Wrap Text
Results For Year Ended 30 June 2018
GRIT REAL ESTATE INCOME GROUP LIMITED
(Registered by continuation in the Republic of Mauritius)
(Registration number: C128881 C1/GBL)
SEM share code: DEL.N0000
JSE share code: GTR
LSE share code: GR1T
ISIN: MU0473N00036
("Grit" or the "Company" or the "Group")
Results for year ended 30 June 2018
Grit Real Estate Income Group ("Grit"), a leading pan-African income real estate company, today announces its
Results for the year ended 30 June 2018.
Financial highlights
- Full year dividend per share increased to US$12.19 cps (2017: US$12.07 cps)
- European Public Real Estate Association ("EPRA")(1) net asset value ("NAV") per share up 6.0% to
US$145.7cps (2017: US$137.4cps)
- Strong growth in adjusted(2) EPRA earnings amounting to US$22.8 million up from US$5.6 million in 2017
- Adjusted EPRA earnings per share up 122.8% to US$11.32cps (2017: US$5.08 cps)
- Loan-to-value ratio of 43% post year end and 51.4% as at 30 June (2017: 42.8%)
- Net property income increased 52.4% year-on-year to US$25.7m (2017: US$16.8m)
- Adjusted(3) administration cost to income producing asset value percentage equates to 1.3% (2017: 1.4%)
- Successful admission to the Main Market of the London Stock Exchange on 31 July 2018, raising gross capital
amounting to US$132.2 million
Portfolio highlights
- Property portfolio now comprises a total of 22 investments
- Weighted Average Lease Expiry (WALE) increased 8.8% to 7.4 years (2017: 6.8 years)
- Weighted Average Annual Rent Escalations at 3.1% (2017: 3.5%)
- Weighted Average Net Rental per m² per month amounts to US$18.2 (2017: US$19.3)
- Gross Lettable Area ("GLA") equates to 308 157m2 (2017: 142 899 m2)
- EPRA Operating Cost to Income ratio (including associates) of 15.6% (2017: 27.5%)
- EPRA Portfolio occupancy rate at 96.7% (2017: 96.9%)
- Weighted Average Cost of Debt at 5.75% (2017: 5.78%)
(1)Explanations of how EPRA figures are derived from IFRS are shown in note 17.
(2)EPRA earnings adjusted for the impact of straight-line leasing and unrealised foreign exchange gains and losses, see note 17.
(3)Ajusted administration costs to asset values are defined and calculated as administration costs less non-controlling administration costs,
acquisition cost and initial setup costs. This is disclosed on note 18.
By order of the Board
26 September 2018
For further information please contact:
Financial Adviser JSE sponsor SEM authorised representative and sponsor
FinCap PSG Capital Perigeum Capital
Grit Real Estate Income Group Limited
Bronwyn Corbett, Chief Executive Officer +230 269 7090
Leon van de Moortele, Chief Financial Officer +230 269 7090
finnCap Ltd - Financial Adviser
William Marle / Scott Mathieson / Matthew Radley (Corporate Finance) +44 20 7220 5000
Mark Whitfeld (Sales) +44 20 3772 4697
Monica Tepes (Research) +44 20 3772 4698
Citigate Dewe Rogerson - Financial PR
Jos Bieneman / David Westover / Ellen Wilton +44 20 7638 9571
Perigeum Capital Ltd - SEM authorised representative and sponsor
Shamin A. Sookia +230 402 0894
Kesaven Moothoosamy +230 402 0898
PSG Capital - JSE Sponsor
David Tosi +27 21 887 9602
Directors: Peter Todd(+) (Chairman), Bronwyn Corbett (Chief Executive Officer)*, Leon van de Moortele (Chief
Financial Officer)*, Ian Macleod(+), Paul Huberman(+) , Faith Matshepo More, Nomzamo Radebe and Catherine McIlraith(+)
(* executive director) ((+) independent non-executive director)
Company secretary: Intercontinental Fund Services Limited
Registered address: 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 notice is issued pursuant to the LSE Listing Rules, the JSE Listings Requirements, SEM Listing Rule 11.3 and
Rule 5(1) of the Securities (Disclosure Obligations of Reporting Issuers) Rules 2007. The Board of Directors of the
Company accepts full responsibility for the accuracy of the information contained in this communiqué.
Chairman's statement
Introduction
Grit continued to deliver against its stated growth objectives of creating a diversified property portfolio
of hard currency based assets across carefully selected African countries. A month after the close of the
June financial year-end, Grit distinguished itself as the first Mauritian-listed company to list on the main
market of the London Stock Exchange ("LSE"), thus providing access to additional capital to fund the group's growth
aspirations.
The Company now holds primary listings on both the LSE and the Johannesburg Stock Exchange ("JSE"),
with a secondary listing on the Stock Exchange of Mauritius ("SEM").
LSE Listing and US$132.2 million Capital Raise
The Board initiated a process more than a year ago to identify an optimal platform that would position
Grit for its next growth phase. The objective was to diversify sources of equity funding and introduce
new long-term shareholders to the Company.
This strategy was successfully executed as our LSE-listing culminated with a gross equity raise of
US$132.2 million, introducing fresh capital and strong support from a number of new international
institutions.
In preparation for the LSE admission, a number of adjustments to the historical financial information
arose, mainly due to variations in the established practice of applying IFRS in different jurisdictions and
aligning to international best practice (see note 15).
In compliance with best practice, as defined by the European Public Real Estate Association (EPRA), Grit
will now be disclosing EPRA NAV, earnings and metrics (which include Company specific adjustments) in
its financial results.
The EPRA underlying principle is that NAV reported in the financial statements under IFRS does not
provide stakeholders with the most relevant information on the fair value of the assets and liabilities,
within an ongoing real estate investment company, with a long-term investment strategy. The objective
of adjusted EPRA NAV is to therefore highlight the fair value of net assets held on an ongoing and long-
term basis.
Financial Performance
The Group continued to perform in line with market guidance, delivered a dividends return on the last
issue price of US$1.43 of 8.5% (annualised) and a EPRA NAV growth of 6%.
The LSE listing and successful capital raise will positively impact on the gearing with an expected reduction
in loan to value ("LTV") ratio from 51.4% to approximately 40% by June 2019. It should be pointed out that
although Grit distributes income similar to a Real Estate Investment Trust ("REIT") it does not have REIT
status and is therefore taxed in each jurisdiction. Therefore, the use of gearing in certain jurisdictions is of
paramount importance to provide appropriate tax shielding.
The overall portfolio remains well-tenanted at a 96.7% occupancy rate, with Anfa Place Shopping Centre
(Anfa) in Morocco, the Company's largest asset by value, providing significant upside potential following
the completion of its refurbishment and tenant optimisation initiatives.
Expansion and Diversification
The Group continued making accretive acquisitions, further diversifying its asset base and regional
exposure. During the period, Grit successfully expanded its portfolio into Ghana, the Company's first
expansion into West Africa when it acquired interests in Capital Place Building and secured the
acquisitions of the 5th Avenue and CADS II building in the capital city, Accra. These acquisitions will
complete in the 2019 year.
These commercial office buildings are held under long-term leases with multi-national companies and,
in line with Grit's strategy of forming strategic partnerships, Grit's interest has been part financed
through the issue of equity at net asset value. On completion, the Ghana portfolio will account for 16%
of the enlarged portfolio. The Company also expanded its portfolio in Mozambique, further
diversifying its asset base with the acquisition of an interest in an A-grade corporate residential estate.
Acacia Estate, with state-of-the-art security features, leased to an international embassy and
international oil company. The asset is located in Costa do Sol, Maputo and has been completed following
financial year end.
Governance and Board
Although I have been the lead independent director of Grit since its inception, this is my first report as
chairman following the resignation of Mr Sandile Nomvete as a result of his responsibilities and position
held as an executive director of Delta Property Fund Limited, a company listed on the JSE.
On behalf of the board, management and all staffs, we wish to thank Sandile Nomvete for his steadfast
support and guidance as founding chairman over the past five years.
A number of additional board changes took place during the last financial year:
- Ms Jackie van Niekerk did not stand for re-election as non-executive director as she took up
an executive role in a South African REIT
- Mr Gujadhur retired as independent non-executive director, with the subsequent resignation of
Mr Doorgakant as an alternative to Mr Gujadhur.
On behalf of the board, I thank Chandra, Maheshwar and Jackie for their contributions and support
during their tenures.
In the lead-up to our LSE listing, a number of new appointments were made, and I wish to welcome
these new directors to the board:
- Mr Paul Huberman was appointed as independent non-executive director and chairman of the
audit committee; and
- Ms Nomzamo Radebe was appointed as non-executive director; and
- Ms Catherine McIlraith joined the board as independent non-executive director.
Subsequent to Grit's listing on the LSE, the Company now holds primary listings in London and
Johannesburg and a secondary listing on the SEM(1).
The Mauritian Securities Act 2005 and the SEM have granted a waiver to the Company from the
requirements to file and publish quarterly financial reports following the LSE listing. Grit will therefore
be filing and publishing half-yearly reports within the reporting deadlines provided under the Mauritian
Securities Act 2005 and the SEM Listing Rules, which also comply with JSE Listing Requirements and the
LSE Listing Rules.
(1) The listing on the SEM is termed a 'secondary listing'. However, all SEM Listing Rules apply to the
Company, except the requirements to publish quarterly financial reports.
Words of Appreciation
Grit has a strategically placed property portfolio, diversified and strong tenants and significant
headroom for growth. These fundamentals are leveraged through the skills of our people and their
relationships with investors, banks, tenants, regulators and other stakeholders in the communities
where we operate.
I would like to thank my fellow board members, the Grit team, our investors and stakeholders for their
continued support during a watershed year of seizing opportunities to create sustainable above average
returns for our investors.
Peter Todd
Chairman
CHIEF EXECUTIVE OFFICER'S STATEMENT
Introduction
The focussed strategy of the company to become the real estate partner of choice to blue chip tenants
has resulted in a quality portfolio, which has created a platform to deliver on shareholder returns. Grit
has created a solid foundation to enhance shareholder value and grow a unique investment offering to
the international investor market. The multi geographic investment strategy, securing hard currency
rentals (mitigating local currency exposure), blue chip tenants and a quality portfolio has mitigated
many perceived Africa risks.
LSE main market listing and US$132.2 million capital raise
On 31 July 2018 Grit successfully listed on the main market of the LSE, raising US$132.2 million in fresh
equity (before costs) and introducing UK-based and international institutional investors to the Group.
The proceeds of this raise place Grit on a new growth trajectory, allowing it to achieve scalability, reduce
debt and strategically diversify the portfolio through the acquisition of additional yield enhancing assets.
Notwithstanding strong anchor shareholder support, the board realised that in order for the Company
to optimally fulfil its mandate of unlocking value for shareholders, diversification of its funding sources
was required.
Following extensive research of potential platforms across the globe, the Board recommended a listing
on the main market of the LSE to shareholders, based on market depth, the number of emerging and
frontier market institutional investors, alignment with the JSE and European corporate governance and
financial reporting standards.
The capital raise associated with the LSE listing was aimed at:
- Broadening and diversifying our shareholder base with established and international investors;
- Supporting Grit's growth aspirations to acquire its yield enhancing current and future pipeline;
- Improving underlying liquidity and tradability of the shares and access into a number of major
indices;
- Enhancing Grit's position as the leading international platform for investing into Africa real
estate; and
- Accessing new strategic partnerships.
The successful LSE listing and capital raise allowed Grit to conclude on a number of pipeline transactions
and reduce debt, in line with the targeted loan to value of 40% by June 2019.
The increased market capitalisation and share price rerating subsequent to the listing, positions Grit well
for inclusion in a number of frontier and emerging market indices with future inclusion in the FTSE
Frontier, MSCI Frontier, SAPY and all-share indices, based on a continued improvement in liquidity.
Corporate activity
The financial results for the year ended 30 June 2018 reflects deployment of the gross proceeds of the
US$121 million raised through the rights offer concluded in the prior financial year. This includes a
positive financial impact from the remaining assets completed, together with the consistent performance
from the current property portfolio during the year. Total income producing assets have increased from
US$488.5m in June 2017 to US$642.3m as at 30 June 2018 as set out in the table in Financial Review.
Details of the assets acquired during this period are as follows:
- 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 (an investment grade country) and a base for developing the necessary
expertise to expand investments into the country. The value of the investment is US$3.1m;
- Imperial Health Sciences Logistics Warehouse located in Nairobi, Kenya and underwritten by
the parent listed company in South Africa, completed on 16 August 2017 (total asset value of
US$21.0m, including the adjacent vacant land). The adjacent land is ear-marked for
redevelopment and potential NAV growth.
- 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 for a net purchase price of US$57.1m.
- On 14 April 2018, Grit announced the acquisition of a 47.5% interest in the company that owns
an office complex known as Capital Place, a three-building complex located on a 1.88 acre
parcel of land in the Airport Residential Area of Accra, Ghana anchored by blue chip tenants.
The seller is a privately held Ghanaian property investment, development and management
company, focusing on commercial and residential property development.
This acquisition further increased Grit's portfolio in Ghana and allows for a strategic partnership
with Sir Samuel Jonah's company, Mobus Properties (Ghana) Limited, which will work jointly
with Grit West Africa, the asset management arm of Grit in Ghana, on future real estate
opportunities and the seller's property developments. The acquisition was financed through the
issue of new Grit shares, amounting to US$8.5m, issued at a price of US$1.5267 per share, net of
dividends on 11 May 2018. A US$5.0m fully refundable deposit has been paid for the acquisition
of the remaining 52.5% interest in Capital Place.
The following assets have / will be acquired post the year end:
- On 13 April 2018 the Company announced that it signed an agreement to acquire an 80.1%
interest in Acacia Estate located in Costa do Sol, Maputo Mozambique. The residential complex
is tenanted by an International Embassy and International oil company under long term leases.
The aggregate purchase consideration is US$23.5m and will be partly settled in cash and partly
through an equity issue. Suspensive conditions associated with the sale of the asset were
fulfilled on 27 August 2018.
- On 26 March 2018, Grit announced that it had paid a fully refundable deposit of US$2m for the
acquisition of the CADS II building situated in Accra. The total consideration for a 50% stake in
this asset is US$10.7m and the effective date of this transaction is 15 August 2018. Post year
end an additional payment of US$ 8.5m was made and the property is currently under transfer.
- On 15 March 2018, Grit signed an agreement to acquire the 5th Avenue Corporate Offices
complex in West Cantonments, Accra. The building is tenanted by a blue chip anchor tenant
occupying 53% of the gross lettable area and contributing 58% of the rental stream. The parent
company of the second biggest tenant, occupying 34% of the gross leasable area and
contributing 30% of the rental income, is a leading owner, operator and developer of wireless
and broadcast communication towers and is listed on the New York Stock Exchange. The
aggregate purchase consideration is US$20.5m, the effective date of this transaction is expected
in October 2018.
Valuations
All properties across the portfolio were independently externally valued as at 31 January 2018 for the
LSE Listing in July 2018.
Valuers were subsequently requested to update their January 2018 valuations for year-end financial
reporting purposes as at 30 June 2018.
The majority of properties retained and held their value with marginal increases in value derived from
respective annual lease escalations.
The Beachcomber Hospitality assets, in Mauritius, increased in value in Euro terms; however due to the
Euro weakening against the US Dollar; these assets currently reflect a decrease in US Dollar value.
A marginal decrease in US Dollar value for Barclays House was as a result of a similar forex impact with
the value having actually increased in Mauritian Rupees; however, the Mauritian Rupee strengthened
against the US Dollar.
Anfa Shopping Centre, in Morocco, experienced a slight valuation uptick due to the positive progression
of the refurbishment project. Upon completion of the development project in 2019, we anticipate a further
valuation upside with the current devaluation being directly related to the refurbishment of a trading
centre.
The Vodacom building, in Mozambique, shows a minor value reduction since the January valuation due
to the lease renewal post December 2020 not having been finalised.
We continue to experience challenging retail trading conditions in Kenya and Mozambique; however as
at 30 June 2018, our retail assets - being community convenience and essential shopping centres - held
their value due to the positive valuations of the Zambia retail assets.
Changes in debt facilities
Material changes to the debt facilities were as follows:
- Bank of China advanced long-term debt of US$37.9m for a period of five years for the
acquisition of Cosmopolitan Mall in Lusaka, Zambia. The proceeds of the loan were utilised to
settle the existing debt held by the vendor with Standard Bank.
The loan was priced at six months Libor + 4.0%, which had a favourable impact on the cost of
funding;
- Bank of China advanced a loan of US$8.6m to acquire the Imperial Health Sciences Logistics
Warehouse in Nairobi, Kenya. The loan was priced at six months Libor + 4.0%;
- As part of Grit's hedging strategy to convert the revolving credit facility from US$ to EUR, the
Company secured a dual-currency facility from Barclays Bank Mauritius amounting to US$20.0
million (equivalent to EUR17.1 million). These loans attract interest at Libor + 3.5% and Euribor +
3.8% respectively; and
- In March 2018, a short-term revolving line of US$20.0m was advanced from SBM Bank
(Mauritius) Ltd, priced at three months Libor + 3.5%.
- In June 2018 the company refinanced the loan in relation to the Barclays House asset. The loan
was converted to a Euro facility and the underlying Mauritian Rupee lease stream was hedged
via a forward sales agreement that converts the Rupees lease stream to Euros for a period of
three years.
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 financing 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 5.75% at 30 June
2018. The LTV at 30 June 2018 was 51.4% after it normalised at 42.8% post 30 June 2017 when cash
held from the capital raise was effectively deployed. The increase is attributable to further drawdowns
made to finance acquisitions.
Proceeds from the recent capital raise and LSE listing will be used to settle revolver debt facilities which
is expected to result in the LTV to normalise at approximately 40% by June 2019.
Following the LSE listing and as part of its debt diversification strategy, the Company is currently
exploring a debt rating by an international ratings agency with the view of entering the debt market with
a note programme. Shareholders will be kept informed of progress in this regard.
Risk management
Grit continues to strictly enforce a number of investment hurdles (margins of safety) that any
investment consideration has to adhere to, before being recommended to the investment committee
and ultimately to the board.
Although some of these self-imposed safeguards may protract the negotiation and transfer process,
their effectiveness is underscored by the portfolio's stable performance even throughout the
Mozambican economic difficulties over the past two years.
Some of these margins of safety include:
- US dollar or Euro-denominated income streams: 93% of portfolio rental income is in hard
currency or pegged to the US$/Eur (Morocco);
- Political risk insurance across the portfolio, which includes the repatriation of funds;
- Investment in politically and economically stable countries - 45% of the portfolio is located in
investment grade countries;
- Land tenure is ensured through comprehensive due diligence processes in partnership with
expert in-country legal counsel. Nine of Grit's assets are freehold;
- Debt diversification - Grit employs a multi-bank strategy and currently engages with eight banks
on the continent;
- Counter party strength - 68.8% of Grit's tenants are in Forbes 2000 or "Other Global" list. The
Group has a weighted lease expiry rate of 7.4 years and a 96.7% occupancy rate (incl. structural
vacancies at Anfa); and
- Self-imposed soft portfolio exposure limitations of 25% per asset class and per country.
Increasing skills and capacity
The LSE listing process rigorously interrogated the quality and depth of our internal processes,
procedures and capacity. This has resulted in a bulking up of senior positions with additional skills set
and knowledge base. This includes the establishment of a highly skilled compliance function and team.
Complementary skills and experience are also being added across various functions of the company
where needs were identified.
Africa is inherently complex from an operational perspective and a skilled and experienced management
team is paramount to a sustainable performance.
Outlook
Grit has positioned itself with a unique and enviable platform to capitalise on the significant
opportunities and growth on the African continent. Given the strength of the Company's existing
portfolio coupled with the opportunities presented by the Company's recent LSE listing, we continue to
look to the future with confidence. Our focus will be on total return including growing the dividend and
net asset value growth of the portfolio. The platform established across the African continent is
substantial and will be leveraged further to grow the portfolio and reduce the overall cost base of the
Company.
Thanks
I wish to thank our founding chairman, Mr Sandile Nomvete for his support, advice and friendship over
the years and wish him well in his future endeavours. In addition, I want to thank the board for their
ongoing guidance, through a period of tremendous growth and also the vigorous process of listing on
the LSE.
On behalf of Grit I welcome our new shareholders to the Company and wish to thank all shareholders
for their encouragement and support in what was a watershed year for the Company.
Lastly, a sincere thanks to Team Grit and your families for making this organisation truly great. You are
the embodiment of our ethos: Grit is passion and perseverance, for long-term sustainability and goals.
It's the day in, day out.
Bronwyn Corbett
Chief Executive Officer
FINANCE REVIEW
Financial overview
Our financial results for the year ended 30 June 2018 have shown a solid return with the resilient
property portfolio delivering a year-on-year increase of 1% in total distribution per share of US$12.19cps.
The growth in the dividend was impacted by non-recurring expenses relating to the LSE listing,
additional resources employed within the Company, the depreciation of the Euro against the US Dollar
in the latter part of 2018 negatively impacting the Euro revenue stream, as well as the targeted pipeline
assets only being transferred after year end. Due to the Anfa Place redevelopment, the centre carried
certain vacancies which should be occupied upon completion creating the potential for further uplift in
NAV and dividend growth.
The successful rights issue in 2017 enabled Grit to further diversify its portfolio of assets across a
number of jurisdictions and asset classes, with significant expansion into corporate accommodation and
hospitality sectors. The expansion of the Euro based Mauritian hospitality assets and the continued
ability to provide hard currency based income streams have further de-risked the portfolio.
Combined WALE has increased from 6.8 years to 7.4 years at the reporting date. The annual increase has
been predominantly driven by new acquisitions during the year, including the Imperial Warehouse and
Beachcomber acquisitions which include long-term rental agreements. The WALE for new acquisitions
stood at a healthy 10.8 years at the reporting date. The existing property WALE of 5.0 years is being
managed through the active management of the portfolio and key lease extensions signed in the period.
Presentation of financial results
The financial statements have been prepared in accordance with IFRS. In accordance with best practice
in the sector, alternative performance measures have also been provided to supplement IFRS based on
the recommendations of EPRA. EPRA Best Practice Recommendations ("BPR") have been adopted
widely throughout this report and are used within the business when considering our operational
performance as well as matters such as dividend policy and elements of our Directors' remuneration.
Full reconciliations between IFRS and EPRA figures are provided in note 17.
Net asset value
NAV per share increased by 5.2% year-on-year, or US$6.7cps, from US$128.9cps to US$135.6cps
(both on a restated 2017 basis). EPRA NAV increased by 6.0% or US$8.3cps from US$137.4cps to US$145.7cps.
This increase in NAV is attributable to strong portfolio growth, with gains from hospitality assets equating
to US$7.5 million, in Anfa Place US$1.7 million and the Zambian retail centres amounting to US$6.6 million.
While net operating income per building has increased in line with escalations, valuation increases on
the existing portfolio are being hampered by the macroeconomic climate, particularly in Mozambique.
The progress made on the ENI S.p.A's capital investment programme in the Rovuma Basin continues to be
positive news for the Mozambique economy. Management believe that this will provide the long
awaited impetus for sustainable economic growth in Mozambique with the Group well positioned to
take advantage of this growth.
Total investment in income generating assets has increased from US$488.5 million in 2017 to US$642.3
million in 2018.
COMPOSITION OF INCOME PRODUCING ASSETS 2017 2018
US$'m US$'m
Investment properties 307.8 383.1
Deposits paid on investment properties 24.4 11.1
Other investments - 4.2
Investments property included within 'Investment of associates' 89.0 201.3
Other loans receivable* 66.7 42.1
Intangible assets (right of use of land) 0.6 0.5
488.5 642.3
* This includes receivable balances from partners in Zambia relating to the loan from Bank of China of US$77m used to fund
the acquisition. The material balance in 2017 relates to the shareholder loan included in the US$47m
Beachcomber acquisition that has been converted into equity. See note 6 for the details of the other
loans receivable and note 7 for borrowings.
Income statement
Gross rental income increased to US$32.1 million (2017: US$22.9 million), and net property income
increased to US$25.7 million from US$16.8 million in the prior year. This is due to the additional rental
income received from the full year income from Lux Tamassa Resort and Mall de Tete, as these were
transferred in March 2017. These reflect annual increases of 40.1% and 53.0%, respectively.
Despite vacancies across the portfolio remaining low, the strategic vacancies within Anfa Place Shopping
Centre (in line with the upgrade to the centre) limited the increase in overall revenue. New acquisitions
in the form of the Imperial Distribution Centre and the Vale Housing Compound were transferred, and
contributed to the rental income increase, during 2018.
Property operating costs increased by 5.8% (or US$0.4 million), with the full year inclusion of Mall de
Tete. Provision for doubtful debts is related to the recoverability of debts from tenants at Anfa Place and
Barclays House.
In real terms, operating costs as a percentage of revenue decreased in the period from 31.4% in
2017 to 22.8% in 2018. This has been achieved through the acquisition of triple net lease assets and cost
savings initiatives and synergies across the geographical locations. This is in spite of the increase in the
provision for bad debts attributable to Anfa Place as a result of the construction work that took place in 2018.
The Group incurred a 85.5% year-on-year increase in administration expenses during the year to
US$14.7m, largely attributable to costs associated with the Group's admission to the LSE, an impairment
charge with in Freedom Asset Management (a company controlled by the Group, but has no ownership
interests) and transactional fees incurred. Adjusted administration costs1 attributable to the
shareholders of the Group increased by 16.7% to US$8.0 million, reflecting increased staff costs of
managing the growing portfolio. With the Company's active on-site administration approach to asset
and property management in the various jurisdictions, the Company has attracted a number of highly
skilled and experienced staff to manage the portfolio. The adjusted administration costs as a
percentage of income producing assets have reduced from 1.4% is 2017 to 1.3% in 2018, showing the
commitment by the Group to proactively manage the cost base.
(1)Adjusted administration costs are defined and calculated as administration costs less non-controlling
administration costs, acquisition cost and initial setup costs is disclosed in note 18.
Total profit for the year attributable to shareholders was US$28.6 million compared with a
US$6.6 million loss after tax in 2017. Adjusted EPRA earnings for 2018, which removes non-cash items such as
fair value movements, straight lining of leases and unrealised foreign currency translation impacts,
increased three-fold during the year to US$22.8 million from US$5.6 million in 2017.
Net debt and cash flow
The Group raised an additional US$93.1 million of debt in 2018 to fund acquisitions. As financing is
integral to our business model, the Group has continued to develop strong relationships with financiers.
The multi-bank approach adopted by Grit has continued, with the main banking partners being Bank of
China, Standard Bank and SBM (Mauritius) Ltd. During the year, the Group secured a new banking
partner, Barclays Bank, who have provided a revolving credit facility for the LSE listing as well as being
the primary funding of the Ghanaian portfolio. The breakdown of the interest-bearing borrowings is
listed in note 7.
The Group's loan-to-value ("LTV") has increased to 51.4% in 2018 (2017: 42.8%). This was driven by the
utilisation of the short-term funding facilities to progress acquisitions completed prior to successful
the fundraising in July 2018. Gearing is expected to normalize in the 2019 financial year to approximately
40% after the acquisition of Acacia Estate, 5th Avenue and CADS II and the settlement of the
short-term debt facilities following the capital raise.
Debt and financing arrangements
In the year, the Group refinanced debt of US$38.0 million held with Afrasia, Nedbank and Rockcastle to
ensure the Group manages the weighted average costs of debt ("WACD"). Despite the increase in the
3-month USD Libor rates in the period ending 30 June 2018, the Group managed to reduce its WACD to
5.75% (2017: 5.78%). This was achieved by entering into Euro based loans and by reducing high cost
debt with low cost short-term debt facilities while the Group was raising equity. Euro based exposures
are entered into to match the currency of the underlying assets with the funding source. As at
30 June 2018, the USD and EUR exposures amounted to 59.8% (2017: 68%) and 39.2% (31%), respectively.
At the balance sheet date, the weighted average maturity of our debt was 2.3 years (2017: 3.3 years).
The revolving credit facilities with SMB (Mauritius) Ltd and Barclays Bank Mauritius were settled with
the proceeds of the capital raise. The Group also agreed terms for the refinancing of US$38 million of
debt and has agreed conditional terms on a further US$23 million of debt maturing in the year ending
30 June 2019.
Dividend
The strong financial performance and distributable earnings growth has allowed the Group to declare a
final distribution of 6.12 USD cents per share, taking the full year distribution to 12.19 USD cents per
share (2017: 12.07 USD cents per share). This represents annual growth of 1%. The Group is targeting an
annual dividend growth of 3% - 5% in 2019.
Our financial outlook
From a strong starting point, the Group has further improved its financial position since the year end
with its successful admission to the main market of the LSE, raising US$132.2 million of capital as a
result. The proceeds will be deployed to reduce gearing and facilitate growth in the property portfolio
with three deals already successfully concluded in the period since 30 June 2018. This has seen the
Group expand its presence in Ghana and Mozambique to further strengthen its footprint in those
geographical locations.
Additional funds will be earmarked for high yield projects in the current pipeline with both internal and
external NAV contributors identified by the Group.
Subsequent events are further disclosed in note 14 to this announcement.
PRINCIPLE RISKS AND UNCERTAINTIES
Grit maintain a Key Risk Register which is shared with the Risk Committee on a quarterly basis. The key
risks are well managed and monitored regularly as the risks could change with changes in the industry,
economy and stakeholders, amongst others.
Key risks are disclosed below:
Risk Consequence and Impact Risk Mitigation
COMPLIANCE
Regulatory risk - JSE, LSE Regulatory risk is associated with Strong relationships with all corporate
and SEM compliance compliance and reputation risks. As Grit is sponsors and Company Secretary.
multi listed on JSE, LSE and SEM markets,
various rules and regulations need to be
adhered to. Failure to comply with the
rules and regulations may lead to fines,
public censures, deregistration from the
stock market and ultimately affect the Completion of annual compliance
reputation of the Group. checklist internally subject to approval
by authorised sponsors.
Appointment of consultants for
specialised assignments.
Regulatory risk - multi- As the Group has established its presence Detailed country due diligence process
jurisdictional legal in several parts of the world, conducted considers aspect like multi-
compliance unintentional non-compliance with new jurisdictional legal compliance.
laws may result in fines or public
censures. At entity level, contractual
terms drafted with the Group may be in
contradiction to country specific laws
thereby resulting in inability to enforce
contractual terms. Engagement of local offices of
international legal firms within the
operational jurisdictions.
Appointment of suitably qualified local
in-country managers with oversight
from senior management dedicated to
specific countries.
Non-compliance with debt Debts covenants are risk monitoring Ratios (both actual and forecast) and
covenants indicators for investors and lenders. Non- debt covenants monitored by
compliance with debt covenants may lead Management on a monthly basis and by
to increased finance costs by financiers the Board on a quarterly basis.
and inability to raise additional funding
for future projects and the debt being called
in and properties confiscated.
STRATEGIC
Repatriation risk Repatriation risk relates to exchange Establishment of appropriate Group
control regulations in operating accounting policies and procedures to
jurisdictions which might act as barriers avoid any economic losses.
to the flow of funds back to ultimate
holding Company, Grit, in terms of foreign
supplier payments, interests and
dividends. Consequently, this can lead to
economic losses for the Group. Moreover,
project financing may also be delayed due
to approval processes with regulators in
relation to foreign equity to debt Establishment of appropriate Group
investments. structure to avoid complex regulatory
conditions.
Appointment of legal and advisory
teams to ensure policies, procedures
and structures are compliant with local
laws.
Retention and recruitment of competent
in-house finance team to analyse and
recommend appropriate solutions to
avoid repatriation risks.
Approval from the Executive Team and
the Board prior to investment
resolution.
Reputational risk A negative image may lead to volatility in Oversight by the Board and independent
share price and affect shareholder's directors.
confidence in the Group.
Strong investors and stakeholders'
relations.
Transparent culture and reporting.
Regular communication with
stakeholders.
Foreign Exchange risk The Group's reporting and functional Investments are concentrated to strong
currency is USD. The Group operates based economies that have stable
internationally and is exposed to foreign exchange rates vis-à-vis USD.
exchange risk arising from various
currency exposures, primarily with
respect to the Euro and Moroccan Dirham
(which itself is partially pegged to the
Euro together with the US Dollar) and to a
lesser extent the Mauritian Rupee,
Mozambican Metical, Zambian Kwacha, Conversion of all other currencies cash
Botswanan Pula, Ghanaian Cedi and balances to USD on receipt or when
Kenyan Shilling. Any severe impact on foreign exchange rates are appropriate.
exchange rate conversion may have a
negative effect on the Group's earnings, Matching the debt currency of the
share price, ability to raise capital and investment to the underlying functional
repayment of debts. Foreign exchange currency where investment is placed.
movements can also impact negatively on
property revaluations and affect the
Group's balance sheet.
Country risk New government policies and regulations Extensive due diligence on country's risk
proclaimed might be to the detriment of performed by internal and external
the Group, such as, restrictions over flow specialised personnel.
of dividends, capital repatriation,
exaggerated direct and indirect taxes and
land ownership restrictions.
Social and political unrest in a particular Establishment of investment limit by
country may affect the market confidence country.
which may lead international tenants to
exit from that country or cease their
trading activities. Consequently, this may
impact on the revenue of Grit as the risk
may lead to high tenant default risks
when local tenants are affected.
Economic, social and political instability in Independent bi-annual country risk
a country might affect the expected report obtained and alert system
return on investment. established.
Insurance cover for political and social
risks.
FINANCIAL
Destruction of investment Damage to investment property due to Establishment of Group insurance policy
property external factors not within the control of and business continuity plan procedures.
Group, for example, earthquake, flood,
terrorist attack and riot may lead to
material damages of investment
properties and hence, financial loss to the
Group. Adequate insurance cover taken for all
properties.
Approval by the Board in relation to
adequacy of insurance cover (covering
replacement cost and loss of income).
Liquidity and refinance Liquidity risk is the risk that the Group is Debt financing is limited to 50% of the
risk not able to meet its financial commitment total investment.
as and when they fall due. Consequently,
the Group might be exposed to inabilities
to refinance debt on expiry and inabilities
to raise debt to fund new projects.
Forward cash-flow management is
established for regular monitoring of the
Group's liquidity.
Monitoring debt markets in all
operational jurisdictions to obtain best
borrowing option.
Debt tendering.
Board and Investment Committee
regularly monitor the liquidity of the
Group.
Early engagement with financiers before
termination date.
Skills shortage for It is the Group's requirement to publish Thorough review by the Executive Team
finance staff in certain its results regularly and obtain financial on management reporting.
jurisdictions information for monitoring and decision
making process by the Board. Certain
jurisdictions where the Group is present
have shortage a of skilled staffs in the
finance department. Due to this shortage,
there may be delays from those
jurisdictions to report accurate financial
information in a timely manner.
Consequently, there is a risk of non-
compliance with statutory and internal
requirements.
Credit Risk Credit risk involves default from tenants in Approval by Executive Team to continue
respect of obligations under a lease with a doubtful tenant.
contract and failure to recover amounts due on
time. In extreme circumstances after
all possible efforts have been taken to recover
the Group may need to proceed with
debts, write off of material amounts.
Vigilant credit control and debt
collection process by Property
Managers.
Continuous monitoring of trading
densities within the retail environment
to identify and address potential risks
before default.
Deposits and security to be provided by
the tenants (including sureties where
applicable).
Interest Rate Risk Excessive volatility in interest rates may Use of interest rate swap by the Group
adversely affect the profitability of the when appropriate.
Group and return on investments.
Ability to access debt from multiple
jurisdictions and currencies.
Limited duration of loan terms.
OPERATIONAL
Underperformance of Where Property Management Companies Performance driven contracts with
property managers (the "Property Managers") fail to perform Property Managers.
their duties in accordance with objectives
set by the Group, the consequence may
affect the financial performance of the
Group at large. It may lead to reputational
risk, cash flow risk, increased vacancy in
buildings, inadequate return on
investment and deterioration of buildings
due to poor maintenance. Review of exceptional debtors report by
Asset Managers.
Recruitment of efficient and competent
Property Managers.
Regular meetings between Asset
Managers and Property Managers.
Regular and independent property
inspections of buildings.
Language barriers Language barriers can create All local employees required to have a
misinterpretation of instructions that working knowledge of English.
might result in delays to projects and non-
delivery of services. It may also cause
delays in producing management reports.
As and when required, there is provision
of additional English training.
Contracts required to be Distinct contract laws exist in different Use of suitably qualified sworn
recorded in the official countries. Therefore, a standard translations for all legal documentation.
language of the specific agreement may not be applicable for all
country jurisdictions. Hence, there is a risk of
inability to correctly interpret detailed
contractual terms and conditions, where
a standardised agreement cannot be Engagement of local legal counsel who
adopted. are fluent in both English and the local
official language of the respective
jurisdiction.
Incorporating clause governing
preference, that is, English contract shall
prevail over contract drafted in local
official language.
Arrears and bad debts Failure to recover amounts on time Vigilant credit control process and
leading to compromised performance management reporting by property
resulting in financial loss managers.
Breakdown in relationships with key Continued engagement with tenants by
tenants asset managers.
Write-off of material bad debts Robust debt collection process.
Continual monitoring of trading
densities within the retail environment
to identify and address potential risks
before default.
Deposits and security (including
personal sureties where applicable.
Information technology (IT) Information technology ("IT") has become Daily backups to an offsite storage
failures a crucial element in the good running of facility.
the business and failures in IT
infrastructure may lead to impaired
operational ability and delayed and
inaccurate financial reporting due to loss
of data.
Multiple iterations of backup data.
IT services outsourced to suitably
qualified service providers.
Vacancy risk Vacancy risk arises when properties Tracking of vacant properties by
remain vacant for prolonged periods or Property and Asset Managers.
properties are not fully rented. It
consequently erodes the rental income
and affects profitability and return on
investment. It may further fire back to
repayment of Group's debt capital
invested in the properties and affect the
liquidity of the Group.
Early engagement with tenants
approaching lease expiry dates.
Strong focus on tenant relationships to
ensure retention.
Physical deterioration of Physical deterioration of properties may Regular site visits performed by Asset
properties not attract tenants. Consequently, this Managers in addition to the monthly
may increase vacancy risk and operational inspections conducted by the Property
costs. High operational cost may in turn Managers.
lead to a decline in profitability.
Proactive and reactive annual repairs
and maintenance programmes.
Tenants' complaints monitored by
Property and Asset Managers.
Board oversees state of properties and
approve maintenance programmes.
Setting up of three year rolling capital
replacement budget.
Ad hoc external assessment of reports
by consultants
Health & safety inspection of properties.
Regular meetings with tenants and
Property Managers for early detection
of potential issues.
Unplanned departure of Sudden departures of key staff may Succession plan designed and
key personnel disrupt the operations and possible implemented which addresses risks
reputational damage of the Group. related to all key personnel.
Default by a major tenant Major tenants are tenants, who are, Regular interaction with tenants and
either, a single tenant occupying a monitoring of their financial position.
property, or a tenant for whom a
property was specifically designed and
built and/or a tenancy whose rental
contribution is a large percentage of the
monthly rental collection and/or whose
presence is significant for a property's
sustainability or demand or success.
Default by such a major client might
significantly impact the profitability of the Credit risk assessment for all new
Group and affect the loan repayment tenants, particularly major tenants.
capacity of the Group.
Early cancellation or reduction of space
occupied by the major tenants.
STATEMENT OF DIRECTORS RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS
The directors are responsible for preparing the group financial statements in accordance with
International Financial Reporting Standards ("IFRSs") as issued by the International Accounting
Standards Board (IASB) and the Mauritius Companies Act 2001, for purposes of complying with the SEM
listings rules, the JSE listing rules and to discharge their stewardship obligations to file
financial statements with the London Stock Exchange.
The directors must not approve the group financial statements unless they are satisfied that the group
financial statements give a true and fair view of the state of affairs of the group and of the profit or loss
of the group for that period. In preparing the financial statements, the directors are responsible for:
- selecting suitable accounting policies and then applying them consistently;
- stating whether applicable IFRSs as issued by the IASB have been followed, subject to any
material departures disclosed and explained in the financial statements;
- making judgements and accounting estimates that are reasonable and prudent; and
- preparing the financial statements on the going concern basis unless it is inappropriate to
presume that the group will continue in business.
The directors are also responsible for safeguarding the assets of the group and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for keeping adequate accounting records that are sufficient to show and
explain the group's transactions and disclose with reasonable accuracy at any time the financial position
of the group and enable them to ensure that the financial statements comply with the Mauritius
Companies Act 2001.
Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the
United Kingdom governing the preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
The Directors consider that the Annual Report and Accounts, taken as a whole, is fair, balanced and
understandable and provides the information necessary for shareholders to assess the Group's position,
performance, business model and strategy.
Each of the Directors confirms that to the best of their knowledge that the Group financial statements,
which have been prepared in accordance with IFRSs, give a true and fair view of the assets, liabilities,
financial position and profit and loss of the Group.
On behalf of the board
Bronwyn Corbett Leon van de Moortele
Chief Executive Officer Chief Financial Officer
Consolidated statement of comprehensive income
Restated for the For the year
year ended ended
30 June 2017 30 June 2018
US$'000 US$'000
Gross rental income 8 22,872 32,128
Straight-line rental income accrual 1,132 1,110
Revenue 24,004 33,238
Property operating expenses (7,170) (7,585)
Net property income 16,834 25,653
Other income 254 9
Administrative expenses (including corporate structuring costs) (7,900) (14,653)
Profit from operations 9,188 11,009
Fair value adjustment on investment properties (20,729) 5,073
Contractual receipts from vendors of investment properties 230 8,689
Total fair value adjustment on investment properties (20,499) 13,762
Fair value adjustment on other investments - (757)
Fair value adjustment on other financial asset - (128)
Fair value adjustment on derivative financial instruments 535 25
Share-based payment expense (133) (282)
Share of profits from associates 6,893 21,028
Gain from bargain purchase on associates 958 -
Foreign currency (losses) / gains 2,081 1,125
Profit / (loss) before interest and taxation (977) 45,782
Interest income 9 2,059 4,375
Finance costs 10 (11,433) (19,660)
Profit / (loss) for the period before tax (10,351) 30,497
Taxation 11 2,916 (4,752)
Profit / (loss) for the period after tax (7,435) 25,745
Gain / (loss) on translation of functional currency 3,045 (1,495)
Total comprehensive income / (loss) (4,390) 24,250
Profit / (loss) attributable to:
Owners of the parent (6,634) 28,562
Non-controlling interests (801) (2,817)
(7,435) 25,745
Total comprehensive income / (loss) attributable to:
Owners of the parent (3,589) 27,067
Non-controlling interests (801) (2,817)
(4,390) 24,250
30 June 2017 30 June 2018
Earnings per share US$'000 US$'000
(Loss) / profit after tax attributable to equity owners of the parent (6,634) 28,562
Weighted average number of shares in issue (net of unvested treasury shares)
In issue at start of period 99,004 200,364
Effect of shares issued in the period 10,849 766
Effect of treasury shares acquired in period (58) -
Effect of treasury shares vested or allocated in the period - 70
109,795 201,200
Dilutive effect of share options
109,795 201,200
Basic earnings / (loss) per share (cents) (6.04) 14.20
Diluted earnings / (loss) per share (cents)
(6.04) 14.20
Restated as at As at
Consolidated statement of financial position 30 June 2017 30 June 2018
US$'000 US$'000
Assets
Non-current assets
Investment properties 3 307,795 383,132
Deposits paid on investment properties 3 24,440 11,117
Property, plant and equipment 1,290 1,749
Intangible assets 592 485
Investments in associates 4 89,016 165,311
Other investments 5 - 4,154
Related party loans receivable 8 802
Other loans receivable 6 66,740 42,863
Deferred tax 6,496 8,999
Total non-current assets 496,377 618,612
Current assets
Current tax receivable 439 -
Trade and other receivables 22,805 29,786
Related party loans receivable 2,000 77
Cash and cash equivalents 24,668 3,086
Total current assets 49,912 32,949
Total assets 546,289 651,561
Equity and liabilities
Total equity attributable to equity holders
Ordinary share capital 319,979 328,394
Treasury shares reserve (15,031) (14,811)
Foreign currency translation reserve 3,275 1,780
Antecedent dividend reserve 1,261 -
Retained loss (51,177) (35,980)
Equity attributable to owners of the Company 258,307 279,383
Non-Controlling interests (1,123) (3,940)
Total equity 257,184 275,443
Liabilities
Non-current liabilities
Redeemable preference shares 12,840 12,840
Interest-bearing borrowings 7 185,051 207,106
Obligations under finance leases 171 124
Related party loans payable 1,365 -
Deferred tax 15,041 20,791
Total non-current liabilities 214,468 240,861
Current liabilities
Interest-bearing borrowings 7 47,959 99,038
Obligations under finance leases 45 51
Trade and other payables 26,176 26,151
Current tax payable - 969
Derivative financial instruments 19 22
Other financial liability - 128
Bank overdrafts 438 8,898
Total current liabilities 74,637 135,257
Total liabilities 289,105 376,118
Total equity and liabilities 546,289 651,561
Restated for the For the year
year ended ended
Consolidated statement of cash flows 30 June 2017 30 June 2018
US$'000 US$'000
Cash generated from / (utilised in) operations
(Loss) / profit before tax for the period (10,351) 30,497
Adjusted for:
Depreciation and amortisation 207 272
Interest income (2,059) (4,375)
Share of profits from associates (6,893) (21,028)
Finance costs 11,433 19,660
Allowance for credit losses 962 (602)
Foreign currency losses/(gains) (2,081) (897)
Straight-line rental income accrual (1,132) (1,110)
Share based payment expense 133 282
Fair value adjustment on investment properties 20,499 (13,761)
Gain from bargain purchase on associates (958) -
Fair value adjustment on other investments - 757
Fair value adjustment on other financial asset - 128
Fair value adjustment on derivative financial instruments (535) (25)
9,225 9,798
Changes to working capital
Movement in trade and other receivables 447 (5,757)
Movement on deposits paid on investment properties (4,702) (11,117)
Movement in trade and other payables 7,200 195
Cash generated / (utilised in) from operations 12,170 (6,881)
Taxation paid (700) (111)
Net cash generated from / (utilised in) operating activities 11,470 (6,992)
Acquisition of investment properties (70,902) (37,083)
Acquisition of property, plant and equipment (649) (685)
Acquisition of intangible assets (10) -
Acquisition of other investments - (3,848)
Net cash outflow on acquisition of associates (15,390) (10,109)
Dividends and interest received from associates 3,573 7,470
Interest received 2,059 4,375
Proceeds from disposal of property, plant and equipment - 4
Related party loans (advanced) / repaid (2,008) 67
Other loans (advanced) / repaid (66,740) (19,532)
Net cash utilised in investing activities (150,067) (59,341)
Proceeds from the issue of ordinary shares 110,828 (0)
Share buy back - (85)
Share issue expenses (5,330) -
Proceeds from the issue of preference shares 12,840 -
Ordinary dividends paid (17,283) (14,907)
Proceeds from interest bearing borrowings 170,933 145,406
Settlement of interest bearing borrowings (114,719) (74,945)
Finance costs paid (12,107) (18,909)
Settlement of obligations under finance leases (73) (40)
Net cash generated from financing activities 145,089 36,520
Net movement in cash and cash equivalents 6,492 (29,813)
Cash at the beginning of the year 17,785 24,230
Effect of foreign exchange rates (47) (229)
Total cash and cash equivalents at the end of the year 24,230 (5,812)
Foreign
currency Antecedent Non- Total
Consolidated statement of Share Treasury translation dividend Retained controlling equity
changes in equity capital share reserve reserve earnings interest holders
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance as at 1 July 2016
- As previously reported 171,995 - (2) 636 (9,256) - 163,373
- 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) - - - - (6,634) (801) (7,435)
Foreign currency translation differences
(as restated) - - 3,045 - - - 3,045
Total comprehensive income - - 3,045 - (6,634) (801) (4,390)
Ordinary dividends paid - - - (636) (11,526) - (12,162)
Treasury shares - (9,931) - - - - (9,931)
Share based payments - - - - 133 - 133
Ordinary shares issued 155,535 - - - - - 155,535
Ordinary shares issued - - - - - 133 133
Share issue expenses (5,330) - - - - - (5,330)
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) 257,184
Balance as at 1 July 2017
- As previously reported 319,979 - 1,063 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) 257,184
Profit for the year - - - - 28,562 (2,817) 25,745
Foreign currency translation differences - - (1,495) - - - (1,495)
Total comprehensive income - - (1,495) - 28,562 (2,817) 24,250
Ordinary dividends paid - - - (1,261) (13,647) - (14,908)
Share based payments - - - - 282 - 282
Treasury shares - 220 - - - - 220
Ordinary shares issued 8,500 - - - - - 8,500
Share buy back (85) - - - - - (85)
Balance as at 30 June 2018 328,394 (14,811) 1,780 - (35,980) (3,940) 275,443
NOTES TO THE FINANCIAL STATEMENTS
1. Basis of preparation
The financial information does not constitute the Group's statutory accounts for either the year ended 30 June 2018 or the year
ended 30 June 2017 (as restated), but is derived from those accounts. The Group's statutory accounts for 2018 will be delivered
following the Company's Annual General Meeting. The Auditor's reports on both the 2018 and 2017 accounts were unmodified, did not
draw attention to any matters by way of an emphasis of matter
The financial statements have been prepared in accordance with: International Financial Reporting Standards (IFRS) as issued by the
IASB; the JSE, LSE and SEM Listings Requirements; and, the requirements of the Mauritian Companies Act 2001. The financial statements
have been prepared on the going-concern basis and were approved for issue by the board on 26 September 2018.
Going concern
The Board continues to adopt the going concern basis in preparing these consolidated financial statements. In considering this
requirement, the Directors have taken into account the following:
The Group's latest rolling forecast for the next two years in particular the cash flows, borrowings and undrawn facilities.
The headroom under the Group's financial covenants.
The current and forecast risks included on the Group's risk register that could impact on the Group's liquidity and solvency
over the next 12 months from the date of signing.
Significant Judgements
The principal area where judgment have been made are:
Unconsolidated structured entity
Drive in Trading (DIT), a B-BBEE consortium, secured a facility of US$33.4 million from the Bank of America N.A (UK Branch)
("BoAML") to finance its investment in Grit. The BoAML facility was granted to DIT after South Africa's Government
Employees Pension Fund (GEPF), represented by Public Investment Corporation ("PIC"), provided a guarantee to BoAML in
the form of a Contingent Repurchase Obligation ("CRO") for up to US$35 million. The terms of the CRO obligate PIC to acquire
the loan granted to DIT should DIT default under the BoAML facility.
In order to facilitate the above, the Group agreed to de-risk 50% of PIC's US$35 million exposure to the CRO, by granting PIC a
guarantee whereby should BoAML enforce the CRO, the Group would indemnify PIC for up to 50% of the losses, capped at
US$17.5 million, following the sale of the underlying securities, being the shares held by DIT in the Grit.
Given the unusual structure of the transaction, the Group has determined that DiT has limited and predetermined activities
and can be considered a "structured entity" under IFRS 10 as the "design and purpose" of DiT was to fund Grit rights issue
and at the same time enable Grit to obtain B-BBEE credentials.
As the Group does not have both, power to direct the activities of DiT and an exposure to variable returns, the Group has
exercised judgement on not to consolidate DiT but disclose it as an unconsolidated structured entity due to DiT being a
related party.
Acquisition of investment properties
Where investment properties are acquired through the acquisition of corporate interests, the directors have regard to the
substance of the assets and activities of the acquired entity in determining whether the acquisition represents the
acquisition of a business.
Where such acquisitions are not judged to be an acquisition of a business under IFRS 3, the transactions are accounted for
as if the Group had acquired the underlying investment property directly, together with any associated assets and
liabilities. Accordingly, no goodwill arises, rather the cost of acquiring the corporate entity is allocated between the
identifiable assets and liabilities of the entity, based on their relative fair values at the acquisition date.
Otherwise corporate acquisitions are accounted for as business combinations.
Investments, associates and joint ventures
As an acquiring group, management needs to ensure that all acquisitions are appropriately classified in the financial statements.
Depending on the shareholding and other factors there can be some judgement as to whether the acquisition is shown as an
investment, associate or consolidated as a subsidiary. In particular the Group holds interests of 50% of the total stake in
multiple investments. The Group is not a controlling party in any of the arrangements. The Company applies judgement to
determine whether the investment is classified as a Joint venture or an associate by considering the guidance provided and
the prevailing operational arrangements. The Group has exercised judgement that, for all investments classified as associates,
the arrangements will not meet the definition of a joint arrangement because there is no controlling party, no enforceable
contractual agreement on sharing of control, there is insignificant level of operational involvement, and the Group does not
have an explicit or implicit right of veto. Therefore, the Group has accounted for these investments as investments in
associates. Where the Company holds investments of less than an equity stake of 20% and do not have significant influence
through other means, the investments are classified as investments at fair value and not as an associate.
Estimates
The principal areas where such estimations have been made are:
Fair value of financial instruments
The Group have estimated the value of its obligation arising from its guarantee to de-risk 50% of PIC's exposure to the
BoAML CRO. The Group's obligation is based on the occurrence or non-occurrence of uncertain future events (the
probability of DiT defaulting on the BoAML facility). Therefore, the fair value of the obligation was based on the probability
of DiT defaulting on the facility, which has been assessed as insignificant as at 30 June 2018.
Impairment of CGUs and non-financial assets
The recoverable amounts of cash-generating units and individual assets have been determined based on the higher of
value-in-use calculations and fair values less costs to sell. These calculations require the use of estimates and assumptions.
The Group reviews and tests the carrying value of assets when events or changes in circumstances suggest that the
carrying amount may not be recoverable. In the case of any goodwill, this is tested on an annual basis for impairment.
Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other
assets and liabilities. If there are indications that an impairment may have occurred, estimates are prepared of expected
future cash flows for each relevant group of assets. Expected future cash flows used to determine the value in use of
goodwill and tangible assets are inherently uncertain and could materially change over time. They are significantly affected
by a number of factors including the pre-tax discount rate used that reflects current market assessments of the time value
of money, together with economic factors such as exchange rates and country specific inflation and interest rates.
Fair value of investment properties
The Group uses the valuation carried out by its independent valuers as the fair value of its property portfolio. The fair value
of investment properties is determined using a combination of the discounted cash flows method and the income capitalisation
valuation method, using assumptions that are based on market conditions existing at the end of the relevant reporting period.
Taxation
Judgement is required in determining the provision for income taxes due to the complexity of legislation. There are many
transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business.
The Group recognises liabilities for anticipated tax inspection issues in the jurisdictions in which it operates based on
estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the
amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period
in which such determination is made.
The Group recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that
the deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred tax
assets requires the Group to make significant estimates related to expectations of future taxable income. Estimates of
future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each
relevant jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability
of the Group to realise the net deferred tax assets recorded at the end of the reporting period could be impacted.
2. Changes in accounting policies
The accounting policies used by the Group in these condensed financial statements are consistent with those applied in the
Group's financial statements for the year to 30 June 2017, as amended to reflect the adoption of new standards, amendments and
interpretations which became effective in the year as shown below.
New standards and interpretations
New standards and interpretations
Standards, interpretations and amendments to published standards that are not yet effective
The following new standards, interpretations and amendments to existing standards have been published that are applicable for future
accounting periods that have not been adopted early by the group. These standards and interpretations will be applied in the first year that
they are applicable to Grit.
Topic Summary of requirements Impact
IFRS 9 Financial instruments IFRS 9 Financial Instruments was issued by the IASB in July The Group will adopt IFRS 9 for the year
(1 January 2018) 2014. The standard replaces IAS 39 Financial Instruments: ended 30 June 2019 and is in the
Recognition and Measurement. The standard sets out the process of implementing the
requirements for recognition and measurement of financial requirements of IFRS 9. It has
instruments and some contracts to buy and sell non-financial developed a detailed plan to assess the
items. It also includes financial instruments derecognition impact of IFRS 9
principles; general hedge accounting; and introduces an
expected credit loss model with forward-looking information.
The standard is effective from 1 January 2018. The Group is a
30 June reporter; hence the Group will adopt the standard
from July 1, 2018 retrospectively in accordance with IAS 8
Accounting Policies, Changes in Accounting Estimates and
Errors, subject to certain exemptions and exceptions in
applying the effective interest method; and impairment
measurement requirements. Furthermore, IFRS 9 will not be
applied to items that have already been derecognised at the
date of initial application.
Classification and measurement of financial instruments We have analysed the classification and
IFRS 9 contains a new classification and measurement measurement of the Group's financial
approach for financial assets that reflects the business model assets and financial liabilities and the
in which assets are managed and their cash flow only change is that rental guarantees
characteristics. IFRS 9 includes three principal classification which are currently carried at FVOCI will
categories for financial assets namely amortised cost, fair be carried at FVTPL upon adoption of
value through profit or loss (FVTPL) and fair value through IFRS 9.
other comprehensive income (FVOCI). These classification Based on the assessment of the
categories for financial assets replace the categories under classification and measurement of
IAS 39. financial instruments above, the Group
The IFRS 9 requirements for the classification and does not believe that IFRS 9
measurement of financial liabilities are substantially classification and measurements
unchanged from IAS 39 except for the the change in fair value requirements will have a material
that is attributable to changes in credit risk of a financial impact on its current financial
liability designated at FVTPL which will be recognised in other instruments.
comprehensive income (OCI) under IFRS 9, whereas under IAS
39 these amounts were always recognised in profit or loss.
Another change introduced by IFRS 9 is the requirement on
modification of financial liabilities that does not result in
derecognition. IFRS 9 states that when a modification or
exchange does not result in derecognition, the adjustment to
the amortised cost will be recognised in profit or loss at that
time.
Impairment of financial and contract assets The Group has started defining the ECL
IFRS 9 replaces the incurred loss model in IAS 39 with a models approach and methodology to
forward-looking expected credit loss (ECL) model for be applied to its affected financial
calculating impairment on financial instruments within the assets. The group has performed an
scope IFRS 9 impairment. The ECL model will require IFRS 9 ECL data readiness assessment
considerable judgement as to how changes in economic and gap analysis to assess the
factors affect ECL. The new impairment model will apply to implications of IFRS 9 on its
financial assets measured at amortised cost or fair value intercompany loans and receivables,
through other comprehensive income (FVOCI). and trade receivables and other
receivables. It is considering applying
the simplified approach on its trade
receivables and possible simple general
approach to its intercompany loans. The
Group will also choose the simplified
approach as an accounting policy in the
event that its contract assets, lease
receivables, and trade and other
receivables contain significant financing
components.
The group will quantify the impact of
the IFRS 9 impairment when the ECL
model is finalised.
Classification of financial liabilities
IFRS 9 largely retains the existing requirements in IAS 39 for
the classification of financial liabilities.
All fair value changes of financial liabilities designated as at The classification of financial liabilities
FVTPL are recognised in profit or loss under IAS 39, whereas generally remained the same from IAS
under IFRS 9 these fair value changes are generally presented 39 to IFRS 9, hence not expecting any
as follows: material impact to the Group. However,
- the change in the fair value that is attributable to changes in the group will perform a detailed
the credit risk of the liability is presented in OCI assessment to determine if there are
- the remaining change in the fair value is presented in profit any measurement impacts and
or loss conclude accordingly
Hedge accounting
IFRS 9 introduces a new general hedge accounting model IFRS 9 introduces a new general hedge
which aligns hedge accounting more closely with risk accounting model. The Group does not
management. apply hedge accounting hence not
impacted by the IFRS 9 hedging
requirements on adoption.
IFRS 15 Revenue from In May 2014, the IASB issued IFRS 15 Revenue from Contracts From the qualitative assessment
contracts with customers with Customers, which replaces IAS 11 Construction Contracts; performed, the Group believes that IFRS
(1 January 2018) IAS 18 Revenue; IFRIC 13 Customer Loyalty Programmes; IFRIC 15 will not have a significant impact on
15 Agreements for the Construction of Real Estate; IFRIC 18 the timing or amount of revenue
Transfers of Assets from Customers; and SIC-31 Revenue— recognised by the Group in any year but
Barter Transactions Involving Advertising Services, and is will improve the presentation of the
effective 1 January 2018. IFRS 15 outlines a single income streams. Therefore, the
comprehensive model for revenue recognition and has been presentation of the Group's revenue
developed to provide a comprehensive set of principles in will be modified to disclose amounts
presenting the nature, amount, timing and uncertainty of from revenue from contracts with
revenue and cash flows arising from an entity's contracts with customers separately from operating
customers. lease revenue.
IFRS 15 scopes out lease contracts within the scope of IAS
17/IFRS 16.
To evaluate the impact of IFRS 15, the Group analysed all of its
non-lease components in the lease contracts to determine its
other revenue streams. The Group identified two main non-
lease components, that is, recoveries and casual retail parking
income. The Group further determined whether these
recoveries and casual retail parking services would be
regarded as a transfer of a service to a customer and noted
that, tenants receive benefits in addition to the right of use of
the property. Thus, the Group concluded that casual retail
parking income and tenant recoveries ("where tenants
reimburse the group for expenses incurred for operating and
maintaining properties, repairs, insurance and real estate
taxes") which are non-lease components, should be accounted
for under IFRS 15. Recoveries for administrative tasks, rates
and taxes and other costs incurred which are associated with
the lease contracts and do not transfer a good or a service to
the lessee, will also be included in recoveries as non-lease
components.
The Group notes that lease contracts within the scope of IAS
17 or IFRS 16 are excluded from the scope of IFRS 15.
Contingent or genuinely variable and fixed rental receipts from
lessees were excluded from the analysis as they are in the
scope of the leases standard and such contracts are scoped
out of IFRS 15. For those rental revenue streams, accounting
will continue under IAS 17 (and subsequently IFRS 16 once that
is effective). The accounting will remain as it is currently, with
rental income being recognised on a straight-line basis over
the lease term. For contingent or genuinely variable rental
revenue, rental income will continue to be recognised in the
period in which it is earned; that is when the tenants achieve
the specified targets defined in their lease agreements (when
received or maybe slightly earlier when the right to payment
arises).
In accordance with the transition guidance, IFRS 15 will only be
applied to contracts that would be incomplete as at 1 July
2017.
Amendments to IFRS 4 Applying This amendment provides for a temporary exemption from No impact. The Group does not have
IFRS 9 with IFRS 4 Insurance IFRS 9 for a reporting company with predominantly insurance insurance contracts that are accounted
Contracts activities as the different effective dates of IFRS 9 and the new for in terms of IFRS 4, hence will not
(1 January 2018) insurance contracts standard could have a significant impact apply this exemption.
on insurers
IFRIC 22 Foreign Currency IFRIC 22 clarifies that the transaction date for the purpose of The Group will be assessing the impact
Transactions and Advance determining the exchange rate to be use on initial recognition of this interpretation prospectively
Consideration of the related asset, expense or income (or part of it) is the during the 2019 reporting period.
(1 January 2018) date on which an entity initially recognises the non-monetary
asset or non-monetary liability arising from the payment or
receipt of advance consideration
An entity can apply this interpretation either retrospectively or
prospectively on initial application
IFRIC 23 Uncertainty over IFRIC 23 clarifies that where it is unclear how tax law applies to The Group will be assessing the impact
Income Tax Treatments a particular transaction or circumstance, an entity will have to of this interpretation prospectively
(1 January 2018) assess whether it is probable that the tax authority will accept during the 2019 reporting period.
the entity's chosen tax treatment. Where it is probable that
the tax authority may not accept the chosen tax treatment,
disclosure about judgements made, assumptions and other
estimates used; and the potential impact of uncertainties that
are not reflected may be required. The interpretation also
requires the entity to reassess the judgements and estimates
applied if the facts and circumstances change
IFRS 16 Leases IFRS 16 replaces IAS 17 Leases, IFRIC 4 Determining whether an The Group will be assessing the impact of this
(1 January 2019) arrangement contains a lease, SIC-15 Operating leases - will adopt the standard for the year ended
incentives and SIC-standard during the 2019 reporting period 30 June 2020.
and 27 Evaluating the substance of transactions involving the
legal form of a lease
Lessee accounting
IFRS 16 introduces a single, on-balance sheet lease accounting
model for lessees. A lessee is required to recognise a
right-of-use asset representing its right to use the underlying
leased asset and a lease liability representing its obligation to
make lease payments. There are recognition exemptions for
short-term leases and leases of low-value items
IFRS 16 can be applied using either a retrospective
approach or a modified retrospective approach with optional
practical expedients for lessees. The lessee will have to apply
any elections consistently to all of its leases
When applying the modified retrospective approach to leases
previously classified as operating leases under IAS 17, the lessee
can elect, on a lease-by-lease basis, whether to apply a number of
practical expedients on transition
Lessor accounting
IFRS 16 substantially carries forward the lessor accounting
requirements in IAS 17. Accordingly, a lessor continues to classify
its leases as operating or finance leases, and to account for those
two types of leases differently IFRS 16 also requires enhanced
disclosures to be provided about a lessor's risk exposure,
particularly to residual value risk
Annual improvements 2017 The annual improvements deals with additional guidance for applying The Group is currently in the process of
(1 January 2019) the acquisition method to particular types of business combinations evaluating the detailed requirements of the
(IFRS 3 Business combinations), accounting for acquisitions of financial statements
interests in joint improvements to assess the impact on the
operations (IFRS 11 Joint arrangements), income tax consequences of
payments on financial instruments classified as equity (IAS 12
Income taxes), and borrowing costs eligible for capitalisation
(IAS 23 Borrowing costs)
Standards, interpretations and amendments to published standards that are effective and applicable to the group
The Group has adopted the following new standards, interpretations and amendments to existing standards for the first time for the financial year
ended 30 June 2018. The nature and effect of the changes are as follows:
Topic Summary of requirements Impact
Amendments to IAS 7 The amendments introduce new disclosure for changes in liabilities Impact not material. Net debt reconciliation has
Disclosure initiative arising from financing activities, by providing a reconciliation already been presented in the current financial
(1 January 2017) between the opening and closing balances statements.
Amendments to IAS 12 The amendments clarify the requirements for recognition of Impact not material. Deferred tax assets have
recognition of deferred tax deferred tax assets arising from unrealised losses on debt already been accounted for in line with the
assets for unrealised instruments measured at fair value amendment
losses (1 January 2017)
Annual improvements This amendment clarifies that disclosure requirements for Impact not material. The Group has been
2016 (1 January 2017) interests in other entities also apply to interests that are disclosing for entities held-for-sale in
classified as held-for-sale or distribution accordance with this clarification in the past
Restated as
at As at
30 June 2017 30 June
2018
3. Investment properties US$'000 US$'000
Net carrying value of properties excluding straight-line rental income accrual
Cost of investment properties 333,279 390,782
Cummulative foreign currency translation differences (14,770) (11,808)
Cummulative fair value surplus/(deficit) (16,014) (2,252)
302,495 376,722
Movement for the period excluding straight-line rental income accrual
Investment property at the beginning of the period 235,086 302,495
Prior year adjustments 672 -
As restated 235,758 302,495
Acquisitions and construction of investment properties 73,938 64,976
Transaction costs capitalised 3,920 1,235
Other capital expenditure 4,793 -
Foreign currency translation differences 4,815 2,944
Revaluation of properties at end of period (20,499) 13,761
Contractual receipts from vendors of investment properties (reduction in purchase price) (230) (8,689)
As at 30 June 302,495 376,722
Reconciliation to consolidated statement of financial position and valuations
Investment properties carrying amount per above 302,495 376,722
Straight-line rental income accrual 5,300 6,410
Total valuation of properties 307,795 383,132
Investment property pledged as security
Investment property pledged as security as follows:
Mozambican investment properties with a market value of US$198.0 million (2017: US$145.5 million) are mortgaged to Standard Bank of
Mozambique to secure debt facilities amounting to US$10.4 million (2017: US$10.4 million), Standard Bank of South Africa to secure debt
facilities amounting to US$50.0 million (2017: US$38.0 million) and Banco Unico of Mozambique to secure debt facilities amounting to
US$2.9 million (2017: US$3.0 million), Bank of China to secure debt facilities amounting to US$13.3 million (2017: US$13.3 million) and
Standard Bank (Mauritius) Limited to secure debt facilities amounting to US$11.0 million (2017: US$0 million).
Moroccan investment properties with a market value of US$92.6 million (2017: US$88.1 million) are mortgaged to Investec South Africa to
secure debt facilities amounting to US$48.5 million (2017: US$50.1 million).
Mauritian investment properties with a market value of US$63.7 million (2017: US$57.6 million) are mortgaged to Barclays Bank of
Mauritius to secure debt facilities amounting to US$7.4 million (2017: US$7.4 million) and State Bank of Mauritius to secure debt facilities
amounting to US$26.0 million (2017: US$25.4 million).
Kenyan investment properties with a market value of US$18.8 million (2017: US$0 million) are mortgaged to Bank of China to secure debt
facilities amounting to US$8.5 million (2017: US$0 million).
Valuation policy and methodology for investment properties held by the Group and by associates
Investment properties are valued at each reporting date with independent valuations performed every year by independent
professional reputable valuation experts who have sufficient expertise in the jurisdictions where the properties are located. All
valuations that are performed in the functional currency of a group entity that is not United States Dollars are converted to United
States Dollars at the effective closing rate of exchange. All valuations have been undertaken in accordance with the version of the
RICS Valuation Standards that were in effect at the relevant valuation date and are further compliant with International Valuation Standards.
Market values presented by valuers have also been confirmed by the respective valuers to be fair value in terms of IFRS.
In respect of the majority of the Mozambican investment properties, independent valuations were performed at 30 June 2018 by
Jones Lang LaSalle Proprietary Limited (JLL), Chartered Surveyors, using either the income capitalisation (yield) or the discounted cash
flow method. The remaining Mozambican properties were valued by REC, Chartered Surveyors and part of the Meridian Group, at
30 June 2018 using the discounted cash flow method. During the year ended 30 June 2017, JLL valued certain of the Mozambican
properties with the remaining valuations having been undertaken by the directors.
The Moroccan investment property was independently valued at 30 June 2018 by Knight Frank, Chartered Surveyors, using the
discounted cash flow method. Due to the redevelopment on Anfa Place Mall, no independent valuation was performed of the
property during the year ended 30 June 2017, but the directors are of the opinion that the carrying amount of the property as at
30 June 2017 approximated its fair value.
The Zambian investment properties held by associates were independently valued at 30 June 2018 by Broll Valuation and Advisory
Services (Pty) Ltd, Chartered Surveyors, using the discounted cash flow method. During the year ended 30 June 2017, the properties
were independently valued by Quadrant Properties, Chartered Surveyors, using the discounted cash flow method.
The Kenyan investment properties held by the Group and its associates were independently valued at 30 June 2018 by Broll Valuation
and Advisory Services (Pty) Ltd, Chartered Surveyors, using the discounted cash flow method.It must however be noted that the
Broll valuation for Buffalo Mall was utilised as a base on which the Directors made fair value adjustments as at 30 June 2018.
During the year ended 30 June 2017, the properties held by associates were not valued independently by external valuers;
however the Directors were of the opinion to hold value provided by Jones Lang LaSalle Proprietary Limited, Chartered Surveyors,
in a prior financial period, where JLL used the discounted cash flow method.
The Mauritian investment properties held by the Group and its associates were independently valued at 30 June 2018 by Broll
Indian Ocean (Pty) Ltd, Chartered Surveyors, using the discounted cash flow method. During the year ended 30 June 2017, the
properties were independently valued by Broll Indian Ocean Limited, Chartered Surveyors, using the discounted cash flow method.
Restated as at As at
Most recent 30 June 2017 30 June 2018
independent valuation Valuer (for the most
Summary of valuations by reporting date date recent valuation) US$'000 US$'000
Commodity House Phase I building 30-Jun-18 REC 42,570 43,190
Commodity House Phase II building 30-Jun-18 REC - 17,270
Hollard Building 30-Jun-18 JLL Sub Sahara Africa 18,500 19,600
Vodacom Building 30-Jun-18 JLL Sub Sahara Africa 48,700 45,900
Zimpeto Square 30-Jun-18 JLL Sub Sahara Africa 11,470 9,200
Bollore Warehouse 30-Jun-18 JLL Sub Sahara Africa 6,500 6,500
Barclays House 30-Jun-18 Broll Indian Ocean 13,835 14,840
Anfa Place Mall 30-Jun-18 Knight Frank 88,119 92,632
Tamassa Resort 30-Jun-18 Broll Indian Ocean 43,814 48,900
Vale Housing Compound 30-Jun-18 JLL Sub Sahara Africa - 37,300
Imperial Distribution Centre 30-Jun-18 Broll South Africa - 18,780
Mara Viwandani 30-Jun-18 Broll South Africa - 3,420
Mall de Tete 30-Jun-18 JLL Sub Sahara Africa 24,220 25,600
Total valuation of investment properties directly held
by the Group 297,728 383,132
Capital expenditure on Commodity House Phase II 10,067 -
Total carrying value of investment properties per the consolidated statement of financial
position 307,795 383,132
Deposits paid on Imperial Distribution Centre 3,062 -
Deposits paid on VALE Housing Compound 21,378 4,117
Deposits paid on CADS II - 2,000
Deposits paid on Capital Place Limited - 5,000
Total deposits paid on investment properties 24,440 11,117
Total carrying value of investment properties including
deposits paid 332,235 394,249
Investment properties held within associates - Group
share
Buffalo Mall Naivasha Limited (includes Broll South
Africa valuation of US$4,660k and a
company adjustment of US$540k in 2018) 30-Jun-18 Broll South Africa 6,025 5,200
Mukuba Mall Limited (50%) 30-Jun-18 Broll South Africa 34,884 38,450
Kafubu Mall Limited (50%) 30-Jun-18 Broll South Africa 12,098 13,000
Cosmopolitan Shopping Centre Limited (50%) 30-Jun-18 Broll South Africa 38,380 40,500
Beachcomber Hospitality (44.42%) 30-Jun-18 Broll Indian Ocean - 91,903
Capital Place Limited (47.5%) 30-Jun-18 Broll South Africa - 12,217
Total of investment properties acquired through
associates 91,387 201,270
Total portfolio 423,622 595,519
Restated as at As at
30 June 2017 30 June 2018
4. Investments in associates US$'000 US$'000
The following entities have been accounted for as associates in the
current and comparative consolidated financial statements using the
equity method:
Name of associate Country % held
Mukuba Mall Limited Zambia 50.0% 34,770 38,355
Kafubu Mall Limited Zambia 50.0% 11,788 12,746
Buffalo Mall Naivasha Limited Kenya 50.0% 4,128 3,294
Cosmopolitan Shopping Centre Limited Zambia 50.0% 38,330 40,526
Capital Place Limited Ghana 47.5% - 7,960
Beachcomber Hospitality Investments Limited Mauritius 44.4% - 62,430
Carrying value of associates 89,016 165,311
Cosmopolitan
Capital Mall
Mukuba Beachcomber Place Shopping Buffalo
Mall Kafubu Mall Hospitality Limited Centre Mall Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Reconciliation to carrying value in
associates
Balance at the beginning of the period
as previously reported 35,968 11,812 - - 38,121 3,148 89,049
Effect of prior year adjustments (1,198) (24) - - 209 980 (33)
Balance at the beginning of the
period as restated 34,770 11,788 - - 38,330 4,127 89,016
Acquired during the period - - 57,052 7,877 - (898) 64,031
Profit from associates 6,180 2,875 7,053 83 4,773 64 21,028
- Operating Profit 2,613 1,974 4,633 83 2,653 214 12,170
- Fair value movement in property 3,567 901 2,420 - 2,120 (150) 8,858
Dividends Received (2,593) (869) (1,429) - (2,577) - (7,470)
Foreign currency translation differences - (1,048) (246) - - - (1,293)
Carrying value of associates 38,355 12,746 62,430 7,960 40,526 3,294 165,311
Investment in the year ended 30 June 2018
The Group acquired a 44.4% interest in Beachcomber Hospitality Investments Limited on 10 August 2017 for a net purchase
consideration of US$57.1 million comprising an equity investment of US$14.8 million and a shareholder loan of US$42.3 million.
Leisure Property Northern (Mauritius) Limited, a company incorporated in Mauritius, is 100% owned by the Group and owns 44.4%
of the share capital of Beachcomber Hospitality Investments Limited which is also a Mauritian incorporated company and the
owner of the Cannonier, Victoria and Mauricia hotels.
The Group acquired a 47.5% interest in Capital Place Limited on 10 May 2018 for a net purchase consideration of US$7.9 million.
Grit Accra Limited, a company incorporated in Mauritius, is 100% owned by the Group and owns 47.5% of the share capital of
Capital Place Limited, a company incorporated in Ghana.
Restated as
at As at
30 June 2017 30 June
2018
5. Other investments US$'000 US$'000
Balance at the beginning of the period - -
Additions - 4,911
Fair value adjustments - (757)
As at 30 June - 4,154
Level 1 Level 2 Level 3 Total
Fair value hierarchy at 30 June 2018 US$'000 US$'000 US$'000 US$'000
Investment in Letlole La Rona 3,091 - - 3,091
Investment in Gateway Delta Developments Holdings Limited - - 1,063 1,063
Level 1 investment comprise of listed equity investment valued at market prices. If all significant inputs required to fair
value an investment are observable, the investment is included in level 2. If one or more of the significant inputs are not
based on observable market data, the investment is included in level 3.
Listed investments
The Group acquired 17,500,000 shares, representing 6.25% of the issued equity capital, in the listed company Letlole La Rona
for US$3.85 million in the year ended 30 June 2018. This company is incorporated in Botswana and listed on the Botswana Stock
Exchange.
Unlisted investments
The Group invested US$1.02 million in an unlisted development company, Gateway Developments Holdings Limited, incorporated in
Mauritius, in the period ended 31 January 2018 as part of its strategy to secure future investment pipeline on the African
continent. The directors are satisfied that this level 3 investment is carried at fair value at 31 January 2018 after
considering the future cash flows associated with the business.
Restated as at As at
30 June 2017 30 June 2018
6. Other loans receivable US$'000 US$'000
Beachcomber Hospitality Investments Limited(1) 47,409 -
Ndola Investments Limited(2,4) 5,103 5,073
Paxton Investments Limited(2) 8,702 8,723
Kitwe Copperbelt Limited(2,4) 5,526 5,577
Syngenta Limited(2,4) - 18,690
Transformers Investment Limited(5) - 4,000
Lifostax Proprietary Limited(3) - 800
As at 30 June 66,740 42,863
(1)This loan, which bore interest at 7.5%, was part payment for the investment made by the Group into this entity in the year
to 30 June 2018. The loan was converted into an associate investment on 10 August 2017.
(2)In April 2017 Bank of China provided the Group with a term loan credit facility of US$77 million for 5 years. This facility
has been fully drawn by the Group as at 30 June 2018. The Group has advanced loans amounting in total to 50% of the
US$77 million facility to the other investors in the Zambian investment. Each of these loans has a 5- year term, is secured
by a suretyship under the terms of the respective loan agreement and has interest charged at a rate of 6- month LIBOR plus 4%.
The party has provided their share of the property as security to Bank of China.
(3)These loans are unsecured, bear interest at the USD base rate of the South African Reserve Bank + 300 basis points and are
repayable 5 years after the drawdown date.
(4)Mr Peter Todd, Chairman of the Company, was a non-executive Mauritian resident director of these companies for all or part
of the periods during which loans were advanced by the Group to these entities. The total interest receivable by the Group
on these loans in the year ended 30 June 2018 was US$0.93 million and in the year ended 30 June 2017 was US$0.08 million.
(5)This loan is unsecured, interest-free and repayable within one year from the drawdown date.
Restated as at As at
30 June 2017 30 June 2018
7. Interest-bearing borrowings US$'000 US$'000
Non-current liabilities
At amortised cost 185,051 207,106
Current liabilities
At amortised cost 47,959 99,038
233,010 306,144
Currency of the interest-bearing borrowings (stated gross of
unamortised loan issue costs)
United States Dollars 160,348 189,094
Euros 72,039 115,719
Mozambican Meticais 3,020 2,913
235,407 307,726
Unamortised loan issue costs (2,397) (1,582)
As at 30 June 233,010 306,144
Movement for the period
Balance at the beginning of the year 161,181 233,010
Proceeds of interest bearing-borrowings
- Loans advanced in relation to investment on associates 13,001 -
- Other new loans advanced 170,933 145,406
Loan issue costs incurred (2,544) (571)
Amortisation of loan issue costs 584 1,386
Foreign currency translation differences 4,574 1,858
Debt settled during the period (114,719) (74,945)
As at 30 June 233,010 306,144
Analysis of facilities and loans in issue
30 June 2017 30 June 2018
Lender Initial facility US$'000 US$'000
Financial institutions
Standard Bank Mozambique US$10.4m 10,451 10,451
Standard Bank South Africa US$12m - 12,000
Standard Bank South Africa US$38.0m 38,000 38,000
Standard Bank (Mauritius) Limited US$11.7m - 11,047
Bank Unico of Mozambique MZN182.7m 3,020 2,913
Investec South Africa US$15.7m + EUR36m 50,154 48,529
Barclays Bank Mauritius EUR7.4m 7,400 7,374
Barclays Bank Mauritius EUR20m - 19,669
Afrasia Bank Mauritius Revolver 19,312 -
Bank of China US$13.3m + US$77m + US$8.5m 52,150 98,260
EUR22.3m + EUR9m + EUR3.2m +
State Bank of Mauritius EUR20m 35,725 58,997
Investec Mauritius US$0.5m 528 486
Nedbank South Africa US$5.6m 5,666 -
Vendor finance
Rockcastle Global Real Estate Limited US$13m 13,001 -
Total loans in issue 235,407 307,726
less: unamortised loan issue costs (2,397) (1,582)
233,010 306,144
Restated as at As at
30 June 2017 30 June 2018
8. Revenue US$'000 US$'000
Contractual rental income 18,811 27,213
Retail parking income 975 965
Recoverable property expenses 3,086 3,950
Total revenue 22,872 32,128
Restated as at As at
30 June 2017 30 June 2018
9. Interest income US$'000 US$'000
Bank interest receivable 13 67
Interest on loans to partners 1,151 3,278
Interest on loans to related parties 66 130
Interest on property deposits paid 532 834
Interest on tenant rental arrears 297 66
2,059 4,375
Restated as at As at
30 June 2017 30 June 2018
10. Finance costs US$'000 US$'000
Interest-bearing borrowings - financial
institutions 9,401 16,972
Interest-bearing borrowings - vendor loans 776 -
Amortisation of loan issue costs 584 1,463
Preference share dividends 220 825
Interest on finance leases 16 (3)
Interest on bank overdraft 62 17
Other interest payable 374 386
11,433 19,660
Restated as at As at
30 June 2017 30 June
2018
11. Taxation US$'000 US$'000
Major components of the taxation expense
Current taxation (3) 1,519
Deferred taxation (2,913) 3,233
(2,916) 4,752
Reconciliation of the taxation expense
Profit before tax (10,351) 30,497
Statutory taxation expense at 15% (all periods) (1,553) 4,574
Tax effect of adjustments to taxable income: - -
Non-taxable income (1,684) (3,802)
Non-deductible expenditure 131 1,204
Under provision in the previous period - 282
Foreign tax credit 33 (1,328)
Deferred tax asset not provided for - 2,101
Investment tax credit - (234)
Minimum tax - 42
Tax losses unutilised carried forward 2,449 -
Effect of different tax rates (2,290) 1,913
Effective taxation expense at 10.48% (2017: 28.17%) (2,916) 4,752
The Company is subject to income tax at the rate of 15% in Mauritius in accordance with the provisions of the Income Tax
Act 1995 as amended. As the Company holds a Category One Global Business License, the Income Tax (Foreign Tax Credit)
Regulations 1996 allow for the setting off of any underlying tax, withholding tax or tax sparing credit by the Company
against any tax due at the 15% rate. In the absence of evidence of payment of foreign tax, the Company can claim as tax
credit (presumed tax credit) an amount equal to 80% of the Mauritius tax chargeable on any foreign-source income.
12. Segmental reporting
Condensed consolidated
segmental analysis Botswana Morocco Mozambique Zambia Kenya Ghana Mauritius Total
Geographical location 30 June 2018 -
US$'000
Gross rental income 9,848 15,645 - 1,311 - 5,324 32,128
Straight-line rental income accrual 296 569 - 105 - 140 1,110
Property operating expenses (5,192) (1,973) - (42) - (378) (7,585)
Share of profit from Associates - - 13,828 64 83 7,053 21,028
Net property rental and related income 4,952 14,241 13,828 1,438 83 12,139 46,681
Fair value adjustment on investment
property 1,704 6,584 - 1,109 - 4,364 13,761
Investment Property vehicles 3,091 92,632 204,560 91,629 25,494 7,960 181,211 606,577
Investment property at fair value 92,632 204,560 - 22,200 - 63,740 383,132
Deposits paid on investment properties - - - - - 11,117 11,117
Investment in associates - - 91,629 3,294 7,960 62,428 165,311
Other investments 3,091 - - - - - 1,063 4,154
Other financial assets - - - - - 42,863 42,863
Corporate
Equity Light accommodati
investments Hospitality Retail Office industrial on Corporate Total
Type of property 30 June 2018 -
US$'000
Gross rental income - 4,157 12,586 11,319 2,227 1,839 - 32,128
Straight-line rental income accrual - (0) 597 337 105 71 - 1,110
Property operating expenses - - (5,788) (1,035) (65) (353) (344) (7,585)
Share of profit from Associates - 7,053 13,892 83 - - - 21,028
Net property rental and related income - 11,210 21,287 10,704 2,267 1,557 (344) 46,681
Fair value adjustment on investment
property - 4,035 (463) 691 1,109 8,389 - 13,761
Investment Property vehicles 3,091 111,330 222,353 148,760 28,700 37,300 55,043 606,577
Investment property at fair value - 48,900 127,432 140,800 28,700 37,300 - 383,132
Deposits paid on investment properties - - - - - - 11,117 11,117
Investment in associates - 62,430 94,921 7,960 - - - 165,311
Equity investments: Available-for-sale 3,091 - - - - - 1,063 4,154
Other financial assets - - - - - 42,863 42,863
30 June 2017 30 June 2018
13. Earnings per share US$'000 US$'000
(Loss)/profit after tax attributable to equity owners of the parent (6,634) 28,562
Weighted average number of shares in issue (net of unvested treasury shares)
In issue at start of period 99,004 200,364
Effect of shares issued in the period 10,849 766
Effect of treasury shares acquired in period (58) -
Effect of treasury shares vested or allocated in the period - 70
109,795 201,200
Dilutive effect of share options - -
109,795 201,200
Basic earnings / (loss) per share (cents) (6.04) 14.20
Diluted earnings / (loss) per share (cents) (6.04) 14.20
14. Subsequent events
- On 31 July 2018, the Company was listed on the London Stock Exchange, raising US$132.2 million of fresh capital
through the issue of 102,074,261 shares at a price of US$1.43 per share.
- Following the successful capital raise, the Company settled short-term debt facilities with State Bank of Mauritius
(US$18.6 million), Barclays Bank Mauritius (US$19.2 million) and BankABC (US$8.5 million).
- On the 27 August 2018, the Group concluded the transfer of the 80.1% interest in Acacia Estate, located in Costa do
Sol, Maputo Mozambique. The residential complex is tenanted by an International Embassy and leading
international petroleum company under long-term leases. The aggregate purchase consideration is
USUS$23.5 million and was settled in cash.
- On 26 March 2018, Grit announced that it had paid a refundable deposit of USUS$2 million for the acquisition of the
CADS II building situated in Accra. The balance of the total consideration
for a 50% stake in the Company of US$8.5 million was made in August 2018 and the property is currently under transfer.
- On 15 March 2018, Grit signed an agreement to acquire the 5th Avenue Corporate Offices complex in West
Cantonments, Accra. The building is tenanted by a blue-chip anchor tenant occupying 53% of the gross lettable area
and contributing 58% of the rental stream. The parent company of the second biggest tenant, occupying 34% of the
gross leasable area and contributing 30% of the rental income, is a leading owner, operator and developer of
wireless and broadcast communication towers and is listed on the New York Stock Exchange. The aggregate
purchase consideration is US$20.5 million. Post year end, the Group made a deposit of US$3.2 million to secure the
transfer of the asset and the effective date of this transaction is expected in early October 2018.
15. Restatements
For full details of the Groups restatements as previously disclosed, refer to the Company website www.grit.group
As at 30 June
2018
16 Distribution calculation(1) US$'000
Basic Earnings attributable to the owners of the parent 28,562
Add Back non cash items:
- Straight-line leasing (non-cash rental) (1,110)
- Total fair value adjustment on investment properties (5,073)
- Fair value adjustments included under income from associates (8,858)
- Fair value adjustment on other investments 757
- Fair value adjustment on other financial asset 128
- Fair value adjustment on derivative financial instruments (25)
- Unrealised foreign exchange gains or losses (non-cash) (1,103)
- Share based payments 282
- Movement in deferred tax 3,247
- Depreciation and amortisation 272
Items added back
- Acquisition costs not capitalised 3,480
- Listing and setup costs included in administrative expenses 1,323
Other cash generation
- VAT and tax credits utilised 2,856
- Rental concessions for capital projects 693
Brought Forward 81
TOTAL DISTRIBUTABLE EARNINGS 25,512
DISTRIBUTABLE INCOME PER SHARE (US$ cps) 12.19
Shares '000
Weighted average shares in issue 209,280
Distribution declared:
Interim US$6.07 cps 12,704
Final (after 30 June) US$6.12 cps 12,808
Distributable income for the period US$12.19 cps 25,512
(1) The distribution calculation is disclosed to provide clarity regarding the final dividend distribution of US$12.19 per
share and to reconcile 'Distributable income' to 'Basic Earnings attributable to the owner of the parent'.
17. EPRA earnings and NAV calculations
Year ended 30 Year ended 30
EPRA earnings June 2017 June 2018
US$'000 US$'000
EPRA EARNINGS (7,435) 25,745
Basic Earnings per above
Add Back:
- Total fair value adjustment on investment properties 20,729 (5,073)
- Gain from bargain purchase on associates (958) -
- Fair value adjustments included under income from associates (4,557) (8,858)
- Fair value adjustment on other investments - 757
- Fair value adjustment on other financial asset - 128
- Fair value adjustment on derivative financial instruments (535) (25)
- Deferred tax in relation to the above (3,440) 5,981
- Acquisition costs not capitalised 635 3,480
- Non-controlling interest included in basic earnings 801 2,817
EPRA EARNINGS 5,240 24,952
EPRA EARNINGS PER SHARE (DILUTED) 4.77 12.40
Company specific adjustments
- Unrealised foreign exchange gains or losses 1,448 (1,103)
- Straight-line leasing (non-cash rental) (1,132) (1,110)
- Amortisation of Right of use of land (non-cash) 26 44
- Deferred tax in relation to the above 1 (1)
Total Company Specific adjustments 343 (2,170)
ADJUSTED EPRA EARNINGS 5,583 22,782
ADJUSTED EPRA EARNINGS PER SHARE (DILUTED) 5.08 11.32
Shares '000 Shares '000
Weighted average shares in issue 110,910 209,280
Less: Weighted average treasury shares for the period (3,058) (10,024)
Add: Weighed average share awards and shares vested shares in Long term incentive scheme 1,943 1,944
EPRA SHARES 109,795 201,200
Year ended 30 Year ended
June 2017 30 June
EPRA NAV 2018
US$'000 US$'000
EQUITY ATTRIBUTABLE TO THE OWNERS OF THE COMPANY 258,307 279,383
ADD BACK:
Fair value of financial instruments 19 22
Deferred tax from revaluation of properties 16,971 20,791
EPRA NAV 275,297 300,197
EPRA NAV PER SHARE (cents per share) 137.4 145.7
Shares '000 Shares '000
Total shares in issue 208,514 214,022
Less: Treasury shares for the period (10,093) (9,941)
Add: Share awards and shares vested shares in Long term incentive scheme 1,943 1,943
EPRA SHARES 200,364 206,025
Year ended 30 Year ended 30
18. Adjusted administration expenses June 2017 June 2018
US$'000 US$'000
Adjusted administration expenses 6,810 7,951
Administrative expenses (including corporate structuring costs) 7,900 14,653
Less Admin expenses (non-controlling interest) (63) (1,929)
Less Acquisition and setup costs (1,027) (4,773)
Year ended 30 Year ended 30
June 2017 June 2018
19. Headlines earnings per share (1) US$'000 US$'000
Reconciliation of basic earnings and headline earnings
Basic earnings (6,634) 28,562
Fair value adjustments on investment property 20,499 (13,761)
Deferred taxation on investment property revaluation (3,580) 5,979
Gain from bargain purchase (958) -
Fair value adjustment on other investments - 757
Fair value adjustment on other financial asset - 128
Fair value adjustment on derivative financial instruments (535) (25)
Share of fair value adjustment on investment property accounted by associate 4,557 8,858
Share-based payment expense 133 282
Headline earnings attributable to shareholders 13,482 30,780
Number of shares in issue at interim 111,787,042 208,514,261
Number of shares in issue at year end 208,514,261 214,022,425
Weighted average number of shares * 109,794,974 201,200,481
Earnings per share (6.04) 14.20
Basic and diluted earnings per share (cents) (6.04) 14.20
Headline diluted earnings per share (cents) 12.28 15.30
* There are no dilutionary instruments in issue
(1) The JSE Listings Requirements require the calculation of headline earnings and disclosure of a detailed reconciliation
of headline earnings to the earnings numbers used in the calculation of basic earnings per share in accordance with the
requirements of IAS 33 – Earnings per Share. Disclosure of headline earnings is not a requirement of International Financial
Reporting Standards (IFRS). In calculating headline earnings per share, headline earnings exclude fair value adjustments for
financial liabilities and accounting adjustments required to account for lease income on a straight-line basis, as well as
other non-cash accounting adjustments that do not affect distributable earnings.
OTHER NOTES
The abridged audited consolidated financial statements for the year ended 30 June 2018 have been
prepared in accordance with the measurement and recognition requirements of International Financial
Reporting Standards ("IFRS"), the JSE Listings Requirements, the LSE Listing Rules, the SEM Listing Rules
and the requirements of the Mauritian Companies Act 2001 and the method of computation followed
per the abridged audited financial statements for the year ended 30 June 2018.
The Group is required to publish financial results for the year ended 30 June 2018 in terms of Listing
Rule 12.14 of the SEM, the JSE Listing Requirements and the LSE Listing Rules. The Directors are not
aware of any matters or circumstances arising subsequent to the year ended 30 June 2018 that require
any additional disclosure or adjustment to the financial statements. These abridged audited
consolidated financial statements were approved by the Board on 26 September 2018.
BDO & Co and PricewaterhouseCoopers have issued their unqualified audit opinion on the Group's
financial statements for the year ended 30 June 2018. Copies of the abridged audited consolidated
financial statements, and the statement of direct and indirect interests of each officer of the Company
pursuant to rule 8(2)(m) of the Securities (Disclosure Obligations of Reporting Issuers) Rules 2007, are
available free of charge, upon request at the Company's registered address. Contact Person: Kesaven
Moothoosamy.
Following a successful capital raise, UK institutional investors now make up 12% of Grit’s shareholder base
on the LSE, with the balance held on the JSE (50%) and SEM (38%).
Top five shareholders for Grit as at 31 August 2018 are as follows:
Anchor shareholders (>5%) %
Government Employees Pension Fund (PIC) 28%
New UK Institutional Investors 12%
Drive In Trading Limited 8%
Delta Property Fund 8%
Transformers Investment Ltd 6%
Management & Staff 5%
Final dividend declaration
Shareholders are advised that dividend number 9 of US$ 6.12 cents per share for the six months ended
30 June 2018 has been approved and declared by the Board of the Company on 26 September 2018.
The source of the cash dividend is from rental income and cum-dividend reserve.
Salient dates and times
For shareholders on the Mauritian Register
Announcement of cash dividend on JSE, SEM and LSE Wednesday, 26 September 2018
Announcement of US$ to Rand conversion rate released on SEM
website by no later than 13:00 Tuesday, 9 October 2018
Last date to trade cum dividend Tuesday, 16 October 2018
Shares trade ex-dividend Wednesday, 17 October 2018
Record date of dividend on the SEM Friday, 19 October 2018
Payment date of dividend Friday, 16 November 2018
Notes
1. All dates and times quoted above are local dates and times in Mauritius. The above dates and
times are subject to change. Any changes will be released on the SEM website.
2. No dematerialisation or rematerialisation of share certificates may take place between
Wednesday, 17 October 2018 and Friday, 19 October 2018, both days inclusive.
3. No transfer of shares between sub-registers in Mauritius, South Africa and the UK may take place
between Tuesday, 9 October 2018 and Friday, 19 October 2018, both days inclusive.
For shareholders on the South African Register
Announcement of cash dividend on JSE, SEM and LSE Wednesday, 26 September 2018
Announcement of US$ to Rand conversion rate released on SENS
by no later than 11:00 Tuesday, 9 October 2018
Last date to trade cum dividend Tuesday, 16 October 2018
Shares trade ex-dividend Wednesday, 17 October 2018
Record date of dividend on the JSE Friday, 19 October 2018
Payment date of dividend Friday, 16 November 2018
Notes
1. All dates and times quoted above are local dates and times in South Africa. The above dates and
times are subject to change. Any changes will be released on SENS.
2. No dematerialisation or rematerialisation of share certificates may take place between
Wednesday, 17 October 2018 and Friday, 19 October 2018, both days inclusive
3. No transfer of shares between sub-registers in Mauritius, South Africa and the UK may take place
between Tuesday, 9 October 2018 and Friday, 19 October 2018, both days inclusive.
4. Shareholders on the South African sub-register will receive dividends in South African Rand, based
on the exchange rate to be obtained by the Company on or before Tuesday, 9 October 2018. A
further announcement in this regard will be made on Tuesday, 9 October 2018.
For shareholders on the UK Register
Announcement of cash dividend on JSE, SEM and LSE Wednesday, 26 September 2018
Announcement of US$ to Rand conversion rate released on the
Regulatory Information Service of the LSE by no later than 10:00 Tuesday, 9 October 2018
Last date to trade cum dividend Wednesday, 17 October 2018
Shares trade ex-dividend Thursday, 18 October 2018
Record date of dividend on the LSE Friday, 19 October 2018
Last date for receipt of currency election forms Friday, 19 October 2018
Payment date of dividend Friday, 16 November 2018
Notes
1. All dates and times quoted above are local dates and times in the UK. The above dates and times
are subject to change. Any changes will be released on the Regulatory Information Service of the
LSE.
2. No dematerialisation or rematerialisation of share certificates may take place between
Wednesday, 17 October 2018 and Friday, 19 October 2018, both days inclusive
3. No transfer of shares between sub-registers in Mauritius, South Africa and the UK may take place
between Tuesday, 9 October 2018 and Friday, 19 October 2018, both days inclusive.
4. Shareholders on the UK sub-register will receive dividends in US$. However, shareholders can
elect to have dividends paid in sterling (GBP) and the option to elect a sterling dividend payment
for this dividend will be available to shareholders until Friday, 19 October 2018 (the "Election
Date").
5. Further details together with a copy of the Dividend Currency Election Form, which should be sent
to Link Asset Services, The Registry, 34 Beckham Road, Beckenham, Kent, BR3 4TU when
completed, will be available on the Company's website shortly at http://grit.group/. CREST
shareholders must elect via CREST.
In terms of the JSE Listings Requirements regarding Dividends Tax, the following information is only of
direct application to shareholders on the South African share register, as the dividend is regarded as a
foreign dividend for shareholders on the South African register:
- the final dividend is subject to South African Dividends Tax;
- the local dividend tax rate is 20%;
- there is no withholding tax payable in Mauritius;
- the number of ordinary shares in issue is 306 396 035 and
- the Mauritian income tax reference number of the Company is 27331528.
Date: 26/09/2018 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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