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Annual financial statementsfor the year ended 30 June 2018

Attacq

2018

An

nu

al fin

ancial statem

ents

1 Glossary

4 Directors’ responsibilities and approval

5 Certificate by Company secretary

6 Audit and risk committee report

13 Directors’ report

16 Independent auditor’s report

22 Statements of financial position

24 Statements of profit or loss and other comprehensive income

25 Statements of cash flows

26 Statements of changes in equity

28 Accounting policies

OUR REPORTING SUITE

We produce a suite of reports to cater for stakeholders’ needs. Supplementary reports, see below, support our IR, and are tailored to meet our readers’ specific information requirements.

IR including the Summarised Consolidated Financial Statementswww.attacq.co.za/investors/integrated-report_2018

Company and group AFS for the year ended 30 June 2018 www.attacq.co.za/investors/annual_financial_statements_2018

Corporate governance report www.attacq.co.za/investors/corporate_governance_2018

Our website www.attacq.co.za

45 Notes to the financial statements

138 Supplementary information

Corporate information

Level of assurance

These AFS have been audited in compliance with the applicable requirements of the Companies Act.

Approval of the annual financial statements

The audited AFS, set out on pages 4 to 137, were approved by the board of directors on 10 September 2018.

The reports and statements set out below comprise the annual financial statements presented to the shareholders:

ATTACQ Annual financial statements 2018 CONTENTS

Annual Financial Statementsfor the year ended 30 June 2018

Summarised audited fi nancial statements and notice of

Annual general meetingfor the year ended 30 June 2018

Absa Absa Bank Limited

Adamax Adamax Property Projects Brooklyn Proprietary Limited

Adjusted NAVPS Net asset value per share adjusted for deferred taxation

A-F-S Available for sale

AFS Annual financial statements

AGM Annual general meeting

AIHI Ikeja AIHI Ikeja Limited

AIH International AIH International Limited

AIM AIM Investco Proprietary Limited

AMS Attacq Management Services Proprietary Limited

APD Atterbury Property Development Proprietary Limited

ARC Audit and risk committee

APF Atterbury Property Fund Proprietary Limited

APH Atterbury Property Holdings Proprietary Limited

ARF Attacq Retail Fund Proprietary Limited

ARS Attacq Retail Services Proprietary Limited

Artisan Development Artisan Development Partners Limited

Artisan Southport Artisan Southport Limited

AttAfrica Atterbury Africa Limited

AttAfrica SA Atterbury Africa SA Proprietary Limited

Attacq and company Attacq Limited

Attacq Energy Attacq Energy Proprietary Limited

Attacq Foundation Attacq Foundation Trust Proprietary Limited

Attacq Namco Attacq Namco Proprietary Limited

Attacq Treasury Share Company Attacq Treasury Share Company Proprietary Limited (formerly Razorbill)

Atterbury Asset Managers Atterbury Asset Managers Proprietary Limited

Atterbury Cyprus Atterbury Cyprus Limited

Atterbury Serbia Atterbury Serbia B.V.

ATT MOA 20 ATT MOA 20 Proprietary Limited

AWIC Attacq Waterfall Investment Company Proprietary Limited

Barrow Barrow Construction Proprietary Limited

B-BBEE Broad-based black economic empowerment

BEE Black economic empowerment

Bishopsgate Bishopsgate Student Residential Limited

Board Board of directors

BOC Bank of China Limited

Brand Group The Brand Group International Proprietary Limited

Brooklyn Bridge Brooklyn Bridge Office Park Proprietary Limited

CAF Combined assurance forum

CEO Chief executive officer

CFC Controlled Foreign Company

CFO Chief financial officer

COO Chief operating officer

CGT Capital gains tax

CGU Cash-generating unit

Companies Act The Companies Act 71 of 2008

Coronation Coronation Fund Managers Limited

Page 1ATTACQ Annual financial statements 2018

GLOSSARY

Dale Creek Investments Dale Creek Investments Proprietary Limited

Deloitte Deloitte & Touche

DEPS Distributable earnings per share

EAJV EA Waterfall Logistics JV Proprietary Limited

ESD Attacq Group ESD Proprietary Limited

fatti 365 fatti 365 Proprietary Limited

fatti Attacq fatti Attacq Proprietary Limited

FCTR Foreign Currency Translation Reserve

Fountains Regional Mall Fountains Regional Mall Proprietary Limited

FVTPL Fair value through profit or loss

Geelhoutboom Geelhoutboom Estate Proprietary Limited

GMR Gross monthly rental

Group Attacq and its subsidiaries

Group AFS Consolidated AFS

Gruppo Gruppo Investment Nigeria Limited

Growthpoint Growthpoint Properties Limited

GTP Guaranteed total package

Harlequin Duck Harlequin Duck Properties 204 Proprietary Limited

Highgrove Highgrove Property Holdings Proprietary Limited

IASB International Accounting Standards Board

IFRIC International Financial Reporting Interpretations Committee

IFRS International Financial Reporting Standards

Income Tax Act The Income Tax Act No 58 of 1962

IRBA Independent Regulatory Board of Auditors

In Coatings In Coatings Proprietary Limited (BEE)

Investec Investec Bank Limited

Investec Securities Investec Securities Limited

IR Integrated report

JIBAR Johannesburg Inter Bank Average Rate

JSE Johannesburg Stock Exchange

JSE Listings Requirements The Listings Requirements, as issued by the JSE from time to time

JV Joint venture

JV15 Waterfall JVCO 15 Proprietary Limited

JV115 Waterfall JVCO 115 Proprietary Limited

Key Capital Key Capital Holdings Proprietary Limited

King IV King IV™ Report on Governance for South Africa 2016

Kompasbaai Kompasbaai Property Development Proprietary Limited

Le Chateau Le Chateau Property Company Proprietary Limited

Leipzig Leipzig Nova Eventis Consortium Proprietary Limited

LibFin Liberty Financial Services

Lisinfo 222 Lisinfo 222 Investments Proprietary Limited

LP Land parcel

LTIP Long-term incentive plan

Lynnaur Lynnaur Investments Proprietary Limited

Lynnwood Bridge Lynnwood Bridge Office Park Proprietary Limited

Majestic Majestic Offices Proprietary Limited

Mall of Namibia Grove Mall of Namibia Proprietary Limited

Page 2ATTACQ Annual financial

statements 2018 GLOSSARY continued

ATTACQ Annual financial statements 2018

MAS MAS Real Estate Inc.

Micawber Micawber 832 Proprietary Limited

MMI MMI Holdings Limited

MOI Memorandum of Incorporation

NAVPS Net Asset Value Per Share

Nedbank Nedbank Limited

NESA Capital NESA Capital Proprietary Limited

Nieuwtown Nieuwtown Property Development Company Proprietary Limited

Ndzilo Ndzilo Fire Protection Engineers (BEE)

OmsFin Old Mutual Financial Services

Pemba Atterbury Pemba Properties Limited

PGLA Primary Gross Lettable Area

Prop 5 Corporation Prop 5 Corporation Proprietary Limited

PwC PricewaterhouseCoopers

Rainprop Rainprop Proprietary Limited

Razorbill Razorbill Properties 91 Proprietary Limited

RBH Royal Bafokeng Holdings Proprietary Limited

REIT Real Estate Investment Trust

Remco Remuneration and nominations committee

RMB Rand Merchant Bank – a division of First Rand Bank Limited

SAICA South African Institute of Chartered Accountants

Sanlam Sanlam Group Limited

Sanlam Capital Sanlam Capital Markets Limited

SA South Africa

SAR Share Appreciation Right

Sasfin Sasfin Limited

SESCF Stenham European Shopping Centre Fund Limited

Standard Bank Standard Bank Limited

Stenham Stenham European Shopping Centre Fund Limited

The Club The Club Retail Park Proprietary Limited

The Moolman Group East and West Investments Proprietary Limited

Thatego Thatego Holdings Proprietary Limited (BEE)

Travenna Travenna Development Company Proprietary Limited

TSE Transformation, Social and Ethics

Twin Cities Twin Cities Cleaning Services Proprietary Limited (BEE)

Value-Added Tax Act Value-Added Tax Act 89 of 1991

WACC Weighted Average Cost of Capital

WDC Waterfall Development Company Proprietary Limited

WIC Waterfall Investment Company Proprietary Limited

Wingspan Retail Africa Wingspan Investments Proprietary Limited

Zenprop Truzen 116 Trust

The directors are required in terms of the Companies Act to maintain adequate accounting records and are responsible for the content and integrity of the consolidated and separate AFS. It is their responsibility to ensure that the consolidated and separate AFS fairly present the state of affairs of Attacq and the group as at the end of the financial year and the results of its operations and cash flows for the year then ended, in conformity with IFRS and the requirements of the Companies Act.

The consolidated and separate AFS are prepared in accordance with IFRS, the JSE Listings Requirements and are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates.

The directors acknowledge that they are ultimately responsible for the system of internal control established by the group and place considerable importance on maintaining a strong control environment. To enable the directors to meet these responsibilities, the board sets standards for internal control aimed at reducing the risk of error or loss in a cost-effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the group and all employees are required to maintain the highest ethical standards in ensuring the group’s business is conducted in a manner that in all reasonable circumstances is beyond reproach. The focus of risk management in the company is on identifying, assessing, managing and monitoring all known forms of risk across the group.

The directors have reviewed the cash flow forecast of the group and company for the next 12 months and, in light of this review and the current financial position, taking into account the maturing of the facilities, they are satisfied that the group and the company have access to adequate resources to continue in operational existence for the next 12 months.

The consolidated and separate AFS, set out on pages 22 to 137 in this report, have been prepared on the going-concern basis.

The external auditors are responsible for independently auditing and reporting on the consolidated and separate AFS. The AFS have been examined by the group’s external auditors and their unmodified report is presented on pages 16 to 21.

The consolidated and separate AFS set out on pages 5 to 137, were approved by the board on 10 September 2018 and were signed on its behalf by:

P Tredoux M HammanChairperson Chief executive officer

10 September 2018 10 September 2018


statements 2018 DIRECTORS’ RESPONSIBILITIES AND APPROVAL

In terms of section 88(2)(e) of the Companies Act, I declare that to the best of my knowledge, for the year ended 30 June 2018, that the company has lodged with the Registrar of Companies all such returns as are required of a public company in terms of the Companies Act and that such returns are true, correct and up to date.

T KoddeCompany secretary

10 September 2018

Page 5ATTACQ Annual financial statements 2018CERTIFICATE BY COMPANY SECRETARY

TO THE SHAREHOLDERSThe company’s audit and risk committee (the committee) is a committee of the board of directors (the board). The activities of the committee are determined by its charter as approved by the board and its statutory responsibilities as per the South African Companies Act, 71 of 2008 (as amended) (the Companies Act) and the King IV Report on Governance for South Africa 2016 (King IV™*).

The purpose of the committee is to provide the board and shareholders with assurance that their interests are protected in respect of enterprise risk management, information and technology governance, legal and regulatory compliance, internal controls and financial reporting. The committee therefore has a responsibility to ensure that the group has effective systems in place to ensure adherence with sound governance principles as defined in King IV; that effective mechanisms are in place to ensure that risks are being managed, and that the group is aware of its legal and regulatory commitments.

One of the key functions of the committee is to ensure assets and liabilities are recorded accurately and fairly, applying appropriate judgement in addition to the application of International Financial Reporting Standards (IFRS). In support of this responsibility the group has implemented an internal control framework, an internal audit function, appointed registered external auditors and reporting against budgets, forecasts and prior year actuals.

The governance of risk remains a key priority for the board and the committee. The board is ultimately responsible for setting the risk appetite and tolerance levels for the group, leveraging opportunities and managing risk. The board has delegated oversight responsibility for risk management to the committee with management responsible for the design of and effective operation of the risk management process.

The committee has assessed the suitability for appointment of Deloitte & Touche (Deloitte), together with the engagement partner on the audit and has recommended the extension of the external audit contract with Deloitte, subject to the approval thereof by shareholders. The committee has also recommended a one-year extension of the internal audit contract with PricewaterhouseCoopers (PwC).

Significant matters considered by the committee during the year under review included the conversion to a Real Estate Investment Trust (REIT); the going concern status of the group; adherence with sound corporate governance principles in respect of information and technology, legal and regulatory requirements; the annual financial statements for the year ended 30 June 2018 and the integrated report.

ROLE OF THE COMMITTEEThe board has formally delegated certain duties, responsibilities and authority to the committee as defined in the audit and risk committee charter (charter). The charter is reviewed annually to ensure adherence to sound governance principles such as King IV. The committee acts on behalf of the board and the matters reviewed and managed by the committee remains the responsibility of the board of directors.

The specific roles and responsibilities of the committee include the following: - Providing the board with assurance regarding the efficacy and reliability of the financial information used by the

directors to assist them in discharging their duties - The appointment of the external auditors subject to the approval of shareholders - Assessing the suitability of the external auditors for appointment - The appointment of the internal auditors - Reviewing the independence of the internal and external auditors - Monitoring the value and nature of non-assurance services provided by the external auditor - Monitoring the tenure of the external auditor as well as the rotation of the external audit partner - Monitoring any significant change in the management of the group during the external audit firm’s tenure which

may mitigate the attendant risk of familiarity between the external auditor and management - Assessment of the quality and performance of the external and internal auditors on an annual basis - Confirming that the company has established appropriate financial reporting procedures and that those

procedures are operating - Consideration of significant matters in relation to the annual financial statements - Reviewing interim and annual financial statements and the annual integrated report - Providing oversight over the internal audit function and approving of the annual and three-year rolling risk-based

internal audit plan

* Copyright and trademarks are owned by the Institute of Directors in Southern Africa NPC and all of its rights are reserved.


statements 2018 AUDIT AND RISK COMMITTEE REPORT

- Overseeing the combined assurance process - Assessing the effectiveness and performance of the chief financial officer (CFO) and the finance function - Ensuring that significant business, financial and other risks have been identified and are being suitably managed - Ensuring sound governance practices, reporting and compliance processes are in operation, including the

monitoring of adherence with King VI and applicable legislation, including but not limited to the Companies Act, 2007, the Income Tax Act 58 of 1962 (Income Tax Act), the Value-Added Tax Act 89 of 1991 (Value-Added Tax Act), Occupational Health and Safety Act and National Buildings Regulations and Standards Act

- Timely and effective implementation of corrective actions identified during internal audit reviews - Ensuring that risk management deficiencies identified are appropriately addressed.

MEMBERSHIP OF THE COMMITTEEAt date of approval of this report the committee comprised four independent non-executive directors elected by the shareholders on recommendation by the remuneration and nominations committee. The chairperson of the board is neither the chairperson nor a member of this committee. The combined skillset of the members of the committee covers the following areas: - Financial and sustainability reporting - Internal financial controls - External audit processes - Internal audit processes - Corporate law - Risk management - Sustainability issues - Information technology governance as it relates to integrated reporting - Governance processes within the company.

Members and attendance of committee meetings held during the year under review are included in the table below:

Member Status Attendance

S Shaw-Taylor (Chairperson) Independent non-executive director 4/4

HR El Haimer Independent non-executive director 4/4

KR Moloko Independent non-executive director 3/4

BT Nagle Independent non-executive director 4/4

ACTIVITIES OF THE COMMITTEE DURING THE YEARThe committee has an annual work plan, developed from the charter, with standing items that the committee considers at each meeting with the addition of any specific matters and topical items which might be of concern to the committee.


During the 2018 financial year, the committee focused on three principal areas which are summarised below:

Risk and internal controls External and internal auditAccounting, tax and financial reporting

Considered reports from internal auditors on their review and assessment of the internal control environment

Considered and recommended for approval the extension of the appointment of the external auditors

Reviewed and recommended for approval the interim and annual results including the significant financial reporting judgements contained therein

Considered and approved the audit approach and scope of audit work to be undertaken by the external auditors including the related audit fees

Considered the ongoing solvency and liquidity of the group

Considered output from the annual risk assessment process as identified and assessed by management and members of the committee

Considered the independence of the external auditors and their effectiveness, taking into account non-audit services undertaken by the external auditors

Reviewed and recommended to the board the approval of the REIT conversion process ensuring compliance with applicable legislation

Considered and interrogated, on a quarterly basis, risk management reports from management on risk management activities and residual risk ratings

Considered and approved the extension of the contract with the outsourced internal auditors

Assessed the effectiveness of the group’s internal control environment

Considered and approved the annual risk-based internal audit plan and budget

Reviewed and approved disclosures in the integrated report in relation to controls, risk management, principal risks and uncertainties

Considered a comprehensive analysis of the group’s regulatory compliance requirements

Considered the level of alignment between the group’s key risks and the internal audit programme

Considered the performance of the CFO and the finance function

Reviewed and recommended for approval the updated risk management policy and framework

Reviewed the enterprise risk management report and considered the maturity of the enterprise risk management function

Reviewed the risk appetite and tolerance levels for the group


statements 2018 AUDIT AND RISK COMMITTEE REPORT continued

FINANCIAL STATEMENTS AND ACCOUNTING PRACTICESThe committee reviewed the interim and the consolidated financial statements for the year ended 30 June 2018, as well as the public announcements relating to the release of these results, and recommended their approval to the board.

The committee ensured that the necessary steps were taken to ensure that the financial statements were prepared in compliance and accordance with the IFRS, the Companies Act and the Johannesburg Stock Exchange (JSE) Listings Requirements.

During the financial year, the committee reviewed the JSE’s proactive monitoring report on the company’s financials for the year ended 30 June 2017 as issued in February 2018. Management has taken the necessary steps to implement the recommendations made by the JSE.

SIGNIFICANT ISSUES IDENTIFIED AND CONSIDERED BY THE COMMITTEEAfter discussions with management and the external auditors, the committee determined that the key material matters of the group’s consolidated financial statements related to: - REIT conversion (distributable earnings per share, liquidity and deferred tax) - Valuation of investment properties - Investment into MAS Real Estate Inc. (MAS) - Going concern.

REIT CONVERSIONAttacq Limited (Attacq’s) application to convert to a REIT was approved by the JSE on 29 May 2018.

As a REIT, Attacq will make a qualifying distribution during October 2018 in terms of section 25BB of the Income Tax Act and calculated with reference to the 30 June 2018 distributable income.

The conversion to a REIT required comprehensive input and advice from external experts on tax legislation and the JSE Listings Requirements as well as on the implementation thereof and ongoing compliance. The committee reviewed the process leading to the conversion including applicable legislation, expert advice and working papers and satisfied itself as to the integrity of the conversion. The committee recommended the implementation of the conversion to the board, and the directors confirmed compliance with paragraph 13.46(h)(ii) of the JSE Listings Requirements.

As a REIT, Attacq will be required to comply with legislation pertaining to, inter alia, borrowing levels, solvency and liquidity and distributions. A process has been introduced for the ongoing monitoring by management, overseen by the committee, to ensure compliance with the requirements of a REIT.

VALUATION OF INVESTMENT PROPERTIESThe group holds investment properties with a carrying value of R21.2 billion. The properties comprise completed properties, developments under construction, infrastructure and development rights.

Investment properties were valued as at 30 June 2018 using external valuations performed by Sterling Valuation Specialists CC, Eris Property Group Proprietary Limited and Wolffs Valuations Services Proprietary Limited in association with Mills Fitchet. The board has adjusted valuations as appropriate for straight-lining of leases (completed properties), cost to complete (developments under construction) and estimated roll-out periods and lease liabilities (development rights).

The committee considered the competencies and independence of the external valuers and reviewed the assumptions and judgements used by the valuers in the external valuations. In addition, the committee reviewed and interrogated the relevant adjustments to the external valuations and concluded that the valuation of investment properties as determined at year end was fairly stated and in accordance with accounting policies.

INVESTMENT INTO MAS REAL ESTATE INC.Attacq holds 22.8% shareholding in MAS via a 100.0% owned subsidiary. The investment is equity accounted and has a carrying value of R3.1 billion as at 30 June 2018. The committee considered the financial results of MAS including its solvency and liquidity and satisfied itself as to the accuracy and value thereof as held on Attacq’s balance sheet at year end.


The committee considered the treatment of the investment in MAS as an associate to be equity accounted and confirmed the treatment as correct in that Attacq does not have control over MAS but has a significant influence by virtue of its shareholding.

GOING CONCERNThe committee and the board considered and assessed the group’s status as a going concern in the preparation of the consolidated financial statements. The committee and the directors have reviewed the group’s cash flow forecast for the 12 months ending 30 June 2019 and they are satisfied that the group has access to adequate resources to continue as a going concern for the next 12 months. The consolidated financial statements have been prepared on the going concern basis.

SUMMARYAfter reviewing the presentations and reports from management and consulting where necessary with the auditors, the committee was satisfied that the financial statements appropriately addressed the critical judgements and key estimates both in respect to amounts and disclosures. The committee was also satisfied that the significant assumptions used for determining the value of investment properties, other investments, taxation, goodwill and other assets and liabilities have been appropriately examined, questioned and challenged.

EFFECTIVENESS OF THE CHIEF FINANCIAL OFFICER AND THE FINANCE FUNCTIONThe committee reviewed the effectiveness of the CFO and the finance function and satisfied itself with the appropriateness of the expertise and the experience of the CFO and his team.

INTERNAL AUDITAttacq has outsourced its internal audit function to PwC, a professional service provider, ensuring that an independent strategically aligned function exists. The function is responsible for preparing and implementing the internal audit plan based on a three-year rolling period as well as the audit plan for the current year. The committee reviews and approves both plans each yearly cycle. The internal audit function operates under the direction of the committee, which approves the scope of the work to be performed. Critical and significant findings are reported to the committee on at least a quarterly basis. Corrective action is taken to address internal control deficiencies identified in the execution of work. The internal audit function operates within the mandates defined within the internal audit charter.

A risk-based internal audit plan was developed for the 2018 financial year. The results of the risk-based audits were reported to the committee. The committee has evaluated the internal audit report, and has not identified any material breakdowns in internal controls within the areas reviewed. Follow-up audits were also conducted during the financial year on corrective actions that have been implemented.

EXTERNAL AUDITDeloitte has been the external auditor of the company and its major subsidiaries since 2011. It will be recommended at the annual general meeting (AGM) scheduled for 15 November 2018, that Deloitte be reappointed as the external auditor for the 2019 financial year. The engagement partner on the audit is Patrick Kleb. The audit partner is required to rotate every five years. Patrick Kleb was appointed in July 2016 and will be recommended for reappointment at the upcoming AGM. - During the year, Deloitte provided non-audit services, including tax reviews and advice, as well as certain agreed

upon procedures pertaining to the REIT conversion. All non-audit services are approved by the committee. The committee is satisfied that the non-audit services provided by Deloitte did not bring its independence into question

- Review of the independence of the external auditor including: – The pre-approval of non-audit services provided – Approval of the audit budget for the year – Annual audit planning, conclusions and final opinion reports – Approval of audit engagement letter.

- Assessed the suitability of the appointment of the current audit firm and audit partner in terms of section 3.84(g)(iii) of the JSE Listings Requirements

- Review of management report items identifying effectiveness of controls over key risks and recommendations for corrective action.

INTERNAL CONTROLSTo meet the group’s responsibility to provide reliable financial information, the group maintains financial, legal compliance and operational systems of internal control. These controls are designed to provide reasonable assurance



that transactions are concluded in accordance with management’s authority, that the assets are adequately protected against material losses, unauthorised acquisition, use or disposal, and that transactions are properly authorised and recorded.

The systems include a documented organisational structure and division of responsibility, established policies and procedures, which are communicated throughout the group. The group employment processes look to the careful selection, training and development of people. The committee is of the view that the internal control systems are adequately designed and functioning appropriately.

RISK MANAGEMENTEffective risk management is an integral part in ensuring that the group’s strategic intent and growth targets are met. Attacq is aware that there are a multitude of risks that need to be managed to safeguard against any avoidable losses. Attacq’s risk management approach does not only focus on the negative aspects of risks, but also in identifying opportunities and appropriate means to exploit such opportunities.

Attacq has conducted a review of its enterprise risk management policy and framework. The risk management policy and framework outlines and prescribes the risk management process and is applicable across the group and its subsidiaries. As a REIT, Attacq’s risk management policy specifically prohibits the company from entering into any derivative transactions that are not in the course of doing business, and the committee has monitored compliance with the policy and confirms that Attacq is in compliance with the policy.

Attacq’s risk management process is based on ISO 31000:2009 risk management principles and guidelines and is currently being updated to take ISO 31000:2018 into account. Attacq applies a formal risk assessment process on an annual basis and continuously identifies and quantifies emerging risks with input from the committee. Residual risk is re-assessed on a quarterly basis by the combined assurance forum and overseen by the committee.

The board takes ultimate responsibility for risk management and has delegated to the committee oversight responsibility. The executive team, as the implementers of strategy, are responsible to ensure that the group has an effective system for managing risks, and that effective and efficient risk mitigations are implemented. Management reports quarterly to the committee to attest that all potential and emerging risks have been identified, recorded and that appropriate action has been taken to mitigate the risks to acceptable levels.

Risk management is a strategic partner for business ensuring that it not only protects value but acts as an enabler for business and growth. Management and the committee are committed to continuously improve the risk management process to ensure a risk resilient environment.

Attacq’s risk management and combined assurance policy and framework aims to: - Set out risk governance structures and roles and responsibilities using a combined assurance (three lines of

defence) approach - Provide an overview of all risk management processes - Define common risk management terminology - Provide a framework to leverage opportunities - Provide guidance related to the key components of an effective risk management initiative - Provide a customised yet consistent approach to the application of risk management across the group - Ensure that the risk management function is integrated with the business planning processes - Adhere to international best practices such as ISO 31000:2018 and the revised COSO II Risk Management

Framework 2017.

PRINCIPAL RISKS AND UNCERTAINTIESSpecific focus was placed on the risks recorded in the risk management report.

REGULATORY COMPLIANCEThe committee provides oversight of the regulatory compliance process and is assisted by the transformation, social and ethics (TSE) committee.

In line with Principle 13 of King IV, the legal and regulatory compliance risk management process is defined in the risk management and combined assurance policy and framework and is facilitated by the head of legal and supported by the risk management function. Attacq has established its compliance requirements (both prescribed and voluntary) through a formal compliance risk assessment process and applies the compliance risk management process as prescribed in the risk management policy and framework. Attacq is in the process of implementing the


Sentinel Legal Regulatory compliance system that will provide employees with direct access to regulatory information, updates, practice notes and latest case law per pre-selected categories of legislation to further strengthen regulatory compliance capacity with the group.

A formal process is in place ensuring a mandatory authorisation process for dealings in the company’s shares, formal procedure for both acceptance and granting of gifts and inducements, disclosure of conflicts of interest, as well as formal levels of authority and delegated signing authorities for business transactions.

INFORMATION AND TECHNOLOGY GOVERNANCEThe committee, with the assistance of the combined assurance forum, provides oversight on information and technology governance within the group. As such, Attacq has developed an information and technology governance charter in line with Principle 12 of King IV.

The information and technology governance charter outlines the decision-making rights and responsibility framework for information and technology governance that will foster a culture of effective and efficient use of the company’s information and technology assets.

COMBINED ASSURANCEAs part of the enterprise risk management process, the group has adopted an integrated approach to combined assurance by using the three lines of defence approach. The committee has established a combined assurance forum (CAF) to co-ordinate risk assurance activities and to ensure that the committee and the board receives appropriate assurance that risks are being appropriately mitigated through the effective application of a combined assurance model.

INTEGRATED REPORTThe committee will evaluate the integrated report for the financial year under review and it will assess its consistency with appropriate reporting standards which conform to the JSE Listings Requirements and King IV.

On behalf of the committee

S Shaw-TaylorAudit and risk committee chairperson

10 September 2018



The directors have pleasure in presenting their report, together with the consolidated and separate AFS for the year ended 30 June 2018.

1. CORPORATE OVERVIEWAttacq converted to a REIT with effect from 29 May 2018. It derives rental income from investments in office and mixed-use, retail, industrial and hotel properties, and distributions and interest from listed and unlisted investments.

Attacq’s focus is on total return, comprising distributions and capital growth.

Attacq’s value proposition is to deliver exceptional and sustainable growth through real estate investments and developments by having a focused approach. Attacq’s value proposition has four key drivers, namely: - South African portfolio; - Waterfall development; - Investment in MAS; and - Rest of Africa retail investments.

Attacq has a total asset value of R29.1 billion (2017: R27.3 billion), which includes landmark commercial and retail property assets and developments. Attacq’s portfolio of properties and investments consists of geographically diverse assets across South Africa, as well as international investments in sub-Saharan Africa through AttAfrica and Gruppo and western, central and eastern Europe through MAS.

2. AUTHORISED AND ISSUED SHARE CAPITALDuring the financial year, there were no significant changes to the issued share capital of Attacq as 340 000 new shares were issued relating to the exercise of share options by M Hamman and HA Austen.

As at 30 June for the respective financial years, Attacq’s issued share capital comprised:

2018 2017

Total issued shares 749 582 777 749 242 777

Treasury shares (46 427 553) (46 427 553)

ARF (29 726 516) (29 726 516)

Attacq Treasury Share Company (previously Razorbill) (16 701 037) (16 701 037)

Net issued shares 703 155 224 702 815 224

3. GOING CONCERNThe AFS have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

The group earned a net attributable profit for the year ended 30 June 2018 of R2.6 billion (including the reversal of deferred tax upon REIT conversion of R1.8 billion). As of that date the group had a positive net asset value and its current assets together with non-current assets held for sale exceeded its current liabilities by R1.7 billion.

4. FINANCIAL PERFORMANCEThe group generated total comprehensive income attributable to the owners of the holding company of R2.6 billion (2017: R501.1 million).

Page 13ATTACQ Annual financial statements 2018DIRECTORS’ REPORT

5. DIRECTORS’ INTERESTS IN ATTACQ SHARES30 June 2018 30 June 2017

Name Direct Indirect Total Direct Indirect Total

P Tredoux – 27 733 27 733 – 27 733 27 733

MC Wilken – – – 9 800 1 437 263 1 447 063

M Hamman 150 000 130 608 280 608 145 000 50 000 195 000

R Nana – – – – – –

JR van Niekerk – – – – – –

MM du Toit – – - – – –

HR El Haimer 6 500 – 6 500 6 500 – 6 500

IN Mkhari – – – – – –

KR Moloko – – – – – –

BT Nagle – – – – – –

S Shaw-Taylor 650 000 – 650 000 650 000 – 650 000

JHP van der Merwe – 631 481 631 481 – 631 481 631 481

LLS van der Watt – – – 2 284 3 279 259 3 281 543

Total 806 500 789 822 1 596 322 813 584 5 425 736 6 239 320

On 14 October 2017, 136 195 LTIPs granted to MC Wilken vested. These share options were exercised on 9 December 2017.

On 30 June 2017, 240 000 share options were granted to M Hamman as detailed in Attacq’s listing prospectus vested. These share options were exercised on 14 December 2017. On 14 December 2017, 240 000 of these shares were sold to cover the costs of the options granted to him.

On 14 October 2017, 85 806 LTIPs granted to M Hamman vested. These share options were exercised on 15 December 2017 and 18 December 2017 respectively.

Other than the aforementioned changes there were no other changes in directors’ shareholding between the end of the financial year and the date of approval of the AFS.

6. SPECIAL RESOLUTIONS PASSED BY THE GROUPApart from the special resolutions passed at the AGM, held on 23 November 2017, no other special resolutions were passed by Attacq or any of Attacq’s direct subsidiaries.

7. INVESTMENT PROPERTYInvestment properties increased by 7.6% from the prior year largely due to the continued roll-out of Waterfall. Additions to investment property totalled R738.9 million, comprising R511.8 million spent on properties under development, R211.2 million on completed developments and R15.9 million on infrastructure. Fair value adjustments on investment property amounted to R329.0 million for this financial year.

Investment property classified as held for sale amounted to R115.1 million (2017: R603.0 million). Refer to note 18 for more details on the investment properties classified as held for sale. Investment properties disposed of during the current year amounted to R62.6 million.

8. DISPOSALSThe following assets were disposed of during the year: - Disposal of the 50.0% undivided share in the development rights related to the Deloitte head office

development - Disposal of investments in Artisan Development Partners and Artisan Southport - Disposal of 25.0% in the Grove Mall of Namibia - Disposal of the investment in Nova Eventis.

9. DIVIDEND DISTRIBUTIONSSubsequent to year end, on 10 September 2018, the board approved a maiden dividend of 74 cents for the 12 months ended 30 June 2018, which will be paid on 8 October 2018.


statements 2018 DIRECTORS’ REPORT continued

10. SUBSEQUENT EVENTSRefer to note 34 to the AFS for disclosure regarding subsequent events.

11. DIRECTORS AND BOARD CHANGESP Tredoux Independent non-executive chairperson

MC Wilken Chief executive officer*

M Hamman Chief executive officer

R Nana Chief financial officer

JR van Niekerk Executive director

MM du Toit Independent non-executive director

HR El Haimer Lead independent non-executive director

IN Mkhari Independent non-executive director

KR Moloko Independent non-executive director

BT Nagle Independent non-executive director

S Shaw-Taylor Independent non-executive director

JHP van der Merwe Independent non-executive director

LLS van der Watt Non-executive director#

M Hamman was appointed as CEO and resigned as CFO with effect from 19 June 2018.

R Nana was appointed as CFO with effect from 19 June 2018.

JR van Niekerk was appointed as executive director with effect from 19 June 2018.

IN Mkhari was appointed as independent non-executive director with effect from 15 March 2018.

* MC Wilken resigned with effect from 31 December 2017.# LLS van der Watt resigned with effect from 1 July 2017.

There were no changes in directors between the reporting date and this report.

12. COMPANY SECRETARYAttacq’s company secretary is T Kodde.

Registered office: ATT House, 2nd Floor, Maxwell Office Park, 37 Magwa Crescent, Waterfall City, 2090 Postal address: PostNet Suite 016, Private Bag X81, Halfway House, 1685.

13. AUDITORSIt will be proposed at the next AGM, scheduled for 15 November 2018, that Deloitte continue in office in accordance with the Companies Act.


To the shareholders of Attacq LimitedReport on the audit of the consolidated and separate financial statementsOpinionWe have audited the consolidated and separate financial statements of Attacq Limited and its subsidiaries (the group) set out on pages 22 to 137, which comprise the statements of financial position as at 30 June 2018, the statements of profit or loss and other comprehensive income, the statements of changes in equity and the statements of cash flows for the year then ended, and the notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate financial position of Attacq Limited as at 30 June 2018, and its consolidated and separate financial performance and its consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS) and the requirements of the Companies Act of South Africa.

Basis for opinionWe conducted our audit in accordance with International Standards on Auditing (ISA). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial Statements section of our report. We are independent of the group in accordance with the Independent Regulatory Board for Auditors’ Code of Professional Conduct for Registered Auditors (IRBA Code) and other independence requirements applicable to performing audits of financial statements in South Africa. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code and in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBA Code is consistent with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Parts A and B). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit mattersKey audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined that there are no key audit matters to communicate in our report with regard to the audit of the separate financial statements of the company for the current period.


statements 2018 INDEPENDENT AUDITOR’S REPORT

Key audit matter How our audit addressed the key audit matter

VALUATION OF INVESTMENT PROPERTY

The carrying value of investment property amounted to R21.2 billion and the fair value adjustment recorded in net profit for the year in respect of investment property was R0.3 billion. Significant judgement is required by the directors in determining the fair value of investment property and for the purposes of our audit; we identified the valuation of investment property as representing a key audit matter due to the significance of the balance to the financial statements as a whole, combined with the judgement associated with determining the fair values.

The group’s investment property comprises various categories of properties, being completed developments, developments under construction, infrastructure and services, and development rights. The models used to determine the fair values for each of the categories (excluding infrastructure and services, which is carried at cost) differ due to the different nature of each of these categories and are performed by independent valuers on an annual basis.

We assessed the competence, capabilities, objectivity and independence of the directors’ independent valuers, and assessed their qualifications. In addition, we discussed the scope of their work with management and reviewed their terms of engagement to determine that there were no matters that affected their independence and objectivity or imposed scope limitations upon them. We confirmed that the approaches they used are consistent with IFRS and industry norms.

We tested the inputs underpinning the investment property valuation, including rental income, discount rates and exit cap rates to that utilised in the prior year. In addition, we compared the discount and capitalisation rates to that of the May 2018 South African Property Owners Association report.

Our independent external valuer compared selected inputs used to market data and entity-specific historical information to confirm the appropriateness of these inputs on a sample basis. Our independent external valuer furthermore reviewed the following: - The models used by the directors and their

independent valuers - The significant judgements relating to the

assumptions of the discount and reversionary cap rates.



Completed developments and developmentsunder constructionThe inputs with the most significant impact on these valuations are disclosed in note 5, and include exit cap rates and discount rates.

Development rightsThe determination of the underlying development rights value within the Waterfall development requires special consideration as number of inputs and assumptions are used in the valuation. The Waterfall land was acquired through a 99-year lease, and is therefore classified as development rights in the consolidated financial statements.

The valuation in respect of Waterfall’s development rights is based on an external valuation performed on a residual valuation method. The valuation is then adjusted downward to take into account, inter alia, the nature of the contractual rights and the estimated future rental obligations attached to the development rights.

We held meetings with each of the directors’ assigned independent valuers in order to confirm that the approaches they used are consistent with IFRS and industry norms.

We further investigated any significant changes in assumptions from those applied in the prior-year valuations.

We performed sensitivity analyses on the significant assumptions to evaluate the extent of impact on the fair values and assessed the appropriateness of the group’s disclosures relating to these sensitivities.

We found that the models used for the various property categories were appropriate and the discount rates and exit cap rates were comparable to market rates.

We assessed the following additional inputs utilised in respect of the valuation of the development rights: - Timing of the development plans against the

developments undertaken in the current year and prospective developments;

- The calculation and treatment of the future rental obligation; and

- The serviced land prices per bulk square metre.

The timing of development plans for the development rights and serviced land prices per square metre appeared reasonable. The treatment of the future rental obligation for the development rights was found to be appropriate. The treatment of the development rights was appropriate and the valuation thereof was reasonable.

The disclosures pertaining to the investment property were found to be appropriate in the consolidated financial statements.


statements 2018 INDEPENDENT AUDITOR’S REPORT continued


CONVERSION TO A REAL ESTATE INVESTMENT TRUST (REIT) AND THE RELATED IMPACT ON THE DEFERRED TAX LIABILITY AND THE DISCLOSURE OF DISTRIBUTABLE EARNINGS

The group converted to a REIT on 29 May 2018 following the approval of the conversion by the JSE. This was a significant change in the focus of the users of the financial statements from a net asset value to a distributable earnings growth perspective.

The conversion to a REIT may enable Attacq Limited to deduct the dividends that it distributes to its shareholders from its taxable income in terms of section 25BB of the Income Tax Act (ITA).

We identified the conversion to a REIT as a key audit matter due to it being a significant transaction during the current year together with the significant impact the conversion had on the deferred tax liability recognised prior to conversion.

In terms of section 25BB of the ITA, a REIT is not subject to capital gains tax when it disposes of immovable property and shares in a REIT or property company (as defined in the ITA). This resulted in a significant portion of the previously recognised deferred tax liability as disclosed in note 11, reversing in the current year. Furthermore a REIT is required to include disclosure of the distributable earnings generated for the year in terms of the SA REIT association’s “best practice recommendations” as disclosed in note 39.

We inspected the approval from the board of directors to convert to a REIT.

We inspected the approval from the JSE for the conversion to a REIT.

We utilised our tax specialists who assessed the compliance with the requirements of section 25BB of the ITA in terms of the distributions made by the group being “qualifying distributions”.

We assessed the amount of the deferred tax liability reversed during the current year as a result of the conversion to a REIT and found the amount that reversed to be appropriate.

We assessed the presentation and disclosure in respect of deferred taxation-related balances in the consolidated financial statements and considered the disclosure to be appropriate.

We assessed the accuracy and completeness of the distributable earnings calculation and disclosure as included in the segmental report in accordance with SA REIT association’s “best practice recommendations”. We found the disclosure and calculations to be appropriate.



VALUATION OF INVESTMENT IN MAS REAL ESTATE INC. (MAS)

The group has a significant investment in MAS Real Estate Inc. (MAS).

The carrying value of investment in MAS as disclosed in note 8, amounted to R3.1 billion.

The fair value is further influenced by the accounting policies applied and appropriate adjustments that should be made on consolidation for differences in accounting policies.

We rely on the work performed by the component auditor in order to support our opinion on the consolidated financial statements.

We identified the valuation of investment in MAS as representing a key audit matter due to the significance of the balance to the financial statements as a whole.

To address the valuation of investment in MAS, we engaged and kept in continuous communication with the component auditor of MAS throughout the audit and issued instructions to satisfy our audit requirements in terms of ISA 600: Special considerations – Audit of Group Financial Statements (including the work of component auditors).

We obtained the audited financial information and recalculated the value of the investment. We furthermore assessed the investment for any indicators of impairment.

The group engagement partner and manager visited Isle of Man and engaged with the component auditors of MAS and reviewed their audit working papers.

We ensured that the group accounting policies were consistently applied.

We consider the disclosure of the investment to be appropriate for purposes of the consolidated financial statements.

Other informationThe directors are responsible for the other information. The other information comprises the directors’ report, audit and risk committee’s report and certificate by the company secretary, as required by the Companies Act of South Africa, which we obtained prior to the date of this auditor’s report and the integrated report, which is expected to be made available to us after that date. Other information does not include the consolidated and separate financial statements and our auditor’s report thereon.

Our opinion on the consolidated and separate financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the directors for the consolidated and separate financial statementsThe directors are responsible for the preparation and fair presentation of the consolidated and separate financial statements in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated and separate financial statements, the directors are responsible for assessing the group’s and the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group and/or the company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the consolidated and separate financial statementsOur objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that


statements 2018 INDEPENDENT AUDITOR’S REPORT continued

includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and separate financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the consolidated and separate financial statements,

whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group’s and the company’s internal controls.

- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

- Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group’s and the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated and separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group and/or the company to cease to continue as a going concern.

- Evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures, and whether the consolidated and separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

- Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the audit and risk committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the audit and risk committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the audit and risk committee, we determine those matters that were of most significance in the audit of the consolidated and separate financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on other legal and regulatory requirementsIn terms of the IRBA Rule published in Government Gazette Number 39475 dated 4 December 2015, we report that Deloitte & Touche has been the auditor of Attacq Limited for eight years.

Deloitte & Touche Buildings 1 and 2, Deloitte PlaceRegistered Auditor The WoodlandsPer: Patrick Kleb Woodlands DrivePartner Woodmead, Sandton

10 September 2018


GROUP COMPANY

Note

30 June 2018

R000

30 June 2017

R000

30 June 2018

R000

30 June 2017

R000

ASSETSNon-current assetsProperty and equipment 4 42 667 52 272 – –

Investment property 5 21 234 085 19 735 365 – –

Per valuation 22 166 318 20 536 861 – –

Straight-line lease debtor (932 233) (801 496) – –

Straight-line lease debtor 932 233 801 496 – –

Deferred initial lease expenditure 9 275 7 666 – –

Intangible assets 6 266 502 290 539 – –

Goodwill 7 67 774 67 774 – –

Investment in associates and joint ventures 8 3 328 852 3 153 392 43 457 3 457 313

Investment in subsidiaries 9 – – 12 236 886 7 040 159

Other investments 10 488 11 941 488 488

Deferred tax assets 11 11 3 329 – –

Loans to subsidiaries 16 – – 5 604 423 178 001

Other financial assets 14 373 651 304 368 2 643 2 643

Total non-current assets 26 255 538 24 428 142 17 887 897 10 678 604

Current assetsTaxation receivable 2 714 951 2 707 –

Trade and other receivables 12 212 563 174 623 2 336 2 237

Inventory 13 42 484 25 278 – –

Other financial assets 14 16 308 193 590 – 59 054

Loans to associates and joint ventures 15 1 190 590 1 250 278 2 814 5 605

Loans to subsidiaries 16 – – 532 961 4 572 652

Cash and cash equivalents 17 1 239 631 447 846 38 760 17 914

Total current assets 2 704 290 2 092 566 579 578 4 657 462

Non-current assets held for sale 18 118 871 801 483 3 149 159 948

Total assets 29 078 699 27 322 191 18 470 624 15 496 014

EQUITY AND LIABILITIESEquityStated capital 19 6 460 108 6 456 633 6 833 194 6 829 719

Available-for-sale reserve 279 845 282 329 6 352 576 4 062 202

Distributable reserves 9 544 296 6 945 483 4 619 971 3 318 771

Share-based payment reserve 20 117 390 128 216 117 390 128 216

Foreign currency translation reserve 744 701 238 254 – –

Acquisition of non-controlling interest reserve 9.2 (104 215) (104 215) – –

Equity attributable to owners of the holding company 17 042 125 13 946 700 17 923 131 14 338 908

Non-controlling interests 9.1 16 705 (43 087) – –

Total equity 17 058 830 13 903 613 17 923 131 14 338 908


statements 2018 STATEMENTS OF FINANCIAL POSITIONFor the year ended 30 June 2018

GROUP COMPANY

Note

30 June 2018

R000

30 June 2017

R000

30 June 2018

R000

30 June 2017

R000

Non-current liabilitiesLong-term borrowings 21 10 527 029 7 976 110 – –

Other financial liabilities 14 127 869 164 696 – 13 992

Cash-settled share-based payments 20 559 1 496 – –

Finance lease obligation 22 88 914 83 150 – –

Loans from subsidiaries 16 – – 376 918 –

Deferred tax liabilities 11 178 924 1 932 140 74 219 1 120 075

Total non-current liabilities 10 923 295 10 157 592 451 137 1 134 067

Current liabilitiesLong-term borrowings 21 584 525 2 279 802 – 3 397

Other financial liabilities 14 74 060 137 145 – –

Loans from subsidiaries 16 – – 84 314 8 076

Taxation payable 1 496 7 665 – 5 700

Cash-settled share-based payments 20 747 1 684 – –

Trade and other payables 23 403 550 501 380 11 303 5 866

Provisions 24 32 196 2 777 739 –

Total current liabilities 1 096 574 2 930 453 96 356 23 039

Non-current liabilities associated with non-current assets held for sale 18 – 330 533 – –

Total liabilities 12 019 869 13 418 578 547 493 1 157 106

Total equity and liabilities 29 078 699 27 322 191 18 470 624 15 496 014


GROUP COMPANY

Note

30 June 2018

R000

30 June 2017

R000

30 June 2018

R000

30 June 2017

R000

Gross revenue 2 138 961 2 060 895 681 019 227 704

Rental income 2 035 494 1 861 093 – 2 328

Straight-line lease income adjustment 103 467 199 802 – –

Investment income 26 – – 681 019 225 376

Property expenses (724 726) (742 277) (773) (2 590)

Net rental income 1 414 235 1 318 618 680 246 225 114

Sale of inventory 29 865 – – –

Cost of sales 13 (24 918) – – –

Other income 25 157 675 60 463 24 287 12 770

Operating and other expenses 25 (322 918) (585 730) (344 259) (427 901)

Operating profit (loss) 1 253 939 793 351 360 274 (190 017)

Amortisation of intangible asset (24 037) (22 060) – –

Fair value adjustments 370 265 527 581 13 992 (13 992)

Investment property 5 328 970 664 525 – –

Other financial assets 14 41 295 (136 944) 13 992 (13 992)

Gain on available-for-sale financial assets 35 750 – 32 336 –

Net income from associates and joint ventures 8 81 706 249 880 – –

Investment income 26 194 447 189 536 5 314 –

Finance costs 27 (950 501) (987 411) (7 454) (10 029)

Profit (loss) before taxation 961 569 750 877 404 462 (214 038)

Income tax credit (expense) 28 1 749 765 (150 599) (93 722) (1 774)

Current tax (21 911) (100 576) (18 827) (91 424)

Deferred tax 1 771 676 (50 023) (74 895) 89 650

Profit (loss) for the year 2 711 334 600 278 310 740 (215 812)

Attributable to:Owners of the holding company 2 651 542 630 164 310 740 (215 812)

Non-controlling interests 9.1 59 792 (29 886) – –

Other comprehensive incomeItems that will be reclassified subsequently to profit or lossGain (loss) on available-for-sale financial assets 27 686 (117 827) 2 192 419 833 602

Taxation relating to components of other comprehensive income 28 2 (11 269) 1 120 751 (145 920)

Realisation of available-for-sale financial assets (32 336) – (32 336) –

Other comprehensive (loss) income for the year net of taxation (4 648) (129 096) 3 280 834 687 682

Total comprehensive income for the year 2 706 686 471 182 3 591 574 471 870

Attributable to:Owners of the holding company 2 646 894 501 068 – –

Non-controlling interests 59 792 (29 886) – –

2 706 686 471 182 – –

Earnings per shareBasic (cents) 29 377.2 89.7 – –

Diluted (cents) 29 374.2 89.0 – –


statements 2018 STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFor the year ended 30 June 2018

GROUP COMPANY

Note

30 June 2018

R000

30 June 2017

R000

30 June 2018

R000

30 June 2017

R000

Cash flow from operating activitiesCash generated from (utilised in) operations 30 1 019 788 1 033 295 16 852 (142 108)

Interest income 119 625 60 303 5 314 22 855

Dividend income 170 504 59 065 637 017 58 323

Finance costs (899 312) (934 930) (4) (10 029)

Taxation paid (29 843) (93 711) (27 234) (86 732)

Net cash generated from (utilised in) operating activities 380 762 124 022 631 945 (157 691)

Cash flows from investing activitiesExpenditure to maintain operating capacityProperty and equipment acquired 4 (2 874) (27 319) – –

Property and equipment disposed 4 284 – – –

Expenditure to expand operating capacityInvestment properties acquired 5 (738 927) (1 098 009) – –

Investment properties disposed 5 62 584 50 017 – –

Associates and joint ventures acquired (2 667) (36 227) (2 667) –

Associates and joint ventures disposed 253 977 744 845 – –

Other investments disposed 10 11 969 – – –

Investments in subsidiary disposed 9 – – 158 973 –

Other financial assets repaid (raised) 98 074 (175 041) 59 054 3 537

Additions to deferred initial lease adjustments (3 804) (4 845) – –

Cash flow relating to non-current assets held for sale 202 279 857 006 163 347 54 965

Net cash (utilised in) generated from investing activities (119 105) 310 427 378 707 58 502

Cash flows from financing activitiesCapital raised 19 3 475 13 828 3 475 13 828

Settlement of share-based payment (13 678) (2 097) (11 198) –

Long-term borrowings raised 21 3 358 695 2 355 304 – –

Long-term borrowings repaid 21 (2 895 275) (3 254 770) (3 397) (509 007)

Loans to associates and joint ventures repaid (advanced) 15 130 649 468 643 5 074 (8 788)

Loans (advanced) repaid to group companies 16 – – (983 760) 406 444

Other financial liabilities (repaid) raised 14 (53 738) (4 792) – 968

Net cash generated from (utilised in) financing activities 530 128 (423 884) (989 806) (96 555)

Total cash movement for the year 791 785 10 565 20 846 (195 744)

Cash at the beginning of the year 447 846 437 281 17 914 213 658

Cash and cash equivalents at the end of the year 1 239 631 447 846 38 760 17 914

Page 25ATTACQ Annual financial statements 2018STATEMENTS OF CASH FLOWS

For the year ended 30 June 2018

Stated capital R000

Available- for-sale reserve

R000

Distributable reserves

R000

Share-based payment

reserve R000

Foreign currency

translation reserve

R000

Acquisition of non-

controlling interest reserve

R000

Equity attributable

to owners of the holding

companyR000

Non-controlling

interestsR000

Total equityR000

GROUPBalance at 1 July 2016 6 442 805 847 499 5 891 513 100 453 318 734 (116 483) 13 484 521 (13 201) 13 471 320

Issue of shares 13 828 – – – – – 13 828 – 13 828

6 456 633 847 499 5 891 513 100 453 318 734 (116 483) 13 498 349 (13 201) 13 485 148

Total comprehensive income – (129 096) 630 164 – – – 501 068 (29 886) 471 182

Profit (loss) for the year – – 630 164 – – – 630 164 (29 886) 600 278

Other comprehensive loss – (129 096) – – – – (129 096) – (129 096)

Derecognition reserves and non-controlling interests due to sale of subsidiaries – (436 074) 423 806 – 12 268 – – –

Foreign currency translation reserve – – – – (80 480) – (80 480) – (80 480)

Recognition of share-based payment reserve – – – 27 763 – – 27 763 – 27 763

Balance at 30 June 2017 6 456 633 282 329 6 945 483 128 216 238 254 (104 215) 13 946 700 (43 087) 13 903 613 Issue of shares 3 475 – – – – – 3 475 – 3 475

6 460 108 282 329 6 945 483 128 216 238 254 (104 215) 13 950 175 (43 087) 13 907 088 Total comprehensive income – (4 648) 2 651 542 – – – 2 646 894 59 792 2 706 686 Profit for the year – – 2 651 542 – – – 2 651 542 59 792 2 711 334 Other comprehensive loss – (4 648) – – – – (4 648) – (4 648)

Foreign currency translation reserve – – – – 506 447 – 506 447 – 506 447 Settlement of share-based payment transaction – – – (14 961) – – (14 961) – (14 961)Transfers between reserves – – 6 969 (15 077) – – (8 108) – (8 108)Derecognition of reserves due to sale of subsidiary – 2 164 (59 698) – (57 534) – (57 534)Recognition of share-based payment reserve – – – 19 212 – – 19 212 – 19 212

Balance at 30 June 2018 6 460 108 279 845 9 544 296 117 390 744 701 (104 215) 17 042 125 16 705 17 058 830

Note 19 9.2

COMPANYBalance at 1 July 2016 6 815 891 3 374 520 3 534 583 100 453 13 825 447

Issue of shares 13 828 – – – 13 828

6 829 719 3 374 520 3 534 583 100 453 13 839 275

Total comprehensive income – 687 682 (215 812) – 471 870

Loss for the year – – (215 812) – (215 812)

Other comprehensive income – 687 682 – – 687 682

Recognition of share-based payment reserve – – – 27 763 27 763

Balance at 30 June 2017 6 829 719 4 062 202 3 318 771 128 216 14 338 908 Issue of shares 3 475 – – – 3 475

Total comprehensive income – 3 280 834 310 740 – 3 591 574 Profit for the year – – 310 740 – 310 740 Other comprehensive income – 3 280 834 – – 3 280 834

Recognition of share-based payment reserve – – – (10 826) (10 826)Transfer between reserves* – (990 460) 990 460 – –

Balance at 30 June 2018 6 833 194 6 352 576 4 619 971 117 390 17 923 131

Note 19

* The transfer of reserves was as a result of the transfer of the investment in MAS to AIM (refer to note 8).


statements 2018 STATEMENTS OF CHANGES IN EQUITYFor the year ended 30 June 2018

Stated capital R000

Available- for-sale reserve

R000

Distributable reserves

R000

Share-based payment

reserve R000

Foreign currency

translation reserve

R000

Acquisition of non-

controlling interest reserve

R000

Equity attributable

to owners of the holding

companyR000

Non-controlling

interestsR000

Total equityR000

GROUPBalance at 1 July 2016 6 442 805 847 499 5 891 513 100 453 318 734 (116 483) 13 484 521 (13 201) 13 471 320

Issue of shares 13 828 – – – – – 13 828 – 13 828

6 456 633 847 499 5 891 513 100 453 318 734 (116 483) 13 498 349 (13 201) 13 485 148

Total comprehensive income – (129 096) 630 164 – – – 501 068 (29 886) 471 182

Profit (loss) for the year – – 630 164 – – – 630 164 (29 886) 600 278

Other comprehensive loss – (129 096) – – – – (129 096) – (129 096)

Derecognition reserves and non-controlling interests due to sale of subsidiaries – (436 074) 423 806 – 12 268 – – –

Foreign currency translation reserve – – – – (80 480) – (80 480) – (80 480)

Recognition of share-based payment reserve – – – 27 763 – – 27 763 – 27 763

Balance at 30 June 2017 6 456 633 282 329 6 945 483 128 216 238 254 (104 215) 13 946 700 (43 087) 13 903 613 Issue of shares 3 475 – – – – – 3 475 – 3 475

6 460 108 282 329 6 945 483 128 216 238 254 (104 215) 13 950 175 (43 087) 13 907 088 Total comprehensive income – (4 648) 2 651 542 – – – 2 646 894 59 792 2 706 686 Profit for the year – – 2 651 542 – – – 2 651 542 59 792 2 711 334 Other comprehensive loss – (4 648) – – – – (4 648) – (4 648)

Foreign currency translation reserve – – – – 506 447 – 506 447 – 506 447 Settlement of share-based payment transaction – – – (14 961) – – (14 961) – (14 961)Transfers between reserves – – 6 969 (15 077) – – (8 108) – (8 108)Derecognition of reserves due to sale of subsidiary – 2 164 (59 698) – (57 534) – (57 534)Recognition of share-based payment reserve – – – 19 212 – – 19 212 – 19 212

Balance at 30 June 2018 6 460 108 279 845 9 544 296 117 390 744 701 (104 215) 17 042 125 16 705 17 058 830

Note 19 9.2

COMPANYBalance at 1 July 2016 6 815 891 3 374 520 3 534 583 100 453 13 825 447

Issue of shares 13 828 – – – 13 828

6 829 719 3 374 520 3 534 583 100 453 13 839 275

Total comprehensive income – 687 682 (215 812) – 471 870

Loss for the year – – (215 812) – (215 812)

Other comprehensive income – 687 682 – – 687 682

Recognition of share-based payment reserve – – – 27 763 27 763

Balance at 30 June 2017 6 829 719 4 062 202 3 318 771 128 216 14 338 908 Issue of shares 3 475 – – – 3 475

Total comprehensive income – 3 280 834 310 740 – 3 591 574 Profit for the year – – 310 740 – 310 740 Other comprehensive income – 3 280 834 – – 3 280 834

Recognition of share-based payment reserve – – – (10 826) (10 826)Transfer between reserves* – (990 460) 990 460 – –

Balance at 30 June 2018 6 833 194 6 352 576 4 619 971 117 390 17 923 131

Note 19

* The transfer of reserves was as a result of the transfer of the investment in MAS to AIM (refer to note 8).


1. ACCOUNTING POLICIES1.1 Statement of compliance

The accounting policies of the group as well as the disclosures made in the separate AFS comply with IFRS as issued by the IASB and IFRIC interpretations effective for the group’s financial year as well as the SAICA Financial Reporting Guidelines as issued by the accounting practices committee and the Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council and the Companies Act, applicable to companies reporting under IFRS and the JSE Listings Requirements.

1.2 Basis of measurementThe AFS have been prepared on the historical cost basis, except for the revaluation to fair value of investment properties and financial instruments. The AFS are prepared on the going concern basis. The AFS are presented in South African rand, which is the functional and presentation currency of Attacq.

The preparation of AFS in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the separate and consolidated AFS, are disclosed in note 2.

1.3 Basis of consolidationThe consolidated AFS incorporate the AFS of the group up to 30 June 2018.

The accounting policies applied for 2018 are consistent with those applied in 2017 by the Attacq group of companies. The group and company AFS present the consolidated financial position and changes therein, operating results and cash flow information of the group and company.

Where necessary, adjustments are made to the financial statements of subsidiaries, associates, joint ventures and joint arrangements to bring the accounting policies used in line with those used by the group.

Refer to note 1.6 for subsidiaries and 1.7 for investment in associates and joint ventures.

1.4 Non-controlling interestsAttacq has elected to measure non-controlling interests at their proportionate share in the recognised amounts of the acquiree’s identifiable net assets and assumed liabilities.

Profit or loss and each component of other comprehensive income are attributable to the owners of the group and to non-controlling interests. Total comprehensive income of subsidiaries is attributable to the owners of the group and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

1.5 GoodwillGoodwill that arises on the acquisition of subsidiaries is presented separately on the face of the statement of financial position.

Goodwill is subsequently measured at cost less accumulated impairment losses. For the purposes of impairment testing, goodwill acquired in a business combination is allocated to each CGU, that is expected to benefit from the synergies of the combination. The unit to which the goodwill is allocated represents the lowest level within the entity at which goodwill is monitored for internal management purposes.

Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential impairment. The carrying value of the CGU containing the goodwill is compared to the recoverable amount, which is the value in use. Any impairment is recognised immediately as an expense and is not subsequently reversed.

1.6 SubsidiariesThe results of subsidiaries are included for the duration of the period in which the group exercises control over the subsidiary. All inter-company transactions and resultant profits and losses between group companies are eliminated on consolidation. Where necessary, accounting policies for subsidiaries are changed to ensure consistency with the policies adopted by the group. If it is not practical to change the policies, the appropriate adjustments are made on consolidation to ensure consistency within the group.

An investor controls an investee when it is exposed, or has rights to, variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.


statements 2018 ACCOUNTING POLICIES

1.6 Subsidiaries (continued)The company carries its investments in subsidiaries at their underlying net asset value. Subsequent increases in underlying net asset value of the investment in subsidiaries are recognised in other comprehensive income. Subsequent decreases in underlying net asset value of the investment in subsidiary are recognised in other comprehensive income, limited to the previously recognised fair value gains. Subsequent impairment losses are recognised in profit and loss.

1.7 Investments in associates and joint venturesAssociates and joint ventures are those entities in which the group has significant influence, but not control or joint control, over the financial and operating policies. Significant influence is presumed to exist when the group holds between 20.0% and 50.0% of the voting rights of another entity.

The company carries its investments in associates and joint ventures at fair value. Subsequent increases in fair value remeasurements of the investment in associates and joint ventures are recognised in other comprehensive income. Subsequent decreases in fair value remeasurement of the investment in associates and joint ventures are recognised in other comprehensive income, limited to the previously recognised fair value gains. Subsequent impairment losses are recognised in profit and loss.

The consolidated AFS include the group’s share of the profit or loss and other comprehensive income of equity-accounted investees, after adjustments to align the accounting policies with those of the group, from the date that significant influence commences until the date that significant influence ceases.

When the group’s share of losses exceeds its interest in an equity-accounted investee, the carrying amount of the investment, including any long-term interest that forms part thereof, is reduced to zero and recognition of further losses is discontinued, except to the extent that the group has an obligation or has made payments on behalf of the investee.

The cumulative post-acquisition movements in profit or loss and other comprehensive income are adjusted against the carrying amount of the investment in the consolidated group financial statements.

The requirements of IAS 39 Financial Instruments: Recognition and Measurement are applied to determine whether it is necessary to recognise any impairment loss with respect to the group’s investment in an associate and joint ventures. When necessary, the entire carrying amount of the investment is tested for impairment in accordance with IAS 36 Impairment of Assets as a single asset by comparing its recoverable amount (the higher of value in use and fair value less costs to sell) with its carrying amount. Any impairment loss recognised forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognised in accordance with IAS 36 Impairment of Assets to the extent that the recoverable amount of the investment subsequently increases.

The group discontinues the use of the equity method from the date when the investment ceases to be an associate and joint venture.

In addition, the group accounts for all amounts previously recognised in other comprehensive income in relation to that associate and joint venture on the same basis as would be required if that associate and joint venture had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognised in other comprehensive income by that associate and joint venture would be reclassified to profit or loss on the disposal of the related assets or liabilities, the group reclassifies the gain or loss from equity to profit or loss (as a reclassification adjustment) when the equity method is discontinued.

1.8 Interest in joint operationsJoint arrangements are arrangements in which the group has joint control, established by contracts requiring unanimous consent for decisions on the activities that significantly affect the arrangements’ returns. They are classified and accounted for as follows: - Joint operation: when the group has rights to the assets and obligations for the liabilities relating to an

arrangement, each of its assets and liabilities, including its share of those held or incurred jointly, are accounted for in relation to the joint operation; or

- Joint venture: when the group has rights only to the net assets of the arrangements, its interest is accounted for using the equity method, similar to the accounting treatment for associates (refer note 1.7).

The group has various undivided shares in investment properties which are being treated as joint operations, hence only the group’s percentage share in the property is included in the consolidated results.


1.8 Interest in joint operations (continued)When a group entity undertakes its activities under joint operations, the group as a joint operator recognises in relation to its interest in a joint operation: - Its assets, including its share of any assets held jointly; - Its liabilities, including its share of any liabilities incurred jointly; - Its revenue, including its share of revenue arising from the sale of the output arising from the joint operation;

and - Its expenses, including its share of any expenses incurred jointly.

The group accounts for assets, liabilities, revenue and expenses relating to its interest in a joint operation in accordance with the IFRS applicable to the particular assets, liabilities, revenues and expenses.

1.9 Fair value measurementThe group measures financial instruments, such as, derivatives, investments and investment properties at fair value at each reporting date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: - In the principal market for the asset or liability; or - In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their best economic interest. A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

Fair value for measurement and/or disclosure purposes in these AFS is determined on the above basis, except for share-based payment transactions that are within the scope of IFRS 2 Share-based Payment, leasing transactions that are within the scope of IAS 17 Leases, and the measurements that have some similarities to fair value but are not fair value, such as value in use in IAS 36 Impairment of Assets.

The group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the AFS are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: - Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities; or - Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value measurement

is directly or indirectly observable; or - Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurement

is unobservable.

Refer to fair value measurement in note 38 for the categorisation of the group and company financial assets and liabilities within the fair value hierarchy.

For assets and liabilities that are recognised in the AFS at fair value on a recurring basis, the group determines whether transfers have occurred between the levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

ACCOUNTING POLICIES continued


statements 2018

1.10 Investment propertyInvestment properties are properties held to earn rentals and for capital appreciation, including development rights, infrastructure and services and developments under construction.

Where a property is under construction with the purpose of holding the completed property for long-term rental yields and for capital appreciation, such property is classified as developments under construction.

Tenant installations are cost paid by the lessor on behalf of the lessee to ensure the building is in the condition suitable for the lease.

Investment property is recognised as an asset when, and only when, it is probable that the future economic benefits that are associated with the investment property will flow to the enterprise and the cost of the investment property can be measured reliably.

All of the group’s completed investment property interests held under operating leases to earn rentals or for capital appreciation purposes are accounted for as investment property and are measured using the fair value model.

All of the group’s developments under construction held for capital appreciation purposes are accounted for as investment properties and are measured using the fair value model.

All of the group’s developments rights are held for development purposes, are accounted for as investment properties and are measured using the fair value model.

All of the group’s infrastructure and services are accounted for as investment properties and are measured using the cost model.

Initial measurementInvestment property is initially recognised at cost, including transaction costs. Costs include costs incurred initially and costs incurred subsequently to add to, or to replace a part of, or service a property. Maintenance and repairs, which neither materially add to the value of the properties nor prolong their useful lives, are charged against profit or loss.

The cost of tenant installations on the first lease are capitalised against the development, while the cost of tenant installations on subsequent leases signed are capitalised and expensed through the statements of comprehensive income over the initial lease period, where such tenant installations will not be recovered through a lump sum or through rental over the initial lease period.

Subsequent measurementSubsequent to initial measurement, investment properties are measured and recognised at fair value, with the exception of infrastructure and services that are measured at cost.

Investment property is valued bi-annually and adjusted to fair value at the respective reporting dates as follows: - at the interim reporting date with reference to the directors’ valuation; and - at the financial year end with reference to the independent valuations.

Developments under construction are initially recognised at cost and subsequently remeasured to fair value. The fair value of development property is not always reliably determinable due to the properties being in the early stages of construction or where construction has not yet begun. Where fair value cannot be reliably determined, but the group expects that the fair value will be reliably determinable when construction is further progressed, the group measures such properties at cost.

If the fair value of an investment property under construction is not determinable, it is measured at cost until the earlier of the date it becomes determinable or construction is complete.

Tenant installations relating to subsequent leases and lease commissions are carried at cost less accumulated amortisation. Amortisation is provided to write down the cost, less residual value, by equal instalments over the period of the lease.

A gain or loss arising from a change in fair value is included in net profit or loss for the period in which it arises.


1.10 Investment property (continued)DerecognitionAn investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in which the investment property is derecognised.

1.11 Property and equipmentProperty and equipment is carried at cost less accumulated depreciation and any impairment losses. Depreciation is provided on all property and equipment to write down the cost, less residual value, using the straight-line method of depreciation, over the items’ estimated useful lives.

It is the policy of the group to write down items of property and equipment with a cost less than R7 000 in full during the year the asset qualifies for recognition in terms of IAS 16 Property, plant and equipment, in order to align with the relevant tax authorities.

The assets’ residual values and useful lives are reviewed and adjusted annually if appropriate. An asset’s carrying amount is written down immediately to its recoverable amount if its carrying amount is greater that its estimated recoverable amount.

1.12 Intangible assetsIntangible assets with finite useful lives are stated at cost, less accumulated amortisation and accumulated impairment losses.

Amortisation is recognised in profit or loss, as “Amortisation of intangible assets”, on an appropriate basis over the estimated useful life. Amortisation commences when the intangible asset is available for use and ceases at the earlier of the date the asset is classified as held for sale or the date it is derecognised.

Useful lives and amortisation methods are reviewed on an annual basis, with the effect of any changes in estimate accounted for on a prospective basis.

The group has asset management contracts and Wi-Fi rights intangible assets that are classified as intangible assets with finite useful lives.

Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at their fair value at the acquisition date (which is regarded as their cost).

Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over the estimated useful lives.

1.13 Financial instrumentsRecognitionA financial instrument is recognised when the group becomes party to a contract which entitles it to receive contractually agreed cash flows on the instrument. All acquisitions of financial assets that require delivery within the timeframe established by regulation or market convention (regular-way purchases) are recognised at trade date, which is the date on which the group commits to acquire the asset.

DerecognitionThe group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial assets are transferred. Any interest in financial assets transferred that is created or retained by the group is recognised as a separate asset or liability.

The group may enter into transactions whereby it transfers assets recognised on its statement of financial position, but retains either all risks and rewards of the transferred assets or a portion of them. If all, or substantially all, risks and rewards are retained, then the transferred assets are not derecognised from the statement of financial position.



statements 2018

1.13 Financial instruments (continued)The rights and obligations retained in the transfer of financial instruments are recognised separately as assets and liabilities as appropriate. In transfers where control over the asset is retained, the group continues to recognise the asset to the extent of its continuing involvement, determined by the extent to which it is exposed to changes in the value of the transferred asset.

The group derecognises a financial liability when it is extinguished, that is, when the obligation specified in the contract is either discharged or cancelled or expires.

The group may enter into transactions where there has been an exchange between an existing borrower and lender of debt instruments with substantially different terms, or there has been a substantial modification of the terms of an existing financial liability, this transaction is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. A gain or loss from extinguishment of the original financial liability is recognised in profit or loss.

MeasurementNon-derivative financial instrumentsNon-derivative financial instruments comprise investments in equity and debt instruments, trade and other payables, cash and cash equivalents, loans and borrowings and trade and other receivables.

Non-derivative financial instruments are recognised initially at fair value plus, in the case where financial instruments are not at FVTPL, any directly attributable transaction costs. Subsequent to initial recognition, non-derivative financial instruments are measured as described below.

Cash and cash equivalents comprise cash on hand, deposits held on call and investments in money market instruments, net of bank overdrafts, all of which are available for use by the group unless otherwise stated. Bank overdrafts that are repayable on demand form an integral part of the group’s cash management system and are included as a component of cash and cash equivalents for purposes of the statements of cash flows. Cash and cash equivalents are measured at amortised cost.

Financial instruments at fair value through profit or lossThe group designates financial assets and financial liabilities at FVTPL when the assets or liabilities are managed, evaluated and reported internally on a fair value basis.

Subsequent to initial recognition, financial instruments designated or classified as at FVTPL are measured at fair value with changes in fair value recognised in profit or loss.

A-F-S financial assetsThe group has designated certain assets as A-F-S financial assets. In other circumstances available-for-sale financial assets are classified as such because they do not fall within the classification of loans and receivables, held to maturity investments or financial assets at FVTPL. Gains or losses on A-F-S financial assets are recognised directly in other comprehensive income, except for impairment losses and foreign exchange gains and losses on monetary items, which are taken to profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in equity is recycled to profit or loss.

Trade and other receivablesTrade and other receivables are recognised initially at fair value and are subsequently measured at amortised cost using the effective interest rate method. Effective interest rate method is a method of calculating the amortised cost of a financial asset or liability (or group of financial assets or financial liabilities) and allocating the interest income or interest expense over the relevant period. Amortised cost is the amount at which the trade and other receivables are measured at initial recognition, minus principal repayments, plus or minus the cumulative amortisation using the effective interest rate method of any difference between the initial amount recognised and the maturity amount, minus any reduction for impairment or uncollectible.


1.13 Financial instruments (continued)Loans and interest-bearing borrowingsInterest-bearing borrowings are financial liabilities with fixed or determinable payments.

Loans and interest-bearing borrowings are recognised initially at fair value, net of transaction costs incurred and subsequently carried at amortised cost using the effective interest rate method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the drawdown occurs (this accounting treatment is applied to the term loan and bond). To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates (this accounting treatment is applied to the revolving facility).

Trade and other payablesTrade and other payables are recognised initially at fair value and subsequently measured at amortised cost, namely original debt less principal repayments and any amortisation, using the effective interest rate method.

Cash and cash equivalentsCash and cash equivalents are recognised initially at fair value plus any directly attributable transaction costs. Cash and cash equivalents are subsequently measured at amortised cost.

Derivative financial instrumentsThe group enters into a variety of derivative financial instruments to manage its exposure to interest rate fluctuations, including interest rate swaps.

Derivative instruments are recognised initially at fair value at the date the derivative contracts are entered into, attributable transaction costs are recognised in profit or loss when incurred. Subsequent to initial recognition, derivative instruments are remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

Impairment of financial assetsA financial asset is assessed at each reporting date to determine whether there is any evidence that the asset should be impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset. An impairment allowance is raised when there is an indication of impairment and a write-off is only effected when the receivable is deemed to be fully impaired and not recoverable.

An available-for-sale equity investment is impaired when: - Its fair value has declined to below cost (adverse developments affecting the investee or operating

environment have occurred since acquisition that, individually or collectively, amount to objective evidence of impairment; or the decline in fair value is significant or prolonged); and

- There is objective evidence of impairment (sometimes referred to as a possible impairment indicator).

If any such evidence exists for available-for-sale financial assets, the cumulative loss which is measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss, is removed from equity and recognised in profit or loss.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate.

Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.

All impairment losses are recognised in profit or loss.



statements 2018

1.13 Financial instruments (continued)An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised cost and available-for-sale financial assets that are debt securities, the reversal is recognised in profit or loss. For available-for-sale financial assets that are equity securities, the reversal is recognised directly in equity.

Offsetting of financial instrumentsFinancial assets and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when, the group has a legal enforceable right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

Determining fair valuesThe determination of fair values of financial assets and financial liabilities is detailed in note 1.9.

SuretiesSureties are contracts that require the group to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument. These are measured and disclosed at their fair value.

1.14 InventoryInventories are measured at the lower of cost and net realisable value.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs to make the sale.

The cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Where a development property is under construction with the purpose of disposing such property for the realisation of sales proceeds, instead of being held for long-term yields and capital appreciation, such property is classified as inventory.

The inventory classification shall continue post completion of the property until either such property is sold, or the purpose of such property changes to one of being held for long-term yields and capital appreciation.

1.15 TaxationIncome taxation expenseIncome taxation expense comprises the sum of current and deferred taxation. Income taxation is recognised in profit or loss except to the extent that it relates to items recognised directly in equity or in other comprehensive income.

Current taxation and deferred taxation are charged or credited to other comprehensive income if the taxation relates to items that are credited or charged, in the same or a different period, to other comprehensive income.

Current taxation and deferred taxation are charged or credited directly to equity if the taxation relates to items that are credited or charged, in the same or a different period, directly in equity.

Current tax is the expected tax payable on taxable income, after deducting the qualifying distribution for the year of assessment, using tax rates that have been enacted or substantively enacted by the reporting dates and includes adjustments for tax payable in respect of the previous years. In accordance with the REIT status, dividends declared are treated as a qualifying distribution in terms of section 25BB of the Income Tax Act.

Current taxationCurrent taxation for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

Deferred taxationDeferred taxation is provided using the balance sheet method on all temporary differences between the carrying amounts for financial reporting purposes and the amounts used for tax purposes.


1.15 Taxation (continued)A deferred taxation asset is recognised to the extent that it is probable that future taxable profits will be available against which the associated unused tax losses and deductible temporary differences can be utilised. The carrying amount of deferred taxation assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Unrecognised deferred taxation assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred taxation asset to be recovered.

Deferred taxation liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, associates, joint ventures and interests in joint arrangements, except where the group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. In respect of deductible temporary differences associated with investments in subsidiaries, associates, joint ventures and interests in joint arrangements, deferred taxation assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

Deferred taxation is calculated using tax rates (and taxation laws) that have been enacted or substantially enacted at the reporting date. The effect on deferred taxation of any changes in taxation rates is charged to the statement of comprehensive income, except to the extent that it relates to items previously charged directly to equity.

Deferred taxation is not recognised on the fair value of investment properties. These items will be realised though sale and, in accordance with the income tax requirements relating to the REIT status, capital gains tax is no longer applicable. Deferred taxation is not recognised for temporary differences that will form part of future qualifying distributions.

1.16 LeasesWhere the group is the lesseeThe group leases land under finance leases and printers, copiers and servers under operating leases from non-related parties.

Lessee – Finance leasesThe leased assets and the corresponding lease liabilities (net of finance charges) under finance leases are recognised on the balance sheet as investment property and borrowings respectively, at the inception of the leases based on the lower of the fair value of the leased assets and the present value of the minimum lease payments.

Investment property held under a lease accounted for as a finance lease is recognised initially at the present value of the minimum lease payments under the lease and thereafter in terms of the fair value methodology applicable to investment property as per note 1.9.

Each lease payment is apportioned between the finance expense and the reduction of the outstanding lease liability. The finance expense is recognised in profit or loss on a basis that reflects a constant periodic rate of interest on the finance lease liability.

Lessee – Operating leasesPayments made under operating leases (net of any incentives received from the lessors) are recognised in profit or loss on a straight-line basis over the period of the lease.

Contingent rentals are recognised as an expense in profit or loss when incurred.

The leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

Where the group is the lessorThe group leases investment properties under operating leases to non-related parties.

Lessor – Operating leasesRental income from operating leases (net of any incentives given to the lessees) is recognised in profit or loss on a straight-line basis over the lease term.

Initial direct costs incurred by the group in negotiating and arranging operating leases are added to the carrying amount of the leased assets and recognised as an expense in profit or loss over the lease term on the same basis as the lease income.



statements 2018

1.17 Non-current assets held for saleOn initial classification as held for sale, generally, non-current assets and disposal groups are measured at the lower of the carrying amount and fair value less costs to sell, with any adjustments taken to profit or loss (or other comprehensive income in the case of a revalued asset). The same applies to gains and losses on subsequent remeasurement. However, certain items, such as financial assets within the scope of IAS 39 Financial Instruments: Recognition and Measurement and investment property within the scope of IAS 40 Investment Properties, continue to be measured in accordance with those standards.

Impairment losses subsequent to classification of assets as held for sale are recognised in profit or loss. Increases in fair value less costs to sell assets that have been classified as held for sale are recognised in profit or loss to the extent that the increase is not in excess of any cumulative impairment loss previously recognised in respect of the asset.

Gains and losses on remeasurement and impairment losses subsequent to classification as disposal groups and non-current assets held for sale are shown within continuing operations in profit or loss, unless they qualify as discontinued operations.

Disposal groups and non-current assets held for sale are presented separately from other assets and liabilities on the statement of financial position. Prior periods are not reclassified.

1.18 Stated capitalOrdinary shares are classified as equity.

Where any company within the Attacq group of companies purchases the company’s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the company’s equity holders until the shares are cancelled or reissued. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental costs and the related income tax effects, is included in equity attributable to the company’s equity holders. The shares are listed on the JSE, with one vote per share.

The transaction costs of an equity transaction are accounted for as a deduction from equity to the extent they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided.

1.19 RevenueRevenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for services provided in the normal course of business, net of value added tax.

Rental incomeRental income comprises gross rental income and fixed operating cost recoveries from the letting of investment properties, excluding value added tax. Rental income excludes tenant security deposits which represent financial advances made by tenants as guarantees during the lease and are repayable by the group upon termination of the lease contracts.

Rental income receivable is recognised on a straight-line basis over the term of the lease. Directly attributable lease incentives are recognised within rental income on the same basis.

Contingent rents, being those lease payments that are not fixed at the inception of a lease, for example increases arising on rent reviews or rentals linked to tenant revenues, are recorded as income in the periods in which they are earned. Rent reviews are recognised as income from the date of the rent review, based on management’s estimates. Estimates are derived from knowledge of market rents for comparable properties determined on an individual property basis and updated for progress of negotiations.

Service charge income is recognised on an accruals basis in line with the service being provided.

As specified in the lease agreements, the group has the primary responsibility for providing services to tenants (electricity, water and gas utilities, interior and exterior cleaning, security, maintenance and repairs). The group negotiates directly with the suppliers all contracts for services provided to tenants. These contracts are concluded between the group subsidiaries which own the properties and the direct supplier.

Interest incomeInterest for the company is recognised, in profit or loss, using the effective interest rate method.

Dividend incomeDividend income for the company, from investments, is recognised when the shareholder’s right to receive payment has been established (provided that it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably).


1.20 Investment incomeInterest incomeInterest for the group is recognised, in profit or loss, using the effective interest rate method.

Dividend incomeDividend income for the group, from investments, is recognised when the shareholder’s right to receive payment has been established (provided that it is probable that the economic benefits will flow to the group and the amount of income can be measured reliably).

1.21 Borrowing costsBorrowing costs that are directly attributable to the acquisition and construction of a qualifying asset are capitalised as part of the cost of that asset until such time as the asset is ready for its intended use. The amount of borrowing costs eligible for capitalisation is determined as follows: - actual borrowing costs on funds specifically borrowed for the purpose of obtaining a qualifying asset less any

temporary investment of those borrowings; and - weighted average of the borrowing costs applicable to the entity on funds generally borrowed for the purpose

of obtaining a qualifying asset. The borrowing costs capitalised cannot exceed the total borrowing costs incurred.

The capitalisation of borrowing costs commences when: - expenditures for the assets have occurred; - borrowing costs have been incurred; and - activities that are necessary to prepare the asset for its intended use or sale are in progress.

Capitalisation is suspended during extended periods in which active development is interrupted.

Capitalisation ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.

All other borrowing costs are recognised as an expense in the period in which they are incurred.

1.22 Foreign currenciesThe group AFS are presented in South African rand, which is the company’s functional and presentation currency. However, the group measures the transactions of each of its material operations using the functional currency determined for that specific entity, which, in most instances, is the currency of the primary economic environment in which the operation conducts its business.

Transactions denominated in foreign currencies are translated at the rate of exchange ruling at the transaction date. Monetary items denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Gains or losses arising on translation are credited to or charged in profit or loss.

Non-monetary items that are measured in terms of historical cost in a foreign currency are not re-translated.

1.23 Foreign operationsThe results and financial position of all the group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows: - assets and liabilities at rates of exchange ruling at the reporting date; - equity items are translated at historical rates; and - income, expenditure and cash flow items at weighted average rates.

Exchange differences on translation are accounted for in other comprehensive income. These differences will be recognised in earnings upon realisation of the underlying operation.

On consolidation, exchange differences arising from the translation of the net investment in foreign operations (ie the reporting entity’s interest in the net assets of that operation) are taken to other comprehensive income.

The average US dollar to SA rand conversion rate, where applicable, of $1: R12.87 (2017: $1: R13.61) has been used to translate the statement of comprehensive income and statement of cash flows while the statement of financial position has been translated at the closing rate at the last day of the reporting period $1: R13.74 (2017: $1: R13.08).



statements 2018

1.23 Foreign operations (continued)The average euro to SA rand conversion rate, where applicable, of €1: R15.34 (2017: €1: R14.85) has been used to translate the statement of comprehensive income and statement of cash flows while the statement of financial position has been translated at the closing rate at the last day of the reporting period €1: R15.99 (2017: €1: R14.93).

1.24 Employee benefitsShort-term benefitsThe cost of short-term employee benefits is recognised during the period in which the employees render the related service. Short-term employee benefits are measured on an undiscounted basis. The accrual for employee entitlements to salaries, bonuses and annual leave represents the amount which the group has a present legal or constructive obligation to pay as a result of the employees’ services provided up to the reporting date.

Defined contribution planAs from 1 November 2015, the group contributes to defined contribution funds for the benefit of employees and these contributions are expensed as they fall due. The group is not liable for contributions to the medical aid of current and retired employees.

1.25 Share-based payment arrangementsEquity-settled share-based paymentsEquity-settled shared-based payments are measured at the grant date fair value of the equity instruments granted, and are expensed on a straight-line basis over the vesting period, with a corresponding increase in equity. The annual expense is based on the group’s estimate of the shares that will eventually vest, adjusted for the effect of non-market vesting conditions.

Cash-settled share-based paymentsCash-settled share-based payment liabilities are initially measured at fair value and subsequently remeasured to fair value at each reporting date as well as at the date of settlement, with any changes in fair value recognised in profit or loss. The expense is recognised on a straight-line basis over the vesting period, with a corresponding increase in the liability.

1.26 Determination and presentation of operating segmentsOperating segments are reported on in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the reportable operating segments, has been identified as the group executive committee. Operating segments reported are based on the group’s different investment portfolios.

The group has nine reportable operating segments which are managed separately based on geographical areas and use of portfolio. The group executive committee reviews internal management reports on these strategic divisions at least quarterly. The group’s reportable operating segments are as follows:

Direct-owned real estate: - Office and mixed use properties; - Retail properties; - Light industrial properties; - Hotels; - Vacant land and infrastructure; and - Developments under construction;

Indirect-owned real estate: - Investment in MAS; - Rest of Africa retail investments; and - Head office/other.

Segment results that are reported to the chief operating decision maker include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. The chief operating decision maker, however, assesses each investment property on an individual basis in making decisions about its performance.

1.27 DividendsDividends and other distributions to the holders of equity instruments, in their capacity as owners, are recognised directly in equity at the date of declaration.


2. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTYIn the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period which the estimates is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The following are the key assumptions and judgements concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year:

Critical accounting judgementsControl over certain investments in associatesThe group has certain investments in associates in which it effectively owns in excess of 20.0% of the issued share capital of the associates. In more cases than one, the group is the single largest shareholder in these investments. The group has deemed these investments to be associates as it does not have control. The assessment of control over these investments took into account the following: - the number of directors that the group has on the boards of the investments; - the involvement in decision making over significant transactions and/or events of the investments; and - the pattern of shareholder voting at shareholder meetings.

Note 8 refers to MAS as an associate of the group. The group has a 23.03% ownership in MAS. The directors of the group assessed whether or not the group has control over MAS based on whether the group has the practical ability to direct the relevant activities of MAS unilaterally. In making their judgement, the directors considered the group’s absolute size of holding in MAS and the relative size of, and dispersion of, the shareholding owned by the other shareholders. After assessment, the directors concluded that the group does not have a sufficiently dominant voting interest to direct the relevant activities of MAS and therefore the group does not have control over MAS.

It must be noted that Attacq has no right, in terms of MAS’ constitutional documents, to appoint a director. Attacq does not have any agreements in place governing the actions of MAS or the MAS board.

Furthermore, in terms of the MAS MOI, a shareholder resolution to remove a director must be passed by shareholders holding at least 75.0% of the voting rights in relation thereto. Any steps by Attacq on its own to remove members of the MAS board of directors could easily be blocked by the remaining shareholder groupings.

Determination of fair value of investment propertyThe group measures and recognises all investment property initially at cost and subsequently at fair value as noted in 1.10. The fair value estimate is determined using independent external valuations on an annual basis, adjusted as follows: - an adjustment for the estimated future rental obligations to the lessors of the Waterfall development,

Nieuwtown and Majestic; - completed developments – completed developments valued using the discounted cash flow of future rental

income are adjusted with the value of the straight-lining lease debtor; and - developments under construction – an adjustment to the present value of the difference between the

estimated fair value of the investment property at completion and the total estimated development cost using the stage of completion method. The stage of completion is determined with reference to the cost incurred to date versus the total anticipated cost of the development, excluding the cost allocated to the development rights.

The above adjustments are made to reflect the fair value at which the asset could be exchanged between market participants at the reporting date under current market conditions.



statements 2018

2. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (continued)Trade receivables and loans and receivablesThe group assesses its trade receivables and loans and receivables for impairment at the end of each reporting period. In determining whether an impairment loss should be recorded in profit or loss, the group makes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from a financial asset.

Determination of valuation of the investment in MASThe determination of the valuation of foreign investments is based on significant judgements applied which is influenced by the different trading environments and jurisdictions, specifically with regards to MAS. The fair value is further influenced by the accounting policies applied and appropriate adjustments are made on consolidation for differences in accounting policies.

Key sources of estimation uncertaintyShare-based paymentsFor share-based payments, estimates are made in determining the fair value of equity instruments granted. Assumptions are used in the valuation models and include assumptions regarding future dividend yield, risk-free rate, expected employee attrition rate, expected share volatility and expected option life. Refer note 20.

Effective date of property transactionsIn the event of an investment property being disposed of or acquired, the effective date of the transaction is generally treated as the date when all suspensive conditions have been met, and the buyer becomes contractually entitled to the income and expenses associated with the property, and not necessarily when the property is transferred.

Fair value estimationThe fair value of financial instruments traded in active markets (such as trading and A-F-S securities) are based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the group is the current bid price.

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. The group uses a variety of methods and makes assumptions that are based on market conditions existing at the end of each reporting period. Quoted market prices or dealer quotes for similar instruments are used for long-term debt. Other techniques, such as estimated discounted cash flows, are used to determine the fair value for the remaining financial instruments. The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows.

The carrying value less impairment provision of trade receivables and payables is assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the company for similar financial instruments.

Impairment of investment in the African asset portfolioManagement has assessed the fair value of the investment in the African asset portfolio, and has determined that a risk of volatility in the property values exist due to the current difficult economic climate in those countries in which the group has a presence.

Based on the above mentioned factors, management assessed this investment for additional impairment.

Impairment of goodwill relating to AMSGoodwill is tested for impairment on an annual basis. Determining whether goodwill is impaired requires an estimation of the value in use of the CGU to which goodwill has been allocated. The value-in-use calculation requires the directors to estimate the future cash flows expected to arise from the CGU and an appropriate discount rate in order to calculate present value.


2. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (continued)Value in use is calculated as the net present value of future cash flows derived from assets using cash flow projections which have been discounted at appropriate discount rates. In calculating the net present value of the future cash flows, certain assumptions are required to be made in respect of highly uncertain matters including management’s assessment of: - whether there is an indication that goodwill is impaired; - the discounted cash flow method used to determine the fair value of the CGU; - the future cash flows of the CGU to which goodwill is allocated (used as input in the discounted cash flow

valuation); - the appropriate long-term growth rate applied to the future cash flow of the CGU; and - the selection of appropriate discount rates to reflect the risks involved, usually the WACC.

Fair value measurements and valuation processesSome of the group’s assets and liabilities are measured at fair value for financial reporting purposes. The board, through the CEO, CFO and COO, determine the appropriate valuation techniques and inputs for fair value measurements.

In estimating the fair value of an asset or a liability, the group uses market-observable data to the extent it is available. Where level 1 inputs are not available, the group engages third-party qualified valuers to perform the valuation. The above officers work closely with the qualified external valuers to establish the appropriate valuation techniques and inputs to the model.

The above officers report the decisions to the ARC and board bi-annually to explain the cause of fluctuations in the fair value of the assets and liabilities.

Information about the valuation techniques and inputs used in the determination of the fair value of various assets and liabilities is disclosed in notes 5, 20 and 38.

Amortisation of intangible asset arising from the asset management contract of AMSManagement has determined the useful life of the intangible asset to be 15 years. The residual value relating to the intangible asset has been determined as Rnil. In making this estimate, management has considered the following: - the general initial lease period related to the underlying investment properties which is generally seven to

10 years for offices and industrial tenants; - the initial renewal period of the above leases; - the general and initial renewal period of all other leases; and - the likelihood of renewal by the tenants following the initial lease period.

Amortisation of Wi-Fi rightsManagement has determined the useful life of the Wi-Fi rights to be in accordance with the roll-out period/realisation tempo of the Waterfall development pipeline. The residual value relating to the Wi-Fi rights has been determined as Rnil. In making this estimate, management has considered the following: - the initial acquisition of the Wi-Fi rights directly attributable to the development rights of LP 10 and LP 10A;

and - expected utilisation of undeveloped bulk and land.

Estimation of the future rental payments to WDCIn 2009 AWIC, a subsidiary of the group, entered into a purchase of development rights and lease agreements with WDC in terms of which it obtained the right to develop the relevant land parcels and to call for the registration of long-term lease agreements against the title deeds of these land parcels.

In terms of the agreements AWIC is obliged to pay, to the land owner (WDC), an amount equal to 6.0% of the net rentals it generates from the leasehold improvements. This obligation is deemed inseparable from the leasehold land and should therefore impact the fair value of the relevant investment property.

The 6.0% net rental obligation is calculated based on: - staggered rental income streams based on the anticipated completion dates of the various leasehold

improvements or disposal of leasehold rights; and - discounting of anticipated cash flow streams to determine the present value of the obligation at rates

between 17.12% and 17.21% (2017: 16.0% to 18.0%).



statements 2018

2. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (continued)In terms of the above mentioned agreements, AWIC has specific obligations relating to the disposal of residential developments which supersedes the net rental obligation described above.

The obligations specifically relating to the disposal of residential developments is calculated based on: - sales price to the end user; - difference between such sales price and a predetermined threshold set out in the agreement; and - the difference multiplied by 5.0%.

Development rightsThe valuation in respect of Waterfall’s development rights is based on an external valuation performed on a residual valuation method. The valuation is then adjusted downward to take into account, inter alia, the nature of the contractual rights and the estimated future rental obligations attached to the development rights (as detailed above).

3. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES3.1 New accounting standards, amendments to published standards and interpretations

The following new standards, amendments to published standards and interpretations which became effective for the year commencing 1 July 2018 were adopted by the group:

Standards, amendments or interpretations Impact on the financial statements

- Amendments to IAS 12 Income Taxes, recognition of deferred tax assets for unrealised losses No significant impact on the AFS

- Amendments to IAS 7 Statement of Cash Flows disclosure initiatives No significant impact on the AFS

- Amendments to IFRS 12 Disclosure of Interests in other entities – Part of improvements to IFRS 2014 – 2016 cycle No significant impact on the AFS

While the amendments to IAS 7 will have no impact of the group’s accounting, the disclosure in the cash flow statement includes detail on movements in assets and liabilities during the year resulting from financing activities.

3.2 New accounting standards, amendments to published standards and interpretations not yet affective and not early adoptedA number of new standards and amendments to standards and interpretations are in issue but are not effective for annual periods beginning on 1 July 2018 and have not been applied in preparing these separate and consolidated AFS. The group is in the process of assessing the potential impact.

IFRS 9 Financial Instruments 2014This standard supersedes IFRS 9 (2009), IFRS 9 (2010) and IFRS 9 (2013). However, for annual periods beginning before 1 January 2018, an entity may elect to apply those earlier versions of IFRS 9 instead of applying this standard if, and only if, the entity’s relevant date of initial application is before 1 February 2015.

The group has performed a preliminary assessment of the impact of IFRS 9. Given the nature of the group’s financial instruments, the group does not believe that the new classification requirements will significantly impact on the measurement of these instruments on group level.

IFRS 15 Revenue from Contracts with CustomersIFRS 15 specifies how and when an entity will recognise revenue as well as requiring such entities to provide users of AFS with more informative, relevant disclosures. The standard provides a single, principles-based five-step model to be applied to all contracts with customers. An entity shall apply this standard for annual reporting periods beginning on or after 1 January 2018. Earlier application is permitted.

The group will adopt the standard in its 2019 financial statements. The group revenue is contractually driven and thus the group does not believe that this standard will have a material impact on the financial statements.

Amendments to IFRS 15 – Clarification on IFRS 15These amendments comprise clarifications of the guidance on identifying performance obligations, accounting for licences of intellectual property and the principal versus agent assessment (gross versus net revenue presentation). New and amended illustrative examples have been added for each of those areas of guidance. The IASB has also included additional practical expedients related to transition to the new revenue standard. This amendment is effective for periods beginning on or after 1 January 2018.


3. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES (continued)The group will adopt the standard in its 2019 financial statements. The group revenue is contractually driven and thus the group does not believes that this standard will have a material impact on the financial statements.

Amendments to IFRS 2 Share-based Payments – Clarification on how to account for certain types of share-based payment transactionsThis amendment clarifies the measurement basis for cash-settled share-based payments and the accounting for modifications that change an award from cash settled to equity settled. It also introduces an exception to the principles in IFRS 2 that will require an award to be treated as if it was wholly equity settled, where an employer is obligated to withhold an amount for the employee’s tax obligation associated with a share-based payment and pay that amount to the tax authority. The amendments is effective for periods beginning on or after 1 January 2018.

The group currently believes the adoption of the pronouncement above will not have a material impact on the AFS.

Amendments to IAS 40 Investment Property – transfer of investment propertyThe amendments clarify that to transfer to, or from, investment properties there must be a change in use. To conclude if a property has changed use there should be an assessment of whether the property meets the definition. This change must be supported by evidence. This amendment is effective for periods beginning on of after 1 January 2018.

It is not expected that this amendment will have a material impact on the AFS.

Annual improvements to IFRS 2014 – 2016Amendments to IFRS 1 First-time Adoption of IFRSThis amendments entail the deletion of short-term exemptions for first-time adopters regarding IFRS 7, IAS 19and IFRS 10 effective 1 January 2018. This amendment is effective for periods beginning on or after 1 January 2018.

It is not expected that this amendment will have any material impact on the AFS.

Amendments to IFRS 12 Disclosure of Interest in Other EntitiesThe amendments clarify the scope of the standard. The amendment is effective for periods beginning on or after 1 January 2017.


Amendments to IAS 28 Investments in Associates and Joint VenturesThe amendments provide guidance on measuring an associate or joint venture at fair value. This amendment is effective for periods beginning on or after 1 January 2018.


Annual improvements to IFRS 2015 – 2017Annual improvement to IFRS 2015 – 2017 Cycle – IFRS 3, IFRS 11, IAS 12 and IAS 23 amendments.

IFRS 16 LeasesThis standard replaces the current guidance in IAS 17 and is a far-reaching change in accounting by lessees in particular.

Under IAS 17, lessees were required to make a distinction between a finance lease (on balance sheet) and an operating lease (off balance sheet). IFRS 16 now requires lessees to recognise a lease liability reflecting future lease payments and a ‘right-of-use asset’ for virtually all lease contracts. The IASB has included an optional exemption for certain short-term leases and leases of low-value assets; however, this exemption can only be applied by lessees.

For lessors, the accounting stays almost the same. However, as the IASB has updated the guidance on the definition of a lease (as well as the guidance on the combination and separation of contracts), lessors will also be affected by the new standard. Under IFRS 16, a contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. This standard is effective for periods beginning on or after 1 January 2019 with earlier application permitted if IFRS 15 Revenue from Contracts with Customers, is also applied.

The group has considered the impact of the new standard on the treatment of leases as a lessee and does not believe that it will have a material impact on the financial performance or financial position of the group.



statements 2018

4. PROPERTY AND EQUIPMENTGROUP

EquipmentR000

Computer equipment

R000

Furniture and fittings

R000

Solar photovoltaic

panelsR000

Other fixed

assetsR000

TotalR000

2018

Cost

Balance at 1 July 2017 27 260 7 376 6 123 27 167 8 208 76 134

Additions – 1 436 – – 1 438 2 874

Disposals (62) – (222) – – (284)

Balance at 30 June 2018 27 198 8 812 5 901 27 167 9 646 78 724

Accumulated depreciation

Balance at 1 July 2017 7 126 5 921 3 068 751 6 996 23 862

Depreciation 5 487 2 891 1 072 1 358 1 671 12 479

Disposals (62) – (222) – – (284)

Balance at 30 June 2018 12 551 8 812 3 918 2 109 8 667 36 057

Carrying amount at 30 June 2017 20 134 1 455 3 055 26 416 1 212 52 272

Carrying amount at 30 June 2018 14 647 – 1 983 25 058 979 42 667

2017

Cost

Balance at 1 July 2016 13 198 6 604 5 691 15 700 7 622 48 815

Additions 14 062 772 432 11 467 586 27 319

Disposals – – – – – –

Balance at 30 June 2017 27 260 7 376 6 123 27 167 8 208 76 134

Accumulated depreciation

Balance at 1 July 2016 2 806 4 589 2 124 – 5 371 14 890

Depreciation 4 320 1 332 944 751 1 625 8 972

Disposals – – – – – –

Balance at 30 June 2017 7 126 5 921 3 068 751 6 996 23 862



Useful lives of property and equipmentThe group reviews the estimated useful lives of property and equipment annually. The useful lives in the current and prior years are:

Item Useful life

- Equipment 3 years - Computer equipment 3 years - Furniture and fittings 3 years - Solar photovoltaic panels 20 years - Other fixed assets 5 to 10 years


5. INVESTMENT PROPERTYGROUP

Develop-ment

rightsR000

Infra-structure

and services

R000Land

R000

Develop-ments under

construc-tion

R000

Completed develop-

mentsR000

TotalR000

2018

CostBalance at 1 July 2017 545 992 710 873 37 508 1 385 475 11 606 122 14 285 970 Additions – 15 942 – 511 760 211 225 738 927 Transfer to provision for committed infrastructure – 25 476 – – – 25 476 Disposals (9 803) (29 715) – – (39 518)Transfer between components (22 854) (64 771) – (1 590 538) 1 678 163 Transfer (to) from inventory (1 106) (3 245) – 3 161 – (1 190)Transfer (to) from non-current assets held for sale (3 070) (7 706) – (38 659) 337 777 288 342

Balance at 30 June 2018 509 159 646 854 37 508 271 199 13 833 287 15 298 007

Fair value adjustmentBalance at 1 July 2017 513 975 – (32 508) 213 491 4 754 437 5 449 395 Additions (48 923) – – 60 590 317 303 328 970 Disposals (23 066) – – – – (23 066)Transfer between components (59 753) – – (201 998) 261 751 – Transfer (to) from inventory (2 796) – – 3 159 – 363 Transfer (to) from non-current assets held for sale (9 272) – – – 189 688 180 416

Balance at 30 June 2018 370 165 – (32 508) 75 242 5 523 179 5 936 078

Carrying amount at 30 June 2017 1 059 967 710 873 5 000 1 598 966 16 360 559 19 735 365

Carrying amount at 30 June 2018 879 324 646 854 5 000 346 441 19 356 466 21 234 085

2017CostBalance at 1 July 2016 428 417 1 111 772 37 508 979 175 10 728 147 13 285 019 Additions 141 761 – 832 307 123 941 1 098 009 Disposals (2 783) (7 468) – (25 502) (35 753)Transfer between components 135 735 (489 264) – (426 007) 779 536 – Transfer to inventory (5 566) (19 634) – – – (25 200)Transfer to non-current assets held for sale (9 811) (26 294) – – – (36 105)

Balance at 30 June 2017 545 992 710 873 37 508 1 385 475 11 606 122 14 285 970

Fair value adjustmentBalance at 1 July 2016 630 881 – (32 508) 205 909 3 953 891 4 758 173 Additions (65 544) – – 194 848 535 221 664 525 Disposals (18 020) – – – (24 515) (42 535)Transfer between components (19 421) – – (187 266) 206 687 –Transfer to non-current assets held for sale (13 921) – – – 83 153 69 232

Balance at 30 June 2017 513 975 (32 508) 213 491 4 754 437 5 449 395

Carrying amount at 30 June 2016 1 059 298 1 111 772 5 000 1 185 084 14 682 038 18 043 192

Carrying amount at 30 June 2017 1 059 967 710 873 5 000 1 598 966 16 360 559 19 735 365

The investment properties are encumbered as per note 21.


statements 2018 NOTES TO THE FINANCIAL STATEMENTSFor the year ended 30 June 2018

5. INVESTMENT PROPERTY (continued)A register of investment properties, together with the title deeds relating to the owned investment properties are available for inspection at the registered office of the company:ATT House, 2nd FloorMaxwell Office Park37 Magwa CrescentWaterfall CityMidrand

GROUP2018

R0002017

R000

Development rights (AWIC)Independent valuer’s valuation 1 141 340 1 462 000

Adjusted forAdjustment relating to the future rental obligation (262 016) (402 033)

Adjusted valuation 879 324 1 059 967

The independent valuer’s valuation was performed as at 30 June 2018 by applying the residual-land valuation model, taking into account obligations pursuant to the leasehold nature of the development rights.

The leasehold obligations are contingent on future net rentals, on future disposals, and is calculated in line with the contractual terms of the leasehold development rights agreements as discussed in note 2.

The following unobservable inputs were used by the independent valuer in estimating the fair value of the development rights: - serviced land prices between R1 200 and R3 500 (2017: R1 500 and R3 350) per bulk/land area square metre,

depending on services installed and intended usage; - estimated capital outlays and professional fees as per independent quantity surveyor; - provision for any additional costs, for example, agent’s commission and marketing; - an estimated development plan spanning one to 14 years (2017: 12 years); and - discount rates for present value calculations between 17.12% and 17.21% (2017: 16.0% to 18.0%).

The deteriorating economic environment and lower tenant activity have caused the directors to take a more conservative view of the roll-out of the development activity resulting in a further reduction in value.

The estimated impact of a change in the following significant unobservable inputs would result in a change in the fair value estimate as follows:

GROUP2018

R0002017

R000

An extension by one year of the estimated development plan (104 049) (151 050)

An increase of 100 basis points in the discount rate: (32 010) (31 421)

Gross valuation of development rights (44 125) (46 000)

Present value of the future rental obligation 12 115 14 579

The effective date of the revaluations on the development rights was 30 June 2018. All independent valuers were registered in terms of section 19 of the Property Valuers Professional Act, Act No 47 of 2000. The valuers were as follows:

Sterling Valuation Specialists Closed Corporation - B Eastman – Nat Dip Prop Val, MIV (SA), Registered Professional Valuer; and - AS Smith – BSc (Hons) Property Studies, MIV (SA), Registered Professional Valuer.

AS Smith, B Eastman and Sterling Valuation Specialists are not connected to the group.

There was no change to the valuation technique from the prior year. The fair value of development rights is deemed to be level 3 as defined by IFRS 13 Fair Value Measurements.

In 2009 AWIC entered into a purchase of development rights and lease agreements with WDC in terms of which it obtained the right to develop certain land parcels and to call for the registration of long-term lease agreements against the title deeds of the land parcels (it is anticipated that all the lease agreements will be registered within the foreseeable future).


5. INVESTMENT PROPERTY (continued)For both years presented, Waterfall comprises remaining undeveloped development rights obtained relating to: - Remainder of LP 8 of portion 1/RE on the Farm Waterfall No 5; - Remainder of LP 9 of portion 1/RE on the Farm Waterfall No 5; - Remainder of LP 10 of portion 1/RE on the Farm Waterfall No 5; - LP 10a of portion 1/RE on the Farm Waterfall No 5; - Remainder of LP 10b of portion 1/RE on the Farm Waterfall No 5; - LP 12 of portion 1/RE on the Farm Waterfall No 5; and - Remainder of LP 22 of Portion 78 of the Farm Waterfall No 5.

The following development rights were classified as held for sale in the current year as per note 18: - A portion of LP 8 of portion 1/RE on the Farm Waterfall No 5; - A portion of LP 9 of portion 1/RE on the Farm Waterfall No 5; and - A portion of LP 10 of portion 1/RE on the Farm Waterfall No 5.

The following development rights were classified as held for sale in the prior year as per note 18: - A portion of LP 10 of portion 1/RE on the Farm Waterfall No 5.

GROUP2018

R0002017

R000

Land (Le Chateau)

Directors’ valuation 5 000 5 000

The effective date of the last valuation performed was 30 June 2016. The valuation was performed by an independent valuer, A De Wet (member of the South African Institute of Valuers and registered as a Professional Associated Valuer with the SA Council for the Property Valuers Profession). A de Wet is not connected to the group and has recent experience in location and category of investment property being valued.

The valuation was based on: - bulk rates for areas being unserviced and for which no building work has been identified/tenanted; and - valuation of tenanted developments under construction.

The bulk areas were discounted to a net present value based on expected timelines for zoning.

The directors chose to value the property on a more conservative basis. Provision was made for the property market which has not turned around and the state of the residential market for second homes. This judgement is based on their experience in the industry and the property movements within the Hartbeespoort area.

NOTES TO THE FINANCIAL STATEMENTS continuedFor the year ended 30 June 2018


statements 2018

5. INVESTMENT PROPERTY (continued)GROUP

2018R000

2017R000

Developments under constructionThe carrying amount of developments under construction are reconciled as follows:Balance at the beginning of the year 1 598 966 1 185 084

Transfer of cost from (to) development rights 22 854 (135 735)

Transfer from infrastructure and services 64 771 489 264

Transfer of fair value from development rights 59 753 19 421

Additions 511 760 832 307

Net gain from fair value adjustment 219 445 644 171

Transfer to assets held for sale (38 659) –

Transfer from inventory 6 320 –

Transfer to completed developments (1 939 914) (986 223)

Independent valuers’ valuation 505 296 2 048 289

Adjusted for – against fair valueCost to complete and stage of completion (158 855) (449 323)

Independent valuers’ valuation – adjusted 346 441 1 598 966

Reconciled as follows:Cost 271 199 1 355 003

Fair value adjustments 75 242 243 963

Adjusted valuation 346 441 1 598 966

The following unobservable inputs were used by the independent valuers in estimating the fair value of the investment property:

GROUP2018

%2017

%

Unobservable inputs Discount rate 13.50 – 14.00 13.25 – 14.00

Reversionary discount rate 13.50 – 14.00 13.25 – 14.00

Market capitalisation rate 7.50 – 8.00 7.25 – 8.00

Reversionary capitalisation rate 7.50 – 8.25 7.25 – 8.00

Expense growth 7.00 7.00

Income growth 6.00 6.00

Long-term vacancy rate 0.25 – 0.50 0.25 – 0.50


5. INVESTMENT PROPERTY (continued)The estimated impact of a change in the following significant unobservable inputs would result in a change in the independent valuers’ valuation as follows:

GROUP2018

R0002017

R000

A decrease of 50 basis points in the discount rate 10 362 75 585

An increase of 50 basis points in the discount rate (9 918) (71 973)

A decrease of 50 basis points in the reversionary capitalisation rate 9 890 65 299

An increase of 50 basis points in the reversionary capitalisation rate (8 722) (57 126)

The independent valuers’ valuation of the following developments under construction represent the group’s shareholding as they are being developed through a joint venture and/or undivided share: - PwC Tower – 75.0%. The balance is held by PwC Waterfall Property Partnership (which has been completed in the

current year); - Corporate Campus Phase 1 – 50.0%. The balance is held by Zenprop (which has been completed in the current

year); - Corporate Campus Phase 2 – 50.0%. The balance is held by Zenprop; - Cummins DC – 50.0%. The balance was classified as held for sale to Zenprop; and - Deloitte – 50.0%. The balance is held by Dale Creek Investments.

Developments under construction are initially recognised at cost and subsequently remeasured to fair value. The fair value of development property is not always reliably determinable due to the properties being in the early stages of construction or where construction has not yet begun. Where fair value cannot be reliably determined, but the group expects that the fair value will be reliably determinable when construction is further progressed, the group measures such properties at cost.

The value of developments under construction is determined with reference to the cost incurred to date plus a portion of the present value of the final anticipated fair value gain upon completion of the building. The final anticipated fair value gain upon completion of the buildings is the difference between the total costs of development and the fair value of the building at completion based on the independent valuer’s valuation.

The portion of the present value of the anticipated fair value gain is determined with reference to the stage of completion of the building. The stage of completion of the building is determined with reference to the cost to date of the top structure and the total anticipated costs excluding the development rights (land) and the related funding costs.

The fair value of developments under construction is deemed to be level 3 as defined by IFRS 13 Fair Value Measurements.

As mentioned in the accounting policies, per 1.10, if the fair value of a development under construction is not determinable, it is measured at cost until the earlier of the date it becomes determinable or such construction is complete. In accordance with this, given the infancy of the following developments under construction, such developments have been carried at cost: - Dale Creek Investments (River Creek – Deloitte head office); - Ingress Phase 1; and - Midi units.

Developments under construction are transferred to “completed developments” on the date of practical completion as certified by the principal agent on the development.

Excluding the above mentioned developments, developments under construction were fair valued as at 30 June 2018 using the discounted cash flow of future income streams method by independent valuers. This is in line with the prior year.

All independent valuers were registered in terms of section 19 of the Property Valuers Professional Act, Act No 47 of 2000. For both years, the valuers were as follows:

Mills Fitchet Magnus Penny & Wolfs trading as Magnus Penny Associates Closed Corporation - T Bate – MSc, BSc Land Econ (UK), MRICS, MIVSA, Professional Valuer; - MRB Gibbons – Nat Dip Prop Val MIVSA, MRICS; and - S Wolffs – Nat Dip Prop Val MIV.

Wolffs Valuation Services in association with Mills Fitchet - S Wolffs – Nat Dip Prop Val MIV.

Sterling Valuation Specialists Closed Corporation - AS Smith – BSc (Hons) Property Studies, Registered Professional Valuer; and - C Houba – BSc (Hons) Property Studies, Registered Professional Valuer.



statements 2018

5. INVESTMENT PROPERTY (continued)GROUP

2018R000

2017R000

Completed developmentsThe carrying amount of completed developments are reconciled as follows:Balance at the beginning of the year 16 360 559 14 682 038

Transfer from developments under construction 1 939 914 986 223

Additions 211 225 123 941

Disposals – (50 017)

Net gain from fair value adjustment 420 770 735 023

Straight-line lease income adjustment against fair value (103 467) (199 802)

Independent valuers’ valuation 18 829 001 16 277 406

Adjusted forTransfer from non-current assets held for sale 527 465 83 153

Independent valuers’ valuation – adjusted 19 356 466 16 360 559

Reconciled as follows:Cost 13 833 287 11 606 122

Fair value adjustments 5 523 179 4 754 437

Adjusted valuation 19 356 466 16 360 559

The following unobservable inputs were used by the independent valuers in estimating the fair value of the investment property:

GROUP2018

%2017

%

Unobservable inputs Discount rate 12.25 – 15.75 12.25 – 15.75

Reversionary discount rate 12.25 – 15.75 12.25 – 15.75

Market capitalisation rate 6.25 – 9.75 6.25 – 9.75

Reversionary capitalisation rate 6.25 – 9.75 6.25 – 9.75

Expense growth 7.00 – 7.50 7.00 – 7.50

Income growth 6.00 6.00

Long-term vacancy rate 0.00 – 5.00 0.00 – 5.00


5. INVESTMENT PROPERTY (continued)The estimated impact of a change in the following significant unobservable inputs would result in a change in the independent valuers’ valuation as follows:

GROUP

2018R000

2017R000

A decrease of 50 basis points in the discount rate 584 072 516 551

An increase of 50 basis points in the discount rate (579 440) (485 762)

A decrease of 50 basis points in the reversionary capitalisation rate 730 809 680 877

An increase of 50 basis points in the reversionary capitalisation rate (656 365) (583 390)

The independent valuers’ valuation of the following completed developments represent the group’s shareholding as they are being held through a joint venture and/or undivided share: - Maxwell Office Park – 50.0%. The balance is held by The Moolman Group; - Mall of Africa – 80.0%. The balance is held by APF (which was completed in the prior year); - Altech building – 50.0%. The balance is held by The Moolman Group (which was disposed of in the prior year); - PwC Tower – 75.0%. The balance is held by PwC Waterfall Property Partnership (which has been completed

in the current year); - Corporate Campus Phase 1 – 50.0%. The balance is held by Zenprop (which has been completed in the

current year); - Eikestad Mall – 80.0%. The balance is held by Key Capital; and - Brooklyn Mall – 25.0%. The balance is held by Growthpoint.

The fair value of completed developments is deemed to be a level 3 as defined by IFRS 13 Fair Value Measurements.

Completed developments were valued as at 30 June 2018 using discounted cash flow of the future income streams method by independent valuers. This is in line with the prior year.

All independent valuers were registered in terms of section 19 of the Property Valuers Professional Act, Act No 47 of 2000. For both years, the valuers were as follows:

Mills Fitchet Magnus Penny & Wolfs trading as Magnus Penny Associates Closed Corporation - T Bate – MSc, BSc Land Econ (UK), MRICS, MIVSA, Professional Valuer; - MRB Gibbons – Nat Dip Prop Val MIVSA, MRICS; and - S Wolffs – Nat Dip Prop Val MIV.

Wolffs Valuation Services in association with Mills Fitchet - S Wolffs – Nat Dip Prop Val, MIV (SA), Registered Professional Valuer.

Jones Lang LaSalle Proprietary Limited - K Pfaff – BSc MRICS, Chartered Valuation Surveyor, Professional Valuer; and - J Karg – Head of Valuations and Associate Director.

Sterling Valuation Specialists Closed Corporation - M Smit – ND Property Valuation, Registered Professional Valuer; - B Eastman – Nat Dip Prop Val, MIV (SA), Registered Professional Valuer; - AS Smith – BSc (Hons) Property Studies, Registered Professional Valuer; and - C Houba – BSc (Hons) Property Studies, Registered Professional Valuer.

Eris Property Group Proprietary Limited - S Khumalo – Advanced Diploma in Property Valuation and Management, Registered Professional Associated

Valuer.



statements 2018

6. INTANGIBLE ASSETSGROUP

2018R000

2017R000

CostBalance at the beginning of the year 379 460 379 460

Balance at the end of the year 379 460 379 460

Accumulated amortisationBalance at the beginning of the year (88 921) (66 861)

Amortisation expense (24 037) (22 060)

Balance at the end of the year (112 958) (88 921)

Net carrying amount at the beginning of the year 290 539 312 599

Net carrying amount at the end of the year 266 502 290 539

Value in use of the asset management contract (including goodwill) is calculated as the net present value of future cash flows derived from assets using cash flow projections which have been discounted at appropriate discount rates. In calculating the net present value of the future cash flows, certain assumptions are required to be made in respect of highly uncertain matters including management’s expectations of: - CGU to which an intangible asset (including goodwill) has been allocated is tested for impairment annually; - the discounted cash flow method is used to determine the value in use of the CGU; - the future cash flows are escalated at 7.0% per annum; - the future cash flows of the CGU to which an intangible asset (including goodwill) is allocated is used as

input in the discounted cash flow valuation; - the appropriate long-term growth rate is applied to the future cash flow of the CGU; - the group has used a WACC of 12.3%; and - the selection of appropriate capitalisation rates to reflect the risks involved, ie the weighted average

capitalisation rates of 7.46%.

During the 2015 financial year, the group (through wholly owned subsidiary AWIC), acquired the Wi-Fi rights in relation to its developments over the Waterfall Farm from WIC. The rights allow AWIC to exploit any multimedia and broadband-based services in respect of its developments.

The Wi-Fi rights are amortised based on the roll-out/realisation tempo of the Waterfall development pipeline.

During the prior year the directors changed their estimate relating to useful life of the Wi-Fi rights to be based on the roll-out/realisation tempo period of the Waterfall development rights pipeline.

For the impairment testing of the asset management contract (including goodwill) the appropriate discount rate was determined as the WACC of 12.3% (2017: 12.3%). The WACC at 30 June 2018 was determined with reference to the post-tax cost of debt (7.50%) and the cost of equity (17.10%), based on market values is 50.0% debt to 50.0% equity.

The intangible assets (other than the Wi-Fi rights) are amortised over 15 years and are tested for impairment on an annual basis or when there are indications that the intangible assets may be impaired.

The Wi-Fi rights intangible asset’s carrying value net of impairments and accumulated amortisation of R61.8 million (2017: R65.9 million) is included in the “Head office SA” segment. Refer to note 39.


7. GOODWILLGROUP

2018R000

2017R000

CostBalance at the beginning of the year 177 444 177 444


Accumulated impairment lossesBalance at the beginning of the year (109 670) (109 670)

Balance at the end of the year (109 670) (109 670)

Net carrying amount at the beginning of the year 67 774 67 774

Net carrying amount at the end of the year 67 774 67 774

The goodwill relates to the following cash-generating units:

– AMS 67 774 67 774

– ARS – –

Total 67 774 67 774

During the prior year, the operations of AMS and ARS were consolidated. The goodwill in ARS was allocated to AMS.

The goodwill is not amortised but tested for impairment on an annual basis or when there are indications that the goodwill may be impaired.

Refer to note 6 for the assumptions used in testing goodwill for impairment.

The directors of the group have tested goodwill that is allocated to AMS, for impairment as at 30 June 2018 and concluded that the goodwill is not impaired based on the following: - no impairment of the investment by the group in the underlying CGU; and - the present value of the future discounted cash flows generated by the CGU exceeds the carrying value of

the CGU (refer note 6).

The accumulated impairment loss of R109.7 million relates to the goodwill allocated to Micawber (wholly owned subsidiary of AWIC) that was fully impaired in 2016.



statements 2018

8. INVESTMENT IN ASSOCIATES AND JOINT VENTURESSet out below is the associated company of the group as at 30 June 2018, which, in the opinion of the directors, is material to the group. The associated company as set out below has ordinary shares, which are held directly by the group. The country of incorporation is also the principal place of business.

Name of associate MASPrincipal activity Real estate investment companyPlace of incorporation British Virgin IslandPrincipal place of business Isle of Man

GROUP COMPANY

2018%

2017%

2018%

2017%

Proportion of ownership/voting rights held by the group 23.03 31.41 0.00 31.41

The above associate is accounted for using the equity method in these consolidated AFS.

During the current year, the investment in MAS was disposed of to AIM (wholly owned subsidiary of Attacq).

Refer to note 38 for the fair value measurements.

Summarised financial information in respect of the group’s material associate is set out below. The summarised financial information below represents amounts shown in the associate’s financial statements prepared in accordance with IFRS (adjusted by the group for equity accounting purposes).

GROUP COMPANY

2018R000

2017R000

2018R000

2017R000

MASCurrent assets 3 891 256 718 390 – –

Non-current assets 14 632 297 10 611 714 – –

Current liabilities (1 270 279) (411 711) – –

Non-current liabilities (3 553 552) (2 215 442) – –

Revenue 665 774 469 005 – –

Profit from continuing operations 296 538 581 312 – –

Profit for the year 296 538 581 312 – –

Other comprehensive loss for the year (18 526) (147 622) – –

Total comprehensive income for the year 278 012 433 690 – –

Dividends received from MAS Real Estate Inc. during the year 151 041 105 303 – –


8. INVESTMENT IN ASSOCIATES AND JOINT VENTURES (continued)The reconciliation of the summarised financial information to the carrying amount of the interest in MAS recognised in the consolidated AFS is as follows:

GROUP COMPANY

2018R000

2017R000

2018R000

2017R000

MASBalance at the beginning of the year 2 729 308 2 722 460 3 401 778 3 082 078

Additions 15 50 362 – 50 362

Transfer of investment in MAS to AIM – – (3 365 073) –

Fair value adjustment through other comprehensive income – – (36 705) 269 338

Share of retained profits and other comprehensive income (loss) for the year 416 505 (43 514) – –

Share of retained profits 68 774 190 009 – –

Share of other comprehensive loss (5 165) (53 393) – –

FCTR 503 937 (74 827) – –

Dividends (151 041) (105 303) – –

Balance at the end of the year 3 145 828 2 729 308 – 3 401 778

Reconciled as follows:Cost 2 336 718 2 336 703 – 2 374 614

Net gain from fair value adjustment – – – 1 027 164

Share of retained profits 188 520 119 746 – –

Other comprehensive income since acquisition 274 277 279 442 – –

Foreign currency translation effect 746 359 242 422 – –

Dividends paid (400 046) (249 005) – –

Balance at the end of the year 3 145 828 2 729 308 – 3 401 778

MAS’ closing balance was converted on 30 June 2018 at the spot euro rate of R15.99.

The shareholding in MAS of 23.0% (2017: 31.4%) (excluding treasury shares) is based on the MAS issued shares after adjusting for MAS treasury shares. Attacq’s shareholding based on MAS’ total issued shares as at 30 June 2018 is 22.8% (2017: 30.6%) (including treasury shares).



statements 2018

8. INVESTMENT IN ASSOCIATES AND JOINT VENTURES (continued)

GROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Carrying amount of the group’s interest in associates and joint venturesMAS 3 145 828 2 729 308 – 3 401 778

Aggregate amount of other associates and joint ventures that are not individually material 183 024 424 084 43 457 55 535

Gruppo 47 948 72 259 – –

Mall of Namibia – 151 275 – –

Artisan Development – 53 424 – –

Wingspan 40 121 54 617 40 121 54 617

EAJV 89 862 88 284 – –

Other associates and joint ventures 5 093 4 225 3 336 918

Balance at the end of the year 3 328 852 3 153 392 43 457 3 457 313

Net income from associates and joint venturesMAS 68 774 190 009 – –

Aggregate amount of other associates and joint ventures that are not individually material 12 932 59 871 – –

Gruppo (957) (17 877) – –

Mall of Namibia 1 865 21 036 – –

Artisan Development 11 074 1 942 – –

Wingspan (4 164) 1 283 – –

EAJV 6 910 19 078 – –

Atterbury Cyprus – 20 654 – –

Atterbury Serbia – 10 908 – –

Other associates and joint ventures (1 549) 2 847 – –

Total 81 706 249 880 – –

The directors have assessed the investments in associates relating to Gruppo to be impaired by R25.2 million which has been recognised in the statement of profit or loss and other comprehensive income under “Other expenses”. This was as a result of the negative performance of the underlying investment property and negative trading conditions in Nigeria. This forms part of the “Rest of Africa” segment (refer to note 39). The net asset values of the group’s interests in the underlying investments are deemed to approach the fair value less cost to sell. The recoverable amount of the investment in Gruppo has been based on the net asset value of the underlying entity. The fair value hierarchy of the investment in Gruppo has been classified as level 3 (refer to note 38).

The investments in Mall of Namibia and Artisan Development were disposed of during the current year.

Refer to note 40 for the interest in direct associates.


9. INVESTMENT IN SUBSIDIARIESGROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Balance at the beginning of the year – – 7 040 159 6 481 046 Additions – – 3 365 445 28 005 Disposal – – (153 142) – Net impairment – – (262 297) (88 332)Fair value adjustment through other comprehensive income – – 2 246 721 619 440 Balance at the end of the year – – 12 236 886 7 040 159 Reconciled as follows:Cost – – 6 256 145 3 011 505 Impairment# – – (350 629) (88 332)Net gain from fair value adjustment – – 6 331 370 4 116 986 Balance at the end of the year – – 12 236 886 7 040 159 Net investment in subsidiaries – – 12 236 886 7 040 159 Investment in subsidiaries comprise the following:AIH InternationalBalance at the beginning of the year – – 18 772 62 043 Fair value adjustment through other comprehensive income – – 25 647 (43 271)Balance at the end of the year – – 44 419 18 772 Reconciled as follows:Cost* – – – – Net gain from fair value adjustment – – 44 419 18 772 Balance at the end of the year – – 44 419 18 772 AIMAdditions – – 3 365 074 – Net impairment – – (211 410) – Balance at the end of the year – – 3 153 664 – Reconciled as follows:Cost – – 3 365 074 – Impairment^ – – (211 410) – Balance at the end of the year – – 3 153 664 – AMSBalance at the beginning of the year – – 232 889 293 458 Additions – – 371 27 763 Net impairment – – (50 887) (88 332)Balance at the end of the year – – 182 373 232 889 Reconciled as follows:Cost – – 321 592 321 221 Impairment# – – (139 219) (88 332)Balance at the end of the year – – 182 373 232 889 Attacq EnergyBalance at the beginning of the year – – 357 – Fair value adjustment through other comprehensive income – – 1 082 357 Balance at the end of the year – – 1 439 357 Reconciled as follows:Cost* – – – – Net gain from fair value adjustment – – 1 439 357 Balance at the end of the year – – 1 439 357

# The impairment of the investment in AMS related to the negative NAV of AMS as a result of losses incurred by AMS.^ The impairment of the investment in AIM related to the decrease in the MAS share price at 30 June 2018.* The cost of this investment is less than R1 000.



statements 2018

9. INVESTMENT IN SUBSIDIARIES (continued)GROUP COMPANY

2018R000

2017R000

2018R000

2017R000

ARFBalance at the beginning of the year – – 1 700 844 1 666 194 Fair value adjustment through other comprehensive income – – 542 475 34 650 Balance at the end of the year – – 2 243 319 1 700 844 Reconciled as follows:Cost – – 1 017 644 1 017 644 Net gain from fair value adjustment – – 1 225 675 683 200 Balance at the end of the year – – 2 243 319 1 700 844 AWICBalance at the beginning of the year – – 3 577 169 2 983 104 Fair value adjustment through other comprehensive income – – 1 193 312 594 065 Balance at the end of the year – – 4 770 481 3 577 169 Reconciled as follows:Cost – – 1 106 556 1 106 556 Net gain from fair value adjustment – – 3 663 925 2 470 613 Balance at the end of the year – – 4 770 481 3 577 169 Brooklyn BridgeBalance at the beginning of the year – – 157 076 210 618 Fair value adjustment through other comprehensive income – – 54 918 (53 542)Balance at the end of the year – – 211 994 157 076 Reconciled as follows:Cost – – 126 541 126 541 Net gain from fair value adjustment – – 85 453 30 535 Balance at the end of the year – – 211 994 157 076 Harlequin DuckBalance at the beginning of the year – – 1 472 1 542 Fair value adjustment through other comprehensive income – – (2) (70)Balance at the end of the year – – 1 470 1 472 Reconciled as follows:Cost* – – – – Net gain from fair value adjustment – – 1 470 1 472 Balance at the end of the year – – 1 470 1 472 Le ChateauBalance at the beginning of the year – – – – Movement in provision for liabilities relating to subsidiaries – – – – Balance at the end of the year – – – – Reconciled as follows:Cost – – 1 1 Impairment – – (1) (1)Balance at the end of the year – – – – LynnaurBalance at the beginning of the year – – 234 067 203 229 Fair value adjustment through other comprehensive income – – 109 564 30 838 Balance at the end of the year – – 343 631 234 067 Reconciled as follows:Cost – – 50 060 50 060 Net gain from fair value adjustment – – 293 571 184 007 Balance at the end of the year – – 343 631 234 067

* The cost of this investment is less than R1 000.


9. INVESTMENT IN SUBSIDIARIES (continued)GROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Lynnwood BridgeBalance at the beginning of the year – – 822 317 725 107

Fair value adjustment through other comprehensive income – – 230 749 97 210

Balance at the end of the year – – 1 053 066 822 317

Reconciled as follows:Cost – – 268 677 268 677

Net gain from fair value adjustment – – 784 389 553 640

Balance at the end of the year – – 1 053 066 822 317

MajesticBalance at the beginning of the year – – 12 404 12 321

Fair value adjustment through other comprehensive income – – 4 306 83

Balance at the end of the year – – 16 710 12 404

Reconciled as follows:Cost* – – – –



Attacq Treasury Share CompanyBalance at the beginning of the year – – 165 401 193 191

Fair value adjustment through other comprehensive income – – 48 919 (27 790)


Reconciled as follows:Cost* – – – –



Attacq NamcoBalance at the beginning of the year – – 117 391 130 239

Additions – – – 242

Disposal – – (153 142) –

Fair value adjustment through other comprehensive income – – 35 751 (13 090)

Balance at the end of the year – – – 117 391

Reconciled as follows:Cost – – – 120 805

Net gain from fair value adjustment – – – (3 414)

Balance at the end of the year – – – 117 391

* The cost of this investment is less than R1 000.

Refer to note 38 for the fair value disclosure of the above investments in subsidiaries.



statements 2018

9. INVESTMENT IN SUBSIDIARIES (continued)

The directors have assessed the investments in subsidiary relating to AIM to be impaired by R211.4 million which has been recognised in the statement of profit or loss and other comprehensive income under “Other expenses”. This was as a result of the negative share performance from the date of transfer of the investment in MAS from Attacq to AIM. The net asset values of the company’s interests in the underlying investments are deemed to approach the fair value less cost to sell. The recoverable amount of the investment in AIM has been based on the market value of the investment AIM holds in MAS. The fair value hierarchy of the investment in AIM has been classified as level 3 (refer to note 38).

The directors have assessed the investments in subsidiary relating to AMS to be impaired by R50.9 million which has been recognised in the statement of profit or loss and other comprehensive income under “Other expenses”. This was as a result of the fund expenses incurred by AMS on behalf of the group. The net asset values of the company’s interests in the underlying investments are deemed to approach the fair value less cost to sell. The recoverable amount of the investment in AMS has been based on the net asset value of the underlying entity. The fair value hierarchy of the investment in AMS has been classified as level 3 (refer to note 38).

9.1 Non-controlling interestsGROUP

2018R000

2017R000

Proportion of ownership interests and voting rights held by non-controlling interest:Nieuwtown 50.0% 50.0%

Majestic 50.0% 50.0%

Profit (loss) allocated to non-controlling interests:Nieuwtown 55 486 (29 969)

Majestic 4 306 83

Total 59 792 (29 886)

The accumulated non-controlling interest comprises of the following components:Nieuwtown (5) (55 493)

Majestic 16 710 12 406

Total 16 705 (43 087)

The non-controlling interest balances recognised are deemed not to be material by the directors.

The principal place of incorporation of the above companies is South Africa.

9.2 Acquisition of non-controlling interest reserveAcquisition of ARF non-controlling interest reserveDuring the 2014 year, the group acquired the non-controlling interest in ARF by issuing 12.1 million shares at R11.63 per share. The transaction was entered into prior to listing and the shares issued subsequent to listing when the market price of a share was R16.50 per share. This resulted in an IFRS 2 Share-based payment charge of R59.2 million recognised in profit or loss (refer to note 20). This resulted in the recognition of an acquisition of non-controlling interest reserve of a credit of R28.8 million. This will be derecognised upon the sale of ARF.

Acquisition of Lynnaur non-controlling interest reserveDuring the 2015 year, the group acquired the non-controlling interest in Lynnaur, the owner of the Aurecon building in Pretoria, for an amount of R50.0 million which made the group the sole owner of all the buildings located in the Lynnwood Bridge Precinct. This resulted in the recognition of an acquisition of non-controlling interest reserve of a debit of R14.8 million. This will be derecognised upon the sale of Lynnaur.

Acquisition of AWIC non-controlling interest reserveDuring the 2015 year, the group acquired the non-controlling interest in AWIC to manage the Waterfall pipeline and take control of the strategic planning and management of Waterfall, including the roll-out of the infrastructure the group became the 100% shareholder of AWIC, with APH exiting as shareholders. The total purchase consideration for APH’s interest, including shareholder’s loan, was R655.1 million This resulted in the recognition of an acquisition of non-controlling interest reserve of a debit of R118.3 million. This will be derecognised upon the sale of AWIC.


9. INVESTMENT IN SUBSIDIARIES (continued) 2018 2017

The assets, liabilities, revenue and total comprehensive income (loss) of the company’s subsidiaries are as follows:

AssetsR000

Liabilities R000

Revenue R000

Total compre-hensive income

(loss) for the

year R000

AssetsR000

LiabilitiesR000

RevenueR000


(loss) for the

year R000

COMPANYAdamax 1 431 1 427 261 – 1 170 1 166 237 –

AIH International 1 537 687 1 493 269 – 22 449 1 297 626 1 278 169 – (36 948)

AIM 3 301 360 147 695 – (211 409) – – – –

Attacq Energy 25 422 23 981 3 059 1 084 27 144 26 788 1 347 356

Attacq Namco – – – 35 751 184 085 66 695 – (10 682)

AMS 29 372 114 710 160 634 (33 169) 26 648 86 135 106 873 (90 563)

ARS 179 147 – 18 581 566 23 626 6 966

ARF 4 833 081 2 589 770 464 284 610 467 4 693 626 2 992 780 466 335 34 651

AWIC 15 237 350 10 466 869 1 032 787 1 603 958 13 375 544 9 817 539 930 795 574 910

Brooklyn Bridge 565 419 353 424 55 778 74 219 563 196 406 118 79 533 (53 539)

Harlequin Duck 1 470 – – (2) 1 472 – – (70)

Le Chateau 5 001 44 113 – (5) 5 000 44 108 – (4)

Leipzig 737 738 – (1) 38 584 38 585 – (1)

Lynnaur 810 474 466 844 68 097 127 565 796 374 562 310 99 187 30 836

Lynnwood Bridge 2 055 233 1 002 158 298 567 286 459 2 013 168 1 190 855 244 428 97 205

Majestic 151 188 117 766 16 704 8 613 146 922 122 111 19 460 168

Micawber 234 365 366 036 26 667 (45 839) 295 302 381 134 45 861 (56 121)

Nieuwtown 1 522 089 1 522 099 175 712 110 971 1 573 608 1 684 590 176 675 (59 926)

Attacq Treasury Share Company 299 736 85 416 – 48 919 287 688 122 286 – (27 789)

Refer to note 40 for the interest in direct subsidiaries.



statements 2018

9. INVESTMENT IN SUBSIDIARIES (continued) 2018 2017

The assets, liabilities, revenue and total comprehensive income (loss) of the company’s subsidiaries are as follows:

AssetsR000

Liabilities R000

Revenue R000


(loss) for the

year R000

AssetsR000

LiabilitiesR000

RevenueR000


(loss) for the

year R000

COMPANYAdamax 1 431 1 427 261 – 1 170 1 166 237 –

AIH International 1 537 687 1 493 269 – 22 449 1 297 626 1 278 169 – (36 948)

AIM 3 301 360 147 695 – (211 409) – – – –

Attacq Energy 25 422 23 981 3 059 1 084 27 144 26 788 1 347 356

Attacq Namco – – – 35 751 184 085 66 695 – (10 682)

AMS 29 372 114 710 160 634 (33 169) 26 648 86 135 106 873 (90 563)

ARS 179 147 – 18 581 566 23 626 6 966

ARF 4 833 081 2 589 770 464 284 610 467 4 693 626 2 992 780 466 335 34 651

AWIC 15 237 350 10 466 869 1 032 787 1 603 958 13 375 544 9 817 539 930 795 574 910

Brooklyn Bridge 565 419 353 424 55 778 74 219 563 196 406 118 79 533 (53 539)

Harlequin Duck 1 470 – – (2) 1 472 – – (70)

Le Chateau 5 001 44 113 – (5) 5 000 44 108 – (4)

Leipzig 737 738 – (1) 38 584 38 585 – (1)

Lynnaur 810 474 466 844 68 097 127 565 796 374 562 310 99 187 30 836

Lynnwood Bridge 2 055 233 1 002 158 298 567 286 459 2 013 168 1 190 855 244 428 97 205

Majestic 151 188 117 766 16 704 8 613 146 922 122 111 19 460 168

Micawber 234 365 366 036 26 667 (45 839) 295 302 381 134 45 861 (56 121)

Nieuwtown 1 522 089 1 522 099 175 712 110 971 1 573 608 1 684 590 176 675 (59 926)

Attacq Treasury Share Company 299 736 85 416 – 48 919 287 688 122 286 – (27 789)

Refer to note 40 for the interest in direct subsidiaries.


10. OTHER INVESTMENTSGROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Balance at the beginning of the year 11 941 408 339 488 307 408

Disposal (11 969) – – –

Foreign exchange differences 516 – – –

Fair value adjustment# – (183 151) – (147 459)

Additions – 488 – 488

Transfer to non-current assets held for sale – (198 460) – (159 949)

Transfer to investment in associates – (15 275) – –

Balance at the end of the year 488 11 941 488 488

Reconciled as follows:Cost 488 11 958 488 488

Net gain from fair value adjustment – (17) – –

Balance at the end of the year 488 11 941 488 488

Other investments comprise the following:

RainpropBalance at the beginning of the year – 791 – 791

Fair value adjustment – (10) – (10)

Transfer to non-current assets held for sale – (781) – (781)

Balance at the end of the year – – – –

NESA CapitalBalance at the beginning of the year 488 – 488 –

Additions – 488 – 488


Reconciled as follows:Cost 488 488 488 488

Net gain from fair value adjustment – – – –


# Includes an impairment of R116.6 million in the prior year which was allocated to the statement of profit or loss and other comprehensive income under “Other expenses”.



statements 2018

10. OTHER INVESTMENTS (continued)GROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Investec Securities*Balance at the beginning of the year – 161 791 – 87 606

Fair value adjustment – (77 803) – (42 129)



Sasfin*Balance at the beginning of the year – 219 012 – 219 012

Fair value adjustment – (105 321) – (105 321)



Artisan DevelopmentBalance at the beginning of the year – 15 275 – –

Transfer to investment in associates – (15 275) – –


Artisan SouthportBalance at the beginning of the year 11 453 11 470 – –

Disposal (11 969) – – –

Foreign exchange differences 516 – – –

Fair value adjustment – (17) – –

Balance at the end of the year – 11 453 – –

Reconciled as follows:Cost – 11 470 – –

Net gain from fair value adjustment – (17) – –

Balance at the end of the year – 11 453 – –

The effective and proportionate shareholding in the investments is as follows:SESCF 19.91% 19.91% 16.03% 16.03%

Artisan Development 0.00% 25.00% 0.00% 0.00%

NESA Capital 0.00% 0.00% 0.00% 0.00%

Artisan Southport (non-controlling share) 0.00% 0.00% 0.00% 0.00%

Rainprop 1.5% 1.5% 1.5% 1.5%

* SESCF is held through foreign investment allowances.

Refer to note 38 for the fair value disclosure of the above investments.

In the prior year, the directors have assessed the investments in SESCF to be impaired by R116.6 million which has been recognised in the statement of profit or loss and other comprehensive income under “Other expenses”. This was as a result of the negative performance of the underlying investment property. This forms part of the “Head office global” segment (refer to note 39). The net asset values of the group’s interests in the underlying investments are deemed to approach the fair value less cost to sell. The recoverable amount of the investment in SESCF has been based on the net asset value of the underlying entity. The fair value hierarchy of the investment in SESCF has been classified as level 3 (refer to note 38). Proceeds from the sale of the investment was received in the current year.


11. DEFERRED TAX ASSETS AND LIABILITIESGROUP COMPANY

2018R000

2017R000

2018R000

2017R000

The balances comprise:Deferred tax assetsTax losses available for set off against future taxable income 11 5 396 – – Straight-line lease debtor – (612) – – Other – (1 455) – – Balance at the end of the year 11 3 329 – – Reconciliation of deferred tax assetsBalance at the beginning of the year 3 329 24 627 – – Reversing temporary differences on tax losses available for set off against future taxable income (3 930) (16 082) – – Reversing temporary difference on investment property – (6 756) – – Originating temporary difference on straight-line lease debtor 612 421 – – Originating temporary difference on other movements – 1 119 – – Balance at the end of the year 11 3 329 – – The balances comprise:Deferred tax liabilitiesInvestment property (200 470) (1 994 535) – –

Straight-line lease debtor – (205 075) – – Tax losses available for set off against future taxable income 130 875 351 490 20 767 – Fair value on investments 14 547 (10 526) (93 044) (1 109 613)MAS equity accounting deferred taxation (130 083) (36 786) – – Asset management agreements (refer to note 6) (57 297) (62 890) – –

Unrealised foreign exchange gains (1 942) (10 462) (1 942) (10 462)Other temporary differences* 65 446 36 644 – – Balance at the end of the year (178 924) (1 932 140) (74 219) (1 120 075)Reconciliation of deferred tax liabilityBalance at the beginning of the year (1 932 140) (1 892 145) (1 120 075) (1 063 804)Reversing (originating) temporary difference on investment property 1 793 262 (162 417) – – Reversing (originating) temporary difference on straight-line lease debtor 206 678 (49 411) – – (Originating) reversing temporary difference on tax losses available for set off against future taxable income (220 995) 12 594 20 767 – Reversing (originating) temporary difference on revaluation of investments 25 073 (15 680) 1 020 486 (128 091)(Originating) reversing temporary difference on MAS equity accounting deferred (93 297) 60 905 – – Reversing temporary difference on asset management agreements 5 593 5 587 – – Originating temporary difference on unrealised foreign exchange gains 8 520 71 820 8 520 71 820 Reversing (originating) other temporary differences 28 382 36 607 (3 917) – Balance at the end of the year (178 924) (1 932 140) (74 219) (1 120 075)

* Mainly relates to unrealised gains and losses on swaps and rental received in advance.



statements 2018

11. DEFERRED TAX ASSETS AND LIABILITIES (continued)Use and sales tax rateCGT is not applicable on the sale of investment property and shares in a REIT or property company, in terms of section 25BB of the Income Tax Act applicable to REITs. Consequently, no deferred tax was raised on the fair value of investment property.

Allowances relating to immovable property cannot be claimed and if a REIT sells immovable property, the allowances claimed in a previous year will be recouped. A deferred taxation liability was raised in this respect.

Section 25BB of the Income Tax Act allows for the deduction of the qualifying distribution paid to the shareholders but the deduction is limited to the taxable income. To the extent that no taxation will be payable in future as a result of the qualifying distribution, no deferred taxation was raised on items such as the straight-line lease income accrual.

Deferred taxation was recognised on the initial recognition of the asset management intangible asset. Refer to note 6 Intangible assets. The deferred taxation is released to profit or loss over the asset’s useful life.

CGT is expected to be payable on disposal of the shares in MAS. Deferred taxation has been raised on the difference between the carrying amount of the equity-accounted investment in MAS and the tax base.

A deferred taxation asset has been recognised for the assessed losses to the extent that it is probable that taxable profit will be available against which the assessed losses can be utilised.

The applicable tax rates on timing differences are based on the directors’ best estimate of the manner in which these timing differences will realise.

Deferred tax assets were not recognised as follows:

- Lynnwood Bridge – R24.2 million (2017: R0.0 million) for R86.4 million (2017: R0.0 million) relating to the estimated assessed loss

- Micawber – R32.3 million (2017: R18.5 million) for R144.2 million (2017: R82.4 million) relating to the fair value adjustment of investment property

- Le Chateau – R2.6 million (2017: R2.6 million) for R9.4 million (2017: R9.4 million), relating to the estimated assessed loss

- Le Chateau – R6.7 million (2017: R6.7 million) for R29.7 million (2017: R29.7 million), relating to the fair value adjustment of investment property

- AMS – R21.1 million (2017: R17.2 million) for R75.2 million (2017: R61.3 million) relating to the estimated assessed loss

- AMS – R9.1 million (2017: R9.1 million) for R40.6 million (2017: R40.7 million) relating to the fair value of investments

- Majestic – R7.4 million (2017: R0.0 million) for R26.6 million (2017: R0.0 million), relating to the estimated assessed loss

- Nieuwtown – R52.7 million (2017: R52.7 million) for R188.2 million (2017: R188.4 million), relating to the estimated assessed loss

- Nieuwtown – R15.7 million (2017: R0.0 million) for R56.1 million (2017: R0.0 million), relating to the finance lease liability

- AWIC – R87.7 million (2017: R0.0 million) for R313.2 million (2017: R0.0 million), relating to the estimated assessed loss.


12. TRADE AND OTHER RECEIVABLESGROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Trade receivables 64 694 52 376 3 20

Municipal receivables 65 338 58 295 – –

Deposits 15 082 10 320 38 38

Other receivables 81 700 15 115 1 869 1 753

Prepayments 5 015 46 161 426 426

Value added tax 320 8 377 – –

Provision for doubtful debts (19 586) (16 021) – –

Balance at the end of the year 212 563 174 623 2 336 2 237

The fair value of deposits, other receivables, and trade receivables are deemed to be the same as the carrying value.

GROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Trade receivables that are past due but not impaired 6 737 11 985 – –

Trade receivables age analysis excluding amounts impaired and provided for:

Current 38 371 24 370 3 20

30 days 8 301 13 148 – –

60 days 1 794 1 879 – –

90 days 1 881 1 575 – –

120 days and more 14 347 11 404 – –

64 694 52 376 3 20

Trade receivables that are past due, considered to be impaired and provided for (19 586) (16 021) – –

Total 45 108 36 355 3 20

Movement in the provision for doubtful debtOpening balance 16 021 7 992 – –

Impairment losses raised 10 290 12 934 – –

Impairment losses reversed (6 725) (4 905) – –

Balance at the end of the year 19 586 16 021 – –

The creation and release of provision for doubtful debts have been included in operating expenses in the statement of profit or loss and comprehensive income. Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash.

In considering any impairments on debtor accounts, the group takes into account deposits held, bank guarantees issued by the debtor, additional sureties provided by the principals of the debtors and running credit checks on debtors and their principals.

No material concentration of credit risk exists.


statements 2018 NOTES TO THE FINANCIAL STATEMENTS continuedFor the year ended 30 June 2018

13. INVENTORIESGROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Opening balance 25 278 – –

Additions 41 297 – – –

Transfer from investment property 827 25 278 – –

Disposal (24 918) – – –


Inventories consist of Waterfall Point and Pirtek.

Disposals in the current year relates to the disposal of Pirtek and a portion of Waterfall Point, resulting in the cost spent to date being recognised as “Cost of sales” in profit or loss.

14. OTHER FINANCIAL ASSETS AND LIABILITIESGROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Non-current assets 373 651 304 368 2 643 2 643

Loans and receivables 354 149 288 484 2 643 2 643

Derivative financial instruments 19 502 15 884 – –

Current assets 16 308 193 590 – 59 054

Loans and receivables 16 308 193 590 – 59 054

Other financial assets 389 959 497 958 2 643 61 697

Non-current liabilities (127 869) (164 696) – (13 992)

Derivative financial instruments (127 869) (164 696) – (13 992)

Current liabilities (74 060) (137 145) – –

Loans and payables (74 060) (136 557) – –

Derivative financial instruments – (588) – –

Other financial liabilities (201 929) (301 841) – (13 992)

Refer to note 37 for the IFRS 13 information and to note 38 for the fair value information.

The group recognised favourable fair value adjustments on derivative financial instruments measured at FVTPL of R41.3 million (2017: unfavourable R136.9 million).

The company recognised favourable fair value adjustments on derivative financial instruments measured at FVTPL of R14.0 million (2017: unfavourable R14.0 million).

Interest rates applicable to the group are fixed at a rate that ranges from 7.21% to 9.24%. These derivative financial instruments expire on dates ranging from January 2019 to June 2030.

The interest rate applicable to the company in the prior year was fixed at a rate of 8.80%. The derivative financial instrument in the company was novated to AWIC during the current year.

Refer to note 36 for the information relating to risk management.


14. OTHER FINANCIAL ASSETS AND LIABILITIES (continued)2018 2017

Repayment date

Interest rate

Loan amount

R000Impairment

R000Total

R000

Loan amount

R000Impairment

R000Total

R000

GROUPLoans and receivables (payables)APD None None (2 248) – (2 248) (2 248) – (2 248)Brand Group None None 8 381 (8 381) – 6 400 – 6 400 ATT MOA 20 June 2018 SA Prime + 0.50% – – – 57 598 – 57 598 ATT MOA 20 August 2017 None – – – 65 538 – 65 538 APH None None (53 011) – (53 011) (134 309) – (134 309)Key Capital March 2020 SA Prime 10 609 – 10 609 12 002 – 12 002 Ghana None None 1 649 (1 649) – 1 570 – 1 570 PwC Waterfall Property Partnership* June 2030 1-month JIBAR linked 331 726 – 331 726 243 069 – 243 069 Zenprop February 2020 None 11 400 – 11 400 22 800 – 22 800 Zenprop February 2019 None 11 400 – 11 400 11 400 – 11 400 Zenprop June 2019 None (12 807) – (12 807) – – – APD November 2017 SA Prime – – – 4 951 – 4 951 APH January 2018 SA Prime – – – 54 103 – 54 103 Barrow June 2019 None (5 994) – (5 994) – – – Power of Trading November 2022 SA Prime 2 679 – 2 679 – – – ESD June 2020 None 943 – 943 943 – 943 In Coatings June 2020 None 500 – 500 500 – 500 Ndzilo June 2020 None 550 – 550 550 – 550 Twin Cities June 2020 None 150 – 150 150 – 150 Thatego June 2020 None 500 – 500 500 – 500

Total 306 427 (10 030) 296 397 345 517 – 345 517

Loans and receivables 380 487 (10 030) 370 457 482 074 – 482 074 Non-current 354 149 – 354 149 288 484 – 288 484 Current 26 338 (10 030) 16 308 193 590 – 193 590

Loans and payables (74 060) – (74 060) (136 557) – (136 557)

Current (74 060) – (74 060) (136 557) – (136 557)

Total 306 427 (10 030) 296 397 345 517 – 345 517

Company loans and receivables

APD November 2017 SA Prime – – – 4 951 – 4 951 APH January 2018 SA Prime – – – 54 103 – 54 103 ESD June 2020 None 943 – 943 943 – 943 In Coatings June 2020 None 500 – 500 500 – 500 Ndzilo June 2020 None 550 – 550 550 – 550 Twin Cities June 2020 None 150 – 150 150 – 150 Thatego 500 – 500 500 – 500

Total 2 643 – 2 643 61 697 – 61 697

Loans and receivables 2 643 – 2 643 61 697 – 61 697 Non-current 2 643 – 2 643 2 643 – 2 643 Current – – – 59 054 – 59 054

Total 2 643 – 2 643 61 697 – 61 697

The impairment loss of R8.4 million (2017: R0.0 million) was recognised for the loan to Brandgroup due to the arbitration process under way. This forms part of the “Head office SA” segment (refer to note 39).

The impairment loss of R1.6 million (2017: R0.0 million) was recognised for the loan to Ghana due to irrecoverability of the amount. This forms part of the “Head office global” segment (refer to note 39).

No other impairments were recognised on loans receivable in the current and prior financial year.

* This loan earns interest on a back-to-back basis based on the external funding from Nedbank at 1-month JIBAR and margins of 2.09%, 2.33% and 2.63% (refer to note 21).



15. LOANS TO ASSOCIATES AND JOINT VENTURES2018 2017

Repayment date

Interest rate

Loan amount

R000Impairment

R000Total

R000

Loan amount

R000Impairment

R000Total

R000

GROUPLoans to associatesAttAfrica None 8.00% 953 911 (166 607) 787 304 908 537 (132 291) 776 246

Artisan Development None None – – – 80 580 – 80 580

EAJV None None 1 201 – 1 201 3 100 – 3 100

Gruppo None 17.25% 257 225 – 257 225 214 245 – 214 245

fatti 365 None None 13 243 (13 243) – 13 693 (13 693) –

fatti Attacq None None 9 938 (9 938) – 15 041 (10 442) 4 599

Fountains Regional Mall None None 3 431 (3 114) 317 3 431 (3 431) –

AttAfrica SA None None 414 – 414 414 – 414

Kompasbaai None None 8 253 (6 170) 2 083 7 774 (7 182) 592

Grove Mall None None – – – 32 810 – 32 810

JV15 None None 36 579 – 36 579 33 952 – 33 952

JV115 None None 105 467 – 105 467 103 740 – 103 740

Balance at the end of the year 1 389 662 (199 072) 1 190 590 1 417 317 (167 039) 1 250 278

The impairment loss of R166.6 million (2017: R132.3 million) was recognised for the loan to AttAfrica due to the negative net asset value of the entity. The recoverable amount of the loan has been based on the net asset value of the underlying entity. This forms part of the “Africa” segment (refer to note 39).

The impairment loss of R13.2 million (2017: R13.7 million) was recognised for the loan to fatti 365 due to the negative net asset value of the entity. The recoverable amount of the loan has been based on the net asset value of the underlying entity. This forms part of the “head office SA” segment (refer to note 39).

The impairment loss of R9.9 million (2017: R10.4 million) was recognised for the loan to fatti Attacq due to the negative net asset value of the entity. The recoverable amount of the loan has been based on the net asset value of the underlying entity. This forms part of the “Head office SA” segment (refer to note 39).

The impairment loss of R3.1 million (2017: R3.4 million) was recognised for the loan to Fountains Regional Mall due to the negative net asset value of the entity. The recoverable amount of the loan has been based on the underlying net asset value of the entity. This forms part of the “head office SA” segment (refer to note 39).

The impairment loss of R6.2 million (2017: R7.2 million) was recognised for the loan to Kompasbaai due to the negative net asset value of the entity. The recoverable amount of the loan has been based on the net asset value of the underlying entity. This forms part of the “head office SA” segment (refer to note 39).

Impairments of R2.3 million were reversed in the current year (2017: R0.0 million). Refer to note 29.



15. LOANS TO ASSOCIATES AND JOINT VENTURES2018 2017

Repayment date

Interest rate

Loan amount

R000Impairment

R000Total

R000

Loan amount

R000Impairment

R000Total

R000

GROUPLoans to associatesAttAfrica None 8.00% 953 911 (166 607) 787 304 908 537 (132 291) 776 246

Artisan Development None None – – – 80 580 – 80 580

EAJV None None 1 201 – 1 201 3 100 – 3 100

Gruppo None 17.25% 257 225 – 257 225 214 245 – 214 245

fatti 365 None None 13 243 (13 243) – 13 693 (13 693) –





Grove Mall None None – – – 32 810 – 32 810

JV15 None None 36 579 – 36 579 33 952 – 33 952

JV115 None None 105 467 – 105 467 103 740 – 103 740

Balance at the end of the year 1 389 662 (199 072) 1 190 590 1 417 317 (167 039) 1 250 278

The impairment loss of R166.6 million (2017: R132.3 million) was recognised for the loan to AttAfrica due to the negative net asset value of the entity. The recoverable amount of the loan has been based on the net asset value of the underlying entity. This forms part of the “Africa” segment (refer to note 39).

The impairment loss of R13.2 million (2017: R13.7 million) was recognised for the loan to fatti 365 due to the negative net asset value of the entity. The recoverable amount of the loan has been based on the net asset value of the underlying entity. This forms part of the “head office SA” segment (refer to note 39).


The impairment loss of R3.1 million (2017: R3.4 million) was recognised for the loan to Fountains Regional Mall due to the negative net asset value of the entity. The recoverable amount of the loan has been based on the underlying net asset value of the entity. This forms part of the “head office SA” segment (refer to note 39).

The impairment loss of R6.2 million (2017: R7.2 million) was recognised for the loan to Kompasbaai due to the negative net asset value of the entity. The recoverable amount of the loan has been based on the net asset value of the underlying entity. This forms part of the “head office SA” segment (refer to note 39).

Impairments of R2.3 million were reversed in the current year (2017: R0.0 million). Refer to note 29.


15. LOANS TO ASSOCIATES AND JOINT VENTURES (continued)2018 2017

Repayment date

Interest rate

Loan amount

R000Impairment

R000Total

R000

Loan amount

R000Impairment

R000Total

R000

COMPANYLoans to associatesfatti 365 None None 13 243 (13 243) – 13 693 (13 693) –





Balance at the end of the year 35 279 (32 465) 2 814 40 353 (34 748) 5 605

The impairment loss of R13.2 million (2017: R13.7 million) was recognised for the loan to fatti 365 due to the negative net asset value of the entity. The recoverable amount of the loan has been based on the net asset value of the underlying entity. This forms part of the “Head office SA” segment (refer to note 39).


The impairment loss of R3.1 million (2017: R3.4 million) was recognised for the loan to Fountains Regional Mall due to the negative net asset value of the entity. The recoverable amount of the loan has been based on the underlying net asset value of the entity. This forms part of the “Head office SA” segment (refer to note 39).

The impairment loss of R6.2 million (2017: R7.2 million) was recognised for the loan to Kompasbaai due to the negative net asset value of the entity. The recoverable amount of the loan has been based on the net asset value of the underlying entity. This forms part of the “Head office SA” segment (refer to note 39).



16. LOANS TO (FROM) SUBSIDIARIES2018 2017

Repayment date

Interest rate

Loan amount

R000Impairment

R000Total

R000

Loan amount

R000Impairment

R000Total

R000

COMPANYAMS None None 98 119 – 98 119 69 325 – 69 325

ARF None None 146 701 – 146 701 336 701 – 336 701

AWIC None None 5 101 469 – 5 101 469 3 601 721 – 3 601 721

AIM None None (76 838) – (76 838) – – –

AIH International (US dollar) None 6-month USD LIBOR + 2.6% 59 040 – 59 040 178 001 – 178 001

AIH International (euro) None 6-month EURIBOR + 2.4% (376 918) – (376 918) – – –

Attacq Energy None None 23 388 – 23 388 25 538 – 25 538

Attacq Namco None None – – – 32 810 – 32 810

Brooklyn Bridge None None 232 841 – 232 841 444 – 444

Harlequin Duck None None (1 466) – (1 466) (1 466) – (1 466)

Le Chateau None None 41 865 (36 859) 5 006 41 860 (36 859) 5 001

Leipzig None None 43 188 (42 451) 737 82 031 (43 446) 38 585

Lynnaur None None (6 010) – (6 010) (6 610) – (6 610)

Lynnwood Bridge None None 64 372 – 64 372 56 822 – 56 822

Nieuwtown None SA Prime 432 652 (112 357) 320 295 375 780 (55 491) 320 289

Razorbill None None 85 416 – 85 416 85 416 – 85 416

Total 5 867 819 (191 667) 5 676 152 4 878 373 (135 796) 4 742 577

Loans to subsidiaries 6 137 384 4 750 653

Non-current 5 604 423 178 001

Current 532 961 4 572 652

Loans from subsidiaries (461 232) (8 076)

Non-current (376 918) –

Current (84 314) (8 076)

Total 5 676 152 4 742 577

The impairment loss of R36.9 million (2017: R36.9 million) was recognised for the loan to Le Chateau due to the negative net asset value of the entity. The recoverable amount of the loan has been based on the underlying net asset value of the entity.

The impairment loss of R42.5 million (2017: R43.4 million) was recognised for the loan to Leipzig due to the negative net asset value of the entity. The recoverable amount of the loan has been based on the underlying net asset value of the entity.

The impairment loss of R112.4 million (2017: R55.5 million) was recognised for the loan to Nieuwtown due to the negative net asset value of the entity. The recoverable amount of the loan has been based on the underlying net asset value of the entity.



17. CASH AND CASH EQUIVALENTSGROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Unrestricted cash balances 1 152 934 381 288 38 760 17 914

Restricted cash balances 86 697 66 558 – –

Balance at the end of the year 1 239 631 447 846 38 760 17 914

The group, through Attacq and AWIC, has overdraft facilities amounting to R90.0 million (2017: R90.0 million) and R150.0 million (2017: R150.0 million) respectively with Nedbank. The overdraft facilities bear interest at SA prime interest rate (2017: SA prime interest rate).

The group, through Attacq, has an overdraft facility amounting to R50.0 million (2017: R50.0 million) with Standard Bank. Standard Bank had a mortgage bond over Waterfall LP 10A as security which has been released in the current financial year. The overdraft facility bears interest at SA prime interest rate less 1.0% (2017: SA prime interest rate less 1.0%).

Unutilised facilities as detailed above as at 30 June 2018 amounted to R290.0 million (2017: R290.0 million).

Restricted cash balances relates to tenant deposits held by the group.



18. NON-CURRENT ASSETS HELD FOR SALE AND ASSOCIATED LIABILITIES

GROUP COMPANY

2018R000

2017R000

2018R000

2017R000

ASSETSThe following investment properties, subsidiaries, associates and loans to associates are presented as held for sale:Other investmentsRainprop 775 781 775 781 Investec Securities Limited* 1 251 45 477 678 45 477 Sasfin Limited* 1 696 152 200 1 696 113 690 Investment propertiesThe Atria (Barrow JV)** 46 668 50 025 – – Cummins** 63 372 – – – Zimmer** 5 109 – – – Brooklyn Bridge (100.0%)^ – 525 735 – – Straight-line lease debtors relating to assets held for sale – 27 265


LIABILITIESBrooklyn Bridge Office Park (100.0%)^ – (330 533) – –

Balance at the end of the year – (330 533) – –

* The investments and related loans held for sale as detailed above, forms part of the head office global segment detailed in note 39.** The investments property held for sale as detailed above, forms part of the office and mixed-use and industrial segments detailed

in note 39.^ The investment property held for sale in the prior year as detailed above, forms part of the office and mixed-use segment detailed in

note 39.

Investment in RainpropThe investment in Rainprop has been classified as held for sale. Directors have entered into a sale of shares agreement with Prop 5 Corporation. Directors consider the investment in Rainprop to no longer be a core asset. The sale is expected to be concluded during the 2019 financial year.

Investment in SESCF (Investec Securities and Sasfin)The group (through Attacq and wholly owned subsidiary Leipzig) classified the 19.9% investment in SESCF as held for sale. SESCF is held through foreign investment allowances. SESCF disposed of the underlying property company. During August 2017, R192.6 million was received. The directors consider the investment in SESCF to no longer be a core asset.

Brooklyn BridgeBrooklyn Bridge was classified as held for sale in the prior year as it was expected to be sold during the financial year ended 30 June 2018. The property is no longer held for sale as the sale transaction has not taken place and is not expected to take place in the foreseeable future.

The group is still actively seeking a potential buyer. However, a highly probable sale is not expected to realise within the next 12 months.

The AtriaThe group (through wholly owned subsidiary AWIC), classified 50.0% of the development rights (17 500m2 bulk) as well as the infrastructure and services related to the mixed-use Atria development, as held for sale. The transaction is expected to be concluded during the 2019 financial year. The development is a joint venture with Barrow. As a result the 50.0% undivided share will be disposed of to Barrow, being the joint venture partner.

Cummins South Africa’s regional officeThe group (through wholly owned subsidiary AWIC), classified 50.0% of the development rights (22 466m2 land area), the infrastructure and services as well as top structure costs spend, related to the industrial Cummins development, as held for sale. The transaction is expected to be concluded during the 2019 financial year. The development is a joint venture with Truzen Trust. As a result the 50.0% undivided share will be disposed of to Truzen Trust, being the joint venture partner.

Zimmer BiometThe group (through wholly owned subsidiary AWIC), classified 50.0% of the development rights (4 866m2 land area) and the infrastructure and services related to the industrial Zimmer development, as held for sale. The transaction is expected to be concluded during the 2019 financial year. The development is a joint venture with Truzen Trust. As a result the 50.0% undivided share will be disposed of to Truzen Trust, being the joint venture partner.


19. STATED CAPITAL

GROUP COMPANY

2018R000

2017R000

2018R000

2017R000

AuthorisedTwo billion ordinary no par value shares (2017: two billion ordinary no par value shares).

Issued

Ordinary no par value shares 6 460 108 6 456 633 6 833 194 6 829 719

Reconciliation of shares issued in rand value:Stated capitalBalance at the beginning of the year 6 456 633 6 442 805 6 829 719 6 815 891

Issue of no par value shares 3 475 13 828 3 475 13 828

6 460 108 6 456 633 6 833 194 6 829 719

Balance at the end of the year 6 460 108 6 456 633 6 833 194 6 829 719

GROUP COMPANY

2018Number of

shares

2017Number of

shares

2018Number of

shares

2017Number of

shares

Reconciliation of number of shares issued:Reported at the beginning of the year 749 242 777 747 822 777 749 242 777 747 822 777

Issue of share capital during the year 340 000 1 420 000 340 000 1 420 000

749 582 777 749 242 777 749 582 777 749 242 777

Adjusted for treasury shares held:ARF (29 726 516) (29 726 516) – –

Attacq Treasury Share Company (16 701 037) (16 701 037) – –

Total 703 155 224 702 815 224 749 582 777 749 242 777

In terms of a general authority to issue shares for cash passed by shareholders at the last AGM, a maximum of 70 315 522 (2017: 70 218 522) shares were placed under the control of the board at their discretion. This is subject to compliance with the company’s MOI, the Companies Act and the JSE Listings Requirements. This authority is valid for the shorter of 15 months or until the next AGM. As at year end, no shares have been issued in terms of this authority.

In addition, a total of 74 958 277 ordinary shares (2017: 74 924 277) were placed under the control of the directors in terms of a resolution passed at the last AGM, provided that any allotment or issue is subject to a maximum discount of 5.0% of the weighted average traded price on the JSE of those securities over the then agreed number of business days prior to the allotment, issue or disposal or the date that the price is agreed, as the case may be. This authority is valid until the next AGM. As at year end, no shares have been issued in terms of this authority.

In terms of an ordinary resolution at the last AGM, the board may, subject to the Companies Act and JSE Listings Requirements, allot and issue shares pursuant to the Attacq LTIP as approved at the meeting.

In terms of a special resolution at the last AGM, the board may, subject to the company’s MOI and the Companies Act, authorise the company to allot and issue shares to the company’s directors (present and future) and prescribed officers (present and future) pursuant to the Attacq LTIP as approved at the meeting.



20. SHARE-BASED PAYMENT RESERVE

GROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Equity-settled share-based payment reserveOpening balance 128 216 100 453 128 216 100 453

Recognition of share options, LTIPs, SARs and retentions expense 391 27 763 – –

Recognition of LTIPs, SARs and retentions expense 18 821 – – –

Settlement of share-based payment (11 198) – (11 198) –

Transfer between reserves (18 840) – (18 840) –

Contribution to subsidiary – – 19 212 27 763


Reconciled as follows:Share-based payments 59 547 70 745 59 547 70 745

Share options 26 916 26 525 12 572 12 572

LTIPs, SARs and retentions expense 58 802 39 981 – –

Modification of equity-settled share-based payments (27 875) (9 035) (27 875) (9 035)

Contribution to subsidiary – – 73 146 53 934


Cash-settled share-based payment reserveOpening balance 3 180 5 959 – –

Cash-settled share-based payments settled during the current year (2 480) (2 097) – –

Recognition of fair value adjustment at the end of the year 606 (682) – –


Reconciled as follows:Current liability 747 1 684 – –

Non-current liability 559 1 496 – –


Share optionsKey employees, expected to have an impact on the company’s future performance, were offered 2 425 000 share options as part of the share incentive scheme.

On 20 July 2015, the 2 425 000 share options granted to key employees, were reclassified from equity-settled grants to cash-settled grants due to a change in the contractual terms of the employees.

Share-based paymentsThe acquisition of 18.05% of the issued share capital of ARF from Nedbank, resulted in an IFRS 2 charge of R59.2 million due to the increase in the share price of Attacq subsequent to the agreement of commercial terms with Nedbank prior to listing on 14 October 2013. Subsequent to listing, the share price at which the agreed number of shares were issued upon implementation of the acquisition on 25 November 2013 was R16.50 as opposed to the contractually agreed issue price of R11.63.

An amount included represents the fair value of the agterskot payment to be paid to Trinsam Trust in respect of the acquisition of a 1.225% stake in AWIC from the Trinsam Trust, determined with reference to the estimated future development profits to be earned by AWIC up to and including 30 June 2020, present valued at a rate of 28.0%. This resulted in an IFRS 2 charge of R11.6 million. During the current year, R11.2 million in respect of this share-based payment was settled.


20. SHARE-BASED PAYMENT RESERVE (continued)

GROUP AND COMPANY 2018

Share optionsNumber

of options

RetentionsNumber of

options

LTIPsNumber

of options

SARsNumber

of options

Movements during the year are as follows:Balance at the beginning of the year 2 190 000 1 687 680 3 507 950 3 329 551 Granted during the year – 354 334 1 892 162 – Exercised during the year (1 140 000) (130 000) (463 491) – Forfeited during the year (135 000) (339 865) (1 236 310) (1 879 747)

Balance at the end of the year 915 000 1 572 149 3 700 311 1 449 804


Share options

Number of options

RetentionsNumber of

options

LTIPsNumber

of options

SARsNumber

of options

Movements during the year are as follows:Balance at the beginning of the year 4 525 000 1 346 869 1 382 928 2 826 710

Granted during the year – 340 811 2 125 022 502 841

Exercised during the year (2 335 000) – – –

Balance at the end of the year 2 190 000 1 687 680 3 507 950 3 329 551

Share optionsThe outstanding share options at 30 June 2018 include 575 000 (2017: 1 510 000) share options that will be settled in cash and 340 000 (2017: 680 000) share options that will be settled by issue of shares.

Retention allocationsRetentions were granted between 11 March 2015 and 1 October 2017. For each grant issued a fair value was calculated at each grant date.

The retentions were granted as part of an employment package and are deemed to have been granted on the first day of employment. These will vest only if the employee has remained in the employment of Attacq for a period of three years (vesting period).



20. SHARE-BASED PAYMENT RESERVE (continued)LTIPsLTIPs were granted between 29 June 2015 and 14 October 2017. For each grant issued a fair value was calculated at each grant date.

For the LTIPs, no performance conditions are applicable to participants receiving less than 10 000 grants. Financial and non-financial performance conditions are applicable to participants who received 10 000 units or more. Both conditions are treated as non-market conditions under IFRS 2.

Financial performance conditions apply to 70.0% of the benefits with non-financial performance conditions applicable to 30.0% of the benefits. The percentage of benefits that vest (as quoted below) is that percentage of 10.0% for transformation and 20.0% for development roll-out conditions.

For all LTIPs granted on and after 14 October 2016, 60.0% of the share options will vest in the third year after grant date, 20.0% of the options will vest in the fourth year and the final 20.0% will vest in year five.

SARsSARs were granted between 8 October 2015 and 1 April 2017. For each grant issued a fair value was calculated at each grant date.

Financial performance conditions are applicable to all participants. Conditions are treated as non-market conditions under IFRS 2.


NumberExpiry

date

Exercise price

R

Fair value

R

Share options – equity-settled share options

Granted on 1 July 2013 240 000 31 December

2018 9.50 4.43

Granted on 1 September 2013 100 000 31 December

2018 11.96 3.98

Fair value of options The weighted average fair value of share options outstanding at the end of the financial year is R4.30 (2017: R4.30).

Options were priced using the Black-Scholes option pricing model. As most of the grants options expire six months after vesting date, the maximum exercise period has been allowed considering the closed periods for Attacq.




NumberExpiry

date

Exercise price

R

Fair value

R

Share options – cash-settled share optionsThe following share-based payment arrangements were in existence during the current and prior years:

Granted on 1 November 2013 70 000 30 September 2018 14.50 2.16

Granted on 1 December 2013 90 000 30 September 2018 14.50 2.16

Granted on 1 April 2014 55 000 31 March 2019 15.25 2.21

Granted on 1 June 2014 160 000 31 July 2019 15.25 2.23

Granted on 1 July 2014 200 000 31 July 2019 15.25 2.23

Fair value of optionsThe weighted average fair value of share options outstanding at the respective dates were as follows: - At grant date – R6.47 (2017: R6.47); - Date of modification – R10.23; and - At 30 June – R2.21 (2017: R3.10).

Options were priced using the Black-Scholes option pricing model. As most of the grant options expire six months after vesting date, the maximum exercise period has been allowed considering the closed periods for Attacq.

Over-the-counter share trading history for dates prior to listing during October 2013 and for all dates after the listing were used. The data was used to obtain independent volatilities over periods of one, three and five years. Based on our analysis a volatility of between 17.95% to 20.71% was applied in our calculations.

The risk-free interest rates for discounting of future cash flows were determined from the bootstrapped zero coupon perfect fit swap curves. The swap curves as at the various grant dates were sourced from the Bond Exchange of South Africa, a subsidiary of the JSE. A risk-free interest rate of between 6.90% to 7.31% was applied in our calculations.





NumberExpiry

date

Exercise price

R

Fair value

R

LTIPs, retentions and SARsThe following LTIPs, retentions and SARs were in existence in the current year:

Retentions granted on 1 July 2015 200 000 30 July 2018 – 21.91

Retentions granted on 1 July 2015 50 000 14 October 2018 – 21.91

Retentions granted on 7 September 2015 30 000 14 October 2018 – 21.82

Retentions granted on 1 April 2016 80 695 14 October 2021 – 19.77

Retentions granted on 6 June 2016 535 442 14 October 2021 – 20.00

Retentions granted on 1 August 2016 23 100 14 October 2021 – 19.19

Retentions granted on 1 October 2016 25 259 14 October 2021 – 17.24

Retentions granted on 1 April 2017 167 614 14 October 2022 – 17.04

Retentions granted on 22 May 2017 10 000 14 October 2020 – 16.80

Retentions granted on 1 June 2017 95 775 14 October 2020 – 16.93

Retentions granted on 1 August 2017 15 000 14 October 2020 – 14.85

Retentions granted on 17 October 2017 74 334 14 October 2022 – 16.51

Retentions granted on 13 March 2018 240 000 14 April 2023 – 17.02

Retentions granted on 16 April 2018 25 000 15 April 2023 – 16.62

LTIP’s granted on 8 October 2015 536 824 14 October 2018 – 21.98

LTIP’s granted on 8 December 2015 106 740 14 October 2018 – 19.88

LTIPs granted on 14 October 2016 1 336 896 14 October 2021 – 17.06

LTIPs granted on 21 September 2017 1 599 851 14 October 2022 – 16.51

LTIPs granted on 13 March 2018 120 000 14 October 2023 – 15.36

SARs granted on 8 October 2015 235 367 14 October 2018 22.30 5.21

SARs granted on 8 December 2015* 510 160 14 October 2018 11.91 10.28



SARs granted on 1 April 2017 502 841 14 October 2022 17.90 5.06

* These awards were retrospectively rewarded for different financial years hence the different strike prices indicated.

The fair value (excluding forfeitures and performance conditions) per share granted under the three schemes mentioned above is the share price of Attacq at grant date less expected dividends over the vesting period. Allowance is then made for expected forfeitures and the likelihood of performance criteria to be satisfied where these are applicable.


21. LONG-TERM BORROWINGS GROUP2018

Interest rate Maturity

Mortgage bondR000

Non-currentR000

CurrentR000

Absa 630 999 132 863 ARF 3-month JIBAR + 1.65% 7 December 2020

1 310 103

236 165 111 ARF 3-month JIBAR + 1.90% 7 December 2022 222 358 108 ARF 3-month JIBAR + 1.50% 7 June 2019 – 96 327 Lynnwood Bridge 3-month JIBAR + 1.65% 7 December 2020 88 835 42 Lynnwood Bridge 3-month JIBAR + 1.90% 7 December 2022 83 641 41 Lynnwood Bridge 3-month JIBAR + 1.50% 7 June 2019 – 36 234 BOC 53 960 39 Torre 1-month JIBAR + 1.95% 4 November 2021 81 000 53 960 39 Investec – 105 741 Brooklyn Bridge 10.95% 31 January 2019 350 000 – 105 741 LibFin 300 000 143 ARF 3-month JIBAR + 1.75% 7 December 2022

514 775 217 998 104

Lynnwood Bridge 3-month JIBAR + 1.75% 7 December 2022 82 002 39 MMI 465 000 221 ARF 3-month JIBAR + 1.60% 7 December 2022

514 775

145 332 68 ARF 3-month JIBAR + 1.80% 9 December 2024 72 666 35 Lynnwood Bridge 3-month JIBAR + 1.60% 7 December 2022 54 668 26 Lynnwood Bridge 3-month JIBAR + 1.80% 9 December 2024 27 334 13 BMW 3-month JIBAR + 1.80% 28 June 2024 273 000 165 000 79 Nedbank 5 253 974 204 554 ARF 3-month JIBAR + 1.63% 7 December 2020

1 115 346

199 832 94 ARF 3-month JIBAR + 1.81% 9 December 2024 176 215 85 ARF 3-month JIBAR + 1.45% 7 June 2019 – 96 327 Lynnwood Bridge 3-month JIBAR + 1.63% 7 December 2020 75 169 35 Lynnwood Bridge 3-month JIBAR + 1.81% 9 December 2024 66 285 32 Lynnwood Bridge 3-month JIBAR + 1.45% 7 June 2019 – 36 234 Mall of Africa 10.16% 6 May 2021

4 750 000 300 000 2 088

Mall of Africa SA Prime - 1.50% 6 May 2021 1 199 912 6 986 Mall of Africa 10.75% 6 May 2021 500 000 3 682 Mall of Africa PV SA Prime - 0.78% 6 May 2021 90 000 61 479 388 Mall of Africa SA Prime - 1.00% 6 May 2021 – 357 581 2 204 PwC Tower 1-month JIBAR + 2.09% 3 June 2030

1 432 000 1 075 888 7 751

PwC Annex 1-month JIBAR + 2.33% 3 June 2030 103 316 765 PwC Tower 1-month JIBAR + 2.63% 3 June 2030 138 786 1 545 Newtown Junction & Majestic 10,85% 1 October 2024 1 200 000 919 164 44 016 Newtown City Lodge 3-month JIBAR + 1.66% 3 November 2025

100 000 63 865 2 112

Newtown City Lodge SA Prime – 0.85% 3 November 2025 16 482 210

Sub-total carried forward 6 703 933 443 561



21. LONG-TERM BORROWINGS GROUP2018


Mortgage bondR000

Non-currentR000

CurrentR000

Absa 630 999 132 863 ARF 3-month JIBAR + 1.65% 7 December 2020

1 310 103

236 165 111 ARF 3-month JIBAR + 1.90% 7 December 2022 222 358 108 ARF 3-month JIBAR + 1.50% 7 June 2019 – 96 327 Lynnwood Bridge 3-month JIBAR + 1.65% 7 December 2020 88 835 42 Lynnwood Bridge 3-month JIBAR + 1.90% 7 December 2022 83 641 41 Lynnwood Bridge 3-month JIBAR + 1.50% 7 June 2019 – 36 234 BOC 53 960 39 Torre 1-month JIBAR + 1.95% 4 November 2021 81 000 53 960 39 Investec – 105 741 Brooklyn Bridge 10.95% 31 January 2019 350 000 – 105 741 LibFin 300 000 143 ARF 3-month JIBAR + 1.75% 7 December 2022

514 775 217 998 104

Lynnwood Bridge 3-month JIBAR + 1.75% 7 December 2022 82 002 39 MMI 465 000 221 ARF 3-month JIBAR + 1.60% 7 December 2022

514 775

145 332 68 ARF 3-month JIBAR + 1.80% 9 December 2024 72 666 35 Lynnwood Bridge 3-month JIBAR + 1.60% 7 December 2022 54 668 26 Lynnwood Bridge 3-month JIBAR + 1.80% 9 December 2024 27 334 13 BMW 3-month JIBAR + 1.80% 28 June 2024 273 000 165 000 79 Nedbank 5 253 974 204 554 ARF 3-month JIBAR + 1.63% 7 December 2020

1 115 346

199 832 94 ARF 3-month JIBAR + 1.81% 9 December 2024 176 215 85 ARF 3-month JIBAR + 1.45% 7 June 2019 – 96 327 Lynnwood Bridge 3-month JIBAR + 1.63% 7 December 2020 75 169 35 Lynnwood Bridge 3-month JIBAR + 1.81% 9 December 2024 66 285 32 Lynnwood Bridge 3-month JIBAR + 1.45% 7 June 2019 – 36 234 Mall of Africa 10.16% 6 May 2021

4 750 000 300 000 2 088

Mall of Africa SA Prime - 1.50% 6 May 2021 1 199 912 6 986 Mall of Africa 10.75% 6 May 2021 500 000 3 682 Mall of Africa PV SA Prime - 0.78% 6 May 2021 90 000 61 479 388 Mall of Africa SA Prime - 1.00% 6 May 2021 – 357 581 2 204 PwC Tower 1-month JIBAR + 2.09% 3 June 2030

1 432 000 1 075 888 7 751

PwC Annex 1-month JIBAR + 2.33% 3 June 2030 103 316 765 PwC Tower 1-month JIBAR + 2.63% 3 June 2030 138 786 1 545 Newtown Junction & Majestic 10,85% 1 October 2024 1 200 000 919 164 44 016 Newtown City Lodge 3-month JIBAR + 1.66% 3 November 2025

100 000 63 865 2 112




21. LONG-TERM BORROWINGS (continued) GROUP2018


Mortgage bondR000

Non-currentR000

CurrentR000

Sub-total brought forward 6 703 933 443 561 OmsFin 475 001 224 ARF 3-month JIBAR + 1.55% 7 December 2020

815 061

181 665 85 ARF 3-month JIBAR + 1.75% 7 December 2022 163 499 78 Lynnwood Bridge 3-month JIBAR + 1.55% 7 December 2020 68 335 32 Lynnwood Bridge 3-month JIBAR + 1.75% 7 December 2022 61 502 29 RMB 600 000 4 182 Amrod 3-month JIBAR + 2.25% 1 December 2022 264 000 155 000 1 167 Aurecon 3-month JIBAR + 2.25% 2 December 2022 200 000 445 000 3 015 Sanlam Capital 313 294 1 707 Dis-Chem (formerly K101 Warehouse) 1-month JIBAR + 2.25% 24 November 2022 80 000 61 500 301 AWIC consolidated 10.37% 10 November 2022

460 000 219 812 1 249

Massbuild Distribution Centre 1-month JIBAR + 2.25% 10 November 2022 31 982 157 Standard Bank 2 434 801 134 851 AIH International 6-month EURIBOR + 2.25% 29 November 2019 – 211 124 26 AIH International 6-month EURIBOR + 2.25% 29 November 2019 – 492 622 62 AIH International 6-month EURIBOR + 2.25% 29 November 2019 – 20 308 3 AIH International 6-month EURIBOR + 2.35% 29 November 2019 – 370 279 – AIH International 6-month EURIBOR + 2.40% 29 November 2019 – 336 698 – ARF 3-month JIBAR + 1.69% 7 December 2020

1 310 103

236 165 112 ARF 3-month JIBAR + 1.95% 7 December 2022 222 358 109 ARF 3-month JIBAR + 1.50% 7 June 2019 – 96 327 Lynnwood Bridge 3-month JIBAR + 1.69% 7 December 2020 88 835 42 Lynnwood Bridge 3-month JIBAR + 1.95% 7 December 2022 83 642 41 Lynnwood Bridge 3-month JIBAR + 1.50% 7 June 2019 – 36 234 AWIC consolidated 3-month JIBAR + 2.35% 30 November 2022 1 240 000 232 000 1 824 Gateway West building 3-month JIBAR + 2.30% 30 November 2022 365 000 140 770 71

Total 10 527 029 584 525





Mortgage bondR000

Non-currentR000

CurrentR000

Sub-total brought forward 6 703 933 443 561 OmsFin 475 001 224 ARF 3-month JIBAR + 1.55% 7 December 2020

815 061

181 665 85 ARF 3-month JIBAR + 1.75% 7 December 2022 163 499 78 Lynnwood Bridge 3-month JIBAR + 1.55% 7 December 2020 68 335 32 Lynnwood Bridge 3-month JIBAR + 1.75% 7 December 2022 61 502 29 RMB 600 000 4 182 Amrod 3-month JIBAR + 2.25% 1 December 2022 264 000 155 000 1 167 Aurecon 3-month JIBAR + 2.25% 2 December 2022 200 000 445 000 3 015 Sanlam Capital 313 294 1 707 Dis-Chem (formerly K101 Warehouse) 1-month JIBAR + 2.25% 24 November 2022 80 000 61 500 301 AWIC consolidated 10.37% 10 November 2022

460 000 219 812 1 249

Massbuild Distribution Centre 1-month JIBAR + 2.25% 10 November 2022 31 982 157 Standard Bank 2 434 801 134 851 AIH International 6-month EURIBOR + 2.25% 29 November 2019 – 211 124 26 AIH International 6-month EURIBOR + 2.25% 29 November 2019 – 492 622 62 AIH International 6-month EURIBOR + 2.25% 29 November 2019 – 20 308 3 AIH International 6-month EURIBOR + 2.35% 29 November 2019 – 370 279 – AIH International 6-month EURIBOR + 2.40% 29 November 2019 – 336 698 – ARF 3-month JIBAR + 1.69% 7 December 2020

1 310 103

236 165 112 ARF 3-month JIBAR + 1.95% 7 December 2022 222 358 109 ARF 3-month JIBAR + 1.50% 7 June 2019 – 96 327 Lynnwood Bridge 3-month JIBAR + 1.69% 7 December 2020 88 835 42 Lynnwood Bridge 3-month JIBAR + 1.95% 7 December 2022 83 642 41 Lynnwood Bridge 3-month JIBAR + 1.50% 7 June 2019 – 36 234 AWIC consolidated 3-month JIBAR + 2.35% 30 November 2022 1 240 000 232 000 1 824 Gateway West building 3-month JIBAR + 2.30% 30 November 2022 365 000 140 770 71

Total 10 527 029 584 525




Mortgage bondR000

Non-currentR000

CurrentR000

Absa 542 000 542 266

ARF 3-month JIBAR + 1.50% 12 May 2018 714 290 – 394 043

ARF 3-month JIBAR + 1.75% 12 May 2020 714 290 393 850 –

Lynnwood Bridge 3-month JIBAR + 1.50% 12 May 2018 315 239 – 148 223

Lynnwood Bridge 3-month JIBAR + 1.75% 12 May 2020 315 239 148 150 –

BOC 69 829 3 820

Torre 1-month JIBAR + 1.95% 4 November 2021 81 000

53 960 13

Torre 1-month JIBAR + 1.95% 4 November 2021 15 869 3 807

Investec – 712 828

Grove Mall SA Prime – 0.50% 31 January 2020 – – 3 397

PwC Sunninghill 9.13% 31 January 2018 400 000 – 378 898

Brooklyn Bridge* 10.95% 31 January 2019 350 000 – 106 693

Brooklyn Bridge* SA Prime – 0.85% 31 January 2019 20 000 – 223 840

Nedbank 3 971 594 590 313



Mall of Africa SA Prime – 1.50% 6 April 2021

4 750 000

687 142 4 280

Mall of Africa 10.16% 8 April 2019 300 000 2 088


Mall of Africa PV SA Prime – 0.73% 6 May 2021 90 000 59 188 394



Newtown Junction & Majestic 10.85% 3 October 2024 1 200 000 955 511 32 291

Newtown City Lodge 3-month JIBAR + 3.16% 3 November 2025 100 000

65 321 1 523


PwC Tower SA Prime – 0.60% 1 July 2030

1 432 000

881 298 –

PwC Tower VAT SA Prime – 0.60% 31 January 2018 – 3 275

PwC Annex# SA Prime – 0.60% 31 January 2018 72 852 –

PwC Annex VAT SA Prime – 0.60% 31 January 2018 – 340

RMB 801 627 40 703

LP 9 SA Prime – 0.25% 1 July 2017 40 000 – –

Novartis 10.64% 2 March 2020 200 000 121 903 3 402

Aurecon 10.48% 3 April 2023 575 000

370 038 33 299

Aurecon 1-month JIBAR + 2.25% 4 March 2019 50 000 333

Amrod SA Prime – 0.50% 4 January 2021 264 000 259 686 3 669

Sanlam Capital 352 455 8 496

Dis-Chem (formerly K101 Warehouse)# 1-month JIBAR + 2.50% 1 November 2017 80 000 17 668 484

Massbuild Distribution Centre 10.58% 3 April 2028 250 000

130 296 3 028

Massbuild Distribution Centre 11.05% 2 May 2028 27 791 252

Massbuild Distribution Centre SA Prime – 0.50% 2 May 2028 39 652 369

Waterfall Lifestyle 11.31% 29 October 2019 150 000 77 378 3 922

Dimension Data 3-month JIBAR + 2.75% 7 September 2026 60 000 59 670 441

Sub-total carried forward 5 737 505 1 898 426

# These long-term borrowings are developments loans that will convert into term loans during the 2018 financial year upon completion of the development.

* These long-term borrowings were classified as liabilities directly associated with non-current assets held for sale (refer to note 18).





Mortgage bondR000

Non-currentR000

CurrentR000

Absa 542 000 542 266





BOC 69 829 3 820

Torre 1-month JIBAR + 1.95% 4 November 2021 81 000

53 960 13

Torre 1-month JIBAR + 1.95% 4 November 2021 15 869 3 807

Investec – 712 828

Grove Mall SA Prime – 0.50% 31 January 2020 – – 3 397

PwC Sunninghill 9.13% 31 January 2018 400 000 – 378 898

Brooklyn Bridge* 10.95% 31 January 2019 350 000 – 106 693

Brooklyn Bridge* SA Prime – 0.85% 31 January 2019 20 000 – 223 840

Nedbank 3 971 594 590 313



Mall of Africa SA Prime – 1.50% 6 April 2021

4 750 000

687 142 4 280



Mall of Africa PV SA Prime – 0.73% 6 May 2021 90 000 59 188 394



Newtown Junction & Majestic 10.85% 3 October 2024 1 200 000 955 511 32 291

Newtown City Lodge 3-month JIBAR + 3.16% 3 November 2025 100 000

65 321 1 523


PwC Tower SA Prime – 0.60% 1 July 2030

1 432 000

881 298 –

PwC Tower VAT SA Prime – 0.60% 31 January 2018 – 3 275

PwC Annex# SA Prime – 0.60% 31 January 2018 72 852 –

PwC Annex VAT SA Prime – 0.60% 31 January 2018 – 340

RMB 801 627 40 703

LP 9 SA Prime – 0.25% 1 July 2017 40 000 – –

Novartis 10.64% 2 March 2020 200 000 121 903 3 402

Aurecon 10.48% 3 April 2023 575 000

370 038 33 299

Aurecon 1-month JIBAR + 2.25% 4 March 2019 50 000 333

Amrod SA Prime – 0.50% 4 January 2021 264 000 259 686 3 669

Sanlam Capital 352 455 8 496

Dis-Chem (formerly K101 Warehouse)# 1-month JIBAR + 2.50% 1 November 2017 80 000 17 668 484

Massbuild Distribution Centre 10.58% 3 April 2028 250 000

130 296 3 028

Massbuild Distribution Centre 11.05% 2 May 2028 27 791 252

Massbuild Distribution Centre SA Prime – 0.50% 2 May 2028 39 652 369

Waterfall Lifestyle 11.31% 29 October 2019 150 000 77 378 3 922

Dimension Data 3-month JIBAR + 2.75% 7 September 2026 60 000 59 670 441

Sub-total carried forward 5 737 505 1 898 426

# These long-term borrowings are developments loans that will convert into term loans during the 2018 financial year upon completion of the development.

* These long-term borrowings were classified as liabilities directly associated with non-current assets held for sale (refer to note 18).




Mortgage bondR000

Non-currentR000

CurrentR000

Sub-total brought forward 5 737 505 1 898 426

Standard Bank 2 238 605 711 909





City Lodge – Waterfall City 3-month JIBAR + 2.70% 31 October 2019 140 000 48 487 2 101

Group Five 10.07% 15 January 2019 470 000 343 375 17 875

Maxwell Office Park (Golder) 3-month JIBAR + 2.25% 31 May 2019

300 000

27 023 2 535

Maxwell Office Park (Att House) 3-month JIBAR + 2.25% 31 May 2019 24 279 2 125

Maxwell Office Park (Premier) 3-month JIBAR + 2.44% 31 July 2020 22 112 1 379

Maxwell Office Park (Honda) 3-month JIBAR + 2.44% 31 July 2020 21 920 1 376

Maxwell Office Park (Colgate) 3-month JIBAR + 2.60% 30 April 2021 41 500 1 578

Maxwell Office Park (Mac Mac House) 3-month JIBAR + 2.30% 30 April 2021 24 900 1 407

Maxwell Office Park (Magwa House) 3-month JIBAR + 2.40% 4 August 2026 61 700 1 749

Allandale building 3-month JIBAR + 2.00% 6 August 2021 330 000 226 600 3 711

AIH International 6-month EURIBOR + 2.27% 28 February 2019 – 304 018 2 484

AIH International 6-month EURIBOR + 2.25% 30 April 2019 – 196 960 11


AIH International 6-month EURIBOR + 2.25% 30 April 2019 – 2 557 –

AIH International 6-month EURIBOR + 1.95% 30 April 2018 – – 131 314

Total 7 976 110 2 610 335

The weighted average cost of debt in respect of the total group borrowings is 8.67% (2017: 8.90%).

Long-term borrowings are mainly at floating rates, of which 97.7% (2017: 91.0%) have economically been hedged to fixed rates. Refer to note 14 as well as note 36 for further detail of the group’s interest rate swap agreements.

In respect of the AIH International long-term borrowings, the facilities are secured by way of a cession and pledge of MAS shares at a 2.9 times cover (2017: 2.3 times cover).

Long-term borrowings have been secured by mortgage loans over investment property to the value of R16.9 billion (2017: R17.5 billion).

Loan covenants were applicable to certain long-term borrowings. None of the covenants were breached during the year ended 30 June 2018.

Refer to note 33 for more details with regards to the sureties provided.





Mortgage bondR000

Non-currentR000

CurrentR000

Sub-total brought forward 5 737 505 1 898 426

Standard Bank 2 238 605 711 909





City Lodge – Waterfall City 3-month JIBAR + 2.70% 31 October 2019 140 000 48 487 2 101

Group Five 10.07% 15 January 2019 470 000 343 375 17 875

Maxwell Office Park (Golder) 3-month JIBAR + 2.25% 31 May 2019

300 000

27 023 2 535

Maxwell Office Park (Att House) 3-month JIBAR + 2.25% 31 May 2019 24 279 2 125

Maxwell Office Park (Premier) 3-month JIBAR + 2.44% 31 July 2020 22 112 1 379

Maxwell Office Park (Honda) 3-month JIBAR + 2.44% 31 July 2020 21 920 1 376

Maxwell Office Park (Colgate) 3-month JIBAR + 2.60% 30 April 2021 41 500 1 578

Maxwell Office Park (Mac Mac House) 3-month JIBAR + 2.30% 30 April 2021 24 900 1 407

Maxwell Office Park (Magwa House) 3-month JIBAR + 2.40% 4 August 2026 61 700 1 749

Allandale building 3-month JIBAR + 2.00% 6 August 2021 330 000 226 600 3 711

AIH International 6-month EURIBOR + 2.27% 28 February 2019 – 304 018 2 484



AIH International 6-month EURIBOR + 2.25% 30 April 2019 – 2 557 –

AIH International 6-month EURIBOR + 1.95% 30 April 2018 – – 131 314

Total 7 976 110 2 610 335

The weighted average cost of debt in respect of the total group borrowings is 8.67% (2017: 8.90%).

Long-term borrowings are mainly at floating rates, of which 97.7% (2017: 91.0%) have economically been hedged to fixed rates. Refer to note 14 as well as note 36 for further detail of the group’s interest rate swap agreements.

In respect of the AIH International long-term borrowings, the facilities are secured by way of a cession and pledge of MAS shares at a 2.9 times cover (2017: 2.3 times cover).

Long-term borrowings have been secured by mortgage loans over investment property to the value of R16.9 billion (2017: R17.5 billion).

Loan covenants were applicable to certain long-term borrowings. None of the covenants were breached during the year ended 30 June 2018.

Refer to note 33 for more details with regards to the sureties provided.


21. LONG-TERM BORROWINGS (continued)COMPANY


Mortgage bondR000

Non-current

R000Current

R000

2017Investec – 3 397

Mall of Namibia SA Prime + 0.5% 31 January 2020 25 000 – 3 397

Total – 3 397

The carrying values of the long-term borrowings are considered by the directors to approximate their fair values.

22. FINANCE LEASE OBLIGATIONGROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Majestic 5 802 5 568 – –

Nieuwtown 83 112 77 582 – –


The figures above are reconciled as follows:

MajesticLessor: City of JohannesburgMinimum lease payments due - Within one year 301 277 – – - In the second to the fifth year, inclusive 1 455 1 349 – – - Later than five years 17 150 17 557 – –

18 906 19 183 – –

Less future finance charges (13 104) (13 615) – –

Total 5 802 5 568 – –

Present value of minimum lease payments due - Later than five years 5 802 5 568 –

Total 5 802 5 568 – –

The group, through a subsidiary, Majestic, entered into a finance lease agreement with the City of Johannesburg for a 30-year lease with option to renew for a further 19 years, on Erf 591, Newtown, Johannesburg.

The effective finance lease starting date was 3 February 2011 with the basic monthly instalment starting at R15 000 (escalating at 8.0% compounded annually). Once the development is completed the basic rental charges will be the higher of the basic monthly instalment or 2.5% of rental income for the year.

The finance lease asset of R5.4 million was recognised as part of the initial cost of investment property. Refer to note 5 for a further description of the investment property.



22. FINANCE LEASE OBLIGATION (continued)GROUP COMPANY

2018R000

2017R000

2018R000

2017R000

NieuwtownLessor: City of JohannesburgMinimum lease payments due - Within one year 1 379 1 277 – – - In the second to the fifth year, inclusive 6 709 6 212 – – - Later than five years 13 042 265 13 044 141 – –

13 050 353 13 051 630 – –

Less future finance charges (12 967 241) (12 974 048) – –

Total 83 112 77 582 – –

Present value of minimum lease payments due - Later than five years 83 112 77 582 – –

Total 83 112 77 582 – –

The group, through a subsidiary, Nieuwtown, entered into a finance lease agreement with the City of Johannesburg for a 90-year lease on Erf 45, 46, 47, 56, 57 and 58 Newtown, Johannesburg.

The effective finance lease starting date is 16 September 2010 with the basic monthly instalment starting at R85 500 (escalating at 8.0% compounded annually). Once the development is completed, the rental payable is the greater of the basic monthly instalment or the turnover rent for the financial year concerned. Turnover rental is determined as follows: 1.75% of rental income for year 1 to 30, 1.9% of rental income for year 31 to 60 and 2.0% of rental income for year 61 to 90.

The finance lease asset of R64.2 million was recognised as part of the initial cost of investment property. Refer to note 5 for a further description of the investment property.


23. TRADE AND OTHER PAYABLESGROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Trade payables 81 974 146 575 5 487 1 718

Accruals 132 487 227 792 5 747 4 079

Deposits held 73 899 67 155 69 69

Rental income received in advance 100 977 52 963 – –

Value added tax 14 213 6 895 – –


The fair value of trade payables, deposits held, amounts received in advance and sundry payables are deemed to be the same as the carrying value.

Trade payables include amounts due relating to buildings under construction.

Accruals include amounts relating to municipal accruals on the investment properties.

24. PROVISIONSGROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Leave pay provision 3 465 2 777 – –

Provision for committed infrastructure 25 476 – – –

Other provisions 3 255 – 739 –

Balance at the end of the year 32 196 2 777 739 –

Leave pay provision reconciliation of provision:

Opening balance 2 777 2 081 – –

Provision raised 3 465 2 777 – –

Provision reversed (2 258) (2 014) – –

Provision utilised (519) (67) – –

Closing balance 3 465 2 777 – –

Provision for committed infrastructure reconciliation of provision:

Opening balance – – – –

Provision raised 25 476 – – –

Closing balance 25 476 – – –

Other provisions reconciliation of provision:

Opening balance – – – –

Provision raised 3 255 – 739 –

Closing balance 3 255 – 739 –

The provision relating to committed infrastructure for the current year relates to infrastructure transferred to investment properties (note 5), for which the group has a constructive obligation to incur additional infrastructure costs.

The provision relating to leave pay for the current year was calculated based on the actual leave days outstanding at 30 June 2018 at the hourly rate per employee.



25. OPERATING PROFITis stated after inclusion of the following:

GROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Other income is stated after taking the following into accountSundry income 7 924 1 251 193 32 Profit on disposal of investment property 16 717 15 217 – 704 Foreign exchange gain 5 214 – 5 214 – Reversal of impairment of loans to associates (note 15) 2 283 – 2 283 – Write-off of other loans 112 355 – – – Profit on disposal of subsidiary 5 633 – 5 633 – Reversal of impairment of other investments 7 549 – 6 554 – Reversal of impairment of investments in subsidiaries – – 3 414 – Lynnwood Bridge profit share – 8 300 – 8 300 Profit on disposal of other investments and associates – 35 695 – 190 Reversal of impairment of loans to subsidiary – – 996 3 368

Operating and other expenses is stated after taking the following into accountLoss on disposal of subsidiary – (4) – (4)Loss on disposal of investments (2 808) – – – Auditors’ remuneration (5 874) (5 725) – – Audit services rendered (5 629) (4 584) – – Non-audit services rendered (245) (441) – – Prior year under provision – (700) – –

B-BBEE spend (6 779) (4 390) – (3 005)Bad debt provision/written off (13 010) (13 183) – – Executive directors’ remuneration (note 32) (6 220) (11 850) – – Non-executive directors’ remuneration (note 32) (3 698) (3 626) (3 698) – Prescribed officers’ remuneration (note 32) (14 235) (8 567) – – Staff expenses (42 278) (37 465) – – Marketing (13 845) (12 778) – – Rates and taxes (8 416) (14 859) – – Professional fees (23 855) (16 471) (1 068) 61 Impairment and write-off of loans (note 14) (9 925) – – – Impairment of loans to associates (note 15) (25 872) (107 292) – (24 447)Impairment of intangible asset (note 6) – – – – Impairment of investments in associates (note 8) (25 232) (20 617) (602) (2 843)Write-off and impairment of loans to subsidiaries (note 16) – – (56 866) (65 641)Write-off of other receivables (39 500) – – – Impairment of investment in subsidiaries (note 9) – – (262 297) (91 747)Impairment of investments (note 10) – (116 641) – (88 080)Legal fees (3 692) (2 918) – 11 Loss on disposal of investment property (1 770) – – – Share-based payment expenses (19 818) (27 081) – – Executive directors’ share-based payments* (725) (2 415) – – Prescribed officers’ share-based payments# (1 882) (5 994) – – Staff share-based payments@ (17 211) (18 672) – –

Foreign exchange losses (32 389) (162 718) (12 119) (139 432)

* Includes forfeitures of R4.1 million (2017: Rnil).# Includes forfeitures of R5.1 million (2017: Rnil).@ Includes forfeitures of R0.5 million (2017: Rnil).


26. INVESTMENT INCOMEGROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Dividend income 3 800 502 637 017 108 685

Dividends – local – 502 562 831 3 382

Dividends – foreign 3 800 – 74 186 105 303

Interest income 190 647 189 034 49 316 116 691

Group companies 120 356 136 874 44 002 105 080

Bank 35 448 24 601 1 340 4 479

Other interest 34 843 27 559 3 974 7 132

Total 194 447 189 536 686 333 225 376

27. FINANCE COSTSGROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Mortgage bonds (869 810) (936 449) (4) (9 023)

Derivative financial liabilities (57 377) (26 105) – (208)

Bank overdraft – (215) – –

Finance lease obligation (7 567) (6 844) – –

Loans from group companies – – (7 450) –

Other (15 747) (17 798) – (798)

Total (950 501) (987 411) (7 454) (10 029)



28. INCOME TAX CREDIT (EXPENSE)GROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Major components of the tax expense (including other comprehensive income)CurrentCurrent tax (21 911) (100 576) (18 827) (91 424)

Local income tax – current year (21 911) (102 004) (18 827) (92 852)

Local income tax – prior period overprovision – 1 428 – 1 428

DeferredOriginating and reversing temporary differences 1 771 678 (61 292) 1 045 856 (56 270)

Deferred tax 1 771 676 (50 023) (74 895) 89 650

Taxation relating to components of other comprehensive income 2 (11 269) 1 120 751 (145 920)

Total 1 749 767 (161 868) 1 027 029 (147 694)

Reconciliation of the tax expenseApplicable tax rate 28.00% 28.00% 28.00% 28.00%

Adjusted for:Non-deductible expenditure* 6.23% 5.65% 1.15% 4.43%

Non-taxable income received^ 10.06% (13.47%) (2.20%) (11.45%)

Fair value adjustments on investment property (11.52%) (6.03%) – –

Reversal of CGT liability on investment property (205.36%) – – –

Provision for impairment of investments – 2.84% 0.57% –

Prior period adjustment – (0.13%) (0.23%) (0.23%)

Reversal of CGT liability on investments in REIT entities – – (61.23%) –

Straight-lining not recognised (11.79%) – – –

Qualifying distribution (16.23%) – (6.06%) –

Tax base cost adjustment# – – – (2.23%)

Deferred tax asset not recognised 16.37% 3.27% – –

Other~ 1.39% 5.43% (0.06%) 5.32%

Total (182.86%) 25.57% (40.05%) 23.84%

* Relates to accounting losses on disposal/unwinding/fair value of investments.^ Relates to accounting profits on disposal/unwinding/fair value of investment, dividends and realisation of other comprehensive

income.# Relates mainly to the MAS base cost adjustment as a result of MAS ceasing to be a CFC.~ Relates mainly to the CFC tax included in the tax paid for the current year as well as share-based payment expense.


29. EARNINGS, HEADLINE EARNINGS AND NET ASSET VALUE PER SHARE

At 30 June 2018 the group had 703 155 224 shares in issue after adjusting for treasury shares, refer to note 19.

The calculation of headline earnings has been performed in accordance with Circular 4/2018.

The calculation of the basic and diluted earnings per share attributable to the ordinary equity holders of the group is based on the following data:

2018 2017

Gross R000

Tax effect of the

adjustmentsR000

Total non-

controlling interest

effect of the adjustments

R000Net

R000Total

R000 GrossR000

Tax effect of the

adjustmentsR000

Total non-



R000Net

R000Total

R000

Earnings for the purpose of earnings per share 2 651 542 – – 2 651 542 2 651 542 630 164 – – 630 164 630 164

Number of sharesWeighted average number of ordinary shares for the purpose of earnings per share 702 989 909 – – 702 989 909 702 989 909 702 389 882 – – 702 389 882 702 389 882

Effect of dilutive potential ordinary shares: Share options 5 594 993 – – 5 594 993 5 594 993 5 689 203 – – 5 689 203 5 689 203

Weighted average number of ordinary shares for the purpose of diluted earnings per share 708 584 902 – – 708 584 902 708 584 902 708 079 085 – – 708 079 085 708 079 085

Earnings per share (cents)Basic 377.18 – – 377.18 377.18 89.72 – – 89.72 89.72

Diluted 374.20 – – 374.20 374.20 89.00 – – 89.00 89.00

Headline profit for the purpose of headline earnings per shareTotal profit attributable to ordinary shareholders 2 651 542 – – 2 651 542 2 651 542 630 164 – – 630 164 630 164

Profit on disposal of associates (5 633) – – (5 633) (5 633) (35 695) 7 996 – (27 699) (27 699)

Loss on disposal of other investments 2 612 (629) – 1 983 1 983 – – – – –

Profit on disposal of investment property (14 947) – – (14 947) (14 947) (15 217) 3 409 – (11 808) (11 808)

Impairment of associates and other investments 51 197 (11 793) – 39 404 39 404 244 540 (54 777) – 189 763 189 763

Fair value adjustments (370 265) 11 563 (25 395) (384 097) (384 097) (527 581) 110 509 (7 835) (424 907) (424 907)

Adjustments of measurements, included in equity-accounted earnings of associates (33 270) 5 834 – (27 436) (27 436) (249 880) 55 973 – (193 907) (193 907)

Realisation of other comprehensive income (35 750) – – (35 750) (35 750) – – – –

Headline profit for the purpose of basic and diluted headline profit per share 2 245 486 4 975 (25 395) 2 225 066 2 225 066 46 331 123 110 (7 835) 161 606 161 606


Effect of dilutive potential ordinary shares 5 594 993 – – 5 594 993 5 594 993 5 689 203 – – 5 689 203 5 689 203


Headline earnings per share (cents)Basic 316.51 316.51 23.01 23.01

Diluted 314.02 314.02 22.82 22.82

Net asset value per share (cents)Closing number of shares (adjusted for treasury shares) 703 155 224 702 815 224

NAVPS (adjusted for treasury shares) (cents)* 2 424 1 984

* Prior to converting to a REIT on 29 May 2018, Attacq used adjusted NAVPS as its key performance measurement. Subsequent to REIT conversion, the key performance measurement consequently changes to DEPS (note 39).



29. EARNINGS, HEADLINE EARNINGS AND NET ASSET VALUE PER SHARE

At 30 June 2018 the group had 703 155 224 shares in issue after adjusting for treasury shares, refer to note 19.

The calculation of headline earnings has been performed in accordance with Circular 4/2018.

The calculation of the basic and diluted earnings per share attributable to the ordinary equity holders of the group is based on the following data:

2018 2017

Gross R000

Tax effect of the

adjustmentsR000

Total non-



R000Net

R000Total

R000 GrossR000

Tax effect of the

adjustmentsR000

Total non-



R000Net

R000Total

R000

Earnings for the purpose of earnings per share 2 651 542 – – 2 651 542 2 651 542 630 164 – – 630 164 630 164


Effect of dilutive potential ordinary shares: Share options 5 594 993 – – 5 594 993 5 594 993 5 689 203 – – 5 689 203 5 689 203


Earnings per share (cents)Basic 377.18 – – 377.18 377.18 89.72 – – 89.72 89.72

Diluted 374.20 – – 374.20 374.20 89.00 – – 89.00 89.00

Headline profit for the purpose of headline earnings per shareTotal profit attributable to ordinary shareholders 2 651 542 – – 2 651 542 2 651 542 630 164 – – 630 164 630 164

Profit on disposal of associates (5 633) – – (5 633) (5 633) (35 695) 7 996 – (27 699) (27 699)

Loss on disposal of other investments 2 612 (629) – 1 983 1 983 – – – – –

Profit on disposal of investment property (14 947) – – (14 947) (14 947) (15 217) 3 409 – (11 808) (11 808)

Impairment of associates and other investments 51 197 (11 793) – 39 404 39 404 244 540 (54 777) – 189 763 189 763

Fair value adjustments (370 265) 11 563 (25 395) (384 097) (384 097) (527 581) 110 509 (7 835) (424 907) (424 907)

Adjustments of measurements, included in equity-accounted earnings of associates (33 270) 5 834 – (27 436) (27 436) (249 880) 55 973 – (193 907) (193 907)

Realisation of other comprehensive income (35 750) – – (35 750) (35 750) – – – –

Headline profit for the purpose of basic and diluted headline profit per share 2 245 486 4 975 (25 395) 2 225 066 2 225 066 46 331 123 110 (7 835) 161 606 161 606


Effect of dilutive potential ordinary shares 5 594 993 – – 5 594 993 5 594 993 5 689 203 – – 5 689 203 5 689 203


Headline earnings per share (cents)Basic 316.51 316.51 23.01 23.01

Diluted 314.02 314.02 22.82 22.82

Net asset value per share (cents)Closing number of shares (adjusted for treasury shares) 703 155 224 702 815 224

NAVPS (adjusted for treasury shares) (cents)* 2 424 1 984

* Prior to converting to a REIT on 29 May 2018, Attacq used adjusted NAVPS as its key performance measurement. Subsequent to REIT conversion, the key performance measurement consequently changes to DEPS (note 39).


30. CASH FLOW FROM OPERATING ACTIVITIESGROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Profit and other comprehensive income before taxation 956 919 633 050 2 564 545 619 564

Adjusted for:Interest income (190 647) (189 034) (49 316) (116 691)

Dividend income (3 800) (502) (637 017) (108 685)

Finance costs 950 501 987 411 7 454 10 029

Depreciation 12 479 8 972 – –

Amortisation of intangible asset 24 037 22 060 – –

Bad debts 13 010 13 183 – –

(Reversal of impairment) impairment of other investments (7 549) 116 641 (6 554) 88 080

Impairment of investments in subsidiaries – – 262 297 91 747

Impairment of loans to subsidiaries – – 56 866 65 641

Write-off of loan by APD (112 355) – – –

Write-off of other receivables 39 500 – – –

Net profit on disposal of associate and other assets (196) (35 873) (166) (366)

Loss on disposal of other investments 2 808 – – –

Net loss (profit) on disposal of investment properties (14 947) (15 217) 950 (704)

(Profit) loss on disposal of subsidiaries (5 633) 4 (5 633) 4

Loss (gain) on available-for-sale financial assets 4 650 117 827 (2 160 083) (833 602)

Impairment loss – associates 25 232 20 617 566 2 843

Impairment (reversal of impairment) of loans to associate 23 589 107 292 (2 283) 24 447

Impairment of loans to other 9 925 – – –

Reversal of impairment loss – subsidiaries – – (4 410) (3 368)

Fair value adjustment to investment properties (328 970) (664 525) – –

Fair value adjustment to other financial instruments (41 295) 136 944 (13 992) 13 992

Realisation of available-for-sale financial assets (35 750) – (32 336) –

Straight-line rental adjustment (103 467) (199 802) – –

Deferred initial lease expenditure 5 413 5 972 – –

Reversal of impairments – (10) – (10)

Equity income from associates (81 706) (249 880) – –

Share-based payments 19 818 27 081 – –

Foreign currency translation effect 50 698 131 410 30 428 22 325

Cash generated from (utilised in) operations before working capital changes 1 212 264 973 621 11 316 (124 754)

Changes in working capital:(Increase) decrease in accounts receivable (77 440) 115 956 99 (6 431)

Increase in inventory (17 206) – – –

(Decrease) increase in accounts payable (97 830) (56 282) 5 437 (10 923)

Total 1 019 788 1 033 295 16 852 (142 108)



31. OPERATING LEASE RECEIVABLESGROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Value of minimum lease payments receivableWithin one year 1 646 180 1 517 123 – –

In the second to fifth year inclusive 5 656 943 4 823 258 – –

Later than five years 4 755 408 3 895 549 – –

Total 12 058 531 10 235 930 – –

Lease agreements are entered into with tenants on variable terms depending on the location and nature of the lettable area. The lease terms for office and industrial buildings are generally longer than for retail outlets.

32. DIRECTORS’ AND PRESCRIBED OFFICERS’ REMUNERATION

GROUP AND COMPANY

Basic salaryR000

BonusR000

Fund contri-

butionsR000

Other benefits

R000Total

R000

2018Executive directorsMC Wilken (Resigned 31 December 2017) 2 152 – 15 35 2 202 M Hamman 3 790 67 105 56 4 018

Total executive directors 5 942 67 120 91 6 220

Prescribed officersPrescribed officer A 1 079 231 35 54 1 399 Prescribed officer B 1 468 374 47 56 1 945 Prescribed officer C 783 – 44 126 953 Prescribed officer D 1 086 4 100 61 31 5 278 Prescribed officer E 1 469 380 48 71 1 968 Prescribed officer F 2 505 – 128 59 2 692

Total prescribed officers 8 390 5 085 363 397 14 235

Total 14 332 5 152 483 488 20 455

2017Executive directorsMC Wilken 4 150 2 710 98 94 7 052

M Hamman 2 880 1 799 68 51 4 798

Total executive directors 7 030 4 509 166 145 11 850

Prescribed officersPrescribed officer A 982 370 25 57 1 434

Prescribed officer B 1 393 360 35 49 1 837

Prescribed officer C – – – – –

Prescribed officer D 2 145 370 135 59 2 709

Prescribed officer E 1 391 620 35 30 2 076

Prescribed officer F 466 – 36 9 511

Total prescribed officers 6 377 1 720 266 204 8 567

Total 13 407 6 229 432 349 20 417


32. DIRECTORS’ AND PRESCRIBED OFFICERS’ REMUNERATION (continued)Key management and prescribed officers were as follows:

2018 - D Theron - PW Mackenzie – Resigned 30 November 2017 - JR van Niekerk - MW Clampett - R Nana - GE Pendleton – Appointed 13 March 2018.

JR van Niekerk and R Nana were appointed as executive directors with effect from 19 June 2018. Remuneration for the full 2018 financial year has been allocated to prescribed officers.

2017 - D Theron - PW Mackenzie - JR van Niekerk – Appointed 1 April 2017 - MW Clampett - R Nana.

GROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Non-executive directors – fees for services as directorsP Tredoux 694 566 694 566

MM du Toit 381 363 381 363

HR El Haimer 466 433 466 433

IN Mkhari (appointed 15 March 2018) 76 – 76 –

KR Moloko 472 478 472 478

BT Nagle 614 494 614 494

S Shaw-Taylor 626 527 626 527

JHP van der Merwe 369 382 369 382

LLS van der Watt – 383 – 383

Total 3 698 3 626 3 698 3 626

P Tredoux’s fees were paid to Tredoux Family Holdings Proprietary Limited.

LLS van der Watt’s fees were paid to APH.

Except for the above, all non-executive directors’ fees were paid to the individuals in their personal capacity.

Effective 1 July 2017, LLS van der Watt resigned as non-executive director from the board.

Share options granted to executive directorsMC WilkenDuring the current year, MC Wilken resigned with effect from 31 December 2017, hence forfeiting outstanding options of 1 736 830.

In the prior year, the Remco approved a grant to MC Wilken consisting of 488 831 LTIPs. The options may be exercised as to 60.0% on 14 October 2019, 20.0% on 14 October 2020 and 20.0% on 14 October 2021. For vesting to occur, MC Wilken had to remain in the employ of the group.

The final tranche of the 2 000 000 share options granted to MC Wilken in November 2012, vested on 30 June 2016 at an exercise price of R8.50 per option and was issued on 4 July 2016 and forms part of Attacq’s issued share capital.

Each option converts into one ordinary share in Attacq on exercise. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting. There is no option of cash settlement.



32. DIRECTORS’ AND PRESCRIBED OFFICERS’ REMUNERATION (continued)

GROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Summary of share options grantedTotal number of options 3 873 3 873 3 873 3 873

Less number of options that have vested (2 136) (2 000) (2 136) (2 000)

Less number of options that have been forfeited (1 737) – (1 737) –

Total – 1 873 – 1 873

Reconciliation of outstanding options, not yet exercisedOpening balance 1 873 1 784 1 873 1 784

Granted during the year – LTIPs – 489 – 489

Forfeited during the year (1 737) – (1 737) –

Vested during the year (136) (400) (136) (400)

Total – 1 873 – 1 873

M HammanIn the prior year, the Remco approved the grant to M Hamman consisting of 263 831 LTIPs. The options may be exercised as to 60.0% on 14 October 2019, 20.0% on 14 October 2020 and 20.0% on 14 October 2021. For vesting to occur, M Hamman has to remain in the employ of the group.

The Remco approved a grant to M Hamman in the prior year of 106 739 LTIPs and 711 596 SARs. These grants were based on a multiple factor of 5.6 of the GTP. These grants constitute a retrospective reward for the financial year ended 30 June 2014, 30 June 2015 and 30 June 2016. The grant values of the LTIPs and SARs were estimated on the NAVPS as at June 2016 of the respective financial year. Performance conditions apply to these grants. For vesting to occur M Hamman has to remain in the employment of the group. Refer to note 20.

The board resolved in August 2013 to grant M Hamman 1 200 000 share options that vest over a three-year period from 30 June 2016. The options may be exercised as to 60.0% on 30 June 2016, 20.0% on 30 June 2017 and 20.0% on 30 June 2018. The first tranche of 720 000 options vested on 30 June 2016 and was exercised on 3 October 2016 and 19 December 2016 in equal tranches. The second tranche of 360 000 vested on 30 June 2017 and has not been exercised to date. For the remainder of the options to vest, M Hamman has to remain in the employ of the group. The exercise price of the options is fixed at R9.50 per share. There is no option of cash settlement.

Each option converts into one ordinary share in Attacq on exercise. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting. There is no option of cash settlement.

GROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Summary of share optionsTotal number of options granted 2 190 2 386 2 190 2 386

Less number of options that have vested (720) (720) (720) (720)

Total 1 470 1 666 1 470 1 666


Vested during the year (326) – (326) –

Granted during the year – LTIPs 148 264 148 264

Forfeited during the year (18) – (18) –

Total 1 470 1 666 1 470 1 666


32. DIRECTORS’ AND PRESCRIBED OFFICERS’ REMUNERATION (continued)Share options granted to prescribed officersThe board resolved in June 2014 to grant 400 000 share options to a prescribed officer that vest over a three-year period from 30 June 2017. The options may be exercised as to 60.0% on 30 June 2017, 20.0% on 30 June 2018, and 20.0% on 30 June 2019. For vesting to occur, the prescribed officer has to remain in the employ of the group.

The board resolved in March 2014 to grant 275 000 share options to a Prescribed Officer that vest over a three year period from 31 March 2017. The options may be exercised on 31 March 2017, 20.0% on 31 March 2018, and 20.0% on 31 March 2019. For vesting to occur, the prescribed officer has to remain in the employ of the group.

Each option converts into one ordinary share in Attacq on exercise. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting. The exercise price of the options is fixed at R15.25 per share.

GROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Summary of share options grantedTotal number of options granted 2 052 2 920 2 052 2 920


Vested during the year (316) (165) (316) (165)

Reclassification out of prescribed officers – (1 052) – (1 052)

Granted during the year – Retentions 240 168 240 168

Granted during the year – LTIPs 434 275 434 275

Granted during the year – SARs – 503 – 503

Forfeited during the year (1 226) – (1 226) –

Total 2 052 2 920 2 052 2 920

33. COMMITMENTSGROUP

2018R000

2017R000

33.1 Shares pledgedShares held by Attacq in MAS were pledged as security in respect of obligations of AIH International. 116 207 554 106 326 444

Total 116 207 554 106 326 444



33. COMMITMENTS (continued)

GROUP2018

R0002017

R000

33.2 Capital commitmentsAlready contracted but not provided for:The Waterfall lease hold and development rights relates to a minimum of 1 905 477m2 of bulk property zoned for light industrial, commercial and retail use. Current costs committed are for the installation of services on various land parcels on the Waterfall land. 106 403 139 312 Due to increased development activity and top structures reaching the completion stage on Waterfall – LP 8, the surrounding infrastructure will be developed. 2 376 32 582 Development of the bulk earthworks on Waterfall – LP 10 commenced during the prior year in preparation for the construction of various retail and commercial buildings. 64 132 80 412 The group entered into an agreement:To develop the Allandale building. A portion of the building has been leased to a third party and has been recognised as an investment property. – 10 840 For the development of the BMW Distribution Warehouse. The building has been leased to a third party and has been recognised as an investment property. 3 436 108 947 For the development of the PwC Tower. The building has been leased to PwC and has been recognised as an investment property. The group has an effective 75.0% interest in the development. 16 390 192 331For the development of a communal and conference facility PwC Annex. The building has been leased to a PwC and will be recognised as an investment property. The group has an effective 75.0% interest in the development. 3 828 39 748 For the development of the Dis-Chem warehouse (formally known as K101 Spec Warehouse). The building has been leased to a third party and has been recognised as an investment property. 7 051 33 809 For the development of The Corporate Campus Phase 1. The building has been leased to various third parties and has been recognised as an investment property. The group has an effective 50.0% interest in the development. – 42 324 For the development of two office buildings in Corporate Campus Phase 2. One of the buildings has been leased to a third party and the second building is being developed on a speculative basis. This has been recognised as an investment property. The group has an effective 50.0% interest in the development. 78 423 – For the installation of a photovoltaic solar system on Mall of Africa. The group has an effective 80.0% interest in the property. – 3 892 For the development of Mall of Africa. The building has been leased to various third parties and has been recognised as an investment property. The group has an effective 80.0% interest in the development. 28 043 84 755 For the development the Massbuild expansion. The building has been leased to a third party and has been recognised in investment property as part of the Massbuild development. 2 148 57 101 For the development of the Torre Warehouse. The building has been leased to Torre and has been recognised as an investment property. – 614 For the development of the Dimension Data Warehouse (previously Spec Warehouse). The building has been leased to Dimension Data and has been recognised as an investment property. – 2 542 For the development of Maxwell Office Park – Magwa House building. The building has been leased to a third party and has been recognised as an investment property. The group has an effective 50.0% interest in the development. 1 344 1 370 For the development the Gateway West building. The building has been developed on a speculative basis and is partially leased to third parties and has been recognised as an investment property. 29 517 68 083 For the development of the Amrod Warehouse. The building has been leased to Amrod and has been recognised as an investment property. 4 500 6 218 For the development of sectional title offices in Waterfall Point, comprising of four buildings, one buildings has been recognised as investment property and on two buildings as inventory. One building has been sold. 145 033 225 706



33. COMMITMENTS (continued)

GROUP2018

R0002017

R000

33.2 Capital commitments (continued)Already contracted but not provided for (continued)Sub-total brought forward 492 623 1 130 586

The group entered into an agreement (continued):To redevelop the old Ster Kinekor space at the Eikestad Precinct into new retail space. The redevelopment will be recognised as investment property. 10 931 –

For the development of three mini warehouses. Two of the buildings will be leased to a third party and have been recognised as investment property. A sale agreement has been signed for one of the buildings and it has been recognised as inventory. 78 927 –

For the Dale Creek Investments development of the River Creek – Deloitte head office. The building will be leased to Deloitte and will be recognised as an investment property. The group has an effective 50.0% interest in the development. 612 458 –

For the development of Cummins South Africa’s regional office. The building will be leased to a third party and will be recognised as an investment property. 43 305 –

For the development of two office buildings of the Ingress Phase 1. One of the buildings has been leased to a third party and the second building is being developed on a speculative basis. Both buildings are recognised as an investment property. 242 678 –

For the development of a super basement for the Atria development. The basement will form part of the Atria mixed-use precinct, which will be leased to third parties and will be recognised as investment property. 71 062 –

For the retiling and general refurbishment of the Lynnwood Bridge Retail Centre. 14 100 –

For the development of office buildings as well as a retail centre on Waterfall – LP 10 and LP 15. The group has effective shares of between 50.0% and 100.0% interest in the development. The buildings have been leased to third parties and have been recognised as investment properties. – 7 486

Total 1 566 084 1 138 072

33.3 Contingent commitmentsApproved but not contracted forThe group has approved:For the Dale Creek Investments development of the River Creek – Deloitte head office. The building will be leased to Deloitte and will be recognised as an investment property. The group has an effective 50.0% interest in the development. – 779 834

The development of the super basement of the Atria in the current year. The precinct will be developed on a speculative basis with the intention to lease it to a third party and will be recognised as an investment property. 270 062 363 420

Various capital expenditures within the AWIC completed buildings portfolio 35 921 –

Various capital expenditures at 2 Eglin, Sunninghill 6 370 –

Various capital expenditures at Eikestad Precinct 10 132 3 649

Various capital expenditures at Garden Route Mall 5 039 –

Various capital expenditures at Brooklyn Mall 7 947 –

Various capital expenditures at MooiRivier Mall 7 815 10 215

Various capital expenditures at Majestic Offices 3 047 –

Various capital expenditures at Newtown Junction 19 993 –

Various capital expenditures at Lynnwood Bridge Retail and Glenfair Boulevard 7 729 6 400

Total 374 055 1 163 518



33. COMMITMENTS (continued)GROUP COMPANY

2018R000

2017R000

2018R000

2017R000

33.3 Contingent commitments (continued)Sureties providedSurety in respect of funds advanced:By Nedbank to Key Capital for the development in Stellenbosch 20 000 20 000 20 000 20 000

By Nedbank for the funding of Kompasbaai 3 333 3 333 3 333 3 333

By Nedbank to Nieuwtown for the investment property Newtown Junction – – 250 000 250 000

By Nedbank to Nieuwtown for the investment property Newtown City Lodge – – 36 000 36 000

By Investec to Brooklyn Bridge for the investment property Brooklyn Bridge Office Park – – 140 000 140 000

By RMB for the purchase of the Aurecon building in Pretoria by Lynnaur. – – – 155 000

By various funders to Lynnwood Bridge and ARF – – 3 252 000 3 252 000

By Sanlam Capital to AWIC for Waterfall Lifestyle centre – – 48 000 48 000

By Sanlam Capital to AWIC for Dimension Data – – 59 070 59 070

By Sanlam Capital to AWIC for Massbuild – – 40 000 40 000

By Sanlam Capital to AWIC for Dis-Chem – – 60 000 60 000

By Standard Bank for the obligations of AIH International (US dollar facility) – – – 885 600

By Standard Bank for the obligations of AIH International (euro facility) – – 1 586 825 344 610

By Nedbank for the development of the PwC Tower building – – 1 075 698 1 075 698

By Nedbank for the development of the PwC Tower Annex building – – 121 545 121 545

By Investec for Grove Mall of Namibia for the development of Mall of Namibia – 25 000 – 25 000

By Investec to Mall of Namibia for Grove Mall of Namibia – 200 000 – 200 000

By Standard Bank for the development of the Group Five building – 110 000 – 110 000

By Nedbank to AWIC for the development of the Mall of Africa – – 336 800 336 800

By Nedbank for a swap entered into for the Hilti building – – 3 568 3 568

By Nedbank for a swap entered into for the Stryker building – – 4 187 4 187

By Nedbank for a swap entered into for the PwC Tower building – – 114 000 114 000

By Nedbank for a swap entered into for the PwC Annex building – – 11 500 11 500

By MMI for the development of the BMW Distribution Centre – – 165 040 –

Sub-total carried forward 23 333 358 333 7 327 566 7 295 911


33. COMMITMENTS (continued)GROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Sub-total brought forward 23 333 358 333 7 327 566 7 295 911

By Standard Bank to AWIC for the development of the Waterfall City Lodge – – – 20 000

By Nedbank to AWIC for a working capital facility in AWIC – – 75 000 75 000

By BOC for a swap entered into with BOC for the Torre building – – 15 000 15 000

By Investec to AWIC for the refinancing of the 2 Eglin, Sunninghill building – – – 200 000

By Standard Bank to AWIC for the Allandale building – – – 255 000

By RMB for the development of the Novartis building – – – 126 360

By Standard Bank for a bridging facility advanced to AWIC for Waterfall City Lodge – – – 19 148

By RMB for the development of the Amrod building – – – 264 000

By Standard Bank to AWIC for the development of the Gateway West building – – – 284 250

By Standard Bank to AWIC for Maxwell Office Park – – – 120 500

By Standard Bank for a portfolio of buildings situated in Waterfall – – 270 000 20 100

By RMB for a portfolio of buildings situated in Waterfall and Pretoria – – 604 181 –

Causa surety in respect of funds advanced:By Attacq for funds advanced by Investec for Mall of Namibia to APH for Grove Mall of Namibia – 225 000 – 25 000

By Attacq in respect of funds advanced by Investec for Mall of Namibia for Grove Mall of Namibia – 136 000 – –

By Attacq for funds advanced by Investec for Mall of Namibia to Demushuwa Property Developer for Grove Mall of Namibia – 64 000 – –

By Standard Bank to The Moolman Group for the development of Maxwell Office Park 301 750 301 750 – –

Total 325 083 1 085 083 8 291 747 8 720 269

34. SUBSEQUENT EVENTSDividend declaration after the reporting dateIn line with IAS 10 Events After the Reporting Period, the declaration of the dividend of 74 cents per share occurred after the end of the reporting period on 10 September 2018, resulting in a non-adjusting event that is not recognised in the financial statements.

No other significant subsequent events occurred.



35. RELATED PARTIESRelated parties are defined as those entities with which the company transacted during the year and in which the following relationship(s) exist:

Direct subsidiaries Direct associatesAIH International AttAfrica SA

AIM fatti 365

Attacq Energy fatti Attacq

Attacq Namco (disposed 29 May 2018) Fountains Regional Mall

AMS Geelhoutboom

ARF Kompasbaai

AWIC Wingspan

Brooklyn Bridge Mall of Namibia (disposed 29 May 2018)

Harlequin Duck Travenna

Le Chateau

Leipzig Nova Indirect associatesLynnaur Artisan Development (disposed 28 March 2018)

Lynnwood Bridge Artisan Southport (disposed 22 December 2017)

Attacq Treasury Share Company AttAfrica

Majestic EAJV

Nieuwtown JV15

Indirect subsidiaries JV115

AIHI Ikeja Pemba (disposed 31 January 2017)

Adamax Atterbury Serbia (disposed 31 March 2017)

ARS Atterbury Cyprus (disposed 31 March 2017)

ESD MAS

Attacq Foundation Bishopsgate (disposed 28 February 2017)

Micawber Gruppo

Directors (note 32)P Tredoux#* (Chairman) HR El Haimer#*

MC Wilken (CEO) – resigned 31 December 2017 BT Nagle#*

M Hamman (CEO) – appointed 19 June 2018 KR Moloko#*

R Nana (CFO) – appointed 19 June 2018 S Shaw-Taylor#*

JR van Niekerk – appointed 19 June 2018 JHP van der Merwe#*

MM du Toit#* LLS van der Watt* (resigned 1 July 2017)

IN Mkhari#* (appointed 15 March 2018) # Independent* Non-executive

ManagementKey management and prescribed officers (note 32):

2018 - D Theron - MW Clampett - JR van Niekerk Appointed as executive director on 19 June 2018 - PW Mackenzie Resigned 31 December 2017 - GE Pendleton Appointed 1 April 2018 - R Nana Appointed as CFO on 19 June 2018

2017 - D Theron - MW Clampett - JR van Niekerk Appointed 1 April 2017 - PW Mackenzie - R Nana


35. RELATED PARTIES (continued)2018 2017

Shares issued/buy- back/sold/ (purchased)

R000

Sales and services to (purchases

and services from)

R000

Dividends received

fromR000

Interest received

from (paid to)

R000

Balances owing by

(to) – net of

impairmentR000

Shares issued/buy-

back/sold/ (purchased)

R000


and services from)

R000

Dividends received

fromR000

Interest received

from (paid to)

R000

Balances owing by

(to) – net of

impairmentR000

GROUPESD – – – – 943 – – – – 943

Attacq Foundation – (1 477) – – – – – – – –

Atterbury Asset Managers – – – – – – (6 366) – – –

AttAfrica – – – 80 635 787 304 – – – 73 573 776 246

AttAfrica SA – – – – 414 – – – – –

Atterbury Serbia – – – – – – – – 8 444 –

Atterbury Cyprus – – – – – – – – 16 722 –

APD – – – – – – – – 492 2 703

APH – – – – – – – – 5 613 (80 206)

APF – – – – – – – – – 123 136

Artisan Development (53 424) – 946 – – – – – – 80 580

Artisan Southport (11 453) – 2 835 – – – – – – 1 570

EAJV – – 5 332 1 201 – – – – –

fatti 365 2 000 – – – – – – – 1 131 –

fatti Attacq 667 – – – – – – – 1 265 4 599

Fountains Regional Mall – – – – 317 – – – – –

Gruppo – – – 39 721 257 225 – – – 35 516 214 245

JV15 – – – – 36 579 – – – – –

JV115 – – – – 105 467 – – – – –

Lynnwood Bridge Home Owners Association – 826 – – – – 826 – – –

MAS – – 151 041 28 – 50 362 – 105 303 355 –

Leipzig Nova – – – 27 – – – – 2 –

Kompasbaai – – – – 2 083 – – – – 592

Wingspan – – 10 331 – – – – – – –

The Club – – – – – – – – 223 –

Grove Mall (153 141) – – – – 241 – – – 32 810

Travenna – – – – – – – 2 880 – –

Non-executive directors’ remuneration (note 32) – (3 698) – – – – (3 626) – – –

Executive directors’ remuneration (note 32) – (6 220) – – – – (11 850) – – –

Prescribed officer remuneration (note 32) – (14 235) – – – – (8 567) – – –

Total (215 351) (24 804) 170 485 120 411 1 191 533 50 603 (29 583) 108 183 143 336 1 157 218





R000


and services from)

R000

Dividends received

fromR000

Interest received

from (paid to)

R000

Balances owing by

(to) – net of

impairmentR000

Shares issued/buy-


R000


and services from)

R000

Dividends received

fromR000

Interest received

from (paid to)

R000

Balances owing by

(to) – net of

impairmentR000

GROUPESD – – – – 943 – – – – 943

Attacq Foundation – (1 477) – – – – – – – –

Atterbury Asset Managers – – – – – – (6 366) – – –

AttAfrica – – – 80 635 787 304 – – – 73 573 776 246

AttAfrica SA – – – – 414 – – – – –

Atterbury Serbia – – – – – – – – 8 444 –

Atterbury Cyprus – – – – – – – – 16 722 –

APD – – – – – – – – 492 2 703

APH – – – – – – – – 5 613 (80 206)

APF – – – – – – – – – 123 136

Artisan Development (53 424) – 946 – – – – – – 80 580

Artisan Southport (11 453) – 2 835 – – – – – – 1 570

EAJV – – 5 332 1 201 – – – – –

fatti 365 2 000 – – – – – – – 1 131 –

fatti Attacq 667 – – – – – – – 1 265 4 599


Gruppo – – – 39 721 257 225 – – – 35 516 214 245

JV15 – – – – 36 579 – – – – –

JV115 – – – – 105 467 – – – – –

Lynnwood Bridge Home Owners Association – 826 – – – – 826 – – –

MAS – – 151 041 28 – 50 362 – 105 303 355 –

Leipzig Nova – – – 27 – – – – 2 –

Kompasbaai – – – – 2 083 – – – – 592

Wingspan – – 10 331 – – – – – – –

The Club – – – – – – – – 223 –

Grove Mall (153 141) – – – – 241 – – – 32 810

Travenna – – – – – – – 2 880 – –




Total (215 351) (24 804) 170 485 120 411 1 191 533 50 603 (29 583) 108 183 143 336 1 157 218




R000


and services from)

R000

Dividends received

fromR000

Interest received

from (paid to)

R000

Balances owing by

(to) – net of

impairmentR000

Shares issued/buy-


R000


and services from)

R000

Dividends received

fromR000

Interest received

from (paid to)

R000

Balances owing by

(to) – net of

impairmentR000

COMPANYAIH International – – – (4 106) (317 878) – – – 56 185 178 001

AIM – – – – (76 838) – – – – –

Attacq Energy – – – – 23 388 – – – – 25 538

ESD – – – – 943 – – – – 943

Attacq Namco (153 141) – – – – 241 – – – 32 810

ARF – – 68 000 – 146 701 – – – – 336 701

AMS 371 (4 760) – – 98 119 – (8 453) – – 69 325

AWIC – – 391 500 – 5 101 469 – – – 8 463 3 601 721

AttAfrica SA – – – – 414 – – – – 414

APD – – – – – – – – 492 4 951

APH – – – – – – – – 5 613 54 103

Brooklyn Bridge – – 19 300 – 232 841 – – – – 444

fatti Attacq 667 – – – – – – – 1 265 4 599

fatti 365 2 000 – – – – – – – 1 131 –


Harlequin Duck – – – – (1 466) – – – – (1 466)

Highgrove – – – – – – – – – –

Leipzig Nova – – – – 737 – – – – 38 585

Le Chateau – – – – 5 006 – – – – 5 001

Lynnaur – – 18 000 – (6 010) – – – – (6 610)

Lynnwood Bridge – – 55 700 – 64 372 – – – – 56 822

MAS – – 74 167 28 – 50 362 – 105 303 355 –

Nieuwtown – – – 40 658 320 295 – – – 37 621 320 289

Kompasbaai – – – – 2 083 – – – – 592

Wingspan – – 10 331 – – – – – – –

Attacq Treasury Share Company – – – – 85 416 – – – – 85 416

The Club – – – – – – – – 223 –

Travenna – – – – – – – 2 880 – –




Total (150 103) (28 913) 636 998 36 580 5 679 909 50 603 (32 496) 108 183 111 348 4 808 179

Balances owing by and to, net of impairment are detailed in note 14, 15 and 16 of the AFS.

Refer to note 33 for all sureties provided by Attacq to its related parties.



36. RISK MANAGEMENT

Changing market conditions expose the group to various financial risks, including interest rate, credit, and liquidity risks.

Although the group does not trade in financial instruments for speculative purposes, it does utilise derivative instruments to manage exposure to some of these risks.

The group finances its operations through a mixture of retained profits, bank borrowings and long-term borrowings.

There have been no significant changes during the year to the types of financial risks the group is exposed to nor to the measurement and management of these risks.

The board, through the ARC, is responsible for the group risk management.

The duties mandated by the board relating to the ARC are detailed in the report of the ARC.

The investment committee meets frequently to consider new opportunities for the group, including credit and interest risk relating to such opportunities and related financing structures.

Interest rate swap derivatives

The group has entered into interest rate swap contracts that entitle, or obligate it to receive interest at a fixed rate on notional principal amounts and entitle or obligate it to pay interest at a variable rate on the same notional principal amounts. Under these agreements the group agrees with the counterparty to exchange at predetermined intervals the difference between the fixed and variable interest amounts calculated on the notional principal amounts.

The interest rate swap derivatives have been valued using a market quoted swap curve as at 30 June 2018. This is consistent with the prior year.

The interest rate swaps have been recognised in terms of IAS 39 Financial Instruments: Recognition and Measurement, which requires that interest rate swaps be fair valued and mark to market at each reporting date.

Interest rate swaps exposed to credit risk as at 30 June 2018 are detailed in note 14.

Interest rate risk

The group’s policy is to manage interest rate risk so that fluctuations in variable rates do not have a material impact on profit and loss.

The group makes use of interest rate derivatives and fixed rate borrowings to hedge its exposure to interest rate fluctuations. Refer to note 14 and 21.

To hedge the fair value risk of fixed interest liabilities, the group uses interest rate swaps and fixes, thus hedging the fair value of the financial liabilities.

It is the policy of the group to enter into interest rate swap and fixed interest rate agreements with financial institutions to the extent that not less than 70.0% of its mortgaged liabilities are held at fixed interest rates (note 21). At 30 June 2018, 98.0% (30 June 2017: 88.0%) of borrowings were hedged and fixed.

The group’s exposure to fair value interest rate risk and cash flow risk can be summarised as follows

GROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Borrowings Bank borrowings at fixed rates and hedged 10 858 403 9 306 771 – –

Bank borrowings at variable rates 253 151 1 279 674 – 3 397

Loans at variable rates 74 060 137 145 – –

Interest rate swaps linked to JIBAR and prime rates (at fair value) 127 869 164 696 – 13 992

Total 11 313 483 10 888 286 – 17 389

The estimated impact of a 100 basis points increase in interest rates would have the following before tax impact on the profits of the group 4 551 15 815 – 174



36. RISK MANAGEMENT (continued) Liquidity risk Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due.

The group ensures that adequate funds are available to meet its expected and unexpected financial commitments through surplus funds deposited at financial institutions and undrawn borrowing facilities. In some cases certain short-term liabilities will be settled as part of predetermined approved structured deals.

The group’s contractual maturity on non-derivative financial liabilities, based on undiscounted cash flows at year end are as follows:

GROUP COMPANY

2018R000

2017R000

2018R000

2017R000

Less than one year Long-term borrowings 584 525 2 279 802 – 3 397

Other financial liabilities 74 060 137 145 – – Trade and other payables 403 550 501 380 11 303 5 866 Loans from subsidiaries – – 84 314 8 076 Cash-settled share-based payments 747 1 684 – – Finance lease obligation 1 680 1 554 – – Non-current liabilities directly associated with assets held for sale – 330 533 – –

Sub-total 1 064 562 3 252 098 95 617 17 339

Between one and five years Long-term borrowings 8 192 857 6 303 294 – –

Other financial liabilities 127 869 164 696 – 13 992 Finance lease obligation 8 164 7 561 – – Cash-settled share-based payments 559 1 496 – –

Sub-total 8 329 449 6 477 047 – 13 992

Over five years Long-term borrowings 2 334 172 1 672 816 – –

Finance lease obligation 79 070 74 035 – –

Sub-total 2 413 242 1 746 851 – –

Total 11 807 253 11 475 996 95 617 31 331

Credit risk

Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in a financial loss to the group.

The group’s cash and cash equivalents are placed with high credit quality financial institutions. Credit risk in respect of trade receivables is limited due to the spread of the customer base and credit approval processes.

The group’s exposure to credit risk is primarily in respect of tenants and is influenced by the individual characteristics and risk profile of each tenant. The exposure to credit risk from tenants is mitigated by the spread of the tenant base. The granting of credit to tenants is made on application and is approved by the finance department and the property managers based on their credit assessment of new and existing tenants. Tenants are required to supply refundable lease deposits and/or bank guarantees and/or suretyships by their principals. As at 30 June 2018, the group did not consider there to be any significant concentration of credit risk which has not been insured or adequately provided for. In providing for impairments on tenant accounts, the group takes cognisance of guarantees delivered by tenants and/or their bankers as well as unencumbered assets of tenants and their principals which may be attached.

The group has some exposure in respect of loans granted where collateral has been requested. The financial position of the counterparties are considered when granting the loans and is also evaluated on an ongoing basis.

The carrying amounts of financial assets included in the statement of financial position represent the maximum exposure to credit risk in respect of these assets. The maximum credit exposure of interest rate swaps is represented by the fair value of these contracts.

Refer to note 12 for an analysis of the group’s trade receivable’s ageing, overdue accounts and impairments.


36. RISK MANAGEMENT (continued) Insurance risk

The group is exposed to insurance risk primarily on its investment properties. The group has insured all its properties at estimated replacement values and against loss of income as a result of disrupted operations.

Foreign currency risk The group is exposed to foreign exchange risks in the following investments:

The below is applicable to the current year: - Investment in MAS, of which the exposure is denominated in euros

- Investment in AIH International, of which the exposure is denominated in US dollar and euros - Investment in AttAfrica, of which the exposure is denominated in US dollar - Investment in Gruppo, of which the exposure is denominated in US dollar - Investment in Artisan Development and Artisans Southport of which the exposure is denominated in

British pounds - Investment in Mall of Namibia, of which the exposure is denominated in Namibian dollars.

The below is applicable to the prior year as these investments were disposed of during the current and/or prior financial year:

- Asset swap agreement with Investec Securities relating to the acquisition of its investment in Stenham, of

which the exposure is denominated in euros - Investment in Bishopsgate, of which the exposure is denominated in euros and British pounds - Investment in Atterbury Cyprus, of which the exposure is denominated in euros - Investment in Atterbury Serbia, of which the exposure is denominated in euros.

The group’s exposure is managed by diversifying its investments into various currency zones.

The group’s most significant exposure to fluctuations in the foreign exchange rates are attributable to: - The group’s investment in MAS denominated in euros - The group’s Standard Bank debt denominated in euros - The group’s loans to the foreign associates (through wholly owned subsidiary AIH International) denominated

in US dollar.



36. RISK MANAGEMENT (continued)

The impact of a change in the exchange rates on the NAV of the group is as follows:

GROUP2018 2017

A decrease of R1.00 to the US dollar (76 003) (13 607)

An increase of R1.00 to the US dollar 76 003 13 607

A decrease of R1.00 to the euro (357 856) (182 846)

An increase of R1.00 to the euro 357 856 182 846

The amount used to determine the impact of a movement in the US dollar exchange rate was the group’s US dollar exposure relating to Africa.

The amount used to determine the impact of a movement in the euro exchange rate was the group’s euro exposure relating to MAS as well as the euro debt with Standard Bank.

The assumption was made that the balance does not materially differ from the balance reported at 30 June 2018.

Capital risk management

The group manages its capital to ensure that entities in the group will be able to continue as going concerns while maximising the return to stakeholders through the optimisation of debt and equity balance. The group’s overall strategy remains unchanged from 2017.

The capital structure of the group consists of net debt (borrowings as detailed in note 21 offset by cash and bank as detailed in note 17) and equity of the group (comprising issued capital, reserve, retained earnings and non-controlling interests as detailed in note 9.1 and 19).

The group is not subject to any externally imposed capital requirements.

The board monitors the debt equity ratio on an ongoing basis to achieve optimal value to the shareholders.


37. FINANCIAL INSTRUMENTSGROUP

2018

Categories of financial instruments NoteTotal

R000Cash

R000At FVTPL

R000

Loans and receivables

at amortised cost

R000

A-F-S financial

assetsR000

Financial liabilities at

amortised cost

R000

Equity and non-financial instruments

R000

ASSETSNon-current assetsProperty and equipment 4 42 667 – – – – – 42 667 Investment property 5 21 234 085 – – – – – 21 234 085 Straight-line lease debtor 932 233 – – – – – 932 233 Deferred initial lease expenditure 9 275 – – – – – 9 275 Intangible assets 6 266 502 – – – – – 266 502 Goodwill 7 67 774 – – – – – 67 774 Investment in associates and joint ventures 8 3 328 852 – – – – – 3 328 852 Other investments 10 488 – – – 488 – – Deferred tax assets 11 11 – – – – – 11 Other financial assets 14 373 651 – 19 502 354 149 – – – Current assetsTaxation receivable 2 714 – – – – – 2 714 Trade and other receivables 12 212 563 – – 212 243 – – 320 Inventory 13 42 484 – – – – – 42 484 Other financial assets 14 16 308 – – 16 308 – – – Loans to associates and joint ventures 15 1 190 590 – – 1 190 590 – – – Cash and cash equivalents 17 1 239 631 1 239 631 – – – – – Non-current assets held for sale 18 118 871 – – – – – 118 871

Total assets 29 078 699 1 239 631 19 502 1 773 290 488 – 26 045 788

LIABILITIESNon-current liabilitiesLong-term borrowings 21 10 527 029 – – – – 10 527 029 – Other financial liabilities 14 127 869 – 127 869 – – – – Cash settled share-based payments 20 559 – – – – – 559 Finance lease obligation 22 88 914 – – – – 88 914 – Deferred tax liabilities 11 178 924 – – – – – 178 924 Current liabilitiesLong-term borrowings 21 584 525 – – – – 584 525 – Other financial liabilities 14 74 060 – – – – 74 060 – Taxation payable 1 496 – – – – – 1 496 Cash-settled share-based payments 20 747 – – – – – 747 Trade and other payables 23 403 550 – – – – 389 337 14 213 Provisions 24 32 196 – – – – – 32 196 Non-current liabilities associated with non-current assets held for sale 18 – – – – – – –

Total liabilities 12 019 869 – 127 869 – – 11 663 865 228 135



37. FINANCIAL INSTRUMENTSGROUP

2018


R000Cash

R000At FVTPL

R000


at amortised cost

R000

A-F-S financial

assetsR000


amortised cost

R000


R000

ASSETSNon-current assetsProperty and equipment 4 42 667 – – – – – 42 667 Investment property 5 21 234 085 – – – – – 21 234 085 Straight-line lease debtor 932 233 – – – – – 932 233 Deferred initial lease expenditure 9 275 – – – – – 9 275 Intangible assets 6 266 502 – – – – – 266 502 Goodwill 7 67 774 – – – – – 67 774 Investment in associates and joint ventures 8 3 328 852 – – – – – 3 328 852 Other investments 10 488 – – – 488 – – Deferred tax assets 11 11 – – – – – 11 Other financial assets 14 373 651 – 19 502 354 149 – – – Current assetsTaxation receivable 2 714 – – – – – 2 714 Trade and other receivables 12 212 563 – – 212 243 – – 320 Inventory 13 42 484 – – – – – 42 484 Other financial assets 14 16 308 – – 16 308 – – – Loans to associates and joint ventures 15 1 190 590 – – 1 190 590 – – – Cash and cash equivalents 17 1 239 631 1 239 631 – – – – – Non-current assets held for sale 18 118 871 – – – – – 118 871

Total assets 29 078 699 1 239 631 19 502 1 773 290 488 – 26 045 788

LIABILITIESNon-current liabilitiesLong-term borrowings 21 10 527 029 – – – – 10 527 029 – Other financial liabilities 14 127 869 – 127 869 – – – – Cash settled share-based payments 20 559 – – – – – 559 Finance lease obligation 22 88 914 – – – – 88 914 – Deferred tax liabilities 11 178 924 – – – – – 178 924 Current liabilitiesLong-term borrowings 21 584 525 – – – – 584 525 – Other financial liabilities 14 74 060 – – – – 74 060 – Taxation payable 1 496 – – – – – 1 496 Cash-settled share-based payments 20 747 – – – – – 747 Trade and other payables 23 403 550 – – – – 389 337 14 213 Provisions 24 32 196 – – – – – 32 196 Non-current liabilities associated with non-current assets held for sale 18 – – – – – – –



37. FINANCIAL INSTRUMENTS (continued)GROUP

2017


R000Cash

R000At FVTPL

R000

Loans and receivables at

amortised cost

R000

A-F-S financial

assetsR000

Financial liabilities at amortised

costR000


R000

ASSETSNon-current assetsProperty and equipment 4 52 272 – – – – – 52 272

Investment property 5 19 735 365 – – – – – 19 735 365

Straight-line lease debtor 801 496 – – – – – 801 496

Deferred initial lease expenditure 7 666 – – – – – 7 666

Intangible assets 6 290 539 – – – – – 290 539

Goodwill 7 67 774 – – – – – 67 774

Investment in associates 8 3 153 392 – – – – – 3 153 392

Other investments 10 11 941 – – – 11 941 – –

Deferred tax assets 11 3 329 – – – – – 3 329

Other financial assets 14 304 368 – 15 884 288 484 – – –

Current assets –

Taxation receivable 951 – – – – – 951

Trade and other receivables 12 174 623 – – 166 246 – – 8 377

Inventory 13 25 278 – – – – – 25 278

Other financial assets 14 193 590 – – 193 590 – – –

Loans to associates 15 1 250 278 – – 1 250 278 – – –

Cash and cash equivalents 17 447 846 447 846 – – – – –

Non-current assets held for sale 18 801 483 – – – – – 801 483

Total assets 27 322 191 447 846 15 884 1 898 598 11 941 – 24 947 922

LIABILITIESNon-current liabilitiesLong-term borrowings 21 7 976 110 – – – – 7 976 110 –

Other financial liabilities 14 164 696 – 164 696 – – – –

Cash-settled share-based payments 20 1 496 – – – – – 1 496

Finance lease obligation 22 83 150 – – – – 83 150 –

Provisions for liabilities relating to associates – – – – – – –

Deferred tax liabilities 11 1 932 140 – – – – – 1 932 140

Current liabilities Long-term borrowings 21 2 279 802 – – – – 2 279 802 –

Other financial liabilities 14 137 145 – 588 – – 136 557 –

Loans from associates 15 – – – – – – –

Taxation payable 7 665 – – – – – 7 665


Trade and other payables 23 501 380 – – – – 494 485 6 895

Provisions 24 2 777 – – – – – 2 777

Non-current liabilities associated with non-current assets held for sale 18 330 533 – – – – 330 533 –

Total liabilities 13 418 578 – 165 284 – – 11 300 637 1 952 657



37. FINANCIAL INSTRUMENTS (continued)GROUP

2017


R000Cash

R000At FVTPL

R000

Loans and receivables at

amortised cost

R000

A-F-S financial

assetsR000


costR000


R000

ASSETSNon-current assetsProperty and equipment 4 52 272 – – – – – 52 272

Investment property 5 19 735 365 – – – – – 19 735 365

Straight-line lease debtor 801 496 – – – – – 801 496

Deferred initial lease expenditure 7 666 – – – – – 7 666

Intangible assets 6 290 539 – – – – – 290 539

Goodwill 7 67 774 – – – – – 67 774

Investment in associates 8 3 153 392 – – – – – 3 153 392

Other investments 10 11 941 – – – 11 941 – –

Deferred tax assets 11 3 329 – – – – – 3 329

Other financial assets 14 304 368 – 15 884 288 484 – – –

Current assets –

Taxation receivable 951 – – – – – 951

Trade and other receivables 12 174 623 – – 166 246 – – 8 377

Inventory 13 25 278 – – – – – 25 278


Loans to associates 15 1 250 278 – – 1 250 278 – – –



Total assets 27 322 191 447 846 15 884 1 898 598 11 941 – 24 947 922

LIABILITIESNon-current liabilitiesLong-term borrowings 21 7 976 110 – – – – 7 976 110 –



Finance lease obligation 22 83 150 – – – – 83 150 –

Provisions for liabilities relating to associates – – – – – – –


Current liabilities Long-term borrowings 21 2 279 802 – – – – 2 279 802 –

Other financial liabilities 14 137 145 – 588 – – 136 557 –




Trade and other payables 23 501 380 – – – – 494 485 6 895

Provisions 24 2 777 – – – – – 2 777

Non-current liabilities associated with non-current assets held for sale 18 330 533 – – – – 330 533 –

Total liabilities 13 418 578 – 165 284 – – 11 300 637 1 952 657


37. FINANCIAL INSTRUMENTS (continued)COMPANY

2018


R000Cash

R000At FVTPL

R000


at amortised cost

R000

A-F-S financial

assetsR000


amortised cost

R000


R000

ASSETS Non-current assets Investment in associates and joint ventures 8 43 457 – – – 43 457 – –

Investment in subsidiaries 9 12 236 886 – – – 12 236 886 – – Other investments 10 488 – – – 488 – – Loans to subsidiaries 16 5 604 423 – – 5 604 423 – – – Other financial assets 14 2 643 – – 2 643 – – –

Current assets Taxation receivable 2 707 – – – – – 2 707 Trade and other receivables 12 2 336 – – 2 336 – – –

Other financial assets 14 – – – – – – – Loans to associates and joint ventures 15 2 814 – – 2 814 – – – Loans to subsidiaries 16 532 961 – – 532 961 – – – Cash and cash equivalents 17 38 760 38 760 – – – – – Non-current assets held for sale 18 3 149 – – – – – 3 149

Total assets 18 470 624 38 760 – 6 145 177 12 280 831 – 5 856

LIABILITIES Non-current liabilities Loans from subsidiaries 16 376 918 – – – – 376 918 –

Deferred tax liabilities 11 74 219 – – – – – 74 219 Current liabilities Loans from subsidiaries 16 84 314 – – – – 84 314 –

Taxation payable – – – – – – – Provisions 24 739 – – – – – 739 Trade and other payables 23 11 303 – – – – 11 303 –

Total liabilities 547 493 – – 376 918 – 472 535 (301 960)




2018


R000Cash

R000At FVTPL

R000


at amortised cost

R000

A-F-S financial

assetsR000


amortised cost

R000


R000

ASSETS Non-current assets Investment in associates and joint ventures 8 43 457 – – – 43 457 – –

Investment in subsidiaries 9 12 236 886 – – – 12 236 886 – – Other investments 10 488 – – – 488 – – Loans to subsidiaries 16 5 604 423 – – 5 604 423 – – – Other financial assets 14 2 643 – – 2 643 – – –

Current assets Taxation receivable 2 707 – – – – – 2 707 Trade and other receivables 12 2 336 – – 2 336 – – –

Other financial assets 14 – – – – – – – Loans to associates and joint ventures 15 2 814 – – 2 814 – – – Loans to subsidiaries 16 532 961 – – 532 961 – – – Cash and cash equivalents 17 38 760 38 760 – – – – – Non-current assets held for sale 18 3 149 – – – – – 3 149

Total assets 18 470 624 38 760 – 6 145 177 12 280 831 – 5 856

LIABILITIES Non-current liabilities Loans from subsidiaries 16 376 918 – – – – 376 918 –

Deferred tax liabilities 11 74 219 – – – – – 74 219 Current liabilities Loans from subsidiaries 16 84 314 – – – – 84 314 –

Taxation payable – – – – – – – Provisions 24 739 – – – – – 739 Trade and other payables 23 11 303 – – – – 11 303 –

Total liabilities 547 493 – – 376 918 – 472 535 (301 960)



2017


R000Cash

R000At FVTPL

R000


at amortised cost

R000

A-F-S financial

assetsR000


costR000


R000

ASSETS Non-current assets Investment in associates and joint ventures 8 3 457 313 – – – 3 457 313 – –

Investment in subsidiaries 9 7 040 159 – – – 7 040 159 – –

Other investments 10 488 – – – 488 – –

Loans to subsidiary 16 178 001 – – 178 001 – – –


Current assets Trade and other receivables 12 2 237 – – 2 237 – – –


Loans to associates and joint ventures 15 5 605 – – 5 605 – – –

Loans to subsidiaries 16 4 572 652 – – 4 572 652 – – –



Total assets 15 496 014 17 914 – 4 820 192 10 497 960 – 159 948

LIABILITIES Non-current liabilities Long-term borrowings 21 – – – – – – –



Current liabilities Long-term borrowings 21 3 397 – – – – 3 397 –


Loans from subsidiaries 16 8 076 – – – – 8 076 –


Trade and other payables 23 5 866 – – – – 5 866 –




38. FAIR VALUE MEASUREMENTSThis note provides information about how the group determines fair values of various financial assets and financial liabilities.

Fair value of the group’s financial assets and financial liabilities are measured at fair value on a recurring basis.

GROUP COMPANY

Note2018

R0002017

R0002018

R0002017

R000

Investment property 5

Level 3 21 234 085 19 735 365 – –

The fair value of investment property is determined using the following techniques: - Development rights – the residual land valuation method; - Land – residual land valuation method; - Developments under construction – discounted cash flow methodology; and - Completed developments – discounted cash flow methodology.

Future cash flows used in determining the discounted cash flows are determined with reference to the signed leases between the group and tenants. Discount, capitalisation and vacancy rates used in the estimate are determined by independent experts.

Refer to note 5 for the significant unobservable inputs and the relationship between the unobservable inputs and the fair value.

GROUP COMPANY

Note2018

R0002017

R0002018

R0002017

R000

Non-current assets held for sale 18

Level 3 118 871 801 483 3 149 159 948

Total 118 871 801 483 3 149 159 948

The fair value of non-current assets held for sale is determined using the following techniques: - completed developments (level 3) – using the contractual selling prices for the related properties; and - completed developments – discounted cash flow methodology.

Future cash flows used in determining the discounted cash flows are determined with reference to the signed leases between the group and tenants. Discount, capitalisation, and vacancy rates used in the estimate are determined by independent experts.

The fair value of other investments is determined with reference to the net asset value of the underlying investment.

There are no unobservable inputs identifiable that would have a significant impact on the fair value of the other investments.

Refer to note 18 for the detailed analysis of the balances.



38. FAIR VALUE MEASUREMENTS (continued)

GROUP COMPANY

Note2018

R0002017

R0002018

R0002017

R000

Investment in subsidiaries 9

Level 3 – – 12 236 886 7 040 159

The fair value of investments in subsidiaries is determined with reference to the net asset value of the underlying subsidiary.

There are no unobservable inputs identifiable that would have a significant impact on the fair value of the investments in subsidiaries.

Refer to note 9 for the detailed analysis of the other investment in subsidiaries balances.

GROUP COMPANY

Note2018

R0002017

R0002018

R0002017

R000

Investment in associates and joint ventures 8

Level 3 3 328 852 3 153 392 43 457 55 535

Level 1 – – – 3 401 778

Total 3 328 852 3 153 392 43 457 3 457 313

The fair value of the group’s investments in associates and joint ventures are determined with reference to the net asset value of the underlying associates and joint ventures.

The fair value of the company’s investments in associates and joint ventures are determined with reference to the net asset value of the underlying associates and joint ventures.

There are no unobservable inputs identifiable that would have a significant impact on the fair value of the investments in associates and joint ventures.

Refer to note 8 for the detailed analysis of the other investments in associates and joint venture balances.

GROUP COMPANY

Note2018

R0002017

R0002018

R0002017

R000

Other investments 10

Level 3 488 11 941 488 488

The fair value of other investments is determined with reference to the net asset value of the underlying investment.

There are no unobservable inputs identifiable that would have a significant impact on the fair value of the other investments.

Refer to note 10 for the detailed analysis of the other investment balances.



GROUP COMPANY

Note2018

R0002017

R0002018

R0002017

R000

Other financial assets (liabilities) 14

Other financial assets

Level 2 19 502 15 884 – –

Level 3 370 457 482 074 2 643 61 697

Other financial liabilities

Level 2 (127 869) (165 284) – (13 992)

Level 3 (74 060) (136 557) – –

Total 188 030 196 117 2 643 47 705

The fair value of derivative financial instruments including other financial assets and liabilities is determined annually as the difference in the net present value of future cash flows on the mortgage bond at the floating and fixed rates. The difference is recognised as an asset or liability.

Future cash flows used in determining the discounted cash flows are determined with reference to forward interest rates, from observable yield curves at the end of the reporting period, and contract interest rates, discounted at rates that reflect the credit risk of various counterparties.

During the current year, there has been no movement relating to fair value hierarchy with respect to the other financial assets and liabilities listed above.

Refer to note 14 for a reconciliation of the financial assets and liabilities.




GROUP COMPANY

Note2018

R0002017

R0002018

R0002017

R000

Loans receivable/(payable)

Loans to associates and joint ventures 15

Level 3 1 190 590 1 250 278 2 814 5 605

Loans from subsidiaries 16

Level 3 – – (376 918) –

Loans to subsidiaries 16

Level 3 – – 5 604 423 178 001

Loans to subsidiaries – current 16

Level 3 – – 532 961 4 572 652

Loans from subsidiaries – current 16

Level 3 – – (84 314) (8 076)

Trade and other receivables 12

Level 3 212 243 166 246 2 336 2 237

Trade and other payables 23

Level 3 (389 337) (494 485) (11 303) (5 866)

The fair value of the above loans receivable, loans payable, trade and other receivables and trade and other payables are designated as level 3.

The carrying amounts of the balances are deemed by the directors to approximate their fair values. The fair value of balances are determined with reference to the carrying value and the net asset value of the underlying investments.

Refer to the relevant notes as indicated above for a detailed analysis of the balances.


39. SEGMENTAL REPORTING GROUP2018

Office and mixed use

R000RetailR000

IndustrialR000

HotelR000

Waterfalldevelop-

mentsR000

Head office SA

R000

Total SA

R000

MASEuropean

R000

Rest ofAfricaR000

Head office GlobalR000

TotalR000

Statement of financial positionInvestment property 7 501 801 10 140 174 1 286 827 427 663 – 5 000 19 361 465 – – – 19 361 465Waterfall developments – – – – 1 872 620 – 1 872 620 – – – 1 872 620Developments under construction – – – – 346 441 – 346 441 – – – 346 441Waterfall development rights – – – – 879 324 – 879 324 – – – 879 324Infrastructure and services – – – – 646 855 – 646 855 – – – 646 855

Straight-line lease debtor 557 474 252 892 99 577 22 290 – – 932 233 – – – 932 233Intangible assets and goodwill – – – – – 334 276 334 276 – – – 334 276Investments in associates and joint ventures 954 40 121 91 619 – – 2 382 135 076 3 145 828 47 948 – 3 328 852Other financial assets 22 920 13 288 – – – 353 751 389 959 – – – 389 959Loans to associates and joint ventures – – 143 247 – – 2 814 146 061 – 1 044 529 – 1 190 590Trade and other receivables 109 565 69 396 23 286 2 674 – 7 587 212 508 – – 55 212 563Cash and cash equivalents 67 684 93 817 5 862 192 – 1 003 838 1 171 393 – – 68 238 1 239 631Inventory 42 484 – – – – – 42 484 – – – 42 484Non-current assets held for sale 46 668 – 68 481 – – 775 115 924 – – 2 947 118 871Other assets 3 000 – – – – 52 155 55 155 – – – 55 155

Total assets 8 352 550 10 609 688 1 718 899 452 819 1 872 620 1 762 578 24 769 154 3 145 828 1 092 477 71 240 29 078 699

Long-term borrowings – – – – – 9 680 546 9 680 546 – – 1 431 008 11 111 554Other financial liabilities 25 474 27 537 12 807 – – 134 397 200 215 – – 1 714 201 929Deferred tax liabilities – – – – – 48 841 48 841 130 083 – – 178 924Trade and other payables 188 611 152 641 33 113 2 870 – 26 304 403 539 – – 11 403 550Other liabilities – – – – 25 476 96 940 122 416 – – 1 496 123 912

Total liabilities 214 085 180 178 45 920 2 870 25 476 9 987 028 10 455 557 130 083 – 1 434 229 12 019 869

Statement of comprehensive incomeRental income 739 306 1 135 254 107 598 46 663 – 6 673 2 035 494 – – – 2 035 494Straight-line lease income adjustment 28 673 29 878 43 278 1 638 – – 103 467 – – – 103 467Property expenses (226 974) (470 003) (32 000) (12 673) – 16 924 (724 726) – – – (724 726)

Net rental income 541 005 695 129 118 876 35 628 – 23 597 1 414 235 – – – 1 414 235Sale of inventory 19 344 – 10 521 – – – 29 865 – – – 29 865Cost of sales (16 522) – (8 396) – – – (24 918) – – – (24 918)Other income 70 699 58 745 – – – 23 017 152 461 – 5 214 – 157 675Operating expenses (32 060) (32 790) (5 972) (731) – (93 525) (165 078) – – (5 178) (170 256)Other expenses (7 918) (13 395) (2 231) – (39 500) (1 773) (64 817) – (83 490) (4 355) (152 662)

Operating profit (loss) 574 548 707 689 112 798 34 897 (39 500) (48 684) 1 341 748 – (78 276) (9 533) 1 253 939Amortisation of intangible assets – – – – – (24 037) (24 037) – – – (24 037)Fair value adjustments 148 153 159 567 (10 842) 20 425 11 667 41 494 370 464 – – (199) 370 265Gain on available for sale financial assets – – – – – 35 750 35 750 – – – 35 750Net income from associates 36 (4 164) 5 362 – – (284) 950 68 774 908 11 074 81 706Investment income 3 340 8 996 13 9 – 57 688 70 046 – 120 619 3 782 194 447Finance costs – – – – – (916 593) (916 593) – – (33 908) (950 501)

Profit (loss) before tax 726 077 872 088 107 331 55 331 (27 833) (854 666) 878 328 68 774 43 251 (28 784) 961 569Taxation – – – – – 1 844 486 1 844 486 (93 297) – (1 424) 1 749 765

Profit (loss) for the year 726 077 872 088 107 331 55 331 (27 833) 989 820 2 722 814 (24 523) 43 251 (30 208) 2 711 334Non-controlling interests – – – – – 59 792 59 792 – – – 59 792

Profit (loss) for the year attributable to owners 726 077 872 088 107 331 55 331 (27 833) 930 028 2 663 022 (24 523) 43 251 (30 208) 2 651 542



39. SEGMENTAL REPORTING GROUP2018


R000RetailR000

IndustrialR000

HotelR000

Waterfalldevelop-

mentsR000

Head office SA

R000

Total SA

R000

MASEuropean

R000

Rest ofAfricaR000


TotalR000

Statement of financial positionInvestment property 7 501 801 10 140 174 1 286 827 427 663 – 5 000 19 361 465 – – – 19 361 465Waterfall developments – – – – 1 872 620 – 1 872 620 – – – 1 872 620Developments under construction – – – – 346 441 – 346 441 – – – 346 441Waterfall development rights – – – – 879 324 – 879 324 – – – 879 324Infrastructure and services – – – – 646 855 – 646 855 – – – 646 855

Straight-line lease debtor 557 474 252 892 99 577 22 290 – – 932 233 – – – 932 233Intangible assets and goodwill – – – – – 334 276 334 276 – – – 334 276Investments in associates and joint ventures 954 40 121 91 619 – – 2 382 135 076 3 145 828 47 948 – 3 328 852Other financial assets 22 920 13 288 – – – 353 751 389 959 – – – 389 959Loans to associates and joint ventures – – 143 247 – – 2 814 146 061 – 1 044 529 – 1 190 590Trade and other receivables 109 565 69 396 23 286 2 674 – 7 587 212 508 – – 55 212 563Cash and cash equivalents 67 684 93 817 5 862 192 – 1 003 838 1 171 393 – – 68 238 1 239 631Inventory 42 484 – – – – – 42 484 – – – 42 484Non-current assets held for sale 46 668 – 68 481 – – 775 115 924 – – 2 947 118 871Other assets 3 000 – – – – 52 155 55 155 – – – 55 155

Total assets 8 352 550 10 609 688 1 718 899 452 819 1 872 620 1 762 578 24 769 154 3 145 828 1 092 477 71 240 29 078 699

Long-term borrowings – – – – – 9 680 546 9 680 546 – – 1 431 008 11 111 554Other financial liabilities 25 474 27 537 12 807 – – 134 397 200 215 – – 1 714 201 929Deferred tax liabilities – – – – – 48 841 48 841 130 083 – – 178 924Trade and other payables 188 611 152 641 33 113 2 870 – 26 304 403 539 – – 11 403 550Other liabilities – – – – 25 476 96 940 122 416 – – 1 496 123 912

Total liabilities 214 085 180 178 45 920 2 870 25 476 9 987 028 10 455 557 130 083 – 1 434 229 12 019 869

Statement of comprehensive incomeRental income 739 306 1 135 254 107 598 46 663 – 6 673 2 035 494 – – – 2 035 494Straight-line lease income adjustment 28 673 29 878 43 278 1 638 – – 103 467 – – – 103 467Property expenses (226 974) (470 003) (32 000) (12 673) – 16 924 (724 726) – – – (724 726)

Net rental income 541 005 695 129 118 876 35 628 – 23 597 1 414 235 – – – 1 414 235Sale of inventory 19 344 – 10 521 – – – 29 865 – – – 29 865Cost of sales (16 522) – (8 396) – – – (24 918) – – – (24 918)Other income 70 699 58 745 – – – 23 017 152 461 – 5 214 – 157 675Operating expenses (32 060) (32 790) (5 972) (731) – (93 525) (165 078) – – (5 178) (170 256)Other expenses (7 918) (13 395) (2 231) – (39 500) (1 773) (64 817) – (83 490) (4 355) (152 662)

Operating profit (loss) 574 548 707 689 112 798 34 897 (39 500) (48 684) 1 341 748 – (78 276) (9 533) 1 253 939Amortisation of intangible assets – – – – – (24 037) (24 037) – – – (24 037)Fair value adjustments 148 153 159 567 (10 842) 20 425 11 667 41 494 370 464 – – (199) 370 265Gain on available for sale financial assets – – – – – 35 750 35 750 – – – 35 750Net income from associates 36 (4 164) 5 362 – – (284) 950 68 774 908 11 074 81 706Investment income 3 340 8 996 13 9 – 57 688 70 046 – 120 619 3 782 194 447Finance costs – – – – – (916 593) (916 593) – – (33 908) (950 501)

Profit (loss) before tax 726 077 872 088 107 331 55 331 (27 833) (854 666) 878 328 68 774 43 251 (28 784) 961 569Taxation – – – – – 1 844 486 1 844 486 (93 297) – (1 424) 1 749 765

Profit (loss) for the year 726 077 872 088 107 331 55 331 (27 833) 989 820 2 722 814 (24 523) 43 251 (30 208) 2 711 334Non-controlling interests – – – – – 59 792 59 792 – – – 59 792

Profit (loss) for the year attributable to owners 726 077 872 088 107 331 55 331 (27 833) 930 028 2 663 022 (24 523) 43 251 (30 208) 2 651 542


39. SEGMENTAL REPORTING (continued) GROUP2017


R000RetailR000

IndustrialR000

HotelR000

Waterfalldevelop-

mentsR000

Head office SA

R000

Total SA

R000

MASEuropean

R000

Rest ofAfricaR000


TotalR000

Statement of financial positionInvestment property 5 188 527 9 896 380 870 137 407 240 – 5 000 16 367 284 – – – 16 367 284

Waterfall developments – – – – 3 368 081 – 3 368 081 – – – 3 368 081

Developments under construction – – – – 1 598 966 – 1 598 966 – – – 1 598 966

Waterfall development rights – – – – 1 058 236 – 1 058 236 – – – 1 058 236

Infrastructure and services – – – – 710 879 – 710 879 – – – 710 879

Straight-line lease debtor 501 534 223 013 56 298 20 651 – – 801 496 – – – 801 496

Intangible assets and goodwill – – – – – 358 313 358 313 – – – 358 313

Investments in associates and joint ventures 918 54 617 91 591 – – – 147 126 2 729 308 223 534 53 424 3 153 392

Other financial assets 35 183 142 118 – – – 319 087 496 388 – – 1 570 497 958

Loans to associates and joint ventures – – 140 792 – – 5 605 146 397 – 1 023 301 80 580 1 250 278

Trade and other receivables 77 926 82 286 5 583 1 446 – 7 295 174 536 – – 87 174 623

Cash and cash equivalents 19 468 96 476 6 708 148 – 237 284 360 084 – – 87 762 447 846

Inventory – – 25 278 – – – 25 278 – – – 25 278

Non-current assets held for sale 603 025 – – – – 781 603 806 – – 197 677 801 483

Other assets – – – – – 64 706 64 706 – – 11 453 76 159

Total assets 6 426 581 10 494 890 1 196 387 429 485 3 368 081 998 071 22 913 495 2 729 308 1 246 835 432 553 27 322 191

Long-term borrowings – – – – – 9 158 969 9 158 969 – – 1 096 943 10 255 912

Other financial liabilities 17 268 183 899 70 174 1 510 – 27 741 300 592 – – 1 249 301 841

Deferred tax liabilities – – – – – 1 861 469 1 861 469 36 786 33 885 – 1 932 140

Trade and other payables 83 532 149 376 137 150 2 125 – 129 186 501 369 – – 11 501 380

Liabilities held for sale – – – – – 330 533 330 533 – – – 330 533

Other liabilities – – – – – 94 807 94 807 – – 1 965 96 772

Total liabilities 100 800 333 275 207 324 3 635 – 11 602 705 12 247 739 36 786 33 885 1 100 168 13 418 578

Statement of comprehensive incomeRental income 663 638 1 072 011 67 569 45 085 – 12 790 1 861 093 – – – 1 861 093

Straight-line lease income adjustment 97 826 74 390 19 981 7 605 – – 199 802 – – – 199 802

Property expenses (168 455) (462 513) (19 075) (13 023) – (79 211) (742 277) – – – (742 277)

Net rental income 593 009 683 888 68 475 39 667 – (66 421) 1 318 618 – – – 1 318 618

Sale of inventory – – – – – – – – – – –

Cost of sales – – – – – – – – – – –

Other income 17 787 6 120 – – – 1 051 24 958 – – 35 505 60 463

Operating expenses (26 515) (32 594) (3 117) (1 470) – (94 100) (157 796) – – (1 834) (159 630)

Other expenses (9 640) (10) (7 824) – – (25 805) (43 279) – (266 180) (116 641) (426 100)

Operating profit (loss) 574 641 657 404 57 534 38 197 – (185 275) 1 142 501 – (266 180) (82 970) 793 351

Amortisation of intangible assets – – – – – (22 060) (22 060) – – – (22 060)

Fair value adjustments 44 060 403 286 68 092 21 498 127 589 (137 628) 526 897 – – 684 527 581

Net income from associates 37 1 283 22 385 – – (496) 23 209 190 008 3 159 33 504 249 880

Investment income 36 183 5 189 14 852 35 – (2 662) 53 597 – 109 089 26 850 189 536

Finance costs – – – – – (891 536) (891 536) – – (95 875) (987 411)

Profit (loss) before tax 654 921 1 067 162 162 863 59 730 127 589 (1 239 657) 832 608 190 008 (153 932) (117 807) 750 877

Taxation – – – – – (112 194) (112 194) (36 096) – (2 307) (150 597)

Profit (loss) for the year 654 921 1 067 162 162 863 59 730 127 589 (1 351 851) 720 414 153 912 (153 932) (120 114) 600 280

Non-controlling interests – – – – – (29 886) (29 886) – – – (29 886)

Profit (loss) for the year attributable to owners 654 921 1 067 162 162 863 59 730 127 589 (1 381 737) 690 528 153 912 (153 932) (120 114) 570 394



39. SEGMENTAL REPORTING (continued)Reconciliation of profit for the year to distributable earnings

GROUP

2018R000

Profit for the year attributable to Attacq’s shareholders 2 651 542 Profit on disposal of subsidiary (5 633)Loss on disposal of other investments 2 612 Profit on disposal of investment property (14 947)Impairment of associates, other investments and loans 51 197 Realisation of A-F-S financial assets (35 750)Fair value adjustments (370 265)Net income from associates and joint ventures (81 706)Non-controlling interests’ share of fair value adjustments (25 395)Straight-line lease income adjustments (95 967)Adjustment for net non-cash interest from associates (87 613)Net cash interest received from associates 42 425 Depreciation and amortisation 40 335 Foreign currency translation effect 50 698 Finance lease interest 3 784 Dividends received from associates 166 723 Write-off of other trade and receivable 52 492 Write-off of loan by APD net of non-controlling interest (56 178)Non-cash interest accrued 7 536 Movement in provision 3 943 Deferred taxation (1 771 676)Actual finance lease payments (773)

Distributable earnings for the year 527 384

Number of shares in issue* 703 155 224 Weighted average number of shares in issue* 702 989 909 Diluted weighted average number of shares in issue* 708 584 902 Distributable earnings per shareBasic (cents) 75.02 Diluted (cents) 75.02 DistributionInterim –Final 520 335 Actual number of shares in issue* 703 155 224 Distribution per share (cents) 74.00 Interim –Final 74.00

* Adjusted for 46 427 553 treasury shares (2017: 46 427 553).



40. DIRECT SUBSIDIARIES AND ASSOCIATES

COMPANY% SHARES

Nature of company

Issued shares

30 June 2018 2018 2017 2018 2017

AIH International (Mauritian)

Investment 1 100.00 100.00 1 1

AIM (Note A) Investment 1 000 100.00 – 1 000 –

Attacq Energy Asset management 1 100.00 100.00 1 1

AMS Property investment 9 028 100.00 100.00 9 028 9 028

AWIC Property investment 100 000 100.00 100.00 100 000 100 000

Brooklyn Bridge Dormant 1 000 100.00 100.00 1 000 1 000

Harlequin Duck Development 400 100.00 100.00 400 400

Le Chateau Investment 1 000 100.00 100.00 1 000 1 000

Leipzig Nova Property investment 100 100.00 100.00 100 100

Lynnwood Bridge Property investment 1 828 100.00 100.00 1 828 1 828

ARF Property investment 735 624 100.00 100.00 735 624 735 624

Lynnaur Investment 105 100.00 100.00 105 105

Attacq Treasury Share Company

Property investment 100 100.00 100.00 100 100

MAS (Note B) Property investment 645 343 798 – 31.41 – 146 818 251

Majestic Property investment 100 50.00 50.00 50 50

Nieuwtown Property investment 100 50.00 50.00 50 50

Wingspan Property investment 630 732 34.44 34.44 217 201 217 201

Kompasbaai Property investment 100 33.00 33.00 33 33

Travenna Investment 1 000 36.00 36.00 360 360

fatti 365 (Note C) Investment 182 43.96 50.00 80 50

fatti Attacq (Note D)

Property investment 400 40.00 50.00 160 120

Fountains Regional Mall

Management 100 000 12.73 12.73 12 731 12 731

AttAfrica SA Investment 1 000 31.83 31.83 318 318

Attacq Namco (Note E)

Investment 100 – 100.00 – 100

The principal place of incorporation of all the above is South Africa, except for AIH International which is Mauritius and MAS which is Isle of Man.

The financial year end of all the above is 30 June.

Changes in the effective shareholding that the group has in the entities above, is shown below:A AIM (wholly owned subsidiary of Attacq) was incorporated during March 2018. AIM holds the

investment in MAS. The investment in MAS was transferred to AIM in order to comply with REIT legislation.

B MAS shareholding was transferred to AIM (refer to note B).

C fatti 365 issued new shares on 27 June 2018 which the group did not subscribe to in the same ratio than the other shareholders and as a result diluted the shareholding.

D fatti Attacq issued new shares on 30 June 2018 which the group did not subscribe to in the same ratio than the other shareholders and as a result diluted the shareholding.

E Disposed Attacq Namco during the current year on 29 May 2018.


SHAREHOLDER INFORMATIONBeneficial shareholders holding 5.0% or more of Attacq’s issued share capital:

At 30 June 2018 At 30 June 2017

Number of shares Shares held % Shares held %

Coronation 107 669 844 15.5 107 658 346 14.4

Sanlam 69 465 490 10.0 100 089 050 13.4

Government Employees Pension Fund 62 505 003 9.0 58 199 177 7.8

RBH* 41 439 525 6.0 41 439 525 5.5

Total 281 079 862 40.4 307 386 098 41.0

* The shares held by RBH are directly held by Lisinfo 222.

Beneficial shareholder spread

At 30 June 2018 At 30 June 2017

Number Shares held % Number Shares held %

Non-public 11 225 159 209 30.0 20 260 414 269 34.8

> 10% 2 177 135 334 23.6 2 207 747 396 27.7

Treasury shares 2 46 427 553 6.2 2 46 427 553 6.2

Directors and associates 7 1 596 322 0.2 16 6 239 320 0.8

Public 6 585 524 423 568 70.0 7 395 488 828 508 65.2

Total 6 596 749 582 777 100.0 7 415 749 242 777 100.0

Summary of trading in Attacq shares

30 June 2018

30 June 2017

Number of trades 106 395 122 371

Total number of shares traded 304 241 264 255 980 854

Total value of shares traded (R000) 5 668 413 4 499 283

High (R) 20.32 19.79

Low (R) 16.80 15.91

Closing price (R) 17.05 16.97

SUPPLEMENTARY INFORMATIONFor the year ended 30 June 2018


statements 2018

Multi/single tenanted Property Province

ValuationR000

PGLAm2

GMRR

GMRR/m2

Vacancym2

Office and mixed use1 8 077 034 299 018 43 441 Multi Brooklyn Bridge Office

ParkGauteng 554 802 23 525 4 103 378 207 3 747

Multi Lynnwood Bridge Offices

Gauteng 520 031 13 399 3 765 134 284 138

Multi Bloukrans Gauteng 225 078 7 224 1 603 385 222 – Multi Kaaimans Gauteng 227 003 6 990 1 679 438 240 – Single Aurecon building Gauteng 801 116 19 104 – – – Single Newtown Nedbank Gauteng 715 000 31 132 – – – Single Majestic Offices Gauteng 147 316 8 913 – – 2 493 Multi 2 Eglin, Sunninghill Gauteng 231 158 25 525 – – 25 525 Single Waterfall – Cell C

CampusGauteng 1 027 288 43 890 – – –

Single Waterfall – Transnet Gauteng 631 857 24 354 – – – Multi MoP – Att House Gauteng 75 964 2 523 518 805 206 – Single MoP – Colgate Gauteng 68 029 2 122 – – – Single MoP – Golder Gauteng 94 746 3 040 – – – Multi MoP – Honda building Gauteng 57 606 1 986 401 700 202 – Multi MoP – Mac Mac House Gauteng 94 549 3 144 648 455 206 – Multi Mop – Magwa House Gauteng 108 908 3 608 690 605 191 – Single MoP – Premier Foods Gauteng 62 182 2 000 – – – Multi Waterfall – Allandale

buildingGauteng 431 157 15 359 2 607 490 176 557

Single Waterfall – PwC Tower and PwC Annex**

Gauteng 1 312 763 36 461 – – –

Multi Waterfall – Gateway West building

Gauteng 370 809 13 803 590 571 209 10 981

Multi Waterfall – Corporate Campus Phase 1*

Gauteng 84 840 2 934 555 692 189 –

Single Waterfall – Novartis Gauteng 234 832 7 982 – – –

Retail 10 389 322 337 627 10 673 Multi Glenfair Boulevard

Shopping CentreGauteng 472 739 15 951 3 725 492 240 431

Multi Lynnwood Bridge Retail Gauteng 360 797 11 378 2 975 427 262 – Multi Newtown Junction Gauteng 486 000 33 653 4 089 215 140 4 476 Multi Garden Route Mall Western

Cape 1 427 000 53 813 9 610 732 179 178

Multi Brooklyn Mall# Gauteng 694 000 18 773 5 383 564 305 1 100 Multi MooiRivier Mall North–

west 1 188 000 49 696 7 937 069 165 1 724

Multi Eikestad Mall Precinct^ Western Cape

925 600 37 872 6 453 480 179 1 889

Multi Waterfall – Mall of Africa^

Gauteng 4 480 000 99 771 27 090 785 273 620

Multi Waterfall – Waterfall Corner

Gauteng 221 688 9 582 1 702 075 182 255

Multi Waterfall – Waterfall Lifestyle

Gauteng 133 498 7 139 1 126 758 158 –

# 25.0% share.* 50.0% share.** 75.0% share.^ 80.0% share.1 Single-tenanted office and mixed-use properties weighted average rental rate of R176.0/m2.


Multi/single tenanted Property Province

ValuationR000

PGLAm2

GMRR

GMRR/m2

Vacancym2

Light industrial2 1 403 539 146 093 8 518 Single Waterfall – Amrod Gauteng 400 685 37 937 – – –

Single Waterfall – BMW Gauteng 289 401 31 987 – – –

Single Waterfall – Dimension Data

Gauteng 93 510 8 291 – – –

Single Waterfall – Dis-Chem Gauteng 83 329 8 518 – – 8 518

Single Waterfall – Massbuild Distribution Centre

Gauteng 400 740 50 033 – – –

Single Waterfall – Torre Gauteng 135 874 9 327 – – –

Hotel3 445 828 19 518 – Single Newtown City Lodge Gauteng 118 000 5 828 – – –

Single Waterfall – City Lodge Gauteng 115 294 5 744 – – –

Single Lynnwood Bridge City Lodge

Gauteng 212 534 7 946 – – –

Developments under construction 757 777 66 465 –

Single Waterfall – Deloitte* Gauteng 141 742 21 250 – – –

Multi Waterfall – Corporate Campus building 2*

Gauteng 128 599 3 215 – – –

Single Waterfall – Corporate Campus Accenture*

Gauteng 143 572 1 932 – – –

Multi Waterfall – Waterfall Point

Gauteng 63 391 10 342 – – –

Single Waterfall – Ingress Financial Services Company

Gauteng – 4 371 – – –

Multi Waterfall – Ingress building 2

Gauteng – 4 360 – – –

Single Waterfall – Cummins$* Gauteng 213 626 8 116 – – –

Single Waterfall – Pirtek Gauteng – 2 926 – – –

Single Waterfall – Superga warehouse

Gauteng 31 418 4 657 – – –

Single Waterfall – Midi warehouse

Gauteng 35 431 5 296 – – –

* 50.0% share.$ Includes portion held for sale (note 18).2 Single-tenanted light industrial properties weighted average rental rate of R70.0/m2.3 Single-tenanted hotel properties weighted average rental rate of R187.0/m2.

SUPPLEMENTARY INFORMATION continuedFor the year ended 30 June 2018


statements 2018

Attacq Limited(Incorporated in the Republic of South Africa)(Registration number: 1997/000543/06)JSE share code: ATT ISIN: ZAE000177218

Registered officeATT House, 2nd FloorMaxwell Office Park37 Magwa CrescentWaterfall City2090

Postal addressPostNet Suite 016Private Bag X81Halfway House1685

DirectorsP Tredoux#* (Chairperson)MC Wilken (CEO) (resigned 31 December 2017)M Hamman (CEO)R Nana (CFO) (appointed 19 June 2018)JR van Niekerk (appointed 19 June 2018)MM du Toit#*HR El Haimer#*KR Moloko#*BT Nagle#*S Shaw-Taylor#*JHP van der Merwe#*LLS van der Watt* (resigned 1 July 2017)# Independent* Non-executive

Company secretaryT Kodde

Transfer secretariesComputershare Investor Services Proprietary LimitedRosebank Towers15 Biermann Avenue, Rosebank, Johannesburg, 2196(PO Box 61051, Marshalltown, 2107)

SponsorJava Capital

Independent auditorsDeloitte & Touche

Registered AuditorsRiverwalk Office Park, Block B41 Matroosberg Road, Ashlea Gardens X6Pretoria, 0081(PO Box 11007, Hatfield, 0028)

CORPORATE INFORMATION

ATT House, 2nd Floor,Maxwell Office Park37 Magwa Crescent, Waterfall City, 2090T +27 10 596 8892 | T +27 87 845 1136F +27 86 242 9247

[email protected]

Attacq

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