property`s quality. This yields €2 975 000 p.a. in income. Price The property can be acquired for €34 900 000 reflecting an 8.5% yield. Description The site of approximately 138 381 sq m is completely fenced and accessible via access gates and with a surrounding road. The property is covered with a logistics hall in prefabricated concrete construction. The warehouse was built in 3 phases and completed in 1997 as one of Fiege’s Mega Centres. The building is divided through fireproof walls into six almost equal sections. The building has approximately 15.0 metres clear height. The mezzanine level above the loading area and in 3 sections of the warehouse provides space for block store and is connected via 6 goods lifts. It is equipped with gas heating as well as a sprinkler system. Loading and unloading takes place via 79 loading bays partly equipped with levellers for various truck sizes, ground level gates, disposal areas and a covered railway siding. The 4 level office tract located in the north-western corner of the building is equipped with window sill ducts, sun protection and decorated with carpet and tile. It provides space for office, social and sanitary facilities as well as meeting rooms. The building has a small canteen for the employees. At the moment the property presents in a prime condition. The standard rectangular layout of the property together with loading bays from three sides and the building height of 15 metres is well suited for the potential of subdivision into various smaller units. Moreover the direct accessibility via railway and the nearby harbour offers another advantage. Tenant Neckermann is one of the leading mail order companies in Europe and offers diverse ordering possibilities via the internet, catalogue or phone. Neckermann is currently owned 100% by Sun Capital Partners Inc, a leading private investment firm focused on leveraged buyouts, equity, debt, and other investments, and provides a range of 700 000 articles from the segments fashion, living and technology.

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PRIVATE PLACEMENT MEMORANDUM

The company is regularly awarded for its ability to innovate as best online shop and won the Concept Award for interactive shopping. In the 2007 and 2008 Neckermann was honoured as one of the top employers in Germany by independent research company CRF. With OttoGroup and Amazon, Neckermann was one of the top 3 mail order companies in Germany in 2010. Starting with catalogue orderings in 1950 today around two thirds of the revenues are generated via e-commerce showing its adaption to customer shopping trends. Net turnover of Neckermann reached EUR 1.16 billion in 2009. In the first three quarters of 2010 Neckermann recorded a growth of 10% in the group, as well as 20% in Germany, compared to the same period the previous year. Across the industry, e-commerce demand increased about 30% compared to the same period last year. Consistent expansion of the distributor model contributes to the positive development of the company. Additional value The property includes a parcel of neighbouring land with full planning permission for warehouse construction. This land has a current market value of approximately €1.6 million, and can be used for either extension of the existing building, or may be developed for a new tenant in due course. 9.3.2

HMV, Glasgow high street Location 154-160 Sauchiehall Street, Glasgow. Glasgow is Scotland’s largest city and the third largest by population in the United Kingdom. The city sits centrally within the Glasgow and Clyde Valley conurbation that has a population of approximately 1.8 million. Edinburgh is situated some 45 miles (72km) to the east. Glasgow is the second strongest retailing town in the UK (after London). Sauchiehall Street is one of the main three shopping thoroughfares within Glasgow city centre, the others being Buchanan Street and Argyle Street. The property is situated in prime position on the north side of the pedestrianised Sauchiehall Street opposite the Sauchiehall Street Shopping Centre and adjacent to Marks & Spencer and Boots. This results in a very high footfall in this location. Description The property comprises an entire three-story blonde sandstone building that was redeveloped to a particularly high standard in 1990 and provides excellent modern trading space with a total floor area of approximately 10 500 sq ft. Tenure Heritable Title (Scottish equivalent of English Freehold). Tenancy The entire property is let to HMV UK Limited for a term of 25 years from 2nd February 1990 expiring 1st February 2015. The lease is drawn on full repairing and insuring terms and is subject to five-yearly upward only rent reviews. The passing rent is £376 900 per annum exclusive with no further reviews. The lease is guaranteed by the EMI Group plc, a multinational music company headquartered in London, United Kingdom. Occupier demand Waterstone’s, a well known British bookstore, have now agreed to extend their lease directly opposite and our recent discussion with Marks & Spencer have confirmed their commitment to the location. Current requirements for the prime pitch include Bon Marche UK’s largest value retailer selling affordable quality womenswear, the Co-Op UK’s largest mutual business comprising UK’s fifth biggest food retailer, the leading convenience store operator and a major financial services provider, TK Maxx (Home) major offprice retailer offering brand-name and designer family apparel, including women’s footwear, lingerie, and accessories, home fashions and other merchandise such as luggage and toys, Peacocks, a fashion retailer, and any units currently on the market cannot satisfy this demand in terms of size and shape. Investment considerations The property presents MAS with the opportunity to acquire a modern well-configured high yielding prime city centre retail unit at a significant discount to long term pricing trends. The current tenant is contracted to pay the passing rent until February 2015 and whilst they are currently not in occupation, they are making no attempt to market their lease at the present time and may indeed re-occupy the property when the current refinancing of the Company is finalised.

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PRIVATE PLACEMENT MEMORANDUM

It is MAS’ opinion however that the property is over-rented and taking a conservative view that the estimated market rental value (the open market rent that a property can be reasonably expected to attain given its particular characteristics, condition, amenities, competitive position, location and local market conditions) is perhaps £315 000 (£125 per sq ft). If this is the case, then this rent, capitalised at 6% (today’s market value on a new lease in this location) would suggest that with the additional guaranteed income a price in the region of £5.3 million for the investment today is reasonable. However, with rental growth already showing signs of improvement with recent lettings to Poundland, offering a range of more than 3 000 items at £1 each, (72/74 Sauchiehall Street) and Holland & Barrett, Europe’s leading retailer of vitamins, minerals and herbal supplements, (94 Sauchiehall Street) this suggests that rents per sq ft, are now heading upwards and in MAS’ view still offer a substantial discount from similar pedestrian footfall locations in Buchanan Street and Argyle Street. Summary Prime Sauchiehall Street rents and yields some two years ago were £165 per sq ft and below 4.75% initial return. With rents beginning to rise due to continued strong occupational requirements for quality retail units, it is the Company’s opinion that by lease expiry in 2015 MAS would be able to take advantage of a rental and yield shift. The Company is in a position to likely be able to acquire this investment in its current condition at a price of between £5-£5.1 million. Bearing in mind the purchase price of £6.75 million paid by the current owner as recently as 2008, the Company would hope to see valuations return to similar levels in the medium term. 9.3.3

Howdens, Braehead, Glasgow Location Situated off the main motorway system some five minutes from Glasgow city centre en route to Glasgow International Airport (3 minutes). Historically, this was an industrial location and still there are signs of industrial users including Bell’s Whisky, in addition to the Howdens Group, who supplies high integrity, custom engineered centrifugal fans and rotary regenerative heat exchangers for critical applications in a wide range of industries, in close proximity to the banks of the River Clyde. The transformation of the area occurred with the development of the Braehead Shopping Centre by Capital Shopping Centres, a specialist property company with a focus on retail investments in the UK and Germany, in the late 90’s and has matured into being Glasgow’s highest rented retailing scheme. The area has systematically been transformed as the old industrial units are demolished and replaced with modern quasi-retail uses including the new Audi and Porsche showrooms, the X-cape Leisure Centre, offering an indoor snow slope, rock climbing, adventure golf, bowling, restaurants and adventure retail stores, and stylish office parks all of which complement the one million square foot retail centre. More recent development include the IKEA store, an international home products company that designs and sells ready-to-assemble furniture, a new Sainsbury’s supermarket and Scotland’s flagship Dobbies Garden Centre, offering plants and garden equipment, all of which are located adjacent to the subject premises. The motorway system is first class in and out of the city with a direct link to the Clyde Tunnel which links to the affluent West End of Glasgow (2 minutes). Description The property comprises a large industrial shed of approximately 200 000 sq ft, which is on a 12-acre site fronting one of Braehead’s main roundabout systems. The building is approximately 30 years old, however is kept in a sound wind and watertight condition by the Howden Group who utilise the space to construct large-scale machinery for distribution throughout the world. Therefore, security is high, with a 24 hour manned security station at the main entrance to the site. Tenure Heritable Title (Scottish equivalent of English Freehold). Tenancy The property is let to the Howden Group plc on a lease which expires on 12th February 2016 with a tenant’s break on 12th February 2013. The passing rent is £595 000 per annum with the option to review in 2013. Price MAS received indications from the owners Aviva, world’s sixth largest insurance group, that they would recommend to their board that the investment to be sold in its current form at a price of £5.7 million to show a net initial return of almost 10% after costs.

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PRIVATE PLACEMENT MEMORANDUM

Investment considerations The property presents an opportunity to acquire an excellently located, high yielding commercial property with significant upside rental and land value growth along with very strong likelihood of planning change benefit over time in an outstanding location. The current tenant is contracted to pay the passing rent until February 2013, when they have a break option, and then until 2016 when the current lease expires. Discussions with senior management at Howdens indicate that, there is every likelihood that they will not exercise their break in 2013, and will remain in occupation until at least 2016. Evidence The Hillington and Braehead area of the city continues to be well served by excellent motorway connections and indeed the opening of the M74 extension later this year will only improve accessibility to this location. There is limited evidence for large industrial units of this size, however there is no doubt that Howdens’ premises at almost £3.00 per sq ft is probably let at the market rent and indeed the most recent sub-letting on the premises was at this figure. In this vicinity, the Babcock complex at Renfrew, whilst in a poorer location, has seen lettings in the past year for larger units at £2.50 per sq ft. The old Rolls Royce factory at Hillington has been let at £2.75 per sq ft whilst 25 000-30 000 per sq ft units in the area are achieving between £4.00 and £5.00 per sq ft. It is interesting that the best quality industrial space is at Eurocentral on the M8 and a 91 000 sq ft unit is available at £5.75 per sq ft. On the up-side, retail warehousing rents in the area are between £18.00 per sq ft and £25.00 per sq ft and selling for anything between a 5% and 6.25% initial yield. Thus, the investment approach would be to initially benefit from the high yield, and use the time until 2016 to negotiate a longer term lease with Howden potentially before 2013 and apply for improvement of planning for a mixed use scheme, (retail, retail warehouse and residential) and the either develop a retail warehousing property, or sell on the land at significantly improved value. Considerations Capital Shopping Centres have recently gone through a major transformation with the sale of shares to Peel Holdings property investment group, an infrastructure, transport and real estate investment company in the UK. MAS understands this may result in investment within many of their retail holdings including Braehead and therefore the opportunity to expand their retail holding. The property is under the jurisdiction of Renfrew Planning Department as opposed to Glasgow City, which is on the other side of the road. As a result, the planning consents tend to be less stringent and the opportunities to redevelop this site, particularly with the local authority need for rates income, could be very favourable. Demand from operators for main arterial routes leading to the main shopping complex in the city can be seen throughout the UK and a separate discussion to look at the various retail or quasi-retail uses which would substantially increase the land value will be required. The tenants, Howdens, still own their office building that is located to the rear of the industrial unit, which they may consider for a sale and leaseback. The industrial unit does come with a pre-emption right on the future acquisition of the office space. 9.3.4

Edinburgh 3-star hotel development This opportunity sits as a subset of the Caltongate development. See paragraph 9.3.6 below.

9.3.5

Industrial property, Lewes, UK Location Lewes is an attractive market town located approximately five miles from the East Sussex coastline. Brighton lies some eight miles to the south west, Eastbourne approximately 16 miles to the south east and Haywards Heath 13 miles to the north. The town lies at the junction of the A27 and A26. The A27 Trunk Road links the coastal towns of Hastings, Eastbourne, Newhaven, Brighton and Worthing whilst the A26 runs from Newhaven in the south to Royal Tunbridge Wells to the north. From the A27 there is easy access to the A23 and M23 to the north. Substantial improvements are currently being made to the A27, both to improve safety and reduce congestion, which will greatly benefit the town.

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PRIVATE PLACEMENT MEMORANDUM

Main line railway services are available to Lewes, with a journey time of approximately one hour to London Victoria Station. The Phoenix Estates are situated in the town centre between North Street and the River Ouse, close to the town’s business and retailing core. On the opposite side of the river is a large Tesco foodstore, whilst Waitrose, an upmarket chain of supermarkets in the United Kingdom, is located within 200 metres on Eastgate Street. The prime pedestrianised retailing pitch is within walking distance. The Malling Brooks land is located outside the town centre in an established commercial area to the east of Tesco and the River Ouse. To the north of the site there is predominantly residential property, whilst to the west and south of the site is the South Downs Business Park and Malling Industrial Estate. Situation The property comprises four commercial estates in the town centre, with one undeveloped site outside the town centre. The total area of all 5 sites is 5.92 hectares (14.64 acres). The gross internal area of the existing buildings is 15 044 sq m (161 928 sq ft). Additional value Opportunities exist to drive the income in the short term through asset management and refurbishment initiatives. The intended use of the property would be to apply for planning changes which in turn would result in an excellent mixed-use redevelopment opportunity. Significant planning and environmental investigations have been undertaken to date by the previous owners and Lewes District Council have over the past few years confirmed that in principle, there would be support for a mixed-use redevelopment of the site. The Company understands that the 5 sites are held freehold. In 2008 the then owner and associated companies worked up an outline planning application for a major mixed-use scheme on the Phoenix Estates land. However, this was never submitted due to the market downturn. The application was for approximately 600 residential units and over 15 000 sq m of commercial space, including the provision of relocation premises for existing businesses on site, at the nearby Malling Brooks site. An application in 2003 for mixed-use development was refused, but the principle of residential development on the site was accepted by the Lewes Town Council. The Core Strategy Issues & Emerging Options document in the new Lewes District Council Local Development Framework, Topic Paper Number 7 (‘Possible Strategic Development Site, North Street, Lewes’) sets out potential redevelopment options for the site for public comment. Income Rental income of 8% on total purchase price has been negotiated reflecting a rental of £560 000 per annum for the first three years on an purchase price of £7 million. The purchase price includes an amount of £1 million for planning applications for change of use to mixed use retail, and residential. 9.3.6

Caltongate MAS has secured the opportunity to participate in the acquisition of the Caltongate development site from the administrators of MountGrange Capital, a private real estate fund management business specialising in UK commercial property investment, development and asset management and the Edinburgh City Council. The site benefits from detailed planning permission for a master plan, prepared by Edinburgh architects AllanMurray and five other leading architects. The master plan proposes to regenerate the area and create a dynamic link between the old and new city thereby lifting the vibrancy and vitality of the old town. This property would form part of the “opportunity” section of MAS’s portfolio. The master plan consists of 7 key areas: 1. 2. 3. 4. 5. 6. 7.

A public square that will become a new cultural quarter of the city with views to Calton Hill A new street connecting Holyrood Palace and the new Scottish Parliament to Waverley Station A substantial residential area that will feature a wide range of innovatively designed homes A flagship five star hotel with conference and spa facilities A three star hotel & mixed use building with viewing terrace An A grade signature office building A new ‘arts quarter’ utilising the arches along Jeffrey Street

Location The property is situated in Edinburgh, Scotland and borders Waverley Station (where trains from London arrive). It is situated between the Royal Mile and Princes Street, making this a uniquely situated large scale, prime site.

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PRIVATE PLACEMENT MEMORANDUM

Land There are two parcels of land that form the entire site. portion 1 is controlled by Deloitte (the administrators of the insolvent property developer landowner) and the portion 2 is owned by Edinburgh City Council. Purchase price Both parcels of land can be acquired for between £12 million and £13 million in total, of which MAS would participate to the extent of £3 million. Value Smith Cole Wright, Glasgow based property surveyors, value both portions of land held together at a conservative base value range of £20 million – £23 million. The value uplift between purchase cost and this fresh valuation is attributable to the fact that the Edinburgh City Council, which has withdrawn from the previous transaction upon the financial collapse of the current landowner (which invalidated the planning approval), now wished to re-enter the deal and negotiations are at a well advanced stage. Commitment to the transaction will be subject to conclusion of an acceptable transaction with the Council. Planning Full and detailed planning permission exists on the entire site for 639 000 sq ft of development including: – – – –

194 181 hotel & conference 219 504 offices 148 674 residential space 77 457 retail and leisure space

Strategy Having secured an option to acquire portion 1, and with the strong commitment of the Edinburgh City Council to conclude a transaction, the priorities are now to: – – – – –

Complete the purchase of both portions of land concurrently Apply for minor modification to planning Develop, joint venture or sell the hotel development sites thereby recovering total equity plus some profit Consider further planning change options Develop, joint venture or sell the retail, residential and office sites

10. PROPERTIES ACQUIRED OR TO BE ACQUIRED 10.1

Principal immovable property owned and leased [6(c)] 10.1.1 Save for the immovable property set out in paragraph 9.2. and 9.3, the Company does not own any other immovable property. 10.1.2

10.2

Principal immovable property acquired or to be acquired [12] Save for the immovable property set out in paragraph 9.2. and 9.3, the Company has not acquired or proposed to acquire any other immovable property since incorporation.

10.3

Subsidiaries acquired or to be acquired [12] 10.3.1 Save for the SPVs acquired for the purposes of investment holding, MAS has not acquired any company or body corporate since incorporation. 10.3.2

10.4

11.

The Company does not lease any immovable property.

The issue of the private placement shares and the receipt of the private placement proceeds do not coincide, directly or indirectly, with the acquisition by MAS, of securities in or of the business undertaking of any other company, in consequence of which that company or business undertaking will become a subsidiary of or part of the business of MAS.

Property disposed or to be disposed No property has been disposed of by MAS or its subsidiaries since incorporation.

SHARE CAPITAL OF THE COMPANY Details of shareholders holding more than 10% of the issued share capital and the shares issued since the Company’s incorporation as well as the current capital structure and the capital structure subsequent to the conclusion of the private placement are included in Annexure 5. Also included in Annexure 5 are the rights attaching to the shares.

31

PRIVATE PLACEMENT MEMORANDUM

SECTION 2 – DETAILS OF THE PRIVATE PLACEMENT 12.

PURPOSE OF THE PRIVATE PLACEMENT 12.1

13.

The purpose of the private placement is to: 12.1.1

raise additional capital to fund the acquisition of further properties;

12.1.2

enhance the size of the free float of shareholders on both the Euro-MTF market and the Alt X, in order to create liquidity in the share;

12.1.3

enable Sanlam and Atterbury to invest their committed capital of R100 million each (as to which, refer to paragraph 3 above); and

12.1.4

provide existing shareholders with the opportunity to subscribe for additional shares in MAS.

12.2

It is intended that the capital raised through the private placement will be applied to fund new property acquisitions, being those identified as the potential acquisition pipeline, or similar investments.

12.3

The directors retain discretion to determine the final allocation of the private placement proceeds, which will be subject to the approval of the independent directors.

TIME AND DATE OF THE OPENING AND OF THE CLOSING OF THE PRIVATE PLACEMENT Offer price per share

€1.00

Number of private placement shares offered in terms of the private placement Total amount to be raised

up to 62 516 280

up to €62 516 280 (approximately R600 million)

Minimum value of subscription amount in Europe and IOM for existing shareholders Minimum value of subscription amount in Europe for new investors who are not “qualified investors”

€100 €50 000

Minimum value of subscription amount in Europe for new “qualified investors”

€500

Minimum value of subscription amount in IOM for new investors

€500

Minimum value of subscription amount in South Africa for existing shareholders and new investors

R1 000

Last day to trade for existing shareholders to be recorded on the share register to be entitled to participate in the private placement

Thursday, 4 August 2011

Record date for existing shareholders to participate in the private placement Opening of the private placement at 09:00 (CET) on Closing of the private placement at 12:00 (CET) on Results of the private placement released on the LuxSE website and SENS Notification of allotments

Friday, 12 August 2011 Monday, 15 August 2011v Friday, 26 August 2011 Monday, 29 August 2011 Wednesday, 31 August 2011

Payment of subscription amounts and accounts at CSDP, banks or broker updated on or before 12:00 (CET) on

Friday, 2 September 2011

Listing of private placement shares on Euro-MTF market and Alt X at commencement of trade on

Friday, 2 September 2011

Refund of any over-subscriptions for applicants subscribing for certificated shares

Monday, 5 September 2011

Note: The above dates are subject to change. Any such change will be announced on the LuxSE website and on SENS. Payment in respect of dematerialised shareholder will be on a delivery versus payment basis.

32

PRIVATE PLACEMENT MEMORANDUM

14. DETAILS OF THE PRIVATE PLACEMENT

15.

14.1

The private placement shares will be offered for subscription to existing shareholders in proportion to their existing shareholding in MAS and in compliance with the pre-emptive rights set out in the articles of association of MAS (an extract of which is attached hereto in Annexure 6). The prescribed period for the offer to existing shareholders pursuant to the pre-emptive rights will run concurrently with the offer to third parties from the opening date of the private placement. For the sake of clarity, the rights of existing shareholders under the pre-emptive rights do not constitute warrants and will not be listed or separately traded on either of the Euro-MTF market or Alt X. To the extent that the private placement is not fully subscribed by existing shareholders, the private placement shares will be offered to new investors.

14.2

Existing shareholders and new investors that have been invited to apply should do so by completing the private placement application forms, which are to be sent to them in accordance with the provisions of this private placement memorandum and the instructions contained in the private placement application forms.

14.3

No offer will be made to the public in respect of the private placement. The private placement is open to applicants only.

14.4

Applicants should note that the Rand-denominated subscription consideration will be converted from Rand to Euro at the closing spot exchange rate on the closing date of the private placement and that the private placement shares will only be issued on market as listed shares.

ANTI-MONEY LAUNDERING MAS applies the IOM anti-money laundering requirements and will identify and verify the identity and source of funds of applicants who, prior to or following admission or a transfer of shares, have holdings of 25% or more. In respect of application received from South African applicants, MAS is, in addition, required to comply with the South African Financial Intelligence Centre Act, 2001 (as amended) and associated regulations, depending on the legal status of significant shareholders, they must submit original or certified copies of identity and address documentation and provide information on the source of funds as may be requested by MAS from time to time. MAS reserves the right to request such information as is necessary to verify the identity of an applicant and/or shareholder whether or not that person is a significant shareholder. In the event of delay or failure by the applicant or transferee to produce any information required for verification purposes, the application or transfer may be refused and subscription monies will be returned to the bank account from which they were remitted.

16.

TERMS, CONDITIONS AND PAYMENT 16.1

Applications for the private placement can only be made on the private placement application forms sent to applicants or obtained by applicants from the Company secretary (whose full details are to be found in the Corporate Information section). In line with exchange control requirements, persons resident in South Africa should complete and return the private placement application form marked ‘South African Application Form’ and other applicants should complete and return the private placement application form marked ‘European Application Form’, in accordance with the instructions contained on the respective private placement application forms.

16.2

The private placement application forms may not be ceded, renounced or assigned in favour of anyone else by the applicant to whom it is addressed.

16.3

The private placement shares may not be applied for in the name of a minor, deceased estate or partnership. Executors, trustees and individual partners may apply for the private placement shares in their own name or through nominee companies. No documentary evidence of capacity need accompany the private placement application forms but the directors of MAS reserve the right to call upon any applicant to furnish evidence of such capacity for noting.

16.4

The private placement application forms are irrevocable and may not be withdrawn once received by the Company secretary, Java Capital, M Partners, the South African transfer secretaries, the CREST Registrar (who ensures financial service in Luxembourg), the CSDP’s, banks or the brokers.

16.5

No receipts will be issued for the application forms, application monies or any supporting documentation.

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PRIVATE PLACEMENT MEMORANDUM

16.6

16.7

34

Payment and delivery for applicants wishing to acquire shares via the Euro-MTF market of the LuxSE 16.6.1

Payment may only be made by bank guaranteed cheque (crossed “not transferable”), banker’s draft or internet transfer (followed by faxed or electronic proof of payment to the Company secretary in the case of internet transfers). Postal orders, cash or telegraphic transfers will not be accepted. Cheques must be made payable in favour of “MAS private placement”. All cheques and bankers drafts will be deposited by MAS immediately upon receipt into the designated account of MAS.

16.6.2

In respect of those applicants who elect to receive physical share certificates, the share certificates will be posted by registered post on or about Friday, 2 September 2011 to the address in the private placement application form. No contrary instructions will be accepted. MAS and the Crest Registrar (who ensures financial service in Luxembourg) accepts no liability for share certificates that may be lost in the post.

Payment and delivery for applicants wishing to acquire shares via the Alt X of the JSE 16.7.1

No payment should be submitted with the application form delivered to the bookrunner, Java Capital. Applicants must make the necessary arrangements to enable their CSDP or broker to make payment for the allocated shares on Friday, 2 September 2011, in accordance with each applicant’s agreement with their CSDP or broker.

16.7.2

The shares so allocated will be transferred, on a ‘delivery versus payment’ basis, to successful applicants on Friday, 2 September 2011.

16.7.3

The applicant’s CSDP or broker must commit to Strate to the receipt of the applicant’s allocation of shares against payment on Friday, 2 September 2011.

16.7.4

On Friday, 2 September 2011, the applicant’s allocation of shares will be credited to the applicant’s CSDP or broker against payment during the Strate settlement runs, prior to the opening of the market.

16.7.5

The CSDP or broker concerned will receive and hold the dematerialised shares on the applicants’ behalf.

16.7.6

Allocated shares will be transferred to successful applicants in dematerialised form only.

16.8

The private placement application forms will only be regarded as complete once payment for the total amount of the application has been received. Should any cheque or banker’s draft subsequently be dishonoured, the directors of MAS may, in their sole discretion, and without prejudice to any rights the Company may have, regard the private placement application form of such applicant as revoked or take such steps in regard thereto as they deem fit.

16.9

“Blocked Rand” may be used by emigrants and non-residents of the common monetary area for payment in terms of the private placement. In this regard, reference should be made to paragraph 34 below which deals with exchange control regulations.

16.10

Applications in Europe (i) by existing shareholders must be for a minimum consideration of €100 and in multiples of €100 thereafter (ii) by new investors who are “qualified investors” must be for a minimum consideration of €500 and in multiples of €100 thereafter and (iii) by new investors, who are not “qualified investors”, must be for a minimum consideration of €50 000. Applications in the IOM by existing shareholders must be for a minimum consideration of €100 and in multiples of €100 thereafter and by new investors must be for a minimum consideration of €500 and in multiples of €100 thereafter. Applications in South Africa by existing shareholders and new investors must be for a minimum consideration of R1 000 and in multiples of R1 000 thereafter.

16.11

Applications from any person in the United Kingdom will only be accepted from (i) existing shareholders (ii) persons who are investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) or (iii) persons who are high net worth entities falling within Article 49 of the Order, and (iv) other persons to whom this private placement memorandum including the private placement application forms may otherwise lawfully be communicated (all such persons together referred to as “relevant persons”). Any person in the United Kingdom who is not a relevant person should not act or rely on this private placement memorandum or any of its contents including the private placement applications forms.

16.12

No late applications will be accepted.

16.13

No request for the issue of replacement certificates will be considered before Monday, 5 September 2011 and thereafter only in writing and accompanied by an acceptable indemnity.

16.14

The current risks associated with holding shares in certificated form, including the risk of loss or tainted scrip, remain.

16.15

MAS shares will only be traded on the LuxSE and the JSE in electronic form, and as such, all shareholders need to dematerialise their shares, at their own expense, should they wish to trade therein. Applicants are advised that it takes between one and ten days to dematerialise certificated shares, depending on volumes being processed by CREST or Strate at the time of dematerialisation.

PRIVATE PLACEMENT MEMORANDUM

17.

18.

19.

OVERSUBSCRIPTION 17.1

The private placement will be fully allocated to those applicants in terms of the private placement. The board of MAS reserve the right to accept applications received in excess of the private placement, in which event a detailed announcement will be made to applicants in this regard.

17.2

In the event of any private placement application forms being accepted for a lesser number of shares than applied for, or rejected, for whatever reason, any surplus application monies received by the Company will be refunded with any interest earned thereon (less any costs) to the applicant by the Company by way of cheque to be posted at the risk of the applicant by registered mail on or about Monday, 5 September 2011. Alternatively, at the risk of the applicant, MAS will refund such monies electronically upon the applicant’s written instruction on or about Friday, 2 September 2011.

RESERVATION OF RIGHTS 18.1

The board of MAS reserves the right to accept or refuse any application(s), either in whole or in part, or to abate any or all application(s) (whether or not received timeously) in such manner as they may, in their sole and absolute discretion, determine.

18.2

The board of MAS reserves the right to accept or reject, either in whole or in part, any private placement application forms should the terms contained in this private placement memorandum and the instructions above not be properly complied with.

18.3

The allocation of the private placement shares, based on private placement application forms received from an applicant, will be determined by the board of MAS in its sole discretion.

18.4

In amplification of the above, the board shall, in its sole discretion, determine an appropriate allocation mechanism, such that the shares will be allocated on a fair and reasonable basis, as far as possible, taking into account the LuxSE and JSE shareholder spread requirements, the liquidity of the shares and considering the potential shareholder base that the board wishes to achieve.

UNDERWRITING The private placement has not been underwritten and is not subject to an underwriting commission.

20. MINIMUM SUBSCRIPTION The private placement is not subject to any minimum subscription amount.

21.

ISSUE OF PRIVATE PLACEMENT SHARES 21.1

All private placement shares offered will be issued at the expense of MAS.

21.2

No private placement shares will be issued at a discount to the issue price.

21.3

All private placement shares issued will rank pari passu in all respects with the existing shares in issue.

22. FUTURE CAPITAL RAISING It is the intention of the Company to raise additional capital in the coming years. The expansion of the capital base will be undertaken to exploit continued investment opportunities for the construction of the Company’s overall portfolio. The Company will endeavour to give all MAS shareholders an equal opportunity to subscribe for additional shares in MAS, provided that same makes commercial sense and subject to regulatory requirements. A detailed announcement will be made to shareholders in this regard at an appropriate date.

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PRIVATE PLACEMENT MEMORANDUM

23. LISTING STATEMENT

36

23.1

LuxSE approval Application will be made to the LuxSE for admission of the private placement shares on the official list of the LuxSE and to trading on the Euro-MTF market after the closing date of the private placement, with effect from the commencement of trade on Friday, 2 September 2011, or as soon as practicable thereafter.

23.2

JSE approval Application will be made to the JSE for the approval of the listing of the private placement shares after the closing date of the private placement, with effect from the commencement of trade on Friday, 2 September 2011, or as soon as practicable thereafter.

23.3

Trading MAS shares on the LuxSE and JSE Shareholders of MAS are advised that their MAS shares will only be traded on the Euro-MTF market and Alt X in dematerialised form and accordingly all shareholders who hold their MAS shares on either the European or South African register in certificated form will have to dematerialise their share certificates, at their own expense, in order to trade their MAS shares on the Euro-MTF market or the Alt X. Such shareholders must make arrangements with their CSDP, bank or broker in terms of the custody agreement with their CSDP, bank or broker.

PRIVATE PLACEMENT MEMORANDUM

SECTION 3 – FINANCIAL INFORMATION OF MAS 24. FORECAST FINANCIAL INFORMATION The consolidated forecast statements of comprehensive income (the “forecasts”) and the consolidated forecast statements of financial position (collectively, “the forecast financial information”) set out below, including the assumptions on which they are based and the financial information from which they have been prepared, are the responsibility of the directors of MAS. The forecasts have not been reviewed or reported on by the Company’s independent auditors or an independent reporting accountant. The forecasts have been prepared in accordance with the Company’s accounting policies and in compliance with the International Financial Reporting Standards. Set out below are the forecasts of the Group for the years ending 28 February 2012, 28 February 2013 and 28 February 2014. The forecasts are prepared on a property by property basis, the assumptions for which are, inter alia, the following: 24.1

Current portfolio The forecasts for the current portfolio include the following assumptions: 24.1.1

Aldi Portfolio The Aldi Portfolio is assumed to continue to perform in the same manner as it has historically. The tenant continues to trade well, the receipt of rents appears highly probable and interest costs have been fully hedged. The Aldi Portfolio has a LTV ratio of 83.2%. Further details regarding the Aldi Portfolio are detailed in Annexure 4.

24.1.2

DPD Property The DPD Property is assumed to continue to perform in the same manner as it has historically. The tenant continues to trade well, the receipt of rents appears highly probable and interest costs have been substantially hedged. The DPD Property has a LTV ratio of 57.7%. Further details regarding the DPD Property are detailed Annexure 4.

24.1.3

Metchley Hall The construction of Metchley Hall is expected to complete in August 2011 in time for the intake of students in September. The project is currently on-schedule, with an expected gross development cost of £5 539 152. Rentals are budgeted at £504 750 per annum. On completion, a loan is expected on the property at 65% loan to development cost, at a margin of circa 2.75%. The debt will be fixed for three years, in line with the length of the University of Birmingham nomination agreement.

24.2

Potential acquisition pipeline For the purposes of these forecasts, management have assumed that the properties that form part of the potential acquisition pipeline as set out in paragraph 9.3 above will be acquired.

24.3

Capital raising The forecasts have been prepared on the assumption that €34 383 954 or approximately R330 000 000 is raised in terms of the private placement. An exchange rate of €1: R9.5975 has been used in these forecasts.

24.4

Fees and costs The annual management fee is 1.5% per annum. Transaction fees of 1% are charged on completion of an acquisition. No performance fee is forescast to be payable throughout the forescast periods.

24.5

Dividends The budgets do not make any assumption about the level of dividend payments, which is the responsibility of the directors. However, distributable core income of €1 825 264, €3 501 982 and €3 789 407 for the years ending 28 February 2012, 28 February 2013 and 28 February 2014 respectively is expected to be available for distribution.

24.6

General The assumptions on which the forecasts are based are considered by the directors to be reasonable and conservative.

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PRIVATE PLACEMENT MEMORANDUM

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME as at 28 February 2012, 2013 and 2014 Assuming €34 383 954 of capital raised Year ending 28-Feb-12 Euro

Year ending 28-Feb-13 Euro

Year ending 28-Feb-14 Euro

4 369 518

6 894 926

7 575 221

546 344

53 007

68 202

—

—

—

(1 124 922) (991 575)

(831 920) (708 218)

(893 122) (708 219)

(267 871)

1 133 825

8 239 169

Results from operating activities

2 531 494

6 541 620

14 281 251

Net interest expense

(1 399 393)

(1 965 130)

(2 293 457)

Profit before taxation

1 132 101

4 576 490

11 987 794

(100 174)

(141 150)

(159 685)

1 031 927

4 435 340

11 828 109

—

—

—

1 031 927

4 435 340

11 828 109

2.4 3.0 54 557 225 42 959 136

8.1 6.1 54 557 225 54 557 225

21.7 6.6 54 557 225 54 557 225

1 031 927

4 435 340

11 828 109

419 856 105 610 267 871

94 857 105 610 (1 133 825)

94 857 105 610 (8 239 169)

1 825 264

3 501 982

3 789 407

1 031 927

4 435 340

11 828 109

267 871

(1 133 825)

(8 239 169)

1 299 798

3 301 515

3 588 940

Income Rent received Sundry income Exchange differences Expenses Investment adviser fees Operating expenses Fair value adjustments

Taxation Net profit after taxation Other comprehensive income Foreign currency translation differences Total comprehensive income for the year Earnings per share (euro cents per share) Headline earnings per share (euro cents per share) Actual number of shares in issue Weighted average number of outstanding shares Reconciliation of profit after taxation to core distributable income Profit after taxation Adjusted for: Legal and professional expenses Listing expenses Fair value adjustments Distributable core income Reconciliation of profit after taxation to headline earnings Profit after taxation Adjusted for: Fair value adjustments Headline earnings

38

PRIVATE PLACEMENT MEMORANDUM

CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 28 February 2012, 2013 and 2014 Assuming €34 383 954 of capital raised Year ending 28-Feb-12 Euro

Year ending 28-Feb-13 Euro

Year ending 28-Feb-14 Euro

97 022 823

105 268 001

115 285 007

73 718 233 425 5 008 277

73 718 233 425 7 683 920

73 718 233 425 11 116 392

5 315 420

7 991 063

11 423 535

102 338 243

113 259 064

126 708 542

Equity Share capital Retained (loss) / profit Foreign currency translation reserve

54 557 225 (95 135) 419 907

54 557 225 4 340 206 419 907

54 557 225 16 168 314 419 907

Shareholder equity

54 881 997

59 317 338

71 145 446

Non current liabilities Long term loans

45 577 381

52 062 863

53 684 233

Financial instruments

852 668

852 668

852 668

Current liabilities (amounts falling within one year) Short term loans Trade and other payables

467 909 558 286

467 909 558 286

467 909 558 286

1 026 195

1 026 195

1 026 195

47 456 244

53 941 726

55 563 096

102 338 241

113 259 064

126 708 542

54 557 225 100.6

54 557 225 108.7

54 557 225 130.4

Non-current assets Investment property Current assets Short term loans Trade and other receivables Cash and cash equivalents

Total assets

Total liabilities Total equity and liabilities Actual number of shares in issue Net asset value (euro cents per share)

39

PRIVATE PLACEMENT MEMORANDUM

25. UNAUDITED CONSOLIDATED PRO FORMA STATEMENT OF FINANCIAL POSITION 25.1

The unaudited consolidated pro forma statement of financial position has not been reviewed or reported on by the Company’s auditors or an independent reporting accountant.

25.2

The unaudited consolidated pro forma statement of financial position of MAS as at 28 February 2011 and the explanatory notes thereto are set out in Annexure 7 to this private placement memorandum.

25.3

The unaudited consolidated pro forma statement of financial position is the responsibility of MAS’ directors and has been prepared to reflect the anticipated financial position of MAS following the private placement. The unaudited pro forma statement of financial position has been prepared for illustrative purposes only and because of its nature may not fairly represent MAS’ financial position.

25.4

After the private placement, the pro forma net asset value per share will equate to 99.942 Euro cents.

26. HISTORICAL FINANCIAL INFORMATION ON MAS 26.1

Annexure 8 contains the historical financial information of MAS for the years ended 28 February 2011, 2010 and 2009.

26.2

The compilation, contents and presentation of the financial information in this private placement memorandum and the annexures is the responsibility of the directors.

27. DIVIDENDS 27.1

The Company aims to provide an investment to shareholders that maximises shareholder value by adopting a high income distribution policy. It is the Company’s intention to distribute on a semi-annual basis all of its revenue profits, subject to applicable laws and periodic repayment obligations under any amortising loan facilities. Other than in unforeseen and exceptional circumstances, it is not the intention to retain income for investment purposes. Where funds are required to grow the investment portfolio, the Company will ordinarily look to achieve this by raising fresh funds from shareholders or the market.

27.2

Dividends will be declared and paid in terms of any LuxSE timetable that may be applicable in respect to the declaration and payment of dividends by the Company.

27.3

In terms of the Company’s articles of association, any dividend that remains unclaimed for a period of three years after having been declared by the Company shall revert to the Company.

27.4

There is no arrangement under which future dividends will be waived or have been waived, however the articles of association of the Company do provide for the waiver of dividends under certain circumstances.

27.5

Applicants are advised that the board of the Company has declared a cash dividend of 2.14 euro cents per share in respect of the five months ending 31 July 2011. Full details on the salient dates and times of payment of the dividend including the unaudited condensed interim financial statements for the three months from 1 March 2011 to 31 May 2011 were released on the LuxSE website and SENS on Friday, 15 July 2011. Further information on the dividend announcement and interim financial statements for the three months from 1 March 2011 to 31 May 2011 can be obtained from the Company’s website (www.masplc.com).

28. LOANS Save for the loans as disclosed in Annexure 9, the MAS group has not received any material loans or other loan capital.

40

PRIVATE PLACEMENT MEMORANDUM

29. BORROWING POWERS 29.1

The borrowing powers of the directors in respect of both MAS and the subsidiaries are unlimited. The directors may exercise all the powers of the Company to incur indebtedness, liabilities or obligations and to secure indebtedness, liabilities or obligations whether of the Company or of any third party.

29.2

The borrowing powers of the Company and the subsidiaries have not been exceeded since incorporation. No regulatory or other restrictions have been imposed on the Company or the subsidiaries’ borrowings powers since incorporation.

29.3

Details of borrowing powers of the Company exercisable by the directors of MAS and all subsidiaries and the manner in which such borrowing powers may be varied is set out in paragraph 6.7 of Annexure 6. None of the loans listed in Annexure 9 have any redemption or conversion rights attaching to them.

29.4

As at the last practicable date, MAS has undertaken no off-balance sheet financing and has no outstanding loans receivable.

30. MATERIAL COMMITMENTS, LEASE PAYMENTS AND CONTINGENT LIABILITIES

31.

30.1

As at the last practicable date MAS had no material commitments, lease payments or contingent liabilities.

30.2

There have been no material changes to the capital commitments, lease payments and contingent liabilities of the Company since that date.

ADEQUACY OF CAPITAL The directors of the Company are of the opinion that the share capital of the Group, both prior and subsequent to the private placement is adequate for the requirements of the Group for at least the next twelve months from the date of issue of this private placement memorandum.

32. MATERIAL CHANGES 32.1

In 2009, MAS conducted a capital raising in Europe, the IOM and South Africa raising a total amount of €9 309 721 and MAS completed the acquisition of the Aldi Portfolio and the DPD Property.

32.2

In 2010 MAS conducted a capital raising in Europe, the IOM and South Africa raising a total amount of €10 079 126 and completed the acquisition of Metchley Hill.

32.3

There have been no material changes in the financial or trading position of MAS since incorporation.

32.4

There has been no material change in the business of the Company since incorporation.

32.5

There has been no change in the trading objects of MAS or its subsidiaries since incorporation.

41

PRIVATE PLACEMENT MEMORANDUM

SECTION 4 – ADDITIONAL MATERIAL INFORMATION 33. TAXATION The following statements on taxation are based on advice received by the directors regarding the laws and practice in force in the relevant jurisdictions at the date of issue of the private placement memorandum. 33.1

Taxation of MAS 33.1.1 MAS is resident for tax purposes in the IOM and subject to income tax at the rate of 0%. There is no withholding tax payable in the IOM. 33.1.2

33.2

There is no capital gains tax payable in the IOM. No IOM stamp duty or similar tax will be payable on the issue or transfer of shares in MAS.

Taxation of the German property investments 33.2.1 Rental income The rental income is German source and as such is subject to German corporate income tax and solidarity tax. The rental income is taxed when received and is not subject to withholding tax in Germany. 33.2.2

Capital gains 33.2.2.1 Sale of property: Sale of German real estate by the Luxembourg SPVs would be subject to German capital gains taxes. 33.2.2.2

33.3

Taxation of the Swiss property investments 33.3.1 Rental income The rental income is subject to Swiss federal, cantonal and communal taxes. 33.3.2

Sale proceeds 33.3.2.1 Sale of property: Sale of Swiss real estate by the Luxembourg SPVs would be subject to special cantonal real estate capital gains taxes which will differ from canton to canton. 33.3.2.2

33.4

Sale of shares in Luxembourg SPV: Under the Swiss/Luxembourg treaty there should be no cantonal capital gains taxes on the sale of the shares in the Luxembourg SPVs owning the Swiss real estate.

United Kingdom real estate investments 33.4.1 Rental income UK income tax should be due on the net income from the rental business. 33.4.2

42

Sale of shares in Luxembourg SPV: Under the German/ Luxembourg treaty there should be no German capital gains taxes on the sale of the shares in the Luxembourg SPV owning the German real estate.

Capital gains Sale of shares in IOM SPV: Sale proceeds upon the disposal of the shares in the IOM SPVs can be considered to be capital gains and thus not taxable in the UK.

33.5

Taxation on profi t distribution from the Luxembourg property holding company MAS (BVI) will look to finance the Luxembourg property holding company in such a manner that efficient distribution of profits can be made from Luxembourg.

33.6

Taxation on profi t distribution from the IOM property holding company There is no withholding tax on the payment of dividends from an IOM company to another IOM company, meaning that there can be efficient profit distribution to MAS in respect of the UK real estate investments.

PRIVATE PLACEMENT MEMORANDUM

34. SOUTH AFRICAN EXCHANGE CONTROL REGULATIONS MAS has obtained SARB exchange control approval for the private placement of its shares in terms of the private placement memorandum. In line with the exchange control approval obtained from the SARB, shares in the Company will only be allotted and issued to the applicants on listing date of the private placement shares and will only be issued on market as listed shares. The subscription for shares and the trade in shares subsequent to listing may only be done in terms of the exchange control regulations. Set out below is a summary of the exchange control regulations relating to the subscription for shares in terms of the private placement and the trade in MAS shares in South Africa only. This summary of the exchange control regulations is intended as a guide only and is therefore not comprehensive. If you are in any doubt you should consult an appropriate professional adviser immediately. 34.1

South African private individuals The subscription for shares in terms of the private placement or the acquisition of shares on the market by a South African private individual will not affect such person’s foreign investment allowance under exchange control regulations. A South African private individual need not take any additional administrative actions and can instruct its broker to accept, buy and sell ordinary shares on its behalf in MAS as it would with any other listed security on the JSE. Such shares are on the South African register and are Rand-denominated.

34.2

South African institutional investors South African retirement funds, long-term insurers, collective investment scheme management companies and investment managers who have registered with the SARB Exchange Control Department as institutional investors for exchange control purposes are entitled to a foreign portfolio investment allowance. South African institutional investors may utilise their foreign portfolio investment allowance to subscribe for shares in terms of the private placement or acquire shares on the market. South African institutional investors will have to provide their CSDP or broker with a copy of their SARB exchange control approval evidencing that they have registered with SARB exchange control as institutional investors for exchange control purposes and are thus entitled to a foreign portfolio investment allowance.

34.3

Member brokers of the JSE Section H(E) of the exchange control regulations provides for a special dispensation to local brokers to facilitate the trading in inward listed shares. South African brokers are now allowed, as a book building exercise, to purchase MAS shares offshore and to transfer the shares to MAS’ South African share register. This special dispensation is confined to inward listed shares and brokers may warehouse such shares for a maximum period of thirty days only.

34.4

South African corporate entities, banks, trusts and partnerships South African corporate entities, banks, trusts and partnerships may subscribe for shares in terms of the private placement or acquire shares on the market without restriction.

34.5

Non-residents of the common monetary area Non-residents of the common monetary area and former residents of the common monetary area who have emigrated may subscribe for shares in terms of the private placement or acquire shares on the market, provided that payment is received in foreign currency or Rand from a non-resident account. Non-residents may sell MAS shares on the market and repatriate the proceeds without restriction.

34.6

Movement of MAS shares between registers Shares in MAS are fully fungible and may be transferred between registers. South African investors may only acquire shares, via the JSE, that are already on the South African branch register maintained by MAS’ transfer secretaries. Member brokers of the JSE may acquire shares on foreign exchanges and transfer shares to the South African register as described in paragraph 34.3 above. Non-residents are not subject to exchange control regulations and may freely transfer shares between branch registers.

35. MATERIAL CONTRACTS 35.1

Save for the investment advisory agreement the salient details of which are set out in Annexure 3, no material contracts have been entered into by the Company or its subsidiaries, other than in the ordinary course of business, since incorporation, that contains an obligation or settlement that is material to MAS as at the last practicable date.

35.2

MAS is not subject to any agreements relating to royalties or technical fees payable.

43

PRIVATE PLACEMENT MEMORANDUM

36. COMMISSIONS PAID OR PAYABLE 36.1

The Company has not paid any commission or consideration in respect of underwriting other than in the normal course of business during the three years preceding the date of this private placement memorandum.

36.2

Since incorporation no commission, discount, brokerage or other special terms have been granted by MAS in connection with the issue or sale of any shares in MAS, save for €10 622 paid to the Company’s previous JSE sponsor, PSG Capital (Proprietary) Limited in terms of the private placement in August 2009.

36.3

The Company has in aggregate paid a total of €148 386 to third parties in respect of managerial, secretarial and technical fees since incorporation up to 28 February 2011 as per the audited financial statements.

37. AMOUNTS PAID OR PAYABLE TO PROMOTERS 37.1

Since incorporation, no promoter of MAS has had any material beneficial interest, either direct or indirect, in the promotion of the Company.

37.2

No promoter of MAS has had any material beneficial interest, either direct or indirect, in any property acquired or to be acquired by MAS.

37.3

The Company has not entered into any promoter’s agreements during the three years preceding the date of this private placement memorandum.

38. ADVISERS’ INTEREST None of the advisers in their capacity as such, whose names are set out on the inside cover of this private placement memorandum, hold any shares in or have agreed to acquire any shares in the Company at the date of this private placement memorandum.

39. GOVERNMENT PROTECTION AND INVESTMENT ENCOURAGEMENT LAW The Company does not benefit from any SA government protection or investment encouragement law.

40. CODE OF CORPORATE PRACTICE AND CONDUCT

41.

40.1

MAS and its directors are committed to the principles of effective corporate governance and application of the highest ethical standards in the conduct of its business and affairs.

40.2

Although not required to so by the laws of IOM, for good corporate governance reasons, MAS holds a shareholders’ meeting at least once every year. The most recent such meeting took place on 13 July 2011.

40.3

Details of MAS’s code of corporate practice and conduct are set out in Annexure 10.

DIRECTORS’ RESPONSIBILITY STATEMENT The directors, whose names are set out on page 3 of this private placement memorandum, collectively and individually accept full responsibility for the accuracy of the information given and certify that to the best of their knowledge and belief there are no facts 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 this private placement memorandum contains all information required by the LuxSE Listings Requirements, the JSE Listings Requirements and South African Companies Act.

42. LITIGATION STATEMENT There are no legal or arbitration proceedings (including any such proceedings that are pending or threatened) of which MAS is aware, which may have or have had a material effect on the financial position of MAS since incorporation.

44

PRIVATE PLACEMENT MEMORANDUM

43. CONSENTS The corporate adviser, sponsor and bookrunner, the investment adviser, independent auditors, Luxembourg legal adviser, South African legal adviser, the IOM transfer secretaries and the South African transfer secretaries, whose names are included in this private placement memorandum, have given and have not, prior to the issue of this private placement memorandum, withdrawn their consent to the inclusion of their names in the capacities stated in this private placement memorandum in the form and context in which they appear.

44. PRELIMINARY EXPENSES AND ISSUE EXPENSES The preliminary expenses and issue expenses that are expected or have been provided for in connection with the private placement are set out below: Description Payable to Printing, publication, distribution and advertising expenses LuxSE documentation fees LuxSE listing fees JSE documentation fees JSE listing fees Corporate adviser and JSE sponsor fee Capital raising fee SA transfer secretaries IOM transfer secretaries Luxembourg legal adviser South African legal adviser

€ (excluding VAT)

De Kock Communications/Fresh Identity LuxSE LuxSE JSE JSE Java Capital Java Capital Computershare Computershare M Partners DLA Cliffe Dekker Hofmeyr

Total

47 2 2 1 2 156 833 2 5 20 5

040 500 259 114 576 291 550 605 210 000 001

1 078 146

45. DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents will be available for inspection and obtainable free of charge at the Company’s registered office and at the offices of the Luxembourg legal adviser at any time during normal business hours from 8h30 to 17h00 from the date of issue of this private placement memorandum: 45.1

the memorandum and articles of association of MAS;

45.2

the investment advisory agreement;

45.3

the Sanlam subscription commitment;

45.4

the Atterbury subscription commitment;

45.5

the audited consolidated annual financial statements of MAS for the year ended 28 February 2011, 2010 and 2009;

45.6

quarterly consolidated financial statements of MAS for the period 2008 – 2011;

45.7

the audit reports on the historical financial information of MAS;

45.8

the consents referred to in paragraph 43 above ; and

45.9

a signed copy of this private placement memorandum.

Signed in the IOM by Lukas Nakos on behalf of all the directors of the Company on 28 July 2011 in terms of powers of attorney granted by them dated 21 July 2011.

For: MAS plc, a director, herein represented by Lukas Nakos under and in terms of a power of attorney executed on 21 July 2011.

45

PRIVATE PLACEMENT MEMORANDUM

Annexure 1

DETAILS OF DIRECTORS OF MAS 1.

DETAILS OF THE DIRECTORS 1.1

The full names, ages, capacities and business address of the directors of MAS and of the subsidiaries of MAS are outlined below: Full name

2.

46

Capacity

Business address

Lukas Nakos (Greek)

Age 35

Managing director

25 Athol Street Douglas IOM IM1 1LB

Date of appointment 3 July 2008

Malcolm Howden Levy (British)

34

Financial director

25 Athol Street Douglas IOM IM1 1LB

16 February 2009

Jaco Jansen (South African)

38

Independent non-executive director

Falcon Cliff Palace Road Douglas IOM

Gideon Johannes Oosthuizen (South African)

44

Non-executive director

Mertech Building Glenfield Office Park Oberon Street Faerie Glen South Africa 0043

Ronald Charles Spencer (British)

64

Chairman, Independent non-executive director

Carefree Cottage Mount Rule Braddan IOM IM4 4HT

16 July 2009

16 February 2009

16 July 2009

1.2

A list of other directorships held by the directors and partnerships of which the directors are partners is set out in paragraph 8 below.

1.3

The directors are not the founders of MAS.

EXPERIENCE OF THE DIRECTORS 2.1

Lukas Nakos – (BBusSc) Lukas is CEO of Exclusive Holdings Limited and MAS plc. Previously Lukas was chief operating officer of a privately owned niche international financial services group with significant real estate exposure, where he had a key role in constructing the real estate portfolio. Lukas is based in the IOM.

2.2

Malcolm Levy – (MCom,MBA (Oxon)) Malcolm is CFO of Exclusive Holdings Limited and MAS plc. Previously co-founder and portfolio manager of a privately managed US$200 million London based emerging market equity hedge fund. Prior to this Malcolm was an equities analyst at Gartmore. He is a CFA and CAIA charterholder and a registered South African chartered accountant. Malcolm is based in the IOM.

2.3

Jaco Jansen – (BCom Hons) Jaco is a non-executive director of the Company. Jaco is head of the asset management division of the Maitland Group, which manages in excess of US$1 billion for private clients and provides investment advice on a multi-asset class basis to institutional clients with €3 billion of assets. Jaco is a registered South African chartered accountant and is based in the IOM.

2.4

Gideon Oosthuizen – (BEng Mech) Gideon is a non-executive director of the Company. Gideon is an executive director of Atterbury Investment Holdings and Atterbury Asset Managers, a significant institutionally owned South African property development and investment group. Gideon is based in South Africa.

PRIVATE PLACEMENT MEMORANDUM

2.5

3.

Ronald Spencer Ron is a non-executive director and chairman of the Company. Ron previously acted as managing director of Merrill Lynch Investment Managers Holdings (IOM) Limited. In addition to being a non-executive director on other IOM companies, in 2004 Ron was admitted as Chartered Director by the Institute of Directors. Ron is based in the IOM.

QUALIFICATION, APPOINTMENT, VOTING POWER, RETIREMENT, REMUNERATION AND BORROWING POWERS OF THE DIRECTORS [2(e)] The relevant provisions of the articles of association of MAS relating to qualification, appointment, voting powers, retirement, remuneration and borrowing powers of directors are set out in Annexure 6. The borrowing powers of the directors in respect of both MAS and the subsidiaries are unlimited.

4.

DISCLOSURES BY THE DIRECTORS None of the directors of MAS or the subsidiaries have:

5.

4.1

been declared bankrupt, insolvent or have entered into any individual voluntary compromise arrangements;

4.2

entered into any receiverships, compulsory liquidations, creditors voluntary liquidations, administrations, company voluntary arrangements or any compromise or arrangement with creditors generally or any class of creditors of any company where such directors are or were directors with an executive function during the preceding twelve months;

4.3

entered into any compulsory liquidations, administrations or partnership voluntary arrangements of any partnerships where such directors are or were partners during the preceding twelve months;

4.4

entered into any receiverships of any asset(s) or of a partnership where such directors are or were partners during the preceding twelve months;

4.5

been involved in any unusual transactions such as purchases outside normal activity or the acquisition or disposal of fixed asset items;

4.6

been publicly criticised by a statutory or regulatory authority, including recognised professional bodies or disqualified by a court from acting as a director of a company or from acting in the management or conduct of the affairs of any company; and/or

4.7

been involved in any offence of dishonesty, fraud or embezzlement.

REMUNERATION OF DIRECTORS [2(c);17(c)] 5.1

The estimated director’s remuneration for the current financial year is as follows:

Name

Salary €’000

Directors’ fees €’000

Fees for other services €’000

Provident Fund & Medical Aid Contributions €’000

Bonuses €’000

L Nakos

—

—

—

—

—

M Levy

—

60

—

—

—

J Jansen

—

19

—

—

—

G Oosthuizen

—

19

—

—

—

R Spencer

—

19

—

—

—

TOTAL

—

117

—

—

—

Notes: 1. The directors have not received any sums by way of an expense allowance 2. The directors have received no other material benefi ts 3. MAS has no commission, gain or profi t-sharing arrangements with any director 4. MAS has not granted any share options to the directors 5. MAS has not issued any shares to the directors in terms of the share incentive scheme 6. L Nakos will receive remuneration of the Euro equivalent of GBP100 000 (one hundred thousand Pounds Sterling) per annum from the investment adviser 7. M Levy will receive a director’s fee in an amount equal to the Euro equivalent of GBP50 000 (fi fty thousand Pounds Sterling) per annum, which amount will be paid to the investment adviser

47

PRIVATE PLACEMENT MEMORANDUM

6.

5.2

MAS has not paid any other fees or incurred any fees that are payable to a third party in lieu of directors’ fees.

5.3

There will be no variation in the estimated remuneration receivable by any of the directors as a direct consequence of the private placement.

5.4

MAS has not paid any amounts (whether in cash or in securities), nor given any benefits to any directors or to any company in which directors are beneficially interested, or to any partnership, syndicate or other association of which the directors are members, or to any director as an inducement to become a director or otherwise, or for services rendered by directors, or otherwise for services rendered by directors or by the associate company or associate entity in connection with the promotion or formation of the Company. There are no outstanding loans granted by MAS to any of the directors.

5.5

Save for the relationship between the investment adviser and MAS (BVI) as set out in paragraph 1.6 and Annexure 3, the business of MAS or any of its subsidiaries, or any part thereof, is not managed or proposed to be managed by any third party under contract or arrangement.

INTERESTS OF THE DIRECTORS [17(a); 17(b)] 6.1

On the last practicable date, the directors (and their associates), in aggregate, held directly and indirectly approximately 0.35% of MAS’ issued share capital as follows: Director

Direct benefi cial

Indirect benefi cial

Total

—

51 025

51 025

0.25

10 000

—

10 000

0.05

J Jansen

—

—

—

—

G Oosthuizen

—

—

—

—

R Spencer

10 000

—

10 000

0.05

TOTAL

20 000

51 025

71 025

0.35

L Nakos M Levy

7.

6.2

Save for being a shareholder of MAS or the investment adviser, no director of MAS has or had any interest, directly or indirectly, in any transaction which is, or was, material to the business of MAS and which was effected by MAS during the current financial year which remains in any respect outstanding or unperformed.

6.3

Save for being a shareholder of MAS or the investment adviser, no director of MAS has had any material beneficial interest, either direct or indirect, in the promotion of the Company.

6.4

Save for being a shareholder of MAS or the investment adviser, no director of MAS has had any material beneficial interest, either direct or indirect, in any property acquired or to be acquired by MAS.

SERVICE CONTRACTS OF THE DIRECTORS [16(b)] 7.1

7.2

48

% held

Lukas Nakos and Malcolm Levy do not have written employment agreements, however, as the executive directors, they are employed on terms and conditions that are normal for positions of their nature, which include, inter alia, that the executives: 7.1.1

are required to spend all such time as reasonably required in the fulfilment of their duties;

7.1.2

are subject to the usual fiduciary obligations of a director of a listed company;

7.1.3

are subject to three month notice of termination;

7.1.4

are required to serve on committees as necessary;

7.1.5

are bound by duties of confidentiality with regards to the business of the Company; and

7.1.6

have agreed to be bound by a restraint of trade for a period post-termination of services.

Other directors have written appointment letters with the Company which includes terms and conditions that are normal for the positions held by them.

PRIVATE PLACEMENT MEMORANDUM

8.

OTHER DIRECTORSHIPS HELD BY THE DIRECTORS The table below sets out the names of the companies and partnerships of which the directors of MAS are or have been directors or partners during the five years preceding the last practicable date: Currently director

Director

Name of company

Nature of business

Lukas Nakos

113 Investments Limited

Investment Holding Company

A L Holding Limited

Investment Holding Company

No

Acts Fondation Limited

Investment Holding Company

Yes

Adage Associates Limited

Investment Holding Company

No

Akanda Properties Limited

Investment Holding Company

No

Amethyst Properties Limited

Investment Holding Company

No

Antigua & Barbuda Properties Limited

Investment Holding Company

Yes

Aquamarine Properties Limited

Investment Holding Company

No

Bedford Square Properties Limited

Investment Holding Company

No

Bermand Limited

Investment Holding Company

No

BKS E-Training Limited

Investment Holding Company

No

Bishopsgate Student Residential Limited

Investment Holding Company

Yes

Blue Star Properties Limited

Investment Holding Company

No

Bonn Property Limited

Investment Holding Company

No

Bouwer Limited

Investment Holding Company

No

Bridge Star Estates Limited

Investment Holding Company

No

C Biscuit Limited

Investment Holding Company

No

Caliban Investment Holdings Limited

Investment Holding Company

No

Carrick Lodge Limited

Investment Holding Company

Yes

Cold Creek International Limited

Investment Holding Company

No

Commprop ~Holdings Limited

Investment Holding Company

Yes

Covenant Mining Limited

Investment Holding Company

No

DCOS Limited

Investment Holding Company

No

Design@7 Visual Works Limited

Investment Holding Company

No

Dominion Fondation Limited

Investment Holding Company

No

Emerald Properties Limited

Investment Holding Company

No

Exclusive Holdings Limited

Investment Holding Company

Yes

Executors Board Limited

Investment Holding Company

No

Financial Compliance Tutors International Limited

Investment Holding Company

No

Finesse Investment Holdings Limited

Investment Holding Company

No

Golden Cross Properties Limited

Investment Holding Company

Yes

Grainbeef Limited

Investment Holding Company

No

Gravine Associates S.A.

Investment Holding Company

No

Henis Group Inc

Investment Holding Company

No

Hilltop Fondation Limited

Investment Holding Company

No

JNA Holdings Limited

Investment Holding Company

No

Jupiter Fondation limited

Investment Holding Company

No

Kenda Properties Limited

Investment Holding Company

No

Kienda Properties Limited

Investment Holding Company

No

Kingdom Initiatives Limited

Investment Holding Company

No

Kings 1 Limited

Investment Holding Company

No

Landesta Limited

Investment Holding Company

No

Le Platine Fondation Limited

Investment Holding Company

No

Leescot Properties Limited

Investment Holding Company

No

Leopold Fondation Limited

Investment Holding Company

No

LG Investments Bloom Limited

Investment Holding Company

No

LG Investments Dianthus Limited

Investment Holding Company

No

LG Investments Lotus Limited

Investment Holding Company

No

LG Investments Orchid Limited

Investment Holding Company

No

LG Investments Plume Limited

Investment Holding Company

No

LG Properties Lotus Limited

Investment Holding Company

No

LGI Daffodil Limited

Investment Holding Company

No

LGI Land Securities Limited

Investment Holding Company

No

LGI Properties Agate Limited

Investment Holding Company

No

LGI Properties Amethyst Limited

Investment Holding Company

No

No

49

PRIVATE PLACEMENT MEMORANDUM

Director

50

Currently director

Name of company

Nature of business

LGI Properties Beryl Limited

Investment Holding Company

No

LGI Properties Beryl Limited (IOM)

Investment Holding Company

No

LGI Properties Crystal Limited

Investment Holding Company

No

LGI Properties Diamond Limited

Investment Holding Company

No

LGI Properties Emerald Limited

Investment Holding Company

No

LGI Properties Jasper Limited

Investment Holding Company

No

LGI Properties Onyx Limited

Investment Holding Company

No

LGI Properties Platinum Limited

Investment Holding Company

No

LGI Properties Ruby Limited

Investment Holding Company

No

LGI Properties Sapphire Limited

Investment Holding Company

No

LGI Properties Topaz Limited

Investment Holding Company

No

LGI Property Holdings (Germany) 2 Limited

Investment Holding Company

No

LGI Property Holdings (Germany) 3 Limited

Investment Holding Company

No

LGI Property Holdings (Germany) 4 Limited

Investment Holding Company

No

LGI Property Holdings (Germany) Limited

Investment Holding Company

No

LGI Property Investments Limited

Investment Holding Company

No

Louis Group (IOM) Limited

Licensed Investment Business

No

Louis Group (UK) Limited

Investment Holding Company

No

Louis Group International (Europe) Limited

Investment Holding Company

No

Louis Group International Holdings Limited

Investment Holding Company

No

Louis Group International Nominees (ONE) Limited

Nominee Company

No

Louis Group International Nominees (TWO) Limited

Nominee Company

No

Louis Group InvestCo Pink Limited

Investment Holding Company

No

Louis Group Investments 116 Limited

Investment Holding Company

No

Louis Group Investments 18 Limited

Investment Holding Company

No

Louis Group Investments Blue Limited

Investment Holding Company

No

Louis Group Investments Pink 2 Limited

Investment Holding Company

No

Louis Group Investments Pink Limited

Investment Holding Company

No

Louis Group Investments Red Limited

Investment Holding Company

No

Louis Group Investments White Limited

Investment Holding Company

No

Louis Group Investments Yellow Limited

Investment Holding Company

No

Louis Group Professional Capital Limited

Licensed Money Lender

No

Louis Group Professional Funding PLC

Professional Investor Fund

No

Louis Group Professional Services Limited

Investment Holding Company

No

Louis Group Properties (Germany) Limited

Investment Holding Company

No

Louis Group Properties Blue Limited

Investment Holding Company

No

Louis Group Properties GR11 Limited

Investment Holding Company

No

Louis Group Properties GR12 Limited

Investment Holding Company

No

Louis Group Properties GR14 Limited

Investment Holding Company

No

Louis Group Properties Grey Limited

Investment Holding Company

No

Louis Group Properties Pink Limited

Investment Holding Company

No

Louis Group Properties RSG Limited

Investment Holding Company

No

Louis Group Secretarial Limited

Nominee Company

No

Louis Group Secretarial Ltd

Nominee Company

No

Louis Group Structured Capital Limited

Licensed Money Lender

No

Louis Group Structured Fund PLC

Professional Investor Fund

No

Lysis Properties (PCC) Inc.

Investment Holding Company

No

MAS plc

Real Estate Investment Company

Yes

MAS (BVI) Holdings Limited

Real Estate Investment Company

Yes

MAS Property Advisors Limited

Investment Adviser

Yes

MAS (IOM) Holdings Limited

Investment Holding Company

Yes

MAS Mezzi Limited

Short-term Financing Company

Yes

MAS (IOM) 1 Limited

Investment Holding Company

Yes

Mayworth Properties Limited

Investment Holding Company

No

Mazaminet Inc

Investment Holding Company

No

Mercury Investment Holdings Limited

Investment Holding Company

No

Mergon Property Investments 1 Limited

Investment Holding Company

Yes

Mergon Property Investments 2 Limited

Investment Holding Company

Yes

Metchley Hall Limited

Investment Holding Company

Yes

PRIVATE PLACEMENT MEMORANDUM

Director

Malcolm Levy

Currently director

Name of company

Nature of business

Millennia Montaigne Developments Limited

Investment Holding Company

Yes

Nitro Limited

Investment Holding Company

No

Octavio Ventures Limited

Investment Holding Company

No

Orange Fondation Limited

Investment Holding Company

No

Phoenix Fondation Limited

Investment Holding Company

No

Phos Investment Holdings Limited

Investment Holding Company

No

Platinum Star Estates Limited

Investment Holding Company

No

REOC Limited

Investment Holding Company

Yes

Real Estate Bonn Limited

Investment Holding Company

No

River Provisions Ltd

Investment Holding Company

No

Riverland Global Limited

Investment Holding Company

No

Roman Fondation Limited

Investment Holding Company

No

Ruby Estates Limited

Investment Holding Company

No

Salt Brokerage Limited

Investment Holding Company

No

Salt Capital Limited

Licensed Investment Business

No

Salt Holdings Limited

Investment Holding Company

Yes

Salt Limited

Investment Holding Company

Yes

Salt Private Equity Limited

Investment Holding Company

Yes

Salt Properties Limited

Investment Holding Company

Yes

Salt Consulting Limited

Consultancy Company

Yes

Salt Natural Resources Limited

Investment Holding Company

Yes

Saturn Investment Holdings Limited

Investment Holding Company

No

Sheraton Development and Investments Limited

Investment Holding Company

No

Silver Arrow Limited

Investment Holding Company

No

Silver Bridge Fondation Limited

Investment Holding Company

No

Silver Leaf Properties Limited

Investment Holding Company

No

Silver Star Estates (PCC) Limited

Investment Holding Company

No

South Park Management Company (Southam) Limited

Investment Holding Company

No

Southern Spear Limited

Investment Holding Company

No

Spring Grove Limited

Investment Holding Company

No

Student Residential Property Advisers Limited

Dormant Company

Yes

Sun Stone Limited

Investment Holding Company

No

Tazetta Limited

Investment Holding Company

No

Titania Fondation Limited

Investment Holding Company

No

Topaz Properties Limited

Investment Holding Company

No

Tranzee Limited

Investment Holding Company

No

Venetian Investment Holdings Limited

Investment Holding Company

No

Vet Holdings Limited

Investment Holding Company

No

Vie Investments Limited

Investment Holding Company

No

Virtue Investment Holdings Limited

Investment Holding Company

No

Water Muller Limited

Investment Holding Company

No

Westair International Limited

Investment Holding Company

No

White Water Limited

Investment Holding Company

No

YPC Wealth Limited

Investment Holding Company

No

Zbaeren & Louis Limited

Investment Holding Company

No

Zerland Investment Limited

Investment Holding Company

No

Zircon Properties Limited

Investment Holding Company

No

Bishopsgate Student Residential Limited

Investment Holding Company

Yes

Commprop Holdings Limited

Investment Holding Company

Yes

Exclusive Holdings Limited

Investment Holding Company

Yes

Fore Fitness Holdings Limited

Investment Holding Company

Yes

Fore Investments 1 Limited

Investment Holding Company

Yes

Fore Investments 2 Limited

Investment Holding Company

Yes

Golden Cross Properties Limited

Investment Holding Company

Yes

Kudu Emerging Markets Limited

Investment Adviser

No

MAS Property Advisors Limited

Investment Adviser

Yes

MAS plc

Real Estate Investment Company

Yes

MAS (BVI) Holdings Limited

Real Estate Investment Company

Yes

MAS (IOM) Holdings Limited

Investment Holding Company

Yes

51

PRIVATE PLACEMENT MEMORANDUM

Director

Jaco Jansen

Gideon Oosthuizen

Ron Spencer

52

Currently director

Name of company

Nature of business

MAS Mezzi Limited

Short-term Financing Company

Yes

Metchley Hall Limited

Investment Holding Company

Yes

Salt Brokerage Limited

Investment Holding Company

No

Salt Capital Limited

Licensed Investment Business

Yes

Salt Consulting Limited

Consulting Company

Yes

Salt Holdings Limited

Investment Holding Company

Yes

Salt Limited

Investment Holding Company

Yes

Salt Private Equity Limited

Investment Holding Company

Yes

Salt Properties Limited

Investment Holding Company

Yes

Salt Natural Resources Limited

Investment Holding Company

Yes

Student Residential Property Advisers Limited

Dormant Company

Yes

Constantia Fund SPC Limited

Investment

Yes

Fidugest Management Limited

Asset Management

Yes

Maitland Asset Management (IOM) Limited

Asset Management

Yes

Maitland Asset Management Holdings Limited

Asset Management

Yes

Maitland Asset Management (Pty) Limited

Asset Management

Yes

MS Investment Management Limited

Investment Management

No

MAS plc

Real Estate Investment Company

Yes

MAS (BVI) Holdings Limited

Real Estate Investment Company

Yes

Atterbury Investment Holdings Limited

Real Estate Investments

Yes

Atterbury Asset Managers (Pty) Ltd

Asset Management for Real Estate

Yes

Atterbury Investment Managers (Pty) Ltd

Real Estate Investments

Yes

Attventure (Pty) Ltd

Real Estate and Private Equity Investments

Yes

Attvest Property Developments Company (Pty) Ltd

Real Estate Investments

Yes

Exclusive Holdings Limited

Investment Holding Company

Yes

4PL.com (Pty) Ltd

Logistics Service Provider

Yes

Mertech Marine (Pty) Ltd

Submarine Cable Retrieval

No

Bethlehem Hydro (Pty) Ltd (Hydro-electric power generation plant)

Hydro-electric power generation plant

Yes

Infotech (Pty) Ltd

Information Technology

No

Mobile Data (Pty) Ltd

Mobile Tracking Solutions

No

Papilio Investments 33 (Pty) Ltd

Real Estate Investments

Yes

Sabinet On-Line (Pty) Ltd

Electronic Access to Information Provider

No

Scarlet Ibis Investments 277 (Pty) Ltd

Real Estate Investments

Yes

MAS Property Advisors Limited

Investment Adviser

Yes

MAS plc

Real Estate Investment Company

Yes

MAS (BVI) Holdings Limited

Real Estate Investment Company

Yes

Wattchatt (Pty) Ltd

Real Estate Investments

Yes

BlackRock Investment Management (Dublin) Limited

Investment

No

BlackRock Institutional Pooled Funds PLC

Investment

No

BlackRock Liquidity Funds plc

Investment

No

Canada Life International Limited

Insurance

Yes

Canada Life International Institutional Limited

Insurance

Yes

Canada Life International Services Limited

Insurance

Yes

Discovery Limited

Non-trading shell company

No

Eastern Corporate Insurance Limited

Captive Insurance

No

Institutional Cash Series PLC

Investment

Yes

India Media PLC

Investment

Yes

MAS plc

Real Estate Investment Company

Yes

MAS (BVI) Holdings Limited

Real Estate Investment Company

Yes

Regeneration Realty Limited

Private Investment Holding Company

Yes

Residential Property Investment Portfolio Limited

Property Investment

No

Wardner Limited

Investment

Yes

PRIVATE PLACEMENT MEMORANDUM

Annexure 2

DETAILS OF SUBSIDIARIES OF MAS [6(a)(i); 6(e)(i)] 1.

MAS (BVI) was incorporated in the British Virgin Islands on 19 December 2008 under the name of MAS (BVI) Holdings Limited.

2.

MAS (BVI) is a wholly-owned subsidiary and its entire shareholding was issued to MAS on incorporation. The subsidiary has an issued share capital of 100 ordinary shares of no par value, which shares were issued to the Company at €1.00 per share. The shares held in the subsidiary have been fully paid-up by the Company and are reflected at €100 in the Company’s accounts. The Company has not received any dividends in respect of the shares held in the subsidiary. As MAS (BVI) is a wholly-owned subsidiary of MAS, it does not produce separate annual financial statements but MAS produces consolidated annual financial statements in respect of the Group.

3.

MAS (BVI) in turn has incorporated a wholly-owned subsidiary in the IOM under the name of MAS (IOM) Holdings Limited (“MAS UK”) and a wholly-owned subsidiary in Luxembourg under the name of European Property Holdings S.à.r.l (“MAS Lux”).

4.

MAS Lux has incorporated a Luxembourg SPV, Inventive Capital S.à.r.l., which company holds the Aldi Portfolio.

5.

MAS Lux has incorporated a Luxembourg SPV, Petrusse Capital S.à.r.l., which company holds the DPD Property.

6.

MAS Lux has also incorporated two other Luxembourgh SPV companies, Egerkingen Capital S.à.r.l. and Magliaso Capital S.à.r.l., both of which companies are dormant.

7.

MAS UK has incorporated an IOM SPV, Golden Cross Properties Limited, which company holds the Metchley Hall property. Golden Cross Properties Limited has incorporated an IOM SPV, Metchley Hall Limited, which is dormant.

8.

MAS UK will incorporate an IOM company for each property purchased in the UK and MAS Lux will incorporate a Luxembourg company for each property purchase in Germany and Switzerland.

9.

MAS (BVI) has also incorporated a wholly-owned subsidiary in the IOM under the name of MAS Mezzi Limited.

10. MAS (BVI) has entered into the investment advisory agreement with the investment adviser in order to provide the investment advisory services to the MAS group. 11. Shareholders are referred to the structure of MAS set out in page 21 of the private placement memorandum.

53

54

GBP100

Nil

Nil

Value of EUR100 shares in MAS’ accounts

Amount still to Nil be paid up

Amount of Nil dividends received

* Amounts as at 28 February 2011.

Amount debts Nil owed by MAS

Nil

Nil

GBP100

GBP100

100%

Property holding

25 Athol Street, Douglas, IOM, IM1 1LB

Golden Cross

Nil

Nil

EUR100

EUR100

100%

Short term financing

25 Athol Street, Douglas, IOM, IM1 1LB

MAS Mezzi

Nil

Nil

Nil

€199 848 to MAS €1 196 049 to €1 030 to MAS (BVI) MAS (BVI) & (BVI) €239 010 to MAS (IOM)

GBP100

Issued capital EUR100

Amount of €15 525 628 debts owed to MAS*

100%

IOM holding

25 Athol Street, Douglas, IOM, IM1 1LB

MAS (IOM) Holdings

Proportion of 100% capital held

Field of activity Operations company

Registered Road Town, offi ce Tortola, British Virgin Islands

MAS (BVI) Name Holdings

Nil

€3 733 881 to MAS (BVI)

Nil

Nil

EUR35 000

EUR35 000

100%

Luxembourg holding

58 rue Charles Martel, L-2134 Luxembourg

European Property Holdings

Nil

€3 205 877 to MAS (BVI) & €72 649 to European

Nil

Nil

EUR3 166 334

CHF4 260 000

100%

Property holding

58 rue Charles Martel, L-2134 Luxembourg

Petrusse Capital

Nil

€2 963 416 to MAS (BVI)

Nil

Nil

EUR475 000

EUR475 000

100%

Property holding

58 rue Charles Martel, L-2134 Luxembourg

Inventive Capital

Nil

€72 026 to MAS (BVI)

Nil

Nil

EUR12 500

EUR12 500

100%

Dormant company

58 rue Charles Martel, L-2134 Luxembourg

Egerkingen Capital

Nil

€10 713 to MAS (BVI)

Nil

Nil

EUR12 500

EUR12 500

100%

Dormant company

58 rue Charles Martel, L-2134 Luxembourg

Magliaso Capital

Nil

N/A

Nil

Nil

GBP100

GBP100

100%

Dormant Company

25 Athol Street, Douglas, IOM, IM1 1LB

Metchley Hall Limited

PRIVATE PLACEMENT MEMORANDUM

The table below contains more detailed information in relation to MAS’s subsidiaries as at 31 May 2011:

PRIVATE PLACEMENT MEMORANDUM

Annexure 3

DETAILS OF THE INVESTMENT ADVISER 1.

OVERVIEW OF THE INVESTMENT ADVISER The investment adviser is a company incorporated in accordance with the laws of the IOM and is a wholly owned subsidiary of Exclusive Holdings Limited. The investment adviser has been incorporated specifically to provide investment advisory services to the Company. The investment adviser is not regulated in the IOM or elsewhere. The investment adviser provides investment advisory services to the Company in the terms of an investment advisory agreement. The investment advisory agreement was entered into between the Company MAS (BVI) and the investment adviser. The investment advisory agreement is a long term contract and is terminable on one year’s notice but only after an initial period of fifteen years, except in instances of defined malperformance, in which case the agreement may be terminated earlier. The investment advisory agreement is available for inspection in terms of paragraph 45. The investment adviser performs, inter alia, the following functions: (i) source investment opportunities and present the same to the Group; (ii) conduct due diligence services, investment analysis and assessments in relation to potential or existing investments; (iii) recommend disposal strategies for each investment; (iv) recommend a debt strategy for each investment (if required), including the presentation of a lending term sheet for consideration and approval by the Company; (v) negotiate the finance documents with the lender(s) selected by the Company and MAS (BVI) and (vi) recommend appropriate risk management strategies particularly with regards interest rate and foreign currency hedging strategies. The investment adviser is responsible for all of its ongoing running costs and expenses unless MAS (BVI) agrees to reimburse the investment adviser for certain of its costs. MAS (BVI) has agreed to reimburse the investment adviser for travelling costs incurred in the course of assessing potential investments but only after a letter of intent or similar document has been signed in respect of such potential investments. The investment adviser is not responsible for the costs of the local property managers or any professional third party fees (agents commission, legal fees, independent valuers fees etc) arising from sourcing investments or raising debt funding for the purchase of investments. The business address of the investment adviser is set in the “Corporate Information” section.

2.

KEY STRENGTHS OF THE INVESTMENT ADVISER The key strengths of the investment adviser include: 2.1

Significant depth of experience in the key competency required, namely property investment and active asset management. This is combined with the requisite complimentary skills and experience in the fields of legal, finance, treasury and corporate governance in the markets in which the Company will invest.

2.2

Intimate market knowledge in the markets in which the Company will invest.

2.3

A blend of strong entrepreneurial style of investment that is balanced by a cautious approach embedded through robust corporate governance and accountability.

2.4

Value creation by complementing income returns from quality property selection with cost benefits achieved through optimum property finance and treasury management.

2.5

Privileged access to off-market deal flow arising from well established relationships in the markets in which the Company will invest.

2.6

Key relationships in financing, property and facilities management.

2.7

Transparent basis of management.

2.8

Significant element of manager capital co-investment (joint participation).

55

PRIVATE PLACEMENT MEMORANDUM

3.

INVESTMENT ADVISER FEE Pursuant to the investment advisory agreement, the investment adviser will be paid an amount equal to 1/12 of 1.5% per month of the last previously calculated net asset value (before deduction of that month’s asset management fee and before deduction of any accrued performance fees), payable monthly in arrears. The asset management fee will be deemed to accrue on a daily basis. The net asset value shall be computed semi-annually for purposes of calculating the asset management fee. The investment adviser is also entitled to an annual performance fee from the Company of an amount equal to 20% of the increase in the aggregate net asset value per share in excess of a hurdle benchmark of 10%, subject to a high water mark. The annual performance fee will be calculated on the basis as set out in paragraph 10 below, and the investment adviser’s account will either be credited if a performance fee is due or no payment will be made if no performance fee is attributable. An amount equal to 75% of the performance fee to which the investment adviser is entitled will be paid annually. After the fifth year, any accrued performance fee owing relating to the previous five years shall be paid in full, and a new five year cycle shall begin, with 75% of any accrued performance fee being paid out annually, and the balance at the end of each five year cycle. The performance fee shall be payable in cash and/or shares issued at the current market value of the shares and subject to the terms of the investment advisory agreement. The investment adviser is entitled to a transactional fee for the sourcing and managing of purchase transactions of one per cent (1%) on transaction values of up to and including €50 000 000 (fifty million Euros) and half a per cent (0.5%) on transaction values above €50 000 000 (fifty million Euros). For the avoidance of doubt, it is agreed that to the extent that the total value of any one acquisition exceeds €50 million, the investment adviser will receive a transactional fee of one per cent (1%) on the first €50 million and half a per cent (0.5%) on the transaction value exceeding €50 million. A statement of the basis on which persons will be compensated by the investment adviser for performing those services is set out in this Annexure 3.

4.

DETAILS OF THE DIRECTORS 4.1

The full names, ages, capacities and business address of the directors of Exclusive Holdings Limited and the investment adviser are outlined below: Full name

56

Capacity

Business address

Lukas Nakos*° (Greek)

Age 35

Managing director

25 Athol Street Douglas IOM IM1 1LB

Pierre Francois Goosen*° (South African)

32

Executive director (Corporate & Legal)

25 Athol Street Douglas IOM IM1 1LB

Dewald Lambertus Joubert*° (British)

38

Non-executive director

25 Athol Street Douglas IOM IM1 1LB

Malcolm Howden Levy*° (British)

34

Financial director

25 Athol Street Douglas IOM IM1 1LB

Gideon Johannes Oosthuizen*° (South African)

44

Non-executive director

Mertech Building Glenfield Office Park Oberon Street Faerie Glen South Africa, 0043

Hendrik Jurgens Pfaff* (South African)

45

Non-executive director

Sanlam Head Office 2 Strand Road Bellville South Africa

Robert Roux* (South African)

47

Non-executive director

Sanlam Head Office 2 Strand Road Bellville South Africa

PRIVATE PLACEMENT MEMORANDUM

Full name

Capacity

Business address

Pieter Hendrik Faure*° (South African) (Alternate director)

Age 37

Alternate director

Mertech Building Glenfield Office Park Oberon Street Faerie Glen South Africa, 0043

Louis Lukas Stephanus van der Watt° (South African) (Alternate director)

45

Alternate director

Mertech Building Glenfield Office Park Oberon Street Faerie Glen South Africa, 0043

Benjamin Francois van Niekerk° (South African) (Alternate director)

71

Alternate director

Mertech Building Glenfield Office Park Oberon Street Faerie Glen South Africa, 0043

* Exclusive Holdings Limited appointment ° investment adviser appointment

5.

EXPERIENCE OF DIRECTORS OF EXCLUSIVE HOLDINGS LIMITED AND THE INVESTMENT ADVISER 5.1

Lukas Nakos Refer to paragraph 2.1 of Annexure 1 above.

5.2

Pierre Goosen – (BCom (Law), LLB) Pierre is joint managing director of Argosy Capital, a European based private equity and venture capital investment business. Prior to joining Argosy, Pierre worked at two highly regarded international law firms practising as a commercial, private equity and funds lawyer. Pierre is an admitted attorney in South Africa and solicitor in England and Wales. Pierre is based in the IOM.

5.3

Dewald Joubert – (BCom (Law), LLB) Dewald is joint managing director of Argosy Capital, a European based private equity and venture capital investment business. Formerly a practising lawyer and partner of the Maitland Group and with wide experience in international tax planning and corporate governance, Dewald served on the boards of a number of listed companies and major trading subsidiaries of listed multinational businesses. Dewald is based in the IOM.

5.4

Malcolm Levy Refer to paragraph 2.2 of Annexure 1 above.

5.5

Gideon Oosthuizen Refer to paragraph 2.4 of Annexure 1 above.

5.6

Hendrik Pfaff – (BCom Hons) Hendrik is currently managing director of Sanlam’s International Investment Partners. His investment management career spans over eighteen years with more than six of those years being in the multi-manager field. Hendrik has held positions at Fidelity International (in the UK) and Sanlam Investment Management. Hendrik is a CFA charterholder and a member of the Society of Investment Professionals. Hendrik is based in South Africa.

5.7

Robert Roux – (BAcc, BCompt) Robert is chief operating officer of the Sanlam Investment Cluster and has a wide range of responsibilities which include functional areas such as finance, risk, legal and compliance as well as the operational responsibilities for companies in Namibia and Ireland. Robert is based in South Africa.

5.8

Pieter Faure, Alternate Director – (CA SA) HDip (Intl) Tax) Pieter Faure is the chief executive officer of the Mertech Group, which is the cornerstone investor in the Company. Pieter joined the Mertech Group in 2005 and was appointed to his current position in July 2007. Pieter is a nonexecutive director on the board of a number of Mertech Group companies, including Atterbury Investment Holdings, a substantial property investment company in South Africa which was founded by Francois van Niekerk and Louis van der Watt (refer below). Pieter is also a trustee of the Mergon Foundation, a charitable organisation founded by Francois van Niekerk and funded from the investment proceeds of the Mertech Group. Pieter is a qualified Chartered Accountant with a higher diploma in International Tax. Prior to joining the Mertech Group, Pieter worked for PricewaterhouseCoopers in Johannesburg for seven years, the last three years of which he specialised in international tax. Pieter is based in South Africa.

57

PRIVATE PLACEMENT MEMORANDUM

6.

5.9

Louis van der Watt, Alternate Director – (CA SA)) Louis van der Watt is a highly experienced property developer and investor. Louis is group chief executive officer of Atterbury Investment Holdings and a non-executive director of Attfund Limited, which collectively own significant commercial property interests in South Africa, both as long-term investors and as property developers. Louis is one of the founding directors of the Atterbury Group and he qualified as a Chartered Accountant in 1992. He completed his articles in the management consulting division of Deloitte & Touche and obtained his CIMA qualification shortly afterwards. Louis’ involvement in the investment adviser arises from a long standing relationship with Francois van Niekerk (refer below), which commenced with the establishment of the Atterbury Group in 1994. Since the establishment of the Atterbury Property Group, Louis and Francois have maintained a close and enduring business relationship, including in relation to the interests of the Mertech Group, which is the cornerstone investor in the Company. Louis is based in South Africa.

5.10

Francois van Niekerk, Alternate Director – (BA(Econ), MBL) Francois van Niekerk is chairman of the Mertech Group, Infotech (Pty) Limited, Atterbury Investment Holdings and the Mergon Foundation, a significant charity. Francois is also a director of Attfund Limited (chairman from 2002-2006), Sabinet Online (chairman from 1997-2003), the Atterbury Property Group, and a number of companies in the property and technology sectors. Francois currently serves on the Council of the University of South Africa (UNISA). Francois is a MBL graduate and Barker gold medallist from UNISA Business School (1973) and a finalist for the L&GV business award from the Financial Writers Club, in 1983. Francois’ interest in the investment adviser follows from the fact that the Mertech Group is the cornerstone investor in the Company. Francois is based in South Africa.

DISCLOSURES BY THE INVESTMENT ADVISER 6.1

7.

58

None of the directors of the investment adviser have: 6.1.1

been declared bankrupt, insolvent or have entered into any individual voluntary compromise arrangements;

6.1.2

entered into any receiverships, compulsory liquidations, creditors voluntary liquidations, administrations, company voluntary arrangements or any compromise or arrangement with creditors generally or any class of creditors of any company where such directors are or were directors with an executive function during the preceding twelve months;

6.1.3

entered into any compulsory liquidations, administrations or partnership voluntary arrangements of any partnerships where such directors are or were partners during the preceding twelve months;

6.1.4

entered into any receiverships of any asset(s) or of a partnership where such directors are or were partners during the preceding twelve months;

6.1.5

been publicly criticised by a statutory or regulatory authority, including recognised professional bodies or disqualified by a court from acting as a director of a company or from acting in the management or conduct of the affairs of any company;

6.1.6

been involved in any offence of dishonesty, fraud or embezzlement;

6.1.7

has been removed from an office of trust on the grounds of misconduct involving dishonesty; and/or

6.1.8

has been declared delinquent or placed under probation in terms of section 162 of the South African Companies Act and/or section 47 of the South African Close Corporations Act, 1984 or was disqualified by a Court to act as a director in terms of section 219 of the South African Companies Act.

REMUNERATION OF THE DIRECTORS OF THE INVESTMENT ADVISER 7.1

Save for Lukas Nakos, Malcolm Levy and Gideon Oosthuizen, the directors of the investment adviser are not directors of MAS and therefore do not receive any remuneration from MAS.

7.2

The directors of the investment adviser will not receive any remuneration from MAS as a direct consequence of the private placement.

7.3

Pierre Goosen and Dewald Joubert render legal services to the MAS group for work done in relation to matters of taxation, structuring, corporate governance, corporate finance, including extensive assistance in relation to shareholder communications, regulatory compliance and fundraising. For their work and so long as is justified by circumstances, the MAS group pays an annual retainer equal to £30 000 and £30 000, respectively. The board will review this retainer on an ongoing basis and has the right to terminate this arrangement at any time.

PRIVATE PLACEMENT MEMORANDUM

8.

7.4

Save for the disclosure in paragraph 7.3, MAS has not paid any amounts (whether in cash or in securities), nor given any benefits to any directors of the investment adviser or to any company in which the directors of the investment adviser are beneficially interested, or to any partnership, syndicate or other association of which the directors of the investment adviser are members, or to any director of the investment adviser as an inducement to become a director of MAS or of the investment adviser or otherwise, or for services rendered by the directors of the investment adviser, or otherwise for services rendered by the directors of the investment adviser or by an associate company or associate entity in connection with the promotion or formation of MAS.

7.5

MAS has not paid any other fees or incurred any fees that are payable to a third party in lieu of fees due to the directors of the investment adviser.

INTERESTS OF THE DIRECTORS OF THE INVESTMENT ADVISER IN MAS 8.1

On the last practicable date, the directors of the investment adviser (and their associates), in aggregate, held directly and indirectly approximately 39.66% of MAS’ issued share capital as follows: Director

Direct beneficial

Indirect beneficial

Total

% held

L Nakos

—

51 025

51 025

0.25

P Goosen

1 000

161 252

162 252

0.8

D Joubert

—

323 744

323 744

1.6

10 000

—

10 000

0.5

M Levy G Oosthuizen

—

—

—

—

P Faure (alternate director)

—

323 744

323 744

1.6

F van Niekerk (alternate director)

—

4 970 825

4 970 825

24.64

L van der Watt (alternate director)

—

—

—

—

Notes: Save of 100 shares acquired by L Nakos 27 January 2009, the directors of the investment adviser acquired their shareholding in MAS after 28 February 2009.

9.

8.2

No director of the investment adviser has or had any interest, directly or indirectly, in any transaction which is, or was, material to the business of MAS and which was effected by MAS during the current financial year which remains in any respect outstanding or unperformed.

8.3

Save for being a shareholder of MAS or the investment adviser, no director of the investment adviser has had any material beneficial interest, either direct or indirect, in the promotion of the Company.

8.4

Save for being a shareholder of MAS or the investment adviser, no director of the investment adviser has had any material beneficial interest, either direct or indirect, in any property acquired or to be acquired by MAS.

SHAREHOLDERS OF THE INVESTMENT ADVISER As at the last practicable date, the beneficial shareholders of the investment adviser were as follows: Name of beneficial shareholder

Number of shares

% held

Salt Properties Limited

1 000

33.33

Sanlam Netherlands Holdings B.V.

1 000

33.33

Argosy Capital Limited

550

18.33

Attventure International Limited

450

15

3 000

100

Total

10. CALCULATION OF INVESTMENT ADVISER PERFORMANCE FEE The performance fee payable by MAS to the investment adviser pursuant to the provisions of the investment advisory agreement shall be determined as follows: 10.1

In its general ledger MAS will maintain a performance fee account in respect of the shares.

10.2

At each individual share issue, the base level (“benchmark level”) for determining the benchmark of each share in that issue of shares shall be set at the net proceeds received from the issue divided by the number of shares issued.

10.3

The benchmark level (adjusted to take account of dividends paid) for each share shall increase at a rate of 10% per annum.

10.4

At the end of every accounting period, MAS shall calculate three net asset values, namely:

59

PRIVATE PLACEMENT MEMORANDUM

60

10.5

The “semi-net NAV”. The semi-net NAV shall be the net asset value of the Company prior to the deduction of any performance fee for that period (‘semi’ indicates that prior year performance fees have been deducted from the net asset value, but not the current period’s performance fee).

10.6

The “gross NAV”. The gross NAV shall be the semi-net NAV of the Company with all previously deducted performance fees added back.

10.7

The “net NAV”. The net NAV shall be semi-net NAV less any performance fee accrued for the current period.

10.8

The cumulative outperformance shall be the gross NAV at period end less the benchmark level at that date. The cumulative performance fee shall be the cumulative outperformance multiplied by 20%. The performance fee accrued for the period shall be the excess of the cumulative performance fee as calculated at the end of the current period over the cumulative performance fee at the end of the previous period. Should the cumulative performance fee be lower at the end of the current period than that of the previous or some other period, no performance fee shall accrue.

10.9

The performance fee computation shall adhere to the concept of a high water mark. The high water mark shall start at zero for each issue of shares at the time of issue and shall equal the maximum level of cumulative outperformance over time. Should the cumulative outperformance fall below any previous high water mark, no performance fee will be charged until this high water mark is again exceeded. The result of this is that performance fees cannot be charged twice on the same level of outperformance.

10.10

Subject to paragraph 3 above of the private placement memorandum, no negative performance fee can be accrued/ charged. In other words, if a performance fee is paid in particular period, this is not required to be repaid in a future period if the level of outperformance over the benchmark were to decline in a future period.

10.11

The above computations shall be performed for each tranche of shares issued. The summation of all of these individual computations shall be the aggregate performance.

DPD Property

Metchley Hall

2

3

215 Metchley Lane, Birmingham B17 0NH, UK

Rentable Area

Student Residential

1 704 sq meters

5 699 sq meters

Retail 8 068 sq Warehouse meters

Sector

Mühlebach- Logistics & strasse 8107 Office Buchs, Switzerland

ALDI Portfolio of Retail properties including: Parsberg, Steinmühler Straße 1, Herbolzheim, Seeweg 5, Staufen, Innere Neumatten 5, Kuppenheim, Teilhäckerstraße 1, RottenburgErgenzingen, Tuttlingen, Germany

Street address/ location

100% of RPI

100% of Swiss CPI

1.78% of the original rent per annum (from year six)

Twenty years + 2x fi ve year tenant options on “triple net” terms. Twenty year leases expire in December 2029

Lease expiry dates

University of Birmingham Nomination Agreement

September 2014

DPD Schweiz Fifteen AG years from completion of build (November 2024)

Aldi Sud subsidiary companies

Average rentable Principal escalation leases

* None of the vendors are related parties * The benefi cial shareholders of the vendors are unknown to the Company

ALDI Portfolio

1

Property No. name 1

Effective date of valuation Valuation

15 January 2010

GBP 296.21

CHF 228.81

N/A

0% (single tenant to 2025)

Coyne Birmingham LLP

Omega Liegenschaften AG Kriesbachstrasse 30 8600 Dübendorf

Aldi Immovest GmbH & Co. KG Aldi Immovest GmbH & Co. KG, Burgstraße 37, 45476 Mülheim an der Ruhr

Notes relating to this table appear on page 62.

28 Feb 2011 GBP 2 700 000

28 Feb 2011 CHF 21 750 000

0% (single tenant to 2029)

Weighted average rental by Name and rentable Vacancy address of area (r/m 2) profi le (%) Vendor

1 Dec 2009 28 Feb 2011 €10 060 000 €89.76

GBP4.1 30 June million 2010 (Gross Development cost)

CHF 20 535 433 (subject to final build costs) in cash

€10 463 300

Purchase price

Effective date of acquisition

PRIVATE PLACEMENT MEMORANDUM

Annexure 4

DETAILS OF THE PROPERTY PORTFOLIO

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PRIVATE PLACEMENT MEMORANDUM

Notes relating to the ALDI Portfolio 1. The directors are not aware of any interest of the vendors or any promoter of the Company, direct or indirect, in any transaction relating to the property in the preceding three years. 2. The valuation of the property was undertaken by an independent valuer. 3. The acquisition of the Aldi Portfolio was funded through loan funding and the balance through the capital raised in terms of a private placement. Notes relating to the DPD Property 1. The DPD Property is a newly constructed property. The vendor entered into an agreement with Omega Plan AG for the construction of the property and a long term lease agreement with DPD Scheiz AG, the tenant of the property, which lease agreement was automatically transferred to MAS on transfer of the property. Save for the vendor’s interest in the sale of the property and the construction of same, the directors are not aware of any interest of the vendors or any promoter of the Company, direct or indirect, in any transaction relating to the property in the preceding three years. 2. The valuation of the property has been undertaken by an independent valuer. 3. The acquisition of the DPD property was secured through loan funding and the balance funded through the capital raised in terms of a private placement. Notes relating to Metchley Hall 1. Metchley Hall is an investment property under construction. Gross Development Cost is expected to be GBP4.1 million, and completion is expected in time for the September intake of students in 2011. 2. The valuation of the property has been undertaken by an independent valuer. 3. There is currently no debt relating to Metchley Hall.

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PRIVATE PLACEMENT MEMORANDUM

Annexure 5

MAJOR SHAREHOLDERS AND CAPITAL STRUCTURE 1.

MAJOR SHAREHOLDERS OF MAS On the last practicable date, the following shareholders, other than the directors of the Company, to the best of the directors’ knowledge and belief, are beneficially interested in 10% or more of the issued share capital of MAS, namely the Mergon Foundation, the BNF Trust and Argosy Capital Limited. The Mergon Foundation is a non-profit charitable foundation in South Africa. Its social impact is widespread and includes some of the following: the provision of food, shelter and basic healthcare to the unemployed; education and skills development to the previously disadvantaged; counselling and guidance to the youth of South Africa; and caring for abandoned children and Aids orphans. More information can be found at www.mergon.co.za. The BNF Trust is a trust governed by South African law. The trustees oversee an investment portfolio as fiduciaries on behalf of the family of the founder of the trust, Francois Van Niekerk. Argosy Capital Limited is a privately owned private equity business and is incorporated in accordance with the laws of the British Virgin Islands.

2.

AUTHORISED AND ISSUED SHARE CAPITAL 2.1

Share capital There is no concept of authorised share capital under the IOM Companies Act 2006. The share capital of the Company prior to the private placement is as follows: Share Capital Issued before private placement Ordinary no par value shares

€

20 173 271

The share capital of the Company after the private placement (assuming the private placement is fully subscribed) is as follows: Share Capital Issued after listing Ordinary no par value shares

€

82 689 551

Notes: There is no concept of authorised share capital under the IOM Companies Act 2006. Assuming the private placement consideration is converted from Rand to Euro at an exchange rate of €1: R9.5975.

3.

2.2

The anticipated market capitalisation of MAS after the private placement will be €82 689 551 or approximately R793 612 968 (assuming the private placement is fully subscribed).

2.3

No debentures or debt securities of any kind (including convertible debt securities, exchangeable debt securities or debt securities with warrants attached) have been created or issued by MAS or by the Company’s subsidiaries.

2.4

MAS does not directly or indirectly hold any of its own shares.

2.5

MAS has no loan capital outstanding.

ALTERATIONS TO SHARE CAPITAL [6(a)(ii)] MAS may, by a resolution of directors, alter its share capital in any way and, in particular but without prejudice to the generality of the foregoing increase its capital by the creation of new shares of such amount as the resolution prescribes. The share capital of MAS was increased on 31 July 2009 to 2 199 748 no par value shares of €1.00 each, on 31 August 2009 to 9 309 821 no par value shares of €1.00 each, on 7 April 2010 to 19 388 947 no par value shares of €1.00 each, on 13 January 2011 to 19 762 959 no par value shares of €1.00 each and on 17 June 2011 to 20 173 271 no par value shares of €1.00 each.

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PRIVATE PLACEMENT MEMORANDUM

4.

5.

ISSUES OF SHARES [6(a)(iii); 20] 4.1

On incorporation, MAS issued and allotted 100 shares of no par value to the founding shareholder at €1.00 per share. On 27 January 2009 the founding shareholder transferred its entire holding in MAS to L Nakos at €1.00 per share.

4.2

After the increase in share capital as set out in paragraph 3, there were 19 388 947 ordinary shares of no par value in issue.

4.3

Since incorporation the Company issued 2 199 648 shares, to selected institutions, high net worth individuals and business associates, at €1.00 per share, on 31 July 2009, in terms of a private placement in Europe and the IOM and 7 110 073 shares, to selected institutions, high net worth individuals and business associates, at €1.00 per share, on 31 August 2009, in terms of a private placement in South Africa. On 7 April 2010 the Company issued 10 079 126 shares, to selected institutions, high net worth individuals and business associates, at €1.00 per share, in terms of a private placement in Europe, the IOM and South Africa.

4.4

Following the issue of 10 000 shares to Ron Spencer, as part payment of the directors fee due to him, on 29 November 2010, and the issue of 774 324 shares as scrip dividend in payment of the interim and the final dividends (of which a total of Euro 4.15 cents per share was declared for the year ended 28 February 2011), there are 20 173 271 shares in issue as at the last practicable date.

4.5

The shares were issued in order to raise funds for working capital purposes and to fund acquisitions by the Company.

4.6

The subsidiaries have not issued any securities since their incorporation, save for shares issued to MAS on incorporation.

4.7

The private placement was authorised by the directors of MAS by resolution on 13 July 2011. The directors of MAS shall, shortly after the closing date of the private placement, issue the appropriate number of shares, by resolution.

4.8

Save for the issues as set out in this paragraph 4, no further offers or issues of shares have been made by MAS.

4.9

Since incorporation no share repurchases, sub-divisions or consolidations have been undertaken by MAS.

UNISSUED SHARES Subject to the provisions of the articles of association of MAS the Lux Listings Requirements and the JSE Listings Requirements, the directors may issue and allot shares in their absolute discretion.

6.

7.

VOTING, VARIATION AND CONVERSION OF RIGHTS [8(c)] 6.1

The provisions of the articles of association of MAS relating to the voting rights, rights to dividends, rights to capital on liquidation, rights on distribution of capital assets and variation of rights attaching to shares in the share capital of MAS are set out in Annexure 6. MAS will publish financial notices concerning matters such as dividends, rights issues, capital increases on the website of the LuxSE and on SENS.

6.2

There are currently no preferential conversion or exchange rights to shares in MAS.

OPTIONS AND PREFERENTIAL RIGHTS IN RESPECT OF SHARES The Company has agreed to provide up to 5% of its share capital from time to time for purchase by, or on behalf of, key personnel of both the Company and the investment adviser (excluding beneficial shareholders in Exclusive Holdings Limited) in order to incentivise key personnel of both the Company and the investment adviser. The purpose of the scheme is to align the interests of such key personnel with those of the shareholders of the Company. As at the last practicable date no shares have been awarded or issued to participants in terms of the scheme. The salient terms of the share incentive scheme are set out below:

64

7.1

The Company will make available loans to allow shares to be purchased by or on behalf of participants in the scheme, the repayment of which loans can be made in part out of the dividends payable on the shares, thus allowing the participants to benefit from the income and capital growth of the Company from the time of issue of the shares.

7.2

The total number of shares held within or available under the scheme will be approximately 5% of the total number of shares in issue.

7.3

The number of shares to be offered to or for the benefit of particular participants under the scheme will be decided by the board in consultation with the board of the investment adviser.

PRIVATE PLACEMENT MEMORANDUM

7.4

The Company will offer to or for the benefit of each participant the immediate right to subscribe for the relevant number of shares at the then market value of the shares together with a loan to allow the shares to be purchased by or on behalf of such participant.

7.5

Each loan shall carry interest at the ECB base rate plus 2% calculated and compounded on a monthly basis and paid annually. The ECB base rate on the first day of every month is the relevant rate for each monthly compounding period. Each loan shall be repaid in full together with interest five years after its relevant subscription date, but can be repaid earlier.

7.6

The Company shall have a pledge, lien or other security interest over the shares held in the scheme by or on behalf of a participant. This security interest will secure the repayment of all principal and interest in respect of any loan made by the Company to or for the benefit of that participant under the scheme (whether such principal or interest relates to a loan to purchase those particular shares or not). To the extent that any loan and/or interest is not repaid in full on its due date the Company will enforce its security interest over such number of shares held by or for the benefit of the relevant participant under the scheme as is necessary to compensate the Company in full for any such unpaid amounts plus costs (using for these purposes the lower of the subscription price of the relevant shares and their then market value) and shall at its discretion either sell such shares and retain the proceeds or cancel them. The Company’s recourse against the participant in such circumstances, however, shall not extend beyond the shares over which the Company has a security interest.

7.7

Appropriate provisions will apply where a participant leaves the scheme, the Company or the investment adviser.

Save for as set out above, there is no other contract or arrangement, either actual or proposed, whereby any option or preferential right of any kind has been or will be given to any person to subscribe for any shares in the Company or the subsidiary.

8.

SHARES ISSUED OTHER THAN FOR CASH [11] Since incorporation, no shares have been issued or agreed to be issued by the Company or its subsidiaries other than for cash.

9.

CLEARING AND SETTLEMENT ON THE LUXSE The MAS shares have been accepted for clearance and settlement in the Clearstream system with ISIN: IM00B4LFGH00 and with Common Code 043775413.

10. SHARE PRICE HISTORY The MAS plc share has had limited trade volume since listing. On the Euro-MTF market, the stock initially quoted at the exchange rate implied equivalent price of the bid and offers on the Alt X. Once the share traded at a price of €1 on the Euro-MTF market, it has remained at this price. On the Alt X, the share price history has been somewhat more volatile, with trades ranging from ZAR8.80 to ZAR11.45. However, much of this volatility reflects currency fluctuations between the Euro and South African Rand.

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PRIVATE PLACEMENT MEMORANDUM

Annexure 6

SALIENT FEATURES OF THE ARTICLES OF ASSOCIATION OF THE COMPANY AND ITS SUBSIDIARIES The following paragraphs are extracted from the articles of association of MAS. Shareholders and potential investors should take note that the extract paragraphs set out below have been placed in numerical order for ease of reading but that the below paragraph numbers do not correspond to the paragraph numbers in the articles of association of MAS:

1.

SHARE CAPITAL The share capital of the Company at the date of adoption of these Articles is one hundred no par value ordinary shares denominated in Euro.

2.

PROVISIONS RELATING TO SHARES 2.1

Subject to the provisions of Article 6.12, shares may be issued and options to acquire shares may be granted at such times, to such persons, for such consideration and on such terms as the directors may determine.

2.2

A share may be issued with or without a par value. A share with a par value may be issued in any currency. The par value of a share with a par value may be a fraction of the smallest denomination of the currency in which it is issued.

2.3

Shares may be numbered or unnumbered.

2.4

The Company may issue bonus shares and nil or partly paid shares.

2.5

A share may be issued for consideration in any form, including money, a promissory note or other written obligation to contribute money or property, real property, personal property (including goodwill and know-how), services rendered or a contract for future services provided that no shares may be issued for a consideration other than money, unless the directors have passed a resolution stating:

2.6

66

2.5.1

the amount to be credited for the issue of the shares;

2.5.2

their determination of the reasonable present cash value of the non-money consideration for the issue; and

2.5.3

that, in their opinion, the present cash value of the non-money consideration for the issue is not less than the amount to be credited for the issue of the shares.

The Company shall keep a register of shareholders containing: 2.6.1

the name and business or residential address of each of the shareholders provided that if the register does not contain a shareholder’s residential address the registered agent shall maintain a separate record of such address;

2.6.2

the number of shares of each class held by each shareholder, in uncertificated and certificated form respectively;

2.6.3

the date on which the name of each shareholder was entered in the register of shareholders; and

2.6.4

the date on which any person ceased to be a shareholder.

2.7

The register of shareholders may be in any such form as the directors may approve but, if it is in magnetic, electronic or other data storage form, the Company must be able to produce legible evidence of its contents.

2.8

A share is deemed to be issued when the name of the shareholder is entered in the register of shareholders.

2.9

The Company may pay commission at such rates or in such amounts, but not exceeding 10%, as the directors may determine to any person in consideration of such persons subscribing or agreeing to subscribe, whether absolutely or conditionally for any shares in the Company, or procuring or agreeing to procure subscriptions, whether absolute or conditional, for any shares in the Company.

PRIVATE PLACEMENT MEMORANDUM

2.10

Subject to any rights or restrictions attached to any shares, each share confers upon the shareholder: 2.10.1

the right to one vote at a meeting of shareholders or on any resolution of shareholders;

2.10.2

the right to an equal share in any dividend paid by the Company; and

2.10.3

the right to an equal share in the distribution of the surplus assets of the Company on its winding up.

2.11

The Company may issue shares of different classes.

2.12

Pre-emption Rights on Allotment: 2.12.1

2.12.2

2.13

Subject to Article 6.12.2, and unless the Company shall by a resolution consented to by a shareholder or shareholders holding at least seventy five per cent of the Voting Rights in relation thereto otherwise direct, unissued shares in the capital of the Company shall only be allotted for cash in accordance with the provisions of this Article: 2.12.1.1

all shares to be allotted (the “offer shares”) shall first be offered to the shareholders of the Company who the directors determine can be offered such offer shares without the Company incurring securities compliance costs which, in the opinion of the directors, would be burdensome given the number of shareholders in the relevant jurisdiction in relation to which such compliance costs would be incurred (the “relevant shareholders”);

2.12.1.2

the offer to relevant shareholders pursuant to Article 6.12.1(a) (the “offer”) shall be made in proportion to the existing holdings of shares of relevant shareholders;

2.12.1.3

the offer shall be made by written notice (the “offer notice”) from the directors specifying the number and price of the offer shares and shall invite each relevant shareholder to state in writing a period, not being less than fourteen days, whether they are willing to accept any offer shares and, if so, the maximum number of offer shares they are willing to take;

2.12.1.4

at the expiration of the time specified for acceptance in the offer notice the directors shall allocate the offer shares to or amongst the relevant shareholders who shall have notified to the Company their willingness to take any of the offer shares but so that no relevant shareholder shall be obliged to take more than the maximum number of shares notified by him under Article 6.12.1(c); and

2.12.1.5

if any offer shares remain unallocated after the offer, the directors shall be entitled to allot, grant options over or otherwise dispose of those shares to such persons on such terms and in such manner as they think fit save that those shares shall not be disposed of on terms which are more favourable to their subscribers than the terms on which they were offered to the relevant shareholders.

The provisions of Article 6.12.1 shall not, for the avoidance of doubt, apply to: 2.12.2.1

the allotment of any share for a consideration other than cash, and, accordingly, the directors may allot or otherwise dispose of any unissued shares in the capital of the Company for a consideration other than cash to such persons at such times and generally on such terms as they may think fit, provided that the directors shall not in any twelve month period issue shares for a consideration other than cash numbering in excess of thirty per cent of the number of shares in the Company’s enlarged share capital without the approval of a resolution of shareholders;

2.12.2.2

the allotment of shares pursuant to, or in connection with, any employee share scheme (which includes, for these purposes, a scheme established for directors, officers and/or employees of the Company’s investment adviser);

2.12.2.3

the allotment of shares for consideration in cash in an aggregate nominal number not exceeding fifteen per cent of the Company’s total nominal issued share capital and such disapplication to apply until 28 February 2012.

At the end of each Financial Year, prior to the payment of any performance fees to the investment adviser (if the Company uses the services of an investment adviser), the directors may establish whether shareholders who subscribed for shares at a different point in time than any other shareholders (the “Disadvantaged shareholders”) were adversely disproportionately affected by the recoupment of performance fees paid to the investment adviser or by the payment of performance fees to the investment adviser. The directors shall, in their discretion, make a determination of the amount by which the Disadvantaged shareholders have been so prejudiced (the “Adjustment Amount”) and determine an equitable basis and methodology to effect shareholder equalisation.

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PRIVATE PLACEMENT MEMORANDUM

3.

4.

2.14

Except as otherwise expressly provided by these Articles, as required by law or as ordered by a court of competent jurisdiction, the Company shall not recognise any person as holding any share on any trust and (except as aforesaid) the Company shall not be bound by or recognise (even if having notice of it) any equitable, contingent, future, partial or other claim to or interest in any share or any interest in any fractional part of a share except an absolute right of the holder to the whole of the share.

2.15

If on any consolidation (or any consolidation and division) of shares any shareholders would become entitled to any fractions of a share, the directors may deal with the fractions in any manner they think fit. In particular, the directors may, subject to the Act and these Articles, sell all or any of such fractions and distribute the net proceeds thereof among the shareholders entitled to such fractions in due proportion. In giving effect to any such sales, the directors may, subject to the Act and these Articles, authorise some person to transfer the shares sold to the purchaser thereof and the purchaser shall be registered as the holder of the shares comprised in any such transfer and shall not be bound to see to the application of the purchase money, nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings relating to the sale.

VARIATION OF CLASS RIGHTS 3.1

Subject to the provisions of the Act, if at any time there are different classes of shares, the rights attached to any class (and whether or not the Company is being wound up) may (unless otherwise provided by the terms of issue of the shares of that class) be varied or abrogated in such manner (if any) as is provided by those rights, or by a resolution of the shareholders of that class passed at a separate meeting by a shareholder or shareholders holding at least seventy five per cent of the Voting Rights exercised in relation thereto.

3.2

To every such separate meeting, the provisions of these Articles relating to meetings of the Company shall, mutatis mutandis, apply but so that: at every such separate meeting, the quorum shall be two persons holding or representing by proxy at least one third of the issued shares of the class, provided that, if at any adjourned meeting of the holders of any class a quorum as so defined is not present, those holders who are present in person or by proxy shall form a quorum;

3.2.2

any holder of shares of the class in question present in person or by proxy may demand a poll; and

3.2.3

each holder of the shares of the class shall, on a poll, have one vote in respect of every share of the class held by him.

3.3

This Article shall apply to the variation or abrogation of the special rights attached to some only of the shares of any class as if each group of shares of the class differently treated formed a separate class, the special rights of which were to be varied or abrogated.

3.4

For the avoidance of doubt, the provisions of these Articles relating to meetings of the Company shall apply, with necessary modifications, to any separate meeting of the holders of shares of a class held otherwise than in connection with the variation or abrogation of the rights attached to shares of that class.

3.5

Subject to the terms of issue or the rights attached to any shares the rights or privileges attached to any class of shares shall be deemed not to be varied or abrogated by the directors resolving that a class of shares is to become or cease to be a Participating Security.

3.6

The rights attached to any class of shares shall not (unless otherwise provided by the rights attached to the shares of that class) be deemed to be varied by the creation or issue of further shares ranking in all respects (save as to the date from which such new shares shall rank for dividend) pari passu therewith or by the purchase or redemption by the Company of any of its own shares in accordance with the provisions of the Act and these Articles.

CONSENT AND VOTING OF SHAREHOLDERS 4.1

4.2

68

3.2.1

Unless otherwise specified in the Act or in the Memorandum or Articles, the exercise by the shareholders or a class of shareholders of a power which is given to them under the Act or the Memorandum or Articles shall be by: 4.1.1

a resolution passed at a meeting of the shareholders or class of shareholders; or

4.1.2

a resolution consented to in writing by the shareholders or class of shareholders.

Subject to any requirement for a higher majority specified in the Act or in the Memorandum or Articles, a resolution of shareholders or a class of shareholders is passed at a meeting of such shareholders if it is approved by a shareholder or shareholders holding a majority of in excess of fifty per cent of the Voting Rights exercised in relation thereto.

PRIVATE PLACEMENT MEMORANDUM

4.3

At any meeting a resolution put to a vote of the meeting shall be decided on a show of hands unless a poll is (on or before the declaration of the result of the show of hands) directed by the chairman or demanded by: 4.3.1

at least three shareholders present in person or by proxy and entitled to vote;

4.3.2

one or more shareholders present in person or by proxy representing not less than one-tenth of the Voting Rights having the right to vote at the meeting; or

4.3.3

one or more shareholders present in person or by proxy holding shares conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less one-tenth of the total sum paid up on all the shares conferring that right

subject thereto that a demand for poll may be withdrawn with the consent of the chairman, and in the event that such demand is withdrawn following a show of hands on the resolution in question, the result of the show of hands shall remain valid. 4.4

At any shareholders’ meeting, the chairman is responsible for deciding in such manner as the chairman considers appropriate whether any resolution proposed has been carried or not and the result of such decision shall be announced to the meeting and recorded in the minutes of the meeting, and shall be conclusive evidence thereof, without proof of the number or proportion of the votes recorded in favour of or against such resolution.

4.5

No objection shall be raised to the qualification of any voter or to the counting of or failure to count any vote except at the meeting or adjourned meeting at which the vote objected to is given or tendered or at which the error occurs. Any objection or error shall be referred to the chairman of the meeting and shall only vitiate the decision of the meeting on any resolution if the chairman decides that it is of sufficient magnitude to vitiate the resolution or may otherwise have affected the decision of the meeting. The decision of the chairman on such matter shall be final and conclusive.

4.6

If an amendment shall be proposed to any resolution under consideration but shall in good faith be ruled out of order by the chairman, the proceedings on the substantive resolution shall not be invalidated by any error in such ruling. In the case of a resolution duly proposed as a resolution requiring the approval of a shareholder or shareholders holding at least seventy five per cent of the Voting Rights exercised in relation thereto, no amendment thereto (other than an amendment to correct a patent error) may in any event be considered or voted upon.

4.7

Procedures on a poll 4.7.1 If a poll is duly directed or demanded it may be taken immediately or, subject to the provisions of Article 19.7.2, at such other time (but being more than thirty days’ after such direction or demand) and place and in such manner as the chairman may direct, and the result of such poll shall be deemed to be the resolution of the meeting at which the poll was directed or demanded. Provided that the time and place at which the poll is to occur is declared by the chairman at the meeting at which the poll is directed or demanded, no notice need be given of a poll not taken immediately.

4.8

4.7.2

A poll duly demanded on the election of a chairman if a meeting or on any question of adjournment shall be taken forthwith. Any business other than upon which a poll has been demanded may be proceeded with, pending the taking of the poll.

4.7.3

On a poll votes may be given in person or by proxy. A shareholder entitled to more than one vote need not, if he votes, use all his votes or cast all the votes he uses in the same way.

Votes of shareholders 4.8.1 Subject to any special terms as to voting on which any share may have been issued with or may for the time being be held, upon a show of hands every shareholder who (being an individual) is present in person or by proxy shall on a show of hands have one vote and on a poll every shareholder present in person or by proxy shall have one vote for each share of which it is the holder. 4.8.2

A shareholder incapable by reason of mental disorder or otherwise of managing and administering his property and affairs may vote, whether on a show of hands or on a poll, by his receiver or other person appointed by any court of competent jurisdiction to act on his behalf and any such person may, on a poll, vote by proxy provided that such evidence as the directors may require of the authority of the person claiming to vote shall have been delivered to the registered office or to such other place and by such means as is specified in accordance with these Articles for the delivery of the appointment of a proxy, not less than forty-eight hours before the time of holding the meeting or adjourned meeting at which such person claims to vote.

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PRIVATE PLACEMENT MEMORANDUM

4.9

5.

70

4.8.3

Any shareholder which is a body corporate may, by resolution of its directors or other governing body, authorise such individual as it thinks fit to act as its representative at any meeting of shareholders or class of shareholders, and the individual so authorised shall be entitled to exercise the same rights on behalf of the shareholder which the individual represents as that shareholder could exercise if it were an individual. The chairman of the meeting at which a vote is cast on behalf of any shareholder which is a body corporate may call for such evidence of authority of the representative to exercise the rights of the shareholder as the chairman may reasonably require.

4.8.4

In the case of an equality of votes, whether by show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll was demanded shall be entitled to a second or casting vote in addition to any other vote that he may have.

4.8.5

No shareholder shall, unless the board otherwise determines, be entitled to vote at any meeting of shareholders or class of shareholders unless all calls or other sums presently payable by him in respect of the shares held by him in the Company have been paid.

Any action that may be taken by the shareholders or a class of shareholders at a meeting may also be taken by a resolution consented to in writing, by a shareholder or shareholders or the member or members of a class of shareholders holding in excess of fifty per cent of the Voting Rights in relation thereto (subject to any requirement specified in the Act or the Articles for a resolution to be passed by a particular majority) provided that a copy of the proposed resolution is sent to all of the persons entitled to consent to it. The consent may be in the form of counterparts, each counterpart being signed by one or more shareholders or by one or more members of the class of shareholders. If the consent is in one or more counterparts, and the counterparts bear different dates, then the resolution shall take effect on the earliest date upon which shareholders or members of the class of shareholders holding a sufficient number of votes to constitute a resolution of shareholders or the class of shareholders have consented to the resolution by signed counterparts. If any written resolution of the shareholders or the class of shareholders is adopted otherwise than by the unanimous written consent of all shareholders or all members of the class of shareholders, a copy of such resolution shall be sent to all shareholders or all the members of the class of shareholders not consenting to such resolution forthwith upon it taking effect.

DIRECTORS 5.1

The directors may be appointed by a resolution of shareholders or by a resolution of directors.

5.2

The minimum number of directors shall be four and there shall be no maximum number.

5.3

Each director holds office for the term, if any, fixed by the resolution of shareholders or the resolution of directors appointing such person, or until such person’s earlier death, resignation, retirement through rotation, removal or until such person is no longer permitted to act as a director under section 93 of the Act.

5.4

A director may be removed from office by: 5.4.1

a resolution passed at a meeting of shareholders called for the purpose of removing the director or for purposes including the removal of the director or by a written resolution consented to by a shareholder or shareholders holding at least seventy five per cent of the Voting Rights in relation thereto; or

5.4.2

a resolution of directors.

5.5

A director may resign his or her office by giving written notice of resignation to the Company and the resignation has effect from the date the notice is received by the Company or from such later date as may be specified in the notice.

5.6

Within fourteen days of the end of every Financial Year at a meeting of directors, or at a meeting of shareholders called for such purpose, one third of the directors who are subject to retirement by rotation or, if their number is not three or a multiple of three, the number nearest to but not exceeding one third shall retire from office by rotation provided that if there is only one director who is subject to retirement by rotation, he shall retire.

5.7

The directors to retire by rotation shall include (so far as is necessary to obtain the number required) any director who wishes to retire and not offer himself for re-election. Any further directors so to retire shall (subject as aforesaid) be those of the other directors subject to retirement by rotation who have been longest in office since their last appointment or re-appointment, but, as between persons who became or were last re-appointed directors on the same day, those to retire shall (unless otherwise agreed amongst themselves) be determined by lot. A director who retires (whether by rotation or otherwise) shall be eligible for re-election and may, if willing to act, be re-appointed. The directors to retire on each occasion (both as to numbers and identity) shall be determined by the composition of the directors at the end of every Financial Year and no director shall be required to retire or be relived from retiring or be retired by reason of any change in the number or identity of the directors after such date.

PRIVATE PLACEMENT MEMORANDUM

6.

5.8

If the board, or the Company as the case may be, at the meeting at which a director retires by rotation, does not fill the vacancy created by his retirement, the retiring director shall, if willing to act, be deemed to have been re-appointed unless at the meeting it is expressly resolved not to fill the vacancy or unless a resolution for the reappointment of the director is put to the meeting and lost or if the retiring director has given notice in writing to the Company that he is unwilling to be re-elected.

5.9

The retirement of any director retiring at a meeting in accordance with this Article shall not have effect until the conclusion of the meeting except where a resolution is passed to elect some other person in the place of the retiring director or a resolution for his re-election is put to the meeting and lost in which case the retirement shall take effect at the time of election of his replacement or the time of the losing of that resolution as the case may be. A retiring director who is re-elected or deemed to have been re-elected will continue in office without a break.

5.10

The Company shall keep a register of directors containing: 5.10.1

the names and business or residential address of the persons who are directors provided that if the register does not contain the residential address of a director, the registered agent of the Company shall maintain a separate record of such address;

5.10.2

the date on which each person whose name is entered in the register was appointed as a director; and

5.10.3

the date on which each person named as a director ceased to be a director of the Company.

5.11

The register of directors may be kept in any such form as the directors may approve, but if it is in magnetic, electronic or other data storage form, the Company must be able to produce legible evidence of its contents.

5.12

The board may, by resolution of directors, fix the emoluments of directors with respect to services to be rendered in any capacity to the Company. If by arrangement with the board a director shall perform or render any special duties or services outside his ordinary duties as a director and not in his capacity as a holder of employment or executive office, he may be paid such reasonable additional remuneration as the board may from time to time determine.

5.13

The board may, by resolution of directors, pay the directors all expenses properly incurred by the directors in the discharge of their duties.

5.14

The board may exercise all the powers of the Company to provide pensions or other retirement or superannuation benefits and to provide death or disability or other allowances or gratuities (whether by insurance or otherwise) for or to institute and maintain any institution, association, society, club, trust, other establishment or profit sharing, share incentive, share purchase or employee’s share scheme calculated to advance the interests of the Company or to benefit any person who is or has at any time been a director of the Company or any company which is a subsidiary company of or allied to or associated with the Company or any such subsidiary or any predecessor in business of the Company or of any subsidiary and for any member of his family and any person who is or was dependant on him. The board may procure any of such matters be done by the Company either alone or in conjunction with any other person. Any director or former director shall be entitled to receive and retain for his own benefit any pension or other benefit provided under this Article and shall not be obliged to account for it to the Company.

5.15

A director is not required to hold a share as a qualification to office.

POWERS OF DIRECTORS 6.1

The business and affairs of the Company shall be managed by, or under the direction or supervision of the directors. The directors have all the powers necessary for managing, and for directing and supervising, the business and affairs of the Company. The directors may exercise all such powers of the Company other than those required by the Act or by the Memorandum or the Articles to be exercised by the shareholders. No alteration of the Memorandum or the Articles and no such direction given by the Company shall invalidate any prior act of the board which would have been valid if such alteration had not been made or such direction had not been given. Provisions contained elsewhere in these Articles as to any specific power of the board shall not be deemed to limit the general powers given by this Article.

6.2

If the number of directors is less than the minimum for the time being prescribed by these Articles the remaining director(s) shall act only for the purposes of appointing an additional director(s) to make up such minimum or of convening a meeting of the shareholders for the purpose of making such appointment. If there are no directors able or willing to act, any two shareholders may summon a meeting for the purpose of appointing directors.

6.3

The board may from time to time delegate or entrust to and confer on any director holding executive office (including a Managing director) such of its powers, authorities and discretion (with power to sub-delegate) for such time on such terms and subject to such conditions as it thinks fit; and revoke, withdraw, alter or vary all or any such powers.

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7.

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6.4

Each director shall exercise that person’s powers as director for a proper purpose and shall not act or agree to the Company acting in a manner that contravenes the Act, the Memorandum or the Articles. Each director, in exercising powers or performing duties as director, shall act honestly and in good faith in what the director believes to be the best interests of the Company.

6.5

Any director which is a body corporate may appoint any individual as its duly appointed representative for the purpose of representing it at meetings of the directors, of any committee of directors or of shareholders and with respect to the signing of consent or otherwise.

6.6

Subject to Article 24.2, the continuing directors may act notwithstanding any vacancy in the board.

6.7

The directors may exercise all the powers of the Company to incur indebtedness, liabilities or obligations and to secure indebtedness, liabilities or obligations whether of the Company or of any third party.

6.8

All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by the directors.

6.9

Any written contract, deed, instrument, power of attorney or other document may be made or executed on behalf of the Company by any person (including any director) acting with the authority of the directors.

PROCEEDINGS OF DIRECTORS 7.1

Unless otherwise specified in the Act or in the Memorandum or Articles, the exercise by the directors of a power given to them under the Act or the Memorandum or Articles shall be by a resolution passed at a meeting of, or consented to in writing by, the directors or any committee of the directors.

7.2

Subject to any contrary provision in the Memorandum or Articles, a resolution of directors is passed at a meeting of the directors if it is approved by a majority of the directors who are present at such meeting and (being entitled to do so) vote thereon, subject thereto that the Independent Non-Executive directors will have a veto right if they are unanimous to any proposed decision. This veto right shall not exist where the Independent Non-Executive directors make up the majority of the board.

7.3

Subject to the provisions of the Articles, the directors may regulate their proceedings as they see fit.

7.4

Any one director may call a meeting of the directors by sending a written notice to each other director.

7.5

A director shall be given reasonable notice of meetings of directors save that any director may waive this requirement to be given notice either before or after such meeting.

7.6

The directors or any committee of directors may meet at such times and in such manner and places within or outside the IOM as the directors or any committee of the directors may determine to be necessary or desirable.

7.7

A director is deemed to be present at a meeting of the directors or at a meeting of any committee of directors if such director participates by telephone, electronic mail or other electronic means and all directors participating in the meeting are able to communicate with each other.

7.8

A director may by a written instrument appoint an alternate who need not be a director and the alternate shall be entitled to attend meetings of the directors or any committee of directors (as appropriate) in the absence of the director who appointed such alternate and to vote or consent in the place of the director until the appointment lapses or is terminated.

7.9

A meeting of the directors is duly constituted and quorate for all purposes if at the commencement of the meeting there are two directors present either in person (in the case of a director who is an individual) or by a duly appointed representative (in the case of a corporate director) or by an alternate (in either case). A person who holds office only as an alternate director shall only be counted in the quorum if his appointed is not present. A director or other person who is present at a meeting of the directors in more than one capacity (that is to say as both director and an alternate director or as an alternate for more than one director) shall not be counted as two or more for these purposes unless at least one other director or alternate director is also present. Any director who ceases to be a director at a meeting of the directors may continue to be present and to act as a director and be counted in the quorum until the termination of the meeting of the directors if no director objects and if otherwise a quorum of directors would not be present.

PRIVATE PLACEMENT MEMORANDUM

8.

7.10

The board shall appoint one or more of the Independent Non-Executive directors as chairman, joint chairman or Deputy chairman of the board and shall determine the period for which he is or they are to hold office and may at any time remove him or them from office. If no such chairman or Deputy chairman is elected or if at any meeting neither a chairman nor a Deputy chairman is present within five minutes of the time appointed for holding it, the directors present shall choose one of their number to be chairman of such meeting. In the event of two or more joint chairman or in the absence of a chairman, two or more joint Deputy chairman being present, the joint chairman or Deputy chairman to act as chairman of the meeting shall be decided by those directors present.

7.11

The board may appoint one or more of their number to any office or employment under the Company (including, but without limitation, that of Chief Executive, Managing director or joint Managing director, assistant Managing director or manager or any other salaried office for such period and on such terms as they think fit but not including auditor), and may enter into an agreement or arrangement with any director for his employment by the Company or for the provision by him of any services outside the scope of the ordinary duties. Without prejudice to any claim a director may have for damages for breach of any contract of service between him and the Company, the appointment of any director under this Article shall be subject to determination if he ceases from any cause to be a director or (subject to the terms of any contract between him and the Company) if the directors resolve that his term of office as an executive director be determined. Any such appointment, agreement or arrangement may be made for such period and upon such terms as the board may determine.

7.12

Any action that may be taken by the directors or a committee of directors at a meeting may also be taken by a resolution of directors or a committee of directors consented to in writing by a majority of the directors or by a majority of the members of a committee of directors provided that a copy of the proposed resolution is sent to all of the persons entitled to consent to it. The consent may be in the form of counterparts, each counterpart being signed by one or more directors or by one or more members of the committee of directors. If the consent is in one or more counterparts, and the counterparts bear different dates, then the resolution shall take effect on the earliest date upon which a majority of the directors or members of the committee of directors has consented to the resolution by signed counterparts. If any written resolution of directors or committee of directors is adopted otherwise than by the unanimous written consent of all directors or all members of the committee of directors, a copy of such resolution shall be sent to all directors or members of the committee of directors not consenting to such resolution forthwith upon it taking effect.

7.13

All acts done by any meeting of the directors or of a committee of directors, or by any persons acting as directors or alternate directors, shall as regards all persons dealing in good faith with the Company, notwithstanding that it is afterwards discovered that there was some defect in the appointment of any such directors or persons acting as aforesaid, or that they or any of them were disqualified or had vacated office or were not entitled to vote, be as valid as if every such person had been duly appointed and was qualified to be a director of the Company and had continued to be a director or alternate director and had been entitled to vote.

COMMITTEES 8.1

Subject to Article 26.3, the directors may delegate one or more of their powers, authorities and discretion, including the power to affix the Seal, to a committee consisting of one or more directors and (if thought fit) one or more persons provided that: 8.1.1

a majority of the members of a committee shall be directors or alternate directors;

8.1.2

no resolution of a committee shall be effective unless a majority of those present when it is passed are directors or alternate directors.

8.2

Any such delegation may be made subject to any conditions the directors may impose, may be made collaterally with, or to the exclusion of, their own powers and may be revoked or altered.

8.3

The directors have no power to delegate to a committee of directors any of the following powers: 8.3.1

to amend the Memorandum or the Articles;

8.3.2

to change the registered office or registered agent;

8.3.3

to designate committees of directors;

8.3.4

to delegate powers to a committee of directors;

8.3.5

to appoint or remove directors;

8.3.6

to appoint or remove an agent to act on behalf of the Company;

8.3.7

to fix emoluments of directors;

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PRIVATE PLACEMENT MEMORANDUM

9.

8.3.8

to approve a scheme of merger, consolidation or arrangement;

8.3.9

to make a declaration of solvency;

8.3.10

to make a determination that, immediately after a proposed Distribution, the Company satisfies the Solvency Test; or

8.3.11

to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the IOM.

8.4

Articles 26.3.3 and 26.3.4 do not prevent a committee of directors, where authorised by the directors, from appointing such committee or, by a subsequent resolution of directors, from appointing a sub-committee and delegating powers exercisable by the committee to the sub-committee.

8.5

The meetings and proceedings of each committee of directors shall be governed mutatis mutandis by the provisions of the Articles regulating the proceedings of meeting of directors so far as they are not superseded by any provisions in the resolution of directors establishing the committee.

DISTRIBUTIONS 9.1

The directors may authorise a Distribution by the Company to shareholders at such time and of such amount as they think fit if they are satisfied, on reasonable grounds, that the Company will, immediately after the Distribution, satisfy the Solvency Test.

9.2

Where a Distribution has been made to a shareholder and the Company did not, immediately after the Distribution, satisfy the Solvency Test, the Distribution (or the value thereof) may be recovered by the Company from the shareholder in accordance with section 51 of the Act.

9.3

If several persons are registered as joint holders of any shares, any one such person may give an effective receipt for any Distribution.

10. DISTRIBUTIONS BY WAY OF DIVIDEND

74

10.1

The Company may, by a resolution of directors, declare and pay a Distribution by way of dividend or interim dividend at such time and of such amount as the directors think fit if the directors are satisfied, on reasonable grounds, that the Company will, immediately after the Distribution, satisfy the Solvency Test.

10.2

Dividends may be paid in money, shares, or other property and where any difficulty arises concerning such distribution, the board may settle it as the board thinks expedient and in particular may issue fractional certificates or, subject to the Act and, in the case of shares held in uncertificated form, the Uncertificated System’s rules, authorise and instruct any person to sell and transfer any fractions or may ignore fractions altogether, and may fix the value for distribution of any assets and may determine that cash shall be paid to any shareholder upon the basis of the value so fixed in order to secure equality of distribution and may vest any assets to be distributed in trustees as the board may think expedient.

10.3

The directors may pay such interim dividends in respect of those shares in the capital of the Company which confer on the holders thereof deferred or non-preferred rights as well as in respect of those shares which confer on the holders thereof preferential or special rights with regard to dividends unless at the time of payment any preferential dividend is in arrears, and provided that the directors act in good faith they shall not incur any responsibility to the holders of any shares for any damage that they may suffer by reason of the payment of an interim dividend on any shares.

10.4

The board may deduct from any dividend or other money payable to any shareholder on or in respect of a share all such sums as may be due from him to the Company on account of all calls or otherwise in relation to the shares of the Company.

10.5

No dividend shall bear interest as against the Company.

PRIVATE PLACEMENT MEMORANDUM

10.6

10.7

Entitlement to Dividends 10.6.1 Subject to the Act, the Articles and the rights of the holders of any shares entitled to any priority, preference or special privileges, and to the terms of issue of any shares, all dividends shall be declared and paid according to the amounts paid up (otherwise than in advance of calls) on the shares on which the dividend is paid. Subject as aforesaid, all dividends shall be apportioned and paid pro rata according to the amounts paid up or credited as paid up on the shares during any portion or portions of the period in respect of which the dividend is paid, but if any share is issued on terms providing that it shall rank for dividend as from a particular date or be entitled to dividends declared after a particular date it shall rank for or be entitled to dividends accordingly. 10.6.2

In respect of each dividend to be paid by the Company the directors may determine a record date, and the dividend shall be payable to those persons registered as shareholders at the close of business on the record date in respect of that dividend, and the amount payable to each shareholder shall be determined by reference to the number of shares, or where appropriate, the number of shares of the relevant class, registered in his name at that time. In the absence of a record date being fixed, entitlement to any Distribution, dividend, allotment or issue shall be determined by reference to the date on which the dividend is declared or the Distribution, allotment or issue is made.

10.6.3

The directors may pay the dividends or interest payable on shares, in respect of which any person is by transmission entitled to be registered as holder, to such person upon production of such certificate and evidence as would be required if such person desired to be registered as a shareholder in respect of such shares.

Method of Payment 10.7.1 The Company may pay any dividend, interest or other sum payable in respect of a share in cash or by direct debit, bank transfer, other means of electronic communication, cheque, dividend warrant or money order (or in respect of any uncertificated share through the Uncertificated System) and may send it by post or other delivery service to the registered address of the shareholder or person entitled to it by reason of death or bankruptcy or by operation of law to the registered address of such person, or to such person and such address as such shareholder or person may direct in writing. Every cheque, warrant or order is sent at the risk of the person entitled to the money represented by it and shall be made payable to the order of the person or persons entitled or, where an authority in that behalf shall have been received by the Company in such form as the Company shall consider sufficient, to such other person as the person or persons entitled may direct in writing. Payment of the cheque, warrant or order to the person entitled or the person specified in such authority shall be a good discharge to the Company. If any cheque, warrant or order has or shall be alleged to have been lost, stolen or destroyed the directors may at the request of the person entitled to it issue a replacement cheque, warrant or order, subject to compliance with such conditions as to evidence and indemnity and the payment of out of pocket expenses of the Company in connection with the request as the directors may think appropriate. Any such dividend, interest or other sum may also be paid by any other method as the directors considers appropriate. 10.7.2

The directors may lay down procedures for making any payment in respect of uncertificated shares through the Uncertificated System; allow any holder of uncertificated shares to elect to receive or not to receive any such payment through the Uncertificated System; and lay down procedures to enable any such holder to make, vary or revoke any such election. The making of such payment in accordance with such authority shall be a good discharge to the Company. If the payment is made on behalf of the Company through the Uncertificated System the Company shall not be responsible for any default in accounting for such payment to the shareholder or other person entitled to such payment by a bank or other financial intermediary of which the shareholder or other person is a customer for settlement purposes in connection with the Uncertificated System.

10.7.3

The directors may, at their discretion, make provisions to enable such shareholder as the directors shall from time to time determine to receive dividends duly declared in a currency other than Euro. For the purpose of the calculation of the amount receivable in respect of any dividend, the rate of exchange to be used to determine the foreign currency equivalent of any sum payable as a dividend shall be such market rate selected by the directors as they shall consider appropriate at the close of business in the IOM on the date which is the business day last proceeding the date on which the directors publicly announces its intention to pay that specific dividend, provided that where the directors consider the circumstances to be appropriate they shall determine such foreign currency equivalent by reference to such market rate or rates or the mean of such market rates prevailing at such time or times or on such other date or dates, in each case falling before the time of the relevant announcement, as the directors may select.

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10.8

10.9

76

Uncashed, Unclaimed and Waiver of Dividends 10.8.1 If cheques, warrants or orders for dividends or other sums payable in respect of a share sent by the Company to the person entitled thereto are returned to the Company undelivered or left uncashed on two consecutive occasions or, following one occasion, reasonably enquires have failed to establish any new address to be used for the purpose, the Company shall not be obliged to send any further dividends or other moneys payable in respect of that share due to that person until he notifies the Company of an address to be used for the purpose. 10.8.2

Payment by the directors of any unclaimed dividend or other moneys payable on or in respect of a share into a separate account shall not constitute the Company a trustee in respect thereof and any dividend unclaimed after a period of three years from the date of declaration of such dividend, or from the date such dividend becomes due for payment, shall be forfeited and shall revert to the Company.

10.8.3

The waiver in whole or in part of any dividend on any share by any document shall be effective only if such document is signed by the shareholder, or the person entitled to the share in consequence of death, bankruptcy or by operation of law, and delivered to the Company and only if or to the extent that the same is accepted as such or acted upon by the Company.

Scrip Dividends 10.9.1 The directors may, subject to the satisfaction of the Solvency Test and subject as hereinafter provided, resolve (at the same time it resolves to pay any dividend on any shares in the capital of the Company) that the shareholder will have the option, for a particular dividend or any dividend declared within a specified period or periods but such period not exceeding five years, to elect to receive in lieu of such dividend (or part thereof) an allotment of additional shares in the capital of the Company credited as fully paid provided that an adequate number of unissued shares in the capital of the Company is available for this purpose. 10.9.2

A shareholder may exercise such option to elect in respect of one dividend only or (if the directors resolve that shareholders should be so permitted) in respect of all future dividends declared within a specified period or periods (“a continuing election”). Subject to Article 32.9.4 any such continuing election shall cease to have effect upon being revoked by notice in writing delivered by the shareholder to, or received at, the registered office or such other place as the Company may direct from time to time.

10.9.3

The number of ordinary shares in the capital of the Company to be allotted in lieu of any amount of dividend as aforesaid shall be determined by the directors so that the value of such shares shall equal, as nearly as possible without exceeding, such amount (disregarding any tax credit) and for this purpose the value of a share shall be deemed to be the average of the middle market quotations of such shares on the Euro-MTF (if so listed), or other relevant stock exchange, on the ex-dividend date and on the next four business days, and each such middle market quotation as is not “ex-dividend” shall be adjusted by deducting there from the cash amount of such dividend per share, or in such other manner as the directors may determine on such basis as they consider to be fair and reasonable. A certificate or report by the auditors (if any) as to the amount of the relevant value in respect of any dividend shall be conclusive evidence of that amount and in giving such a certificate the auditors may rely on advice or information from such brokers or other sources of information as they think fit.

10.9.4

The directors may specify a minimum number of shares in respect of which the right of election may be exercised.

10.9.5

The directors, after determining the maximum number of shares in the capital of the Company to be allotted as aforesaid, shall give notice to the shareholders of the option to elect accorded to them and shall send with such notice forms of election which specify the procedure to be followed and the place at which and the latest date and time by which duly completed forms of election must be lodged in order to be effective. If appropriate such notice will also refer to the fact that any continuing elections remain in effect and specify the place at which and the latest date and time by which notices of revocation must be lodged if the continuing election is not to apply in respect of the dividend in question.

10.9.6

The directors shall allot to the holders of those shares in respect of which the share election has been or is duly exercised in lieu of the dividend (or that part of the dividend in respect of which the right of election has been accorded) such number of additional shares in the capital of the Company determined as aforesaid and for such purpose the directors shall appropriate and capitalise out of any reserve or fund as they shall determine an amount equal to the aggregate nominal amount of the additional shares to be so allotted and apply the same in paying up in full the appropriate number of unissued shares for allotment and distribution to and amongst those shareholders who have given notices of election as aforesaid, such additional shares to rank pari passu in all respects with the fully paid shares in the capital of the Company then in issue save only as regards participation in the relevant dividend.

PRIVATE PLACEMENT MEMORANDUM

10.9.7

The directors may do all acts and things considered necessary or expedient to give effect to any such capitalisation, with full power to the directors to make such provisions as they think fit for the case of shares becoming distributable in fractions (including provisions whereby, in whole or in part, fractional entitlements are disregarded or the benefit of fractional entitlements accrues to the Company rather than to the shareholders concerned). The directors may authorise any person to enter, on behalf of all the shareholders interested, into an agreement with the Company providing for such capitalisation and matters incidental thereto and any agreement made under such authority shall be effective and binding on all concerned.

10.9.8

The directors may on any occasion determine that rights of election shall not be made available to any shareholders with registered addresses in any territory where, in the absence of a registration statement or other special formalities, the circulation of an offer of rights of election would or might be unlawful and in such event the provisions aforesaid shall be construed subject to such determination.

10.10

Reserve Fund 10.10.1 Before recommending a dividend (whether preferential or otherwise) the directors may set aside any part of the net profits of the Company to a reserve fund, and may apply the same either by employing it in the business of the Company or by investing it in such manner as they think fit. Such reserve fund may be applied for the purpose of maintaining the property of the Company, replacement wasting assets, meeting contingencies, forming an insurance fund, equalising dividends, paying special dividends or bonuses, or for any other purpose for which the profits of the Company may lawfully be used. The directors may divide the reserve fund into such special funds as it thinks fit and may consolidate into one fund any special fund or any part of any special fund into which the reserve fund may have been divided, as it thinks fit. The directors may also carry forward to the accounts of the succeeding year or years any profit or balance of profits which they shall not think fit to distribute or to place to reserve.

10.11

Capitalisation of Reserves 10.11.1 Subject to the provisions of the Act, the directors may resolve that it is desirable to capitalise any part of the amount for the time being standing to the credit of any of the Company’s reserve funds, reserve accounts or to the credit of the profit and loss account (not being required for the payment of or provision for any fixed preferential dividend), and accordingly that such sum be applied: 10.11.1.1

on behalf of the shareholders who would have been entitled thereto if distributed by way of dividend and in the same proportion either in or towards paying up any amounts for the time being unpaid on any shares held by such shareholders respectively or paying up in full unissued shares or debentures of the Company to be allotted and issued credited as fully paid up to and among such shareholders in the proportion aforesaid or partly in the one way and partly in the other; or

10.11.1.2

otherwise as the directors may resolve.

10.11.2

Whenever such a resolution shall have been passed, the directors may do all acts and things considered necessary or expedient to give effect to any such capitalisation, with full power to the directors to make such provisions as they think fit for the case of shares becoming distributable in fractions (including provisions whereby, in whole or in part, fractional entitlements are disregarded or the benefit of fractional entitlements accrues to the Company rather than to the shareholder concerned). The directors may authorise any person to enter, on behalf of all the shareholders interested, into an agreement with the Company providing for such capitalisation and matters incidental thereto and any agreement made under such authority shall be effective and binding on all concerned.

10.11.3

The following provisions of this Article 32 (which are without prejudice to the generality of the provisions of Article 32.11.1) apply: 10.11.3.1

where a person is granted pursuant to an employees’ share scheme a right to subscribe for shares in the Company in cash at a subscription price less than their nominal value; and

10.11.3.2

where, pursuant to an employees’ share scheme, the terms on which any person is entitled to subscribe in cash for shares in the Company are adjusted as a result of a capitalisation issue, rights issue or other variation of capital so that the subscription price is less than their nominal value.

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PRIVATE PLACEMENT MEMORANDUM

10.11.4

11.

78

In any such case the directors: 10.11.4.1

may transfer to a reserve account a sum equal to the deficiency between the subscription price and the nominal value of the shares (the “cash deficiency”) from the profits or reserves of the Company which are available for distribution and not required for the payment of any preferential dividend; and

10.11.4.2

subject to Article 32.13, if such transfer is made, shall not apply that reserve account for any purpose other than paying up the cash deficiency upon the allotment of those shares.

10.12

Whenever the Company is required to allot shares pursuant to such a right to subscribe, the directors may (subject to the Act) appropriate to capital out of the reserve account an amount equal to the cash deficiency applicable to those shares, apply that amount in paying up the deficiency on the nominal value of those shares and allot those shares credited as fully paid to the person entitled to them.

10.13

If any person ceases to be entitled to subscribe for shares as described above, the restrictions on the reserve account shall cease to apply in relation to such part of the account as is equal to the amount of the cash deficiency applicable to those shares.

10.14

No right shall be granted under any employees’ share scheme under Article 32.11.3(a) and no adjustment shall be made as mentioned in Article 32.11.3(b) unless there are sufficient profits or reserves of the Company available for distribution and not required for the payment of any preferential dividend to permit the transfer to a reserve account in accordance with this Article of an amount sufficient to pay up the cash deficiency applicable to the shares concerned.

VOLUNTARY WINDING UP 11.1

The Company may by a resolution of shareholders resolve that the Company be wound up voluntarily.

11.2

If the Company is being wound up the surplus assets remaining after payment of all creditors, and subject to the rights attached to any shares which may be issued on special terms and conditions, are to be divided among the shareholders in proportion to the capital which at the commencement of the winding up is paid up on the shares held by them respectively and, if such surplus assets are insufficient to repay the whole of the paid up capital, they are to be distributed so that as nearly as may be the losses are borne by the shareholders in proportion to the capital paid up at the commencement of the winding up on the shares held by them respectively.

11.3

If the Company is being wound up, the liquidator may, with the sanction of a resolution of shareholders, divide among the shareholders in specie the whole or any part of the assets of the Company and may, for that purpose, value any assets and determine how the division shall be carried out as between the shareholders or the shareholders of different classes. The liquidator may, with the sanction of a resolution of shareholders, vest the whole or any part of the assets in trustees upon such trusts for the benefit of the shareholders as the liquidator with the like sanction determines, but no shareholder shall be compelled to accept any assets upon which there is a liability.

PRIVATE PLACEMENT MEMORANDUM

Annexure 7

UNAUDITED CONSOLIDATED PRO FORMA STATEMENT OF FINANCIAL POSITION The unaudited consolidated pro forma statement of financial position has not been reviewed or reported on by the Company’s independent auditors or an independent reporting accountant. The unaudited consolidated pro forma statement of financial position is the responsibility of the directors and has been prepared to reflect the financial position of MAS following the private placement. The unaudited consolidated pro forma statement of financial position has been prepared for illustrative purposes only and because of its nature may not give a fair reflection of MAS’ financial position. The unaudited consolidated pro forma statement of financial position has been compiled in compliance with the accounting policies of MAS. Set out below is the unaudited consolidated pro forma statement of financial position of the group as at 28 February 2011.

UNAUDITED CONSOLIDATED PRO FORMA STATEMENT OF FINANCIAL POSITION as at 28 February 2011 Before1 28-Feb-11 Euro

Adjustments2 Euro

Pro Forma 28-Feb-11 Euro

30 202 039

—

30 202 039

2 275 139 233 425 6 611 798

— — 34 383 954

2 275 139 233 425 40 995 752

9 120 362

34 383 954

43 504 316

Total assets

39 322 401

34 383 954

73 706 355

Equity Share capital Retained (loss) / profit Foreign currency translation reserve

19 762 959 (451 170) 419 907

34 383 954 — —

54 146 913 (451 170) 419 907

Shareholder equity

19 731 696

34 383 954

54 115 650

Non current liabilities Long term loans

17 689 032

—

17 689 032

Financial instruments

852 667

—

852 667

Current liabilities (amounts falling within one year) Short term loans Trade and other payables

467 909 581 097

— —

467 909 581 097

1 049 006

—

1 049 006

Total liabilities

19 590 705

—

19 590 705

Total equity and liabilities

39 322 401

34 383 954

73 706 355

Actual number of shares in issue Net asset value per share (Euro cents)

19 762 959 99.8

34 383 954 —

54 146 9133 99.9

Non-current assets Investment property Current assets Short term loans Trade and other receivables Cash and cash equivalents

Notes: 1. The “Before” column has been extracted from the audited results of MAS for the year ended 28 February 2011 2. Represents proceeds raised in terms of the private placement. It has been assumed that 34 383 954 shares will be issued at €1 per share thereby raising €34 383 954 or approximately R330 000 000 at an assumed EUR:ZAR exchange rate of EUR:R9.5975, the Bloomberg closing rate on 11 July 2011. 3. The difference between the actual number of shares in issue and the difference between shareholders equity per the unaudited consolidated pro forma statement of fi nancial position (set out in this annexure) and per the forecast statements of fi nancial position at 28 February 2012, 2013 and 2014 (in paragraph 24) is due to the election by some shareholders to receive the fi nal dividend for the year ended 28 February 2011 in form of shares (scrip dividend).

79

PRIVATE PLACEMENT MEMORANDUM

Annexure 8

HISTORICAL FINANCIAL INFORMATION OF MAS Set out below are extracts from the audited financial statements of MAS for the years ended 28 February 2011, 2010 and 2009. These extracts are the responsibility of the directors of MAS. The financial statements, from which the information below was extracted, were audited by KPMG Audit LLC in accordance with International Financial Reporting Standards. The independent auditors, KPMG Audit LLC, issued an unqualified opinion to the members of MAS on 3 May 2011 in respect of the year ended 28 February 2011, on 25 May 2010 in respect of the year ended 28 February 2010 and on 17 June 2009 in respect of the year ended 28 February 2009. Their opinions provided that the financial statements gave a true and fair view, in accordance with IFRS, on the state of the Company’s affairs as at 28 February 2011, as at 28 February 2010, as at 28 February 2009 and the Company’s profit for the years then ended. The independent auditors’ reports issued by KPMG Audit LLC are included in the annual reports for the years ended 28 February 2011, 2010 and 2009 which annual reports are available for inspection.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 28 February 2011

Note

2011 Euro

2010 Euro

2009 Euro

Income Rental income Finance income Exchange differences

1 5 3

1 710 966 329 918 276 148

290 999 — 82 123

— — 23 504

Expenses Investment adviser fees Operating expenses Fair value adjustments

2 4

(235 417) (689 291) 1 929 864

(71 748) (825 676) (2 114 785)

— (16 866)

3 322 188 (686 023)

(2 639 087) (48 863)

6 638 (5 301)

2 636 165 (4 679)

(2 687 950) —

1 337

2 631 486

(2 687 950)

1 337

Results from operating activities Net interest expense

Profit/(loss) before taxation Taxation

12

Profit/(loss) for the year Other comprehensive income Foreign currency translation differences

6

Total comprehensive income/(loss) for the year2 Earnings per share (cents per share)1 Headline earnings per share (cents per share) Weighted average number of ordinary shares Distributable core income (see supplementary information) 1. 2.

There are no potentially dilutive instruments in issue The directors consider that all results derive from continuing activities

80

17 7

419 907

—

3 051 393

(2 687 950)

1 337

14.1 3.4 18 665 728 812 782

(78.6) (38.0) 3 420 493 n/a

1 337 100 1 337

PRIVATE PLACEMENT MEMORANDUM

CONSOLIDATED STATEMENT OF FINANCIAL POSITION for the year ended 28 February 2011

2011 Euro

2010 Euro

2009 Euro

8

30 209 039

24 773 271

2 141 532

9

2 275 139 233 425 6 611 798

— 122 499 1 528 306

— 858 21 291

Note Non-current assets Investment property

Current assets Short term loans receivable Trade and other receivables Cash and cash equivalents Total current assets

9 120 362

1 650 805

22 149

39 322 401

26 424 076

2 163 681

19 762 959 (451 170) 419 907

9 309 821 (2 686 613) —

100 1 337

19 731 696

6 623 208

1 437

17 689 032 852 667

16 953 384 726 197

2 038 973 —

18 541 699

17 679 581

2 038 973

467 909 581 097

1 692 277 429 010

123 271

1 049 006

2 121 287

123 271

Total liabilities

19 590 705

19 800 868

2 162 244

Total equity and liabilities

39 322 401

26 424 076

2 163 681

99.8

71.1

1 436.8

Total assets Equity Share capital Retained earnings Foreign currency translation reserve

7 6

Shareholder equity Non-current liabilities Long term loans Financial instruments

10 11

Total non-current liabilities Current liabilities (amounts falling within one year) Short term loans payable Trade and other payables Total current liabilities

Net asset value (cents per share)

10

81

PRIVATE PLACEMENT MEMORANDUM

CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 28 February 2011

2011 Euro

2010 Euro

2009 Euro

1 337 5 301 — — 122 413 —

OPERATING ACTIVITIES Profit/(loss) before taxation Net interest expense Finance income Movement in fair value adjustments Changes in working capital position Taxation

2 636 686 (329 (1 929 509 (4

165 023 918) 864) 073 679)

(2 687 950) 48 863 — 2 114 785 184 098 —

Net cash generated from/(used in) operating activities

1 566 800

(340 204)

Acquisition of investment properties Issuance of short term loans Interest received

(1 363 705) (2 095 587) 122 119

(24 020 327) — —

2 141 532 — —

Cash (used in) investing activities

(3 337 173)

(24 020 327)

2 141 532

Proceeds from issue of share capital3 Proceeds from loan facilities Repayment of loan facilities Net interest paid Dividends paid

9 068 638 — (577 035) (686 023) (396 043)

9 309 721 16 606 688 — (48 863) —

100 2 038 973 — (5 301) —

Net cash generated from financing activities

7 409 537

25 867 546

NET INCREASE IN CASH AND EQUIVALENTS

5 639 164

1 507 015

Cash and equivalents at the beginning of the year Effect of exchange rate fluctuations

1 528 306 (555 670)

21 291 —

CASH AND EQUIVALENTS AT YEAR END

6 611 800

1 528 306

INVESTING ACTIVITIES

FINANCING ACTIVITIES

3.

82

—

Supplementary information to the Consolidated Statement of Cash Flows During the year the Company issued 10 453 138 new shares at €1.00 each. 1 384 500 of the shares were issued as the capitalisation of a loan due to the Company, at the same price of €1.00 per share.

PRIVATE PLACEMENT MEMORANDUM

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 28 February 2011

Share Capital Euro

Retained Earnings Euro

Currency Translation Reserve Euro

Total Euro

100

1 337

—

1 437

Issue of shares Loss for the year

9 309 721 —

— (2 687 950)

— —

9 309 721 (2 687 950)

Closing balance as at 28 February 2010

9 309 821

(2 686 613)

—

6 623 208

Opening balance at 28 February 2009

Profit for the year Other comprehensive income for the year

— —

2 631 486 —

— 419 907

2 631 486 419 907

Total comprehensive income for the year

—

2 631 486

419 907

3 051 393

Issue of shares Dividends paid

10 453 138 —

— (396 043)

— —

10 453 138 (396 043)

Closing balance as at 28 February 2011

19 762 959

(451 170)

419 907

19 731 696

83

PRIVATE PLACEMENT MEMORANDUM

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1.

SIGNIFICANT ACCOUNTING POLICIES Statement of compliance MAS plc has prepared its financial statements in accordance with International Financial Reporting Standards (“IFRS”). Basis of measurement The financial statements have been prepared under the historical cost convention, except for the following material items in the consolidated statement of financial position: – Investment property is measured at fair value; – Financial instruments at fair value through profit and loss are measured at fair value. Functional and presentation currency The consolidated financial statements are presented in Euros, which is the Company’s functional and presentation currency. Use of estimates and judgments The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. The directors continually evaluate these judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses based upon historical experience and on other various factors that they believe to be reasonable under the circumstances. Actual results may differ from the judgements, estimates and assumptions. The estimates and assumptions by the directors that have a significant risk of causing a material adjustment to the carrying value of the assets and liabilities within the next financial year are as follows: – Taxation The Company is subject to income taxes across the jurisdictions where it operates. There are numerous assumptions made in the computation of the provision for taxation across the operating subsidiaries, and the ultimate taxation liability is an estimate that may result in being materially different from that indicated in the financial statements. – Provisions The Company has issued loans to third parties. The directors have assessed the likelihood of recoverability of these as highly probable. New standards and interpretations not yet adopted These standards are effective for financial reporting periods commencing on or after 1 January 2011. IFRS 9 Financial Instruments Standard issued November 2009 (IFRS 9 (2009)) IFRS 9 (2009) is the first standard issued as part of a wider project to replace IAS 39, IFRS 9 (2009) retains but simplifies the mixed measurement model and establishes two primary measurement categories for financial assets: amortised cost and fair value. The basis of classification depends on the entity’s business model and the contractual cash flow characteristics of the financial asset. The guidance in IAS 39 on impairment of financial assets and hedge accounting continues to apply. Prior periods need not be restated if an entity adopts the standard for financial reporting period commencing before 1 January 2012. This standard is effective for financial reporting periods commencing on or after 1 January 2013.

84

PRIVATE PLACEMENT MEMORANDUM

Standard issued October 2010 (IFRS 9 (2010)) IFRS 9 (2010) adds the requirements related to the classification and measurement of financial liabilities, and de-recognition of financial assets and liabilities to the version issued in November 2009. It also includes those paragraphs of IAS 39 dealing with how to measure faire value and accounting for derivatives embedded in a contract that contains a host that is not a financial asset, as well as the requirements of IFRIC 9 Reassessment of Embedded Derivatives. Below is a summary of amendments/improvements to standards and interpretations that are not yet effective. Amendments/Improvements

Effective Date

IAS 32

IAS 32 Financial Instruments: Presentation: Classification of Rights Issues

1 February 2010

IFRS 1

IFRS 1 First-time Adoption of International Financial Reporting Standards – Limited Exemption from Comparative IFRS 7 Disclosures for First-time Adopters

1 July 2010

IFRS 3

IFRS 3 Business Combinations

1 July 2010

IAS 27

IAS 27 Consolidated and Separate Financial Statements

1 July 2010

IFRIC 14

IAS 19 – The Limit on a Defined Benefit Assets, Minimum Funding Requirements and their interaction

1 January 2011

IFRS 1

IFRS 1 First-time Adoption of IFRS

1 January 2011

IFRS 7

IFRS 7 Financial Instruments: Disclosures

1 January 2011

IAS 1

IAS 1 Presentation of Financial Statements

1 January 2011

IAS 34

IAS 34 Interim Financial Reporting

1 January 2011

IFRIC 13 IFRIC 13 Customer Loyalty Programmes

1 January 2011

IFRS 7

IFRS 7 Disclosures – Transfers of Financial Assets

1 July 2011

IFRS 1

IFRS 1 Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters

1 July 2011

IAS 12

IAS 12 Deferred Tax: Recovery of Underlying Assets

1 January 2012

The directors do not expect the adoption of these standards and interpretation to have a material impact on the Company’s financial statements in the period of initial application. Basis of consolidation The consolidated financial statements include the financial statements of the Company and its subsidiary undertakings for the period under review. The acquisition method of accounting has been adopted. Under this method, the results of subsidiary undertakings acquired or disposed of in the year are included in the consolidated statement of comprehensive income from the date of acquisition or up to the date of disposal. Subsidiaries are those enterprises controlled by the Company, and comprise those entities set out in Annexure 2 (save for Metchley Hall Limited, which was incorporated after the period under review), which are wholly-owned by the Company Control exists where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account. Intra-group balances and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised losses are eliminated in the same way as unrealised gains, but to the extent that there is no evidence of impairment. Revenue recognition Revenue is accounted for on an accrual basis and includes rent receivable and finance income. – Rental income from investment property leased out under operating leases is recognised in the consolidated statement of comprehensive income on a straight-line basis over the term of the leases. – Finance income is recognised using the effective interest method.

85

PRIVATE PLACEMENT MEMORANDUM

Investments Investment Property (“IAS40”): direct real estate investments are classified as investment property and comprise both freehold and leasehold land and buildings and installed equipment held for the purpose of earning rental income and for capital appreciation. Investment property is treated as a long-term investment and is initially recognised at cost (including related transaction costs) a subsequently carried at fair value, with any changes therein recognised in profit or loss. Subsequent additions that produce future economic benefit to the Company are capitalised. Investment property under construction is initially recognised at cost as the construction progresses, and subsequently at fair value. Maintenance and repairs which neither materially add to the value of the properties nor prolong their useful lives are expensed in profit or loss. Independent valuations are obtained on an annual basis. The directors value the investment property on an interim basis. Investment property is classified as held for sale when the directors have approved the disposal of the property. The valuation calculations are based on the aggregate of the net annual rents receivable and associated costs, using the discounted cash flow method. The discounted cash flow method takes projected cash flow and discounts it at a rate which is consistent with comparable market transactions. Any gains or losses arising from changes in fair value are included in the profit or loss. These unrealised fair value adjustments are excluded from the computation of distributable core income. Gains or losses arising from the disposal of investment property, being the difference between the net disposal proceeds and the carrying value, are recognised in the profit or loss. Foreign currency Transactions in currencies other than Euro are recorded at the rate of exchange prevailing at the dates of the transactions. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rate at the date the fair value was determined. Other non-monetary assets and liabilities denominated in foreign currencies are translated at the initial drawdown rate. Gains and losses arising on translation are recognised in the profit or loss. Foreign operations The financial statements of entities that use a functional currency other than the euro, are translated into euros. Assets and liabilities are translated using the exchange rates at the reporting date. Items in the consolidated statement of comprehensive income and consolidated statement of cash flows are translated into euros using the actual, or approximate average, rates of exchange for the transactions. The resulting translation adjustments are recorded in other comprehensive income. Cumulative translation adjustments are recognised as income or expense upon partial or complete disposal or liquidation of a foreign entity. Exchange differences arising from the translation of the net investment in foreign operations are taken to other comprehensive income. They are recycled and taken to the profit or loss upon disposal of the operation. Cash and Cash Equivalents Cash and cash equivalents consist of cash at bank. Borrowings Interest bearing bank loans are recorded at the proceeds received, net of direct issue costs. Borrowing costs are amortised over the term of the loan. Derivatives The Company has currency exposures related to its investments and may enter into portfolio level and investment specific foreign exchange contracts and other derivatives to hedge such exposures. Movements in the fair value of derivatives are accounted for in profit or loss. The Company may also use interest rate derivatives to hedge interest rate exposure on the underlying debt of the property portfolio. Headline earnings Headline earnings are derived from basic earnings, adjusted for re-measurements that relate to the platform of the entity, per Circular 3/2009 issued by the South African Institute of Chartered Accountants. Taxation Taxation on the profit or loss for the year comprises current and deferred tax relating to operations in taxable jurisdictions. Income tax is recognised in profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year in each taxable jurisdiction, using tax rates enacted or substantively enacted at balance sheet date, and any adjustment to tax payable in respect of previous years. Deferred tax is provided using the balance sheet liability method, based on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the Statement of Financial Position date. Given the nature of the business, the expected manner of realisation is invariably the recovery of the carrying value of the assets via sale.

86

PRIVATE PLACEMENT MEMORANDUM

Segment reporting The risks and rewards faced by the Company relate primarily to the geographical location of the investment properties and therefore this forms the primary reporting segment. The business segment split is a secondary segment. Distributable core income Distributable core income is the Company’s measure of realised profits that have been generated through the core operations of the Company, as represented by the cash rental and interest income received, less interest expenses, operating expenses and taxation paid, that can be distributed to shareholders.

2.

OPERATING EXPENSES Year ended 28-Feb-11 Euro

Year ended 28-Feb-10 Euro

Legal and professional expenses a Directors’ fees (note 15) Listing expenses b Company administration expenses Company secretarial expenses Audit fees Accounting fees General expenses Property taxes and insurance

189 116 105 75 65 20 42 52 21

183 111 295 58 81 36 15 38 5

Total

689 291

825 676

Year ended 28-Feb-11 Euro

Year ended 28-Feb-10 Euro

695 072 610 796 085 032 540 529 932

228 276 705 327 079 473 778 147 663

a. Legal and professional expenses

Legal services – MAS Property Advisers Ltd Independent taxation and professional advice Due diligence and other costs Independent property valuations Total

82 49 45 12

105 728 862 000

122 011 50 877 10 340 —

189 695

183 228

Year ended 28-Feb-11 Euro

Year ended 28-Feb-10 Euro

56 20 12 8 7

251 5 20 5 13

b. Listing expenses

Corporate advisers Transfer secretaries Bourse de Luxembourg Johannesburg Stock Exchange Other Total

276 971 200 327 836

105 610

085 380 760 078 402

295 705

87

PRIVATE PLACEMENT MEMORANDUM

3.

EXCHANGE DIFFERENCES Exchange gains and losses arise from the revaluation of the monetary assets and liabilities denominated in foreign currencies. It is not the policy of the Company to hedge currencies held between Euro, Sterling and Swiss Franc.

4.

FAIR VALUE ADJUSTMENTS

DPD Property Fair value adjustment – DPD property Fair value adjustment – Credit Suisse AG interest rate swap Aldi Portfolio Fair value adjustment – Aldi portfolio Fair value adjustment – Sparkasse Schwarzwald-Baar interest rate swap/cap

5.

Year ended 28-Feb-11 Euro

Year ended 28-Feb-10 Euro

116 977 (106 403)

137 308 (276 667)

10 574

(139 359)

60 000 42 665

(1 525 896) (449 530)

102 665

(1 975 426)

Golden Cross Property Fair value adjustment – Golden Cross property

1 816 625

—

Total

1 929 864

(2 114 785)

Year ended 28-Feb-11 Euro

Year ended 28-Feb-10 Euro

Interest on short term loans Interest on bank deposits

291 537 38 381

— —

Total

329 918

—

Year ended 28-Feb-11 Euro

Year ended 28-Feb-10 Euro

Translation of foreign operations Net investment in foreign operations

169 476 250 431

— —

Total

419 907

—

FINANCE INCOME Finance income consists of the following interest income:

6.

88

FOREIGN CURRENCY TRANSLATION RESERVE

PRIVATE PLACEMENT MEMORANDUM

7.

SHARE CAPITAL During the year under review, the Company issued 10 453 138 ordinary shares of no par value at €1.00 each (year ended 28 February 2010: 9 309 721 shares of no par value at €1.00 each). The current issued share capital of the Company is 19 672 959 ordinary shares of no par value at €1.00 each. The Company does not have authorised share capital as it is registered under the Companies Act 2006 of the IOM. Number of shares Euro

Share capital Euro

100

100

Issued during the year

9 309 721

9 309 721

Balance at 28 February 2010

9 309 821

9 309 821

Issued during the year

10 453 138

10 453 138

Balance at 28 February 2011

19 762 959

19 762 959

Balance at 1 March 2009

8.

INVESTMENT PROPERTY Investment property comprises investment properties held for rental income valued at €27 021 709 and investment property under construction valued at €3 180 330. All investment property and investment property under construction are carried at fair value. Reconciliation of movement in investment property

Year ended 28 February 2010 Property purchase price Capitalised expenses: Notary and land registration taxes Commissions Legal and professional costs Transaction fees Exchange difference Fair value adjustment Fair value 28 February 2010 Year ended 28 February 2011 Foreign currency translation movement Fair value adjustment Fair value 28 February 2011

Aldi Portfolio Euro

DPD Property Euro

Total Euro

10 462 300

13 950 904

24 413 204

465 293 200 104

019 067 887 623 — (1 525 896)

10 207 186 139 140 137

10 000 000

14 773 271

24 773 271

— 60 000

2 071 461 116 977

2 071 461 176 977

10 060 000

16 961 709

27 021 709

663 642 928 137 689 308

475 500 387 243 140 (1 388

682 709 815 760 689 588)

89

PRIVATE PLACEMENT MEMORANDUM

Investment property under construction

Property purchase price Capitalised expenses: Development costs Legal and professional costs Notary, land registration taxes and stamp duty Commissions Transaction fees Fair value adjustment Fair value 28 February 2011

Golden Cross Euro

Total Euro

1 060 110

1 060 110

135 99 39 17 11 1 816

135 99 39 17 11 1 816

084 663 400 669 779 625

3 180 3304

Total fair value of investment property 28 February 2011 4.

084 663 400 669 779 625

3 180 330

30 202 039

Golden Cross, the Birmingham student residential development, has a profi t share arrangement with the introducer/project manager. The terms of this agreement are that the Company will earn the fi rst £2 082 568 of profi t on this project. The project manager will then earn the next £694 189 of profi t, and thereafter all further profi t will be split 75% to MAS plc and 25% to the introducer/project manager.

Property details

Aldi portfolio

DPD Golden property Cross property

Location

Currency Purchase price Rent Initial purchase yield Debt Acquisition date / expected completion date

Various, Germany EUR 10 462 300 732 108 7.00% 8 369 840 01-Dec-09

Zurich, Switzerland CHF 20 535 431 1 304 000 6.35% 12 550 000 15-Jan-10

Birmingham, United Kingdom GBP 900 000 — — — 01-Sep-11

The DPD property was valued by Wüest and Partner at CHF 21.75 million (€16.96 million and the Aldi portfolio by DTZ at €10.06 million at 28 February 2011. The Golden Cross property (investment property under construction) was valued by Savills at GBP 2.70 million at 28 February 2011. Considerable judgement is required in interpreting market data to determine the estimates of value; accordingly the estimates of value presented in the financial statements are not necessarily indicative of the amounts that the Company could realise in a market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair values.

90

PRIVATE PLACEMENT MEMORANDUM

9.

SHORT TERM LOANS RECEIVABLE

REOC Limited a Argosy Capital Limited

b

Total

Year ended 28-Feb-11 Euro

Year ended 28-Feb-10 Euro

1 971 996 303 143

— —

2 275 139

—

The Company made the following short term loans during the year: a) MAS (BVI) Holdings Limited made a secured loan of £1 700 000 to REOC Limited on 15 July 2010. The interest receivable for the period up to 28 February 2011 is £134 766. The loan bears interest at a rate of 1% each month for 6 months, 1.25% each month for three months thereafter and 1.5% each month for the remaining months until the loan is repaid within 2 years. Although interest is charged on the full amount of the loan, only £1 539 459 had been drawn by year-end. The loan is secured against all of the shares in REOC Limited, in addition to REOC Limited’s shares in all of REOC Limited’s 3 underlying investment companies. b) MAS (BVI) Holdings Limited made a secured loan to Argosy Capital Limited on 26 January 2011 of €3 250 000 for the acquisition of an investment property. The loan bears interest at a rate of 15% per annum and the interest receivable for the period up to 28 February 2011 is €45 411. Although interest is charged on the full amount of the loan, only €257 732 had been drawn by year-end. The balance is for settlement of a property acquisition, which is in the process of completion. This loan is secured against 3 492 937 shares in MAS plc, in addition to 100% of the shares in the SPV purchasing the investment property costing £2 451 243. c) MAS (IOM) Holdings Ltd made a secured short term loan of £600 000 to Keresforth Limited with effect from 1 April 2010. The loan amount, including interest of £38 226, was repaid on 14 July 2010.

10. LOANS PAYABLE

Long term loans Credit Suisse AG – DPD property a,c Sparkasse Schwarzwald-Baar – Aldi portfolio Short term loans Credit Suisse AG – DPD property Other short term loans Total

a

b

Year ended 28-Feb-11 Euro

Year ended 28-Feb-10 Euro

(9 319 192) (8 369 840)

(8 583 544) (8 369 840)

(467 909) —

(307 777) (1 384 500)

(18 156 941)

(18 645 661)

a) Petrusse Capital S.à.r.l. (a subsidiary) received a loan of CHF 13 000 000 on 15 January 2010 from Credit Suisse AG for the acquisition of the DPD property. This is a 15-year term fl oating rate loan at 90bps above Swiss LIBOR (see note 11). The DPD property purchased by Petrusse Capital S.à.r.l. is held as security against this loan. There are no conversion or redemption rights for this loan. Amortisation repayments of CHF 150 000 per quarter began in June 2010 on this loan and the amount outstanding at 28 February 2011 was CHF 12 550 000. Such amortisation payments are to be fi nanced by the rentals received from the property. b) Inventive Capital S.à.r.l. (a subsidiary) received a loan of €8 369 840 on 1 December 2009 from Sparkasse Schwarzwald-Baar for the acquisition of the Aldi portfolio. This is a 20-year term fl oating rate loan at 95bps above Euribor (see note 11). The Aldi portfolio purchased by Inventive Capital S.à.r.l. is held as security against this loan. There are no conversion or redemption rights for this loan. Amortisation payments are expected to begin at the end of 2014. c) Included in the loan amount is a loss of €1 246 713 that results from translation from the functional currency (Swiss francs) to the presentation currency (euros).

91

PRIVATE PLACEMENT MEMORANDUM

11.

FINANCIAL INSTRUMENTS Reconciliation of fi nancial instruments Aldi Euro

DPD Euro

Total Euro

28 February 2010 Fair valuation of hedging instruments

(449 530)

(276 667)

(726 197)

28 February 2011 Fair valuation of hedging instruments Foreign currency translation reserve

42 665 —

(106 403) (62 732)

(63 738) (62 732)

(406 865)

(445 802)

(852 667)

Total

The Company has hedged the interest rate exposure on the loans disclosed in Note 10. 75% of the Sparkasse Schwarzwald-Baar debt used to purchase the Aldi portfolio was hedged with Bayern LB via an interest rate swap at a fixed rate of 4.2%, and 25% fixed via an interest rate cap with a strike at 4.0%, on 20 October 2009. Both the hedge and the cap started on 1st December 2009, the completion date of the property. The mark-to-market valuation of this hedge was a negative (€406 865) as at 28 February 2011. 70% of the Credit Suisse AG debt used to purchase the DPD Property was hedged directly with Credit Suisse AG via a forwardstarting interest rate swap at 2.76% on 14th September 2009. The start date was the 15 June 2010. The mark-to-market valuation of this hedge was a negative (€445 802) as at 28 February 2011.

12.

TAXATION The Company is subject to IOM taxation at a rate of 0% (2010: 0%). Operating entities in the Company, however, are exposed to taxation in the jurisdictions in which they operate and, potentially, in the jurisdictions through which the SPV investment companies are held. In the UK, the Company does not yet earn rental income and has not yet realised a capital gain. Accordingly no provision has been made for taxation. In Switzerland, the Company is liable to cantonal and federal taxes, in addition to a wealth tax. The effective income tax rate for income from Petrusse Capital S.à.r.l., that owns the DPD property, is 20.673%, with wealth tax charged at a rate of 0.1695% of net assets. For the period under review, Petrusse Capital S.à.r.l. was in a taxable loss position as a result of capital allowances on the property, and hence no income tax is payable. A wealth tax of CHF 6 000 has been provided for. In Germany, the Company is taxed on net rental income, with an effective corporate income tax and solidarity tax rate of 15.825%. For the year under review Inventive Capital S.à.r.l., the Luxembourg SPV that owns the Aldi portfolio, was in a taxable loss position as a result of capital allowances on the property, and hence no income tax is payable. Deferred taxation – Taxable temporary differences The rate at which deferred tax is provided on taxable temporary differences is derived from the method of expected realisation of the taxable temporary differences. It is the intention of the Company to sell the SPV entities that own both the Aldi portfolio and DPD property after a reasonable investment period. The sale of shares in the SPV entities will not trigger any capital gains tax or other tax consequences in either of the operating jurisdictions, or in Luxembourg. As a result, no provision is made for deferred taxation. However, if the individual properties are sold, which is not the intention of the Company, the following deferred taxation consequences would arise: In Germany, the capital gain, being the excess of the realisation price over the tax base of the asset, will be subject to German corporate income tax and solidarity tax at a combined rate of 15.825%. In Switzerland, the capital gain will be split into two components:

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PRIVATE PLACEMENT MEMORANDUM

i) the reversal of previous depreciations; and ii) the real capital gain (sale price minus cost of purchase plus acquisition costs). The reversal of previous depreciations is taxed as income for cantonal taxes, at an effective rate of 20.673%, and the real capital gain that is taxed on a sliding scale that penalises early disposal of properties, but provides for deductions of the applied rate as the holding period increases. The combined rate of cantonal and communal capital gains tax and federal capital gains tax is 31.053%. – Deductible temporary differences In the period under review, a deductible temporary difference arises from the fair value adjustment of the interest rate hedging instruments in Germany. As recovery of this deferred tax asset is dependent upon the generation of sufficient future taxable income, deferred tax assets are recognised only to the extent that they offset deferred tax liabilities on the balance sheet. In the current year, no deferred tax liabilities have been recognised and accordingly no deferred tax assets are recognised.

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PRIVATE PLACEMENT MEMORANDUM

13.

SEGMENT REPORTING Logistics / Switzerland 28 February 2011 Euro

Retail / Germany 28 February 2011 Euro

Student Residential Birmingham 28 February 2011 Euro

Corporate 28 February 2011 Euro

Consolidated 28 February 2011 Euro

Statement of comprehensive income Rental income Finance income Exchange differences Operating expenses Fair value adjustment

978 858 278 308 (45 343) 10 574

732 108 — — (69 911) 102 665

— — — (1 728) 1 816 625

— 329 640 275 840 (807 726) —

1 710 329 276 (924 1 929

Results from operating activities

944 675

764 862

1 814 897

(202 246)

3 322 188

Net interest expense

(228 887)

(366 756)

—

(90 380)

(686 023)

Profit/(loss) before taxation

715 788

398 106

1 814 897

(292 626)

2 636 165

—

—

—

(4 679)

(4 679)

715 788

398 106

1 814 897

(297 305)

2 631 486

16 961 709

10 060 000

3 180 330

—

30 202 039

Current assets Short term loans Trade and other receivables Cash and cash equivalents

— 203 314 582 045

— 14 305 574 733

— 206 69 667

2 275 139 15 600 5 385 353

2 275 139 233 425 6 611 798

Total current assets

785 359

589 038

69 873

7 676 092

9 120 362

17 747 068

10 649 038

3 250 203

7 676 092

39 322 401

Current liabilities Short term loans Trade and other payables

(467 909) (362 733)

— (90 385)

— (28 229)

— (99 750)

(467 909) (581 097)

Total current liabilities

(830 642)

(90 385)

(28 229)

(99 750)

(1 049 006)

Non-current liabilities Loans Financial instruments

(9 319 192) (406 866)

(8 369 840) (445 801)

— —

— —

(17 689 032) (852 667)

Total non-current liabilities

(9 726 058)

(8 815 641)

—

—

(18 541 699)

(10 556 700)

(8 906 026)

(28 229)

(99 750)

(19 590 705)

7 190 368

1 743 012

3 221 974

7 576 342

19 731 696

Taxation Profit/(loss) for the year

966 918 148 708) 864

Statement of financial position Non-current assets Investment Property

Segment assets

Segment liabilities Segment net assets

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PRIVATE PLACEMENT MEMORANDUM

14. FINANCIAL RISK MANAGEMENT

Overview The Company has exposure to the following risks from its use of financial instruments: – – – – –

liquidity risk market price risk credit risk interest rate risk foreign exchange risk

These risks are managed as follows: Liquidity risk – the risk that arises when the maturity of assets and liabilities do not match. An unmatched position potentially enhances profitability, but can also increase the risk of losses. The Company has internal procedures focused on ensuring the efficient but prudent use of cash and availability of working capital. The liquidity risk inherent in the Company is mainly as a result of the tenant risk in the property portfolio. Should a tenant default, liquidity risk may result in the inability of the Company to cover the interest payments. As a result adequate cash buffers are maintained, and tenant strength is reviewed on a continual basis. The following are the contractual maturities of financial liabilities, including interest payments: 28 February 2011 Euro

< 1 year

1-3 years

> 3 years

Property loan portfolio Short term loan and trade payables

467 909 628 006

935 818 —

16 753 214 —

1 095 915

935 818

16 753 214

< 1 year

1-3 years

> 3 years

Property loan portfolio Short term loan and trade payables

307 776 2 121 287

820 737 —

16 132 647 —

Total

2 429 063

820 737

16 132 647

Total 28 February 2010 Euro

Market price risk – the risk that the market price of an investment or financial instrument will fluctuate due to changes in foreign exchange rates, market interest rates, market factors specific to the security or its issuer or factors generally affecting all investments. The risk to the Company relates to an imbalance between demand and supply for the relevant investments and financial instruments in the portfolio, which could potentially result in a disorderly market. This risk is mitigated through the use of a dedicated investment adviser, MAS Property Advisors Limited, which focuses on the continual assessment of the portfolio and its movements in relation to the broader market.

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PRIVATE PLACEMENT MEMORANDUM

The fair values of assets and liabilities affected by market price risk are as follows: Year ended 28-Feb-11 Euro

Year ended 28-Feb-10 Euro

Assets Investment property

30 202 039

24 773 271

Liabilities Loans Financial instruments

(17 689 032) (852 668)

(17 261 161) (726 197)

(18 541 700)

(17 987 358)

Credit risk – the Company is exposed to credit risk primarily as a result of its banking relationships. In particular, the credit exposure relates to potential default on the hedging instruments if the counterparty defaults as a result of a deteriorating credit rating. The carry value of financial assets represents the maximum credit risk, as follows: Year ended 28-Feb-11 Euro

Year ended 28-Feb-10 Euro

Short term loans Trade and other receivables Cash and cash equivalents

2 275 139 233 425 6 611 798

— 122 499 1 528 306

Total

9 120 362

1 650 805

Interest rate risk – a significant part of the funding of the Company’s portfolio derives from debt. Debt is managed on an active basis, hedging against adverse movements in interest rates. Note 11 details the hedging activities undertaken in the current year.

The Company’s exposure to interest rates on financial liabilities are as follows:

28 February 2011 Credit Suisse AG – DPD Property – Interest rate

Sparkasse Schwarzwald-Baar – Aldi Portfolio – Interest rate

Fixed Euro

Floating Euro

Capped Euro

6 850 971 2.76% + 90bps

2 936 130 Swiss Libor +90bps

—

6 277 380 4.2% + 95bps

— N/a

— 2.76% + 90bps

8 891 320 Swiss Libor +90bps

6 277 380 4.2% + 95bps

—

N/a 2 092 460 4.0% + 95bps

28 February 2010 Credit Suisse AG – DPD Property – Interest rate

Sparkasse Schwarzwald-Baar – Aldi Portfolio – Interest rate

96

N/a

— N/a 2 092 460 4.0% + 95bps

PRIVATE PLACEMENT MEMORANDUM

Foreign exchange risk – the Company holds both assets and liabilities denominated in currencies other than euro, the presentation currency. It is therefore exposed to currency risk, as the value of the assets denominated in other currencies will fluctuate due to changes in exchange rates. The following table highlights the extent of the currency risk: At 28 February 2011 the Company had the following currency exposures: Currency risk exposures GBP 0.8490

CHF 1.2823

ZAR 9.6188

Cash at Bank Foreign currency Euro equivalent

1 461 413 1 721 335

746 665 582 286

81 807 8 505

Payables Foreign currency Euro equivalent

(45 613) (53 725)

(465 132) (362 733)

(214 193) (22 268)

Receivables Foreign currency Euro equivalent

21 822 25 703

260 710 203 314

— —

1 674 225 1 971 996

— —

— —

Other monetary liabilities Foreign currency Euro equivalent

— —

(12 550 000) (9 787 101)

— —

Interest rate swaps Foreign currency Euro equivalent

— —

(571 651) (445 801)

— —

3 111 847 3 665 309

(12 579 408) (9 810 035)

(132 386) (13 763)

2 700 000 3 180 330

21 750 000 16 961 709

— —

Closing exchange rate Monetary items

Other monetary assets Foreign currency Euro equivalent

Total net monetary exposure Foreign currency Euro equivalent Non-monetary items Investment property Foreign currency Euro equivalent

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PRIVATE PLACEMENT MEMORANDUM

15.

DIRECTORS’ REMUNERATION

The directors received the following remuneration for their services during the year: Year ended 28-Feb-11 Euro

Year ended 28-Feb-10 Euro

19 000 59 072 – 19 000 19 000

12 667 73 276 – 12 667 12 667

116 072

111 277

Jaco Jansen Malcolm Levy a Lukas Nakos b Gideon Oosthuizen Ron Spencer c Total

a. b. c.

This amount was paid directly to MAS Property Advisors Limited, the investment adviser, and is included in the professional services fees included in note 16. Lukas Nakos is the CEO of MAS Property Advisors Limited. His services to the Company form part of the arrangements under the Investment Management Agreement. During the year, Ron Spencer elected to receive €10 000 due in the form of shares issued at €1.00 as settlement of €10 000 of director’s fees.

Authority to issue shares Shares may be issued and options to acquire shares may be granted at such times, to such persons, for such consideration and on such terms as the directors may determine, provided that the amount issued does not exceed 10% of the issued share capital of the Company, and subject to such issue being offered to the current shareholders.

16.

RELATED PARTY TRANSACTIONS Relationships – Related parties are defined as those entities with which the Company transacted during the year and in which the following relationship(s) exist: shareholding; directorships; or key management. Transactions between group companies which are eliminated on consolidation are not disclosed. Investment During the year the following payments were made to the investment adviser:

adviser Year ended 28-Feb-11 Euro

Year ended 28-Feb-10 Euro

Investment management fees5 Transaction fees Professional services

235 417 11 779 229 039

71 748 348 383 276 366

Total

476 235

696 497

REOC Limited (“REOC”) Lukas Nakos is a director of both MAS plc and REOC. The terms of the loan are disclosed in note 9 (a). 5.

98

The investment management fee is computed in terms of the Investment Management Agreement. This fee amounts to 1/12th of 1.5% of the net asset value of the Company per month.

PRIVATE PLACEMENT MEMORANDUM

17.

RECONCILIATION OF PROFIT/(LOSS) FOR THE YEAR TO HEADLINE EARNINGS

Profit/(loss) for the year Adjusted for: Revaluation of investment property Headline earnings

Year ended 28-Feb-11 Euro

Year ended 28-Feb-10 Euro

2 631 486

(2 687 950)

(1 993 602)

1 388 588

637 884

(1 299 362)

Headline earnings per share is based on a weighted average number of shares in issue of 18 665 728 (2010: 3 420 492).

18.

SUBSIDIARIES The following entities are all 100% held subsidiaries of MAS plc: Company Name MAS (BVI) Holdings Limited MAS (IOM) Holdings Limited Golden Cross Properties Limited MAS Mezzi Limited European Property Holdings S.à.r.l. Petrusse Capital S.à.r.l. Inventive Capital S.à.r.l. Magliaso Capital S.à.r.l. Egerkingen Capital S.à.r.l.

Share Domicile Capital BVI EUR 100 IOM GBP 100 IOM GBP 100 IOM EUR 100 Luxembourg EUR 12 500 Luxembourg CHF 4 260 000 Luxembourg EUR 475 000 Luxembourg EUR 12 500 Luxembourg EUR 12 500

The aggregate intercompany indebtedness between subsidiaries at 28 February 2011 was as follows: – MAS (BVI) Holdings Limited owed MAS plc €15 525 628 (2010: €9 911 378) – European Property Holdings S.à.r.l. owed MAS (BVI) Holdings Limited €3 773 881 (2010: €8 532 074) – Petrusse Capital S.à.r.l. owed European Property Holdings S.à.r.l. €72 649 and MAS (BVI) Holdings Limited €3 205 877 (2010: Petrusse Capital S.à.r.l. owed European Property Holdings SARL €5 390 637) – Inventive Capital S.à.r.l. owed MAS (BVI) Holdings Limited €2 963 416 (2010: Inventive Capital S.à.r.l. owed European Property Holdings S.à.r.l. €3 106 109) – Egerkingen Capital S.à.r.l. owed MAS (BVI) Holdings Limited €72 026 (2010: n/a) – Magliaso Capital S.à.r.l. owed MAS (BVI) Holdings Limited €10 713 (2010: n/a) – MAS (IOM) Holdings Limited owed MAS (BVI) Holdings Limited €199 848 (2010: €383) – MAS Mezzi Limited owed MAS (BVI) Holdings Limited €1 030 (2010: n/a) – Golden Cross Properties Limited owed MAS (IOM) Holdings Limited €239 010 and MAS (BVI) Holdings Limited €1 196 049 (2010: n/a)

19.

SIGNIFICANT SHAREHOLDINGS Mergon Foundation BNF Investments (Pty) Limited Amplain Limited Mertech Investments (Pty) Limited Mertech Services (Pty) Limited

37.15% 25.77% 17.67% 9.02% 5.34%

20. SUBSEQUENT EVENTS No material events outside of the ordinary course of business have occurred between reporting date and signature date of these financial statements.

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PRIVATE PLACEMENT MEMORANDUM

Supplementary information 1) Reconciliation of profi t for the year to distributable core income – Unaudited Euro Profit for the year Adjusted for: Movement in fair value adjustments Unrealised exchange differences Fundraising and structure costs Non distributable interest expense

a

Distributable core income a. Standard Bank fees incurred in transferring capital raised out of South Africa

100

2 631 486 (1 929 864) (238 808) 268 248 731 062 81 720 812 782

PRIVATE PLACEMENT MEMORANDUM

Annexure 9

LOANS AND BORROWING POWERS [2(e); 9(a); 9(b)] Save for the loans set out below, no other material loans, including the issue of debentures, have been made to MAS or its subsidiaries: 1.

MAS (BVI) made a secured loan to Argosy Capital Limited on 26 January 2011 of €3 250 000 for the acquisition of an investment property. The loan bears interest at a rate of 15% per annum and the interest receivable for the period up to 28 February 2011 is €45 411. Although interest is charged on the full amount of the loan, only €257 732 had been drawn by year-end. The balance is for settlement of a property acquisition, which is in the process of completion. This loan is secured against 3 492 937 shares in MAS, in addition to 100% of the shares in the SPV purchasing the investment property costing £2 451 243.

2.

Inventive Capital S.à.r.l. (a subsidiary) received a loan of €8 370 000 on 1 December 2009 from Sparkasse Bank. This is a 20-year term floating rate loan at 95bps above Euribor. The Aldi Portfolio purchased by Inventive Capital S.à.r.l. is held as security against this loan. There are no conversion or redemption rights for this loan. This interest on this loan has been hedged as disclosed in paragraph 9.2.2 of the private placement memorandum.

3.

Petrusse Capital S.à.r.l. (a subsidiary) received a loan of CHF 13 000 000 on 15 January 2009 from Credit-Suisse. This is a 15-year term floating rate loan at 90bps above Swiss LIBOR. The DPD Property purchased by Petrusse Capital Sa.r.l. is held as security against this loan. There are no conversion or redemption rights for this loan. Amortisation repayments begin in June 2010 on this loan. Such amortization payments are to be financed by the rentals received from the property. The interest on this loan has been hedged as disclosed in paragraph 9.2.3 of the private placement memorandum.

4.

Neither MAS nor its subsidiaries has made any loans to or for the benefit of any director, manager or associate of any director or manager of MAS.

5.

No loan capital is currently outstanding.

6.

The borrowing powers of the Company and its subsidiaries have not been exceeded since incorporation. No regulatory or other restrictions have been imposed on the Company or the subsidiaries’s borrowings powers since incorporation.

7.

The borrowing powers of the directors are set out in Annexure 6. The borrowing powers of the directors of the subsidiaries are identical to those of MAS.

8.

Details of material inter-company loans are set out in note 18 of Annexure 7.

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PRIVATE PLACEMENT MEMORANDUM

Annexure 10

STATEMENT OF CORPORATE PRACTICE AND CONDUCT The Company is committed to principles of comprehensive corporate governance. It embraces the adoption and monitoring of sound effective systems of internal control, the assessment and management of business risks and the definition and implementation of appropriate business procedures. The directors of the Company regard corporate governance as vitally important to the success of its business and are committed to applying the principles enunciated in the rules of the LuxSE where it has its primary listing. Corporate governance within the Company is managed by the board of directors and the audit committee, the details of which are set out below. The board considers all investment decisions on a case by case basis on recommendation by the investment committee of the investment adviser.

1.

AUDIT COMMITTEE The audit committee sits quarterly and comprises two independent non-executive directors, Jaco Jansen (chairman) and Ron Spencer. The terms of reference for the committee include: 1.1

Monitoring the integrity of the financial statements, reviewing significant financial reporting issues and judgments that they contain.

1.2

Reviewing and challenging where necessary the accountancy policies and their application; methods and assumptions used for unusual transactions; and the appropriateness of accounting treatments.

1.3

Reviewing, at least annually, the systems of internal controls and risk management systems, to ensure that an adequate risk management process is in place and operating effectively.

1.4

Reviewing the arrangements for employees of any group company to raise concerns, in confidence, about possible wrongdoing in financial reporting or other matters. The audit committee ensures that these arrangements allow proportionate and independent investigation of such matters and appropriate follow up action.

1.5

Considering and making recommendations to the board in relation to the appointment, re-appointment and removal of the external auditor, and overseeing the relationship with the external auditor and the investigation of matters arising out of the external audit.

The board is provided with regular reports on the audit committee’s activities.

2.

COMPANY SECRETARY The company secretary is responsible for ensuring that all statutory documentation is filed with the registrar and all such documentation is true, correct and up to date.

3.

ETHICS MAS endeavours to act with honesty, responsibility and professional integrity in its dealings with employees, shareholders, customers, suppliers and society at large. In any instance where ethical standards are called into question, the circumstances are investigated and resolved in an appropriate and fair manner.

4.

SOCIAL RESPONSIBILITIES MAS acknowledges its social responsibility towards the communities in which it operates and deserving institutions at large.

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PRIVATE PLACEMENT MEMORANDUM

Annexure 11

RISK FACTORS Making an investment carries inherent risk. Prospective investors should carefully consider the risks associated with investing in the Company and seek professional advice before making any decision to invest in the Company. The directors believe the below listed risks to be the most significant for potential investors. The risks listed, however, do not necessarily comprise all of those associated with an investment in the Company and are not intended to be presented in any assumed order of priority.

Suitability of investment Potential investors should consider carefully whether an investment in the Company is suitable in view of their personal circumstances and financial resources. Potential investors are not to construe the contents of the private placement memorandum as tax, business or legal advice. A prospective investor should consult with its own legal, business and tax advisers to determine the appropriateness and consequences of an investment in the Company.

Lack of operating history The Company and the investment adviser are recently formed entities and have limited operating history upon which investors can evaluate likely performance. There can be no assurance that the Company will achieve its investment objective or that the strategy applied to the Company will be successful.

Unusual duration of the investment advisory agreement The investment advisory agreement is terminable on one year’s notice but only after an initial period of fifteen years. The circumstances in which the Company can terminate the investment advisory agreement prior to the end of its initial fifteen year term are limited. The Company retains the right to terminate the investment advisory agreement in the event of a material breach or poor performance as defined in the investment advisory agreement.

No regulation The investment adviser is not (nor are its personnel) subject to regulation by the Financial Supervision Commission in the IOM.

Key individuals The Company’s success will depend to a significant extent upon the experience of the investment adviser’s officers whose continued service is not guaranteed.

Availability of investment opportunities The availability of potential investments that meet the Company’s investment criteria will depend on the state of the economy and financial markets in UK, Germany and Switzerland. The Company will be competing for investments with other real estate investment vehicles, as well as individuals, financial institutions and other institutional investors. The Company can offer no assurance that it will be able to identify and make investments that are consistent with its investment criteria or rate of return targets, or that it will be able to fully invest its available capital.

Development risk While it is not the intention of the directors to invest in development projects, in certain circumstances the Company may be exposed to development risks and the returns on the shares may therefore be subject to some extent to the risks associated with the development of real estate projects.

Economic risk Any future property market recession could materially adversely affect the value of properties. Returns from an investment in property depend largely upon the amount of rental income generated from the property and the costs and expenses incurred in the maintenance and management of the property, as well as upon changes in its market value. Rental income and the market value for properties are generally affected by overall conditions in the economy, such as growth in gross domestic product, employment trends, inflation and changes of interest rates. Government authorities at all levels are actively involved in the promulgation and enforcement of regulations relating to taxation, land use and zoning and planning restrictions, environmental protection and safety and other matters. The institution and enforcement of such regulations could have the effect of increasing the expense and lowering the income or rate of return from, as well as adversely affecting the value of, the Company’s property portfolio.

Property risk Investments made by the Company are subject to the general risks associated with property including but not limited to, fluctuations in the property markets, interest rates, fluctuations in property yields, changes in local legislation relating to ownership, landlord and tenant, environmental factors and the unforeseen actions of third parties. Both property values and rental income may also be affected by competition from other property owners, or the perceptions of prospective buyers or tenants of the attractiveness, convenience and safety of the properties.

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Property markets are cyclical and prices are subject to demand and supply factors over which the Company has no direct control. Property and property related assets are inherently difficult to value due to the individual nature of each property and the fact there is not necessarily a liquid market or price mechanism. As a result, valuations may be subject to substantial uncertainty. There is no assurance that the estimates resulting from the valuation process will reflect the actual sales price even where such sales occur shortly after the valuation date. Investments in properties are relatively illiquid and more difficult to realise than equities or bonds. The price of the Company’s shares may not accurately reflect the value of its underlying assets at or between valuations.

Currency exchange rates risk The base currency of the Company is Euros and as such, the returns to investors will be impacted by currency movements between the Euro and other currencies in which the Company holds property investments. These currency movements may be advantageous or disadvantageous to Euro returns. In addition, an investor must consider its personal effective ‘base’ currency as any currency movements between the Euro and the individual’s base currency could result in a loss of capital invested.

Interest rate risk Adverse movements in interest rates could result in materially adverse performance of the property portfolio performance and as such, investors could incur loss of capital invested.

Concentration risk The Company’s investments in property assets and their tenants may be concentrated. However, the Company will seek to manage down concentration risk in relation to specific properties and tenants as the Company’s investments increase.

Land and property ownership rights Whilst the Company will use all reasonable endeavours to operate property owning structures that comply with relevant laws and regulations (as well as tax provisions) relating to land and property ownership by foreign companies as well as with a view to mitigating the tax effect of local tax regulations, there can be no guarantee that in the future the countries in which the Company operates and/ or invests will not adopt laws and regulations which may adversely impact on the Company’s ability to own and operate land and property and the returns thereon. Accordingly, in such circumstances, the returns to the Company may be materially and adversely affected.

Law, regulatory regime and permits The failure to obtain or to continue to comply with all necessary approvals, licences or permits, including renewals thereof or modifications thereto, may adversely affect the Company’s performance, as could delays caused in obtaining such consents due to objections from third parties. Changes in laws relating to ownership of land could have an adverse effect on the value of shares. New laws may be introduced which may be retrospective and affect environmental planning, land use and development regulations. The Company could be adversely affected by delays in, or a refusal to grant, any required governmental approval for any particular investment, as well as by the application to the Company of any legal or administrative restriction on making investments.

Potential environmental liability Under various laws and regulations, an owner of property may be liable for the costs of removal or remediation of certain hazardous or toxic substances on or in such property. Such laws often impose such liability without regard to whether the owner knew of, or was responsible for the presence or removal of, these substances. The owner’s liability as to any property is generally not limited under such laws and could exceed the value of the property and / or the aggregate assets of the owner. The presence of such substances, or the failure to properly remediate contamination from such substances, may adversely affect the owner’s ability to sell the real estate or to borrow funds using such property as collateral, which could have an adverse effect on any return from such investment.

Litigation risk Investment in the Company involves certain risks normally associated with investment in property, which includes for example the risk that a party may successfully litigate against the Company, which may result in a reduction in the assets of the Company. The directors are not aware of any pending litigation against the Company.

Tax and regulatory changes The tax regimes applying to the Company and/or its SPVs, the ability of the Company to repatriate its assets and other operations of the Company are based on regulations which are subject to change through legislative, judicial or administrative action in the jurisdictions in which the Company and/or its SPVs operate and/or invest, thereby affecting the tax treatment of the Company and/or its SPVs in these jurisdictions.

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Illiquidity of the property market The property market is affected by many factors, such as general economic conditions, availability of financing, interest rates and other factors, including investor/buyer supply and demand, that are beyond the Company’s control. The Company cannot predict whether any member of the Company which owns property will be able to sell that property for the price or on the terms set by it, or whether the price or other terms offered by a prospective purchaser would be acceptable to it. Nor can the Company predict the length of time needed to find a willing purchaser and to complete the sale of a property. The Company may be required to expend funds to refurbish or to make improvements before a property can be sold. The Company cannot be certain that it will have funds available to correct such defects or to make such improvements.

Dividends Shareholders should note that payment of any future dividends is not guaranteed and will be at the discretion of the directors after taking into account various factors including the Company’s operating results, financial condition and current and anticipated cash needs.

Gearing The Company, either directly or indirectly through its SPV’s, may use borrowings which will typically be secured on assets in its property portfolio. If the cost of the Company’s borrowings exceeds the return on the assets in its property portfolio, the borrowings will have a negative effect on the Company’s performance. A relatively small movement in the value of the properties or the amount of income derived in respect thereof may result in a disproportionately large movement, unfavourable or favourable, in the value of the shares in the Company or the amount of income received in respect thereof. In the event that the Company enters into a bank facility agreement or funding agreement, such agreement(s) may contain financial covenants. In particular, such an agreement may require that the Company and/or its SPVs have assets exceeding a fixed percentage of the value of any loan draw down. If the value of such assets falls such that any financial covenant is breached, or if any other covenant is breached, the Company may be required to repay or procure the repayment of the borrowings in whole or in part. In such circumstances, it may be necessary to sell, in a limited time, all or part of the Company’s property portfolio, potentially in circumstances where there has been a downturn in property values generally such that the realisation proceeds do not reflect the valuation of such properties.

The factors mentioned above are not comprehensive and there may be other risks that relate to or may be associated with an investment in the Company.

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PRIVATE PLACEMENT MEMORANDUM

NOTES

106

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