Wrap Text
Provisional summarised audited consolidated financial statements for the twelve months ended 28 February 2017
NEWPARK REIT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2015/436550/06)
JSE share code: NRL ISIN: ZAE000212783
(Approved as a REIT by JSE)
("Newpark” or "the Company” or "the group”)
PROVISIONAL SUMMARISED AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE TWELVE MONTHS ENDED
28 FEBRUARY 2017
DIRECTORS' COMMENTARY
Nature of Business
Newpark is a property holding and investment company that is currently invested in A-grade commercial properties.
Property portfolio
Newpark's property portfolio consists of four properties. Two are located in the heart of Sandton, Gauteng, namely the JSE which
has 18,163 m(2) of gross lettable area ("GLA”) and an adjoining property known as 24 Central, which has 15,083 m(2) of GLA. One
property is situated in Linbro Park which has 12,317 m(2) of GLA and one property is situated in Crown Mines which has 11,277 m(2) of
GLA. The combined independent valuations of these properties as at 28 February 2017 was R1,34 billion.
Strategy
Newpark's investment strategy is to seek well positioned prime commercial properties which provide quality cash flows with the
potential of upward rating on lease renewals and/or redevelopment opportunities within the medium to long-term (5 years to 20
years). In addition to the core business of acquiring and developing physical assets in South Africa, Newpark will explore the potential
for investment into listed real estate securities that offer good value in certain offshore markets.
Distributable Earnings and Commentary on results
Distributable earnings for the full year of 49,56 cents per share is in line with the guidance provided on listing of 49,47 cents per
share. The board has declared a final dividend of 24,56 cents per share after having declared an interim dividend of 25,00 cents per
share.
Year on year Newpark has increased its net asset value per share from R8,05 to R8,75, an increase of 8,7%.
Acquisitions
As announced on SENS on 23 February 2017, Newpark acquired two industrial properties situated in prime locations with high
quality tenants, triple net leases and long lease expiry profiles through the acquisition of I.M.P. Properties Proprietary Limited
("IMP”) and IMP's related companies, Formprops 61 Proprietary Limited ("Formprops”) and CP Finance Proprietary Limited ("CP
Finance”).
The acquisition is consistent with Newpark's investment strategy of acquiring high quality commercial properties that offer superior
capital growth and that are earnings accretive. The properties have a blended acquisition yield of 9.7%, a weighted average lease
expiry profile of 8.5 years (based on income) and average rental escalations of 8.4%.
Sectoral split, Lease expiry profile and Vacancies
SECTORAL SPLIT GLA Gross Rentals
Based on:
Mixed use 9.4% 15.8%
Office 49.1% 63.8%
Industrial 41.5% 20.4%
100.0% 100.0%
LEASE EXPIRY PROFILE (unaudited)
Based on: GLA Gross Rentals
Vacant 4.6% 5.7%
Feb 2018 7.5% 3.2%
Feb 2019 6.8% 12.4%
Feb 2020 5.4% 6.9%
Feb 2021 0.2% 0.3%
Feb 2022 1.2% 2.1%
> Feb 2022 74.3% 69.4%
100.0% 100.0%
Funding
Amount Margin
Facility drawn down R'millions over Jibar
Expiry August 2020 (facility 1) 270 1.65%
Expiry March 2017(A) (facility 2) 231 1.95%
Amount
Interest rate applicable R'millions Hedges base-rate
Interest rate swap 1 135 8.52%
Interest rate swap 2 230 7.70%
Interest rate cap 135 10.17%
Both the swap 1 and cap expire in January 2019
The swap 2 expires in April 2020 and has been put in place subsequent to year-end on 10 April 2017
(A)Refer note 7 below
The RMB facilities at year-end are secured by a first mortgage bond over fixed property with a carrying value of R1 016 758 947.
The RMB facility 1 is repayable in August 2020. Newpark has an interest rate swap 1 and interest rate cap on this facility. The interest
rate cap has the effect that 50% of the interest on the RMB facility is capped at a base rate of 10.17%. In addition, the interest rate
swap 1 secured with RMB has the effect that in respect of the remaining 50% of the interest on the RMB facility, the floating portion
of the current rate is swapped for a fixed rate of 8.52%, before the RMB margin of 1.65%. The interest rate swap 1 and cap expire
on 18 January 2019 and interest is payable quarterly.
The RMB facility 2 (bridge loan) was repayable in March 2017. Newpark has an interest rate swap 2 on this facility. The floating rate
of the facility 2 is swapped for a fixed rate of 7.70%, before the RMB margin of 1.95%. The interest rate swap 2 expires on 10 April
2020 and interest is payable quarterly.
Subsequent to the reporting period the RMB facility 2 of R230 881 700 was restructured into a 3 year term loan facility of
R500 000 000, consolidating Newpark's existing RMB facility 1 (a 3 year term loan of R270 000 000), on 24 May 2017. The
consolidated term loan facility has a full capital redemption in May 2020. The term loan remains fully hedged as outlined above.
Percentage of debt hedged
The all-in weighted average cost of funding is 9.71% and the average hedge-term is 2.5 years. It is the board's policy to hedge at
least 70% of the exposure to interest rate risk and Newpark currently has 73,1% of its exposure to interest rate risk hedged.
Summary of financial performance
28 February 2017 29 February 2016
Shares in issue 100,000,001 100,000,001
Net asset value per share R8.75 R8.05
Loan-to-value ratio * 33.5% 22.3%
Gross property operating expense ratio 20.6% 34.9%
*The loan-to-value ratio is calculated by dividing interest bearing borrowing net of cash on hand by the total of investment property.
Outlook
The board is confident that Newpark will deliver growth of 6,5% to 7,5% in distributable income per share for FY 2018. The forecast
is based on the assumption that a stable macro-economic environment will prevail, no material tenant default will occur and
operating cost increases will not exceed inflation. This forecast has not been audited or reviewed by the Company's auditors.
SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited Audited Audited
Restated Restated
28 February 29 February 28 February
2017 2016 2015
(R'000) (R'000) (R'000)
Assets
Non-current assets
Investment properties note 3 1 234 246 982 308 739 591
Straight-line lease asset 87 758 57 550 40 637
Derivative financial instruments - 699 -
Lease incentive 19 849 22 496 17 124
1 341 853 1 063 053 797 352
Current Assets
Trade and other receivables 4 834 6 157 6 718
Lease incentive 2 647 2 647 2 647
Currrent rax receivable - - 865
Cash and cash equivalent 50 746 32 217 1 231
Total Current Assets 58 227 41 021 11 461
Total Assets 1 400 080 1 104 074 808 813
Equity and Liabilities
Equity
Share capital 619 918 620 006 1
Reserves 180 412 180 412 -
Retained income 75 023 4 826 452 918
875 354 805 244 452 919
Liabilities
Non-Current Liabilities
Bank borrowings 270 000 270 000 198 290
Deferred tax - - 100 029
Derivative financial instruments 3 078 - -
273 078 270 000 298 319
Current liabilities
Trade and other payables 20 611 28 830 10 176
Current portion of bank borrowings 230 882 -
Loans from shareholders - - 47 400
Receiver of revenue 155 - -
Total Liabilities 524 726 298 830 355 894
Total Equity and Liabilities 1 400 080 1 104 074 808 813
Net asset value per share R8,75 R8,05 -*
* Newpark not listed during 2015
SUMMARISED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Audited Audited
Restated
12 months ended 12 months ended
28 February 29 February
2017 2016
(R'000) (R'000)
Revenue 109 663 95 185
Property operating expenses (22 699) (33 206)
Other income - 100
Administrative expenses (3 096) (6 000)
Net gain from fair value adjustment on investment property 37 980 241 825
Net change in fair value of financial instruments at fair value through profit (3 777) 699
or loss
Operating profit 118 071 298 603
Finance income 3 316 1 161
Finance costs (26 190) (22 191)
Profit before taxation 95 196 277 573
Taxation - 100 122
Profit for the period 95 196 377 695
Other comprehensive income - -
Total comprehensive income 95 196 377 695
Earnings per share information (cents per share)
Basic earnings per share note 5 95.20 416.24
Diluted earnings per share note 5 95.20 416.24
SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share capital Share issue Total share Capital Restated Restated
costs capital reorganisation Retained Total
Audited (R'000) (R'000) reserve (loss)/income equity
(R'000) (R'000) (R'000) (R'000)
Balance at 1 March 2015 1 - 1 - 452 918 452 919
Profit for the period - - - - 377 695 377 695
Other comprehensive income - - - - - -
Total comprehensive income
for the period - - - - 377 695 377 695
Issue of shares 625 000 (4 994) 620 006 - - 620 006
Capital reorganisation (1) - (1) 180 412 (180 474) (63)
Dividends - - - - (645 313) (645 313)
Total contributions by and 624 999 (4 994) 620 005 180 412 (825 787) (25 370)
distributions to owners of
company recognised directly
in equity
Balance at 1 March 2016 625 000 (4 994) 620 006 180 412 4 826 805 244
Profit for the period - - - - 95 196 95 196
Other comprehensive income - - - - - -
Total comprehensive income
for the period - - - - 95 196 95 196
Share issue costs - (88) (88) - - (88)
Dividends - - - - (24 999) (24 999)
Total contributions by and - (88) (88) - (24 999) (25 086)
distributions to owners of
company recognised directly
in equity
Balance at 28 February 2017 625 000 (5 082) 619 918 180 412 75 024 875 354
SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
Audited Audited
Restated
28 February 29 February
2017 2016
(R'000) (R'000)
Cash flows from operating activities
Cash generated from operations 64 967 48 223
Finance income 3 316 1 161
Finance costs (26 191) (22 191)
Taxation received - 958
Net cash from operating activities 42 092 28 151
Cash flows from investing activities
Purchase of furniture and fixtures (1 509) (1 100)
Acquisition of Investment property (229 032) -
Acquisition of investment in subsidiary 1 183 (62)
Net cash from investing activities (229 358) (1 162)
Cash flows from financing activities
(Costs associated with share issue)/ Issue of shares (88) 62 500
Repayment of shareholders' loan - (47 400)
Dividends paid (24 999) (83 813)
Bank borrowings advanced 230 882 270 000
Bank borrowings repaid - (198 290)
Net cash from financing activities 205 795 3 997
Total cash and cash equivalent movement for the period 18 529 30 986
Cash and cash equivalents at beginning of period 32 217 1 231
Total cash and cash equivalents at end of period 50 746 32 217
Additional info on cash flow:
Cash generated from operations before working capital changes 72 890 29 009
Working capital changes (7 923) 19 214
Cash generated from operations 64 967 48 223
SIGNIFICANT FINANCIAL STATEMENT NOTES
1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The provisional summarised audited consolidated financial statements are prepared in accordance with the requirements of the JSE
Listings Requirements and the requirements of the Companies Act 71 of 2008 of South Africa applicable to summary financial
statements. The JSE Listings Requirements require provisional reports to be prepared in accordance with the framework concepts
and the measurement and recognition requirements of International Financial Reporting Standards ("IFRS”), the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial
Reporting Standards Council, and to also, as a minimum, contain the information required by IAS 34, Interim Financial
Reporting. The accounting policies applied in the preparation of these financial statements are in terms of IFRS and are consistent
with those applied in the previous consolidated annual financial statements.
The provisional summarised audited consolidated financial statements were compiled by Dries Ferreira, the financial director.
The directors are not aware of any matters or circumstances arising subsequent to the year-end that require any additional
disclosure or adjustment to the financial statements.
The provisional summarised audited consolidated financial statements for the twelve months ended 28 February 2017 have been
extracted from audited information but is not itself audited. The directors of Newpark take full responsibility for the preparation of
this report and that the financial information has been correctly extracted from the underlying audited consolidated financial
statements. The annual financial statements were audited by PricewaterhouseCoopers Inc. and an unmodified audit opinion has
been issued on the audited consolidated financial statements for the financial year ended 28 February 2017. The auditor's report
does not necessarily report on all of the information contained in this announcement. Shareholders are therefore advised that in
order to obtain a full understanding of the nature of the auditor's engagement, they should obtain a copy of that report together
with the accompanying audited consolidated financial statements, both of which are available for inspection at Newpark's
registered office.
2. SEGMENTAL ANALYSIS
Segmental information
At 28 February 2017, the group is organised into three main operating segments:
- Mixed use
- Office
- Industrial
28 February 2017 Mixed use Office Industrial General Total
(R'000) (R'000) (R'000) (R'000) (R'000)
Revenue 52 565 56 592 506 - 109 663
Property operating expenses (22 699) - - - (22 699)
Administrative expenses - - - (3 096) (3 096)
Fair value adjustments 16 768 19 244 1 969 (3 777) 34 203
Operating profit 46 634 75 836 2 475 (6 873) 118 071
Mixed use Office General Total
29 February 2016 (R'000) (R'000) (R'000) (R'000)
Revenue 58 160 37 025 - 95 185
Property operating expenses (21 896) (11 320) - (33 206)
Other income - - 100 100
Administrative expenses - - (6 000) (6 000)
Fair value adjustments 122 782 119 043 699 242 524
159 046 144 758 (5 201) 298 603
The amounts provided to EXCO with respect to total assets are measured in a manner consistent with that in the statement of
financial position. These assets are allocated based on the operations of the segment.
28 February 2017 Mixed use Office Industrial General Total
(R'000) (R'000) (R'000) (R'000) (R'000)
Investment property 487 773 531 603 214 870 - 1 234 246
Straight-line lease asset 3 727 67 901 16 130 - 87 758
Lease incentive - 22 496 - - 22 496
Trade & other receivables 3 562 - 1 272 - 4 834
Cash & cash equivalents - - - 50 746 50 746
495 062 622 000 232 272 50 746 1 400 080
29 February 2016 Mixed use Office General Total
(R'000) (R'000) (R'000) (R'000)
Investment property 471 510 510 798 - 982 308
Straight-line lease asset 3 490 54 060 - 57 550
Derivative financial instruments - 699 - 699
Lease incentive - 25 143 - 25 143
Trade and other receivables 6 028 29 100 6 157
Cash & cash equivalents - - 32 217 32 217
481 028 590 729 32 317 1 104 074
The amounts provided to EXCO with respect to total liabilities are measured in a manner consistent with that in the statement of
financial position. These liabilities are allocated based on the operations of the segment.
28 February 2017 Mixed use Office Industrial General Total
(R'000) (R'000) (R'000) (R'000) (R'000)
Bank borrowings - 270 000 230 882 - 500 882
Derivative financial instruments - 3 078 - - 3 078
Trade and other payables 2 002 15 755 1 667 1 188 20 611
Receiver of revenue - - 155 - 155
2 002 288 833 232 704 1 188 524 726
29 February 2016 Mixed use Office General Total
(R'000) (R'000) (R'000) (R'000)
Bank borrowings - 270 000 - 270 000
Trade & other payables 1 521 23 166 4 143 28 830
1 521 293 166 4 143 298 830
Audited Audited
Restated
12 months ended 12 months ended
28 February 29 February
2017 2016
Distributable income (R'000) (R'000)
Headline earnings 57 216 46 092
Adjusted for:
Change in fair value of investment property as a result of (14 078) (26 762)
amortisation of straight-line lease asset and tax thereof
Change in fair value of investment property as a result of 2 647 2 647
amortisation lease incentive and tax thereof
Deferred tax movement -
Fair value adjustment of financial derivative instruments 3 777 (503)
and the tax thereof
49 562 21 474
Weighted average number of ordinary shares in issue 100 000 100 000
('000)
Distributable income per share (cents per share) 49,56 21,47
Interim dividend 25,00 -
Final dividend 24,56 21,47
3. Investment properties
For the year under review the property value includes movement made up of the increase in straight lining of the lease assets and
the decrease in lease incentives as well as additions and depreciation relating to furniture and fixtures.
28 February 2017 29 February 2016
(R'000) (R'000)
Cost/ Accumulated Carrying Cost/ Accumulated Carrying
Valuation depreciation value Valuation depreciation value
Investment property 1 231 629 - 1 231 629 980 747 - 980 747
Furniture and fittings 3 839 (1 222) 3 514 2 330 (769) 1 561
Total 1 235 469 (1 222) 1 234 246 983 077 (769) 982 308
Reconciliation of investment properties - 28 February 2017
Opening balance Additions Fair value Depreciation Closing
adjustments balance
Investment property 980 747 212 902 37 980 - 1 231 629
Furniture and fixtures 1 561 1 509 - (453) 2 617
Total 982 308 214 411 37 980 (453) 1 234 246
Reconciliation of investment properties - 29 February 2016
Opening balance Additions Fair value Depreciation Closing
adjustments balance
Investment property 738 923 - 241 825 - 980 747
Furniture and fixtures 669 1 100 - (208) 1 561
Total 739 591 1 100 241 825 (208) 982 308
A register containing the information required by Regulation 25(3) of the Companies Regulations, 2011 is available for inspection at
the registered office of the company.
28 February 29 February
2017 2016
(R'000) (R'000)
JSE Building
Portion 25 of Erf 7 Sandown Johannesburg, South Africa
-Purchase price 18 070 18 070
-Fair value adjustment 603 930 573 491
622 000 591 561
24 Central
Portion 20 of Erf 7 Sandton Township, registration division IR, Province of Gauteng
-Purchase price 238 000 238 000
-Fair value adjustment 249 465 234 021
-Net capitalised expenditure 4 035 1 418
491 500 473 439
Linbro Park
Portion 3 of Erf 9 Frankenwald Ext3 Johannesburg, South Africa
-Purchase price 143 427 -
-Fair value adjustment 1 573 -
145 000 -
Crown Mines
Erven 1 and 2 Crown City Extension 1
-Purchase price 85 605 -
-Fair value adjustment 395 -
86 000 -
28 February 29 February
2017 2016
(R'000) (R'000)
Fair value of investment property for accounting purposes
Opening fair value of property assets 1 065 000 800 000
Gross fair value adjustment on investment property 37 980 241 825
Additions to furniture & fittings 1 509 1 100
Depreciation (453) (208)
Acquisition of investment property 212 902 -
Acquisition of straight-line assets 16 130 -
Straight-line lease asset and lease incentive movement 11 433 22 283
Property valuation 1 344 500 1 065 000
Less: straight-line lease income adjustment (87 758) (57 549)
Less: lease incentive receivable (22 496) (25 142)
Closing fair value of property assets 1 234 246 982 308
Securities
Mortgage bonds have been registered over investment properties with a fair value of R1 016 758 947 (February 2016: R982 308 223)
as security for interest bearing liabilities at a nominal value amounting to R500 881 700 (February 2016: R270 000 000).
Details of valuation
The properties were valued on 28 February 2017 using the discounted cash flow of future income streams method. The valuations
of the properties were performed by an independent valuer, Peter Parfitt of Quadrant Properties Proprietary Limited, who is a
registered valuer in terms of section 19 of the Property Valuers Professional Act, No 47 of 2000.
At the 28 February 2017, the key assumptions and unobservable inputs used by the company in determining fair value were as
follows:
These assumptions are based on current market conditions.
Mixed use Office Industrial
Discount rate 14,50% 14,25% 15,00%
Exit capitalisation rate 9,00% 8,50% 9,87%
Capitalised rate 8,50% 8,25% 9,30%
Investment property is required to be fair valued with sufficient regularity that the value is representative of the fair value.
Measurement of fair value
Valuation techniques:
Discounted cash flows: The valuation model considers the present value of net cash flows to be generated from the property, taking
into account expected rental and expense growth rates, vacant periods, lease incentive costs such as rent-free periods and other
costs not recovered from tenants. The expected net cash flows are discounted using a discount rate. The discount rate applied is
derived using an appropriate capitalisation rate and adding a growth rate based on market-related rentals, testing this for
reasonableness by comparing the resultant Rand rate per m2 against comparative sales of similar properties in similar locations.
Amongst other factors, the capitalisation rate estimation considers the quality of the property, its location, the tenants' credit quality
and their lease terms.
Inter-relationship between key unobservable inputs and fair value measurements:
The estimated fair value would increase/ (decrease) if:
- expected market rental growth was higher/ (lower);
- expected expense growth was lower/ (higher);
- vacant periods were shorter/ (longer);
- the occupancy rate was higher/ (lower);
- rent-free periods were shorter/ (longer);
- discount rate was lower/ (higher); and
- reversionary capitalisation rate was lower/ (higher).
4. Acquisition of investment properties
On 21 February 2017, the group acquired two investment properties (refer note 3 above for descriptions) for a total purchase
consideration of R229 031 297, including the costs directly associated with the acquisition of the properties.
The investment properties are held in IMP and IMP's related wholly owned subsidiaries, Formprops and CP Finance. These two
industrial properties are situated in prime locations with high quality tenants, triple net leases and long lease expiry profiles. The
first year of ownership will deliver a neutral contribution to both earnings and distributions, but is expected to be both earnings and distribution
enhancing from year two onwards.
Property name Address and geographical Sector Total GLA Net operating Purchase
location (m(2)) Income price
(R'000) (R'000)
Linbro Park Portion 3 and 4 of Erf 9 Industrial 12 317 14 590 143 427
Frankenwalk Extension 3
Township (Linbro Business
Park)
Crown Mines Erven 1 and 2 Crown City Industrial 11 277 7 452 85 605
Extension 1
Total 23 594 22 042 229 031
5. Earnings per share
Audited Audited
Restated
12 months ended 12 months ended
28 February 29 February
2017 2016
Basic earnings per share (R'000) (R'000)
Profit attributable to shareholders 95 196 377 695
Weighted average number of ordinary shares in issue ('000) 100 000 90 740
Basic earnings per share (cents per share) 95,20 416,24
Diluted earnings per share
There are no dilutive instruments in issue
Profit attributable to shareholders 95 196 377 695
Weighted average number of ordinary shares in issue ('000) 100 000 90 740
Basic diluted earnings per share (cents per share) 95,20 416,24
Headline earnings per share
Profit attributable to shareholders 95 196 377 695
Adjusted for:
Change in fair value of investment property and tax thereof (37 980) (331 603)
57 216 46 092
Weighted average number of ordinary shares in issue ('000) 100 000 90 740
Headline earnings per share (cents per share) 57,22 50,80
6. Payment of final dividend
The board has approved and notice is hereby given of the final gross dividend of 24,56209 cents per share for the six months
ended 28 February 2017. The interim dividend paid on 7 November 2016 amounted to 24,99884 cents per share.
The dividend is payable to Newpark's shareholders in accordance with the timetable set out below:
2017
Last date to trade cum dividend: Monday, 12 June
Shares trade ex dividend: Tuesday, 13 June
Record date: Thursday, 15 June
Payment date: Monday, 19 June
Share certificates may not be dematerialised or rematerialised between Tuesday, 13 June 2017 and Thursday, 15 June 2017, both
days inclusive.
In accordance with Newpark's status as a REIT, shareholders are advised that the dividend meets the requirements of a "qualifying
distribution” for the purposes of section 25BB of the Income Tax Act, No. 58 of 1962 ("Income Tax Act”). The dividend will be deemed
to be a dividend for South African tax purposes, in terms of section 25BB of the Income Tax Act.
The dividend received by or accrued to South African tax residents must be included in the gross income of such shareholders and
will not be exempt from income tax (in terms of the exclusion to the general dividend exemption, contained in paragraph (aa) of
section 10(1)(k)(i) of the Income Tax Act) because it is a dividend distributed by a REIT. This dividend is, however, exempt from
dividend withholding tax in the hands of South African tax resident shareholders, provided that the South African resident
shareholders, provided the following forms to their Central Securities Depository Participant ("CSDP”) or broker, as the case may
be, in respect of uncertificated shares, or the company, in respect of certificated shares:
a) a declaration that the dividend is exempt from dividends tax; and
b) a written undertaking to inform the CSDP, broker or the company, as the case may be, should the circumstances affecting
the exemption change or the beneficial owner cease to be the beneficial owner,
both in the form prescribed by the Commissioner for the South African Revenue Service. Shareholders are advised to contact their
CSDP, broker or the company, as the case may be, to arrange for the abovementioned documents to be submitted prior to payment
of the dividend, if such documents have not already been submitted.
Dividends received by non-resident shareholders will not be taxable as income and instead will be treated as an ordinary dividend
which is exempt from income tax in terms of the general dividend exemption in section 10(1)(k)(i) of the Income Tax Act. On 22
February 2017 the dividends withholding tax was increased from 15% to 20% and accordingly, any dividends received by a non-
resident from a REIT will be subject to dividend withholding tax at 20%, unless the rate is reduced in terms of any applicable
agreement for the avoidance of double taxation ("DTA”) between South Africa and the country of residence of the shareholders.
Assuming dividend withholding tax will be withheld at a rate of 20%, the net dividend amount due to non-resident shareholders is
19.64967 cents per share. A reduced dividend withholding rate in terms of the applicable DTA, may only be relied upon if the non-
resident shareholder has submitted the following forms to their CSDP or broker, as the case may be, in respect of uncertificated
shares, or the company, in respect of certificated shares:
a) a declaration that the dividend is subject to a reduced rate as a result of the application of a DTA; and
b) a written undertaking to inform their CSDP, broker or the company, as the case may be, should the circumstances affecting
the reduced rate change or the beneficial owner cease to be the beneficial owner,
both in the form prescribed by the Commissioner for the South African Revenue Service. Non-resident shareholders are advised to
contact their CSDP, broker or the company, as the case may be, to arrange for the abovementioned documents to be submitted
prior to payment of the dividend if such documents have not already been submitted, if applicable.
The dividend will be transferred to dematerialised shareholders' CSDP accounts/broker accounts on Monday, 19 June 2017.
Certificated shareholders' dividend payments will be paid to certificated shareholders' bank accounts on or about, Monday,
19 June 2017.
Shares in issue at the date of declaration of dividend: 100,000,001
Newpark's income tax reference number: 9114003149.
7. Events after the reporting period
The funding facilities of the group have been consolidated after the reporting period as set out in the funding note above. The initial
RMB fees were reduced subsequent to year-end to the numbers listed in the funding note above and all of these corrections were
brought to book in the F2017 period reported on in this set of financial statements.
Other than the matter outlined above the directors are not aware of any material event which occurred after the reporting date and
up to the date of this report.
8. Related parties
Relationships
Subsidiary Newpark Towers Proprietary Limited
Former shareholders of subsidiary BD Van Wyk
Ellerine Bros Proprietary Limited
Ellwain Investments Proprietary Limited
FHP Manager Proprietary Limited
Renlia Developments Proprietary Limited
GROUP GROUP
28 February 29 February
2017 2016
(R'000) (R'000)
Interest paid to related parties
BD Van Wyk - 35
Ellerine Bros Proprietary Limited - 548
Ellwain Investments Proprietary Limited - 548
Renlia Developments Proprietary Limited - 376
Newpark Towers Proprietary Limited - -
- 1 057
Professional services - WellCapital (Pty) Ltd (JAI Ferreira director) 200 -
9. Prior period errors
Error 1:
The recognition of deferred tax and income tax in the accounting records of Newpark REIT Limited and its group-company was
inconsistent with the provisions of the Income Tax Act which specifies that a REIT is not subject to tax. The underlying assumption
which must support the recognition of any income tax or deferred tax asset or liability must be that the asset or liability will be
realised in the ordinary course of business. With Newpark group being classified as a REIT, and also expecting to maintain its
classification as a REIT as a result of the intention to declare distributions in line with the requirements of section 25BB of the
Income Tax Act, it is therefore not correct to recognise any tax balance on the statement of financial position. The change to REIT
status was confirmed during the 2016 financial period and therefore these changes would have had to be accounted for in the
2016 financial period. There was no impact recorded for the 2015 financial period as the REIT status was achieved in 2016 only.
The correction of the errors results in adjustments as follows:
Restated Reported Difference
29 February 29 February
2016 2016
(R'000) (R'000) (R'000)
Statement of financial position
Non-current assets
Deferred tax - 55 (55)
Equity
Opening retained income - - -
Retained income 4 826 (9 759) 14 585
Non-current liabilities
Deferred tax - (14 640) (14 640)
Statement of profit or loss and other comprehensive income
Taxation income 100 122 85 537 14 585
Error 2:
The recognition of a current portion of the straight-line lease asset was incorrectly recorded in the financial statements. The
principle of disclosing a current portion of straight-line lease assets is to disclose the portion of the straight-line lease asset that
will realise in cash in the next 12 months. None of the straight-line lease assets have any unwinding portion and accordingly the
correct disclosure between current and non-current was adopted for the this set of financial statements as no portion of the
straight-line lease assets should have been disclosed as current during the comparative periods.
The correction of the errors results in adjustments as follows:
Restated Reported Difference
29 February 29 February
2016 2016
(R'000) (R'000) (R'000)
Statement of financial position
Non-current assets
Straight-line lease asset 57 550 44 823 12 727
Current assets
Straight-line lease asset - 12 727 (12 727)
Restated Reported Difference
29 February 29 February
2015 2015
(R'000) (R'000) (R'000)
Statement of financial position
Non-current assets
Straight-line lease asset 40 638 23 726 16 912
Current assets
Straight-line lease asset - 16 912 (16 912)
Changes to the board
Effective 31 August 2016, Ron Hill resigned as the financial director of the Company and Dries Ferreira was appointed as financial
director effective 1 September 2016. The board would like to thank Ron for his valuable contribution in establishing Newpark as a
REIT. The board also welcomes Stewart Shaw-Taylor to the board. Stewart joined the board on 1 February 2017.
By order of the board.
Simon Fifield Dries Ferreira
Chief Executive Officer Financial Director
Johannesburg
25 May 2017
DIRECTORS
G D Harlow (Chairman) **, S P Fifield (Chief Executive Officer), JAI Ferreira (Financial Director), B D van Wyk *, D T Hirschowitz*,
K M Ellerine*, H C Turner **, D I Sevel ** S Shaw-Taylor**
* Non-executive director ** Independent non-executive director
REGISTERED OFFICE
51 West Street, Houghton, Gauteng, 2198
P O Box 3178, Houghton, Gauteng, 2041
WEBSITE
www.newpark.co.za
COMPANY SECRETARY
CIS Company Secretaries Proprietary Limited
TRANSFER SECRETARY
Computershare Investor Services Proprietary Limited
DESIGNATED ADVISOR
Java Capital
Date: 25/05/2017 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
