ANNUAL REPORT 2010
Superior returns at lower than market risk. CONTENT
Page No.
Definitions 1 Corporate information 2 Profile 3 Structure 4 Directorate 5 Financial highlights 6 Manager’s report 8 Property portfolio 12 Directors’ responsibility 15 Shari’ah advisory board 16 Shari’ah compliance certificate 17 Approval of annual financial statements 18 Company secretary’s certificate 18 Report of the independent auditors 19 Report of the trustee 20 Oasis Crescent Property Fund - Balance sheet 21 - Income statement 22 - Statement of changes in unitholders’ funds 24 - Cash flow statement 25 - Notes to the annual financial statements 26 Oasis Crescent Property Fund Managers Limited - Balance sheet 46 - Income statement 47 - Statement of changes in equity 48 - Cash flow statement 48 - Notes to the annual financial statements 49 Notice of annual general meeting 62
CONFIDENTIAL
This document is confidential, contains privileged information and is intended solely for the use of the individualor entity to whom it is addressed. If you are not the intended recipient you may not disclose, copy or in any way publish the content hereof which is subject to copyright. If you have received this in error, please notify us immediately by return e-mail or by telephone. DEFINITIONS
“ALTx” the Alternative Exchange of the JSE which is a market for small to medium companies that are in a growth phase;
“CISCA” the Collective Investment Schemes Control Act (Act 45 of 2002);
“Crescent range” or “Shari’ah investment products offered by the Oasis Group, which are compliant” managed in accordance with the investment guidelines that have been established by the Oasis Group Shari’ah Advisory Board;
“FSB” Financial Services Board established by section 2 of the Financial Services Board Act, 1990 (Act No. 97 of 1990);
“Fund” Oasis Crescent Property Fund (JSE code OAS, ISIN ZAE000074332), a closed-end property fund created under the scheme, registered in terms of CISCA;
“Independent Valuer” Mills Fitchet Magnus Penny (Proprietary) Limited (registra- tion number 1996/004736/07), a duly authorised professional valuer, registered without restriction in terms of the Property Valuers Professional Act, 2000 (Act No. 47 of 2000);
“JSE” the JSE Limited (registration number 2005/022939/06), a company duly registered and incorporated with limited liability under the company laws of the RSA, licensed as an exchange under the Securities Services Act, 2004;
“NPI” or “Non-Permissible Income” contaminated income that will be disclosed separately and treated in line with the guidelines of the Oasis Group Shari’ah Advisory Board;
“Oasis Group” an independent organisation, which offers a range of savings products, including domestic and global collective investment schemes, retirement and preservation schemes; endowment policies and pension annuities.
“OCPFM” Oasis Crescent Property Fund Managers Limited (registration number 2003/012266/06), a public company duly incorpo- rated in terms of the laws of the RSA and approved by the Registrar to manage the scheme;
“Scheme” the Oasis Crescent Property Trust Scheme, a collective investment scheme in property registered in terms of CISCA;
“Scheme Deed” the scheme deed made and entered into between OCPFM and the Trustee to establish a collective investment scheme in property and the terms under which it is administered, which was approved by the Registrar on 2 November 2005;
“Trustee” ABSA Real Estate Asset Management, a division of ABSA Bank Limited (registration number 1986/004794/06), a public company duly incorporated in terms of the laws of the RSA.
OASIS CRESCENT PROPERTY FUND | Annual Report 2010 1 CORPORATE INFORMATION
Registered Office of the fund Manager 20th Floor, Triangle House Oasis Crescent Property Fund Managers Limited 22 Riebeek Street (Registration number 2003/012266/06) Cape Town, 8001 PO Box 1217, Cape Town, 8000 Principal Office of the Manager 20th Floor, Triangle House 22 Riebeek Street Cape Town, 8001 PO Box 1217, Cape Town, 8000
Directors and secretary of the manager Auditors Directors: PricewaterhouseCoopers Inc MS Ebrahim (Executive Chairman) (Registration number 1998/012055/21) N Ebrahim Registered Auditors M Swingler (Resigned 10 May 2010) No. 1 Waterhouse Place Z Ismail Kara* # Century City, 7441 Dr Y Mahomed*# PO Box 2799, Cape Town, 8000 Busisa Jiya *# (Appointed 7 July 2009) Abduraghman Mayman (Appointed 10 May 2010) Secretary: N Ebrahim (B.Soc.Sc. B.Proc.)
Trustee Independent property valuers ABSA Real Estate Asset Management, Mills Fitchet Magnus Penny (Proprietary) Limited a division of ABSA Bank Limited (Registration number 1996/004736/07) (Registration number 1986/004794/06) 20th Floor, 1 Thibault Square 1st Floor, Block E, Flora Office Park Cape Town, 8001 Cnr Ontdekkers and Conrad Roads PO Box 4442, Cape Town, 8000 Florida, 1709 PO Box 1132, Johannesburg, 2000
Designated Advisor Transfer secretaries PSG Capital (Proprietary) Limited Computershare Investor Services 2004 (Proprietary) Limited (Registration number 2006/015817/07) (Registration number 2004/003647/07) 1st Floor Ground Floor Ou Kollege 70 Marshall Street 35 Kerk Street Johannesburg, 2001 Stellenbosch, 7600 PO Box 61051, Marshalltown, 2107 PO Box 7403, Stellenbosch, 7599
Attorneys Commercial banker Ebrahims Inc ABSA Bank Limited (Registration number 95/12638/21) (Registration number 1986/004794/06) 21st Floor, Triangle House 170 Main Street 22 Riebeek Street Johannesburg, 2001 Cape Town, 8001 PO Box 7757, Johannesburg, 2000 PO Box 477, Cape Town, 8000
Note: * Non-executive # Audit committee
2 OASIS CRESCENT PROPERTY FUND | Annual Report 2010 PROFILE
The Oasis Group is an independent organisation, owned and driven by its founding shareholders, management and staff. It endeavours to provide unrivalled financial products and services to its clients. Since inception, the Oasis Group has experienced success and received widespread acclaim for growth in assets under management and excellent investment performance, and for delivering on its mission, which is to provide SUPERIOR RETURNS AT LOWER THAN MARKET RISK.
Oasis provides a range of domestic and global collective investment schemes, retirement and preservation schemes as well as insurance products such as endowment policies and pension annuities in the Crescent (socially responsible or Shari’ah compliant) and Oasis ranges. Oasis Crescent Property Fund provides an alternative to conventional South African property unit trusts or property loan stock companies for Shari’ah compliant investors to diversify the asset allocation of their investment portfolio.
The fund, created under the scheme, is a collective investment scheme in property registered in terms of CISCA to house the properties.
OBJECTIVES OF THE FUND
The objectives of the fund are to:
• provide sustainable income and real returns for investors
• provide an opportunity for clients to diversify their portfolios by investing in a liquid and transparent Shari’ah compliant property fund in the regulated environment of the JSE Limited.
• build a high-quality property portfolio consisting of commercial, industrial and retail properties backed by national, multi-national and government tenants
• develop the existing properties to their full potential
OASIS CRESCENT PROPERTY FUND | Annual Report 2010 3 STRUCTURE
The fund is a property fund created under the scheme in terms of the CISCA to house the properties. The scheme was registered by the Registrar on 2 November 2005 and is managed by Oasis Crescent Property Fund Managers Limited. The fund structure is illustrated below:
REGULATORY MANAGEMENT BODIES
REGISTRAR
FSB
JSE THE FUND OCPFM
TRUSTEE
ABSA Real Estate Asset Management
AUDITORS
Pricewaterhouse Investment Property Coopers Inc Manager Administration
SHARI’AH ADVISORY BOARD
4 OASIS CRESCENT PROPERTY FUND | Annual Report 2010 DIRECTORATE
PROFILES OF THE OCPFM DIRECTORS
Mohamed Shaheen Ebrahim (55) Designation and function: Executive Chairman Zaheeda Ismail Kara, (44) Designation and function: Non-executive Director Shaheen Ebrahim has successfully managed several & Chairperson of the Audit Committee enterprises, acquiring over thirty years experience in commerce. He has been involved with the Oasis Group Zaheeda Ismail Kara has accumulated 21 years of since its inception in 1997 and is Chief Operations property experience since she joined Old Mutual Officer of the Oasis Group. Properties as a Property Portfolio Manager in 1988. She was appointed as Director – Properties for the Nazeem Ebrahim, B.Soc.Sc., B.Proc. (52) Public Investment Commissioners in 2001 and sub- Designation and function: Executive Director sequently joined Telkom SA Limited where she is currently Executive Manager of Strategic Property Nazeem Ebrahim was educated at the University Asset Management. of Cape Town and received B.Soc.Sc. and B.Proc. degrees. He serves as an executive director of the Oasis Group. His professional experience includes Yousuf Mahomed, MD, FACS, FACC (64) over twenty-five years of business and legal practice. Designation and function: Non-executive Director & member of the Audit Committee Michael Swingler, CA(SA), CFA (39) (Resigned 10 May 2010) Dr. Mahomed has excelled in the medical profession Designation and function: Executive Finance Director and has proven himself to be an experienced businessman and at present is a member of the In- Michael Swingler is a Chartered Accountant and dianapolis Chamber of Commerce and the Business Chartered Financial Analyst. He has been with the Diversity Council. He has built up a vast knowledge in Oasis Group since its inception and his professional the property sector, being involved in five successful experience includes all aspects of property research real estate businesses based in Indianapolis. Besides and analysis. Oasis Crescent Property Fund Managers Limited, he is also a non-executive director on the board of Oasis Abduraghman Mayman BCompt. Hons; BCom Hons Crescent Management Company Limited and an (Financial Management), CA (SA) (55) associated company in Dubai. (Appointed 10 May 2010) Designation and function: Executive Finance Director Busisa Jiya, B.Bus Sc. (UCT), Senior Leadership Development Programme at Manchester University’s Adduraghman Mayman is a Chartered Accountant School of Business (38) with more than 35 years experience in accounting, Designation and Function: Non-executive director & auditing and finance. He was previously the financial member of the Audit Committee director of the Africa region for one of the largest oil companies and his International experience includes Busisa Jiya is a professionally trained retirement assignments in London, Africa and South East Asia. fund trustee who served on the Board of Trustees of Prior to joining the Oasis Group he was the Chief various large retirement funds, and was previously Financial Officer for one of the leading print media the Principal Officer of one of the largest self-ad- groups in Africa. ministered retirement funds in South Africa. During his career Busisa worked in the asset management industry, and obtained significant experience in the property sector. He is currently the Senior Company Representative for Africa at Thomson Reuters where he is responsible for all operations within the Group’s Markets Division in Africa.
OASIS CRESCENT PROPERTY FUND | Annual Report 2010 5 FINANCIAL HIGHLIGHTS
2010 2009 Distribution per unit including non-permissible income (cents) 103.7 107.0
Non-permissible rental per unit (cents) (5.7) (2.5)
Non-permissible interest per unit (cents) (2.1) (5.0)
Distribution per unit excluding non-permissible income 95.9 99.5 (cents)
Property portfolio valuation (Rm) 374.4 353.3
Investments portfolio valuation (Rm) 103.8 59.2
Cash and cash equivalents (Rm) 33.4 21.7
Net asset value per unit (cents) 1 320 1 235
Listed market price at year end (cents) 1 230 1 210
Comment
Since listing, the focus of OCPFM has been primarily on investing to improve:
• the quality of properties in the portfolio • the quality of the tenant mix • the quality of the operating environment • investment in listed global property fund for scalability, geographical and currency diversification
Distribution per unit including non-permissible income decreased by 3% from 107.0 cents to 103.7 cents per unit. Distribu- tion per unit excluding non-permissible income decreased by 3.6% from 99.5 cents to 95.9 cents.
During the current reporting period, the fund issued 3.48 million units (1.79 million for cash and 1.69 million units in lieu of distribution). The June 2009 as well as November 2009 issues were done at 1250 cents per unit. The proceeds raised are being invested in suitable investments and utilised for ongoing capital expenditure.
The fund is in a strong position, with 20.9% of the capital invested offshore. It is in a net cash position of R33 million, ideally positioned to take advantage of any opportunities.
As a result of this, the portfolio is exceptionally well positioned to benefit from the strong fundamentals in the property market in terms of net asset value and income generation.
At The Ridge@Shallcross the focus continues to be developing the centre to meet the high end standard in the market. Following the upgrade of the localised security systems such as remote cameras and patrolled security infrastructures and the repair and maintenance of the centre, the focus shifted to obtain an optimum tenant mix that is appropriate for this high quality centre, especially the consolidation of sizeable areas for major tenants. During the year under review, there has also been a significant increase in marketing events at the centre and this progress is reflected in the growth in turnover and foot fall. As a consequence the centre has increased the foot fall count by 1.6% on a 12 month rolling basis. The centre continues to improve from a demand perspective as the right tenant mix becomes apparent. The management is allowing for certain lower profiled tenancies to expire without renewals to provide opportunity for better branded occupants.
6 OASIS CRESCENT PROPERTY FUND | Annual Report 2010 FINANCIAL HIGHLIGHTS
In the industrial component of the portfolio, we continue to increase rentals as lease escalations take effect. Our aim is to also renew leases at rentals which are more aligned to the market rates.
The successful introduction of offshore investment provides scalability, and geographical and currency diversification to the portfolio which significantly reduces the risk of the portfolio. The global property market is recovering from the financial crises. The global property fund is up 62.1% to USD 6.47 per unit, compared to USD 3.99 at the end of the previous year. During the year we have thus seen a recovery of R 14.2 million in the temporary decline in the capital value of offshore investments which was driven by the market cycle and sentiment and not any fundamental change in the invested fund or the underlying companies or any measurable decline in the cash flows generated by the underlying companies which is primarily rental of a contractual nature. In addition, the global economic downturn and funding constraints have resulted in new development decreasing significantly which will result in very low levels of new supply over the medium term which will in turn support existing rental levels. With companies globally focusing on cost savings, there is also a high retention of existing tenants being reported by property companies due to the reluctance of companies to incur additional costs to relocate to new premises. Going forward, this bodes well for lease renewals.
OASIS CRESCENT PROPERTY FUND | Annual Report 2010 7 MANAGER’S REPORT
Overview of performance
The fund has continued to deliver a competitive return relative to inflation:
2010 2009 Since Inception Oasis Crescent Property Fund actual return 9.5% 8.9% 9.5% Inflation 5.1% 11.2% 5.1%
Notes: 1. Performance based on total return (capital and distribution excluding non-permissible income). 2. The return was realised at low risk due to low debt. Fund portfolio
Segment Profile based on distributable income (Sectoral) 2010 2009 Retail 34% 30% Office 12% 13% Industrial 39% 36% Listed properties and other investments 15% 21% 100% 100%
Segment Profile based on distributable income (Geographical) 2010 2009 Western Cape 60% 57% KwaZulu-Natal 26% 23% Offshore investments 11% 12% Domestic Other 3% 8% 100% 100%
Segment Profile based on assets employed 2010 2009 Retail 29% 32% Office 32% 37% Industrial 12% 12% Listed properties and other investments 27% 19% 100% 100%
Amounts in R’000 Rentable Area Revenue 2010 Geographical profile Area (m2) % Amount % Western Cape 74.247 83 29,710 55 KwaZulu-Natal 15,074 17 19,451 36 Offshore investments - - 4,453 8 Domestic Other - - 528 1 Total 89,321 100 54,142 100
8 OASIS CRESCENT PROPERTY FUND | Annual Report 2010 MANAGER’S REPORT
Amounts in R’000 Rentable Area Revenue 2009 Geographical profile Area (m2) % Amount % Western Cape 78.827 83 25,217 51 KwaZulu-Natal 15,074 17 17,923 37 Offshore investments - - 4,402 9 Domestic Other - - 1,370 3 Total 88,901 100 48,912 100
Tenant profile %
A – Large nationals, large listed, large franchisees, multi-nationals and government 74 B – Nationals, listed, franchisees and medium to large professional firms 25 C – Other 1
100
% by rentable % by Lease expiry profile area revenue March 2011 721 March 2012 29 22 March 2013 86 March 2014 24 17 March 2015 onwards 32 34 100 100
The overall vacancy factor was 3.12% as at 31 March 2010 (2009: 2.36%) and is set out in the table below :
Vacancies based on rentable area 2010 2009
Retail 15.7% 13.4% Office - - Industrial - - Total at portfolio level 3.1% 2.4%
At The Ridge@Shallcross 2,362m² (2009: 1,773m²) was vacant due to ongoing efforts to improve the tenant mix.
Segment Avg rental Rentable Avg rental Rentable Avg rental Avg rental per m² Area (m²) escalation Area (m²) per m² escalation 2010 2010 2010 2009 2009 2009
Retail 86 17,795 7.00% 17,375 83 7.00% Office 75 6,608 8.50% 6,608 69 8.50% Industrial 22 64,918 9.00% 64,918 20 9.00% 89,321 88,901
OASIS CRESCENT PROPERTY FUND | Annual Report 2010 9 MANAGER’S REPORT
Outlook Strong demand, combined with supply constraints, increasing replacement and land cost provides a positive outlook for rental growth. Going forward, the outlook for the fund is to deliver distribution growth in line with the growth in rentals and growth in distribution from offshore investments subject to any dilutions.
Service charge The service charge is equal to 0.5% per annum of the fund’s market capitalisation and borrowing facilities based on the average daily closing prices of the units. The amount paid to OCPFM was R2.2 million (2009: R1.7 million).
Property management Property management is outsourced to OCPFM and external service providers. The amount paid to OCPFM was R916,855 (2009: R799,177).
Actual units in issue At year-end the number of units in issue was 37,462,790 (2009: 33,981,445).
Shareholding in OCPFM OCPFM is 100% owned by Oasis Group Holdings (Pty) Ltd.
Unitholders Unitholders holding more than 5% of issued units as at 31 March 2010:
Name Number of PIs % of holding
Oasis Crescent Balanced Progressive Fund of Funds 9,355,387 25.0% Oasis Crescent Preservation Pension Fund 5,162,639 13.8% Crescent Retirement Annuity Fund 3,823,721 10.2% Eden Court Trust 3,458,941 9.2%
Unitholders spread as at 31 March 2010:
No of unitholders Number of units % of total Non-Public 4 3,582,335 9.6% Public 266 33,880,455 90.4% Total 270 37,462,790 100.0%
Name Number of PI holders Holding % of holding Directors 2 2,396,022 66.9% Associates of directors 2 1,186,313 33.1% Total Non Public 4 3,582,335 100.0%
10 OASIS CRESCENT PROPERTY FUND | Annual Report 2010 MANAGER’S REPORT
Directors’ interests Beneficial Director Direct Indirect Total
MS Ebrahim 11,697 1,186,314 1,198,011 N Ebrahim 11,697 1,186,314 1,198,011 Total 23,394 2,372,628 2,396,022
The indirect interests of the OCPFM directors are held by Eden Court Trust and OCPFM.
Corporate governance The OCPFM directors are committed to the principles of transparency, integrity and accountability as advocated in the King Code II and King Code III reports, the latter of which became effective on 1 March 2010. Accordingly, the OCPFM directors endorse the King Code III and aim to comply in all sensible and material respects with the spirit and intent thereof in the control, management and direction of the fund in the future. In supporting the King Code II, in respect of its last financial year and King Code III in the future, the directors of OCPFM recognise the need to conduct the business of the fund with integrity and in accordance with generally acceptable corporate practices. Therefore, the directors of OCPFM subscribe to the principles of timeous, honest and objective communications with its stakeholders, and the highest standards of ethics in the conduct of its business.
Board of directors The Board of OCPFM consists of three non-executive directors and three executive directors.
Name Attendance
MS Ebrahim 2/2 N Ebrahim 2/2 M Swingler 2/2 Z Ismail Kara 2/2 Dr Y Mahomed 2/2 B Jiya (Appointed 7 July 2009) 1/2
• Appointment to the board must be formal and transparent and a matter for the board as a whole, assisted when appropriate by a nomination committee. • There is a policy in place which is a clear division of responsibilities at board level to ensure a balance of power and authority such that no one individual has unfettered powers of decision making.
Audit committee The audit committee consists of the non-executive directors and the designated advisor.
Name Attendance
Z Ismail Kara (Chairperson) 2/2 Dr Y Mahomed 2/2 B Jiya 1/2 Designated advisor 2/2
The mandate of the Audit Committee includes: • Setting the principles for recommending the use of external auditors for non-audit services. • Considering the appointment of the external auditor and overseeing the audit process. • Satisfying itself of the expertise, resources and experience of the finance function of OCPFM.
OASIS CRESCENT PROPERTY FUND | Annual Report 2010 11 PROPERTY PORTFOLIO
Market Market Cost value Cost value Property Lettable Acquisition 2010 2010 2009 2009 Region Sector name Location area (m²) date R’000 R’000 R’000 R’000
Western Industrial Sacks Circle 34 Sacks 20,088 Nov 2005 R23,001 R47,600 R23,001 R43,500 Cape Bellville Circle, Bellville Western Industrial Moorsom 13-19 20,842 Nov 2005 R23,495 R58,300 R23,461 R52,700 Cape Avenue Moorsom Epping Avenue, Epping Western Industrial Nourse 27 Nourse 9,698 Nov 2006 R18,645 R21,713 R18,642 R20,900 Cape Avenue Avenue Epping Epping Western Industrial Waltex Drukkery 14,290 Nov 2005 R17,412 R20,000 R17,412 R20,000 Cape Goodwood Street, Elsies River Western Office / Protea 98 St 7,261 Nov 2005 R44,144 R76,200 R44,144 R67,000 Cape Retail Assurance Georges Cape Town Mall, Cape Town Western Retail Eclipse Park Parklands 2,068 Nov 2005 R13,667 R15,600 R11,631 R14,200 Cape Parklands Main Road, Milnerton Kwa-Zulu Retail The Ridge@ 90 15,074 Jul 2006 R125,468 R135,000 R125,421 R135,001 Natal Shallcross Shallcross Road, Durban
Total 89,321 R265,832 R374,413 R263,712 R353,301
Property criteria Consistent with the tried and tested investment philosophy of the Oasis Group, the focus on quality, value and capital protection is apparent when looking at the portfolio in more detail. The portfolio has a high exposure to quality national, multi-national and government tenants with a preference for leases with a long duration. This tenant quality and certainty of cash flows are the key drivers of capital protection and delivering sustainable income.
12 OASIS CRESCENT PROPERTY FUND | Annual Report 2010 PROPERTY PORTFOLIO
PROTEA ASSURANCE HOUSE CAPE TOWN OASIS CRESCENT PROPERTY FUND | Annual Report 2010 13 PROPERTY PORTFOLIO THE RIDGE @ SHALLCROSS SHOPPING CENTRE, DURBAN
14 OASIS CRESCENT PROPERTY FUND | Annual Report 2010 DIRECTORS’ RESPONSIBILITY
The directors of OCPFM are responsible for the The fund and the company operated in a well-estab- preparation, integrity, and fair presentation of the lished control environment, which incorporates risk financial statements of the fund and the company. management and internal control procedures, which The financial statements have been prepared in are designed to provide reasonable, but not absolute, accordance with International Financial Reporting assurance that assets are safeguarded and the risks Standards (“IFRS”) and the requirements of the facing the business are being controlled. Collective Investment Schemes Control Act of 2002, and include amounts based on judgements and The going concern basis has been adopted in estimates made by management. preparing the financial statements. The directors have no reason to believe that the fund and the company The directors consider that in preparing the financial will not be going concerns in the foreseeable future, statements they have used the most appropriate based on forecasts and available cash resources. accounting policies, consistently applied and These financial statements support the viability of the supported by reasonable and prudent judgements fund and the company. and estimates. The directors are satisfied that the information contained in the financial statements fairly There is no directors’ report as OCPFM is a wholly owned presents the results of operations for the period and subsidiary of a company incorporated in South Africa. the financial position of the fund and of the company The fund’s external auditors, PricewaterhouseCoopers at year-end. The directors also prepared the other Inc., audited the financial statements, and their report information in the report and are responsible for both is presented on page 19. its accuracy and its consistency with the financial statements.
The directors have responsibility for ensuring that accounting records are kept. The accounting records should disclose with reasonable accuracy the financial position of the fund and the company to enable the directors to ensure that the financial statements comply with the relevant legislation.
Mohamed Shaheen Ebrahim Michael Swingler Executive Chairman Executive Finance Director
OASIS CRESCENT PROPERTY FUND | Annual Report 2010 15 SHARI’AH ADVISORY BOARD
Principles Shaykh Yusuf DeLorenzo In addition to its responsibilities in terms of compliance is a leading Islamic scholar in the United States. He with all conventional regulation that apply to the fund, has translated over twenty books from Arabic, Persian the manager has a duty towards its socially responsible and Urdu for publication in English. Shaykh DeLorenzo investors to provide information to and comply with the compiled the first English translation of legal rulings issued Oasis Group Shari’ah Advisory Board. This process includes by Shari’ah supervisory boards on the operations of Islamic the following: banks. Since 1989 he has served as secretary of the Fiqh Council of North America. He is also a Shari’ah consultant Initial property selection based on tenant activity to several Islamic financial institutions and was an advisor and identifying core business activities that are not on Islamic education to the government of Pakistan. acceptable. Removing non-permissible income from the income distri- Shaykh Nizam Yaquby bution which will consist mainly of interest earned on cash received an MSc in Finance from McGill University held for acquisition and distribution. (Canada) and has studied Shari’ah law in Morocco, India and Saudi Arabia. He is an active scholar in Islamic Although the manager has and will continue to endeavour finance and has been the Professor of Tafsir, Hadith and to avoid or limit investments that will produce non-per- Fiqh in Bahrain since 1976. Shaykh Yaquby is a member of missible income it remains an inevitable part of investing the Shari’ah Board of the Accounting and Auditing Or- in conventional markets. The non-permissible income ganisation for Islamic Financial Institutions and also works component of the distribution will be separately disclosed as an independent Shari’ah consultant in Bahrain. He and dispensed to registered charitable organisations currently sits on the Islamic supervisory boards of several with a focus on the areas of healthcare, education and Islamic financial institutions. disaster relief.
Oasis Group Shari’ah Advisory board In accordance with the provisions of Shari’ah Law for investing, the Oasis Group Shari’ah Advisory Board is appointed to provide advice and ensure compliance with the ethical mandate.
Dr Daud Bakar is a respected academic who was awarded a doctorate in philosophy from the University of St. Andrews in Scotland and has presented numerous papers and publications regarding Islamic banking and investment. Dr Bakar is a member of the Shari’ah Board of the Accounting and Auditing Organisation for Islamic Financial Institutions, the Shari’ah Advisory Council of the Securities Commission of Malaysia and Bank Negara Malaysia (Central Bank of Malaysia). In addition he is a Shari’ah consultant to numerous respected investment committees throughout the world.
16 OASIS CRESCENT PROPERTY FUND | Annual Report 2010 SHARI’AH COMPLIANCE CERTIFICATE
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OASIS CRESCENT PROPERTY FUND | Annual Report 2010 17 CRESCENT FUND TRUST
Non-permissible income of the fund is dispensed to the Crescent Fund Trust which is a registered public benefit organisation with a focus on the areas of healthcare, education and disaster relief. The Public Benefit Organisation number of the fund is 930002681 and SAB&T Inc. Chartered Accountants are the Auditors of the Trust.
APPROVAL OF ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
The annual financial statements of the fund and OCPFM for the year ended 31 March 2010 as set out on pages 20 to 61 were approved by the board of directors of OCPFM on 10 May 2010 and are signed on its behalf by:
Mohamed Shaheen Ebrahim Michael Swingler Executive Chairman Executive Finance Director
COMPANY SECRETARY’S CERTIFICATE for the year ended 31 March 2010
I hereby certify that for the year ended 31 March 2010, the company has lodged with the Registrar of Companies all such returns as are required of a public company in terms of Section 268G(d) of the Companies Act, 1973, as amended, and all such returns are true, correct and up to date.
Nazeem Ebrahim Company Secretary
18 OASIS CRESCENT PROPERTY FUND | Annual Report 2010 REPORT OF THE INDEPENDENT AUDITORS for the year ended 31 March 2010
INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF An audit involves performing procedures to obtain OASIS CRESCENT PROPERTY FUND MANAGERS LIMITED, audit evidence about the amounts and disclosures AND TO THE UNITHOLDERS OF THE OASIS CRESCENT in the financial statements. The procedures selected PROPERTY FUND depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the We have audited the annual financial statements of financial statements, whether due to fraud or error. In Oasis Crescent Property Fund Managers Limited (“the making those risk assessments, the auditor considers Company”) and the Oasis Crescent Property Fund (“the internal controls relevant to the entity’s preparation and Fund”), which comprise the directors’ and trustee’s fair presentation of the financial statements in order to reports, the statements of financial position as at 31 design audit procedures that are appropriate in the March 2010, the statements of comprehensive income, circumstances, but not for the purpose of expressing the statements of changes in unit holder funds and the an opinion on the effectiveness of the entity’s internal statement of cash flow for the year then ended, and a control. An audit also includes evaluating the ap- summary of significant accounting policies and other propriateness of accounting policies used and the explanatory notes, as set out on pages 20 to 61. reasonableness of accounting estimates made by management, as well as evaluating the overall pre- Directors’ Responsibility for the Financial Statements sentation of the financial statements. The Company’s directors are responsible for the preparation and fair presentation of these financial We believe that the audit evidence we have obtained statements in accordance with International Financial is sufficient and appropriate to provide a basis for our Reporting Standards and in the manner required by audit opinion. the Companies Act of South Africa and the Collective Investment Schemes Control Act, 2002. This responsibility Opinion includes: designing, implementing and maintaining In our opinion, the financial statements present fairly, internal controls relevant to the preparation and fair in all material respects, the financial position of Oasis presentation of financial statements that are free Crescent Property Fund Managers Limited and Oasis from material misstatement, whether due to fraud or Crescent Property Fund at 31 March 2010, and their error; selecting and applying appropriate accounting financial performance and their cash flows for the year policies; and making accounting estimates that are then ended in accordance with International Financial reasonable in the circumstances. Reporting Standards and in the manner required by the Companies Act of South Africa and the Collective Auditor’s Responsibility Investment Scheme Control Act, 2002. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the PricewaterhouseCoopers Inc financial statements are free from material misstatement. Director: Peet Burger Registered Auditor Cape Town Date: 11 May 2010
OASIS CRESCENT PROPERTY FUND | Annual Report 2010 19 REPORT OF THE TRUSTEE for the year ended 31 March 2010
In terms of Section 70(1)(f) of the Collective Investments Schemes Control Act of 2002
To the unitholders of Oasis Crescent Property Fund
During the period as set out above during which the Collective Investment Schemes Control Act of 2002 has been in effect the Trust has been administered in accordance with: i) the limitations imposed on the investment and borrowing powers of the Manager by the Act; and ii) the provisions of the Act and the deed.
ABSA Bank Limited Trustee Johannesburg 10 May 2010
20 OASIS CRESCENT PROPERTY FUND | Annual Report 2010 STATEMENT OF FINANCIAL POSTION as at 31 March 2010
2010 2009 Notes R '000 R '000 ASSETS Non-current assets 478,222 412,511
Investment properties 2 364,308 345,436 Property, plant and equipment 3 42 53 Straight-line lease accrual 2 10,105 7,865 Available-for-sale financial assets 4 103,767 59,157
Current assets 41,775 29,500
Trade receivables 5 4,034 4,063 Other receivables 6 4,347 2,733 Cash and cash equivalents 7 33,394 22,704
Total assets 519,997 442,011
UNITHOLDERS’ FUNDS AND LIABILITIES
Unitholders’ funds 494,599 419,817
Capital of the fund 8 402,487 360,931 Retained Income - - Non-distributable reserve 2.1 108,581 89,589 Fair value loss on available-for-sale assets (16,469) (30,703)
Current liabilities 25,398 22,194
Trade payables 9 3,086 3,638 Accruals 10 249 359 Other payables 11 1,585 791 Trade payables to related parties 22.3 13 239 Unitholders for distribution 20,155 17,113 Non-permissible income for dispensation 310 54
Total unitholders' funds and liabilities 519,997 442,011
NAV (per unit) 1 320 cents 1 235 cents
OASIS CRESCENT PROPERTY FUND | Annual Report 2010 21 STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 March 2010
2010 2009 Notes R '000 R '000
Revenue 56,382 50,940 Rental and related income 49,161 43,140 Income from investments 12 4,981 5,772 Straight-lining of lease income 2 2,240 2,028
Expenses 13 17,929 17,015 Property expenses 15,302 14,559 Service charges 2,202 1,749 Other operating expenses 425 707 Net income from rentals and investments 38,453 33,925
Realised gain on sale of available-for-sale 7 2,897 investments Fair value adjustment to investment properties 16,752 31,964 excluding straight-lining of lease income Fair value adjustment to investment properties 18,992 33,992 Straight-lining of lease income (2,240) (2,028)
Operating profit for the year 55,212 68,786
Net non-permissible investment income 796 1,678 Non-permissible investment income received 809 1,692 Interest paid (13) (14)
Net profit for the year 56,008 70,464 Other Comprehensive Income Fair value gain / (loss) on available for sale financial 14,227 (35,672) assets Total Comprehensive Income for the year 70,235 34,792
Basic earnings per unit including non-permissible 15 156.9 224.6 income (cents)
22 OASIS CRESCENT PROPERTY FUND | Annual Report 2010 RECONCILIATION OF DISTRIBUTABLE INCOME for the year ended 31 March 2010
2010 2009 Notes R '000 R '000 Reconciliation of Distributable Income: Rental and related income 49,161 43,140 Less: Property expenses (15,302) (14,559) Property operating income 33,859 28,581 Murabaha income 360 1,370 Less: Murabaha expenses - - Murabaha operating income 360 1,370 Investment income 5,430 6,094 Less: Investment expenses (13) (14) Investment operating income 5,417 6,080 Service charges and other operating expenses (2,627) (2,456) Distributable income including non-permissible 37,009 33,575 income Non-permissible rental income (2,035) (1,574) Non-permissible interest income (739) (781) Distributable income excluding non-permissible 34,235 31,220 income Distribution per unit including non-permissible income 103.7 107.0 Interim distribution per unit (cents) 50.8 54.8 Final distribution per unit (cents) 52.9 52.2 Additional information: Headline earnings and diluted headline earnings per 15 110.0 113.5 unit including non-permissible income (cents) Distribution per unit including non-permissible income 15 103.7 107.0 (cents) Distribution per unit excluding non-permissible 15 95.9 99.5 income (cents) Weighted average units in issue 35,694,283 31,366,369 Units in issue at the end of the year 37,462,790 33,981,444
OASIS CRESCENT PROPERTY FUND | Annual Report 2010 23 STATEMENT OF CHANGES IN UNITHOLDERS’ FUNDS for the year ended 31 March 2010
Capital Non- Available- Retained Total of the fund distributable for-sale income reserve reserve R ’000 R ’000 R ’000 R ’000 R ’000
Balance at 1 April 2008 281,629 55,597 2,072 - 339,298 Net profit for the year ended - - - 70,464 70,464 31 March 2009 Other Comprehensive Income
Fair value loss on available-for-sale - - (35,672) - (35,672) financial assets Transfer to available-for-sale reserve - - 2,897 (2,897) -
Total Comprehensive Income for the - - (30,703) 67,567 374,090 year 31 March 2009 Issue of units for cash 60,000 - - - 60,000 Issue of units in lieu of distribution 22,194 - - - 22,194 Transaction costs for issue of new units (277) - - - (277) Transfer to non-distributable reserve - 33,992 - (33,992) - Distribution received in advance (2,615) - - 2,615 - Distribution to unitholders - - - (33,835) (33,835) Dispensation of non-permissible - - - (2,355) (2,355) income Balance at 1 April 2009 360,931 89,589 (30,703) - 419,817 Net profit for the year ended - - - 56,008 56,008 31 March 2010
Other Comprehensive Income Fair value gain on available-for-sale - - 14,227 - 14,227 financial assets Transfer to available-for-sale reserve - - 7 (7) - Total Comprehensive Income for the - - 14,234 56,001 70,235 year 31 March 2010 Issue of units for cash 22,410 - - - 22,410 Issue of units in lieu of distribution 21,107 - - - 21,107 Transaction costs for issue of new units (265) - - - (265) Transfer to non-distributable reserve - 18,992 - (18,992) - Distribution received in advance (1,696) - - 1,696 - Distribution to unitholders - - - (35,931) (35,931) Dispensation of non-permissible - - - (2,774) (2,774) income Balance at 31 March 2010 402,487 108,581 (16,469) - 494,599
24 OASIS CRESCENT PROPERTY FUND | Annual Report 2010 STATEMENT OF CASH FLOWS for the year ended 31 March 2010
2010 2009 Notes R '000 R '000 CASH FLOWS FROM OPERATING ACTIVITIES Net profit for the period 56,008 70,464 Adjusted for: Interest received (809) (1,692) Interest paid 13 14 Depreciation 11 5 Provision for receivables impairment 33 810 Straight-line lease accrual 2 (2,240) (2,028) Realised gain on available-for-sale financial assets (7) (2,897) Fair value adjustment to investment properties excluding straight-lining of lease income 2 (16,752) (31,964)
36,257 32,712 Decrease/(increase) in current assets Trade receivables (4) (2,536) Other receivables (1,614) (2,197) Trade receivables from related parties - 123
(Decrease)/increase in current liabilities Trade payables (552) 1,067 Accruals (110) 102 Other payables 794 (331) Trade payables to related parties (226) (24)
Cash generated from operations 34,545 28,916 Interest paid (13) (14) Interest received 809 1,692 Unitholders for distribution 17 (11,782) (7,101) Non-permissible income dispensed 17 (2,518) (3,939)
Net cash inflow from operating activities 21,041 19,554 CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of available-for-sale financial assets (30,376) (46,945) Acquisition of property, plant and equipment - (58) Acquisition of investment properties (2,120) (22,209) Net cash inflow from investing activities (32,496) (69,212) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of units 22,410 60,000 Transaction cost on issue of new units (265) (277)
Net cash inflow from financing activities 22,145 59,723 NET INCREASE IN CASH AND CASH EQUIVALENTS 10,690 10,065 CASH AND CASH EQUIVALENTS At beginning of period 22,704 12,639 At end of period 7 33,394 22,704
OASIS CRESCENT PROPERTY FUND | Annual Report 2010 25 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
1. Accounting policies • Improvements to IFRSs - 2008 • Amendments to IFRS 1- First-Time Adoption of The principal accounting policies applied in the International Financial Reporting Standards and preparation of these financial statements are set out below. IAS 27 Consolidated and Separate Financial Statements: 1.1 Basis of accounting Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate The financial statements of Oasis Crescent Property Fund • Amendment to IFRS 2-Share-Based Payment: have been prepared in accordance with International Vesting Conditions and Cancellations Financial Reporting Standards (IFRS) and the requirements of • IAS 23 Borrowing Costs – Revised the Collective Investment Schemes Control Act of 2002. • Amendment to IAS 32-Financial Instruments: Presentation and IAS 1 Presentation of Financial The financial statements are prepared on the historical Statements - Puttable Financial Instruments and cost basis as modified by the revaluation of investment Obligations Arising on Liquidation properties and of available-for-sale financial assets. • Amendments to IFRIC 9 Reassessment of Embedded Derivatives and IAS 39 Financial Standards, amendments and interpretations effective in Instruments: Recognition and Measurement 2010 • IFRIC 13 - Customer Loyalty Programmes • IFRIC 15 - Agreements for the Construction of The fund has adopted the following new and amended Real Estate IFRSs and interpretations as of 1 April 2009: • IFRIC 16 - Hedges of a Net Investment in a Foreign Operation (a) Standards, amendments and interpretations • AC 503 - Accounting for Black effective in 2010 and relevant to the fund’s Economic Empowerment (BEE) Transactions – operations Revised • AC 504: IAS 19 (AC116) - The limit on a defined • IAS 1 (Revised) - Presentation of financial benefit asset, minimum funding requirements statements: The revised standard prohibits the and their interaction in the South African presentation of items of income and expenses pension fund environment (‘non-owner changes in equity’) in the state- ment of changes in unitholders’ fund, requiring (c ) Standards, amendments and interpretations to all such income and expense items to be existing standards not yet effective presented separately from owner changes in equity. All non-owner changes in equity will be Management is assessing the impact of these standards, required to be shown in a performance state- amendments and interpretations on the fund’s ment. The fund has elected to present compre- operations. hensive income in one statement, instead of • Improvements to IFRSs – 2008 (effective from annual two. As the change in accounting policy only periods beginning on or after 1 July 2009) impacts presentation aspects, there is no impact • Improvements to IFRSs – 2009 (effective from annual on the results of operations or financial position. periods beginning on or after 1 July 2009 and 1 January 2010) • IFRS 7 (Amendment) – Financial instruments: • Amendments to IFRS 1- First-Time Adoption of Inter Disclosures: Improving disclosures about financial national Financial Reporting Standards (effective instruments. The amendments to IFRS 7 require from annual periods beginning on or after 1 January enhanced disclosures about fair value measure 2010) ments and liquidity risk. As the change in • IFRS 2 (Amendment) – Group cash-settled accounting policy only impacts presentation share-based payment transactions (effective from aspects, there is no impact on the results of annual periods beginning on or after 1 January 2010) operations or financial position. • IFRS 3 (Revised) - Business combinations (effective from annual periods beginning on or after 1 July 2009) (b) Standards, amendments and interpretations • IFRS 9 Financial instruments (effective from annual to existing standards effective in 2010 but not periods beginning on or after 1 January 2013) relevant to the fund’s operations • Amended IAS 24 Related party disclosures (effective from annual periods beginning on or after 1 January 2011)
26 OASIS CRESCENT PROPERTY FUND | Annual Report 2010 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
• IAS 27 (Revised) – Consolidated and separate Property, plant and equipment financial statements(effective from annual periods beginning on or after 1 July 2009) Property, plant and equipment is stated at historical cost • Amendment to IAS 32 – Classification of Rights Issues less depreciation. Historical cost includes expenditure (effective from annual periods beginning on or after that is directly attributable to the acquisition of the items. 1 February 2010) • Amendments to IAS 39 - Financial Instruments: Subsequent costs are included in the asset’s carrying Recognition and Measurement Exposures Qualifying amount or recognised as a separate asset, as appropriate, for Hedge Accounting (effective from annual periods only when it is probable that future economic benefits beginning on or after 1 July 2009) associated with the item will flow to the fund and the cost • Amendment to IFRIC 14 - Prepayments of a minimum of the item can be measured reliably. All other repairs funding requirement (effective from annual periods and maintenance are charged to the statement of com- beginning on or after 1 January 2011) prehensive income during the financial period in which • IFRIC 17 – Distribution of non-cash assets to owners they are incurred. (effective from annual periods beginning on or after 1 July 2009) Depreciation is calculated using the straight line method • IFRIC 18 – Transfers of assets from customers (effective to allocate their cost to their residual values over their from annual periods beginning on or after 1 July 2009) estimated useful lives as follows: • IFRIC 19 - Extinguishing financial liabilities with equity instruments (effective from annual periods beginning - Office Equipment: 5 years on or after 1 July 2010) The assets’ residual values and useful lives are reviewed, 1.2 Tangible assets and adjusted if appropriate, at each statement of financial position date. Investment properties An asset’s carrying amount is written down immediately Investment properties are held to earn rental income and to its recoverable amount if the asset’s carrying amount is for capital appreciation and are initially recorded at cost, greater than its estimated recoverable amount. including the transaction cost on acquisition. Additional expenditure on investment properties is capitalised when Gains and losses on disposals are determined by it is probable that future economic benefits will flow to the comparing proceeds with carrying amounts. These are fund. All other subsequent expenditure on the properties included in the statement of comprehensive income. is expensed in the period in which it is incurred. Investment property held to earn rental income, capital appreciation 1.3 Revenue and expense recognition and not occupied by the fund is classified as investment property. Revenue comprises gross rental and related income excluding Value Added Tax. Where a lease has a fixed Investment properties are subsequently measured at fair escalation clause the rental income is recognised on a value, representing open market value, as determined by straight line basis over the period of the lease. Related registered external valuers as at the financial year end. income from lessees is recognised as it falls due for Open market value is determined by the valuer using two payment. methods namely the discounted cash flow method and the net income capitalisation method. Refer note 2 for Interest income is recognised using the effective interest key judgements used in the valuations. rate method.
Any surplus or deficit is included in net income. As required Dividend income is recognised when the right to receive by the trust deed, surpluses are transferred from retained payment is established. income to a non-distributable reserve, which is not available for distribution. Likewise, deficits are transferred Management fees payable to Oasis Crescent Property Fund from retained income and set off against existing non- Managers Limited represent 0.5% of the enterprise value of distributable reserves to the extent that such reserves the fund which consists of the total market capitalisation and are available for the particular investment property. any long term borrowings of the fund. The management fee On the disposal of an investment property any realised is calculated and payable monthly based on the average accumulated surplus included in the non-distributable daily closing price of the fund as recorded by the JSE Limited reserve is transferred to a capital reserve, which is not and the average daily extent of any long term borrowings. available for distribution. Management fees are recognised monthly as and when the services are performed
OASIS CRESCENT PROPERTY FUND | Annual Report 2010 27 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
1.4 Financial instruments The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not The fund classifies its financial assets in the following active (and for unlisted securities), the fund establishes categories: loans and receivables and available-for- fair value by using valuation techniques. These include sale financial assets. The classification depends on the the use of recent arm’s length transactions, reference purpose for which the financial assets were acquired. to other instruments that are substantially the same and Management determines the classification of its financial discounted cash flow analysis. assets at initial recognition. The fund assesses at each statement of financial position Loans and receivables date whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of Loans and receivables are non-derivative financial assets equity securities classified as available-for-sale, a significant with fixed or determinable payments that are not quoted or prolonged decline in the fair value of the security below in an active market. They are included in current assets, its cost is considered as an indicator that the securities are except for maturities greater than 12 months after the impaired. If any such evidence exists for available-for-sale statement of financial position date. These are classified financial assets, the cumulative loss – measured as the as non-current assets. The fund’s loans and receivables difference between the acquisition cost and the current comprise “trade receivables”, “other receivables’’, fair value, less any impairment loss on that financial asset ‘‘trade receivables from related parties’’ and “cash and previously recognised in statement of comprehensive cash equivalents” in the statement of financial position income – is removed from equity and recognised in the (note 5, 6, 22 and 7) statement of comprehensive income. Impairment losses recognised in the statement of comprehensive income on Available-for-sale financial assets equity instruments are not reversed through the statement of comprehensive income. Impairment testing of trade Available-for-sale financial assets are non-derivatives that receivables is described in note 1.5 are either designated in this category or not classified in any of the other categories. They are included in Financial assets and liabilities are set-off and the net non-current assets unless management intends to dispose balance is reported in the statement of financial position of the investment within 12 months of the statement of where there is a legally enforceable right to set off and financial position date. the fund intends to settle on a net basis or to realise the asset and settle the liability simultaneously. Regular purchases and sales of financial assets are recognised on the trade-date – the date on which the 1.5 Trade receivables fund commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for Trade receivables are recognised initially at fair value all financial assets not carried at fair value through profit and subsequently measured at amortised cost using the or loss. Financial assets are derecognised when the rights effective interest method, less provision for impairment. A to receive cash flows from the investments have expired provision for impairment of trade receivables is established or have been transferred and the fund has transferred when there is objective evidence that the fund will not be substantially all risks and rewards of ownership. Available- able to collect all amounts due according to the original for-sale financial assets are subsequently carried at fair terms of the receivables. Significant financial difficul- value. Loans and receivables are carried at amortised ties of the debtor, probability that the debtor will enter cost using the effective interest method. bankruptcy or financial reorganisation, and default or delinquency in payments (more than 60 days overdue) When securities classified as available-for-sale are sold are considered indicators that the trade receivable is or impaired, the accumulated fair value adjustments impaired. The amount of the provision is the difference recognised in equity are included in the statement between the asset’s carrying amount and the present of comprehensive income as “gains and losses from value of estimated future cash flows, discounted at investment securities”. the original effective interest rate net of any deposit. The carrying amount of the asset is reduced through the use Dividends on available-for-sale equity instruments are of an allowance account, and the amount of the loss is recognised in the statement of comprehensive income recognised in the statement of comprehensive income within as part of income from investments when the fund’s right property expenses When a trade receivable is uncollect- to receive payments is established. ible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against “property expenses’’.
28 OASIS CRESCENT PROPERTY FUND | Annual Report 2010 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
The effective interest method is a method of calculating 1.11 Taxation the amortised cost of a financial asset or financial liability and of allocating the interest income or interest No income taxation is accounted for in the fund as all expense over the relevant period. The effective interest income is distributed to unitholders and is taxable in their rate is the rate that exactly discounts estimated future hands. Likewise, no Capital Gains Tax is accounted for cash payments or receipts throughout the expected in the fund as these gains will vest with the participatory life of the financial instrument, or, when appropriate, a interest holders on disposal of their interests. shorter period, to the net carrying amount of the financial asset or financial liability. When calculating the effective 1.12 Deferred taxation interest rate, the fund estimates cash flows considering all contractual terms of the financial instrument but does The fund is not liable for capital gains on the sale of not consider future credit losses. The calculation includes directly held investment properties and accordingly no all fees paid or received between parties to the contract deferred taxation is provided on the revaluation of the that are an integral part of the effective interest rate, properties. transaction costs and all other premiums or discounts.
1.6 Cash and cash equivalents 1.13 Segment reporting
Cash and cash equivalents comprise cash on hand, Operating segments are reported in a manner consistent deposits held on call with banks and other short-term with the internal reporting provided to the chief operating highly liquid investments with original maturities of three decision maker. The chief operating decision maker is the months or less. person or group that allocates resources to and assesses the performance of the operating segments of an entity. 1.7 Capital of the fund The fund has determined that its chief operating decision maker is the investment manager of the fund. Capital of the fund consists of unitholders’ capital net of any directly attributable transaction cost on issue of units, The fund operates in the following primary business and is classified as equity. segments:
1.8 Trade payables Office – comprising office buildings and office parkings Industrial – industrial buildings such as warehouses and Trade payables are recognised initially at fair value and factories subsequently measured at amortised cost using the Retail – comprising retail outlets effective interest rate method. Investments – comprising available-for-sale investments and cash and bank balances 1.9 Deposits Corporate – comprising items not attributable to the other segments Deposits represent amounts received from the tenants as a security against any unpaid rentals and are classified 1.14 Distributions to unitholders as trade payables. Initially the liability is measured at its fair value plus transaction costs. Subsequent to initial The fund has an obligation to distribute the income measurement, the liability is measured at amortised cost per unit for distribution as calculated. Distributions to using the effective interest method. unitholders are recognised as a liability once the amount for distribution has been calculated. The fund is obliged 1.10 Provisions to distribute income semi-annually for the 6 months to 30 September and the 6 months to 31 March. Distributions A provision is recognised when there is a present legal exclude income arising from: or constructive obligation as a result of past events, it is probable that an outflow of economic resources will be • unrealised fair value adjustments to investment required to settle the obligation and a reliable estimate properties of the amount of the obligation can be made. Provisions are measured at the present value of the expenditures • realised capital gains and losses on disposal expected to be required to settle the obligation using of investment properties a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the • non-permissible activities as prescribed by the obligation. The increase in the provision due to passage Oasis Group Shari’ah Advisory Board of time is recognised as finance cost.
OASIS CRESCENT PROPERTY FUND | Annual Report 2010 29 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
• unrealised gains and losses on available-for- 1.17 Leasing arrangements sale financial assets The period of leases whereby the fund leases out its • realised gains and losses on available-for-sale investment property under operating leases is one to five financial assets. years or more. Leases generally contain fixed escalation rates of approximately 6% to 12% except for the Carnaud 1.15 Use of estimates, assumptions and judgements lease on Sacks Circle property where it is the higher of CPI or 4.5%. The preparation of the financial statements necessitates the use of estimates, assumptions and judgements. The estimates and assumptions affect the reported amounts of assets, liabilities and contingent liabilities at the statement of financial position date as well as affecting the reported income and expenses for the period. Although estimates are based on management’s best knowledge and judgement of current facts as at the statement of financial position date, the actual outcome may differ from these estimates, possibly significantly.
Impairment of available-for-sale financial asset
The fund’s investment manager follows the guidance of IAS 39 to determine when an available-for-sale asset is impaired. The determination requires significant judgment. In making this judgment, the fund’s investment manager evaluates, among other factors, the duration and extent to which the fair value of an investment is less than cost and the financial health and business outlook for the investee, including factors such as industry and sector performance.
The fund’s investment manager does not consider the available-for-sale investment to be impaired, due to the reasons stated in the financial highlights on page 7. If the available-for-sale investment was to be impaired this would result in a movement between the non distribut- able reserves. Furthermore this would not have an impact on the distribution per unit.
1.16 Leases
Operating leases
Properties leased out under operating leases are included in investment properties in the statement of financial position as per note 2. Lease income is recognised over the term of the lease on a straight-line basis.
30 OASIS CRESCENT PROPERTY FUND | Annual Report 2010 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
2010 2009 R '000 R '000 2. Investment properties At valuation 374,413 353,301 Straight line lease accrual (10,105) (7,865)
364,308 345,436 Movement in investment properties Carrying value at the beginning of the year 345,436 291,263 Additions 2,120 22,209 Fair value adjustment to investment properties excluding 16,752 31,964 straight-lining of lease income Revaluation 18,992 33,992 Change in straight line lease accrual (2,240) (2,028)
Carrying value at the end of the year 364,308 345,436
The investment properties were independently valued by Mills Fitchet Magnus Penny (Pty) Ltd on 31 March 2010. The fund generally values its properties using the capitalisation of net income approach which requires the valuer to establish the current net income of the existing leases to which a market derived capitalisation rate is applied. The market capitalisation rates and discount rates used were in the range of 8.19% to 14.50% (2009: between 8.56% and 14.13%).
The principal assumptions underlying estimation of fair value are those related to the receipt of contractual rentals, expected future market rentals, void periods ranging from 0% to 5%, maintenance requirements and appropriate discount rates. These valuations are regularly compared to actual market yield data, actual transactions by the fund and those reported by the market.
2.1 As at 31 March 2009, the following investment properties are included in the property portfolio :
Property name Non- Non- Market Cost distributable Market Cost distributable value 2010 reserve value 2009 reserve 2010 2010 2009 2009
R’000 R’000 R'000 R’000 R’000 R'000
Sacks Circle Bellville 47,600 23,001 24,599 43,500 23,001 20,499 Moorsom Avenue 58,300 23,495 34,805 52,700 23,461 29,239 Epping Nourse Avenue 21,713 18,645 3,068 20,900 18,642 2,258 Epping Waltex Goodwood 20,000 17,412 2,588 20,000 17,412 2,588 Protea Assurance 76,200 44,144 32,056 67,000 44,144 22,856 Cape Town Eclipse Park 15,600 13,667 1,933 14,200 11,631 2,569 The Ridge@Shallcross 135,000 125,468 9,532 135,001 125,421 9,580 Total 374,413 265,832 108,581 353,301 263,712 89,589
OASIS CRESCENT PROPERTY FUND | Annual Report 2010 31 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
2010 2009 R '000 R '000
3. Property, plant and equipment (Building equipments) Cost 58 58 Accumulated depreciation (16) (5) Carrying value at the end of the year 42 53
4. Available-for-sale financial assets Carrying value at the beginning of the year 59,157 44,987 Additions 34,129 63,347 Disposals (3,753) (16,402) Revaluation 14,234 (32,775) Carrying value at the end of the year 103,767 59,157
4.1 The US Dollar value of the investments in Oasis Crescent Global Property Equity Fund is as follows :
Units held 2,202,096 1,557,797
Ex-dividend price in US Dollars 6.47 3.99 US Dollar value of the investment 14,248 6,216 Rand / US Dollar exchange rate 7.2831 9.5169
5. Trade receivables Investment income receivable 47 122 Accrued dividends 1,568 1,984 Accrued profit from Murabaha Investment 202 279 Accounts receivable: Broll 29 30 Municipal charges 1,006 666 Net accounts receivable 1,182 982 Accounts receivable 2,157 1,924 Provision for receivables impairment (Note 21.1) (975) (942)
4,034 4,063
5.1 Due to the short term nature of the trade receivables, the book value represents the fair value of trade receivables. All trade receivables are expected to be received within 12 months.
32 OASIS CRESCENT PROPERTY FUND | Annual Report 2010 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
2010 2009 R '000 R '000
6. Other receivables Deposits 52 51 Proceeds receivable in respect of investment sold 3,753 - Advance for purchase of property - 2,024 Prepayments: - Alternative Exchange fees (ALTx) 29 16 - Letting commission 449 568 - South African Musical Rights Organisation fees (SAMRO) 3 2 - Insurance 18 - - Close Circuit Television costs (CCTV) 43 62 - Other - 6 4,347 2,733
6.1 Due to the short term nature of the other receivables, the book value represents the fair value of other receivables.
7. Cash and cash equivalents For the purposes of the cash flow statement, cash and cash equivalents comprise the following: Deposits at banks 33,394 22,704 The cash is held on call as per the requirements of the trust deed.
8. Capital of the fund Balance as at 31 March 402,487 360,931 Units in issue at 31 March 2010 : 37,462,790 (2009: 33,981,445)
During the current reporting period the fund issued 3.48 million units (1.79 million for cash and 1.69 million units in lieu of distribution). The June 2009 as well as November 2009 issues were done at 1250 cents per unit. The proceeds raised are being invested in suitable investments and utilised for ongoing capital expenditure.
9. Trade payables Trade payables: - Municipal charges 871 863 - Accruals 915 1,446 - Designated advisory fees - 130 - Seller - Ridge@Shallcross 33 33 - Deposits 1,267 1,166 3,086 3,638
9.1 Deposits include an amount of R81,561 (2009: R63,537) received from Oasis Group Holdings (Pty) Limited.
OASIS CRESCENT PROPERTY FUND | Annual Report 2010 33 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
2010 2009 R '000 R '000
10. Accruals - Audit fees 134 127 - Valuation costs 30 28 - Printing and publishing costs 85 204 249 359 11. Other payables Rent received in advance 1,126 453 VAT payable 459 338 1,585 791 12. Income from investments Dividend received - offshore 4,032 4,040 Short term cash deposits - domestic 360 1,370 - offshore - 224 Domestic dividends 168 - Service fee rebate - offshore 421 170 Foreign exchange loss - (32) 4,981 5,772 13. Operating profit - expenses by nature Operating profit is stated after charging: Property expenses 15,302 14,559 - Property management fees 1,226 1,082 - Municipal charges 8,253 7,242 - Salaries 596 565 - Cleaning 516 487 - Provision for receivables impairment (Note 21.1) 245 810 - Insurance 463 420 - Security 1,337 1,232 - Advertising and promotions 464 600 - Repairs and maintenance 1,620 1,280 - Others 582 841 Service charge (Note 13.1) 2,202 1,749
Other operating expenses 425 707
- Audit fee 182 177 - Designated advisor fee (9) 123 - Trustee fee 147 128 - Printing and publishing (116) 107 - Other operating expenses 221 172 Total expenses 17,929 17,015
34 OASIS CRESCENT PROPERTY FUND | Annual Report 2010 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
13.1 The service charge is equal to 0.5% per annum of the fund’s market capitalisation and borrowing facilities and a pro-rata portion is payable on a monthly basis. The market capitalisation is based on the average daily closing price of the units as quoted on the Alternative Exchange (ALTx) of South Africa.
14. Basic and headline earnings per unit
Basic earnings per unit Basic earnings per unit was 156.9 cents for the year ended 31 March 2010 (2009: 224.6 cents). The calculation of the basic earnings per unit is based on 35,694,283 (2009: 31,366,369) weighted average units in issue at the end of the year and net profit of R56.0 million (2009: R70.5 million).
Headline earnings per unit Headline earnings per unit was 110 cents for the year ended 31 March 2010 (2009: 113.5 cents). The calculation of the headline earnings per unit is based on 35,694,283 (2009: 31,366,369) weighted average units in issue during the year and headline earnings of R39.25 million (2009: R35.6 million).
2010 2009 R '000 R '000
15. Basic and headline earnings per unit Headline earnings and distribution income reconciliation
Net profit for the year 56,008 70,464 Adjusted for: Realised gain on sale of available-for-sale investments (7) (2,897) Fair value adjustment to investment properties (16,752) (31,964)
Headline earnings 39,249 35,603 Less: Straight line lease accrual (2,240) (2,028) Distribution including non-permissible income 37,009 33,575
Non-permissible rental income (2,035) (781) Non-permissible investment income (739) (1,574)
Distribution income excluding non-permissible income 34,235 31,220 Basic earnings per unit including non-permissible income 156.9 224.6 (cents) Headline earnings and diluted head line earnings per unit 110.0 113.5 including non-permissible income (cents) Distribution per unit including non-permissible income 103.7 107.0 (cents) Distribution per unit excluding non-permissible income 99.5 99.5 (cents) Weighted average units in issue 35,694,283 31,366,369 Units in issue at the end of the period 37,462,790 33,981,444
OASIS CRESCENT PROPERTY FUND | Annual Report 2010 35 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
2010 2009 R '000 R '000 16. Operating lease rentals
Future contractual rental income due from tenants can be analysed as follows: Within one year 35,542 40,498 Within two to five years 65,892 72,350 More than five years 7,867 14,155 109,301 127,003
17. Notes to cash flow statement - Distribution Amounts unpaid at the beginning of the year 17,167 14,211 Amounts declared during the year 37,009 33,575 Distribution received in advance 1,696 2,615 Amounts unpaid at the end of the year (20,465) (17,167) Distribution including non-permissible income 35,407 33,234 Non-permissible income dispensed (2,518) (3,939) Distribution excluding non-permissible income 32,889 29,295 Distribution in scrip (21,107) (22,194) Distribution Paid in Cash 11,782 7,101
18. Capital Commitments As at 31 March 2010, there were no capital commitments (2009: R Nil) to be funded from existing cash resources. 19. Contingent Liabilities The fund has no contingent liabilities.
20. Events after the balance sheet date The directors are not aware of any events subsequent to 31 March 2010 which are likely to have a material effect on the financial information contained in this report. The commitments reflected in note 18 are in the ordinary course of business. 21. Financial risk management The fund’s activities expose it to a variety of financial risks: market risk (including foreign currency risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. Risk management is carried out by the Oasis Group Central Risk Committee under policies approved by the board of directors. The board provides the principles for overall risk management, as well as the policies covering specific areas, such as interest rate risk, credit risk, use of non-derivative financial instruments, and investment of excess liquidity.
Market risk: Foreign currency risk The fund’s financial assets and liabilities are denominated in South African Rands (ZAR) except for the investments and the related investment income receivable in offshore investments which are denominated in US Dollars (USD) and translated to Rands (ZAR) at each balance sheet date at the closing rate of exchange between ZAR and USD.
36 OASIS CRESCENT PROPERTY FUND | Annual Report 2010 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
Sensitivity analysis Sensitivity analysis As of 31 March 2010, if the Rand had weakened/strength- As at 31 March 2010, if the closing market prices of the ened by 5% against the US Dollar (and assuming all other equity investments that the fund holds had been 10% variables remained constant), the available-for-sale higher/lower, with all other variables held constant, the financial asset would have been R5.18 million (2009 : 2.9 available-for-sale financial asset would have been R10.38 million) higher /lower than as stated in the statement of million (2009: R5.92 million) higher/lower. The sensitivity financial position. analysis for price risk excludes the effect of movements in foreign currency exchange rates. This sensitivity analysis for currency risk includes the effect of non-monetary financial instruments, denominated in Fair value estimation currency, other than the entity’s functional currency. Effective 1 January 2009, the fund adopted the amendment to IFRS 7 for financial instruments that are The foreign currency risk is managed by close monitoring measured in the statement of financial position at fair of foreign currency rates on a regular basis. value, this requires disclosure of fair value measure- ments by level of the following fair value measurement Market risk: Cash flow interest rate risk hierarchy: The fund has cash on call (denominated in ZAR) which attracted an average variable interest rate of 5.98% - Quoted prices (unadjusted) in active markets for during the year under review (2009: 5.92%). The sensitivity identical assets or liabilities (level 1) analysis is based on the average cash balances. - Inputs other than quoted prices included within level Interest expenses incurred is primarily on the municipal 1 that are observable for the asset or liability, either charges. directly (that is, as prices) or indirectly (that is, derived from prices) (level 2). Management does not invest in interest rate derivatives. - Inputs for the asset or liability that are not based on observable market data (that is, unobservable Sensitivity analysis inputs) (level 3). At 31 March 2010, if interest rates at that date had been 1% lower/higher, with all other variables held constant, The following table presents the fund’s assets and liabilities net profit for the year would have been R133,000 (2009: that are measured at fair value at 31 March 2010: R286,000) lower/higher, arising mainly as a result of lower/ higher interest income on cash deposits at banks.
The fund manages interest rate risk by monitoring interest rates on a regular basis. There were no significant Assets Level 1 Level 2 Level 3 Total borrowings or loans outstanding during the period under review which attract interest exposure to the entity. RRRR Available-for- - -- - Market risk: Price risk sale financial The fund is exposed to property price and market rental instruments risks. Investment in - 103,767 - 103,767 Oasis Crescent Market price risk arises mainly from uncertainty about Global Property future prices of financial instruments held. It represents Equity Fund the potential loss the fund might suffer through holding market positions in the face of price movements.
The fund is exposed to market price risk via the quoted investment disclosed in note 4, namely units held in the Oasis Crescent Global Property Equity Fund. Price risk is managed by only investing in highly rated well diversified collective investment schemes, with outstanding track records.
OASIS CRESCENT PROPERTY FUND | Annual Report 2010 37 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by the fund is the ex dividend price. These instruments are included in level 1. The instruments included in level 2 comprise primarily Irish stock exchange property equity investments classified as available-for-sale. The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
Specific valuation techniques used to value financial instruments include:
- Quoted market prices or dealer quotes for similar instruments.
- Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments.
Credit risk The fund is exposed to credit risk on its financial assets such as trade and other receivables, and cash and cash equivalents. This risk arises due to change in the credit rating of the counter party subsequent to the fund obtaining the financial assets.
The fund has formal policies and procedures in place to ensure management of credit risk. A formal credit risk assessment is performed for all new tenants and tenancy contracts are made with tenants with an appropriate credit history. Cash is invested with high credit quality financial institutions. Furthermore, trade receivables consist of a spread of good quality tenant receivables and adequate provision is made for bad debts where applicable.
The fund does not consider significant credit risk to arise from its trade receivables to related parties.
The fund’s maximum exposure to credit risk at 31 March 2010 and 31 March 2009 is represented by the carrying amounts of trade and other receivables and cash and cash equivalents at the respective dates. The fund holds deposits from tenants which will be applied towards arrear rentals in the event of default by a tenant.
The executive directors of Oasis Crescent Property Fund Managers Limited monitor the fund’s exposure to the concentra- tion of credit risk on a monthly basis.
The following table provides information regarding the aggregated risk exposure for financial assets with external ratings as at 31 March 2010:
Credit rating Carrying value in Balance sheet F1+ (zaf) Not rated R ‘000 R ‘000 R ‘000 Trade and other receivables - 7,786 7,786 Cash and cash equivalents 33,394 - 33,394
The following table provides information regarding the aggregated risk exposure for financial assets with external ratings as at 31 March 2009:
Credit rating Carrying value in Balance sheet A3 (BCA rating) Not rated R ‘000 R ‘000 R ‘000 Trade and other receivables - 4,063 4,063 Cash and cash equivalents 22,704 - 22,704
38 OASIS CRESCENT PROPERTY FUND | Annual Report 2010 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
The fund holds net deposits from tenants with a carrying value of R1,266,574 (2009: R1,166,000) which may be applied towards the arrear rentals set out above.
The counter parties included in the trade receivables and trade receivables from related parties are financial institutions, tenants and listed entities. Historically the default rates of the above entities are NIL except for the trade receivables from the tenants where the default rates was 0.5% (2009: 2.18%) on rental and related income.
Impairment history
The following table provides information regarding the carrying value of financial assets that have been impaired and the ageing of financial assets that are past due but not impaired:
2010 Neither past due Financial Financial Impairment Carrying value nor impaired assets that are assets that in Statement (days) past due but have been of Financial not impaired impaired Postion (days) (days) R ‘000 0-60 61-120 and 61-120 and above above Trade receivables 8,762 - 974 974 7,788 Trade receivables from related - - - parties Cash and cash equivalents 33,394 - - - 33,394
2009 Neither past due Financial Financial Impairment Carrying value nor impaired assets that are assets that in Statement (days) past due but have been of Financial not impaired impaired Postion (days) (days) R ‘000 0-60 61-120 and 61-120 and above above Trade receivables 3,799 264 942 942 4,063 Cash and cash equivalents 22,704 - - - 22,704
21.1 The provision for impairment of trade receivables are as follows:
2010 2009 R '000 R '000
Opening balance 942 132 Provision for receivables impairment 245 810 Bad debts written off (212) - Closing balance 974 942
OASIS CRESCENT PROPERTY FUND | Annual Report 2010 39 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
Liquidity risk
Proper liquidity risk management implies that sufficient investments in cash and marketable securities are maintained, and that funding is available from an adequate amount of committed credit facilities.
The following are the contractual maturities of financial liabilities, including interest payments and excluding the impact of netting arrangements. More than one More than Payable within month but not three months Carrying Contractual 1 month or on exceeding but not As at 31 March 2010 amount cash flows demand three months exceeding one year Non-derivative financial liabilities R’000 Trade payables 3,086 3,086 3,086 - - Trade payables to related parties 13 13 13 - - Unitholders for distribution 20,155 20,155 - 20,155 - Non-permissible income for 310 310 310 - dispensation 23,564 23,564 3,409 20,155 -
More than one More than Payable within month but not three months Carrying Contractual 1 month or on exceeding but not As at 31 March 2009 amount cash flows demand three months exceeding one year Non-derivative financial liabilities R’000 Trade payables 3,638 3,638 3,638 - - Trade payables to related parties 239 239 239 - - Unitholders for distribution 17,113 17,113 - 17,113 - Non-permissible income for 54 54 54 - dispensation 21,044 21,044 3,931 17,113
Capital Risk Management
The fund’s objectives when managing capital is to safeguard the fund’s ability to continue as a going concern and to provide an adequate return to the unitholders by pricing the rentable units proportionately with the level of risk.
Management considers capital to be equivalent to the amount reflected as “Unitholders funds” on the face of the statement of financial position.
The fund’s policy is to distribute its entire permissible income as calculated to the unitholders and dispense the non-permis- sible income to Crescent Fund Trust, a recognised charitable trust, for the year as required by the Collective Investments Schemes Control Act.
22. Related party transactions and balances
22.1 Identity of the related parties with whom material transactions have occurred.
Oasis Crescent Property Fund Managers Limited is the management company of the fund in terms of the Collective Investment Schemes Control Act.
Eden Court Property Fund (Pty) Limited is the entity that owned any property that is not Shari’ah compliant up to 31 October 2008. Rentals were collected by Eden Court Property Fund (Pty) Limited and expenses were paid and recovered by Oasis Crescent Property Fund Managers Limited.
40 OASIS CRESCENT PROPERTY FUND | Annual Report 2010 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
Oasis Group Holdings (Pty) Limited is a tenant at the Ridge@Shallcross.
As disclosed in the prospectus of Oasis Crescent Global Property Equity Fund a management fee is charged for investing in the Oasis Crescent Global Property Equity Fund by Oasis Global Management Company (Ireland) Limited, the manager of the fund.
There are common directors to Oasis Crescent Property Fund Managers Limited, Eden Court Property Fund (Pty) Limited, Oasis Group Holdings (Pty) Limited, and Oasis Global Management Company (Ireland) Limited. Transactions with related parties are executed on terms no less favorable then those arranged with third parties.
22.2 Type of related party transactions
The fund pays a service charge and a property management fee on a monthly basis to Oasis Crescent Property Fund Managers Limited.
2010 2009 22.3 Related party transactions R '000 R '000
Service charge paid to Oasis Crescent Property Fund 2,202 1,749 Managers Limited Property management fees paid to Oasis Crescent 916 799 Property Fund Managers Limited Expense recoveries from Eden Court Property Fund - 596 (Pty) Limited Rental, related income and deposit from Oasis 292 325 Group Holdings (Pty) Limited at the Ridge@Shallcross Related party balances Trade payables to Oasis Group Holdings (Pty) Limited 6 122 Trade payables to Oasis Crescent Property Fund 7 117 Managers Limited
13 239
23. Segmental analysis
Management has determined the operating segments based on the management information reviewed by the investment manager in making strategic decisions. The investment manager considers the business based on the following five reportable segments, namely: Retail, Offices, Industrial, Investments and Corporate .The operating segments derive their revenue primarily from rental income from lessees. All of the Fund’s business activities and operating segments are reported within the segments below.
OASIS CRESCENT PROPERTY FUND | Annual Report 2010 41 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
Retail Offices Industrial Investments Corporate Total 23. Segmental analysis-2010 R ‘000 R ‘000 R ‘000 R ‘000 R ‘000 R ‘000 Segment revenue Property income Rental and related income 23,849 7,495 17,817 - - 49,161 Income from investments Dividend income offshore - - - 4,453 - 4,453 Permissible investment income domestic - - - 360 - 360 Domestic dividend income - - - 168 - 168 23,849 7,495 17,817 4,981 - 54,142 Segment expense Property expenses 10,176 2,725 2,401 - - 15,302 Service charges - - - - 2,202 2,202 Domestic divedend income - - - - 425 425 10,176 2,725 2,401 - 2,627 17,929 Realised gain on sale of available-for-sale - - - 7 - 7 investments Segment result Operating profit/(loss) 13,673 4,770 15,416 4,988 (2,627) 36,220 Net finance income Net interest received - - - 796 796 Net profit/(loss) before straight-line lease income 13,673 4,770 15,416 5,784 (2,627) 37,016 and fair value change to investment properties Straight-lining of lease income 969 (417) 1,688 - - 2,240 Fair value adjustment to investment properties 185 7,777 8,790 - - 16,752 Net profit / (loss) after straight-line lease income 14,827 12,130 25,894 5,784 (2,627) 56,008 and fair value change to investment properties Segment assets Investment properties 161,972 60,483 141,853 - - 364,308 Property, Plant & Equipment 42 - - - - 42 Straight-line lease accrual 3,868 477 5,760 - - 10,105 Available-for-sale financial assets - - - 103,767 - 103,767 Trade receivables 1,649 144 396 - 1,845 4,034 Other receivables 243 13 308 3,753 30 4,347 Cash and cash equivalents - - - 33,394 - 33,394 167,774 61,117 148,317 140,914 1,875 519,997 Segment liabilities Trade payables 2,492 154 183 - 256 3,085 Accruals - - - - 249 249 Other payables 1,093 - 33 - 459 1,585 Trade payables to related parties 13 - - - -13 Unitholders for distribution - - - - 20,155 20,155 Non-permissible income available for - - - - 310 310 dispensation 3,598 154 216 - 21,429 25,397 Capital expenditure 2,083 - 37 - - 2,120
42 OASIS CRESCENT PROPERTY FUND | Annual Report 2010 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
Retail Offices Industrial Investments Corporate Total 23. Segmental analysis-2009 R ‘000 R ‘000 R ‘000 R ‘000 R ‘000 R ‘000 Segment revenue Property income Rental and related income 21,017 7,214 14,909 - - 43,140 Income from investments Dividend income offshore - - - 4,178 - 4,178 Permissible investment income - offshore - - - 224 - 224 - domestic - - - 1,370 - 1,370 21,017 7,214 14,909 5,772 48,912 Segment expense Property expenses 10,026 2,608 1,919 - 6 14,559 Service charges - - - - 1,749 1,749 Other operating expenses - - - - 707 707 10,026 2,608 1,919 - 2,462 17,015 Realised gain on sale of available-for-sale - - - 2,897 - 2,897 investments Segment result Operating profit 10,991 4,605 12,990 8,669 (2,462) 34,794 Net finance income Net interest received - - - 1,678 - 1,678 Net profit/(loss) before straight-line lease income 10,991 4,605 12,990 10,347 (2,462) 36,472 and fair value change to investment properties Straight-lining of lease income 773 (178) 1,433 - - 2,028 Fair value adjustment to investment properties 8,857 3,004 20,103 - - 31,964 Net profit / (loss) after straight-line lease income 20,621 7,431 34,526 10,347 (2,462) 70,464 and fair value change to investment properties Segment assets Investment properties 146,525 65,883 133,028 - - 345,436 Property, Plant & Equipment 53 - - - - 53 Straight-line lease accrual 2,675 1,117 4,073 - - 7,865 Available-for-sale financial assets - - - 59,157 - 59,157 Trade receivables 1,366 - 282 - 2,415 4,063 Other receivables 2,128 44 542 - 19 2,733 Trade receivables from related parties ------Cash and cash equivalents - - - 22,704 - 22,704 152,747 67,044 137,925 81,861 2,434 442,011 Segment liabilities Trade payables 2,289 515 492 - 342 3,638 Accruals - - - - 359 359 Other payables 424 29 - 338 791 Trade payables to related parties 148 - 91 - - 239 Unitholders for distribution - - - - 17,113 17,113 Non-permissible income available for - - - - 54 54 dispensation 2,861 515 612 - 18,206 22,194 Capital expenditure 21,594 - 615 - - 22,209
OASIS CRESCENT PROPERTY FUND | Annual Report 2010 43 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
24. Unitholders Spread and analysis :
Unitholders holding more than 5% of issued units as at 31 March 2010:
Name Number of PIs % of holding
Oasis Crescent Balanced Progressive Fund of Funds 9,355,387 25.0% Crescent Retirement Annuity Fund 5,162,639 13.8% Oasis Crescent Preservation Pension Fund 3,823,721 10.2% Eden Court Trust 3,458,941 9.2%
Unitholders holding more than 5% of issued units as at 31 March 2009:
Name Number of PIs % of holding
Eden Court Trust 2,133,941 7.9% Crescent Retirement Annuity Fund 2,303,414 8.5% BNP Paribas Securities 1,496,600 5.5% Oasis Crescent Preservation Pension Fund 2,558,614 9.5% Oasis Crescent Global Equity Fund 1,805,000 6.7% Crescent Balanced Progressive Fund of Funds 6,735,999 24.9%
Unitholders spread as at 31 March 2010: No of No of % of Unitholders Units total
Non-public 4 3,582,335 9.6% Public 266 33,880,455 90.4% Total 270 37,462,790 100%
Unitholders spread as at 31 March 2009: No of No of % of Unitholders Units total
Non-public 4 3,513,206 10.3 Public 268 30,468,239 89.7 Total 272 33,981,445 100.0
Director’s beneficial interests in OCPF as at 31 March 2010:
Beneficial Direct Indirect Total
M S Ebrahim 11,697 1,186,314 1,198,011 N Ebrahim 11,697 1,186,314 1,198,011 Total 23,394 2,372,628 2,396,022
44 OASIS CRESCENT PROPERTY FUND | Annual Report 2010 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
Name No. of PI holders Holding % of holding
Directors 2 2,396,022 66.9% Associates of directors 2 1,186,313 33.1% Total Non Public 4 3,582,335 100%
Director’s beneficial interests in OCPF as at 31 March 2009:
Beneficial Direct Indirect Total
M S Ebrahim 10,853 1,152,980 1,163,833 N Ebrahim 10,853 1,152,980 1,163,833 Total 21,706 2,305,960 2,327,666
Name No. of PI holders Holding % of holding
Directors 2 2,327,666 66.3% Associates of directors 2 1,185,540 33.7% Total Non Public 4 3,513,206 100%
OASIS CRESCENT PROPERTY FUND | Annual Report 2010 45 STATEMENT OF FINANCIAL POSTION as at 31 March 2010
Note(s) 2010 2009 R '000 R '000
ASSETS
Non-current assets Property, plant & equipment 2 73 97 Available-for-sale financial asset 3 1,230 1,210 1,303 1,307 Current assets Trade receivables from related entities 350 422 Loans to shareholders 5 1,230 611 Current tax receivable 40 - Trade and other receivables 21 6 Cash and cash equivalents 6 902 913 2,543 1,952 Total assets 3,846 3,259
EQUITY AND LIABILITIES Equity Share capital 7 1 1 Reserves 198 181 Retained income 1,276 786 1,475 968 LIABILITIES Non-current liabilities Deferred tax 8 17 15 Subordinated loan 9 2,000 2,000 2,017 2,015 Current liabilities Trade payables to related entities 204 194 Current tax payable 5 - 2 Trade and other payables 150 80 354 276 Total Liabilities 2,371 2,291 Total Equity and Liabilities 3,846 3,259
46 OASIS CRESCENT PROPERTY FUND MANAGERS | Annual Report 2010 STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 March 2010
2010 2009 Note(s) R '000 R '000
Revenue
Service charges 2,236 1,803 Property management fees 916 850 3,152 2,653 Other income Dividend income 95 97 Interest received 74 96 Service fee rebate 33 172 196 Operating expenses Administration and management fees 2,182 1,805 Auditors remuneration 55 34 Depreciation 2 24 23 Directors' remuneration 10 177 153 Other operating expenses 206 334 2,644 2,349 Profit before taxation 680 500 Taxation 11 190 140
Profit for the year 490 360 Other Comprehensive Income Fair value gain on available-for-sale financial assets 17 9 (net of tax) Total Comprehensive Income for the year 507 369
OASIS CRESCENT PROPERTY FUND MANAGERS | Annual Report 2010 47 STATEMENT OF CHANGES IN EQUITY for the year ended 31 March 2010
Share Fair value Retained Total capital reserve income equity R' 000 R' 000 R' 000 R’ 000
Balance at April 1, 2008 1 172 426 599 Fair value gain on available-for-sale financial asset -9 -9 Net profit for the year ended 31 March 2009 - - 360 360
Balance at April 1, 2009 1 181 786 968
Fair value gain on available-for-sale financial asset -17-17 Net profit for the year ended 31 March 2010 - - 490 490 Balance at March 31, 2010 1 198 1,276 1,475 Note 7
STATEMENT OF CASH FLOWS for the year ended 31 March 2010
Note(s) 2010 2009 R '000 R '000 CASH FLOWS FROM OPERATING ACTIVITIES Cash from operating activities Cash generated from operations 12 673 308 Interest income 74 96 Dividends received 95 97 Tax Paid 13 (234) (254) Net cash from operating activities 608 247
Cash flows from investing activities Loans advanced to related entities (619) (247)
Net cash outflow from investing activities (619) (247)
Total cash movement for the year (11) - Cash at the beginning of the year 913 913 Total cash at end of the year 6 902 913
48 OASIS CRESCENT PROPERTY FUND MANAGERS | Annual Report 2010 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
Accounting policies Item Average useful life Motor vehicles 5 years 1. Presentation of Annual Financial Statements Each part of an item of property, plant and equipment The annual financial statements have been prepared with a cost that is significant in relation to the total cost of in accordance with International Financial Reporting the item shall be depreciated separately. Standards, and the Companies Act of South Africa, 1973. The annual financial statements have been prepared on The residual values and useful lives of assets are reviewed, the historical cost basis, except for the measurement of and adjusted if appropriate, at each statement of certain financial instruments at fair value, and incorporate financial position date. the principal accounting policies set out below. 1.3 Financial instruments These accounting policies are consistently applied to all the years presented, unless otherwise stated. Initial recognition
1.1 Significant judgements The company classifies financial instruments, or their component parts, on initial recognition as a financial asset, In preparing the annual financial statements, a financial liability or an equity instrument in accordance management is required to make estimates and with the substance of the contractual arrangement. assumptions that affect the amounts represented in the annual financial statements and related disclosures. Financial assets and financial liabilities are recognised on Use of available information and the application of the company’s statement of financial position when the judgement is inherent in the formation of estimates. Actual company becomes party to the contractual provisions of results in the future could differ from these estimates which the instrument. may be material to the annual financial statements. The areas involving a higher degree of judgement Derecognition or complexity, or the areas where assumptions and estimates are significant to the financial statements are Financial assets and financial liabilities are derecognised disclosed in the notes to the financial statements. when the rights or obligations to receive or incur cash flows from the asset or liabilitiy have expired or been transferred 1.2 Property, plant and equipment and the company has transferred substantially all the risks and rewards of ownership. The cost of an item of property, plant and equipment is recognised as an asset when: Offsetting financial instruments • it is probable that future economic benefits associated with the item will flow to the company; Financial assets and liabilities are offset and the net and amount reported in the statement of financial position • the cost of the item can be measured reliably. when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on Costs include costs incurred initially to acquire or a net basis, or realise the asset and settle the liability si- construct an item of property, plant and equipment multaneously. and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in Loans from related entities the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is These include loans to holding companies, fellow subsid- derecognised. iaries, and are recognised initially at fair value plus direct transaction costs. Property, plant and equipment are shown at cost less accumulated depreciation and any accumulated Subsequently these loans are measured at amortised impairment losses. Property, plant and equipment are cost using the effective interest rate method, less any depreciated on a straight line basis and full month de- impairment loss recognised to reflect irrecoverable preciation is charged in the month of acquisition and no amounts. depreciation is charged in the month of disposal to write each asset down to its estimated residual value over the On loans receivable an impairment loss is recognised term of their useful lives: in statement of comprehensive income when there is objective evidence that it is impaired.
OASIS CRESCENT PROPERTY FUND MANAGERS | Annual Report 2010 49 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
The impairment is measured as the difference between The carrying amount of the asset is reduced through the the investment’s carrying amount and the present value use of an allowance account, and the amount of the loss of estimated future cash flows discounted at the effective is recognised in the statement of comprehensive income interest rate computed at initial recognition. within operating expenses. When a trade receivable is un- collectible, it is written off against the allowance account Impairment losses are reversed in subsequent periods for trade receivables. Subsequent recoveries of amounts when an increase in the investment’s recoverable amount previously written off are credited against operating can be related objectively to an event occurring after expenses in the statement of comprehensive income. the impairment was recognised, subject to the restriction that the carrying amount of the investment at the date Trade payables to related entities and trade and other the impairment is reversed shall not exceed what the payables amortised cost would have been had the impairment not been recognised. Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the Trade receivables from related entities and trade and effective interest rate method. other receivables Borrowings from related entities Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised Borrowings are recognised initially at fair value, net of cost using the effective interest rate method. Appropriate transaction costs incurred. Borrowings are subsequent- allowances for estimated irrecoverable amounts are ly carried at amortised cost; any difference between recognised in statement of comprehensive income when proceeds (net of transaction costs) and the redemption there is objective evidence that the asset is impaired. value is recognised in the statement of comprehensive Significant financial difficulties of the debtor, probability income over the period of the borrowings using the that the debtor will enter bankruptcy or financial reorgan- effective interest method. isation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the Cash and cash equivalents trade receivable is impaired. The allowance recognised is measured as the difference between the asset’s carrying Cash and cash equivalents comprise cash on hand amount and the present value of estimated future cash and demand deposits, and other shortterm highly liquid flows discounted at the effective interest rate computed investments that are readily convertible to a known at initial recognition. amount of cash and are subject to an insignificant risk of changes in value. These are initially recognised at fair The effective interest method is a method of calculating value and subsequently at amortised cost. the amortised cost of a financial asset or financial liability and of allocating the interest income or interest Available for sale financial assets expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future These financial assets are non-derivatives that are either cash payments or receipts throughout the expected designated in this category or not classified elsewhere.They life of the financial instrument, or, when appropriate, a are included in noncurrent assets unless management shorter period, to the net carrying amount of the financial intends to dispose of the investment within 12 months of asset or financial liability. When calculating the effective the statement of financial position date. interest rate, the Fund estimates cash flows considering all contractual terms of the financial instrument but does Investments are recognised and derecognised on a trade not consider future credit losses. The calculation includes date basis where the purchase or sale of an investment all fees paid or received between parties to the contract is under a contract whose terms require delivery of the that are an integral part of the effective interest rate, investment within the timeframe established by the transaction costs and all other premiums or discounts. market concerned.
50 OASIS CRESCENT PROPERTY FUND MANAGERS | Annual Report 2010 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
These investments are measured initially and subsequent- 1.4 Tax ly at fair value plus transaction costs for all financial assets not carried at fair value through statement of comprehen- Current and deferred income taxes sive income. Gains and losses arising from changes in fair value are recognised directly in equity until the security The tax expense for the period comprises current and is disposed of or is determined to be impaired. Financial deferred tax. Tax is recognised in the statement of com- assets are derecognised when the rights to receive cash prehensive income, except to the extent that it relates to flows from the investments have expired or have been items recognised directly in equity. transferred and the company has transferred substan- tially all risks and rewards of ownership. Available-for-sale The current income tax charge is calculated on the financial assets are subsequently carried at fair value. basis of the tax laws enacted or substantively enacted at the statement of financial position date. Management The company assesses at each statement of financial periodically evaluates positions taken in tax returns with position date whether there is objective evidence that a respect to situations in which applicable tax regulation financial asset or a group of financial assets is impaired. In is subject to interpretation. It establishes provisions where the case of equity securities classified as available for sale, appropriate on the basis of amounts expected to be paid a significant or prolonged decline in the fair value of the to the tax authorities. security below its cost is considered as an indicator that the securities are impaired. If any such evidence exists Deferred income tax is recognised, using the liability for available-for-sale financial assets, the cumulative loss method, on temporary differences arising between the tax – measured as the difference between the acquisition bases of assets and liabilties and their carrying amounts in cost and the current fair value, less any impairment loss the financial statements. However, the deferred income on that financial asset previously recognised in statement tax is not accounted for if it arises from initial recognition of comprehensive income – is removed from equity and of an asset or liability in a transaction other than a business recognised in the statement of comprehensive income. combination that at the time of the transaction affects Impairment losses recognised in the statement of com- neither accounting nor taxable profit or loss. Deferred prehensive income on equity instruments are not reversed income tax is determined using tax rates (and laws) that through the statement of comprehensive income. have been enacted or substantively enacted by the statement of financial position date and are expected Impairment losses recognised in statement of com- to apply when the related deferred income tax asset is prehensive income for equity investments classified as realised or the deferred income tax liability is settled. available-for-sale are not subsequently reversed through statement of comprehensive income. Impairment losses Deferred income tax assets are recognised only to the recognised in statement of comprehensive income extent that it is probable that future taxable profit will be for debt instruments classified as available-for-sale are available against which the temporary differences can subsequently reversed if an increase in the fair value of be utilised. the instrument can be objectively related to an event occurring after the recognition of the impairment loss. Deferred income tax assets and liabilities are offset when there is a legal enforcable right to offset current tax assets Interest on availableforsale securities calculated using the against current tax liabilities and when the deferred effective interest method is recognised in the statement income taxes assets and liabilties relate to income taxes of comprehensive income as part of ‘other income’. levied by the same taxation authority on either the Dividends on available-for-sale equity instruments are taxable entity or different taxable entities where there is recognised in the statement of comprehensive income an intention to settle the balances on a net basis. as part of ‘other income’ when the company’s right to receive payments is established. 1.5 Share capital and equity
The fair values of quoted investments are based on current Ordinary shares are classified as equity. bid prices. If the market for a financial asset is not active (and for unlisted securities), the company establishes fair Incremental costs directly attributable to the issue of new value by using valuation techniques. shares or options are shown in equity as a deduction, net of tax, from the proceeds. When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments 1.6 Provisions recognised in equity are included in the statement of comprehensive income as ‘gains and losses from Provisions are recognised when: investment securities’. • the company has a present obligation as a result of a past event;
OASIS CRESCENT PROPERTY FUND MANAGERS | Annual Report 2010 51 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
• it is probable that an outflow of resources embodying • nonmonetary items that are measured at fair economic benefits will be required to settle the value in a foreign currency are translated using the obligation; and exchange rates at the date when the fair value was • a reliable estimate can be made of the obligation. determined.
The amount of a provision is the present value of the Exchange differences arising on the settlement of expenditure expected to be required to settle the monetary items or on translating monetary items at rates obligation. different from those at which they were translated on initial recognition during the period or in previous annual Provisions are adjusted to reflect the time value of financial statements are recognised in statement of com- money using a pretax rate that reflects current market prehensive income in the period in which they arise. assessments of the time value of money and the risks specific to the obligation. The increase in the provision When a gain or loss on a non monetary item is recognised due to the passage of time is recognised as an expense. directly in equity, any exchange component of that gain or loss is recognised directly in equity. When a gain or loss 1.7 Revenue on a non monetary item is recognised in statement of comprehensive income, any exchange component of Revenue is measured at the fair value of the consider- that gain or loss is recognised in statement of compre- ation received or receivable and represents the amounts hensive income. receivable for goods and services provided in the normal course of business, net of trade discounts and volume Cash flows arising from transactions in a foreign currency rebates, and value added tax. are recorded in Rands by applying to the foreign currency amount the exchange rate between the Rand and the Interest is recognised, in statement of comprehensive foreign currency at the date of the cash flow. income, using the effective interest rate method. 1.9 Standards, amendments and interpretations effective Portfolio management fees are earned from property in 2010 fund management and administration activities, and are recognised as revenue when the related services have The company has adopted the following new and been performed. amended IFRSs and interpretations as of 1 April 2009:
1.8 Translation of foreign currencies (a) Standards, amendments and interpretations effective in 2010 and relevant to the company’s operations Functional and presentation currency • IAS 1 (Revised) Presentation of financial statements. Items included in the financial statements of the company The revised standard prohibits the presentation of are measured using the currency of the primary economic items of income and expenses (‘nonowner changes environment in which the entity operates (the “functional in equity’) in the statement of changes in equity, currency”). The financial statements are presented in requiring all such income and expense items to be South African Rand, which is the company’s functional presented separately from owner changes in equity. currency. All nonowner changes in equity will be required to be shown in a performance statement. The company Foreign currency transactions has elected to present comprehensive income in one statement, instead of two. As the change in A foreign currency transaction is recorded, on initial accounting policy only impacts presentation aspects, recognition in Rands, by applying to the foreign currency there is no impact on the results of operations or amount the spot exchange rate between the functional financial position, currency and the foreign currency at the date of the transaction. • IFRS 7 (Amendment) – Financial instruments disclosures: Improving disclosures about financial instruments. The At each statement of financial position date: amendments to IFRS 7 require enhanced disclosures about fair value measurements and liquidity risk. As • foreign currency monetary items are translated using the change in accounting policy only impacts pre- the closing rate; sentation aspects, there is no impact on the results of operations or financial position. • non monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction; and
52 OASIS CRESCENT PROPERTY FUND MANAGERS | Annual Report 2010 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
(b) Standards, amendments and interpretations to • Amendments to IFRS 1 FirstTime Adoption of Interna- existing standards effective in 2010 but not relevant to the tional Financial Reporting Standards (effective from company’s operations annual periods beginning on or after 1 January 2010),
• Improvements to IFRSs 2008, • IFRS 2 (Amendment) –Group cashsettled sharebased payment transactions (effective from annual periods • Amendments to IFRS 1 FirstTime Adoption of Interna- beginning on or after 1 January 2010), tional Financial Reporting Standards and IAS 27 Consolidated and Separate Financial Statements: • IFRS 3 (Revised) Business combinations (effective from Cost of an Investment in a Subsidiary, Jointly Controlled annual periods beginning on or after 1 July 2009), Entity or Associate (effective 1 January 2009) , • IFRS 9 Financial instruments (effective from annual • IFRS 8 Operating Segments (effective 1 January 2009), periods beginning on or after 1 January 2013),
• IAS 23 Borrowing Costs – Revised (effective 1 January 2009), • Amended IAS 24 Related Party Disclosures (effective from annual periods beginning on or after 1 January • Amendment to IAS 32 Financial Instruments: Presen- 2011), tation and IAS 1 Presentation of Financial Statements Puttable Financial Instruments and Obligations Arising • IAS 27 (Revised) Consolidated and separate financial on Liquidation (effective 1 January 2009), statements (effective from annual periods beginning on or after 1 July 2009), • Amendments to IFRIC 9 Reassessment of Embedded Derivatives and IAS 39 Financial Instruments: • Amendment to IAS 32 – Classification of Rights Issues Recognition and Measurement (effective 1 July 2009), (effective from annual periods beginning on or after 1 February 2010), • IFRIC 13, ‘Customer loyalty programmes’ (Effective 1 July 2008), • Amendments to IAS 39 Financial Instruments: Recognition and Measurement Exposures Qualifying • IFRIC 15, ‘Agreements for the construction of real for Hedge Accounting (effective from annual periods estate’ (Effective 1 January 2009), beginning on or after 1 July 2009),
• IFRIC 16, ‘Hedges of a Net Investment in a Foreign • Amendment to IFRIC 14 Prepayments of a Minimum Operation’ (Effective 1 October 2008), funding requirement (effective from annual periods beginning on or after 1 January 2011), • AC 503 Accounting for Black Economic Empowerment (BEE) Transactions Revised (effective 1 January 2009), • IFRIC 17 – Distribution of noncash assets to owners (effective from annual periods beginning on or after • AC 504: IAS 19 (AC116) The limit on a defined 1 July 2009), benefit asset, Minimum funding requirements and their interaction in the South African pension fund • IFRIC 18 – Transfers of assets from customers (effective environment (effective 1 April 2009). from annual periods beginning on or after 1 July 2009),
(c) Standards, amendments and interpretations to existing • IFRIC 19 Extinguishing financial liabilities with equity standards not yet effective instruments (effective from annual periods beginning on or after 1 July 2010). Management is assessing the impact of these standards, amendments and interpretations on the company’s operations.
• Improvements to IFRSs – 2008 (effective from annual periods beginning on or after 1 July 2009),
• Improvements to IFRSs – 2009 (effective from annual periods beginning on or after 1 July 2009 and 1 January 2010),
OASIS CRESCENT PROPERTY FUND MANAGERS | Annual Report 2010 53 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
2010 2009 R '000 R '000 2. Property, plant & equipment
2010 2009 Cost Accumulated carying Cost Accumulated carying value depreciation value depreciation Motor Vehicles 138 (65) 73 138 (41) 97
Reconciliation of property, plant and equipment 2010 Opening Depreciation Total Balance Motor Vehicles 97 (24) 73
Reconciliation of property, plant and equipment 2009 Opening Depreciation Total Balance Motor Vehicles 120 (23) 97
A register containing the information required by paragraph 22(3) of Schedule 4 of the Companies Act is available for inspection at the registered office of the company.
3. Available-for-sale financial asset 100,000 units in Oasis Crescent Property Fund at fair value 1,230 1,210
Fair values are determined annually at balance sheet date.
Schedule of movement Carrying value at the beginning of the year 1,210 1,200 Unrealised gain/for the year 20 10
Carrying value at the end of the year 1,230 1,210
The above quoted investment represents seed capital in the Oasis Crescent Property Fund. The fair value of investments in listed closed ended investment schemes is determined by reference to the current bid prices.
4. Trade receivables from/(payables to) related entities Holding company Oasis Group Holdings (Pty) Limited - payable (182) (194)
54 OASIS CRESCENT PROPERTY FUND MANAGERS | Annual Report 2010 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
2010 2009 R '000 R '000 Related entities Oasis Crescent Property Fund 316 394 Eden Court Property Company No.1 (Pty) Limited 7 1 Eden Court Property Fund (Pty) Limited - 15 Crescent Property Company No. 1 (Pty) Ltd 3 - Oasis Crescent Land Developers (Pty) Limited 22 10 Eden Court Advisory Services (Pty) Ltd - 2 Oasis Crescent Capital (Pty) Ltd (22) - Roodebloem Estates (Pty) Ltd 2 - 328 422
Trade receivables 350 422 Trade payables (204) (194)
146 228
Credit quality of receivables from related entities The credit quality of receivables to group companies that are neither past due nor impaired can be assessed by reference to historical information about counterparty default rates. Historically the default rate has been zero. Credit rating Not rated 350 422
5. Loans to related entities Oasis Group Holding (Pty) Limited 1,230 611
The above loans are unsecured, interest free and has no fixed terms of repayment. Credit quality of loans to related entities The credit quality of loans to group companies that are neither past due nor impaired can be assessed by reference to historical information about counterparty default rates. Historically the default rate has been zero. Credit rating Not rated 1,230 611
6. Cash and cash equivalents Cash and cash equivalents consist of:
Bank balances 18 68 Money market investments 884 845 902 913
Credit quality of cash at bank and short term deposits, excluding cash on hand The credit quality of cash at bank and short term deposits, excluding cash on hand, that are neither past due nor impaired can be assessed by reference to external credit ratings:
OASIS CRESCENT PROPERTY FUND MANAGERS | Annual Report 2010 55 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
2010 2009 R '000 R '000
Credit rating F1+(ZAF) 18 68 Not rated 884 845 902 913
The effective interest rate on the money market investments was 6.96% (2009: 9.96%).
7. Share capital Authorised and issued 1,000 Ordinary shares of R 1 each 1 1
8. Deferred tax Deferred tax liability Available-for-sale financial assets (32) (29) Audit fee accrual 15 14 (17) (15)
Reconciliation of deferred tax liability At beginning of the year (15) (28) Increase on available-for-sale financial assets (3) (1) Reduction due to audit fee accrual 1 14 (17) (15)
9. Subordinated loan Oasis Group Holdings (Pty) Limited 2,000 2,000 The subordinated loan is a requirement for the registration of the Oasis Crescent Property Trust Scheme. The loan is unsecured, bears no interest and has no fixed terms of repayment. 10. Directors’ remuneration Nonexecutive (for services as directors) B Jiya 55 - H Jeena - 31 Z I Kara 61 61 Dr. Y Mahomed 61 61 177 153
56 OASIS CRESCENT PROPERTY FUND MANAGERS | Annual Report 2010 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
2010 2009 R '000 R '000
Details of directors interest At year end, directors hold the following direct and indirect interests in the units of Oasis Crescent Property Fund respectively: 2010 Director Direct Indirect Total MS Ebrahim 11,697 1,186,314 1,198,011 N Ebrahim 11,697 1,186,314 1,198,011 23,394 2,372,628 2,396,022
2009 Director Direct Indirect Total MS Ebrahim 10,853 1,152,980 1, 163,833 N Ebrahim 10,853 1,152,980 1,163,833 21,706 2,305,960 2,327,666
11. Taxation Major components of the tax expense
Current Normal tax current period 192 155 Deferred Originating temporary differences (2) (15) 190 140 Reconciliation of the tax expense Reconciliation between accounting profit and tax expense. Accounting profit 680 500 Tax at the applicable tax rate of 28% 190 140 The income tax rate of 28% in 2009 is still applicable in 2010.
12. Cash generated from operations Profit before taxation 680 500 Adjustments for: Depreciation 24 23 Dividends received (95) (97) Interest received (74) (96) Changes in working capital: Trade and other receivables (15) 1 Trade and other payables 71 (23) Trade receivables from related parties 72 - Trade payables to related parties 10 - 673 308
OASIS CRESCENT PROPERTY FUND MANAGERS | Annual Report 2010 57 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
2010 2009 R '000 R '000
13. Tax paid Balance at beginning of the year (2) (101) Current tax for the year recognised in statement of comprehensive income (192) (155) Balance at end of the year (40) 2 (234) (254)
14. Assets under management The company administers assets on behalf of clients with a market value of R 495 million (2009: R 420 million).
15. Related parties The related parties are the directors of the company, the holding company, the ultimate holding company, fellow subsidiaries, associated entities and funds managed by the preceding companies . The company’s current loan accounts with related entities are detailed in note 5 and investment with related parties are detailed in note 3. Transactions with related parties are executed on terms no less favourable than those arranged with third parties.
Oasis Group Holdings (Pty) Limited charges a monthly management fee which essentially represents a recovery of routine overhead costs incurred in connection with the administration of the business.
Eden Court Property Fund (Pty) Limited is the vehicle that accumulates the properties carrying the non-Shari’ah compliant tenants. Oasis Crescent Property Fund Managers Limited received services charges and property administration fees from Eden Court Property Fund (Pty) Limited.
The company is controlled by Oasis Group Holdings (Pty) Limited, which owns 100% of the issued share capital. The ultimate holding company is Eden Court Holdings (Pty) Limited.
Related party transactions
Revenue received from related parties Oasis Crescent Property Fund - service charges 2,222 1,747 Eden Court Property Fund (Pty) Limited - service charges - 44 Oasis Crescent Property Fund - property management fees 916 799 Eden Court Property Fund (Pty) Limited - property management fees - 50
Distribution/interest received from related parties Oasis Crescent Property Fund dividend received 95 97 Oasis Money Market Fund interest received 72 91
Expenses paid to related parties Oasis Group Holdings (Pty) Limited - service charges 1,960 1,805 Oasis Money Market Fund interest received 222 - 16. Risk management The company’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.
58 OASIS CRESCENT PROPERTY FUND MANAGERS | Annual Report 2010 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
Risk management is carried out by the Oasis Group Central Risk Committee under policies approved by the board of directors.The board provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non derivative financial instruments, and investment of excess liquidity.
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities. Due to the dynamic nature of the underlying businesses, company treasury maintains flexibility in funding by maintaining availability under committed credit lines.
The company manages liquidity risk through an ongoing review of future commitments and credit facilities.
Cash flow forecasts are prepared and adequate utilised borrowing facilities are monitored.
The table below analyses the company’s financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
Carrying Contractual Payable within More than one amount cash flows 1 month or on month but not demand exceeding three months At 31 March 2010 R ‘000 R ‘000 R ‘000 R ‘000 Non-derivative financial liabilities Subordinated loan 2,000 2,000 2,000 - Trade payables to related entities 204 204 204 - Trade and other payabless 150 150 111 39
At 31 March 2009 Non-derivative financial liabilities Subordinated loan 2,000 2,000 2,000 - Trade payables to related entities 194 194 194 - Trade and other payabless 80 80 61 19
Interest rate risk
Cash and cash equivalents are exposed to interest rate risk. Deposits at banks attract a variable average interest rate of 5% (2009: 8%)
The company has investments in Money Market Unit Trust Investments (denominated in South African Rand) which attracts a variable annualised yield of 6.96% (2009: 9.96 %).
The company is not exposed to fair value interest rate risk as it does not earn or incurr fixed interest on any of its financial assets or financial liabilities.
The company manages interest rate risk by monitoring interest rates on a regular basis.
Sensitivity analysis
At 31 March 2010, if interest rates relevant to the current account and Money Market Unit Trust Investments at that date had been 1% higher/lower, with all other variables held constant, net profit for the year would have been R10,730 (2009: R6,194) higher/ lower.
OASIS CRESCENT PROPERTY FUND MANAGERS | Annual Report 2010 59 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
Credit risk Credit risk consists mainly of cash deposits, cash equivalents, and trade debtors. The company only deposits cash with major banks with high quality credit standing and excess cash is deposited in Oasis Money Market Unit Trust funds.
The company has formal policies and procedures in place to ensure management of credit risk. A formal credit risk assessment is performed for all new clients and client contracts are made with those with an appropriate credit history. Furthermore, trade receivables consist of a spread of good quality client receivables and adequate provision is made for bad debts where applicable. Trade receivables are not considered impaired nor past due.
The company does not consider significant credit risk to arise from its trade receivables to related entities.
The counter parties include high net worth individuals, and highly regulated entities. Historically, the default rate has been zero.
The company’s maximum exposure to credit risk at 31 March 2010 and 31 March 2009 is represented by the carrying amounts of trade and other receivables, trade receivables from related entities and cash and cash equivalents at the respective dates. Foreign exchange risk The majority of the company’s financial assets and liabilities are denominated in South African Rand (ZAR). As a result, the company is not subject to significant amounts of risk due to fluctuations in foreign currency movements. In accordance with IFRS 7, currency risk is not considered to arise from financial instruments that are non-monetary items.
Price risk Market price risk arises mainly from uncertainty about future prices of financial instruments held. It represents the potential loss the company might suffer through holding market positions in the face of price movements. The company is exposed to market price risk via the quoted investment disclosed in note 3, namely units held in the Oasis Crescent Property Fund, which represents seed capital as required by the Collective Investment Schemes Control Act, 2002. The Company is not involved in trading of marketable securities, other than the seed capital it holds in Oasis Crescent Property Fund. Sensitivity analysis If the market in which the Oasis Crescent Property Fund is invested increased / decreased by 10%, with all other variables being constant, the fair value reserve would have been R123,000 (2009: R121,000) higher/lower. In accordance with the company’s policy, the executive directors monitor the company’s overall exposure to market price risk on a daily basis, and the full board of directors review it on a quarterly basis.
Fair value estimation Effective 1 January 2009, the fund adopted the amendment to IFRS 7 for financial instruments that are measured in the statement of financial position at fair value, this requires disclosure of fair value measurements by level of the following fair value measurement hierarchy: • Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1) • Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2). • Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3). The following table presents the company’s assets and liabilities that are measured at fair value at 31 March 2010
Assets Level 1 Level 2 Level 3 Total R R R R Available for sale financial instruments Investment in Oasis Crescent Property Fund 1,230,000 - - 1,230,000
The fair value of financial instruments traded in active markets is based on quoted market prices at the statement of financial position date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis.
60 OASIS CRESCENT PROPERTY FUND MANAGERS | Annual Report 2010 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2010
16. Risk management (continued) The quoted market price used for financial assets held by the company is the bid price. These instruments are included in level 1. The instrument included in level 1 is a Johannesburg Stock Exchange Property Unit Trust units classified as available for sale. The fair value of financial instruments that are not traded in an active market (for example, overth- ecounter derivatives) is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
Specific valuation techniques used to value financial instruments include: - Quoted market prices or dealer quotes for similar instruments. - Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial instruments. Capital risk management
Capital consists of capital and reserves as disclosed on the face of the statement of financial position as well as the subordinated loan.The company’s objectives when managing capital are to safeguard the company’s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders and to provide an adequate return to shareholders by pricing services proportionately with the level of risk.
The company sets the amount of capital in poportion to risk. The company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characterstics of the underlying assets. In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders or sell assets. The company is required to maintain a capital balance equivalent to the statutory capital adequacy requirement (“CAR”). The CAR is determined in accordance with section 88(1) of the Collective Investments Schemes Control Act, 2002.
The required capital to be maintained is: • a basic capital which must be the greater of an amount of R600,000 or a sum equivalent of 13 weeks’ of fixed cost for the whole of the collective investment scheme business of a manager or such other amount as the registrar may determine in a particular case. • seed capital of R1 million to be invested by the manager in each portfolio administered by the manager: Provided that (i) the prescribed amount may be reduced by 10 percent for every R1 million invested by investors in a portfolio which investors may not be connected to but must be independent from the manager; and (ii) if the sum of R1 million has been reduced to nil in terms of subparagraph (i) and disinvestment from a portfolio causes the investment in the portfolio to reduce to less than R10 million, a manager need not reinvest any further sum in terms of this paragraph ; plus • position risk capital of a sum equivalent to a percentage of the amount paid for participatory interests in a portfolio determined as follows in respect of each type of portfolio: Money Market portfolio 10 per cent; income portfolio 15 per cent ; and all other portfolios 25 per cent.
Fixed costs are defined in section 88(1) of the Collective Investments Schemes Control Act, 2002.
Summary of the company’s CAR requirements is shown in the table below: 2010 2009 R '000 R '000 Required Capital 688 684 Actual Capital 3,228 2,779
17, Additional information required in terms of the Collective Investment Schemes Control Act of 2002
In terms of the Collective Investment Schemes Control Act the manager is required to have a minimum capital of R688,401. At 31 March 2010 the available capital including the subordinated loan was in excess of R 2.54 million (2009: R 2.10 million).
OASIS CRESCENT PROPERTY FUND MANAGERS | Annual Report 2010 61 NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the annual general meeting of unitholders of Oasis Crescent Property Fund (“OCPF”) will be held at the registered office of OCPF, 20th Floor, Triangle House, 22 Riebeek Street, Cape Town on Tuesday, 20 July 2010, commencing at 10:00am for the purpose of considering and, if deemed fit, passing with or without modification, the following ordinary resolutions:
ORDINARY RESOLUTION NUMBER 1 Issuing of units for cash “Resolved that in terms of the JSE Limited (“JSE”) Listings Requirements, the directors of Oasis Crescent Property Fund Managers Limited, the manager of OCPF as approved by the Registrar of Collective Investment Schemes (“the Manager”), are hereby authorised to allot and issue for cash without restrictions to any public unitholder (as defined by the JSE Listings Requirements), as and when suitable opportunities arise, in their discretion, units in the capital of OCPF, subject to the following conditions: (a) this authority shall only be valid until the next annual general meeting of OCPF but shall not extend beyond 15 months from the date of this resolution; (b) the issues for cash in the aggregate in any one financial year shall not exceed 50% of the issued capital of OCPF, on a fully diluted basis; (c) in determining the price at which an issue of units for cash will be made in terms of this authority, the maximum discount permitted shall be 10% of the weighted average traded price of OCPF’s units on the JSE (adjusted for any dividend declared but not yet paid or for any capitalisation award made to unitholders), over the 30 business days prior to the date that the price of the issue is determined or agreed by the directors of the Manager; (d) this authority includes the issue of units arising from any options or convertible securities issued by OCPF for cash; and (e) this authority requires a 75% majority of the votes cast in favour of this resolution by all unitholders present or represented by proxy at the annual general meeting convened to approve this resolution.” ORDINARY RESOLUTION NUMBER 2 General authority to the directors of the Manager “Resolved that any executive director of the Manager of OCPF, be and are hereby authorised to do all such things and sign all documents and take all such action as they consider necessary to carry into effect these resolutions.” VOTING AND PROXIES An OCPF unitholder entitled to attend and vote at the annual general meeting is entitled to appoint one or more proxies to attend, speak and vote in his/her stead. For the convenience of registered certificated unitholders or unitholders who have dematerialised their linked units with own name registration, a form of proxy (blue) is attached hereto. Duly completed forms of proxy must be received by the transfer secretaries at their registered office, Ground Floor, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107), by no later than 10:00am on Friday, 16 July 2010.
Unitholders who have dematerialised their units and have not selected own name registration must advise their Central Securities Depository Participant (“CSDP”) or broker of their voting instructions should they be unable to attend the annual general meeting but wish to be represented thereat. Dematerialised unitholders without own name registration should contact their CSDP or broker with regard to the cut-off time for their voting instructions. If, however, such members wish to attend the annual general meeting in person, then they will need to request their CSDP or broker to provide them with the necessary authority in terms of the custody agreement entered into between them and their CSDP or broker. By order of the directors of the Manager
By order of the directors of the Manager N Ebrahim Company secretary of the Manager Cape Town 10 June 2010 Registered office of OCPF Registered office of Transfer Secretaries 20th Floor, Triangle House Computershare Investor Services 2004 (Proprietary) Limited 22 Riebeek Street (Registration number 2004/003647/07) Cape Town, 8001 Ground Floor (PO Box 1217, Cape Town, 8000) 70 Marshall Street Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107)
62 OASIS CRESCENT PROPERTY FUND MANAGERS | Annual Report 2010 OASIS CRESCENT PROPERTY FUND A property fund created under the Oasis Crescent Property Trust Scheme registered in terms of the Collective Investment Schemes Control Act (Act 45 of 2002) (“CISC Act”) JSE code: OAS ISIN: ZAE000074332 FORM OF PROXY (“OCPF”)
For the use by certificated unitholders in OCPF or dematerialised unitholders in OCPF registered with own name registration only, at the annual general meeting of the Oasis Crescent Property Fund (“OCPF”) to be held at 10:00am on Monday, 20 July 2010, at 20th Floor, Triangle House, 22 Riebeek Street, Cape Town or at any adjournment thereof.
Dematerialised unitholders in OCPF who are not own name unitholders, must inform their CSDP or broker of their intention to attend the annual general meeting and request their CSDP or broker to issue them with the necessary authorisation to attend the annual general meeting in person and vote or provide their CSDP or broker with their voting instructions should they not wish to attend the annual general meeting in person. Dematerialised unitholders in OCPF, who are not own name unitholders, must not use this form of proxy but must contact their CSDP or broker as OCPF will take no responsibility for unitholders in OCPF who do not contact their CSDP or broker timeously.
I/We (name/s in BLOCK LETTERS) of (address) being the holder(s) of Oasis Crescent Property Fund units hereby appoint (see note 2):
1. or failing him/her,
2. or failing him/her,
3. the Chairperson of the general meeting, as my/our proxy to act for me/us on my/our behalf at the annual general meeting which will be held for the purpose of considering and, if deemed fit, passing, with or without modification, the ordinary resolutions to be proposed thereat and at any adjournment thereof; and to vote for and/or against the ordinary resolutions and/or abstain from voting in respect of the OCPF units registered in my/our name(s), in accordance with the following instructions:
Number of units in OCPF voted
For Against Abstain Ordinary resolution number 1 Issuing of units for cash
Ordinary resolution number 2 General authority to the directors of the Manager
Please indicate instructions to the proxy in the appropriate space provided above by the insertion therein of the relevant number of units in OCPF. Each unitholder is entitled to appoint one or more proxies (who need not be a unitholder of OCPF) to attend, speak and vote in place of that unitholder at the annual general meeting. If you return this form of proxy duly signed, without any specific directions, the proxy shall be entitled to vote as he/she thinks fit.
Signed at on 2010
Signature(s)
Capacity and authorisation
Assisted by me (if applicable)
Please read the notes on the reverse hereof. FORM OF PROXY
Notes:
1. The form of proxy should only be used by unitholders in OCPF who hold units in OCPF that are not dematerialised or who hold dematerialised units in OCPF in their own name.
2. A unitholder in OCPF entitled to attend and vote at the annual general meeting may insert the name of a proxy or the names of two alternative proxies of the unitholder’s choice in the space provided, with or without deleting “the Chairperson of the annual general meeting”. A proxy need not be a unitholder of OCPF. The person whose name stands first on this form of proxy and who is present at the annual general meeting will be entitled to act as proxy to the exclusion of those whose names follow.
3. A unitholder is entitled to one vote on a show of hands and, on a poll, one vote in respect of each unit held. A unitholder’s instructions to the proxy must be indicated by inserting the relevant number of votes exercisable by that unitholder in the appropriate box. Failure to comply with this instruction will be deemed to authorise the proxy to vote or to abstain from voting at the annual general meeting as he/she deems fit in respect of all the unitholder’s votes.
4. A vote given in terms of an instrument of proxy shall be valid in relation to the annual general meeting, notwithstanding the death of the person granting it, or the revocation of the proxy, or the transfer of the units in OCPF in respect of which the vote is given, unless an intimation in writing of such death, revocation or transfer is received by the transfer secretaries not less than 48 hours before the commencement of the annual general meeting. 5. If a unitholder in OCPF does not indicate on this form of proxy that his or her proxy is to vote in favour of or against any ordinary resolution(s) or to abstain from voting, or gives contradictory instructions, or should any further resolution(s) or any amendment(s) which may properly be put before the annual general meeting be proposed, the proxy shall be entitled to vote as he thinks fit.
6. The completion and lodging of this form of proxy will not preclude the relevant unitholders from attending the annual general meeting and speaking and voting in person to the exclusion of any proxy appointed in terms hereof, should such unitholder wish to do so.
7. The Chairperson of the annual general meeting may reject or accept any form of proxy which is completed and/ or received, other than in compliance with these notes.
8. Any alteration to this form of proxy, other than the deletion of alternatives, must be signed, not initialled, by the signatory/(ies). 9. Documentary evidence establishing the authority of a person signing this form of proxy in a representative capacity must be attached to this form of proxy, unless previously recorded by OCPF or unless this requirement is waived by the Chairperson of the annual general meeting. 10. A minor or any other person under legal incapacity must be assisted by his/her parent or guardian, as applicable, unless the relevant documents establishing his/her capacity are produced or have been registered by the transfer secretaries of OCPF. 11. Where there are joint holders of units in OCPF: • any one holder may sign the form of proxy; and • the vote(s) of the senior unitholder(s) (for that purpose seniority will be determined by the order in which the names of unitholders in OCPF appear in the register of unitholders) who tenders a vote (whether in person or by proxy) will be accepted to the exclusion of the vote(s) of the other joint unitholder(s). 12. Forms of proxy should be lodged with or mailed to: Hand deliveries to: Postal Deliveries to: Computershare Investor Services 2004 (Pty) Limited Computershare Investor Services 2004 (Pty) Limited Ground Floor, 70 Marshall Street PO Box 61051 Johannesburg, 2001 Marshalltown, 2107 to be received by no later than 10:00 am on Friday, 16 July 2010.