Condensed interim consolidated financial statements
for the six-month period ended 31 December 2015
MAS REAL ESTATE INC
Registered in British Virgin Islands
Registration number 1750199
Registered as an external company in the Republic of South Africa
Registration number 2010/000338/10
ISIN: VGG5884M1041
SEDOL (XLUX): B96VLJ5
SEDOL (JSE): B96TSD2
JSE share code: MSP
("MAS" or "the company")
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIOD ENDED 31 DECEMBER 2015
Highlights
FUNDING
- Interim distribution
proposed of EUR6,7 million,
or 2,27 euro cents per
share based on the
shares in issue
at period end
- Like-for-like
adjusted NAV per
share increased
1,28% to 118,5 euro cents
- Adjusted core
income up by
3,9% over the
previous six months
- Attractive financing
rates continue to be available
PORTFOLIO
- Obtained planning approval
on the North Street Quarter development
- Completion of
Whitbread hotels at
the New Waverley
development February 2016
- Further income
accretive
acquisitions in Germany
- Karoo Fund
final
redemption
received January 2016
TEAM
- New European Asset
Manager appointed
- # of staff increased to 21
- New Head Office
RELATIONSHIPS
- Included in
the JSE
SAPY index
- Replenished pipeline
- Relationships with
debt providers enhanced
SUSTAINABILITY
- 6 000 square metres
of photovoltaic farm at
Chippenham
- Environmental
credibility key to
securing North
Street quarter
Pplanning approval
- All development
plans substantially
exceed
environmental
requirements
Portfolio breakdown
June 2015
Income-generating property 44%
Development property 22%
Investments 21%
Treasury 13%
December 2015
Income-generating property 46%
Development property 28%
Investments 13%
Treasury 13%
Market value
United Kingdom 52%
Germany 41%
Switzerland 7%
Rental area
United Kingdom 53%
Germany 44%
Switzerland 3%
Rent roll
United Kingdom 26%
Germany 65%
Switzerland 9%
Key metrics
Adjusted core income per share (Euro cents)
June 2015 2,22
December 2015 2,29
Adjusted NAV per share* (Euro cents)
June 2015 121,2
December 2015 118,5
* See adjusted like-forlike NAV per share bridge December 2015 for an analysis of the movement in adjusted NAV per share.
Median daily share volume (number of shares)
June 2015 40 753
December 2015 47 254
Total assets (Euro million)
June 2015 410
December 2015 412
Investment property (Euro million)
June 2015 248,5
December 2015 275,9
Number of property locations (number)
June 2015 19
December 2015 20
Number of employees (number)
June 2015 20
December 2015 21
Loan to value (percentage)
June 2015 4,8
December 2015 4,6
Our key metrics are defined as follows:
KEY METRICS OBJECTIVE EXPLANATION
Financial
Adjusted core Income generation The group's measure of underlying income which includes:
income per share and growth operating income as adjusted for listing and structure costs that
are eliminated; net finance costs; normal taxation; and further
adjusted for realised profits or losses on investment property,
investments and treasury investments to the extent that the board
of directors deem it appropriate to distribute these
Adjusted NAV per Capital preservation and Net asset value per share, adjusted by adding back deferred tax
share growth
Loan to value Optimal gearing External finance to gross property portfolio (investment property
plus investments)
Portfolio
Total assets Economies of scale Total assets, including all property and non-property assets
Investment property Portfolio construction Income-generating, development properties and investment property held for sale
Property locations Diversification and optimal The number of locations in which we own properties
asset size
Team
Number of Optimal operational capacity The number of employees, including group directors, as at the
employees period end
Market
Median daily share Liquidity of traded share The median number of shares traded per day during the financial
volume (annual) period on the JSE
CEO review
The key financial metrics of the group continue to develop in an encouraging manner. Adjusted NAV, on a like-for-like basis(1),
has grown by EUR4,5 million reaching EUR348,9 million at the period end. Adjusted core income increased by EUR0,25 million over
the previous six-month period. The gross investment property portfolio reached EUR275,9 million as we have invested further in
both our income-generating and development portfolios, and gearing has been secured on very attractive terms and will be
accretive to our core income as this is invested in the pipeline.
Indices
The inclusion of MAS in the JSE SAPY index in December 2015 marks an important milestone in the development of the
company. We indicated at year-end that entering various indices was a strategic priority, and it is pleasing to have already
made this progress by the half-year stage. The much-improved liquidity makes the share more investable, and we are already
seeing the benefits of that with an increased shareholder base.
(1) Like-for-like adjustments relate to the removal of foreign exchange differences, and distributions, from the base, to allow a
deeper analysis of the change in the underlying portfolio
Market and pipeline
We are very well positioned at the start of 2016 to capitalise on various strong growth opportunities. In our core markets, we
continue to see large capital sums being invested as institutions seek exposure to both real estate debt and equity. The
continued competition has suppressed yields for our current and target assets, meaning in particular that careful consider-
ation and diligence is required in appraising new investment opportunities in these markets. The firmness of these core
markets has led us once again to seriously consider particular jurisdictions outside of Germany, Switzerland and the UK, where
we believe that the risk-adjusted value proposition is compelling. It appears that from our detailed research such opportunities
do exist, and we are diligently examining these in detail at the current time.
The pipeline has nonetheless been replenished with value-accretive investments in our markets. We expect to complete
the negotiations for acquisitions in the months ahead. This is no mean feat in the current environment, but reflects the
growing brand and presence of MAS, from which we are beginning to reap rewards. Our reputation as a serious yet
transparent investor is invaluable and continues to grow.
Currency
MAS has adopted a basket-of-currencies approach to investing and does not hedge between the base currency of euros, and
other investment currencies of sterling and Swiss francs. During the review period, the euro has strengthened against sterling
and Swiss franc. In turn, this has the notional effect of reducing the value, reported in euros, of the portfolio in Switzerland and
the UK.
Portfolio development and performance
Summarised statement of financial position
As at As at As at
31 December 31 December 30 June
Euro 2015 2014 2015
Goodwill 28 449 119 26 475 251 29 351 139
Investment portfolio
– Income-generating property
(including investment property held for sale) 171 955 352 102 787 078 164 390 519
– Development property 103 907 766 50 935 343 84 148 287
– Investments 50 232 879 75 152 433 79 568 758
– Treasury 51 053 961 103 190 261 47 716 754
Other assets 6 204 208 2 824 782 5 279 954
Total assets 411 803 285 361 365 148 410 455 411
Shareholder equity 348 408 569 319 140 168 353 140 598
Non-current liabilities 22 063 767 37 874 976 22 468 897
Current liabilities 41 330 949 4 350 004 34 845 916
Total equity and liabilities 411 803 285 361 365 148 410 455 411
Adjusted net asset value per share (euro cents)* 118,5 109,8 121,2
Number of ordinary shares in issue 294 455 630 290 602 608 291 787 889
* Net asset value per share as adjusted for deferred tax
Income-generating property
Our income-generating portfolio has grown by EUR7,6 million to EUR172,0 million with the December 2015 acquisition of a German
retail warehouse tenanted by OBI, the prominent German retailer. The group has also exchanged conditional contracts on a logistics
unit in Munich, Germany, on which we are due to complete in the coming months. Both acquisitions represent a good strategic fit with
strong income, and with further investments imminent we will continue to deliver assets at similarly appealing yields.
The completion of the first two hotels and The Arches at New Waverley, our major development in the heart of
Edinburgh in Scotland, will further boost the income-generating portfolio in the second half of the financial year. In addition,
Siemens, our anchor tenant at Chippenham, Wiltshire, has leased an additional 1 000 square metres during the review period
and has not exercised its lease break, thereby affirming its commitment to the site. This was expected, but having this secured
allows us to move onto the next phase of enhancing the profitability of the site. In addition, we have obtained planning
permission for a 6 000 square metre photovoltaic farm, which gives the site real green credentials. It will supply all of the
electricity required on the estate, and feed the excess into the national grid at a fixed price.
Development property
The value of our development property portfolio has increased by EUR19,8 million to EUR103,9 million due to the continued capital
investment in our development portfolio.
New Waverley
Our regeneration development in Edinburgh represents our most significant development to date. Phase 1 comprises three
pre-let hotels with accompanying retail and leisure outlets, the construction of which is well advanced. The two Whitbread
hotels were handed over to the tenant in late February, while completion later this year of the third hotel, to be occupied by
Adagio, is on track. The Arches are now let and open for business.
North Street Quarter
Located in the unique and delicate setting of the South Downs National Park, our North Street Quarter development in Lewes,
East Sussex, is another regeneration scheme. In December 2015 we received unanimous approval at planning committee on our
planning application. This is another significant achievement that demonstrates our expertise and experience in managing and
extracting value in highly sensitive locations, in a manner that ensures both a financially and socially viable scheme.
Langley Park
Our Langley Park development is situated on a large site in Chippenham, Wiltshire. The last six months have seen terms agreed
to sell a piece of the land to a discount food retailer, and to bring a leading budget hotel operator to the site on a long-lease
basis.
Investments
Despite recent declines in European and South African equity and real estate indices, our investment portfolio has performed
strongly over the period with a net gain of EUR4,5 million.
The Karoo Fund, which has been a strong performer, increased in value by a further EUR3,5 million in the period, with EUR37,8 million
being redeemed. The Karoo Fund had a termination date of 31 January 2016, and as part of our final distribution we have
received an in-specie redemption of shares in Sirius Real Estate Limited ("Sirius"). The final redemption has triggered the
settlement of our liability to Attacq Limited, from whom we acquired the investment, through the issuance of MAS shares.
Per the overage arrangement detailed in the Sale and Purchase Agreement, these shares are to be issued at the 30-day
VWAP as at the date of each redemption. Accordingly, 21 317 449 shares will be issued to Attacq in settlement of this, which would
have increased the shareholding of Attacq to 48,6% as at the date of this report.
Our direct investment in Sirius has increased in value by EUR1,0 million. Together with the in-specie redemption from Karoo
we now hold 12,1% of Sirius. This remains a strategic and important investment for MAS, and we are encouraged by the
performance of its underlying portfolio and income-generating ability.
Funding
Our current loan-to-value of 4,6% gives us the opportunity to continue to gear the portfolio at low fixed rates of interest.
During the period, management has made significant progress in this regard securing a combined facility of EUR30,6 million at
a fixed interest rate below 2,5%. We are also in advanced discussion with other lenders as we look to optimise our gearing and
fund our investment pipeline.
Adjusted like-for-like NAV per share bridge December 2015 (Euro cents)
June 2015 121,2
Distributions (2,2)
Foreign Exchange losses (2,0)
Adjusted like-for-like NAV 117,0
Investements FV 1,2
Core income 0,8
Treasury FV 0,3
Structural costs (0,1)
Income generating FV (0,7)
December 2015 118,5
Adjusted like-for-like NAV per share bridge June 2015 (Euro cents)
December 2014 109,8
Foreign Exchange gains 7,5
Distributions (1,1)
Adjusted like-for-like NAV 116,2
Devlopment property FV 4,1
Core income 1,1
Treasury FV 0,9
Investements FV 0,4
Structural costs (0,1)
Income generating FV (1,4)
June 2015 121,2
Distribution income statement
For the six months ended 31 December 2015
Six-month Six-month Six-month
period ended period ended period ended
31 December 30 June 31 December
Euro 2015 2015 2014
Rental income 6 586 450 6 108 461 2 625 058
Service charges 695 687 589 637 —
Other income 145 964 — —
Expenses
Portfolio related expenses (1 783 557) (1 547 436) (489 420)
Investment adviser fees — — (1 248 330)
Administrative expenses* (2 817 825) (1 453 849) (466 405)
Net operating income 2 826 719 3 696 813 420 903
Net finance income/(costs) 15 184 (441 917) (134 780)
Taxation** (502 278) (219 184) (152 264)
Core income 2 339 625 3 035 713 133 859
Adjustments:
Realised profits on Karoo Fund redemptions 4 355 077 1 713 177 3 208 380
Realised profits on treasury portfolio — 1 696 715 —
Adjusted core income 6 694 702 6 445 604 3 342 239
Adjusted core income per share 2,29 2,22 1,18
Weighted average number of shares outstanding 292 516 780 290 688 212 283 885 876
Actual number of shares outstanding 294 455 630 291 787 889 290 602 608
Interim distribution*** (euro cents per share) 2,27 2,20 1,15
* Excluding listing and structure costs of EUR174 809 (June: EUR129 131; December: EUR375 450)
** Excluding deferred taxation of (EUR142 521) (June: (EUR253 868); December EUR526 128)
*** Based upon the number of shares in issue at interim period end
Underlying core income continues to increase, in-line with the growing portfolio and driven by acquisitions. The investment
case for acquiring income-yielding properties remains strong, whereby we continue to exploit the large yield gaps between
acquisition yields and the cost of debt funding. Further acquisitions are imminent, and the completion of the Whitbread
hotels, which will drive core income growth into the second half of this year.
Distribution
The directors are pleased to propose an interim distribution to shareholders of EUR6 694 702 or 2,27 euro cents per share based
upon the number of shares in issue at the period end. Details of the distribution will follow in due course.
Team
We continue to add to our growing team and, in doing so, improve our 'on the ground' capabilities. We have recently
employed a European asset manager based in Frankfurt, Germany. The financial performance of MAS is ultimately driven by
the collective output of our team. We have a very strong team now, and we are well positioned to continue leveraging this
team in our investment jurisdictions.
Reporting currency
The company's results are reported in euros.
Listings
MAS is listed on the Main Board of the Johannesburg Stock Exchange ("JSE") and the Euro MTF Market of the Luxembourg
Stock Exchange.
Statement of compliance
These condensed interim consolidated financial statements have been prepared in accordance with International Financial
Reporting Standard IAS 34: Interim Financial Reporting, the JSE Listings Requirements, Luxembourg Stock Exchange
("LuxSE") rules and regulations and applicable legal and regulatory requirements of the BVI Companies Act 2004.
Assurance
KPMG Audit LLC has independently reviewed these condensed interim consolidated financial statements for the six-month
period ended 31 December 2015. The review report does not necessarily report on all information contained in these condensed
interim consolidated financial statements. The directors take full responsibility for the preparation of these condensed interim
consolidated financial statements.
By order of the board
Lukas Nakos
Chief Executive Officer
Douglas, Isle of Man
24 February 2016
Registered office For correspondence Directors
Midocean Chambers 2nd Floor, Clarendon House Ron Spencer (non-executive chairman)
Road Town Victoria Street Lukas Nakos (chief executive officer)
Tortola Douglas Malcolm Levy (chief financial officer)
British Virgin Islands Isle of Man Jonathan Knight (chief investment officer)
IM1 2LN Gideon Oosthuizen (non-executive)
Registrar Pierre Goosen (non-executive)
Computershare Investor Services Transfer secretary Morné Wilken (non-executive)
(BVI) Limited Computershare Investor Services Jaco Jansen (non-executive)
Woodbourne Hall (Proprietary) Limited
PO Box 3162 Ground floor Company secretary
Road Town, Tortola 70 Marshall Street Helen Cullen
British Virgin Islands Johannesburg, 2001
South Africa JSE sponsor
Java Capital Trustees and Sponsors
Proprietary Limited
Review report by KPMG Audit LLC to MAS Real Estate Inc
For the six months ended 31 December 2015
We have been engaged by MAS Real Estate Inc (the "company") and its subsidiaries (collectively the "group") to review
the condensed set of consolidated financial statements for the interim report for the six-months ended 31 December 2015
which comprise the condensed consolidated statement of profit or loss, the condensed consolidated statement of other
comprehensive income, the condensed consolidated statement of financial position, the condensed consolidated statement of changes
in equity, the condensed consolidated statement of cash flows and the related notes.
This report is made solely to the company in accordance with the terms of our engagement. Our review has been
undertaken so that we might state to the company those matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
company for our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The interim report is the responsibility of, and has been approved by, the directors. The directors are responsible for
preparing the interim report in accordance with International Financial Reporting Standard IAS 34 Interim Financial
Reporting, the Johannesburg Stock Exchange ("JSE") Listings Requirements, the Luxembourg Stock Exchange ("LuxSE")
rules and regulations and applicable legal and regulatory requirements of the BVI Companies Act 2004.
The annual financial statements of the group are prepared in accordance with IFRSs. The condensed set of financial
statements included in this interim report have been prepared in accordance with IAS 34 Interim Financial Reporting.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of consolidated financial statements in
the interim report based on our review.
Scope of review
We have conducted our review in accordance with International Standard on Review Engagements (UK and Ireland)
2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing
Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance with applicable law and International
Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become
aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Opinion on the financial statements
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of consolidated
financial statements in the interim report for the six-months ended 31 December 2015 is not prepared, in all material
respects, in accordance with IAS 34 Interim Financial Reporting.
KPMG Audit LLC
Chartered Accountants
Heritage Court
41 Athol Street
Douglas
Isle of Man IM99 1HN
24 February 2016
Condensed consolidated statement of profit or loss
For the six months ended 31 December 2015
Six-month Six-month Audited
period ended period ended Year ended
31 December 31 December 30 June
Euro Note 2015 2014 2015
Revenue
Rental income 4 6 586 450 2 625 058 8 733 519
Service charge 4 695 687 — 589 637
Other income 145 964 — —
Expenses
Portfolio related expenses (1 783 557) (489 420) (2 036 856)
Investment adviser fees — (1 248 330) (1 249 295)
Administrative expenses (2 992 634) (841 855) (2 423 870)
Net operating income 2 651 910 45 453 3 613 135
Fair value adjustments 5 2 378 038 16 296 691 27 877 364
Exchange differences (3 053 676) 2 543 511 17 660 295
Profit before finance income/costs 1 976 272 18 885 655 49 150 794
Finance income 318 713 146 500 4 676
Finance costs (303 529) (281 280) (581 374)
Profit before taxation 1 991 456 18 750 875 48 574 096
Taxation 6 (644 799) 373 864 (99 188)
Profit for period/year attributable to the owners of the group 1 346 657 19 124 739 48 474 908
Basic and diluted earnings per share (euro cents) 16 0,46 6,74 16,87
The notes form part of these condensed interim consolidated financial statements.
Condensed consolidated statement of other comprehensive income
For the six months ended 31 December 2015
Six-month Six-month Audited
period ended period ended Year ended
31 December 31 December 30 June
Euro 2015 2014 2015
Profit for period/year 1 346 657 19 124 739 48 474 908
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss
Foreign operations – foreign currency translation differences (2 901 167) 94 500 6 575 768
Total comprehensive (loss)/income for the period/year attributable to (1 554 510) 19 219 239 55 050 676
the owners of the group
Condensed consolidated statement of financial position
For the six months ended 31 December 2015
Audited
As at As at As at
31 December 31 December 30 June
Euro Note 2015 2014 2015
Non-current assets
Goodwill 7 28 449 119 26 475 251 29 351 139
Investment property 8 273 819 368 153 722 421 248 538 806
Investments 9 15 910 475 75 152 433 12 346 864
Property, plant and equipment 176 846 17 838 15 136
Deferred taxation asset 6 908 482 659 187 737 015
Total non-current assets 319 264 290 256 027 130 290 988 960
Current assets
Investments 9 34 322 404 — 67 221 894
Short term loans receivable 10, 17 19 056 917 — —
Trade and other receivables 5 118 880 2 147 757 4 527 803
Treasury investments 11 — 31 933 437 2 604 979
Cash and cash equivalents 31 997 044 71 256 824 45 111 775
Assets held for sale 12 2 043 750 — —
Total current assets 92 538 995 105 338 018 119 466 451
Total assets 411 803 285 361 365 148 410 455 411
Equity
Share capital 13 308 913 797 304 161 079 305 671 992
Retained earnings 35 197 243 14 261 661 40 269 910
Foreign currency translation reserve 4 297 529 717 428 7 198 696
Shareholder equity attributable to the owners of the group 348 408 569 319 140 168 353 140 598
Non-current liabilities
Interest bearing borrowings 14 219 630 13 984 633 14 779 769
Financial instruments 14 6 413 512 23 176 439 6 545 482
Deferred taxation liability 6 1 430 625 713 904 1 143 646
Total non-current liabilities 22 063 767 37 874 976 22 468 897
Current liabilities
Interest bearing borrowings 751 848 890 919 968 120
Financial instruments 14 32 886 514 — 26 378 571
Trade and other payables 5 215 677 3 459 085 4 795 360
Provisions 92 290 — —
Deferred consideration 2 384 620 — 2 703 865
Total current liabilities 41 330 949 4 350 004 34 845 916
Total liabilities 63 394 716 42 224 980 57 314 813
Total shareholder equity and liabilities 411 803 285 361 365 148 410 455 411
Actual number of ordinary shares in issue 294 455 630 290 602 608 291 787 889
Net asset value per share (euro cents) 118,3 109,8 121,0
Adjusted net asset value per share (euro cents)# 118,5 109,8 121,2
# Net asset value per share as adjusted for deferred taxation
The notes form part of these condensed interim consolidated financial statements.
These condensed interim consolidated financial statements were approved by the board of directors on 24 February 2016
and signed on their behalf by:
Ron Spencer Malcolm Levy
Chairman Chief financial officer
Condensed consolidated statement of changes in equity
For the six months ended 31 December 2015
Foreign
Retained currency
Share (loss)/ translation
Euro Note capital earnings reserve Total
Balance at 30 June 2014 (audited) 289 978 080 (1 276 580) 622 928 289 324 428
Comprehensive income for the period
Profit for the period — 19 124 739 — 19 124 739
Other comprehensive income — — 94 500 94 500
Total comprehensive income for the period — 19 124 739 94 500 19 219 239
Transactions with the owners of the group
Issue of shares 13 14 182 999 — — 14 182 999
Distributions — (3 586 498) — (3 586 498)
Total transactions with the owners of the group 14 182 999 (3 586 498) — 10 596 501
Balance at 31 December 2014 304 161 079 14 261 661 717 428 319 140 168
Comprehensive income for the period
Profit for the period — 29 350 169 — 29 350 169
Other comprehensive income — — 6 481 268 6 481 268
Total comprehensive income for the period — 29 350 169 6 481 268 35 831 437
Transactions with the owners of the group
Issue of shares 13 1 510 913 — — 1 510 913
Distributions — (3 341 920) — (3 341 920)
Total transactions with the owners of the group 1 510 913 (3 341 920) — (1 831 007)
Balance at 30 June 2015 (audited) 305 671 992 40 269 910 7 198 696 353 140 598
Comprehensive income for the period
Profit for the period — 1 346 657 — 1 346 657
Other comprehensive loss — — (2 901 167) (2 901 167)
Total comprehensive income for the period — 1 346 657 (2 901 167) (1 554 510)
Transactions with the owners of the group
Issue of shares 13 3 241 805 — — 3 241 805
Distributions — (6 419 324) — (6 419 324)
Total transactions with the owners of the group 3 241 805 (6 419 324) — (3 177 519)
Balance at 31 December 2015 308 913 797 35 197 243 4 297 529 348 408 569
The notes form part of these condensed interim consolidated financial statements.
Condensed consolidated statement of cash flows
For the six months ended 31 December 2015
Six-month Six-month Audited
period ended period ended Year ended
31 December 31 December 30 June
Euro 2015 2014 2015
Profit for the period/year 1 346 657 19 124 739 48 474 908
Cash generated from operating activities 743 083 299 519 4 261 555
Cash used in investing activities (10 385 043) (133 320 881) (163 395 452)
Cash used in financing activities (3 886 730) (3 530 316) (6 092 501)
Net decrease in cash and cash equivalents (13 528 690) (136 551 678) (165 226 398)
Cash and cash equivalents at the beginning of the period/year 45 111 775 205 800 188 205 800 188
Effect of exchange rate fluctuations 413 959 2 008 314 4 537 985
Cash and cash equivalents at the end of the period/year 31 997 044 71 256 824 45 111 775
Notes to the condensed consolidated financial statements
For the six months ended 31 December 2015
1. Reporting entity
MAS Real Estate Inc. (the "company" or "MAS") is domiciled in the British Virgin Islands ("BVI"). These condensed interim
consolidated financial statements as at, and for the six-month period ended 31 December 2015, comprise the company and
its subsidiaries (together referred to as the "group" and individually as "group entities").
MAS is a real estate investment company with a portfolio of commercial properties in Western Europe. The group aims
to provide investors with an attractive, sustainable euro-based distribution and growth in value over time through acquisition,
development and asset management strategy. The current investment focus of the group is on Germany, Switzerland and
the United Kingdom.
2. Basis of preparation
Statement of compliance
These condensed interim consolidated financial statements have been prepared in accordance with International Financial
Reporting Standard IAS 34: Interim Financial Reporting, the Johannesburg Stock Exchange ("JSE") Listings Requirements,
Luxembourg Stock Exchange ("LuxSE") rules and regulations and applicable legal and regulatory requirements of the BVI
Companies Act 2004.
3. Significant accounting policies
Other than outlined below, the accounting policies applied in the preparation of these condensed interim consolidated
financial statements are consistent with those applied in the preparation of the consolidated financial statements for the
year ended 30 June 2015.
The following new accounting policy has been applied in the period:
Assets held for sale
Non-current assets, or disposal groups comprising assets and liabilities are classified as held for sale if it is highly probable that
they will be recovered primarily through their sale rather than through continuing use, and the following criteria are met:
- Management is committed to a plan to sell;
- The asset is available for immediate sale and an active programme to locate a buyer is initiated;
- The sale is highly probable, within 12 months of classification as held for sale;
- The asset is being actively marketed for a reasonable sale price in relation to its fair value; and
- Actions required to complete the plan indicate that it is unlikely that the plan will be significantly changed or withdrawn.
Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less costs to
sell. However, the measurement provisions of IFRS 5: Non-current assets held for sale and discontinued operations do not apply
to investment property, which continues to be measured at fair value in accordance with the groups accounting policy for
investment property.
New and amended standards and interpretations not yet adopted
Below is a summary of amendments/improvements to standards and interpretations that are not yet effective and were
not early adopted:
IASB effective for
annual periods
Amendments/improvements to standards and interpretations not yet effective beginning on or after
Accounting for Acquisitions of Interests in Joint Operations – Amendments to IFRS 11 1 January 2016
Clarification of Acceptable Methods of Depreciation and Amortisation – Amendments to IAS 16 and 1 January 2016
IAS 38
Equity Method in Separate Financial Statements – Amendments to IAS 27 1 January 2016
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture – 1 January 2016
Amendments to IFRS 10 and IAS 28
Annual Improvements to IFRSs – 2012-2014 Cycle 1 January 2016
Investment entities: Applying the Consolidation Exception – Amendments to IFRS 10, IFRS 12 and 1 January 2016
IAS 28
Disclosure Initiative – Amendments to IAS 1 1 January 2016
Amendments to IAS 16 and IAS 41 – bringing bearer plant into the scope of IAS 16 and IAS 41 1 January 2016
IFRS 9 (2014) – Financial instruments 1 January 2018
IFRS 15 Revenue from Contracts with Customers 1 January 2018
IFRS 16 Leases 1 January 2019
Management has not yet assessed the impact of adopting these standards and interpretations.
4. Revenue
Six-month Six-month Audited
period ended period ended Year ended
31 December 31 December 30 June
Euro 2015 2014 2015
Rental income 6 586 450 2 625 058 8 733 519
Service charge 695 687 — 589 637
7 282 137 2 625 058 9 323 156
The future aggregate minimum rental receivable under non-cancellable operating leases is as follows:
Audited
As at As at As at
31 December 31 December 30 June
Euro 2015 2014 2015
No later than 1 year 15 292 948 8 240 986 13 327 092
Greater than 1 year and less than 5 years 65 655 806 45 320 480 62 612 949
Greater than 5 years 121 583 632 109 561 871 121 736 011
202 532 386 163 123 337 197 676 052
5. Fair value adjustments
Six-month Six-month Audited
period ended period ended Year ended
31 December 31 December 30 June
Euro 2015 2014 2015
Fair value adjustments
Gain on fair value of investments 7 791 510 41 394 078 46 786 228
Gain on fair value of treasury investments 309 149 1 847 018 4 301 694
(Loss)/gain on fair value of investment property (2 074 710) (5 732 013) 5 718 442
Loss on fair value of financial instruments (3 647 911) (21 212 392) (28 929 000)
2 378 038 16 296 691 27 877 364
Summarised as follows:
Fair value movement in investments
Karoo Fund 7 076 240 40 130 514 45 651 311
Sirius Real Estate Limited ("Sirius") 715 270 1 263 564 1 134 917
9 7 791 510 41 394 078 46 786 228
Fair value movement in treasury investments
Treasury investments 309 149 1 847 018 4 301 694
11 309 149 1 847 018 4 301 694
Fair value movement in investment property
United Kingdom (677 049) (2 105 788) 11 837 028
Germany (1 397 661) (3 626 225) (5 502 304)
Switzerland — — (616 282)
8 (2 074 710) (5 732 013) 5 718 442
Fair value movement in financial instruments
Interest rate swaps (46 837) (447 703) (312 488)
Attacq Limited ("Attacq") financial liability 14 (3 601 074) (20 764 689) (24 896 101)
Development management fee 14 — — (1 488 165)
Priority participating profit dividend 14 — — (2 232 246)
(3 647 911) (21 212 392) (28 929 000)
6. Taxation
The company, which is domiciled in the British Virgin Islands, is not subject to tax in that jurisdiction. Operating subsidiaries
of the group, however, are exposed to taxation in the jurisdictions in which they operate and, potentially, in the jurisdictions
through which the investment companies are held.
In the UK, the group provides for taxation at the rate of 20% of taxable profits, being net rentals less allowable
property expenses and interest. In the current period, UK normal taxation of EUR322 347 (December 2014: EUR87 097;
June 2014: EUR241 594) has been provided for.
In Switzerland, the group is liable to cantonal and federal taxes, in addition to a wealth tax. The effective income tax rate
for income from the Swiss portfolio is 20,673%, with wealth tax charged at a rate of 0,1695% of net assets. For the period
under review the Swiss portfolio was in a taxable loss position as a result of capital allowances on the property, and hence
no income tax is payable. A wealth tax payable of EUR3 426 (December 2014: EUR3 722; June 2014: EUR10 652) has been accrued.
In Germany, the group is taxed on net rental income, with an effective corporate income tax and solidarity tax rate of
15,825%. For the year under review the German portfolio corporation income tax payable of EUR176 505 (December 2014:
EUR61 445; June 2014: EUR119 201) has been accrued.
Corporate tax charge and deferred taxation
Six-month Six-month Audited
period ended period ended Year ended
31 December 31 December 30 June
Euro 2015 2014 2015
Current year taxation (502 278) (152 263) (371 447)
Deferred taxation income/(expense) (142 521) 526 128 272 259
Tax expense (644 799) 373 865 (99 188)
Reconciliation of deferred taxation:
Deferred taxation brought forward 406 631 873 399 873 399
Current year deferred taxation 142 521 (526 128) (272 259)
Foreign exchange movement in Other Comprehensive Income ("OCI") (27 009) (292 554) (194 509)
Deferred taxation liability carried forward 522 143 54 717 406 631
The deferred taxation liability results from the following types of differences:
Audited
As at As at As at
31 December 31 December 30 June
Euro 2015 2014 2015
Deferred taxation on temporary differences between accounting and fiscal
value of investment property 908 482 659 187 737 015
Deferred taxation asset 908 482 659 187 737 015
Deferred taxation on temporary differences between accounting and fiscal
value of investment property 1 430 625 713 904 1 143 646
Deferred taxation liability 1 430 625 713 904 1 143 646
Net deferred taxation liability 522 143 54 717 406 631
Reconciliation of effective taxation rate
Six-month Six-month Audited
period ended period ended Year ended
31 December 31 December 30 June
Euro % 2015 % 2014 % 2015
Profit before taxation 1 991 456 18 750 875 48 574 096
Taxation using the company's domestic rate 0,00 — 0,00 — 0,00 —
Effect of tax rates in foreign jurisdictions (25,23) (502 278) (0,81) (152 264) (0,76) (371 447)
Change in recognised deductible temporary
differences
- Revaluation of investment property 12,12 241 286 3,89 729 304 2,14 1 040 682
- Change in tax base (19,27) (383 807) (1,09) (203 176) (1,58) (768 423)
(32,38) (644 799) 1,99 373 864 (0,20) (99 188)
7. Goodwill
The group's goodwill comprises:
Audited
As at As at As at
31 December 31 December 30 June
Euro 2015 2014 2015
New Waverley 10 Limited 1 533 560 1 445 049 1 582 184
MAS Property Advisors Limited 26 915 559 25 030 202 27 768 955
28 449 119 26 475 251 29 351 139
Reconciliation of the group's carrying amount of goodwill:
MAS Property New
Advisors Waverley 10
Euro Limited Limited Total
Cost
Opening balance 1 July 2014 (audited) — 1 371 537 1 371 537
Acquisition of subsidiary 24 970 329 — 24 970 329
Foreign exchange movement in OCI 59 873 73 512 133 385
Closing balance 31 December 2014 25 030 202 1 445 049 26 475 251
Foreign exchange movement in OCI 2 738 753 137 135 2 875 888
Closing balance 30 June 2015 (audited) 27 768 955 1 582 184 29 351 139
Foreign exchange movement in OCI (853 396) (48 624) (902 020)
Closing balance 31 December 2015 26 915 559 1 533 560 28 449 119
Carrying amount 31 December 2014 25 030 202 1 445 049 26 475 251
Carrying amount 30 June 2015 (audited) 27 768 955 1 582 184 29 351 139
Carrying amount 31 December 2015 26 915 559 1 533 560 28 449 119
Impairment
New Waverley 10 Limited
There was no indicator of impairment at 31 December 2015, accordingly, no impairment test was performed. Goodwill will
be tested for impairment at 30 June 2016. No impairment charge arose as a result of the group's previous annual impairment
test of goodwill in relation to New Waverley 10 Limited (December 2014: nil; June 2015: nil).
MAS Property Advisors Limited
No impairment charge arose as a result of the group's impairment test of goodwill in relation to MAS Property Advisors
Limited.
The recoverable amount of the MAS Property Advisors Limited Cash Generating Unit ("CGU") was based on the value
in use, as determined using a discounted cash flow. The cash flow was forecast for a period of 8,5 years, which is the remain-
ing term of the investment advisory agreement. Budgeted earnings before interest, tax, depreciation and amortisation
("EBITDA") was based on expectations of future outcomes taking into account past experience adjusted for anticipated net
asset growth of the group and increases in operating expenses.
The following key assumptions were used in the impairment assessment:
Inputs
Pre-tax discount rate 7,16%
Annual increase in revenue 8,00% – 14,00%
Annual increase in operating expenses 0,32% – 5,00%
Budgeted period 8,5 years
No cash flows have been assumed beyond the budgeted period, and accordingly no growth is assumed beyond the
forecast period. Management has determined that a reasonably possible change to the key assumptions would not result in
impairment.
8. Investment property
The group's investment property comprises income-generating and development property:
Audited
As at As at As at
31 December 31 December 30 June
Euro 2015 2014 2015
Income-generating property 169 911 602 102 787 078 164 390 519
Development property 103 907 766 50 935 343 84 148 287
273 819 368 153 722 421 248 538 806
The group's investment property is measured at fair value. The group holds three classes of investment property: Retail;
Industrial; and mixed use developments under construction ("Mixed use") in three jurisdictions: UK; Germany; and
Switzerland.
As at 31 December 2015
Development
property Income-generating property
UK UK Germany Switzerland
Euro Mixed use Industrial Retail Retail Industrial Total
Opening balance 84 148 287 37 602 476 2 811 400 102 830 000 21 146 643 248 538 806
Property acquisitions — — — 10 315 400 — 10 315 400
Capitalised expenditure 21 551 678 4 088 — 22 131 — 21 577 897
Capitalised acquisition costs — — — 1 089 375 — 1 089 375
Capitalised retentions 796 643 — — 270 755 — 1 067 398
Fair value adjustment (note 5) — — (677 049) (1 397 661) — (2 074 710)
Reclassification to assets held for — — (2 043 750) — — (2 043 750)
sale (note 12)
Foreign exchange movement in OCI (2 588 842) (1 147 220) (90 601) — (824 385) (4 651 048)
Closing balance 103 907 766 36 459 344 — 113 130 000 20 322 258 273 819 368
As at 31 December 2014
Development
property Income-generating property
UK UK Germany Switzerland
Euro Mixed use Industrial Retail Retail Industrial Total
Opening balance 25 101 270 8 359 590 4 866 030 7 900 000 18 524 952 64 751 842
Property acquisitions 16 262 250 24 821 334 — 35 333 931 — 76 417 515
Capitalised expenditure 8 742 653 — — — 9 428 8 752 081
Capitalised acquisition costs 953 220 1 439 409 — 5 855 355 — 8 247 984
Fair value adjustment (note 5) (839 576) (1 266 212) — (3 626 225) — (5 732 013)
Foreign exchange movement in OCI 715 526 224 198 141 032 — 204 256 1 285 012
Closing balance 50 935 343 33 578 319 5 007 062 45 463 061 18 738 636 153 722 421
As at 30 June 2015 (audited)
Development
property Income-generating property
UK UK Germany Switzerland
Euro Mixed use Industrial Retail Retail Industrial Total
Opening balance 25 101 270 8 359 590 4 866 030 7 900 000 18 524 952 64 751 842
Property acquisitions 16 262 250 24 821 334 — 90 488 931 — 131 572 515
Capitalised expenditure 22 194 819 — — — 183 723 22 378 542
Capitalised acquisition costs — 1 441 896 — 7 239 508 — 8 681 404
Capitalised retentions — — — 2 703 865 — 2 703 865
Fair value adjustment (note 5) 14 881 638 (523 880) (2 520 730) (5 502 304) (616 282) 5 718 442
Foreign exchange movement in OCI 5 708 310 3 503 536 466 100 — 3 054 250 12 732 196
Closing balance 84 148 287 37 602 476 2 811 400 102 830 000 21 146 643 248 538 806
Fair value
Acquisitions during the period are carried at fair value being the independent valuation at the date of acquisition. Development
properties are carried at fair value. Where fair value cannot be reliably determined, but for which the group expects the fair
value will be reliably determinable as construction progresses, they are measured at cost less impairment until fair value
becomes reliably determinable, as cost less impairment is the best estimate of fair value. Changes in fair values are recognised
as gains and losses in profit or loss. There are no realised gains in the current period (December 2014: EURnil; June 2015 EURnil).
On 22 December 2015 the group acquired a retail warehouse in Germany tenanted by OBI for EUR10 315 000.
Operating leases
Investment properties are subject to operating leases. The group's investment property portfolio generated EUR6 586 450
(December 2014: EUR2 625 058; June 2015: EUR8 733 519) in rental income and EUR695 687 (December 2014: EUR nil; June 2015:
EUR589 637) in service charge income. No rental income or service charge income generated by investment property was
contingent or variable. Portfolio related expenses of EUR1 783 557 (December 2014: EUR489 420; June 2015: EUR2 036 856) have
been recognised in profit or loss.
Interest bearing borrowings
Bank borrowings of EUR14 971 478 (December 2014: EUR14 875 552; June 2015: EUR15 747 889) are secured on retail and commercial
income-generating property in Germany and Switzerland with a fair value of EUR28 272 258 (December 2014: EUR26 638 636;
June 2015: EUR29 096 643). On 21 December 2015 the group entered into three loan agreements for a combined facility of
EUR30 550 000 on retail income generating property in Germany with a fair value of EUR47 680 000. This facility was not drawn
down as at 31 December 2015, see note 18.
Capital commitments
The group has capital commitments of EUR25 467 195 (December 2014: EUR15 028 153; June 2015: EUR43 863 249) in respect of
capital expenditures contracted for at the reporting date, see note 18.
Related parties
The group entity New Waverley 10 Limited has a development management agreement with New Waverley Advisers Limited,
a related party, for the development and construction of the New Waverley mixed use site in Edinburgh. This development
management agreement includes development management fees, together with a profit participation on the 'B shares'. The
group has provided for the fees proportionate to the fair value adjustment in the New Waverley development, see notes 14 and 17.
The group has capitalised costs incurred from related parties amounting to EUR17 790 498 (December 2014: EUR8 560 753;
June 2015: EUR19 958 467) during the period, see note 17.
Measurement of fair values
Valuation process for level 3 investment property
For all investment properties their current use equates to the highest and best use. The external valuations received are
initially reviewed by the relevant internal asset manager and compared to their expectation of what fair value would be
for individual investment properties. If the asset manager is in agreement with the valuation, the valuation reports are then
checked by the finance team to confirm their numerical and methodological accuracy. Lastly, the investment property
valuation is reviewed by the Audit Committee.
Fair value hierarchy
The fair value measurement of all the group's investment properties has been categorised as level 3 in the fair value
hierarchy based upon the significant unobservable inputs into the valuation technique used.
The following table shows the carrying amount and fair value of the group's investments in the fair value hierarchy:
As at 31 December 2015 Fair value
Euro Carrying amount Level 1 Level 2 Level 3
Income-generating property 169 911 602 — — 169 911 602
Development property 103 907 766 — — 103 907 766
273 819 368 — — 273 819 368
As at 31 December 2014 Fair value
Euro Carrying amount Level 1 Level 2 Level 3
Income-generating property 102 787 078 — — 102 787 078
Development property 50 935 343 — — 50 935 343
153 722 421 — — 153 722 421
As at 30 June 2015 (audited) Fair value
Euro Carrying amount Level 1 Level 2 Level 3
Income-generating property 164 390 519 — — 164 390 519
Development property 84 148 287 — — 84 148 287
248 538 806 — — 248 538 806
Valuation technique and significant unobservable inputs
The following table shows the valuation technique used in measuring the fair value of investment property, as well as the
significant unobservable inputs used.
As at 31 December 2015, 31 December 2014 and June 2015
Inter-relation between key
Investment Significant unobservable inputs and fair value
property type Valuation technique unobservable inputs measurement
Income-generating Discounted cash flows: The valuation – Risk adjusted The estimated fair value would
property model considers the present value of discount rates increase (decrease) if:
net cash flows to be generated from – Market rent – Expected market rental growth
the property, taking into account – Net rental growth were higher (lower)
expected rental growth rate, void – Reversionary – The occupancy rate were higher
periods, occupancy rate, lease incentive discount rate (lower)
costs such as rent-free periods and – The reversionary discount rate
other costs not paid by tenants. The were lower (higher)
expected net cash flows are discounted – The risk adjusted discount rate
using risk-adjusted discount rates. were lower (higher)
Among other factors, the discount rate
estimation considers the quality of a
building and its location, tenant credit
quality and lease terms.
Development Discounted cash flows less cost to – Risk adjusted The estimated fair value would
property complete: The discounted cash flow discount rates increase (decrease) if:
is determined on the same basis as – Market rent – Expected market rental growth
income-generating properties based – Net rental growth were higher (lower)
on the completed development – Reversionary – The occupancy rate were higher
property. discount rate (lower)
– Costs to complete – The reversionary discount rate
Costs to complete as determined by were lower (higher)
external quantity surveyors are deduct- – The risk adjusted discount rate
ed from the discounted cash flow. were lower (higher)
– The costs to complete were lower
(higher)
– Completion dates were earlier
(later)
Cost less impairment: Costs directly – Capitalised costs The estimated fair value would
associated with the construction of – Impairment increase (decrease) if:
investment property are capitalised. - Impairment were lower (higher)
An impairment review is performed
to the extent that there are indicators
of impairment. As fair value cannot be
reliably determined cost is the best
indication of fair value.
Income-generating investment property held at 31 December 2015 and the New Waverley development in Edinburgh
continue to be held at their 30 June 2015 fair value for which a sensitivity analysis is available in the group's integrated
annual report 2015. Development properties are carried at capitalised cost less impairment, which is determined to be the
best estimate of fair value therefore a sensitivity analysis is not applicable.
9. Investments
The carrying amount of the group's investments was as follows:
Audited
As at As at As at
31 December 31 December 30 June
Euro 2015 2014 2015
Non-current
Karoo Fund — 64 098 804 —
Sirius 15 910 475 11 053 629 12 346 864
15 910 475 75 152 433 12 346 864
Current
Karoo Fund 34 322 404 — 67 221 894
34 322 404 — 67 221 894
50 232 879 75 152 433 79 568 758
Investments are classified as fair value through profit or loss ("FVTPL"). Accordingly they are measured at fair value at
the reporting date with changes in fair value being recognised in profit or loss. These investments have been classified as
FVTPL because the contractual terms of the financial assets do not give rise to cash flows that are solely payments of
principal and interest on the amount outstanding.
On 1 September 2015 the Sirius shares held as treasury investments of EUR2 871 591 were transferred to the investments
portfolio as management intends to hold the shares for the longer term rather than as a short term treasury investment.
The Sirius investment has been fair valued at 31 December 2015 and a gain of EUR715 270 (December 2014: EUR1 263 564; June
2015: EUR1 134 917) was recognised in fair value adjustments in profit or loss.
The Karoo fund is classified as FVTPL. On 28 August 2015 and 26 October 2015 the Karoo Fund compulsorily redeemed
a portion of the investment amounting to EUR12 410 441 and EUR25 388 994 respectively. At 31 December 2015 the investment was
fair valued to EUR34 322 404 (December 2014: EUR64 098 804; June 2015: EUR67 221 894) and a gain of EUR7 076 240 (December
2014: EUR40 130 514; June 2015: EUR45 651 311) was recognised in fair value adjustments in profit or loss. As at 31 December 2015
a liability of EUR29 112 780 (December 2014: EUR20 612 124; June 2015: EUR26 378 571) is due to Attacq when the investment in the
Karoo Fund is realised, see note 14. On 31 January 2016 the group's remaining shares in the Karoo Fund were redeemed, see
note 19.
Reconciliation of investments
Audited
As at As at As at
31 December 31 December 30 June
Euro 2015 2014 2015
Opening balance 79 568 758 35 743 617 35 743 617
Reclassification from treasury investments (note 11) 2 871 591 — —
Acquisition — 10 178 432 10 178 432
Redemption (37 799 435) (11 796 176) (20 214 050)
Fair value movement (note 5) 7 791 510 41 394 078 46 786 228
Foreign exchange movement in OCI (2 199 545) (367 518) 7 074 531
Closing balance 50 232 879 75 152 433 79 568 758
Fair value hierarchy
The following table shows the carrying amount and fair value of the group's investments in the fair value hierarchy:
As at 31 December 2015 Fair value
Euro Carrying amount Level 1 Level 2 Level 3
Karoo Fund 34 322 404 — 34 322 404 —
Sirius 15 910 475 15 910 475 — —
50 232 879 15 910 475 34 322 404 —
As at 31 December 2014 Fair value
Euro Carrying amount Level 1 Level 2 Level 3
Karoo Fund 64 098 804 — 64 098 804 —
Sirius 11 053 629 11 053 629 — —
75 152 433 11 053 629 64 098 804 —
As at 30 June 2015 (audited) Fair value
Euro Carrying amount Level 1 Level 2 Level 3
Karoo Fund 67 221 894 — 67 221 894 —
Sirius 12 346 864 12 346 864 — —
79 568 758 12 346 864 67 221 894 —
Valuation techniques and unobservable inputs
The shares in the Karoo Fund are not listed in an active market, however, all inputs into the Karoo Fund's NAV valuation are
observable as the underlying investments are listed, with the exception of a convertible debenture that is not significant to
the fair valuation. As such level 2 in the fair value hierarchy is considered to be appropriate.
The following table shows the valuation technique used to measure investments held at fair value as well as the inputs
used for level 2 investments.
As at 31 December 2015, 31 December 2014 and 30 June 2015
Level 2
Inter-relationship between inputs
Investments Valuation technique Inputs and fair value measurement
Karoo Fund Fair value is based on the NAV per share: The estimated fair value would
fund's reported net asset value 31 December 2015 – EUR2 236 increase (decrease) if:
("NAV"). 31 December 2014 – EUR1 730 – NAV per share were higher
30 June 2015 – EUR2 067 (lower)
The NAV of the fund is valued
by the fund's investment All inputs used by the fund's
manager as follows: investment manager in
– Investments in equities by determining the fund's NAV are
the Karoo Fund are valued observable with the exception
at quoted prices in active of a convertible debenture that
markets is not significant to the input
– Where there is not an for fair valuation.
active market, fair value is
based on broker quotes on
similar contracts that are
traded in an active market
and the quotes reflect the
actual transactions in similar
instruments
10. Short term loans receivable
The carrying amount of the group's short term loans receivables was as follows:
Audited
As at As at As at
31 December 31 December 30 June
Euro 2015 2014 2015
Attacq 19 056 917 — —
19 056 917 — —
On 30 November 2015 the group provided a short term loan to Attacq, a related party, see note 17. The group provided
EUR18 920 000 over a term of a maximum of 3 months and a minimum of 1 month with early repayment permitted thereafter
without penalty, subject to interest of 8% per annum. The group has taken two forms of security, firstly the amount payable
to Attacq under the Karoo transaction of EUR29 112 780, see note 14; and Attacq's shares in the company owning Nova
Aventis (Stenham European Shopping Centre Fund (Guernsey) to the value of EUR22 931 521). The loan is fully repayable on
29 February 2016.
This short term loan receivable has been classified as a financial asset at amortised cost, accordingly on initial recognition
it was recognised at fair value and subsequently measured at amortised cost using the effective interest method. This
financial asset has been classified as amortised cost because the objective is to hold and to collect contractual cash flows
that are solely payments of principle and interest on the amount outstanding.
The carrying amount of the Attacq short term loan receivable is a reasonable approximation of its fair value.
11. Treasury investments
The carrying amount of the group's treasury investments was as follows:
Audited
As at As at As at
31 December 31 December 30 June
Euro 2015 2014 2015
Sirius — — 2 556 524
Other — 31 933 437 48 455
— 31 933 437 2 604 979
During the period the Sirius investment of EUR2 871 591 was reclassified to investments as it is managements' intention to hold
the investment for the longer term rather than as a short term treasury investment.
Reconciliation of treasury investments
Audited
As at As at As at
31 December 31 December 30 June
Euro 2015 2014 2015
Opening balance 2 604 979 — —
Investment — 30 000 000 30 000 000
Fees (42 537) 86 419 —
Redemption — — (31 696 715)
Fair value movement (note 5) 309 149 1 847 018 4 301 694
Reclassification to investments (note 9) (2 871 591) — —
Closing balance — 31 933 437 2 604 979
12. Assets held for sale
The carrying amount of the group’s asset held for sale was as follows:
Audited
As at As at As at
31 December 31 December 30 June
Euro 2015 2014 2015
Opening balance — — —
Reclassification from investment property (note 8) 2 043 750 — —
Closing balance 2 043 750 — —
On 22 December 2015 the group exchanged contracts to sell Sauchiehall Street for GBP1 500 000 (approx. EUR2 043 750).
On 22 January 2016 the group completed on the sale of Sauchiehall Street, see note 19.
Measurement of fair values
Fair value hierarchy
The fair value measurement of all the group's asset held for sale has been categorised as level 3 in the fair value hierarchy
based upon the significant unobservable inputs into the valuation technique used.
The following table shows the carrying amount and fair value of the group's investments in the fair value hierarchy:
As at 31 December 2015 Fair value
Euro Carrying amount Level 1 Level 2 Level 3
Sauchiehall Street investment property 2 043 750 — — 2 043 750
2 043 750 — — 2 043 750
Valuation technique and significant unobservable inputs
The following table shows the valuation technique used in measuring the fair value of assets held for sale, as well as the
significant unobservable inputs used.
Inter-relation between key
unobservable inputs and fair value
Valuation technique Significant unobservable inputs measurement
Discounted cash flows: The valuation – Risk adjusted discount rates The estimated fair value would
model considers the present value of – Market rent increase (decrease) if:
net cash flows to be generated from – Net rental growth – Expected market rental growth
the property, taking into account – Reversionary discount rate were higher (lower)
expected rental growth rate, void periods, – The occupancy rate were higher
occupancy rate, lease incentive costs such (lower)
as rent-free periods and other costs not – The reversionary discount rate were
paid by tenants. The expected net cash lower (higher)
flows are discounted using risk-adjusted – The risk adjusted discount rate were
discount rates. Among other factors, lower (higher)
the discount rate estimation considers
the quality of a building and its location,
tenant credit quality and lease terms.
13. Share capital
The ordinary share capital of the company has no par value and in addition the company has unlimited authorised share
capital as it is incorporated in the British Virgin Islands as a BVI Business company.
Number of Share capital
shares Euro
Balance at 1 July 2014 (audited) 279 483 999 289 978 080
Issued during the period
– Acquisition of MAS Property Advisors Limited 9 751 326 12 489 097
– Scrip distributions 1 367 283 1 693 902
Balance at 31 December 2014 290 602 608 304 161 079
Issued during the period
– Scrip distributions 1 185 281 1 510 913
Balance at 30 June 2015 (audited) 291 787 889 305 671 992
Issued during the period
– Scrip distributions 2 667 741 3 241 805
Balance at 31 December 2015 294 455 630 308 913 797
During the period the group incurred nil (December 2014: EUR10 903; June 2015: EUR13 029) expenses in relation to issuing
shares. Prior period amounts were offset against share capital.
14. Financial instruments
The carrying amounts of the group's financial instruments were as follows:
Audited
As at As at As at
31 December 31 December 30 June
Euro 2015 2014 2015
Non-current
Derivative financial instruments 2 592 709 2 564 315 2 603 535
Financial liabilities 3 820 803 20 612 124 3 941 947
6 413 512 23 176 439 6 545 482
Current
Financial liabilities 32 886 514 — 26 378 571
32 886 514 — 26 378 571
39 300 026 23 176 439 32 924 053
Derivative financial instruments
Derivative financial instruments comprise level 2 interest rate swaps, for which further information is available in the group's
integrated annual report 2015.
Financial liabilities
The group's financial liabilities comprise:
Audited
As at As at As at
31 December 31 December 30 June
Euro 2015 2014 2015
Non-current
Development management fee 1 528 321 — 1 576 779
Priority participating profit dividend 2 292 482 — 2 365 168
Attacq financial liability — 20 612 124 —
3 820 803 20 612 124 3 941 947
Current
Santon Developments plc ("Santon") financial liability 3 773 734 — —
Attacq financial liability 29 112 780 — 26 378 571
32 886 514 — 26 378 571
36 707 317 20 612 124 30 320 518
Santon financial liability
The group entered into a revenue sharing agreement with Santon, the terms of which require the group to pay Santon
GBP2 750 000 (approx. EUR3 773 734) on receipt of implementable planning. On 10 December 2015 The South Downs National
Park Authority's planning committee approved in principle the plans to develop the North Street Quarter development in
Lewes.
Final written permission will be granted subject to section 106 planning conditions being met.
This financial liability has been classified as FVTPL by opting to use the fair value option. This reduces the accounting
mismatch by matching the fair value of the liability with the fair value movement in investment property.
Reconciliation of financial liabilities:
Priority
Attacq Santon Development participating
financial financial management profit
Euro liability liability fee dividend Total
Balance at 1 July 2014 (audited) — — — — —
Fair value adjustment (note 5) 20 764 689 — — — 20 764 689
Foreign exchange movement in OCI (152 565) — — — (152 565)
Balance at 31 December 2014 20 612 124 — — — 20 612 124
Fair value adjustment (note 5) 4 131 412 — 1 488 165 2 232 246 7 851 823
Foreign exchange movement in OCI 1 635 035 — 88 614 132 922 1 856 571
Balance at 30 June 2015 (audited) 26 378 571 — 1 576 779 2 365 168 30 320 518
Assumed on grant of planning permission — 3 773 734 — — 3 773 734
Fair value adjustment (note 5) 3 601 074 — — — 3 601 074
Foreign exchange movement in OCI (866 865) — (48 458) (72 686) (988 009)
Balance at 31 December 2015 29 112 780 3 773 734 1 528 321 2 292 482 36 707 317
On 31 January 2016 the group's remaining shares in the Karoo Fund were redeemed. In accordance with the purchase
agreement of the Karoo Fund, Attacq is entitled to a contingent adjustment in the consideration paid to the group. The
contingent adjustment is share based and will result in shares being issued to Attacq, see note 19.
Measurement of fair values
Fair value hierarchy
The following table shows the carrying amount and fair value of the group's financial liabilities in the fair value hierarchy:
As at 31 December 2015 Fair value
Euro Carrying amount Level 1 Level 2 Level 3
Development management fee 1 528 321 — — 1 528 321
Priority participating profit dividend 2 292 482 — — 2 292 482
Santon financial liability 3 773 734 — — 3 773 734
Attacq financial liability 29 112 780 — 29 112 780 —
36 707 317 — 29 112 780 7 594 537
As at 31 December 2014 Fair value
Euro Carrying amount Level 1 Level 2 Level 3
Attacq financial liability 20 612 124 — 20 612 124 —
20 612 124 — 20 612 124 —
As at 30 June 2015 (audited) Fair value
Euro Carrying amount Level 1 Level 2 Level 3
Development management fee 1 576 779 — — 1 576 779
Priority participating profit dividend 2 365 168 — — 2 365 168
Attacq financial liability 26 378 571 — 26 378 571 —
30 320 518 — 26 378 571 3 941 947
Valuation techniques and unobservable inputs
The following table shows the valuation technique used to measure investments held at fair value as well as the inputs used
for level 2 and significant unobservable inputs for level 3 financial liabilities:
As at 31 December 2015 and 30 June 2015
Inter-relationship between
Level 3 Significant unobservable significant unobservable inputs and
financial liability Valuation technique inputs fair value measurement
Development Discounted cash flows: – Net rental growth The estimated fair value would
management fee Fair value is based on the – Reversionary discount rate increase (decrease) if:
profitability of the New Waverley – Risk adjusted discount rates – Expected net rental growth was
and development. See note 8 for the – Cost to complete higher (lower)
valuation technique in respect of – Market rent – The reversionary discount rate
Priority New Waverley. were lower (higher)
participating – The risk adjusted discount rate
profit dividend were lower (higher)
– The costs to complete were
lower (higher)
– Market rent now higher (lower)
As at 31 December 2015
Inter-relationship between
Level 3 Significant unobservable significant unobservable inputs and
financial liability Valuation technique inputs fair value measurement
Santon financial Discounted cashflows: – Risk adjusted discount rate The estimated fair value would
liability Fair value is based on the – Contractual liability increase (decrease) if:
contractual liability. – The risk adjusted discount rate
was lower (higher)
– The contractual liability was
higher (lower)
The New Waverly development continues to be held at its 30 June 2015 fair value and therefore there has been no change
to the fair value of either the development management fee or priority participating profit dividend, for both of which a
sensitivity analysis is available in the group's integrated annual report 2015.
As at 31 December 2015, 31 December 2014 and 30 June 2015
Level 2 Inter-relationship between inputs
financial liability Valuation technique Inputs and fair value measurement
Attacq financial Fair value is based on the fund's NAV per share The estimated fair value would
liability reported net asset value ("NAV"). increase (decrease) if:
The NAV of the fund is valued by 31 December 2015 – EUR2 236 – NAV per share were higher
the fund's investment manager as 31 December 2014 – EUR1 730 (lower)
follows: 30 June 2015 – EUR2 067
– Investments in equities by
the Karoo Fund are valued All inputs used by the fund's
at quoted prices in active investment manager in
markets determining the fund's NAV are
– Where there is not an active observable with the exception
market, fair value is based of a convertible debenture that
on broker quotes on similar is not significant to the input
contracts that are traded in an for fair valuation.
active market and the quotes
reflect the actual transactions
in similar instruments
15. Operating segments
The group has the following four strategic divisions identified as reportable segments:
Reportable segment Description
Income-generating property Consists of all the income-generating investment property in the portfolio.
Development property Consists of development property namely the New Waverley development in
Edinburgh, North Street Quarter development in Lewes and the Langley development in
Chippenham.
Investments Consists of the holding in the Karoo Fund and Sirius.
Corporate and treasury Consists of all of the cash holdings outside of the other reporting segments, treasury
investments and goodwill.
The group's chief operating decision maker is determined to be the executive management team. The executive management
team analyses the performance and position of the group by aggregating the group into the four reportable segments.
These reportable segments have different risk profiles and generate revenue/income from different sources, accordingly, it
allows the executive management team to make better informed strategic decisions for the group. Management reports are
prepared and reviewed on a quarterly basis by the executive management team to facilitate this process.
31 December 2015
Income- Corporate
generating Development and
Euro property property Investments treasury Total
Statement of comprehensive income
External revenue 7 072 154 253 398 — 102 549 7 428 101
Inter-segment revenue — — — — —
Segment profit/(loss) before tax 3 180 957 (64 481) 5 828 941 (6 953 961) 1 991 456
Interest income 42 43 183 583 135 045 318 713
Interest cost (303 529) — — — (303 529)
Depreciation — — — (2 990) (2 990)
Other material non-cash items
– Fair value adjustments (2 121 548) — 5 033 132 (533 546) 2 378 038
– Exchange differences (527) — 612 226 (3 665 375) (3 053 676)
Statement of financial position
Segment non-current assets 170 820 084 105 441 326 15 910 475 27 092 405 319 264 290
Segment current assets 15 763 799 1 507 903 34 322 404 40 944 889 92 538 995
Segment non-current liabilities 18 242 964 3 820 803 — — 22 063 766
Segment current liabilities 6 459 982 5 164 232 29 112 780 593 955 41 330 949
31 December 2014
Income- Corporate
generating Development and
Euro property property Investments treasury Total
Statement of comprehensive income
External revenue 2 445 959 179 099 — — 2 625 058
Inter-segment revenue — — — — —
Segment (loss)/profit before tax (3 854 352) (900 100) 20 416 052 3 089 275 18 750 875
Interest income 35 23 — 146 442 146 500
Interest cost (276 486) (4 794) — — (281 280)
Depreciation — — — (13 646) (13 646)
Other material non-cash items
– Fair value adjustments (5 340 140) (839 576) 20 629 389 1 847 018 16 296 691
– Exchange differences 45 295 59 219 — 2 438 997 2 543 511
Statement of financial position
Segment non-current assets 103 446 288 52 380 369 75 152 433 25 048 040 256 027 130
Segment current assets 1 653 468 447 495 — 103 237 055 105 338 018
Segment non-current liabilities 17 262 852 — 20 612 124 — 37 874 976
Segment current liabilities 4 158 558 72 237 — 119 209 4 350 004
30 June 2015 (audited)
Income- Corporate
generating Development and
Euro property property Investments treasury Total
Statement of comprehensive income
External revenue 8 885 744 437 412 — — 9 323 156
Inter-segment revenue — — — — —
Segment (loss)/profit before tax (3 559 523) 11 113 166 26 749 365 14 271 088 48 574 096
Interest income 90 47 — 4 539 4 676
Interest cost (576 350) (5 024) — — (581 374)
Depreciation — — — (18 884) (18 884)
Other material non-cash items
– Fair value adjustments (9 475 685) 11 161 228 21 890 127 4 301 694 27 877 364
– Exchange differences 2 771 — 5 043 582 12 613 942 17 660 295
Statement of financial position
Segment non-current assets 165 127 532 85 730 472 12 346 864 27 784 092 290 988 960
Segment current assets 9 918 844 1 149 173 67 221 894 41 176 540 119 466 451
Segment non-current liabilities 18 526 950 3 941 947 — — 22 468 897
Segment current liabilities 5 405 117 2 637 785 26 378 571 424 443 34 845 916
Where assets/liabilities and income/expense are shared by reportable segments they are allocated to each respective
reportable segment based on a rational driver of use or ownership of the assets/liabilities or income/expense.
Geographical information
The group invests in investment property in Western Europe. The geographical information below analyses the group's rev-
enue and non-current assets by the company's country of domicile and the jurisdiction in which the underlying assets are
held: UK, Germany and Switzerland.
Revenue
Six-month Six-month Audited
period ended period ended Year ended
31 December 31 December 30 June
Euro 2015 2014 2015
BVI — — —
UK 2 584 456 923 739 3 336 893
Germany 4 220 335 1 153 790 4 806 043
Switzerland 623 310 547 529 1 180 220
7 428 101 2 625 058 9 323 156
Non-current assets
Audited
As at As at As at
31 December 31 December 30 June
Euro 2015 2014 2015
BVI — — —
UK 184 903 550 191 166 246 166 275 302
Germany 114 038 482 46 122 248 103 567 015
Switzerland 20 322 258 18 738 636 21 146 643
319 264 290 256 027 130 290 988 960
16. Earnings per share and diluted earnings per share
Basic and diluted earnings per share
The calculation of basic and diluted earnings per share has been based on the following profit attributable to ordinary
shareholders and the weighted-average number of ordinary shares outstanding.
Profit attributable to ordinary shareholders
Six-month Six-month Audited
period ended period ended Year ended
31 December 31 December 30 June
Euro 2015 2014 2015
Profit for the year attributable to the owners of the group 1 346 657 19 124 739 48 474 908
1 346 657 19 124 739 48 474 908
Weighted-average number of ordinary shares
Six-month Six-month Audited
period ended period ended Year ended
31 December 31 December 30 June
Euro 2015 2014 2015
Issued ordinary shares at 1 July 291 787 889 279 483 999 279 483 999
Effect of shares issued related to business combinations — 1 971 580 6 911 654
Effect of shares issued for scrip distributions 728 891 2 430 297 872 468
Weighted-average number of ordinary shares 292 516 780 283 885 876 287 268 121
Basic and diluted earnings per share
Six-month Six-month Audited
period ended period ended Year ended
31 December 31 December 30 June
Euro 2015 2014 2015
Profit attributable to ordinary shareholders 1 346 657 19 124 739 48 474 908
Weighted-average number of ordinary shares 292 516 780 283 885 876 287 268 121
Basic and diluted earnings per share (euro cents) 0,46 6,74 16,87
There are no dilutionary instruments in issue and therefore basic earnings and diluted earnings are the same.
Adjusted core income and adjusted core income per share
Six-month Six-month Audited
period ended period ended Year ended
31 December 31 December 30 June
Euro 2015 2014 2015
Profit for the year attributable to the owners of the group 1 346 657 19 124 739 48 474 908
Adjusted for:
Fair value adjustments (2 378 038) (16 296 691) (27 877 364)
Previously recognised held to maturity unwind — 774 410 —
Exchange differences 3 053 676 (2 543 511) (17 660 295)
Capital raising fees and structure costs 174 809 375 450 504 581
Deferred taxation 142 521 (526 128) (272 259)
Realised profits on the Karoo Fund redemptions 4 355 077 2 433 970 4 921 557
Realised profits on treasury portfolio — — 1 696 715
Adjusted core income 6 694 702 3 342 239 9 787 843
Weighted-average number of ordinary shares 292 516 780 283 885 876 287 268 121
Adjusted core income per share (euro cents) 2,29 1,18 3,41
Headline earnings per share
The group has applied the new Circular 2/2015 (the "Circular") as issued by the JSE and South African Institute of
Chartered Accountants. The Circular requires retrospective application, accordingly the group has applied the Circular to
the previously reported headline earnings and headline earnings per share and noted no changes to the previously reported
figures.
The headline earnings and headline earnings per share is as follows:
Six-month period ended
31 December 2015
Euro Gross Net
Profit for the period 1 346 657 1 346 657
Adjusted for:
Revaluation of investment property 2 074 710 1 833 424
Headline earnings 3 421 367 3 180 081
Weighted-average number of ordinary shares 292 516 780 292 516 780
Headline earnings per share (euro cents) 1,17 1,09
Six-month period ended
31 December 2014
Euro Gross Net
Profit for the period 19 124 739 19 124 739
Adjusted for:
Revaluation of investment property 5 732 013 5 002 709
Headline earnings 24 856 752 24 127 448
Weighted-average number of ordinary shares 283 885 876 283 885 876
Headline earnings per share (euro cents) 8,76 8,50
Audited
Year ended 30 June 2015
Euro Gross Net
Profit for the period 48 474 908 48 474 908
Adjusted for:
Revaluation of investment property (5 718 442) (6 759 124)
Headline earnings 42 756 466 41 715 784
Weighted-average number of ordinary shares 287 268 121 287 268 121
Headline earnings per share (euro cents) 14,88 14,52
The JSE Listings Requirements require the calculation of headline earnings and diluted headline earnings per share and the
disclosure of a detailed reconciliation of headline earnings to the earnings numbers used in the calculation of basic earnings
per share, to be in accordance with the requirements of IAS 33 – Earnings per Share. Disclosure of headline earnings is not
a requirement of IFRS. The directors do not use headline earnings or headline earnings per share in their analysis of the
group's performance, and do not consider it to be a useful or relevant metric for the group. The directors make no reference
to headline earnings or headline earnings per share in their commentaries. Instead, the directors use adjusted core income.
17. Related parties
Parent and ultimate controlling party
The group has no ultimate controlling party, but is controlled by its ordinary shareholders in aggregate.
Related party transactions
MAS Property Advisors Limited ("MAS Prop")
MAS Prop is a real estate advisory company and is a 100% owned subsidiary of the group. All intra-group transactions
and outstanding balances between MAS Prop and other subsidiaries in the group are eliminated on consolidation. Prior to
15 October 2014 in the previous reporting period, MAS Prop was owned by a group of investors of which Lukas Nakos and
Malcolm Levy, the chief executive officer and chief financial officer of the group respectively, had significant influence.
Prior to the group's acquisition of MAS Prop the group incurred investment advisory fees and on-charged staff costs
of EUR1 710 399 (December 2014) and EUR1 372 564 (June 2015), and transaction fees of EUR332 018 (December 2014), and
EUR352 500 (June 2015). Transaction fees were capitalised within investment property. All fees were charged to the group in
accordance with the investment advisory agreement and were on an arm's length basis.
Artisan Real Estate Investors Limited ("Artisan")
Artisan is a real estate management company and is owned by a group of investors of which Lukas Nakos and Malcolm
Levy, the chief executive officer and chief financial officer of the group respectively have significant influence.
New Waverley Advisers Limited ("NW Advisers")
NW Advisers is a real estate developer and is a 100% owned subsidiary of Artisan, as such is controlled by Artisan which is
a related party of the group.
During the period NW Advisers on-charged expenses in relation to the development of New Waverley which amounted
to EUR17 790 498 (December 2014: EUR8 228 735; June 2015: EUR19 605 967). These have been capitalised as part of the New
Waverley development within investment property. On-charges were charged to the group in accordance with the
development management agreement and were on an arm's length basis.
Corona Real Estate Partners Limited ("Corona")
Corona is a real estate management company with six staff members, and is owned 100% by Jonathan Knight who is the
Chief Investment Officer of the group.
During the period the group used the professional services of Corona and incurred expenses of EUR464 726
(December 2014: EUR104 590; June 2015: EUR331 218), which were charged to the group on an arm's length basis. At the end
of the reporting period nil (December 2014: nil; June 2015: EUR37 251) was owed to Corona. Professional services fees are
expensed in the profit or loss within Administrative expenses.
Attacq
Attacq is a significant shareholder in the company and has significant influence over the group.
On 30 November 2015 the group entered into a short-term loan agreement with Attacq for EUR18 920 000 which has
carrying amount of EUR19 056 917 as at 31 December 2015, see note 10.
The group purchased the Karoo Fund from Attacq in 2013 for an all share consideration of EUR34 199 731, see note 9.
Under the purchase agreement of the Karoo Fund Attacq is entitled to a contingent adjustment (the "Adjustment") in the
consideration paid to it by the group. This contingent adjustment is dependent upon the value at which the Karoo Fund
redeems. The contingent payment will be share-based and would amount to EUR29 112 780 (December 2014: EUR20 612 124;
June 2015: EUR26 378 571), see note 14, if the current reported net asset value were to be realised. On 31 January 2016 the
group's remaining shares in the Karoo Fund were redeemed, see note 19.
Other related party transactions
Income/(expenses)
for the period/year ended Capitalised for the period/year ended Balances receivable/(payable) as at
Audited Audited Audited
31 December 31 December 30 June 31 December 31 December 30 June 31 December 31 December 30 June
Euro 2015 2014 2015 2015 2014 2015 2015 2014 2015
MAS Property Advisors
Limited
– Investment adviser fee — (1 248 330) (1 249 295) — — — — — —
– Transaction fee — — — — 332 018 352 500 — — —
– Oncharged staff costs — (462 069) (123 269) — — — — — —
— (1 710 399) (1 372 564) — 332 018 352 500 — — —
New Waverley Advisers
Limited
– Oncharged development — — — 17 790 498 8 228 735 19 605 967 (127 164) — 33 432
costs
– Development management — — (1 488 165) — — — (1 528 321) — (1 576 779)
fee (note 14) 1
— — (1 488 165) 17 790 498 8 228 735 19 605 967 (1 655 485) — (1 543 347)
New Waverley Holdings
Limited
– Development profit — — (2 232 246) — — — (2 292 482) — (2 365 168)
participation fee (note 14)
— — (2 232 246) — — — (2 292 482) — (2 365 168)
Corona Real Estate Partners
Limited
– Legal and professional (464 726) (104 590) (331 218) — — — — — 37 251
expenses
(464 726) (104 590) (331 218) — — — — — 37 251
Attacq
– Karoo Fund financial liability (3 601 074) — (24 896 102) — — — (29 112 780) (20 612 124) (26 378 571)
(note 14)
– Related party loan (note 10) 134 803 — — — — — 19 056 917 — —
(3 466 271) — (24 896 102) — — — (10 055 863) (20 612 124) (26 378 571)
Artisan Real Estate Investors
Limited
– Oncharged administrative (30 120) (20 639) 6 435 — — — 7 494 (11 812) 12 737
expenses
(30 120) (20 639) 6 435 — — — 7 494 (11 812) 12 737
(3 961 117) (1 835 628) (30 313 860) 17 790 498 8 560 753 19 958 467 (13 996 336) (20 623 936) (30 237 098)
All related party balances (except Attacq, see notes 10 and 14) are unsecured and are repayable on demand.
1 Movements between opening and closing receivable/(payable) and the corresponding income/(expense) relate to foreign exchange movements
recognised in other comprehensive income.
Transactions with key management
Six-months ended 31 December 2015
Short-term Long-term
Euro Role Basic salary Benefits incentive incentive Total
Lukas Nakos* CEO 110 728 — 166 092 166 092 442 912
Malcolm Levy* CFO 103 808 — 155 711 155 711 415 230
Jonathan Knight* CIO 41 523 — 77 856 77 856 197 235
Ron Spencer Chairman 15 000 — — — 15 000
Gideon Oosthuizen NED 13 750 — — — 13 750
Jaco Jansen NED 13 750 — — — 13 750
Morne Wilken NED 10 000 — — — 10 000
Pierre Goosen NED 10 000 — — — 10 000
318 559 — 399 659 399 659 1 117 877
* Payments, which are made in sterling, are converted to euros at the average rate of 1,3841
As the group has not yet implemented a formal incentive scheme, on 17 November 2015 the Remuneration Committee
approved two incentives for the executive directors. In line with the remuneration policy, these incentives aim to align the
interests of the executive directors, motivate the achievement of superior performance in line with the group's strategic
objectives, and retain talent. The incentives reward the executive directors for services and performance achieved in the 14½
month period from 15 October 2014 to 31 December 2015.
The first incentive is a short term incentive ("STI") to the value of EUR399 659. The STI rewards past performance and is
paid in cash. Half of it was paid in December 2015 with the balance due in June 2016.
The second incentive is a long term incentive ("LTI") to the value of EUR399 659. The LTI rewards past performance and
was paid in cash in December 2015. The terms of the LTI required that the after tax benefit received by the directors be
invested in MAS shares, acquired in the open market. Such shares were acquired in December 2015. There are no vesting
conditions, nor any requirement for the directors to sell the shares should they not be employed by the group. However,
there are restrictions on disposal until 2017.
Both the STI and LTI schemes have been recognised as an employment benefit in the reporting period in which they
have been approved by the Remuneration Committee.
Six-months ended 31 December 2014
Short-term Long-term
Euro Role Basic salary Benefits incentive incentive Total
Lukas Nakos CEO 43 625 — — — 43 625
Malcolm Levy(a) CFO 65 788 — — — 65 788
Jonathan Knight CIO 16 363 — — — 16 363
Ron Spencer Chairman 9 500 — — — 9 500
Gideon Oosthuizen NED 9 500 — — — 9 500
Jaco Jansen NED 9 500 — — — 9 500
Morne Wilken NED 4 008 — — — 4 008
Pierre Goosen NED 4 008 — — — 4 008
162 292 — — — 162 292
(a) Included in this amount is EUR24 940 that was paid directly to MAS Property Advisors Limited, the investment advisor.
Year ended 30 June 2015 (audited)
Short-term Long-term
Euro Role Basic salary Benefits incentive incentive Total
Lukas Nakos CEO 152 149 — — — 152 149
Malcolm Levy(b) CFO 142 641 — — — 142 641
Jonathan Knight CIO 57 056 — — — 57 056
Ron Spencer Chairman 24 500 — — — 24 500
Gideon Oosthuizen NED 23 250 — — — 23 250
Jaco Jansen NED 23 250 — — — 23 250
Morne Wilken NED 10 000 — — — 10 000
Pierre Goosen NED 10 000 — — — 10 000
442 846 — — — 442 846
(b) Inaddition, the directors fees of EUR24 940 were paid directly to MAS Property Advisors Limited. These fees ceased from a group perspective on 15 October 2014,
when Malcolm Levy became an employee of the group.
18. Commitments
The group entered into contracts for the construction and development of New Waverley. These contracts will give rise to
capitalised expenses of GBP18 691 519 (approx. EUR25 467 195) over the next year, these expenses will be capitalised as part of
the New Waverley development.
On 22 December 2015 the group exchanged conditional contracts to acquire a logistics unit in Germany for EUR11 800 000.
On 21 December 2015 the group entered into three loan agreements with Victoria Lebensversicherung AG
("the Lender") for a combined facility of EUR30 550 000. The three loan agreements were: EUR16 895 000 13 year all-in interest
rate of 2,49% p.a; EUR5 770 000 13 year all-in interest rate of 2,49% p.a; and EUR7 885 000 11 year all-in interest rate of 2,32% p.a.
The Lender is entitled to compensation in an amount equal to 2,50% of the undisbursed amount unless at least
EUR30 550 000 has been disbursed by the end of the drawing period being 31 March 2016. On drawdown, as security the
Lender has 5 cross-collateralised retail properties in Germany with a fair value of EUR47 680 000. The group intends to use
the debt as general borrowings to fund the acquisition of new investments.
19. Subsequent events
Sale of investment property
On 22 January 2016 the group completed on the sale of Sauchiehall Street for GBP1 500 000 (approx. EUR2 043 750).
Karoo Fund and Attacq liability
On 31 January 2016 the group's remaining shares in the Karoo Fund were redeemed. The group received an in-specie
redemption of 64 540 371 shares in Sirius and EUR2 577 304 cash in exchange for EUR32 411 907 being the group's share of the Karoo
Fund's net asset value at 31 January 2016. The final redemption has triggered the settlement of the Attacq financial liability
(see note 14), from whom the group acquired the investment, through the issuance of MAS shares. Under the purchase
agreement the MAS adjustment shares are issued at a price per share equal to the 30-day volume weighted average price
of a MAS share at each point the Karoo Fund is realised. Accordingly, 21 317 449 shares will be issued to Attacq in settlement of the
Attacq financial liability, which would have increased Attacq's shareholding in MAS to 48,6% as at the date of this report.
Completion of development property
The group has completed the construction of the two pre-let Whitbred hotel at New Waverley and on 22 February 2016
they were both formally handed over to the tenant.
Registered in the British Virgin Islands Company number 1750199
Registered as an external company in South Africa Registration number 2010/000338/10
JSE share code MSP
SEDOL (XLUX) B96VLJ5
SEDOL (JSE) B96TSD2
ISIN VGG5884M1041
Number of shares in issue as at 31 December 2015 294 455 630
www.masrei.com
29 February 2016
Date: 29/02/2016 12:00:00
Supplied by www.sharenet.co.za
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