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Financial Results And Restatement Of Prior Year Financial Statements In Line With The Proposed Listing On The LSE
GRIT REAL ESTATE INCOME GROUP LIMITED
(previously Mara Delta Property Holdings Limited)
(Registered by continuation in the Republic of Mauritius)
(Registration number: 128881 C1/GBL)
SEM share code: DEL.N0000
JSE share code: GTR
ISIN: MU0473N00036
("Grit" or "the Company" or with its subsidiaries "the Group")
UNAUDITED ABRIDGED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED
31 MARCH 2018 AND PROVISIONAL ABRIDGED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SEVEN MONTHS
ENDED 31 JANUARY 2018 AND PROVISIONAL ABRIDGED RESTATEMENT OF PRIOR YEARS FINANCIAL STATEMENTS IN LINE WITH THE
PROPOSED LISTING ON THE MAIN MARKET OF THE LONDON STOCK EXCHANGE
DIRECTORS' COMMENTARY
NATURE OF THE BUSINESS
Grit is a pan African property investment company focusing on African real estate assets (excluding South Africa and Namibia).
The Company is underpinned by predominantly US Dollar and Euro denominated, medium to long term leases with high quality
global graded tenants, delivering sustainable income and growth. The Company holds dual primary listings on the main board
of the Johannesburg Stock Exchange ("JSE"), since July 2014, and on the Official Market of the Stock Exchange of
Mauritius Ltd ("SEM"), since March 2015. The Company has announced a potential listing on the main market of the London
Stock Exchange ("LSE Listing") which is due to take place in July 2018. The Company has seen significant growth in
the portfolio, with total property related investments of US$591m. The Company has exposure into Morocco, Mozambique,
Mauritius, Kenya and Zambia. During the reporting and subsequent period, the Company entered the Botswana and Ghana markets.
The Group's strategy remains to expand its property portfolio throughout targeted countries in Africa. The Company's
expansion will provide sustainable long term, hard currency-based income from high quality global graded tenants.
The core focus of the Company is on enhancing shareholder value through a progressive dividend policy and long- term
capital growth, which supports the target net asset value growth of the Company. The Company's sustained delivery
has been attributed to the geographic and asset class diversification, low portfolio vacancy rate, long term
lease profile, redevelopment opportunities and strong management expertise.
REVIEW
The financial results of the third quarter of the 2018 financial year reflects deployment of the proceeds of
the recently concluded rights offer. This includes positive financial impact of the remaining assets transferred,
together with the consistent performance from the current property portfolio during the quarter.
Total property related investments have increased from US$488m in June 2017 to US$591m in March 2018.
Details of the assets acquired during this period are as follows:
- Imperial Health Sciences Logistics Warehouse located in Nairobi, Kenya transferred on 16 August 2017
(total asset value of US$21.86m, including the adjacent vacant land);
- On 11 August 2017, following receipt of the required regulatory approvals, the Company exercised its
convertible loan and was issued 44.428% of the share capital of Beachcomber Hospitality Investments
Limited. (Total value of the 44.428% in the associated company is US$65.4m, comprising primarily of
three hotel assets in Mauritius valued at US$95.8m and debt of US$27.7m);
- On 18 August 2017, the Company acquired a minority stake in Letlole La Rona Limited, which is listed
on the Botswana Stock Exchange. The investment provides an initial entry into the Botswana market
and a base for developing the necessary expertise to expand investments into the country. The value
of the investment is US$3.9m; and
- During the current period, Grit has made its first investment into Ghana by paying a refundable
deposit of US$2m for the acquisition of the CADS II building situated in Accra. The building is tenanted
by Tullow Oil. The total consideration for a 50% stake in the company is US$10.7m.
All properties have been independently valued as at 31 January 2018 in preparation for the proposed LSE Listing.
The Group's office, hospitality, light industrial and corporate accommodation assets have all retained value or
shown favorable fair value adjustments when compared to 30 June 2017 valuations.
The retail sector in Zambia remains stable with revaluation gains recognized for all the assets. Challenging
trading conditions in Kenya and Mozambique resulted in decreased values for retail assets in these countries.
In Morocco, the refurbishment project of Anfa Place Shopping Centre ("Anfa") has progressed positively beyond
the planning stages (which included creation of strategic vacancies of circa 20%) to the implementation
and approval stages with associated amended valuation methodology and reduced valuation during project works.
Upon completion of the development project, management estimates a valuation upside. This is due to additional
gross lettable area achieved on the project and improved tenancy mix and retail offering. The directors
estimate that the devaluation of the property is temporary in nature and that within 18 months of the
completion of the project, the following will be eliminated: the negative impact that the construction
costs have on cashflow, risk weighting on discount rates and exit capitalization rates used in the discounted
cashflow model utilized to value the property.
Material changes to the debt facilities were as follows:
- Bank of China advanced long-term debt of US$37.56m for a period of five years for the acquisition of
Cosmopolitan Mall in Lusaka, Zambia. The proceeds of the loan were utilized to settle the existing
debt held by the vendor with Standard Bank. The loan was priced at 6 months Libor + 4.0%, which had
a favorable impact on the cost of funding;
- Bank of China advanced a loan of US$8.55m to acquire the Imperial Health Sciences Logistics
Warehouse in Nairobi, Kenya. The loan was priced at 6 months Libor + 4.0%;
- As part of Grit's hedging strategy to convert the Revolving Credit Facility from USD to EUR, the
Company secured a dual-currency facility from Barclays Bank Mauritius amounting to US$20.0 million
(equivalent to EUR17.1 million). The above loans attract interest at Libor + 3.5% and Euribor + 3.8%
respectively; and
- In March 2018, a short-term revolving line of US$20m was advanced from SBM Bank (Mauritius) Ltd,
priced at 3 months Libor + 3.5%.
The Company continued with its multibank strategy which has had a positive impact on the weighted
average cost of debt as well as mitigating potential refinance risk.
The result of the above transactions was a reduction in the weighted average cost of debt from 5.78% at
30 June 2017 to 5.68% at 31 March 2018.
The loan to value ("LTV") at 31 March 2018 was 51.13% after it normalised to 42.78% post 30 June 2017
when cash held from the capital raise was effectively deployed. The increase is attributable to further
drawdowns made on acquisitions.
LSE Listing
The Company announced its intention to seek a listing on the Official List of the United Kingdom Listing
Authority ("UKLA") (as a standard listing) and admission to trading on the main market for listed securities
of the London Stock Exchange, on 9 April 2018. Subsequently the Company issued a circular to all shareholders to
obtain the necessary approvals in relation to the raising of additional equity funding by way of the placing
and offer for subscription in terms of the LSE Listing. The shareholders approved all requisite resolutions
on 10 May 2018.
The Company intends to issue up to 250 million shares, subject to raising a minimum amount of US$140m.
Shares will not be issued below the net asset value ("NAV") per share as at 31 March 2018, with final pricing details
to be included in the prospectus to be issued in connection with the proposed LSE Listing. All cash proceeds will be
deployed in acquiring yield accretive prime real estate assets and to reduce the Company's overall LTV to below 40%.
The rationale for the main market LSE Listing, with the intention to convert to a premium listing, is as follows:
- Support the growth aspirations of Grit and to facilitate the conversion of its current and future
pipeline. The capital raised from the LSE Listing will enable its entry into new African
jurisdictions and consolidate its presence in existing jurisdictions;
- Improve the depth and diversity of the shareholder base as well as improve the liquidity of the
stock, resulting in the inclusion in varied indexes specifically the FTSE Frontier Index and MSCI
Frontier Index;
- Ensure the Company adheres to European standards of corporate governance and financial
reporting for the benefit of its shareholders.
In preparation for the proposed LSE Listing and the requirement to present historical financial information
for the 3 years ended 30 June 2017, the directors have identified a number of provisional adjustments,
which have resulted in the company restating its historic Financial information for the three financial
years ended 30 June 2017. The Company's statutory auditors, are presently auditing the seven-month
period ended 31 January 2018, including the historic restatements of the accounts.
Introduction of the European Public Real Estate Associations ("EPRA") reporting guidelines
In conjunction with the proposed LSE Listing, the Group will align its reporting with standard practice in the
United Kingdom and the European Union by including EPRA reporting as a key metric of movements in net
asset value ("NAV") of the Company and earnings. EPRA reporting was introduced after discussion
between the investor community who showed the need for reporting that provided consistency and transparency
across Europe. EPRA reporting consists of reporting on EPRA Earnings and EPRA NAV, as well as providing
a consistent method on reporting property metrics within a real estate company (such as EPRA net
initial yield, EPRA vacancy rate and EPRA cost ratios).
EPRA NAV is a measure of the fair value of net assets assuming a normal investment property company
business model. Accordingly, there is an assumption of owning and operating investment property for the
long term. For this reason, deferred taxes on property revaluations and the fair value of deferred tax
liabilities are excluded as the investment property is not expected to be sold and the tax liability is not
expected to materialize.
EPRA earnings is a key measure of a real estate company's operational performance, to the extent to
which its dividend payments to shareholders are underpinned by earnings from operating activities.
Unrealised changes in valuations, gains or losses on disposal of property, acquisition costs of property and
other expense items (typically of a non-cash component) are excluded from a Company's underlying
operational performance. A Company also provides for a number of Company specific adjustments which
GRIT will report as Adjusted EPRA earnings.
HIGHLIGHTS
On track to meet target year end distribution
First Ghana acquisitions secured
WACD - 5.68% (2017: 5.78%)
Proposed Main Market LSE Listing - July 2018
Portfolio occupancy of 97.3%
Multinational Tenants – 70% (Forbes 2000 and Other Global)
Unaudited Unaudited
Consolidated statement of comprehensive income Unaudited Unaudited and Unaudited and restated and restated
for the three restated for the and restated for for the nine for the
months ended three months the nine months ended months ended year ended
31 March 31 March 31 March 31 March 30 June
2018 2017 2018 2017 2017
US$'000 US$'000 US$'000 US$'000 US$'000
Gross rental income 8,177 6,040 23,345 16,740 22,872
Straight-line rental income accrual 453 155 1,063 931 1,132
Revenue 8,630 6,195 24,408 17,671 24,004
Income from associates 6,770 2,494 15,691 5,021 6,893
Property operating expenses (1,254) (1,370) (4,551) (4,306) (7,170)
Net property income 14,146 7,319 35,548 18,386 23,727
Other income (1,622) 545 (90) 1,923 254
Administrative expenses (1,774) (2,002) (6,058) (5,729) (7,006)
Profit from operations 10,750 5,862 29,400 14,580 16,975
Acquisition fees and set-up costs (5,047) (997) (5,190) (1,085) (678)
Fair value adjustment on investment property 4,600 (2,294) 9,091 1,997 (20,499)
Fair value adjustment on derivative financial instruments (106) (468) (166) 114 535
Gain from bargain purchase - - - - 609
Foreign currency (losses)/gains 2,050) 20 3,744 (2,623) 2,081
Profit before interest and taxation 12,247 2,123 36,879 12,983 (977)
Interest income 295 583 3,523 888 2,059
Finance costs (5,083) (3,442) (14,029) (7,258) (11,433)
Profit for the period before tax 7,459 (736) 26,373 6,613 (10,351)
Current tax expense (68) 771 (68) (159) (32)
Deferred tax (expense)/income (315) (46) (1,057) 1,367 2,947
Profit for the period after tax 7,076 (11) 25,248 7,821 (7,436)
Profit/(loss) on translation of functional currency 2,122 504 1,809 451 3,045
Other comprehensive income - - - - -
Total comprehensive income 9,198 493 27,057 8,272 (4,391)
Profit attributable to:
Owners of the parent 7,074 461 26,280 8,985 (6,634)
Non-controlling interests 2 (472) (1,032) (1,164) (802)
7,076 (11) 25,248 7,821 (7,436)
Total comprehensive income attributable to:
Owners of the parent 9,196 965 28,089 9,436 (3,589)
Non-controlling interests 2 (472) (1,032) (1,164) (802)
9,198 493 27,057 8,272 (4,391)
Unaudited and Unaudited and
Reconciliation of basic earnings and headline earnings Unaudited restated restated
for the nine for the nine for the year
months ended months ended ended
31 March 31 March 30 June
2018 2017 2017
US$'000 US$'000 US$'000
Basic earnings 25,248 7,821 (7,436)
Fair value adjustments on investment property (net of deferred taxation) (9,091) (1,997) 20,499
Share of value adjustment on investment property accounted by associate (4,085) (1,745) (4,181)
Fair value adjustments on financial instruments 166 (144) (535)
Headline earnings attributable to shareholders 12,238 3,965 8,347
Number of shares in issue at interim 208,514,261 100,061,130 111,787,042
Number of shares in issue 208,514,261 121,931,722 208,514,261
Treasury shares (number of shares) 9,940,758 3,000,000 10,093,493
Weighted average number of shares 208,514,261 106,301,518 110,435,576
Earnings per share
Basic and diluted profit per share (cents) 12.11 7.36 (6.71)
Headline and diluted headline earnings per share (cents) 5.87 3.73 7.56
Consolidated statement of financial position Unaudited as Restated Restated
at unaudited as unaudited as
at at
31 March 31 March 30 June 2017
2018 2017
US$ US$ US$
Assets
Non-current assets
Investment properties 387,718 318,651 307,795
Deposit paid on investment properties 4,117 8,620 24,440
Property, plant and equipment 1,169 1,611 1,290
Intangible assets 33 216 592
Other investments 3,757 - -
Investment in associates 157,443 48,403 89,016
Related party loans 29,348 - 10,637
Loans receivable 8,723 23,194 56,111
Deferred tax - 954 -
Total non-current assets 592,308 401,649 489,881
Current assets
Current tax receivable 566 - 439
Derivative financial instruments 25 - -
Trade and other receivables 35,706 11,942 22,805
Other financial asset 16,856 - -
Related party loans 2,691 1,989 2,000
Cash and cash equivalents 9,484 6,489 24,668
Total current asset 65,328 20,420 49,912
Total assets 657,636 422,069 539,793
Equity and liabilities
Total equity attributable to equity holders
Share capital 319,979 203,952 319,979
Treasury shares (14,414) (5,100) (15,031)
Foreign currency translation reserve 5,084 680 3,275
Antecedent dividend reserve - 391 1,261
Retained (loss) (38,681) (30,651) (51,177)
Equity attributable to owners of the company 271,968 169,272 258,307
Non-controlling interests (2,155) (1,485) (1,123)
Total equity 269,813 167,787 257,184
Liabilities
Non-current liabilities
Redeemable preference shares 12,840 12,840 12,840
Interest-bearing borrowings 245,809 146,591 185,051
Obligation under finance lease 145 180 171
Related party loans - 1,365 1,365
Deferred tax 9,998 11,419 8,545
Total non-current liabilities 268,792 172,395 207,972
Current liabilities
Interest-bearing borrowings 65,020 70,227 47,959
Obligation under finance lease 42 47 45
Trade and other payables 36,115 10,775 26,176
Other financial liability 16,950 - -
Derivative financial instruments - 55 19
Bank overdraft 904 783 438
Total current liabilities 119,031 81,887 74,637
Total liabilities 387,823 254,282 282,609
Total equity and liabilities 657,636 422,069 539,793
Loan to value 51.13% 52.93% 42.78%
Net asset value per share (cents) 136.96 142.33 130.18
Net asset value per share (excluding deferred taxation) (cents) 142.00 151.13 134.49
EPRA net asset value per share (cents) 144.03 154.87 137.70
Unaudited and Unaudited and
Condensed consolidated statement of cash flows Unaudited for the restated for the restated for
nine months ended nine months ended the year ended
31 March 2018 31 March 2017 30 June 2017
US$'000 US$'000 US$'000
Cash (utilised in)/generated from operating activities (4,138) 1,989 20,193
Changes in working capital 10,832 172 6,649
Dividends paid (14,167) (12,239) (17,649)
Net cash utilised in investing activities (85,204) (89,469) (170,775)
Net cash generated from financing activities 73,128 87,471 185,653
Net movement in cash and cash equivalents (19,549) (12,076) 24,071
Cash at the beginning of the period/year 24,228 17,772 159
Total cash at the end of the period/year 4,679 5,696 24,230
Represented by:
Cash at bank 9,479 6,478 24,667
Bank overdraft (904) (783) (438)
Total cash at the end of the period/year 8,575 5,695 24,229
Consolidated statement of changes in equity Foreign
Non- currency Antecedent
Share controlling Treasury translation dividend Retained Total equity
capital interest shares reserve reserve earnings holders
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'00
Balance as at 1 July 2016
- as previously reported 171,995 - - (2) 636 (9,256) 163,372
- effect of prior year adjustment - (455) (5,100) 231 - (19,732) (25,056)
- as restated 171,995 (455) (5,100) 229 636 (28,989) 138,317
Profit for the period - restated - (1,164) - - - 8,985 7,821
Dividends paid - - - - (1,311) (10,647) (11,957)
Foreign currency translation reserve movement - - - 451 - - 451
Shares issued 34,320 133 - - - - 34,453
Share issue expenses (1,298) - - - - - (1,298)
Ordinary shares held as treasury shares - - - - - - -
Transfer from share issues (1,066) - - - 1,066 - -
Balance as at 31 March 2017 203,952 (1,485) (5,100) 680 391 (30,651) 167,787
Profit for the period - 362 - - - (15,619) (15,257)
Dividends paid - - - - (285) (5,125) (5,409)
Share based payments - - - - - 218 218
Foreign currency translation reserve movement - - - 2,594 - - 2,594
Shares issued 121,215 - - - - - 121,215
Share issue expenses (4,033) - - - - - (4,033)
Ordinary shares held as treasury shares - - (9,931) - - - (9,931)
Transfer from share issues (1,155) - - - 1,155 - -
Balance as at 30 June 2017 319,979 (1,123) (15,031) 3,274 1,261 (51,177) 257,183
Unaudited for the nine months ended
Profit for the period - (1,032) - - - 26,280 25,248
Dividends paid - - - - (1,261) (14,028) (15,289)
Foreign currency translation reserve movement - - - 1,810 - - 1,810
Ordinary shares held as treasury shares - - 617 - - - 617
Share based payments - - - - - 243 243
Transfer from share issues - - - - - - -
Balance as at 31 March 2018 319,979 (2,155) (14,414) 5,084 - (38,682) 269,812
Condensed consolidated segmental analysis Ghana Botswana Morocco Mozambique Zambia Kenya Mauritius Total
Geographical location 31 March 2018 - US$
Gross rental income - - 6,966 10,916 - 940 4,523 23,345
Straight-line rental income accrual - - 120 526 - 109 308 1,063
Property operating expenses - - (3,438) (796) - (30) (287) (4,551)
Income from Associates - - - - 11,280 (3,070) 7,480 15,691
Net property rental and related income - - 3,648 10,646 11,280 (2,051) 12,024 35,548
Fair value adjustment on investment
property - - (871) 5,094 - 771 4,098 9,091
Investment Property vehicles 2,000 3,757 97,526 202,326 91,339 22,119 129,851 548,918
Investment property at fair value 2,000 - 94,842 198,762 - 21,756 63,442 380,803
Straight-line rental income accrual - - 2,684 3,564 - 109 558 6,915
Investment in associates - - - - 91,339 253 65,851 157,443
Equity investments: Available-for-sale - 3,757 - - - - - 3,757
Other financial assets - - - - - - - -
Equity Light Corporate Head
investments Hospitality Retail Office industrial accommodation office Total
Type of property 31 March 2018 - US$
Gross rental income - 3,019 8,693 8,722 1,626 1,284 - 23,345
Straight-line rental income accrual - 138 107 567 109 142 - 1,063
Property operating expenses - - (3,744) (539) (47) (221) - (4,551)
Income from Associates - 7,480 8,210 - - - - 15,691
Net property rental and related income - 10,638 13,267 8,750 1,688 1,205 - 35,548
Fair value adjustment on investment
property - 2,394 (4,816) 1,154 828 8,831 - 8,392
Investment Property vehicles 3,757 114,023 222,459 143,642 28,370 36,668 - 548,918
Investment property at fair value - 47,900 128,226 139,748 28,260 36,668 - 380,802
Straight-line rental income accrual - - 2,912 3,894 109 - - 6,915
Investment in associates - 66,123 91,319 - - - - 157,443
Equity investments: Available-for-sale 3,757 - - - - - - 3,757
Other financial assets - - - - - - - -
SUBSEQUENT EVENTS
Other than those items mentioned above, the following material events occurred subsequent to the end
of the reporting period:
a) On 10 May 2018, the Company through its wholly-owned subsidiary Grit Accra Limited, concluded
the acquisition of 47.5% of Capital Place Limited ("Capital Place"), which owns 100% of the Capital
Place Building, a commercial building in Accra Ghana. The Company also paid a refundable deposit
of US$5m in April 2018 to secure the acquisition of the remaining 52.5%. The building in Capital
Place has a value US$25.5m. The initial purchase of 47.5% has been partly settled through the
issue of new shares in the Company at the last published net asset value per share of US$1.5267
(as at 31 December 2017). The new shares were issued with a non-entitlement to dividends prior to the transfer date.
b) The Company signed a binding Heads of Agreement for the acquisition of the Fifth Avenue asset
in Ghana for a gross consideration of US$20.5m of which US$5.8m shall be through the issue of
new shares and US$14.8m payable in cash. The shares will be issued at the last published net asset
value per share and will include a non-entitlement to dividends prior to transfer date.
c) Grit obtained an overdraft facility of US$8.5m from ABC Bank as an equity bridge for the upcoming
capital raise in order to secure the upcoming acquisitions. The facility bears interest of 3 months'
LIBOR + a margin of 3.5%.
CHANGES TO THE BOARD
Since the last quarterly results were published, the following changes to the board of directors ("Board")
have taken place:
- 8 March 2018 - Mr Maheshwar Doorgakant resigned as permanent Alternate Director to Mr
Chandra Gujadhur;
- 29 March 2018 - Mr Chandra Gujadhur resigned as Chairman of the Audit Committee and as a
member of the Board due to him reaching the age of seventy and other commitments;
- 29 March 2018 - Mr Paul Huberman was appointed as a member of the Board and as the Chairman
of the Audit Committee;
- 12 April 2018 - Mr Sandile Nomvete resigned as the Chairman and member of the Board to focus
on his role as CEO of Delta Property Fund; and
- 12 April 2018 - Mr Peter Todd was appointed as the Chairman of the Board.
The Board wishes to thank Mr Doorgakant, Mr Gujadhur and Mr Nomvete for their valuable contributions
to the Group during their tenure on the Board. The Board also welcomes Mr Huberman and is of the view that
with his extensive experience in the real estate and finance sectors in the UK, he will add great value to
the Board and to the proposed LSE Listing.
Mr Todd, who has been a member of the Board since his appointment as the Lead independent non-
executive director in August 2014, is welcomed as the new Chairman.
NOTES
The Group is required to publish interim reports in accordance with the Listing Rule 12.19 of the SEM.
Accordingly, this announcement presents the abridged unaudited consolidated financial results of the
Group in respect of the three and nine months period from 1 January 2018 to 31 March 2018 and 1 July
2017 to 31 March 2018 respectively.
Save for the changes in accounting policies as detailed further down in this announcement, the accounting
policies which have been applied are consistent with those used in prepartion of the audited financial statements
for the year ended 30 June 2017.
The abridged unaudited consolidated financial statements for the three and nine months ended
31 March 2018 (the "Financial Statements") have been prepared in accordance with the measurement
and recognition requirements of IFRS, the requirements of IAS 34: Interim Financial Reporting,
the SEM Listing Rules, the JSE Listings Requirements and the Securities Act of Mauritius 2005.
The Financial Statements have not been reviewed or reported on by the Group's external auditors.
These Financial Statements were approved by the Board on 11 June 2018
Copies of the above Financial Statements and the statement of direct and indirect interests of each officer
of the Group, pursuant to rule 8(2)(m) of the Securities (Disclosure Obligations of Reporting Issuers) Rules
of Mauritius 2007, are available free of charge, upon request at the Company's registered address. Contact
person: Mrs Smitha Algoo.
Restatement of accounts
In preparation for the proposed LSE Listing and the requirement to present historical financial information for
the 3 years ended 30 June 2017, the directors have identified a number of adjustments. These adjustments arose
from the application of applying IFRS in different jurisdictions and also the correction of prior period errors.
The nature of the restatements can be described as follows:
Revenue recognition and measurement
The Group has amended its accounting policy and treatment for recognition of cash received from the
vendors of properties, either for claims under rental guarantees provided by the seller, or rentals accruing
to Group prior to the date of transfer of the property in terms of IAS 18 Revenue.
Vendor rental guarantees
In acquiring certain properties, the Group has been the beneficiary of rental guarantees as well as net
operating income guarantees from the vendors. The Group's accounting policy in respect of amounts
received under such guarantees was to recognise them as revenue. Given that such amounts are
receivable from the vendor rather than tenants, the Group has now determined that such amounts should
be accounted for as an adjustment to the acquisition costs of the asset.
Where a property acquisition cost is adjusted by any amounts received under rental guarantees there will
be a corresponding adjustment to the fair value movement on the property.
Tenant lease incentives and rent concessions
In the ordinary course of business, the Group has provided tenants with rent concessions and lease
incentives. The principles established in IAS 17 Leases requires that such costs are recognised on a straight-
line basis over the lease term, unless another systematic basis is more appropriate. Having reconsidered
the application of this principle, the Group has concluded that it is appropriate to revise the periods over
which certain costs are being recognised.
Pre-transfer rental receipts
In December 2015, the Group entered into an agreement to acquire an investment property. Completion
took place in January 2018 and the sale agreement provided for rental receipts to accrue to the Group
during the intervening period. The Group's accounting policy in respect of these amounts was to recognise
this rent receivable as revenue. Given that the right to rental receipts in the periods prior to completion
results from an agreement with the vendor, the Group has now determined that such amounts should be
accounted for as an adjustment to the acquisition cost of the asset. Following the completion of the
property transfer in January 2018, the fair value movement in the property will include the adjustment for
rent received pre-transfer.
The resultant impact to the Group is to reduce the revenue recognized through profit and loss and increase the
fair value adjustment in the appropriate period. The combined impact of the above adjustments is a
reduction of previously reported net assets for 2017 of US$5,567,816, (2016: US$1,987,335), and to reduce
previously reported profit after tax for 2017 of US$3,580,481 (2016 - reduction of US$1,987,335).
The above items will have an impact on headline earnings per share, but do not affect distribution as all
cash generation is included in distribution. The above treatment will be considered a company specific
adjustment to EPRA Earnings in the future.
Consolidation of Freedom Asset Management
Freedom Asset Management Limited ("FAM"), a company owned by entities controlled by Bronwyn
Corbett and Sandile Nomvete ("founders"), was appointed as the asset manager of the Group in
September 2014.
Having reviewed the terms of the asset management agreement between FAM and Grit it has been determined that
Grit had de facto control over the business of FAM. FAM's sole contract, was the contract with Grit (and its
subsidiaries) and the contract determined the services and operations of FAM. The structure of the asset
management agreement was such that Grit had the ability to vary the returns to FAM via the absolute
discretion Grit had in accepting or rejecting which assets were acquired by Grit (which would attract a
fee of 1% for each asset acquisition), and as such, Grit controlled the variability of the returns
of FAM and controlled the applicable costs within Grit.
In May 2016, the asset management agreement was terminated, and the employees transferred to the
Group in exchange for the issue of three million shares at a value of US$1.70 a share. As a result, the Group
previously recognised an intangible asset of US$5,100,000.
Subsequent to the termination of the agreement, 1,859,243 of the shares issued to FAM were in part
allocated for the benefit of the founders, with the remaining 1,140,757 subject to share option awards
made to the employees transferred to Grit.
Further to this in June 2017, FAM also subscribed for 7,093,493 shares as part of the rights issue with the
consideration paid through an unsecured interest-bearing loan (with an interest rate of Libor + 6.5%) of
US$9,930,890 provided by the Group, with such shares being acquired for the benefit of the executive
management and staff of Grit's long-term incentive plan. The shares are held within FAM until such time
as the formation of Grit Executive Share Trust is completed, with the transfer of the shares to the Grit
Executive Share Trust being concluded through the cession of the loan from FAM to the Trust.
Based on the above, the directors reconsidered the nature of the above transactions and the relationship
that existed between the Group and FAM, in particular with regard to the application of IFRS 10. It was
concluded that both before and after the termination of the asset management agreement the Group
controlled FAM and as a result FAM has been consolidated for each of the periods presented.
The shares issued to FAM, previously recognised as an intangible asset of US$5,100,000 being 3,000,000
shares and the shares acquired by FAM (for the benefit of the executive management and staff) of
US$9,930,890 being 7,093,493 shares, held on the Group's balance sheet have now been recorded as a
reduction of share capital with the shares treated as treasury shares on consolidation. The residual
amounts in FAM after the elimination of these amounts and the asset management fees recharged to the
Group, has been treated as a non-controlling interest.
The Group has also recognised share based payments in respect of the above shares allocated to the
founders and the share option awards made to staff in August 2016.
The impact of the above item has been to reduce previously reported total net assets for 2017 by
US$15,787,005 (2016 - reduction of US$5,554,515, 2015 - reduction of US$710,312), with such reductions
being recorded as treasury shares and losses attributable to Non-controlling Interests. Profit after tax
decreased in 2017 by US$934,929 (2016 - decrease of US$3,034,933, 2015 - decrease of US$731,305).
The reduction in profit after tax is attributable to Non-controlling Interest.
The NAV per share is not materially impacted by the above restatement as the treasury shares
are excluded from the calculation of the net asset value attributable to the owners of Grit.
Deferred tax
The Group holds its investment properties through corporate vehicles and effects disposals of such
properties through the sale of the corporate vehicle holding the property in question. No tax arises on the
sale of shares in the jurisdictions in which the Group is domiciled for tax purposes. The Group therefore
expected the fair value of the its investment properties to be realised in a manner that did not result in a
tax liability. For this reason, the Group had previously adopted an accounting policy of not providing for
deferred tax on changes in the fair value of investment properties. The Group has reconsidered its
accounting policy in the light of conclusions reached by the IFRS Interpretations Committee in July 2014
and has determined that a change in policy is required to reflect the tax that would be payable on a disposal
both inside and outside the corporate vehicle.
The impact of the above item has been to reduce previously reported net assets for 2017 by
US$13,821,131 (2016 - reduction of US$16,606,028, 2015 - reduction of US$1,809,574) and to increase
previously reported profit after tax for 2017 by US$2,784,897 (2016 - decrease of US$14,796,454, 2015 -
decrease of US$1,809,574).
The above changes do not impact tangible net asset value per share or EPRA net asset value per share as
the deferred tax related to the restatements are excluded from such calculations.
Restatement of the valuation of Anfa Place Shopping Centre
Anfa was included in the accounts at 30 June 2017 at a directors' valuation of 987,500,000 Moroccan
Dirham (or US$102,270,351). In addition, the initial pre-construction costs in relation to the
redevelopment of Anfa of US$5,350,852 was recorded at cost. As part of the proposed LSE
Listing, Anfa was subject to an external professional valuation as at 31 January 2018 which valued the
property at 850,000,000 Moroccan Dirham (or US$92,896,176).
The directors' valuation at 30 June 2017 was not prepared on a comparable basis. Having reviewed the
external valuation at 31 January 2018 and considered the property market of Morocco, both generally and
specific to Anfa, during the seven months to 31 January 2018, the directors have concluded that the
external valuation undertaken as at 31 January 2018 is better evidence of the value of Anfa at 30 June
2017 and have therefore adopted this value into the accounts at 30 June 2017 as a restated directors
valuation. The external valuation included the final project plan, construction costing (which were not
finalized by the date of prior to the issue of the 30 June 2017 financial statements) as well as the negotiated
rental concessions with tenants related to relocation and fit out allowances that was approved by the
board in November 2017.
The impact of the above has been to reduce previously reported net assets for 2017 by US$20,230,194
(2016 - reduction of US$278,520). Profit after tax decreased in 2017 by US$19,951,674 (2016 - decrease
of US$278,520).
Accounting for foreign currency
In prior years, the Group incorrectly recorded foreign currency exchange movements relating to
subsidiaries and associates with a functional currency other than the reporting currency of the group
within the income statement lines 'Foreign currency gains and losses' and 'Share of profits from
associates', whereas these should have been recorded as a movement in the foreign currency translation
reserve. In addition to this, the group had incorrectly classified exchange movements within the income
statement line 'Fair value adjustment on investment properties'.
The impact of the above has no impact to previously reported net assets. Profit after tax decreased in
2017 by US$1,211,320 (2016 - increase of US$990,990, 2015 - decrease of US$1,222,246). Other
comprehensive income increased in 2017 by US$1,979,842 (2016 - decrease of US$990,990, 2015 -
increase of US$1,222,246).
Write off of certain balances
The Group identified a number of corrections to the recorded amounts of certain assets and liabilities in
prior periods that should have either been expensed or credited to profit and loss. The adjustments
predominately relate to transactions with the vendors of the properties and are deemed as irrecoverable.
The impact of the above has been to reduce previously reported net assets for 2017 by US$2,135,225
(2016 - reduction of US$629,336). Profit after tax increased in 2017 by US$1,505,890 (2016 - decrease of US$629,336).
Reclassification of accounts
Acquisition accounting
When acquiring an investment property through the acquisition of a corporate vehicle, the Group's
accounting policy has been to account for the transaction as a business combination. This has involved
measuring the identifiable assets acquired and liabilities assumed at fair value and recognising and
measuring any goodwill or gain from a bargain purchase.
The Group has reconsidered the nature of such acquisitions in the light of guidance provided by IFRS 3
Business Combinations and has concluded that they are not characterised by the features typically
associated with a business combination, but rather that of an asset. This involves allocating the acquisition
cost to the identifiable assets and liabilities based on of their relative fair values at the date of purchase.
In contrast to the position when accounting for a business combination, no goodwill or gain from a bargain
purchase arises and acquisition costs are generally capitalised rather than expensed.
The above item has had no impact on previously reported net assets or profit after tax but has led to
reclassifications within the statement of comprehensive income and statement of cashflows for years
ended 30 June 2017, 30 June 2016 and June 2015.
Reclassification for disclosure purposes
Certain items have been reclassified to provide consistent disclosure with property companies in the
United Kingdom. The reclassifications include:
- Disclosure of unamortised debt origination fees from other receivables to Interest bearing borrowings
- Certain Related party loans are classified as current assets rather than non-current assets
- Related party loans are classified as non-current liabilities rather than current liabilities
- The movement in the interest swap has been reclassified from finance costs to fair value movement in derivatives
- The movement between straight-line leasing and Fair value adjustment on investment property
Rights offer
As part of the Rights offer in June 2017, certain shareholders participated in the offer to subscribe for
15,342,886 shares with a total value of US$21,480,041. Settlement of their obligations was conducted via
a setoff of funds due to the respective shareholders by the Company. The Company incorrectly recorded
the amount in the statement of cashflows as 'Proceeds from the issue of shares' and cash outflows as
'Acquisition of investment property'. The cashflow has been restated to correct the classification.
The impact of the reclassification is to reduce the Proceeds from the issue of shares by US$21,480,041
and decrease the cash outflow for the Acquisition of investment property by US$21,480,041.
All details of the above restatements are fully detailed in the below provisional abridged unaudited consolidated financial statements
for the seven-month period ended 31 January 2018, which also includes the provisional abridged restated historical financial information
for the years ended 30 June 2015, 30 June 2016, 30 June 2017. The full set of Financial Statements will be available on the company
website when the audit of the aforementioned financial statements is complete, which will be prior to publication of the Prospctus.
Grit Real Estate Income Group Limited
Consolidated statement of financial position
As at 30 June 2015, 30 June 2016, 30 June 2017 and 31 January 2018
(All unaudited)
Unaudited
Restated as at Restated as at Restated as at As at
30 June 2015 30 June 2016 30 June 2017 31 January 2018
US$'000 US$'000 US$'000 US$'000
Assets
Non-current assets
Investment properties 210,391 239,926 307,795 381,873
Deposits paid on investment
properties - 8,620 24,440 4,117
Property, plant and equipment 97 525 1,290 1,200
Intangible assets 9 599 592 605
Other investments - - - 4,931
Investments in associates - 45,822 89,016 157,173
Related party loans 12 - 10,637 30,263
Loans receivable - - 56,111 9,523
Other financial asset - - - 16,856
Deferred tax - - - -
Total non-current assets 210,508 295,492 489,881 606,541
Current assets
Current tax receivable - - 439 547
Derivative financial instruments - - - 12
Trade and other receivables 18,787 15,327 22,805 31,661
Related party loans - - 2,000 625
Cash and cash equivalents 6,566 17,785 24,668 8,880
Total current assets 25,354 33,112 49,911 41,725
Total assets 235,861 328,604 539,792 648,266
Equity and liabilities
Total equity attributable to ordinary
shareholders
Ordinary share capital 127,959 171,995 319,979 319,979
Treasury shares reserve - (5,100) (15,031) (14,811)
Foreign currency translation reserve 437 230 3,275 3,652
Antecedent dividend reserve - 636 1,261 -
Retained loss (5,792) (28,989) (51,177) (28,119)
Equity attributable to owners of
the Company 122,603 138,771 258,306 280,701
Non-Controlling interest (710) (455) (1,123) (1,908)
Total equity 121,893 138,317 257,183 278,793
Liabilities
Non-current liabilities
Redeemable preference shares - - 12,840 12,840
Interest-bearing borrowings 10,491 126,633 185,051 225,787
Obligations under finance leases - - 171 153
Related party loans 1,153 1,365 1,365 -
Deferred tax 2,427 11,458 8,545 8,697
Total non-current liabilities 14,070 139,456 207,972 247,476
Current liabilities
Interest-bearing borrowings 91,166 34,548 47,959 87,996
Obligations under finance leases - - 45 43
Trade and other payables 8,252 14,700 26,176 16,026
Current tax payable 138 1,029 - -
Derivative financial instruments - 554 19 -
Other financial liability - - - 16,950
Bank overdrafts 342 - 438 982
Total current liabilities 99,898 50,832 74,637 121,996
Total liabilities 113,968 190,287 282,609 369,473
Total equity and liabilities 235,861 328,604 539,792 648,266
Net asset value per share (cents) 166.45 142.97 130.18 141.36
Net asset value per share (excluding deferred
taxation) (cents) 169.75 154.78 134.49 145.74
EPRA Net asset value per share
(cents) 168.15 160.51 137.7 148.44
Grit Real Estate Income Group Limited
Consolidated statement of comprehensive income
For years ended 30 June 2015, 30 June 2016, 30 June 2017 and for the periods ended 31 January 2017 (unaudited and restated)
and 31 January 2018 (unaudited)
Year ended Year ended Year ended Period ended Period
30 June 30 June 30 June 31 January ended 31
2015 2016 2017 2017 January
RESTATED RESTATED RESTATED (Unaudited) 2018
US$'000 US$'000 US$'000 US$'000 US$'000
Gross rental income 13,589 19,986 22,872 12,441 17,175
Straight-line rental income accrual 2,267 1,901 1,132 859 1,061
Revenue 15,856 21,887 24,004 13,300 18,236
Share of profits from associates - 3,313 6,893 2,793 13,848
Property operating expenses (3,478) (5,623) (7,170) (3,202) (3,778)
Net property income 12,378 19,577 23,727 12,891 28,307
Other income 384 805 254 1,559 30
Administrative expenses (4,541) (7,355) (7,006) (3,518) (4,474)
Profit from operations 8,221 13,027 16,974 10,933 23,863
Acquisition fees and set-up costs (996) (1,563) (678) (818) (4,867)
Fair value adjustment on investment properties 7,889 (4,625) (20,729) 4,460 2,279
Fair value adjustment on investment properties from cash
receipts from Sellers 329 892 230 - 7,788
Fair value adjustment on other investments - - - - 61
Fair value adjustment on financial instruments - - - - (93)
Fair value adjustment on derivative financial instruments - (554) 535 101 31
Gain from bargain purchase on associates - 251 609 - -
Foreign currency (losses)/gains (12,969) 4,127 2,081 (3,124) 2,796
Profit before interest and taxation 2,474 11,554 (977) 11,552 31,858
Interest income 91 170 2,059 506 2,763
Finance costs (3,640) (9,243) (11,433) (5,290) (10,932)
Profit for the period before tax (1,075) 2,481 (10,351) 6,767 23,689
Taxation (2,505) (20,243) 2,914 251 (151)
Profit for the period after tax (3,580) (17,762) (7,436) 7,018 23,538
Other comprehensive income
Amounts that may be reclassified to profit and loss
(Loss)/profit on translation of functional currency 384 (207) 3,045 217 377
Other comprehensive income - - - - -
Total comprehensive income (3,196) (17,969) (4,391) 7,235 23,915
Profit attributable to:
Owners of the parent (2,848) (17,962) (6,635) 7,018 24,322
Non-controlling interests (731) 200 (802) - (785)
(3,580) (17,762) (7,436) 7,018 23,538
Total comprehensive income attributable to:
Owners of the parent (2,464) (18,169) (3,589) 7,235 24,699
Non-controlling interests (731) 200 (802) - (785)
(3,196) (17,969) (4,391) 7,235 23,915
Basic and diluted earnings per ordinary share
(cents)* (7.60) (21.73) (6.73) 6.79 11.29
Grit Real Estate Income Group Limited
Consolidated statement of changes in equity
As at 30 June 2015, 30 June 2016, 30 June 2017 and 31 January 2018 (all unaudited and restated)
Foreign
Treasury currency Antecedent Non-
Share shares translation dividend Retained controlling
capital reserve reserve reserve loss interest Total equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance as at 1 July 2014
- As previously reported 865 - 53 - 19 - 937
- effect of prior year adjustments - - - - - 21 21
- as restated 865 - 53 - 19 21 958
Profit for the year (as restated) - - - - (2,848) (731) (3,580)
Foreign currency translation differences (as
restated) - - 384 - - - 384
Other comprehensive income - - - - - - -
Total comprehensive income - - 384 - (2,848) (731) (3,196)
Ordinary shares issued 130,704 - - - - - 130,704
Share issue expenses (3,610) - - - - - (3,610)
Ordinary dividends paid - - - - (2,963) - (2,963)
Balance as at 30 June 2015 (restated) 127,959 - 437 - (5,792) (710) 121,893
Balance as at 1 July 2015
- As previously reported 127,959 - (785) - (2,761) - 124,413
- effect of prior year adjustments - - 1,222 - (3,032) (710) (2,520)
- as restated 127,959 - 437 - (5,792) (710) 121,893
Profit for the year (as restated) - - - - (17,962) 200 (17,762)
Share based payments - - - - 3,235 - 3,235
Foreign currency translation differences (as
restated) - - (207) - - - (207)
Total comprehensive income - - (207) - (14,727) 200 (14,734)
Ordinary dividends paid - - - - (8,470) - (8,470)
Treasury shares - (5,100) - - - - (5,100)
Ordinary shares issued 44,830 - - - - - 44,830
Ordinary shares issued - - - - - 56 56
Share issue expenses (158) - - - - - (158)
Transfer from share issues (636) - - 636 - - -
Balance as at 30 June 2016 171,995 (5,100) 230 636 (28,989) (455) 138,317
Balance as at 1 July 2016
- As previously reported 171,995 - (2) 636 (9,256) - 163,372
- effect of prior year adjustments - (5,100) 232 - (19,733) (455) (25,056)
- as restated 171,995 (5,100) 230 636 (28,989) (455) 138,317
Profit for the year (as restated) - - - - (6,635) (802) (6,668)
Share based payments - - - - 133 - 133
Foreign currency translation differences (as
restated) - - 3,045 - - - 2,277
Other comprehensive income - - - - - - -
Total comprehensive income - - 3,045 - (6,501) (802) (4,258)
Ordinary dividends paid - - - (636) (11,526) - (12,161)
Treasury shares - (9,931) - - - - (9,931)
Ordinary shares issued 155,535 - - - - 155,535
Ordinary shares issued - - - - 133 133
Share issue expenses (5,331) - - - - (5,331)
Transfer from share issues (2,221) - 2,221 - - -
Clean-out ordinary dividend paid* - - - (960) (4,161) - (5,121)
Balance as at 30 June 2017 319,979 (15,031) 3,275 1,261 (51,177) (1,123) 257,183
Balance as at 1 July 2017
- As previously reported 319,979 - 1,064 1,261 (7,578) - 314,725
- effect of prior year adjustments - (15,031) 2,212 - (43,599) (1,123) (57,541)
- as restated 319,979 (15,031) 3,275 1,261 (51,177) (1,123) 257,183
Profit for the year - - - - 24,322 (785) 23,538
Share based payments - - - - 214 - 214
Foreign currency translation differences - - 377 - - - 377
Other comprehensive income - - - - - - -
Total comprehensive income - - 377 - 24,536 (785) 24,129
Ordinary dividends paid - - - (1,261) (1,478) - (2,738)
Treasury shares - 220 - - - - 220
Balance as at 31 January 2018 319,979 (14,811) 3,652 - (28,119) (1,908) 278,793
Grit Real Estate Income Group Limited
Consolidated statement of cash flows
For years ended 30 June 2015, 30 June 2016, 30 June 2017 (unaudited and restated) and for the periods ended 31 January 2017
(unaudited) and 31 January 2018 (unaudited)
Period
Year Year Year ended 31 Period
ended 30 ended 30 ended 30 January ended 31
June 2015 June 2016 June 2017 2017 January
restated restated restated (Unaudited) 2018
US$'000 US$'000 US$'000 US$'000 US$'000
Cash generated from/(utilised in) operations
Profit before tax (1,075) 2,481 (10,351) 6,767 23,689
Adjusted for:
Depreciation and amortisation 14 94 208 87 149
Interest income (91) (170) (2,059) (506) (2,763)
Income from associates - (3,313) (6,893) (2,793) (13,848)
Interest expense 3,640 9,243 11,433 5,290 10,932
Allowance for credit losses 988 832 962 463 135
Unrealised foreign exchange loss 13,774 (17,560) 17,683 17,934 5,859
Straight-line income accrual (2,267) (1,901) (1,132) (859) (1,061)
Fair value adjustment on investment properties (7,889) 4,625 20,729 (4,460) (2,279)
Fair value adjustment on investment properties from cash receipts from
Sellers (329) (892) (230) - (7,788)
Gain from bargain purchase on associates - (251) (609) - -
Share based payment - 3,235 133 - 214
Fair value adjustment on other investments - - - - (61)
Fair value adjustment on financial instruments - - - - 93
Fair value adjustment on derivative financial instruments - 99 (535) (101) (31)
6,764 (3,477) 29,338 21,823 13,240
Changes to working capital
Trade and other receivables (16,301) (1,415) 9,149 (1,638) (13,209)
Trade and other payables 9,615 6,440 (2,500) 1,328 (3,794)
Cash (utilised in)/generated from operations 79 1,549 35,987 21,513 (3,764)
Interest received 91 170 2,059 506 2,815
Finance costs paid (4,358) (8,787) (9,716) (4,605) (9,445)
Taxation paid (171) (589) (1,488) (810) (112)
VAT on acquisition of investment property recoverable - - (4,554) (1,304) -
Net cash (utilised in)/generated from operating activities (3,857) (7,657) 22,289 15,300 (10,506)
Acquisition of investment property (220,008) (36,116) (85,056) (17,848) (43,040)
Acquisition of property, plant and equipment - (520) (1,012) - (389)
Acquisition of intangible assets - (593) (10) (6) (26)
Acquisition of other investments - - - - (3,849)
Net cash outflow on acquisition of associates - (23,016) (15,183) - (62,136)
Dividends received from associates - 1,787 3,573 1,648 4,778
Interest received from associates - - - - 1,617
Proceeds from disposal of property, plant and equipment - - - - 4
Loans (advanced to)/raised from related parties 264 399 (9,951) 281 (19,460)
Other loans (advanced)/repaid - - (58,582) (23,073) 46,609
Net cash utilised in investing activities (219,745) (58,060) (166,221) (38,997) (75,892)
Proceeds from the issue of ordinary shares 126,846 36,872 110,962 17,377 -
Share issue expenses (3,610) (158) (5,331) (1,269) -
Proceeds from the issue of preference shares - - 12,840 - -
Ordinary dividends paid (2,963) (8,470) (17,649) (11,564) (2,878)
Proceeds from interest-bearing borrowings 132,961 141,480 183,934 44,698 121,712
Settlement of interest-bearing borrowings (23,303) (109,507) (114,720) (28,268) (49,319)
Settlement of debt structure fees - - (1,960) - (32)
Settlement of obligations under finance leases - - (73) (28) (20)
Net cash generated from financing activities 229,930 60,217 168,003 20,947 69,464
Net movement in cash and cash equivalents 5,827 (5,500) 24,071 (2,750) (16,934)
Cash at the beginning of the period 649 6,224 17,785 17,772 24,230
Effect of foreign exchange rates (252) 17,061 (17,626) (17,934) 603
Total cash at the end of the period 6,224 17,785 24,230 (2,913) 7,899
IMPACT OF PRIOR YEAR RESTATEMENTS AND CORRECTION OF PRESENTATION
Impact to the 2017 Financial Year
IMPACT ON STATEMENT OF FINANCIAL As previously Revenue Deferred Tax Acquisition Consolidation Accounting Write off Reclassificat Restatement RESTATED
POSITION reported Recognition accounting of Freedom for foreign of certain ion for of the
and Asset currency balances disclosure valuation of
measurement Management purposes Anfa Place
Limited Shopping
Centre
USD USD USD USD USD USD USD USD USD USD
ASSETS
Non-Current Assets
Investment property 351,822,336 - (19,587,426) 332,234,910
Property Plant and Equipment 1,932,521 (642,768) 1,289,753
Intangible assets 5,692,190 (5,100,000) 592,190
Investment in available-for-sale financial
asset - -
Investments in associates 89,049,264 (33,388) 89,015,876
Investments in subsidiaries - -
Related party loans 12,722,604 - (11,930,890) 791,714
Loans receivable 66,740,037 - 66,740,037
Other financial assets - -
Deferred tax assets 6,174,482 (6,174,482) -
Total non-current assets 534,133,434 - (6,174,482) - (5,100,000) - (33,388) (11,930,890) (20,230,194) 490,664,480
Current Assets
Current tax receivable 438,831 438,831
Derivative financial instruments - -
Trade and other receivables 25,916,520 (5,567,816) 19,602 (2,101,837) 4,538,114 - 22,804,583
Related party loans - (10,714,274) 11,930,890 1,216,616
Cash and cash equivalents 24,666,676 1,258 24,667,934
Total current assets 51,022,027 (5,567,816) - - (10,693,414) - (2,101,837) 16,469,004 - 49,127,964
TOTAL ASSETS 585,155,461 (5,567,816) (6,174,482) - (15,793,414) - (2,135,225) 4,538,114 (20,230,194) 539,792,444
EQUITY AND LIABILITIES
Equity
Share Capital 319,978,513 - 319,978,513
Treasury shares - (15,030,891) (15,030,891)
Foreign currency translation reserve 1,063,721 2,211,099 - 3,274,820
Antecedent dividend reserve 1,260,656 1,260,656
Retained Earnings (7,578,171) (5,567,816) (13,821,131) 366,770 (2,211,098) (2,135,225) - (20,230,194) (51,176,865)
Non-Controlling interest - (1,122,884) (1,122,884)
Total equity attributable to equity
holders 314,724,719 (5,567,816) (13,821,131) - (15,787,005) - (2,135,225) - (20,230,194) 257,183,348
LIABILITIES
Non-current liabilities
Redeemable preference shares 12,840,000 12,840,000
Interest-bearing borrowings 187,447,310 (2,396,611) 185,050,699
Obligations under finance leases 171,247 171,247
Related party loans - 1,365,000 1,365,000
Deferred tax liabilities 898,773 7,646,649 8,545,422
Total non-current liabilities 201,357,330 - 7,646,649 - - - - (1,031,611) - 207,972,368
Current liabilities
Interest-bearing borrowings 47,959,452 47,959,452
Obligations under finance leases 44,566 44,566
Trade and other payables 19,247,458 (6,409) 6,934,725 26,175,774
Related party loans 1,365,000 (1,365,000) -
Current tax payable - -
Financial instruments 18,724 18,724
Other financial liabilities - -
Cash and cash equivalents 438,212 438,212
Total current liabilities 69,073,412 - - - (6,409) - - 5,569,725 74,636,728
Total liabilities 270,430,742 - 7,646,649 - (6,409) - - 4,538,114 - 282,609,096
Total equity and liabilities 585,155,461 (5,567,816) (6,174,482) - (15,793,414) - (2,135,225) 4,538,114 (20,230,194) 539,792,444
Impact on net asset value per share
(cents)
NAV per Share 150.94 (2.67) (6.63) 0.00 0.29 0.00 (1.02) 0.00 (9.70) 130.18
TNAV per Share 148.41 (0.14) 2.53 2.53 2.82 2.53 1.51 2.53 (7.17) 134.49
EPRA NAV per Share 150.94 (2.67) 0.52 0.00 0.29 0.00 (1.02) 0.00 (9.70) 137.70
Impact to the 2017 Financial Year
IMPACT ON STATEMENT OF CHANGES IN EQUITY
Foreign
Treasury currency Antecedent Retained Non-
Share Capital Shares translation dividend loss controlling Total Equity
reserve reserve interest
USD USD USD USD USD USD USD
Balance as at 1 July 2016 171,995,297 (5,100,000) 229,358 635,547 (28,988,973) (454,515) 138,316,715
As previously stated 171,995,297 (1,898) 635,547 (9,256,498) 163,372,448
Restatements to opening balance - (5,100,000) 231,256 - (19,732,475) (454,515) (25,055,733)
Profit for the year - - - - (6,634,574) (801,659) (7,436,233)
Profit for the year as previously stated - - - - 17,731,685 17,731,685
Revenue Recognition and measurement (3,580,481) (3,580,481)
Deferred Tax 2,784,897 2,784,897
Consolidation of Freedom Asset Management Limited (133,270) (801,659) (934,929)
Write off of certain balances (1,505,890) (1,505,890)
Accounting for foreign currency (1,979,842) (1,979,842)
Restatement of the valuation of Anfa Place Shopping Centre (19,951,674) (19,951,674)
Foreign currency translation differences - - 3,045,461 - - - 3,045,461
Movement for the year as previously stated - 1,065,619 - - 1,065,619
Accounting for foreign currency 1,979,842 1,979,842
Share based payments 133,270 133,270
Total comprehensive income - - 3,045,461 - (6,501,305) (801,659) (4,257,502)
Ordinary shares issued 155,534,757 155,534,757
Ordinary shares held as treasury shares - (9,930,891) - (9,930,891)
Non-controlling interest 133,290 133,290
Share issue expenses (5,330,652) (5,330,652)
Transfer from share issues (2,220,889) 2,220,889 -
Ordinary dividends paid (1,595,780) (15,686,588) (17,282,368)
Balance as at 30 June 2017 319,978,513 (15,030,891) 3,274,820 1,260,656 (51,176,865) (1,122,884) 257,183,348
Impact to the 2017 Financial Year
IMPACT ON STATEMENT OF As previously Revenue Deferred Tax Acquisition Consolidation Accounting Write off Reclassificat Restatement RESTATED
COMPREHENSIVE INCOME reported Recognition accounting of Freedom for foreign of certain ion for of the
and Asset currency balances disclosure valuation of
measurement Management purposes Anfa Place
Limited Shopping
Centre
USD USD USD USD USD USD USD USD USD USD
Gross rental income 24,329,570 (1,458,053) 22,871,517
Straight-line rental income accrual 1,132,143 - 1,132,143
Revenue 25,461,713 (1,458,053) - - - - - - - 24,003,660
Share of profits from associates 7,621,227 (1,541,391) 813,245 6,893,081
Property operating expenses (7,170,116) (7,170,116)
Net property income 25,912,824 (1,458,053) - - - (1,541,391) 813,245 - - 23,726,625
Other income 3,274,668 (3,274,470) 253,752 253,950
Administrative expenses (5,601,436) (1,405,018) (7,006,454)
Profit from operations 23,586,056 (4,732,523) - - (1,151,266) (1,541,391) 813,245 - - 16,974,121
Fair value adjustment on investment
properties 2,936,120 922,000 (224,883) - (4,410,266) - (19,951,674) (20,728,703)
Fair value adjustment on investment properties from cash
receipts from Sellers - 230,042 230,042
Fair value adjustment on derivative
financial instruments 103,624 431,864 535,488
Gain from bargain purchase 957,837 (348,779) 609,058
Acquisition and setup costs (1,166,356) 573,662 - (85,606) (678,300)
Foreign exchange differences 778,640 (616,706) 181,239 3,971,815 (2,233,529) 2,081,459
Profit before interest and taxation 27,195,921 (3,580,481) (616,706) - (970,027) (1,979,842) (1,505,890) 431,864 (19,951,674) (976,835)
Interest income 1,993,516 65,792 2,059,308
Finance costs (10,970,561) (30,694) (431,864) (11,433,119)
Profit for the period before tax 18,218,876 (3,580,481) (616,706) - (934,929) (1,979,842) (1,505,890) - (19,951,674) (10,350,646)
Current Tax (32,326) (32,326)
Deferred Tax (454,865) 3,401,603 2,946,738
Profit for the period after tax 17,731,685 (3,580,481) 2,784,897 - (934,929) (1,979,842) (1,505,890) - (19,951,674) (7,436,233)
Foreign currency transaction reserve 1,065,619 1,979,842 3,045,461
Total comprehensive income 18,797,304 (3,580,481) 2,784,897 - (934,929) - (1,505,890) - (19,951,674) (4,390,772)
Owners of the parent 17,731,685 (3,580,481) 2,784,897 - (133,270) (1,979,842) (1,505,890) - (19,951,674) (6,634,574)
Non-controlling interest in income - - - - (801,659) - - - - (801,659)
17,731,685 (3,580,481) 2,784,897 - (934,929) (1,979,842) (1,505,890) - (19,951,674) (7,436,233)
Other comprehensive income
attributable to:
Owners of the parent 1,065,619 - - - - 1,979,842 - - - 3,045,461
Non-controlling interest in income - - - - - - - - - -
1,065,619 - - - - 1,979,842 - - - 3,045,461
Impact on earnings per share (cents)
Basic diluted earnings per share 16.06 (3.24) 2.52 0.00 0.33 (1.79) (1.36) 0.00 (18.07) (6.18)
Headline earnings per share 8.65 (4.29) 2.52 0.52 0.12 2.20 (1.36) (0.39) 0.00 7.95
Impact to the 2017 Financial Year
IMPACT ON STATEMENT OF CASH As previously Revenue Deferred Tax Acquisition Consolidation Accounting Write off of Reclassifica Rights issue Restatement RESTATED
FLOWS reported Recognition and accounting of Freedom for foreign certain tion for of the
measurement Asset currency balances disclosure valuation of
Management purposes Anfa Place
Limited Shopping
Centre
USD USD USD USD USD USD USD USD USD USD
Profit before tax 18,218,876 (3,580,481) (616,706) - (934,929) (1,979,842) (1,505,890) - - (19,951,674) (10,350,646)
Adjusted for:
Depreciation and amortisation 207,535 207,535
Interest income (1,993,516) (1,993,516)
Share in profit from associates (7,621,227) 1,541,391 (813,245) (6,893,081)
Finance costs 10,970,561 (30,694) (431,864) 10,508,003
Tax Paid - -
Allowance for credit losses 962,073 962,073
Unrealised foreign exchange loss 1,220,542 616,706 (181,239) (3,971,815) 2,233,529 (82,277)
Straight-line income accrual (1,132,143) (1,132,143)
Gain from bargain purchase (957,837) 348,779 (609,058)
Share based payments - 133,270 - 133,270
Acquisition costs - (573,662) - 85,606 (488,056)
Fair value adjustment on investment
properties (2,936,120) (922,000) 224,883 4,410,266 19,951,674 20,728,703
Fair value adjustment on financial
instruments (103,624) (230,042) - 431,864 98,198
Fair value adjustment on investment in
subsidiary - -
16,835,120 (4,732,523) - - (1,013,592) - - - - - 11,089,005
Changes to working capital
Trade and other receivables 8,459,768 4,732,523 268,339 13,460,630
Trade and other payables (9,939,611) 355,827 (9,583,784)
15,355,278 - - - (389,426) - - - - - 14,965,852
Interest received 1,993,516 18,380 2,011,896
Finance costs paid (9,685,296) (9,685,296)
Taxation paid (1,479,815) (8,022) (1,487,837)
Dividends paid (17,649,138) 366,770 (17,282,368)
Net cash (utilised in) / generated from
operating activities (11,465,455) - - - (12,298) - - - - - (11,477,753)
Acquisition of investment property (82,561,907) 21,480,041 (61,081,866)
VAT on acquisition of investment
property (4,553,568) (4,553,568)
Acquisition of property, plant and
equipment (1,011,886) (1,011,886)
Acquisition of intangible assets (10,374) (10,374)
Net cash outflow on acquisition of
subsidiaries and associates (24,118,753) (24,118,753)
Dividends received from associates 3,573,077 3,573,077
Loans (advanced to) / raised from
subsidiaries and related parties (68,533,142) (68,533,142)
Investment in subsidiaries - -
Net cash utilised in investing activities (177,216,553) - - - - - - - 21,480,041 - (155,736,512)
Proceeds from the issue of shares 133,439,348 (21,480,041) 111,959,307
Share issue expenses (5,330,652) (5,330,652)
Proceeds from the issue of preference
shares 12,840,000 12,840,000
Proceeds from interest bearing
borrowings and finance leases 168,983,007 168,983,007
Settlement of interest bearing
borrowings and finance leases (114,793,052) (114,793,052)
Net cash generated from financing
activities 195,138,652 - - - - - - - (21,480,041) - 173,658,611
Net movement in cash and cash
equivalents 6,456,643 - - - (12,297) - - - - - 6,444,346
Cash at the beginning of the year 17,771,821 13,555 17,785,376
Total cash at the end of the year 24,228,464 - - - 1,258 - - - - - 24,229,722
Impact to the 2016 Financial Year
IMPACT ON STATEMENT OF FINANCIAL As previously Revenue Deferred Tax Acquisition Consolidation Accounting Write off Reclassificat Restatement RESTATED
POSITION reported Recognition accounting of Freedom for foreign of certain ion for of the
and Asset currency balances disclosure valuation of
measurement Management purposes Anfa Place
Limited Shopping
Centre
USD USD USD USD USD USD USD USD USD USD
ASSETS
Non-Current Assets
Investment property 248,545,665 - - 248,545,665
Property, plant and equipment 803,240 (278,520) 524,720
Intangible assets 5,699,199 (5,100,000) 599,199
Investments in associates 45,945,339 (123,030) 45,822,309
Related party loans 978,277 (978,275) 2
Deferred tax assets 5,984,142 (5,984,142) -
Total non-current assets 307,955,862 - (5,984,142) - (6,078,275) - (123,030) - (278,520) 295,491,895
Current Assets
Trade and other receivables 18,101,466 (1,987,335) 155,991 (506,305) (437,033) 15,326,784
Cash and cash equivalents 17,771,821 13,555 17,785,376
Total current assets 35,873,287 (1,987,335) - - 169,546 - (506,305) (437,033) - 33,112,160
TOTAL ASSETS 343,829,149 (1,987,335) (5,984,142) - (5,908,729) - (629,335) (437,033) (278,520) 328,604,055
EQUITY AND LIABILITIES
Equity
Share capital 171,995,297 - 171,995,297
Treasury shares - (5,100,000) (5,100,000)
Foreign currency translation reserve (1,898) 231,256 229,358
Antecedent dividend reserve 635,547 635,547
Retained Earnings (9,256,498) (1,987,335) (16,606,028) - - (231,256) (629,336) - (278,520) (28,988,973)
Non-controlling interest - (454,515) (454,515)
Total equity attributable to equity
holders 163,372,448 (1,987,335) (16,606,028) - (5,554,515) - (629,336) - (278,520) 138,316,715
LIABILITIES
Non-current liabilities
Interest-bearing borrowings 127,070,183 (437,033) 126,633,150
Related party loans - 1,365,000 1,365,000
Deferred tax liabilities 835,646 10,621,886 11,457,532
Total non-current liabilities 127,905,829 - 10,621,886 - - - - 927,967 - 139,455,682
Current liabilities
Interest-bearing borrowings 34,548,386 34,548,386
Trade and other payables 15,062,336 (362,236) 14,700,100
Related party loans 1,365,000 (1,365,000) -
Current tax payable 1,020,938 8,022 1,028,960
Financial instruments 554,212 554,212
Total current liabilities 52,550,872 - - - (354,214) - - (1,365,000) - 50,831,658
Total liabilities 180,456,701 - 10,621,886 - (354,214) - - (437,033) - 190,287,340
Total equity and liabilities 343,829,149 (1,987,335) (5,984,142) - (5,908,729) - (629,336) (437,033) (278,520) 328,604,055
NAV per Share 163.27 (1.99) (16.60) 0.00 (0.21) 0.00 (0.63) 0.00 (0.28) 142.97
TNAV per Share 158.13 3.16 5.15 5.15 4.94 5.15 4.52 5.15 4.87 154.78
EPRA NAV per Share 163.27 (1.99) 0.41 0.00 (0.21) 0.00 (0.63) 0.00 (0.28) 160.51
IMPACT ON STATEMENT OF CHANGES IN EQUITY
Foreign Antecedent Non-
Treasury currency dividend Retained controlling Total Equity
Share capital Shares translation reserve loss interest
reserve
USD USD USD USD USD USD USD
Balance as at 1 July 2015 127,958,794 - 436,857 - (5,792,403) (710,312) 121,892,936
As previously stated 127,958,794 - (785,389) - (2,760,583) 124,412,822
Restatements to opening balance - - 1,222,246 - (3,031,820) (710,312) (2,519,886)
Profit for the year - - - - (17,961,949) 200,150 (17,761,799)
Profit for the year as previously stated - - - - 1,973,789 1,973,789
Revenue Recognition and measurement (1,987,335) (1,987,335)
Deferred Tax (14,796,454) (14,796,454)
Consolidation of Freedom Asset Management Limited (3,235,083) 200,150 (3,034,933)
Write off of certain balances - 990,990 990,990
Accounting for foreign currency (629,336) (629,336)
Restatement of the valuation of Anfa Place Shopping Centre (278,520) (278,520)
Foreign currency translation differences - - (207,499) - - - (207,499)
Movement for the year as previously stated - 783,491 - - 783,491
Accounting for foreign currency (990,990) (990,990)
Share based payments 3,235,083 3,235,083
Total comprehensive income - - (207,499) - (14,726,865) 200,150 - (14,734,214)
Ordinary shares issued 44,830,305 - - - - 44,830,305
Ordinary shares held as treasury shares - (5,100,000) (5,100,000)
Non-controlling interest 55,647 55,647
Share issue expenses (158,255) - - - - (158,255)
Transfer from share issues (635,547) - - 635,547 - -
Ordinary dividends paid - - - - (8,469,704) (8,469,704)
Balance as at 30 June 2016 171,995,297 (5,100,000) 229,358 635,547 (28,988,973) (454,515) 138,316,715
Impact to the 2016 Financial Year
IMPACT ON STATEMENT OF As previously Revenue Deferred Tax Acquisition Consolidation Accounting Write off Reclassificat Restatement RESTATED
COMPREHENSIVE INCOME reported Recognition accounting of Freedom for foreign of certain ion for of the
and Asset currency balances disclosure valuation of
measurement Management purposes Anfa Place
Limited Shopping
Centre
USD USD USD USD USD USD USD USD USD USD
Gross rental income 20,878,458 (892,133) 19,986,325
Straight-line rental income accrual 2,217,399 (316,786) 1,900,613
Revenue 23,095,857 (1,208,919) - - - - - - - 21,886,938
Share of profits from associates 3,219,866 227,534 (134,422) 3,312,978
Property operating expenses (5,769,024) 146,300 (5,622,724)
Net property income 20,546,699 (1,062,619) - - - 227,534 (134,422) - - 19,577,193
Other income 2,933,782 (2,133,635) 5,184 805,331
Administrative expenses (3,856,608) (3,498,633) 11,391 (7,355,241)
Profit from operations 19,623,873 (3,196,254) - - (3,493,449) 227,534 (123,031) - - 13,027,282
Fair value adjustment on investment
properties (3,759,543) 316,786 (328,766) (586,502) (278,520) (4,625,154)
Fair value adjustment on investment properties from cash
receipts from Sellers - 892,133 892,133
Fair value adjustment on derivative
financial instruments (99,198) (455,014) (554,212)
Gain from bargain purchase 250,515 - 250,515
Acquisition and setup costs (1,838,800) 328,766 453,050 (506,305) (1,563,289)
Foreign exchange differences and other 2,763,774 - 13,488 1,349,958 4,127,220
Profit before interest and taxation 16,940,621 (1,987,335) - - (3,026,911) 990,990 (629,336) (455,014) (278,520) 11,554,495
Interest income 170,158 170,158
Finance costs (9,698,267) 455,014 (9,243,253)
Profit for the period before tax 7,412,512 (1,987,335) - - (3,026,911) 990,990 (629,336) - (278,520) 2,481,400
Current Tax (1,493,959) (8,022) (1,501,981)
Deferred Tax (3,944,764) (14,796,454) (18,741,218)
Profit for the period after tax 1,973,789 (1,987,335) (14,796,454) - (3,034,933) 990,990 (629,336) - (278,520) (17,761,799)
Foreign currency transaction reserve 783,491 (990,990) (207,499)
Total comprehensive income 2,757,280 (1,987,335) (14,796,454) - (3,034,933) 0 (629,336) - (278,520) (17,969,298)
Profit attributable to:
Owners of the parent 1,973,789 (1,987,335) (14,796,454) - (3,235,083) 990,990 (629,336) - (278,520) (17,961,949)
Non-controlling interest in income - - - - 200,150 - - - - 200,150
1,973,789 (1,987,335) (14,796,454) - (3,034,933) 990,990 (629,336) - (278,520) (17,761,799)
Other comprehensive income
attributable to:
Owners of the parent 783,491 - - - - (990,990) - - - (207,499)
Non-controlling interest in income - - - - - - - - - -
783,491 - - - - (990,990) - - - (207,499)
Impact on earnings per share (cents)
Basic diluted earnings per share 2.42 (2.43) (18.11) 0.00 (3.96) 1.21 (0.77) 0.00 (0.34) (22.06)
Headline earnings per share 5.09 (3.91) (18.11) 0.40 (3.95) 1.92 (0.77) 0.56 0.00 (18.84)
Impact to the 2016 Financial Year
IMPACT ON STATEMENT OF CASH As previously Revenue Correction of Acquisition Consolidation Accounting Write off Reclassifica Restatement RESTATED
FLOWS reported Recognition the accounting of Freedom for foreign of certain tion for of the
and Accounting Asset currency balances disclosure valuation of
measurement Policy - Management purposes property
Deferred Tax
USD USD USD USD USD USD USD USD USD USD
Profit before tax 7,412,512 (1,987,335) - - (3,026,911) 990,990 (629,336) - (278,520) 2,481,400
Adjusted for: -
Depreciation and amortisation 94,133 94,133
Interest income (170,158) (170,158)
Share in profit from associates (3,219,866) (227,534) 134,422 (3,312,978)
Finance costs 9,698,267 (455,014) 9,243,253
Allowance for credit losses 831,600 831,600
Unrealised foreign exchange loss 725,284 - (1,338,567) (11,391) (624,674)
Straight-line income accrual (2,217,399) (2,217,399)
Gain from bargain purchase (250,515) - (250,515)
Share based payments - 3,235,083 3,235,083
Acquisition costs (328,766) - - (328,766)
Fair value adjustment on investment
properties 3,759,543 - 328,766 575,111 - 278,520 4,941,940
Fair value adjustment on derivatives financial
instruments 99,198 455,014 554,212
16,762,599 (1,987,335) - - 208,172 - ( 506,305) - - 14,477,131
Changes to working capital
Trade and other receivables (3,203,268) 1,987,335 (90,579) 506,305 (800,207)
Trade and other payables 5,726,945 (105,180) 5,621,765
19,286,276 - - - 12,413 - - - - 19,298,689
Interest received 170,158 170,158
Finance costs (9,241,646) (9,241,646)
Taxation paid (589,490) (589,490)
Dividends paid (8,469,704) (8,469,704)
Net cash generated from / (utilised in) operating activities 1,155,594 - - - 12,413 - - - - 1,168,007
Acquisition of investment property (31,490,817) - (31,490,817)
Acquisition of property, plant and
equipment (798,114) (798,114)
Acquisition of intangible assets (593,172) (593,172)
Net cash outflow on acquisition of
subsidiaries and associates (31,419,780) (31,419,780)
Dividends received from associates 1,786,552 1,786,552
Loans raised from / (advanced to)
subsidiaries and related parties 398,501 398,501
Net cash utilised in investing activities (62,116,830) - - - - - - - - (62,116,830)
Proceeds from the issue of ordinary
shares 40,695,046 40,695,046
Share issue expenses (158,255) (158,255)
Proceeds from interest bearing
borrowings 142,152,774 142,152,774
Settlement of interest bearing
borrowings (110,179,398) (110,179,398)
Net cash generated from financing
activities 72,510,167 - - - - - - - - 72,510,167
Net movement in cash and cash
equivalents 11,548,930 - - - 12,413 - - - - 11,561,343
Cash at the beginning of the year 6,222,891 1,142 6,224,033
Total cash at the end of the year 17,771,821 - - - 13,555 - - - - 17,785,376
- -
Impact to the 2015 Financial Year
IMPACT ON STATEMENT OF FINANCIAL As previously Revenue Deferred Tax Acquisition Consolidation Accounting Write off Reclassificat Restatement RESTATED
POSITION reported Recognition accounting of Freedom for foreign of certain ion for of the
and Asset currency balances disclosure valuation of
measurement Management purposes Anfa Place
Limited Shopping
Centre
USD USD USD USD USD USD USD USD USD USD
ASSETS
Non-Current Assets
Investment property 210,390,631 210,390,631
Property, plant and equipment 96,512 96,512
Intangible assets 8,774 - - 8,774
Related party loans 11,778 11,778
Deferred tax assets 190,143 (190,143) -
Total non-current assets 210,697,838 - (190,143) - - - - - - 210,507,695
Current Assets
Trade and Other Receivables 18,777,373 9,767 18,787,140
Cash and Cash equivalents 6,565,282 1,142 6,566,424
Total current assets 25,342,655 - - - 10,909 - - - - 25,353,564
TOTAL ASSETS 236,040,493 - (190,143) - 10,909 - - - - 235,861,259
EQUITY AND LIABILITIES
Equity
Share capital 127,958,794 127,958,794
Foreign currency translation reserve (785,389) 1,222,246 436,857
Retained Earnings (2,760,583) (1,809,574) (1,222,246) (5,792,403)
Non Controlling Interest - (710,312) (710,312)
Total equity attributable to equity
holders 124,412,822 - (1,809,574) - (710,312) - - - - 121,892,936
LIABILITIES
Non-current liabilities
Interest-bearing borrowings 10,490,966 10,490,966
Deferred tax liabilities 807,205 1,619,431 2,426,636
Total non-current liabilities 11,298,171 - 1,619,431 - - - - - - 12,917,602
Current liabilities
Interest-bearing borrowings 91,165,629 91,165,629
Trade and other payables 8,683,724 (431,313) 8,252,411
Related party loans - 1,152,534 1,152,534
Current tax payable 137,756 - 137,756
Cash and cash equivalents 342,391 342,391
Total current liabilities 100,329,500 - - - 721,221 - - - - 101,050,721
Total liabilities 111,627,671 - 1,619,431 - 721,221 - - - - 113,968,323
Total equity and liabilities 236,040,493 - (190,143) - 10,909 - - - - 235,861,259
Impact on net asset value per share
(cents) - - - - - - - - - -
NAV per Share 168.91 0.00 (2.46) 0.00 0.00 0.00 0.00 0.00 0.00 166.45
TNAV per Share 169.75 (0.84) (0.84) (0.84) (0.84) (0.84) (0.84) (0.84) (0.84) 169.75
EPRA NAV per Share 168.91 0.00 (0.76) 0.00 0.00 0.00 0.00 0.00 0.00 168.15
Impact to the 2015 Financial Year
IMPACT ON STATEMENT OF CHANGES IN
EQUITY
Foreign Antecedent Non-
Treasury currency dividend Retained controlling Total Equity
Share capital Shares translation reserve loss interest
reserve
USD USD USD USD USD USD USD
equity
Balance as at 1 July 2014 864,655 - 52,865 - 19,471 936,991
Profit for the year - - - - (2,848,440) (731,305) (3,579,745)
Profit for the year as previously stated - - - - 183,380 183,380
Deferred Tax (1,809,574) (1,809,574)
Acquisition accounting - (731,305) (731,305)
Accounting for foreign currency (1,222,246) (1,222,246)
Foreign currency translation differences - - 383,992 - - - 383,992
Movement for the year as previously stated - - (838,254) - - (838,254)
Accounting for foreign currency 1,222,246 1,222,246
Total comprehensive income - - 383,992 - (2,848,440) (731,305) (3,195,753)
Ordinary shares issued 130,704,474 - - - - 130,704,474
Non-controlling interest 20,993 20,993
Share issue expenses (3,610,335) - - - - (3,610,335)
Ordinary dividends paid - - - - (2,963,434) (2,963,434)
Balance as at 30 June 2015 127,958,794 - 436,857 - (5,792,403) (710,312) 121,892,936
Impact to the 2015 Financial Year
IMPACT ON STATEMENT OF As previously Revenue Deferred Tax Acquisition Consolidation Accounting Write off Reclassificat Restatement RESTATED
COMPREHENSIVE INCOME reported Recognition accounting of Freedom for foreign of certain ion for of the
and Asset currency balances disclosure valuation of
measurement Management purposes Anfa Place
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USD USD USD USD USD USD USD USD USD USD
Gross rental income 13,918,198 (329,114) 13,589,084
Straight-line rental income accrual 2,622,295 (355,329) 2,266,966
Revenue 16,540,493 (684,443) - - - - - - - 15,856,050
Property operating expenses (3,477,760) - (3,477,760)
Net property income 13,062,733 (684,443) - - - - - - - 12,378,290
Other income 384,061 - 384,061
Administrative expenses (1,711,297) (2,829,868) (4,541,165)
Profit from operations 11,735,497 (684,443) - - (2,829,868) - - - - 8,221,186
Fair value adjustment on investment
properties 4,560,459 355,329 2,478,150 495,354 7,889,292
Fair value adjustment on investment properties from cash
receipts from Sellers - 329,114 329,114
Gain from bargain purchase 3,504,523 (3,504,524) (1)
Acquisition and setup costs (4,121,219) 1,026,374 2,098,563 (996,282)
Foreign exchange differences and other (11,251,461) (1,717,600) (12,969,061)
Profit before interest and taxation 4,427,799 - - - (731,305) (1,222,246) - - - 2,474,248
Interest income 91,478 91,478
Finance costs (3,640,293) (3,640,293)
Profit for the period before tax 878,984 - - - (731,305) (1,222,246) - - - (1,074,567)
Current Tax (78,542) (78,542)
Deferred Tax (617,062) (1,809,574) (2,426,636)
Profit for the period after tax 183,380 - (1,809,574) - (731,305) (1,222,246) - - - (3,579,745)
(Loss)/profit on translation of functional
currency (838,254) - 1,222,246 383,992
Total comprehensive income (654,874) - (1,809,574) - (731,305) (0) - - - (3,195,753)
Owners of the parent 183,380 - (1,809,574) - - (1,222,246) - - - (2,848,440)
Non-controlling interest in income - - - - (731,305) - - - - (731,305)
183,380 - (1,809,574) - (731,305) (1,222,246) - - - (3,579,745)
Owners of the parent (838,254) - - - - 1,222,246 - - - 383,992
(838,254) - - - - 1,222,246 - - - 383,992
Impact on earnings per share (cents)
Basic diluted earnings per share 0.39 0.00 (3.84) 0.00 0.00 (2.59) 0.00 0.00 0.00 (6.05)
Headline earnings per share (16.73) (1.45) (3.84) 2.18 0.00 (3.65) 0.00 0.00 0.00 (23.49)
Impact to the 2015 Financial Year
IMPACT ON STATEMENT OF CASH As previously Revenue Deferred Tax Acquisition Consolidation Accounting Write off Reclassificat Restatement RESTATED
FLOWS reported Recognition accounting of Freedom for foreign of certain ion for of the
and Asset currency balances disclosure valuation of
measurement Management purposes Anfa Place
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USD USD USD USD USD USD USD USD USD USD
Profit/(loss) before tax 878,984 - - - (731,305) (1,222,246) - - - (1,074,567)
Adjusted for: -
Depreciation 13,973 13,973
Interest income (91,477) (91,477)
Finance costs 3,640,293 3,640,293
Allowance for credit losses 413,784 413,784
Unrealised foreign exchange loss 11,803,314 1,717,600 13,520,914
Straight-line income accrual (2,622,295) (2,622,295)
Acquisition costs (1,026,374) (1,026,374)
Gain from bargain purchase (3,504,523) 3,504,524 1
Fair value adjustments on investment
properties (4,560,458) (2,478,150) (495,354) (7,533,962)
5,971,595 - - - (731,305) - - - - 5,240,290
Changes to working capital
Trade and other receivables (14,141,497) (9,767) (14,151,264)
Trade and other payables 1,454,330 721,221 2,175,551
(6,715,572) - - - (19,851) - - - - (6,735,423)
Interest received 91,477 91,477
Finance costs (4,357,686) (4,357,686)
Taxation paid (171,207) (171,207)
Dividends paid (2,963,434) (2,963,434)
Net cash utilised in operating activities (14,116,422) - - - (19,851) - - - - (14,136,273)
Acquisition of investment property &
property, plant & equipment (172,115,747) (172,115,747)
Net cash outflow on acquisition of
subsidiaries (31,115,210) (31,115,210)
Loans refunded from/(advanced to)
subsidiaries and related parties 263,956 263,956
Net cash (utilised in)/generated from investing activities (202,967,002) - - - - - - - - (202,967,002)
Proceeds from the issue of ordinary
shares 126,825,299 20,993 126,846,292
Capital issue expenses (3,610,335) (3,610,335)
Proceeds from interest bearing
borrowings 122,745,142 122,745,142
Settlement of interest bearing
borrowings (23,303,118) (23,303,118)
Net cash generated from financing
activities 222,656,987 - - - 20,993 - - - - 222,677,980
Net movement in cash and cash
equivalents 5,573,563 - - - 1,142 - 5,574,705
Cash at the beginning of the year 649,328 649,328
Total cash at the end of the year 6,222,891 - - - 1,142 - - - - 6,224,033
OUTLOOK
Whilst the Board recognises the complexity and risk in Africa, the Group has positioned itself with a
skilled and experienced management team and platform to capitalise on the significant opportunities on
the continent. With the proposed LSE Listing, the Company will position its reporting and governance in
line with European standards. Given the strength of the company's existing portfolio coupled with the
opportunities presented by the company's proposed LSE Listing, the Board continues to look to the future
with confidence.
GOING CONCERN
Having considered the Group's budget and cash flow, the Board is of the opinion that the Group has
adequate resources to continue operating for the foreseeable future and that it is appropriate to adopt
the going concern basis in preparing the Group's financial statements. The directors have satisfied
themselves that the Group is in a sound financial position and that it has access to sufficient borrowing
facilities to meet its foreseeable cash requirements.
NOTES
The provisional abridged unaudited consolidated financial statements for the seven months ended 31 January 2018,
together with the provisional abridged restated figures for the years ended 30 June 2015, 30 June 2016 and 30 June
2017 have been prepared in accordance with the measurement and recognition requirements of IFRS, the
SEM Listing Rules, the JSE Listings Requirements and the Securities Act of Mauritius 2005. The aforementioned
statements for the seven months ended 31 January 2018, together with the abridged restated figures for the years
ended 30 June 2015, 30 June 2016, and 30 June 2017 are provisional as they are still subject to audit sign off
which is expected shortly.
The aforementioned financial information in this announcement was approved by the Board on 11 June 2018.
By order of the Board
12 June 2018
JSE sponsor and corporate advisor to Grit SEM authorised representative and sponsor to Grit
PSG CAPITAL Perigeum Capital
Directors: Peter Todd (chairman), Bronwyn Corbett*, Paul Huberman, Ian Macleod, Leon van de Moortele*,
Nomzamo Radebe, Catherine Mcllraith and Matshepo More (*executive director)
Company secretary: Intercontinental Fund Services Limited
Registered address: c/o Intercontinental Fund Services Limited, Level 5, Alexander House, 35 Cybercity, Ebène, 72201, Mauritius
Transfer secretary (South Africa): Computershare Investor Services Proprietary Limited
Registrar and transfer agent (Mauritius): Intercontinental Secretarial Services Limited
Corporate advisor and JSE sponsor: PSG Capital Proprietary Limited
Sponsoring Broker: Axys Stockbroking Ltd
SEM authorised representative and sponsor: Perigeum Capital Ltd
This communiqué is issued pursuant to SEM Listing Rules 11.3 and 12.19 and section 88 of the Mauritian Securities Act 2005 and
the JSE Listings Requirements. The Board accepts full responsibility for the accuracy of the information contained in these abridged
unaudited consolidated financial statements and this communiqué.
Date: 13/06/2018 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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