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ACP - Clarification of unaudited simplified financial information in audited results for year ended 31 March 2013
ACUCAP PROPERTIES LIMITED
(Reg No. 2001/021725/06)
(Incorporated on 12 September 2001)
(Acucap or the company)
Share Code: ACP
ISIN: ZAE000037651
CLARIFICATION OF UNAUDITED SIMPLIFIED FINANCIAL INFORMATION CONTAINED IN THE
AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2013
Acucap unitholders are referred to the audited results for the year ended 31 March 2013
published on the Stock Exchange News Service of the JSE Limited on 13 June 2013
(June Announcement) and are advised to take note of the clarification of the unaudited
Simplified Financial Information (Simplified Financial Information), as contained in the
June Announcement, below.
In terms of section 8.15 of the Listings Requirements of the JSE Limited (the JSE)
(the Listings Requirements), the Simplified Financial Information constitutes pro forma
financial information and the company is therefore required to comply with the requirements
of sections 8.16 to 8.34 of the Listings Requirements and the SAICA guide on Pro forma
Financial Information, revised and issued in September 2012.
Simplified Financial Information
Basis of preparation and purpose
The purpose of compiling a Simplified Balance Sheet is to reflect a net asset value per linked
unit for Acucap. The net asset value aims to (as closely as possible) reflect the fair market
value of the respective core assets and core liabilities (except where otherwise indicated),
and to present the more significant assets and liabilities separately. In order to achieve this
outcome, adjustments have been made to the IFRS accounting where it is not based on fair value,
to reverse the impact of the debentures (including those held by the BEE parties), and to reclassify
certain line items. These adjustments are more fully described below.
The purpose of compiling a Simplified Income Statement is to reflect the calculation of distribution
per linked unit as presented in the 31 March 2013 financial statements. The Simplified Income Statement
has prepared using the principles in Debenture Trust Deed, which allows for the distribution of
items that are income in nature. To achieve this objective, all items of a capital nature have
been eliminated (as more fully detailed below) and any impact of the BEE unitholders and other
unitholders have reversed in order to reflect the distributable profit on a per unit basis for
all legal unitholders. The format within the income statement has also been adjusted to line up
the principles of the trust deed.
Directors responsibility
The Simplified Financial Information is the sole responsibility of the directors of Acucap and has
been prepared in accordance with the basis stated above, for illustrative purposes only, to
illustrate the impact on Acucaps financial position and performance following the adjustments.
Due to its nature, the Simplified Financial Information may not fairly present Acucaps financial
position subsequent to the adjustments.
The directors are also responsible for such internal control as the directors determine is
necessary to enable the preparation of Simplified Financial Information that is free from material
misstatement, whether due to fraud or error.
KPMG Inc., Acucaps reporting accountant, has provided a reasonable assurance report on
The Simplified Financial Information which is available for inspection at the registered offices
of Acucap.
ACUCAP PROPERTIES LIMITED SIMPLIFIED BALANCE SHEET AS AT 31 MARCH 2013
As reported Simplified
at 31 March 2013 Balance Sheet
at 31 March 2013
Before 1 Reclassification Other Notes
adjustments
R'000
Assets
Property assets 7 948 485 (82 129) 7 866 356
Investment properties 7 452 230 (18 857) - 7 433 373
Non-current
receivable 83 395 - - 83 395
Current receivable 30 033 - - 30 033
Investment properties
and related
receivables 7 565 658 (18 857) - 2 7 546 801
Investment properties
under development* 319 555 - - 319 555
Owner-occupied
property 8 920 (8 920) - 2 -
Property development
inventory 54 352 (54 352) - 2 -
Listed property
investments* - 1 400 892 - 3 1 400 892
Investment in Sycom
Property Fund
Managers* 256 934 353 066 4 610 000
Other non-current
assets 2 172 406 (1 585 946) 586 460
Loans in respect of
unit purchase scheme 390 771 - - 390 771
Equipment 1 400 - - 1 400
Intangible assets
and goodwill 256 934 (256 934) - 4 -
Interest in jointly
controlled entities 153 078 - - 153 078
Listed investments 1 356 789 (1 356 789) - 3 -
Owner occupied
property - 8 920 - 2 8 920
Deferred lease
expenditure 18 857 2 18 857
Deferred tax assets 13 434 - - 13 434
Other current assets 227 772 10 249 12 859 250 880
Trade and other
receivables 203 511 (44 103) 12 859 3,7 172 267
Tax receivable 1 265 - - 1 265
Property development
inventory - 54 352 - 2 54 352
Cash and
cash equivalents 22 996 - - 22 996
Total assets 10 348 663 - 365 925 10 714 588
*at fair value in simplified balance sheet
Equity and liabilities
Shareholders interest 4 856 731 1 797 131 758 311 7 412 173
Share capital and
share premium 2 212 903 1 749 150 - 8 3 962 053
Non-distributable
reserve 3 020 133 - 353 066 4 3 373 199
Accumulated loss (376 305) 47 981 405 245 6,7 76 921
Non-current
liabilities 4 666 723 (1 389 052) (404 256) 2 873 415
Debentures 1 749 150 (1 749 150) - 8 -
Financial
liabilities 2 633 303 423 849 (183 737) 6,7 2 873 415
Financial
instruments 47 981 (47 981) - 6 -
BEE instrument 220 519 - (220 519) 7 -
Deferred tax
liabilities 15 770 (15 770) - 5 -
Deferred tax - 15 770 - 5 15 770
Current
liabilities 825 209 (423 849) 11 870 413 230
Trade and other
payables 127 834 - (1 285) 7 126 549
Financial
liabilities 423 849 (423 849) - 6 -
Debenture interest
payable 273 526 - 13 155 7 286 681
Total equity and
liabilities 10 348 663 365 925 10 714 588
Net asset value per
linked unit 37.73 40.39
Net tangible asset
per linked unit 36.26 37.07
Notes and Assumptions
1. The audited financial information in the Before column has been extracted, without adjustment,
from the published audited results of Acucap for the year ended 31 March 2013 (specifically the
consolidated Statement of Financial Position).
Reclassifications
2. Property Assets are reclassified as follows, so that after this reclassification the total of
Property Assets is equal to the external valuers valuation:
i. deferred lease expenditure (R18 857 000) and owner-occupied property (R8 920 000) to other
non-current assets;
ii. property inventory (R54 352 000) to other current assets.
3. The line item Listed property Investments represents the investments at fair value
(R1 400 892 000), and results from reclassifying the investment of R1 356 789 000 from other
non-current assets, together with the accrued distribution of R44 103 000 reflected in current assets.
4. The line Investment in Sycom Property Fund Managers (R610 000 000) reflects the investment at fair
value (note 9 of the annual financial statements). The line item comprises a transfer from the line
item intangible assets and goodwill (R256 934 000), together with a fair value adjustment of R353 066 000
(consequential adjustment is reflected in equity in the non-distributable reserve).
5. The line item Deferred Tax liability results from reclassifying the same line item from non-current
liabilities in order to reflect it separately.
6. These adjustments relate to the reclassification of current liabilities to non-current liabilities
on the basis that these liabilities are hedged and are effectively non-current (R423 849 000),
and reclassification of interest rates swops to equity (R47 981 000) on the basis that this is a hedge
of future distributions.
Fair value adjustments
Refer to note 4 above for the explanation of the Sycom Property Fund Managers fair value adjustment.
Reversal of unitholder liabilities (presented thereafter as shareholders interest)
7. These adjustments related to reversing the balances in respect of the BEE transaction
(refer note 18 to the financial statements) and comprise (i) raising of a receivable of R 17 186 000,
reversal of trade and other receivables of R4 327 000 (net R12 859 000) (ii), reversal of trade and
other payables of R1 283 000 and (iii) raising a debenture interest liability of R 13 155 000,
(iv) reversing the BEE instrument reflected under non-current liabilities (R220 519 000), (v) reversing
non-current financial liabilities in respect of the BEE instrument (R184 527 000).
8. The adjustment relates to reversing the debenture holder liability to equity (R 1 749 150 000).
ACUCAP PROPERTIES LIMITED SIMPLIFIED INCOME STATEMENT
As Reported Reclassifications Other Notes for the year
Before adjustments ended
for the year 31 March 2013
ended
31 March 2013
R'000
Revenue 650 790 (12 434) 638 356
- Contractual 644 410 - (6 054) 2 638 356
- Straight lining 6 380 - (6 380) 3 -
Net operating
(expenses)/income (39 604) (25 547) - 2,6 (65 151)
Loss on disposal
of investment
properties (962) - 962 3 -
Amortisation of
intangible assets (25 559) - 25 559 3 -
Profit before fair
value adjustments,
interest and
taxation 584 665 (25 547) 14 087 573 205
Income from listed
investments - 80 121 - 4 80 121
Income from investment
in Sycom Property Fund
Managers - 57 472 - 5,6 57 472
Other operating
expenses - (20 891) - 5 (20 891)
Fair value adjustment
to investment
properties 441 276 - (441 276) 3 -
Fair value adjustment
to BEE instrument (82 745) - 82 745 9 -
Profit before interest
and taxation 943 196 91 155 (344 444) 689 907
Interest income 126 429 (111 544) - 4,10 14 885
Interest received on
Unit Purchase Trust - 25 055 - 4 25 055
Notional interest on
units issued - 7 674 - 4 7 674
Interest expense
- debentures (535 476) - 535 476 7 -
- other (195 893) - 19 716 2,8 (176 177)
Share of profit of
equity accounted
investee
(net of income tax) 18 701 - (18 701) 3 -
Profit before
taxation 356 957 12 340 192 047 561 344
Interest paid on debentures 561 344
Earnings per linked
unit 738.31 520.06
Headline earnings per
linked unit 481.86 519.96
Distribution per
linked unit 307.22 307.22
Weighted average number
of linked units 171 768 394 180 189 388
Notes and Assumptions:
1. The audited financial information in the Before column has been extracted, without adjustment, from the
published audited results of Acucap for the year ended 31 March 2013 (specifically the consolidated Statement
of Financial Position).
2. Profits, expenses and related distributions recorded in different accounting periods Contractual
development revenue of R6 054 000, related development expenses of R2 034 000 and a distribution of
R3 003 000 were included in the calculation of distributions in the prior period. These amounts were only
accounted for in terms of IFRS in the current year. These items have been reversed from the IFRS numbers in
order to determine the current year distribution.
Capital (non-distributable) items eliminated
3. These items are considered to be capital in nature and in accordance with the principles of the trust deeds
do not enter into the calculation of distributable profit. (i) Loss on disposal of investment properties (R962 000);
(ii) Amortisation of intangible assets (R25 559 000); (iii) Fair value adjustments on investment properties
(R441 276 000); (iv) straight line rental adjustment required by IFRS (R6 380 000), (v) Equity accounted profit
of R18 701 000. As a result they have been reversed.
Reclassifications to detailed line items
4. Interest income has been further subdivided into (i) Income from listed investments (R80 121 000);
(ii) Interest received on unit purchase trust (R25 055 000); (iii) Notional interest on units issued (R7 674 000);
5. Net operating income /(expenses) has been subdivided into (i) income from Sycom Property Fund Managers
(R48 472 000); (ii) other operating expenses (R20 891 000), a further reduction in costs of (R2 034 000) has been
accounted for (refer note 2 above). The aim is to reflect in this line only net operating expenses relating to
property rentals (as detailed Retail, Office, Industrial and Storage Segments in the segmental report in the
annual financial statements).
Income not accrued under IFRS
6. Income from Investment in Sycom Property Fund Managers has been increased by R9 000 000 in respect of an
underwriting fee on the Sycom rights issue. This amount was not accrued for under IFRS, but is distributable
in accordance with the principles of the debenture trust deed.
7. Reversal of the debenture interest to allow the simplified income statement to reflect the amount available for
distribution.
8. Other interest paid by the Black Economic Empowerment vehicle amounting to R16 713 000, which was included in
terms of IFRS, is now eliminated (refer note 18 to the 31 March 2013 financial statements).
9. The fair value adjustment in respect of the BEE instrument is eliminated (R82 745 000).
10. Interest earned in respect of the BEE transaction not accounted for under IFRS has been accrued, amounting
to R1 306 000.
24 July 2013
Sponsor
Absa Bank Limited (acting through its Corporate and Investment Banking division)
Date: 25/07/2013 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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