Wrap Text
Reviewed provisional condensed consolidated financial results for the year ended 31 August 2017
Dipula Income Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 2005/013963/06)
JSE share code: DIA ISIN: ZAE000203378
JSE share code: DIB ISIN: ZAE000203394
(Approved as a REIT by the JSE)
("Dipula" or "the company",
and together with its subsidiaries, "the group")
REVIEWED PROVISIONAL CONDENSED CONSOLIDATED
FINANCIAL RESULTS FOR THE YEAR ENDED 31 AUGUST 2017
HIGHLIGHTS
DISTRIBUTABLE EARNINGS
UP 11.3% TO
R428.2 million
COMBINED DIVIDENDS
PER SHARE
UP 5.8%
A-SHARE DIVIDEND
UP 5% TO
101.29784 cents per share
B-SHARE DIVIDEND
UP 6.7% TO
95.49834 cents per share
PORTFOLIO VALUE
AT
R6.9 billion
POST-PERIOD ACQUISITIONS
OF
R1.5 billion
27 NON-CORE PROPERTIES
SOLD FOR
R295 million
COMMENTARY
Introduction
Despite a challenging environment, Dipula continued to grow distributions for the year ended 31 August 2017
("the year"). During the year, a number of disposals were completed and post year-end, strategic acquisitions of
approximately R1.5 billion have been concluded. Dipula's revenue for the year exceeded R1 billion. Net asset value
("NAV") decreased slightly to R10.13 per share (2016 : R10.46) due to the impairment of goodwill and the derivative
liability raised on interest rate swaps.
Profile
Dipula is a REIT that owns a diversified portfolio, comprising retail, office and industrial properties located across all
provinces in South Africa. The majority are located in Gauteng.
Dipula trades under the codes DIA and DIB. DIA shares are entitled to a 5% preferred income growth while DIB shares
receive the remaining net distributable income. With effect from 1 September 2017, the growth in the A share dividend
changes from a fixed 5% per annum to the lesser of 5% or CPI.
Distributable earnings
Distributable earnings increased 11.3% to R428.2 million (2016: R384.6 million). Distributions per share on the combined
basis increased by 5.8% (2016: 8%).
The dividend attributable to A-shares was up 5% year-on-year to 101.29784 cents per share (2016: 96.47414 cents) and
is in line with the dividend policy to A-shareholders. The dividend attributable to B-shares increased 6.7% year-on-year to
95.49834 cents per share (2016: 89.49361 cents).
Property portfolio
Dipula's property portfolio of 174 properties is valued at R6.9 billion with a total gross lettable area of 757 363m(2)
(2016: 201 properties; R7.1 billion value; 807 100m(2)). The decrease is as a result of the sale of a number of non-core
properties.
August 2017 August 2016 August 2015
Cost-to-income ratios % % %
Property cost to income (gross basis) 33.6 34.2 34.5
Property cost to income (net basis) 19.3 16.9 19.8
Total cost to income (net basis) 23.0 20.8 24.2
Sectoral and geographic profile
The sector and geographic breakdown of Dipula's portfolio at 31 August 2017 is set out below:
Sectoral Split by GLA and Revenue
% of GLA % of Revenue
Retail 59% 68%
Office 16% 17%
Industrial 25% 15%
Grand Total 100% 100%
Geographic Split by GLA and Revenue
% of GLA % of Revenue
Gauteng 60.3% 61.2%
Limpopo 13.4% 12.1%
Eastern Cape 9.6% 9.6%
KwaZulu-Natal 6.0% 7.5%
North West 3.0% 3.1%
Free State 2.9% 2.4%
Mpumalanga 2.2% 2.6%
Western Cape 2.2% 1.3%
Northern Cape 0.4% 0.2%
Grand Total 100.00% 100.00%
Portfolio LEP August 2017
Average monthly
Lease Expiry Profile GLA gross income
Vacant 63 420
2018 179 937 13 519 048
2019 159 694 16 031 904
2020 87 628 9 818 152
2021 72 480 7 242 631
After 2021 181 552 15 679 153
Vacancies
Vacancies remained stable at 8.5% (2016: 8.5%). The breakdown of vacancies by sector is as follows: Retail 7.1%
(2016: 8.5%), Offices 18.7% (2016: 12.8%) and Industrial 5.4% (2016: 5.9%).
Acquisitions and disposals
Dipula acquired the remaining 20% interest in property holding companies, Jarabilla Investments Proprietary Limited
and Lizinex Proprietary Limited, for a consideration of R133.6 million. During the year 27 non-core properties valued
at R295 million were sold at an aggregate yield of 10%.
Refurbishments and developments
The group is planning refurbishments and upgrades to the existing portfolio totalling R265 million over the next
18 months at an average yield of approximately 11%.
Completed refurbishments and developments during the year amounted to approximately R50 million.
Funding
At 31 August 2017, the group's all-in blended rate of debt was 9.17% (2016: 8.93%). The company has total debt
facilities of R3.0 billion with R2.8 billion utilised to date. The weighted average length of borrowings is 2.7 years.
An aggregate of approximately 90% of the debt has been fixed at year-end for an average period of 2.2 years.
Debt maturity and hedging profile
Financial Facility Fixed/Swap Floating
year-end R'000 % R'000 % R'000 %
2018 557 676 18.6 329 456 11.0 228 220 7.6
2019 951 195 31.8 1 148 601 38.3 (197 406) (6.6)
2020 742 800 24.8 756 250 25.3 (13 450) (0.4)
2021 543 642 18.1 350 000 11.7 193 642 6.5
2022 200 000 6.7 100 000 3.3 100 000 3.3
2 995 313 100 2 684 307 89.6 311 006 10.4
Subsequent events
Post year-end events
As announced on 10 November 2017, Dipula has entered into an agreement to acquire a portfolio of properties for
R1.27 billion. At a forward yield of 11.7% the acquisition is in line with the strategy of acquiring quality enhancing assets.
The portfolio has minimal vacancies at 0.8%.
In addition, Dipula has concluded agreements for the acquisition of three properties for R227 million.
These acquisitions remain subject to various conditions precedent.
Manco internalisation
As announced on SENS on 16 October 2017, Dipula has concluded an agreement to internalise its management,
through the disposal of 100% of the beneficial interest in the Dipula Asset Management Trust by the beneficiaries (the
"vendors") to Dipula for an aggregate acquisition cost of R142 million. The proposed internalisation is consistent with
global best practice and will better align the interests of the company's management and investors. The transaction was
effective 1 September 2017 and all of Dipula's executive management and key staff will be formally employed by Dipula.
The acquisition cost is payable as follows:
- R92.3 million (65% of aggregate cost) through the allotment and issue of a number of Dipula B ordinary shares to
the vendors to be determined with reference to the 30-day volume weighted average price of Dipula B ordinary
shares as at the effective date;
- with the balance of R49.7 million payable in cash.
The internalisation remains subject to Dipula shareholders approving the issue of shares to related party vendors by way
of special resolution passed in terms of section 41(1) of the Companies Act, No 71 of 2008.
Prospects
The board expects growth in distributions of between 5% and 5.5% for the year ending 31 August 2018. This growth
assumes that stable macroeconomic conditions prevail, no major corporate failures will occur and that tenants will be
able to absorb rising utility costs and rates recoveries. Forecast rental income is based on contractual escalations and
market-related renewals. This forecast has not been reviewed or reported on by the group's auditors.
Payment of final dividend
The board has approved and notice is hereby given of the final dividend (dividend number 13) for the period
1 March 2017 to 31 August 2017 of 50.64892 cents per A-share and 53.65841 cents per B-share.
Dipula shareholders will be offered an election, in respect of all or part of their shareholding, to re-invest the cash
dividend of 50.64892 cents per A-share and 53.65841 cents per B-share in return for A-shares or B-shares, as the case
may be (the "re-investment option"). By electing to participate in this re-investment option, shareholders will be able to
increase their shareholding in Dipula without incurring dealing costs. In turn, Dipula will benefit from an increase in the
amount of shareholders' funds available to support continued growth.
Further details regarding the re-investment option, including the manner in which the number of shares to which a
participating shareholder is entitled will be determined and the action to be taken by A and B shareholders in order
to participate in the re-investment option, will be set out in a circular to shareholders to be issued on or about
21 November 2017, and a further announcement in this regard will be released on SENS.
The dividend is payable to Dipula shareholders in accordance with the timetable set out below:
Last day to trade cum dividend Tuesday, 5 December 2017
Shares trade ex dividend Wednesday, 6 December 2017
Record date Friday, 8 December 2017
Payment date Monday, 11 December 2017
Share certificates may not be dematerialised or rematerialised between Wednesday, 6 December 2017 and Friday,
8 December 2017, both days inclusive.
The dividend will be transferred to dematerialised shareholders CSDP accounts/broker accounts on Monday,
11 December 2017. Certificated shareholders' dividend payments will be paid to certificated shareholders' bank
accounts on or about Monday, 11 December 2017.
An announcement relating to the tax treatment will be released separately on SENS.
On behalf of the board
Zanele Matlala Izak Petersen
Chairperson CEO
15 November 2017
Directors
ZJ Matlala* (Chairperson), IS Petersen (CEO), R Asmal (FD), BH Azizollahoff(*#), NS Gumede, SA Halliday(*),
E Links(*), Y Waja(*)
(*) Independent non-executive #British
All directors, other than BH Azizollahoff, are South African.
There were no changes to the board during this period.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Restated
Reviewed Audited
year ended year ended
31 August 31 August
2017 2016
R'000 R'000
ASSETS
Non-current assets 6 989 754 7 017 087
Investment property 6 882 691 6 963 015
Fair value of property portfolio 6 727 095 6 822 860
Straight-line rental income accrual 155 596 140 155
Goodwill 13 327 48 482
Property, plant and equipment 1 267 1 374
Derivative financial assets – 4 216
Loan receivable 92 469 –
Current assets 374 260 206 704
Trade and other receivables 153 817 147 972
Loan receivable 89 936 –
Derivative financial assets 281 –
Cash and cash equivalents 130 226 58 732
Non-current assets held for sale
Investment property held for sale 42 942 93 850
Total assets 7 406 956 7 317 641
EQUITY AND LIABILITIES
Equity 4 424 473 4 325 604
Stated capital 3 346 742 3 107 931
Fair value reserve 998 793 992 884
Retained income 78 938 93 599
Non-controlling interest – 131 190
Non-current liabilities 2 306 139 2 631 664
Interest-bearing liabilities 2 271 057 2 631 664
Derivative liability 35 082 –
Current liabilities 676 344 360 373
Interest-bearing liabilities 551 008 255 000
Trade and other payables 125 336 105 373
Total equity and liabilities 7 406 956 7 317 641
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Reviewed Audited
31 August 31 August
2017 2016
R'000 R'000
Revenue 1 069 660 1 065 387
Contractual rental income 825 555 797 557
Recoveries and other income 226 962 225 918
Straight-line rental income accrual 17 143 41 912
Property expenses (353 463) (349 646)
Net property income 716 197 715 741
Administration and corporate costs (31 887) (32 013)
Net operating profit 684 310 683 728
Net finance cost (243 632) (242 002)
Finance income 20 606 8 540
Finance cost (264 238) (250 542)
Net profit after finance cost 440 678 441 726
Transaction costs on business combination – (3 032)
Goodwill impaired (35 155) –
Fair value adjustments 1 352 245 025
Investment properties and properties held for sale 57 512 284 124
Straight-line rental income accrual (17 143) (41 912)
Interest rate swaps (39 017) 2 813
Profit before taxation 406 875 683 719
Taxation – –
Profit for the year after taxation 406 875 683 719
Other comprehensive income – –
Total comprehensive income for the year 406 875 683 719
Total profit and comprehensive income for the year attributable to:
Shareholders of the company 387 922 666 049
Non-controlling interests 18 953 17 670
406 875 683 719
Basic and diluted earnings per share
A–share (cents) 91.59 163.18
B–share (cents) 91.59 163.18
RECONCILIATION BETWEEN PROFIT, EARNINGS AND HEADLINE EARNINGS
Reviewed Audited
31 August 31 August
2017 2016
R'000 R'000
Earnings 387 922 666 049
Adjustments: 7 372 (242 212)
Goodwill impaired 35 155 –
NCI portion of fair value adjustment 12 586 –
Fair value – investment properties and properties held for sale (57 512) (284 124)
Fair value – straight-line rental income 17 143 41 912
Headline earnings 395 294 423 837
Total number of shares in issue* 436 932 798 413 655 926
Number of A-shares in issue 218 466 344 206 827 963
Number of B-shares units in issue 218 466 454 206 827 963
Weighted average number of A-shares in issue* 211 771 488 203 078 454
Weighted average number of B-shares in issue* 211 771 516 205 098 372
Basic and diluted earnings per A-share (cents) 91.59 163.18
Basic and diluted earnings per B-share (cents) 91.59 163.18
Headline and diluted earnings per A-share (cents) 93.33 103.84
Headline and diluted earnings per B-share (cents) 93.33 103.84
Distribution per A-share 101.29784 96.47414
Interim 50.64892 48.23707
Final 50.64892 48.23707
Distribution per B-share 95.49834 89.49361
Interim 41.83993 38.78144
Final 53.65841 50.71217
Combined share 196.79618 185.96775
Interim 92.48885 87.01851
Final 104.30733 98.94924
Net asset value per A-share (cents) 1 012.62 1 045.70
Net asset value per B-share (cents) 1 012.62 1 045.70
Loan to Value (LTV) 38.9% 40.1%
Basic and headline earnings per share are based on the weighted average number of shares in issue during the year.
The company does not have any dilutionary instrument in issue.
* Net of treasury shares.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Non-
Stated Fair value Retained controlling Total
capital reserve income interest equity
R'000 R'000 R'000 R'000 R'000
Balance at 31 August 2015
(Audited) Restated 2 821 910 705 947 76 114 – 3 603 971
Total comprehensive income
for the year – – 666 049 17 670 683 719
Dividends declared – – (361 627) (14 692) (376 319)
Issue of shares 286 021 - - - 286 021
Equity contributed by
non-controlling shareholders – – – 128 212 128 212
Transfer to fair value reserve
– investment properties – 284 124 (284 124) – –
Transfer to fair value reserve
– interest rate swaps – 2 813 (2 813) – –
Balance at 31 August 2016
(Audited) Restated 3 107 931 992 884 93 599 131 190 4 325 604
Total comprehensive income
for the year – – 387 922 18 953 406 875
Dividends declared – – (404 984) (8 200) (413 184)
Issue of shares 238 811 - - - 238 811
Acquisition of non-controlling interest – – 8 310 (141 943) (133 633)
Transfer to fair value reserve
– investment properties – 44 926 (44 926) – –
Transfer to fair value reserve
– interest rate swaps – (39 017) 39 017 – –
Balance at 31 August 2017
(Reviewed) 3 346 742 998 793 78 938 – 4 424 473
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
Restated
Reviewed Audited
31 August 31 August
2017 2016
R'000 R'000
Cash flows from operating activities
Cash generated from operations 691 395 577 007
Net finance cost (245 228) (242 002)
Dividends paid (413 184) (376 319)
Net cash generated from/(utilised in) operating activities 32 983 (41 314)
Cash flows from investing activities
Acquisition of investment properties and capital expenditure (110 424) (424 533)
Acquisition of business combination – (730 137)
Acquisition of non-controlling interest (133 633) –
Acquisition of property, plant and equipment (460) (474)
Proceeds on disposal of investment properties 111 642 60 703
Net cash utilised in investment activities (132 875) (1 094 441)
Cash flows from financing activities
Issue of shares 238 811 286 021
Interest-bearing liabilities (repaid)/raised (67 425) 845 420
Net cash generated from financing activities 171 386 1 131 441
Net increase/(decrease) in cash and cash equivalents 71 494 (4 314)
Cash and cash equivalents at the beginning of the year 58 732 63 046
Cash and cash equivalents at the end of the year 130 226 58 732
CONDENSED CONSOLIDATED SEGMENTAL INFORMATION
Retail Offices Industrial Land Total
R'000 R'000 R'000 R'000 R'000
YEAR TO 31 AUGUST 2017
(REVIEWED)
Extracts from the statement
of comprehensive income
Revenue from property portfolio(#) 737 589 177 611 137 317 – 1 052 517
Property expenses (259 152) (57 808) (36 488) (15) (353 463)
Net property income 478 437 119 803 100 829 (15) 699 054
Extracts from the statement
of financial position
Investment property at fair value 4 633 166 1 221 630 1 001 315 26 580 6 882 691
Investment property held for sale 40 500 – – 2 442 42 942
Total 4 673 666 1 221 630 1 001 315 29 022 6 925 633
YEAR TO 31 AUGUST 2016
(AUDITED)
Extracts from the statement
of comprehensive income
Revenue from property portfolio(#) 716 200 168 707 138 568 – 1 023 475
Property expenses (246 010) (62 455) (41 167) (14) (349 646)
Net property income 470 190 106 252 97 401 (14) 673 829
Extracts from the statement
of financial position
Investment property at fair value 4 762 274 1 212 682 975 309 12 750 6 963 015
Investment property held for sale 31 250 26 500 34 700 1 400 93 850
Total 4 793 524 1 239 182 1 010 009 14 150 7 056 865
(#) Excluding straight-line rental income.
The entity has four reportable segments based on the sectoral nature – these are the entity's strategic business
segments. For each strategic business segment, the entity's executive directors review internal management reports
on a monthly basis.
Reconciliations of reportable segment revenues and profit
R'000
2017
Revenues
Total revenue for reportable segments 1 052 517
Straight-line rental income accrual 17 143
Consolidated revenue 1 069 660
Profit
Total profit for reportable segments 699 054
Straight-line rental income accrual 17 143
Administration and corporate costs (31 887)
Net finance cost (243 632)
Fair value adjustments 1 352
Goodwill impaired (35 155)
Profit before taxation 406 875
2016
Revenues
Total revenue for reportable segments 1 023 475
Straight-line rental income accrual 41 912
Consolidated revenue 1 065 387
Profit
Total profit for reportable segments 673 829
Straight-line rental income accrual 41 912
Administration and corporate costs (32 013)
Net finance cost (242 002)
Transaction cost on business combination (3 032)
Fair value adjustments 245 025
Profit before taxation 683 719
DISTRIBUTABLE EARNINGS
Reviewed Audited
31 August 31 August
2017 2016
R'000 R'000
Reconciliation of profit for the year to distributable earnings
Profit attributable to shareholders of the company 387 922 666 049
Fair value – investment properties revaluation (57 512) (284 124)
Fair value – straight-line rental income 17 143 41 912
Fair value – interest rate swaps 39 017 (2 813)
NCI portion of fair value adjustment 12 586 –
Antecedent dividend 10 991 2 492
Transaction costs on business combination – 3 032
Goodwill impaired 35 155 –
Straight-line rental income accrual (17 143) (41 912)
Distributable earnings and dividends declared 428 159 384 636
Distribution statement
Revenue 1 052 517 1 023 475
Contractual rental income 825 555 797 557
Recoveries and other income 226 962 225 918
Property expenses (353 463) (349 646)
Net property income 699 054 673 829
Administration and corporate costs (31 887) (32 013)
Net operating profit 667 167 641 816
Net finance cost (243 632) (242 002)
Antecedent dividend 10 991 2 492
Non-controlling interests (6 367) (17 670)
Distribution 428 159 384 636
RESTATEMENT OF THE COMPARATIVES
RESTATEMENT IN THE COMPARATIVE STATEMENTS OF FINANCIAL POSITION, STATEMENTS OF COMPREHENSIVE INCOME, STATEMENTS
OF CHANGES OF EQUITY AND STATEMENTS OF CASH FLOWS
Following a review by the JSE through its proactive monitoring of financial statements for compliance with IFRS,
certain matters were highlighted by the JSE relating to the financial statements for the year ended 31 August 2016
and the comparative period which needed to be corrected in accordance with IFRS. Dipula engaged with the JSE and
agreed to restate these figures when reporting its financial statements for 31 August 2017.
The impact of the restatements has not resulted in any change to actual dividend paid, dividend per share, earnings per
share, headline earnings per share and net asset value per share.
The following restatements were effected to prior years:
1. BUSINESS COMBINATION TREATMENT
In the prior year, the company classified in the statements of cash flows the purchase price of the Moolman
business combination as part of the acquisition of investment properties instead of recognising it as a separate
cash outflow item and the note to the financial statements did not detail the liability on acquisition correctly.
Restated Effects of
comparative Published restatement
2016 2016 2016
EXTRACT OF STATEMENTS OF CASH FLOWS R'000 R'000 R'000
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of investment properties (424 533) (1 282 882) 858 349
Acquisition of business combination (730 137) – (730 137)
Acquisition of property, plant and equipment (474) (474) –
Contribution from non-controlling interest – 128 212 (128 212)
Proceeds on disposal of investment properties 60 703 60 703 –
Net cash utilised in investment activities (1 094 441) (1 094 441) –
Restated Effects of
comparative Published restatement
EXTRACT OF NOTES TO THE ANNUAL 2016 2016 2016
FINANCIAL STATEMENTS R'000 R'000 R'000
Business combinations and acquisition of
non-controlling interests
Assets acquired and liabilities assumed
The fair values of the identifiable assets and liabilities of
Jarrabilla and Lizinex as at the date of the acquisitions
were:
Investment property (at fair value) 858 349 858 349 –
Liabilities (217 289) – (217 289)
Total identifiable net assets at fair value 641 060 858 349 (217 289)
Non-controlling interest (20% of net assets) (128 212) (171 670) 43 458
Goodwill – – –
Purchase consideration transferred 512 848 686 679 (173 831)
2. ANTECEDENT DIVIDENDS
In the prior years, the company incorrectly treated antecedent dividends as a reduction of dividends paid and
a reduction of stated capital. In the 31 August 2016 year, the amount of antecedent dividend treated incorrectly
amounted to R11.350 million and in the 31 August 2015 year, the amount of antecedent dividend treated
incorrectly amounted to R22.894 million.
Restated Effects of
comparative Published restatement
EXTRACT OF STATEMENTS OF FINANCIAL 2016 2016 2016
POSITION R'000 R'000 R'000
Equity 4 325 604 4 325 604 –
Stated capital 3 107 931 3 073 687 34 244
Fair value reserve 992 884 992 884 –
Non-controlling interest 131 190 131 190 –
Accumulated profit 93 599 127 843 (34 244)
Restated Effects of
comparative Published restatement
2015 2015 2015
R'000 R'000 R'000
Equity 3 603 971 3 603 971 –
Stated capital 2 821 910 2 799 016 22 894
Fair value reserve 705 947 705 947 –
Accumulated profit 76 114 99 008 (22 894)
Restated Effects of
comparative Published restatement
EXTRACT OF STATEMENTS OF 2015 2015 2015
COMPREHENSIVE INCOME R'000 R'000 R'000
Net operating profit 453 104 453 104 –
Net finance cost (292 538) (269 644) (22 894)
Finance income 7 626 7 626 –
Finance cost (149 456) (149 456) –
Debenture interest (150 708) (127 814) (22 894)
Net profit after finance cost 160 566 183 460 (22 894)
Fair value adjustments 207 391 207 391 –
Profit before taxation 367 957 390 851 (22 894)
Taxation – – –
Profit for the year after taxation 367 957 390 851 (22 894)
Other comprehensive income – – –
Total comprehensive income for the year 367 957 390 851 (22 894)
(*) There was no impact on the statement of comprehensive income in 2016
Restated comparative Published Effects of restatement
EXTRACT OF Stated Retained Stated Retained Stated Retained
STATEMENTS OF capital income capital income capital income
CHANGES IN EQUITY R'000 R'000 R'000 R'000 R'000 R'000
Balance at 31 August 2014 427 852 (80 375) 427 852 (80 375) – –
Total comprehensive income
for the year – 367 957 – 390 851 – (22 894)
Capitalisation on cancellation
of debentures 2 394 058 – 2 371 164 – 22 894 –
Transfer to fair value reserve
– investment properties – (210 065) – (210 065) – –
Transfer to fair value reserve
– interest rate swaps – (1 403) – (1 403) – –
Balance at 31 August 2015 2 821 910 76 114 2 799 016 99 008 22 894 (22 894)
Shares issued net of share issue
expenses 286 021 – 274 671 – 11 350 –
Total comprehensive income
for the year – 666 049 – 666 049 – –
Dividends declared – (361 627) – (350 277) – (11 350)
Transfer to fair value reserve
– investment properties – (284 124) – (284 124) – –
Transfer to fair value reserve
– interest rate swaps – (2 813) – (2 813) – –
Balance at 31 August 2016 3 107 931 93 599 3 073 687 127 843 34 244 (34 244)
Restated Effects of
comparative Published restatement
2016 2016 2016
EXTRACT OF STATEMENTS OF CASH FLOWS R'000 R'000 R'000
Cash flows from operating activities
Cash generated from operations 577 007 577 007 –
Finance income 8 540 8 540 –
Finance cost (250 542) (250 542) –
Distribution paid (376 319) (364 969) (11 350)
Net cash utilised in operating activities (41 314) (29 964) (11 350)
Cash flows from financing activities
Issue of shares net of share issue expenses 286 021 274 671 11 350
Interest-bearing liabilities raised 845 420 845 420 –
Net cash generated from financing activities 1 131 441 1 120 091 11 350
Restated Effects of
comparative Published restatement
2015 2015 2015
EXTRACT OF STATEMENTS OF CASH FLOWS R'000 R'000 R'000
Cash flows from operating activities
Cash generated from operations 460 952 460 952 –
Finance income 7 626 7 626 –
Finance cost (149 456) (149 456) –
Distribution paid (288 184) (265 290) (22 894)
Net cash generated from operating activities 30 938 53 832 (22 894)
Cash flows from financing activities
Issue of shares net of share issue expenses 715 563 692 669 22 894
Interest-bearing liabilities raised 444 724 444 724 –
Net cash generated from financing activities 1 160 287 1 137 393 22 894
Restated Effects of
comparative Published restatement
Reconciliation between profits, earning and headline 2015 2015 2015
earnings R'000 R'000 R'000
Profits attributable to shareholders of the company 367 957 390 851 (22 894)
Debenture interest 150 708 127 814 22 894
Earnings 518 665 518 665 –
Distribution per combined share (cents) 172.17620 172.17620 –
Earnings per share (cents) 144.69 144.69 –
Headline earnings per share (cents) 87.23 87.23 –
Restated Effects of
comparative Published restatement
EXTRACT OF NOTES TO THE ANNUAL FINANCIAL 2016 2016 2016
STATEMENTS R'000 R'000 R'000
Stated capital
Balance at beginning of year 2 821 910 2 799 016 22 894
Antecedent dividend – (11 350) 11 350
Shares issued net of share issue expenses 286 021 286 021 –
Balance at end of year 3 107 931 3 073 687 34 244
Distributions paid
Distributions payable at beginning of year – – –
Distributions declared (361 627) (350 277) (11 350)
Distributions paid to non-controlling interest (14 692) (14 692) –
Distributions payable at end of year – – –
(376 319) (364 969) (11 350)
Restated Effects of
comparative Published restatement
EXTRACT OF NOTES TO THE ANNUAL FINANCIAL 2015 2015 2015
STATEMENTS R'000 R'000 R'000
Stated capital
Balance at beginning of year 427 852 427 852 –
Antecedent dividend – (22 894) 22 894
Capital conversion of linked units to shares 2 394 058 2 394 058 –
Balance at end of year 2 821 910 2 799 016 22 894
Distributions paid
Distributions payable at beginning of year (131 313) (131 313) –
Distributions declared (156 871) (133 977) (22 894)
(288 184) (265 290) (22 894)
Cash generated from operations
Profit before taxation 367 957 390 851 (22 894)
Adjusted for:
Finance cost 149 456 149 456 –
Finance income (7 626) (7 626) –
Debenture interest 150 708 127 814 22 894
Fair value adjustment (207 391) (207 391) –
Straight-lining income accrual (4 077) (4 077) –
Operating income before working capital changes 449 027 449 027 –
Working capital changes 11 925 11 925 –
460 952 460 952 –
BASIS OF PREPARATION AND ACCOUNTING POLICIES
These results were prepared by the Financial Director, Mr R Asmal and the Group Financial Manager,
Mrs N Kotze CA(SA).
The reviewed provisional condensed consolidated financial results for the year ended 31 August 2017 have been
prepared in accordance with the requirements of the JSE Listings Requirements and the requirements of the
Companies Act of South Africa. 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) and the SAICA Financial Reporting Guides as issued by the Accounting
Practices Committee and the Financial Pronouncements as issued by the Financial Reporting Standards Council and
contain the information required by IAS 34 Interim Financial Reporting. The accounting policies applied are consistent
with those applied in the previous years' consolidated annual financial statements.
Auditor's report
The provisional condensed consolidated financial results for the year ended 31 August 2017 have been reviewed by
Deloitte & Touche, and their unmodified review report is available for inspection at the Company's registered office.
The auditor's review report does not necessarily report on all of the information contained in these provisional
condensed consolidated financial results.
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 the auditor's reviewed report together with the accompanying financial
information from the issuers registered office. The directors take full responsibility for the preparation of these
provisional condensed consolidated financial results.
Measurement of fair value
Investment property
On an annual basis, properties above R12 million (at the last valuation date) and one-third of properties below R12
million are valued by independent registered valuers. The remaining two-thirds are valued internally by directors.
The properties are valued using either the discounted cash flow or capitalisation methods by the internal and external
valuers. The valuations are done on an open-market basis with consideration given to the future earnings potential and
applying an appropriate capitalisation rate to a property. The capitalisation rates used range between 7.5% and 13%.
Investment properties held-for-sale were valued at the net sale price, which is considered to be the fair value.
Financial instruments
Financial instruments are measured at fair value including derivatives. The fair value of interest rate swaps is based on
broker quotes. Those quotes are tested for reasonableness by discounting estimated future cash flows based on the
terms and maturity of each contract and using market interest rates for a similar instrument at the reporting date.
Hierarchy levels
The fair value hierarchy reflects the significance of the inputs used in making fair value measurements. The level within
which the fair value measurement is categorised in its entirety shall be determined on the basis of the lowest level input
that is significant to the fair value measurement in its entirety.
The different levels have been defined as follows:
– Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.
– Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly
or indirectly.
– Level 3: Inputs for assets or liabilities that are not based on observable market data.
Investment properties and derivative financial instruments have been categorised as levels 3 and 2 respectively. There
has been no material change between levels during the year.
Investment properties
Fair value measurements for investment properties categorised as Level 3: R'000
Balance at beginning of year 6 963 015
Acquisitions/additions 101 151
Transferred to non-current assets held for sale (306 648)
Tenant installation/lease commission 2 237
Change in fair value 122 455
Depreciation 481
Balance at end of year 6 882 691
Valuation technique and significant unobservable inputs
Inter-relationship between key
unobservable inputs and fair
Valuation technique Significant unobservable inputs value measurement
Discounted cash flows: The - Expected rental growth varies
valuation model considers the between 6% to 8% per annum.
present value of net cash flows to be
generated from the property taking
into account expected rental and The estimated fair value would
capitalisation rates. The expected - Risk-adjusted discount rates vary increase/(decrease) if:
net cash flows are discounted using between 14% and 16%.
risk-adjusted discount rates. Among - expected rentals were higher/
other factors, the discount rate (lower); and
estimation considers the quality of
the property, its location and lease - risk-adjusted discount rates and
terms. capitalisation rates were lower/
(higher).
Capitalisation model: Establishes - Capitalisation rates vary between
the market related rental income for 7.5% and 13%.
the property and applies appropriate
capitalisation rate.
Derivative financial instruments – Level 2
Interest rate swaps
Valuation technique Significant unobservable inputs
Valued by discounting the future cash flows using the South African swap
curve at the dates when the cash flows take place. - Interest rate swap curve
CORPORATE INFORMATION
Registered office
and business address
Block B Dunkeld ParkBlock B Dunkeld Park
6 North Road, Dunkeld West
Johannesburg, 2196
Transfer secretaries
Link Market Services South Africa
Proprietary Limited Bankers
(Registration number 2000/007239/07) The Standard Bank of South Africa Limited
13th Floor, (Registration number 1962/000738/06)
19 Ameshoff Street 3rd Floor, East Wing, 30 Baker Street
Braamfontein, 2001 Rosebank, 2196
Independent auditors Corporate advisor and Sponsor
Deloitte & Touche Java Capital
Practice number: 902276 6A Sandown Valley Crescent
Registered auditors Sandton, 2196
Deloitte Place
The Woodlands Company secretary
20 Woodlands Drive CIS Company Secretaries Proprietary Limited
Woodmead (Registration number 2006/024994/07)
Sandton Rosebank Towers
15 Biermann Avenue
Rosebank, 2191
www.dipula.co.za
Date: 15/11/2017 09:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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