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ABRIDGED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012
Vunani Property Investment Fund Limited
(Registration number: 2005/019302/06)
ISIN: ZAE000157459
JSE code: VPF
(“VPIF” or “the Fund” or “the Company”)
ABRIDGED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012
(Prepared by M de Lange, Financial director)
STATEMENTS OF FINANCIAL POSITION Audited Audited
as at 30 June Group Company
2012 2011 2012 2011
Assets Note R’000 R’000 R’000 R’000
Non-current assets 1 441 059 791 477 529 188 -
Investment property 1 426 394 782 437 513 352 -
Property, plant and equipment 6 936 5 938 749 -
Other non-current assets 7 729 3 102 345 -
Investment in subsidiaries 14 742 -
Current assets 33 972 10 139 558 160 142 556
Trade and other receivables 13 893 6 615 40 386 954
Income tax receivable 37 - - -
Cash and cash equivalents 20 042 3 974 4 049 20
Loan to subsidiaries 38 851 -
Loan to group entity 474 874 141 582
Total assets 1 475 031 801 616 1 087 348 142 556
Equity and liabilities
Equity 307 190 285 929 22 686 (1 558)
Ordinary share capital 301 142 301 142
(Accumulated loss)/retained (56 500) 8 282 (17 242) (1 700)
earnings
Non-distributable reserve 363 389 277 505 39 627 -
Debentures 588 918 142 417 588 918 142 417
Linked unit holders' interest 896 108 428 346 611 604 140 859
Other liabilities
Other non-current liabilities 203 606 344 379 119 746 -
Other financial liabilities 123 110 298 505 112 233 -
Deferred tax 80 496 45 874 7 513 -
Current liabilities 375 317 28 891 355 998 1 697
Current portion of other 306 296 7 355 306 296 -
financial liabilities
Trade and other payables 69 021 21 536 49 702 1 697
Total liabilities 578 923 373 270 475 744 1 697
Total equity and liabilities 1 475 031 801 616 1 087 348 142 556
Units in issue 120 618 57 024
Net asset value per linked 742.9 751.2
unit (cents)
Net tangible asset value less 809.7 831.6
deferred tax value per linked unit
(cents)
STATEMENTS OF COMPREHENSIVE INCOME Audited Audited
for the year ended 30 June Group Company
12 months 6 months 12 months 6 months
30 June 30 June 30 June 30 June
2012 2011 2012 2011
Note R’000 R’000 R’000 R’000
Investment property income 165 860 55 869 37 775 -
Straight-line rental 5 994 328 5 259 -
adjustment
Revenue 171 854 56 197 43 034 -
Other income 926 1 - -
Property and operating (78 507) (24 284) (32 616) (1 755)
expenses
Operating profit 94 273 31 914 10 418 (1 755)
Finance income 2 005 232 62 574 9 888
Finance cost amortisation (45 694) (1 987) - -
Finance costs (25 085) (15 204) (6 379) -
Net operating profit 25 499 14 955 66 613 8 133
Fair value adjustments 106 835 (7 505) 38 795 -
Profit before denture 132 334 7 450 105 408 8 133
interest and taxation
Distributions (77 813) (16 351) (75 489) (9 857)
Trust distributions – net (2 324) (6 494) - -
rental income
Debenture interest (75 489) (9 857) (75 489) (9 857)
Profit/(loss) before 54 521 (8 901) 29 919 (1 724)
amortisation of debenture
premium
Amortisation of debenture 1 679 - 1 679 -
premium
Profit/(loss)before income 56 200 (8 901) 31 598 (1 724)
tax
Income tax expense (35 098) 1 981 (7 513) -
Profit/(loss) for the period 21 102 (6 920) 24 085 (1 724)
Total comprehensive income
for the period attributable
to:
Equity holders 21 102 (6 920) 24 085 (1 724)
Basic and diluted earnings 85.69 16.54
per linked unit (cents)
STATEMENTS OF CHANGES IN EQUITY
for the year ended 30 June
(Accumulated
Ordinary Non- loss)/
share distributable retained
capital reserve earnings Total
R’000 R’000 R’000 R’000
GROUP
Balance at 31 December 2010 142 292 683 24 292 849
Total comprehensive income
for the period
Loss for the period (6 920) (6 920)
Transfer from non- (15 178) 15 178 -
distributable reserve
Balance at 30 June 2011 142 277 505 8 282 285 929
Transactions with owners of
the company, recognised
directly in equity
Issue of linked units 159 159
Total comprehensive income
for the year
Profit for the year 21 102 21 102
Transfer to non- 85 884 (85 884) -
distributable reserve
Balance at 30 June 2012 301 363 389 (56 500) 307 190
COMPANY
Balance at 31 December 2010 142 - 24 166
Total comprehensive income
for the period
Loss for the period (1 724) (1 724)
Balance at 30 June 2011 142 - (1 700) (1 558)
Transactions with owners of
the company, recognised
directly in equity
Issue of linked units 159 159
Total comprehensive income
for the year
Profit for the year 24 085 24 085
Transfer to non- 39 627 (39 627) -
distributable reserve
Balance at 30 June 2012 301 39 627 (17 242) 22 686
STATEMENTS OF CASH FLOWS
for the year ended 30 June Audited Audited
Group Company
12 months 6 months 12 months 6 months
30 June 30 June 30 June 30 June
2012 2011 2012 2011
R’000 R’000 R’000 R’000
Cash flows from operating activities
Cash generated/(utilised) by 89 544 26 666 6 176 (124)
operations
Finance income 2 005 232 29 340 9 888
Finance costs (25 085) (15 204) (6 379) -
Trust distributions – net rental (2 324) - - -
income
Debenture interest paid (34 516) (9 857) (34 516) (9 857)
Income tax paid (62) - - -
Net cash inflow/(outflow) from 29 562 1 837 (5 379) (93)
operating activities
Cash flows from investing activities
Additions to property, plant and (2 507) (2 412) (925) -
equipment
Additions to investment property (7 141) (5 792) - -
Additions to other non-current (5 566) (554) (352) -
assets
Repayment of loans from Vunani - (92)
Property Investment Trust
Acquisition of businesses (479 711) - (480 036) -
Loans to subsidiaries (38 851) -
Loan to group entity (333 292) -
Net cash (outflow)/inflow from (494 925) (8 758) (853 456) 92
investing activities
Cash flow from financing activities
Proceeds from issue of linked units 448 339 - 448 339 -
Advance of other financial 73 747 6 009 447 825 -
liabilities
Repayment of other financial (40 655) - (33 300) -
liabilities
Net cash inflow from financing 481 431 6 009 862 864 -
activities
Net increase/(decrease) in cash and 16 086 (912) 4 029 (1)
cash equivalents
Cash and cash equivalents at the 3 974 4 886 20 21
beginning of the year
Cash and cash equivalents at the end 20 042 3 974 4 049 20
of the year
GROUP 12 months 6 months
30 June 30 June
2012 2011
R’000 R’000
Reconciliation of headline and diluted headline
earnings per linked unit
Profit/(loss) attributable to equity holders: 21 102 (6 920)
Adjust for:
Trust distributions - net rental income 2 324 6 494
Debenture interest 75 489 9 857
Amortisation of debenture premium (1 679) -
Impairment of goodwill 1 190 -
Revaluation of investment property
Gross revaluation (115 607) 206
Deferred tax 21 503 (29)
Headline earnings per linked unit 4 322 9 608
Reconciliation of earnings and diluted earnings
per linked unit:
Profit/(loss) attributable to equity holders: 21 102 (6 920)
Adjust for:
Trust distributions - net rental income 2 324 6 494
Debenture interest 75 489 9 857
Amortisation of debenture premium (1 679) -
Earnings per linked unit 97 236 9 431
Reconciliation of distributable earnings per
linked unit:
Revenue 165 860 55 869
Other income 926 1
Less gain on bargain purchase (830) -
Property expenses (78 507) (22 560)
Add back listing costs 13 469 -
Net finance costs (23 080) (16 959)
Finance income 2 005 232
Finance costs (25 085) (17 191)
Income tax (25) -
Distributable earnings 77 813 16 351
BASIS OF PRESENTATION
These audited consolidated financial statements have been prepared in accordance
with the Listing Requirements of the JSE Limited, the recognition and measurement
requirements of International Financial Reporting Standards (IFRS), presentation
and disclosure requirements of IAS34, the AC 500 series issued by the Accounting
Practices Board and the requirements of the Companies Act of South Africa. The
accounting policies as set out in the audited financial statements for the year
ended 30 June 2012 are in terms of IFRS and have been consistently applied when
compared to the previous accounting period. These consolidated financial
statements incorporate the financial statements of the company and its
subsidiaries that in substance are controlled by the Group. Results of
subsidiaries are included from the effective date of acquisition up to the
effective date of disposal. All significant transactions and balances between
Group enterprises are eliminated on consolidation.
BUSINESS COMBINATIONS
2011
On 11 August 2011, VPIF acquired the entire issued share capital of Cedar Park and
Pacific Eagle for R6,0 million and R13,0 million respectively. Cedar Park’s only
asset is a commercial building situated at Greenstone Hill Office Park, Emerald
Boulevard, Greenstone Hill with a gross lettable area measuring 1 827m2; and
Pacific Eagle’s only asset is a commercial building situated at 14 Loop Street,
Cape Town with a gross lettable area measuring 2 323m2. The purchase price was
settled through the issue of linked units in VPIF at a price equal to the listing
price.
The property known as Athol Ridge Office Park situated at 151 Katherine Street
with a gross lettable area of 8 679m2 was acquired on the same date for an amount
of R104,5 million.
On 6 December 2011, VPIF took transfer of the Lion Roars and Mabe office parks.
The Lion Roars Office Park was acquired for an amount of R52,1 million and is
situated at 53 Heugh Road, Walmer, Port Elizabeth with a gross lettable area of 4
117m2. Mabe Office Park was acquired for an amount of R24,1 million and is
situated at 91 Ridder Street, Ooseinde, Rustenburg with a gross lettable area of 1
642m2.
VPIF also acquired the building known as the Xstrata building on 15 December 2011
for a purchase consideration of R29 million. The building is situated at 12 Kgwebo
Avenue, Waterfall East extension 4, Rustenburg with a gross lettable area of 3
720m2.
On 14 February 2012, VPIF took transfer of the property known as the Foretrust
building after receiving approval from its linked unit holders to acquire the
property for an amount of R251,1 million. The property is situated at Martin
Hammerschlag Way, Cape Town with a gross lettable area measuring 26 780m2.
The table below indicates the net assets acquired on the abovementioned business
combinations:
GROUP Cedar Pacific Athol Lion
Park Eagle Ridge Roars
R’000 R’000 R’000 R’000
Net assets acquired:
Investment property 17 057 37 100 104 692 52 186
Property, plant and equipment 965 - - -
Other non-current assets 519 - - -
Cash and cash equivalents 155 170 - -
Trade and other receivables 50 23 - -
Other financial liabilities (14 665) (22 513) - -
Deferred tax 1 226 (775) - -
Trade and other payables (499) (195) - -
Net assets acquired 4 808 13 810 104 692 52 186
Goodwill 1 190 - - -
Gain on bargain purchase - (830) - -
Cost of investment 5 998 12 980 104 692 52 186
Less cash acquired (155) (170) - -
5 843 12 810 104 692 52 186
COMPANY
Subsidiaries 5 998 12 980 - -
Investment property - - 104 692 52 186
5 998 12 980 104 692 52 186
Settlement of cost of investment:
Cash paid/(received) 2 031 (31) 104 692 52 186
Linked units issued 3 967 13 011 - -
5 998 12 980 104 692 52 186
After tax profit since acquisition 36 298 9 530 3 323
Full year after tax profits 49 216 10 891 6 646
GROUP Xstrata Mabe Park Foretrust Total
R’000 R’000 R’000 R’000
Net assets acquired:
Investment property 29 025 24 057 251 098 515 215
Property, plant and equipment - - - 965
Other non-current assets - - - 519
Cash and cash equivalents - - - 325
Trade and other receivables - - - 73
Other financial liabilities - - - (37 178)
Deferred tax - - - 451
Trade and other payables - - - (694)
Net assets acquired 29 025 24 057 251 098 479 676
Goodwill - - - 1 190
Gain on bargain purchase - - - (830)
Cost of investment 29 025 24 057 251 098 480 036
Less cash acquired - - - (325)
29 025 24 057 251 098 479 711
COMPANY
Subsidiaries - - - 18 978
Investment property 29 025 24 057 251 098 461 058
Settlement of cost of investment:
Cash paid/(received) 29 025 24 057 251 098 463 058
Linked units issued - - - 16 978
29 025 24 057 251 098 480 036
After tax profit since acquisition 1 646 1 583 10 132 26 548
Full year after tax profits 3 292 3 166 27 019 51 279
There were no business combinations during the period ended 30 June 2011.
EVENTS AFTER THE REPORTING DATE
On 2 August 2012, the property held in Pacific Eagle has been transferred to VPIF
in terms of section 47 of the Income Tax Act and the underlying company will be
deregistered in order to keep the company structure as simple as possible. The
property held in Cedar Park has been lodged in the deeds office and is expected to
be transferred on 14 September 2012, after which the underlying company will be
deregistered. The details of the transferred properties are as follows:
Company name: Cedar Park Pacific Eagle
Registered legal description: Unit 18 of Erf 1570, 1571,
Greenstone Hill 1572, 1573 and
Office Park, Ext 1574
22, Erf 1836 and
1837
Region: Gauteng Western Cape
Sector: Commercial Commercial
Vacancy: Nil Nil
Gross lettable area (GLA): 1 827m2 2 323m2
Property description and use: Buildings/ Buildings/
Offices Offices
Subsequent to year end, the following properties were acquired:
Property name: Brickfield Road Business Centre
Transfer date: 10 August 2012 To be transferred
Registered legal description: Erf 13753, Cape Erf 155 Edenburg
Town
Region: Western Cape Gauteng
Sector: Industrial Office
Vacancy: Nil Nil
Gross lettable area (GLA): 5 251m2 4 893m2
Property description and use: Industrial/ Buildings/Offices
Offices
AUDIT REPORT
The Group's auditor KPMG Inc., have issued an unmodified audit opinion on the
complete set of audited financial statements for the year ended 30 June 2012.
Their audit report is available for inspection at the registered office of the
company.
STATEMENT ON GOING CONCERN
The directors have made an assessment of the group’s ability to continue as a
going concern and have no reason to believe the business will not be a going
concern in the year ahead.
INTRODUCTION
It is with pleasure that we report on Vunani Property Investment Fund’s (VPIF or
the Fund) performance during its first year as a listed company on the JSE, having
débuted on 11 August 2011. In what was a highly satisfactory listing, VPIF raised
capital worth R448 million in a well-subscribed offer which exceeded our target by
R142 million.
In light of some of the most volatile trading weeks during 2011, the board’s
decision to list based on VPIF’s long-term value proposition rather than on market
timing was vindicated during the reporting period. VPIF listed at a conservative
R7,05 per linked unit and unit holders have seen attractive rerating to R8,25 per
unit, an improvement of 17%. Management is confident that the stock will rerate
within the next 12 months to reflect the quality of the assets and focused
management.
During the year we continued to deliver on our growth strategy and we are pleased
to report that this led to a strong property balance sheet supported by yield-
enhancing acquisitions and quality long-term holdings in commercial property
assets.
OPERATING ENVIRONMENT
The global financial turmoil persists and international economists and financial
analysts are of the opinion that the status quo could continue for some time.
Whilst South Africa can take comfort from being partially insulated from the
effects of global trends, the local economic conditions remain subdued with real
GDP growth expected to remain around the higher end of 2% in the near term.
Against this backdrop of difficult global and domestic conditions, local business
in general remained muted, households more frugal and bank credit providers
cautious in their lending. Since 2008 VPIF has followed a conservative strategy
and for 2013 the Fund will continue to exercise prudence in all aspects of its
business.
Vacancies in the office sector are generally above normal levels, but appear to
have stabilised during the year, suggesting we are at the bottom of the current
cycle. We remain focused in the specialised A+ to B+ grade office buildings in the
main metropolitan areas where more opportunities exist and the impending scarcity
of office supply will drive up rentals as the current oversupply is absorbed.
Consequently, we will continue to create and pursue opportunities in our target
market and acquire quality, yield enhancing assets to ensure that the overall
portfolio remains growth-orientated and resilient.
ACQUISITIONS
Difficult as the present economic conditions might be, there is significant
competition in the market for good assets. Whilst there is a large amount of stock
on offer, the key this year has been to select and acquire those assets with
sustainable cash flows. Our efforts in this regard have been well rewarded as
evident in our 51% growth in enterprise value since listing. These acquisitions
included:
- Lion Roars in a premier node in Port Elizabeth purchased for R52,1 million. The
office park comprises 4 117m² with a 12% yield and is 100% occupied by national
tenants;
- two buildings in Rustenburg’s premier node were added to the portfolio. Mabe
Park at 1 642m² and the Xtrata Building at 3 720m² were purchased for R24
million and R29 million, respectively. Both have a 10,85% yield and are fully
let by national tenants; and
- Foretrust Building in Cape Town’s development node comprising 26 780m², which
was acquired at a purchase price of R251,1 million at a yield of 11%. It is
occupied by Government on a six-year lease.
The above assets comply with our strategic focus to make value acquisitions that
will improve our key performance indicators and at the same time conform to our
criteria of being well-located, yield-enhancing with long-term leases and
preferably national or listed tenants. Going forward, we will grow the portfolio
aggressively, but not at the expense of quality.
REFURBISHMENTS AND EXTENSIONS
A core competence of management is its ability to undertake yield-enhancing
refurbishments. Several refurbishment projects and extensions with a combined
value of about R13 million were completed during the year.
This includes the two-phase extension of Motherwell Shopping Centre on the
outskirts of Port Elizabeth where long-term leases with Super Spar, Tops, Pep and
Build-It have been secured. Phase I was completed in November and is yield-
enhancing. The R4 million extension resulted in a R12 million fair value
adjustment.
The refurbishment of Vunani Chambers in Cape Town worth R7 million is in hand and
should enhance retail and lettability in addition to the revaluation of the
property. Completion is scheduled for March 2013 and the project is on track.
In addition, the R3,5 million refurbishment of our Rynlal property was completed
in June 2012 and gross rentals are improving. This resulted in a fair value
adjustment of R10 million. It was encouraging that while construction was underway
at Rynlal strong leasing activity was experienced.
Since the listing we have delivered on our commitment to aggressively grow the
fund through quality acquisitions. Our portfolio is 80% tenanted by blue chip or
government tenants with a weighted average lease expiry of 4,71 years. This gives
us a robust distribution with a consistent growth profile. VPIF will continue to
upgrade its portfolio while being mindful of the need to protect distributions.
VACANCIES
SAPOA/ Investment Property Databank (IPD) figures indicate a marginal increase in
the A-grade property vacancy rate to 8,73% whilst the vacancy rate of B-grade
office space remains relatively flat at 12,6%. The sector average is 10,5%.
VPIF’s vacancies remained materially below the IPD average at 5,8%. Foretrust was
acquired with a 3 077m2 vacancy that was not paid for. If this is omitted, the
portfolio vacancy will be 3,5% for the financial year ended 30 June 2012.
VPIF’s property portfolio is predominantly tenanted by blue chip or government
tenants. Hands-on management of the portfolio ensures excellent tenant retention
and a low vacancy rate. In addition, a large proportion of the buildings are
single tenanted which reduces churn.
We value and will continue to nurture our relationships with our government and
corporate tenants as these have proved to be financially rewarding.
LEASE EXPIRIES
The weighted average lease expiry of VPIF’s portfolio is just under five years.
2012 was a big year for the Fund as it had 38% of its leases expiring. We are
pleased to report that our tenant retention for the year was 89%. All material
leases were renewed at or near to budgeted rentals.
Lease renegotiations on some of the shorter tenure contracts have commenced and
are progressing well.
Given that vacancies in the commercial property market have stabilised, management
does not expect any significant rental reversions in 2013.
FINANCIALS
VPIF has maintained its exemplary growth record since listing and we are pleased
to report on the successful performance of the company to our stakeholders. The
results are attributed to the efficient management of existing assets, our
expertise in refurbishment of properties and our ability to make value
acquisitions.
VPIF declared a maiden distribution of 27,0 cents per linked unit for the 20 week
interim period. The board of directors declared a final distribution of 33,97
cents per linked unit. The total distribution for the year to linked unit holders
since listing amounts to 60,97 cents per linked unit.
The distribution per linked unit per the Pre-Listing Statement (as published on 28
July 2011) for the period 1 July 2011 to 30 June 2012 was forecasted to be 70,84
cents per linked unit assuming that there would be no debt post the listing. The
factors that impacted on the actual distribution to be different from the
forecasted distribution for the year was as follows:
- The listing of the company occurred on 11 August 2011 and not 1 July 2011 as
assumed in the forecast;
- The three acquisitions (being Athol Ridge, Cedar Park and Pacific Eagle were
made on 11 August 2011, whereas the forecast assumed 1 July 2011; and
- The linked units were listed at a price of R7,05 and not R7,50 resulting in
more units being issued than envisaged and therefore a zero debt position was
not achieved.
Revenue increased by 48,44% from R111,738 million (annualised) to R165,86 million
for the year to 30 June 2012.
Total property expenses increased from R48,568 million (annualised) to R78,5
million. Included in total property expenses are operating expenses amounting to
R30,5 million (2011: R15,2 million annualised). The increase is mainly due to
expenses incurred for the listing of VPIF amounting to R13,5 million.
This resulted in a net operating profit of R25,5 million in the reporting period
to 30 June 2012.
VPIF has taken advantage of the low long-term rates and has hedged 80% of its
other financial liabilities through interest rate swaps.
BORROWINGS
At listing, VPIF had a relatively low gearing with a loan to value of 18,31%. Post
the acquisition of the Foretrust building and the revaluation of the portfolio,
the loan to value ratio increased to 31,4%. The company remains well capitalised
with significant headroom to take advantage of any potential yield enhancing
acquisitions. We do not anticipate the loan to value ratio to exceed 40%.
VPIF has a conservative approach to its debt strategy. The Fund has capitalised on
historically low interest rates and has fixed 80% of its debt for five years at an
all-in average rate of 8,98%. The balance is at a floating rate of 7,37%, which
combines in a through rate of 8,7%.
ENVIRONMENT
We are proud to report on our successful green refurbishment project in Loop
Street, Cape Town. This is a prime example of where the interior, exterior and the
external environment of this 1904 heritage building were incorporated into the
renovation plans by implementing a full spectrum of green issues during its
refurbishment phase.
The building now uses less than one third of the average electricity consumption
and one sixteenth of the water consumption compared with the rest of our
portfolio. This translates into a R10 to R15/m2 per month saving for the tenant.
On the back of this success, we are pursuing a green strategy through the entire
portfolio in consultation with the local authorities, Eskom and various suppliers.
STRATEGY
VPIF will continue to focus on its chosen niche within the commercial property
space. Delivery on the company’s strategy to sustain income growth and capital
appreciation through yield enhancing acquisitions and refurbishments remains on
track. Management has a deal making culture and is confident that it will be able
to grow the fund in 2013. Underlying this strategy is a measure of prudence which
will remain in place until the economic environment improves.
OUTLOOK
During the reporting period, VPIF outperformed the sector and delivered on its
pre-listing forecasts, despite challenging economic conditions. We believe this is
due to hard disciplined work and project delivery, but also due to a clear
understanding, and possibly a different approach to extracting value from the
sector. We think we can safely state the Fund’s fundamental situation has never
been better or more promising for the future. Our focus has been, and will
continue to be, to create maximum value for our unit holders and above market
performance over time.
Statements contained throughout this announcement regarding the prospects of the
group have not been reviewed or reported on by the group’s external auditor.
SEGMENTAL REPORTING
The group has seven reportable segments based on the geographic split of the
country which are the group’s strategic business segments. For each strategic
business segment, the group’s CEO (the chief operating decision maker) reviews
internal management reports on at least a monthly basis. All segments are located
in South Africa. There are no single major customers.
The following summary describes the operations in each of the group’s reportable
segments:
For the year ended 30 June 2012 Head Gauteng Kwa-Zulu Northern
Office Natal Province
R’000 R’000 R’000 R’000
Revenue - Investment property - 121 832 3 269 1 001
income
Straight-line rental adjustment 4 994 439 - -
Other income 830 96 - -
Property expenses (21 810) (43 332) (894) (171)
Operating income (16 036) 79 035 2 375 830
Finance income 1 890 80 1 -
Finance cost amortisation (44 694) - - -
Finance costs (21 811) (1 154) - -
Net operating income (80 651) 77 961 2 376 830
Fair value adjustments 108 296 (850) - -
Reportable segment profit before 27 645 77 111 2 376 830
debenture interest and income
tax
Reportable segment assets 31 790 876 610 29 508 8 939
Reportable segment liabilities (492 157) (45 446) (195) (36)
For the year ended 30 June 2012 Western Eastern North Total
Cape Cape West
R’000 R’000 R’000 R’000
Revenue - Investment property 28 284 7 567 3 907 165 860
income
Straight-line rental adjustment 611 - - 5 994
Other income - - - 926
Property expenses (10 153) (1 469) (678) (78 507)
Operating income 18 742 6 098 3 229 94 273
Finance income 12 22 - 2 005
Finance cost amortisation (1 000) - - (45 694)
Finance costs (2 119) (1) - (25 085)
Net operating income 15 635 6 119 3 229 25 499
Fair value adjustments (611) - - 106 835
Reportable segment profit before 15 024 6 119 3 229 132 334
debenture interest and income
tax
Reportable segment assets 379 682 90 775 57 727 1 475 031
Reportable segment liabilities (39 905) (734) (450) (578 923)
For the year ended 30 June 2011 Head Gauteng Kwa-Zulu Northern
Office Natal Province
R’000 R’000 R’000 R’000
Revenue - Investment property - 47 550 1 562 471
income
Straight-line rental adjustment 328 - - -
Other income - 1 - -
Property expenses (4 032) (17 267) (354) (85)
Operating income (3 704) 30 284 1 208 386
Finance income 124 103 - -
Finance cost amortisation (1 987) - - -
Finance costs (15 201) (3) - -
Net operating income (20 768) 30 384 1 208 386
Fair value adjustments (7 505) - - -
Reportable segment profit before (28 273) 30 384 1 208 386
debenture interest and income
tax
Reportable segment assets 4 007 685 388 24 607 7 718
Reportable segment liabilities (357 717) (14 414) (123) (42)
For the year ended 30 June 2011 Western Eastern North Total
Cape Cape West
R’000 R’000 R’000 R’000
Revenue - Investment property 4 859 1 427 - 55 869
income
Straight-line rental adjustment - - - 328
Other income - - - 1
Property expenses (2 237) (309) - (24 284)
Operating income 2 622 1 118 - 31 914
Finance income 2 3 - 232
Finance cost amortisation - - - (1 987)
Finance costs - - - (15 204)
Net operating income 2 624 1 121 - 14 955
Fair value adjustments - - - (7 505)
Reportable segment profit before 2 624 1 121 - 7 450
debenture interest and income
tax
Reportable segment assets 57 358 22 538 - 801 616
Reportable segment liabilities (419) (553) - (373 269)
MANAGEMENT
VPIF is fortunate to have retained the same leadership team since its formation
five years ago. Their collective experience and commitment has undoubtedly proved
beneficial to the establishment and growth of VPIF and we are confident that they
will prove their worth once again.
APPRECIATION
Our sincere thanks go to our tenants, partners, unit holders and all other
individuals, firms and authorities that we have worked with, for having supported
us over the last year. We trust that we will be able to build further on our
relationship in the years to come.
VPIF is a conservative and well-managed Fund with sound management and hardworking
staff. This year’s excellent performance could not have been possible without
their dedication and discipline. Again, our sincere gratitude goes to our staff,
consultants and contractors who have made this possible.
CASH DISTRIBUTION
Notice is hereby given of debenture interest payment number 2 of 33,97 cents per
linked unit for the six months ended 30 June 2012.
The salient dates relating to the cash distribution are as follow:
Declaration date: Monday, 17 September 2012
Last date to trade in order to Friday, 5 October 2012
participate in the cash distribution:
Linked units ‘ex’ distribution Monday, 8 October 2012
Record date: Friday, 12 October 2012
Payment date: Monday, 15 October 2012
Linked units may not be dematerialised or rematerialised between Monday, 8 October
2012 and Friday, 12 October 2012, both dates inclusive.
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given to unit holders that the annual general meeting of unit
holders of the Company will be held in the boardroom, Vunani House, 151 Katherine
Street, Sandton at 11:00 on Friday 19 October 2012.
The following salient dates apply to the annual general meeting:
Last day to trade to be eligible to Friday, 5 October 2012
vote at the Annual General Meeting.
Record date for determining those Friday, 12 October 2012
shareholders entitled to vote at the
Annual General Meeting.
Last day for receipt of forms of proxy By 11:00 on Wednesday, 17
for the Annual General Meeting (or they October 2012
may be handed to the Chairman at the
meeting).
INTEGRATED ANNUAL REPORT
The Integrated Annual Report for the year ended 30 June 2012, incorporating the
notice of annual general meeting will be mailed to unit holders today.
Sandton
17 September 2012
Independent Lead Sponsor
Grindrod Bank Limited
Corporate Adviser and Joint Sponsor
Vunani Corporate Finance
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