Attacq Limited (previously Atterbury Investment Holdings Limited) (Registration number 1997/000543/06) (JSE share code: ATT) (ISIN: ZAE000177218) (“Attacq” or “the company”)
PROSPECTUS The definitions and interpretations commencing on page 8 of this prospectus have, where applicable, been used in these cover pages. This prospectus is issued in compliance with the Listings Requirements and the Companies Act, for the purpose of providing information to the public with regard to the company and is issued in respect of: • a private placement to raise up to approximately R800 million by way of an offer for subscription to invited investors for up to approximately 53 333 333 private placement shares in the company at an issue price to be determined by demand and for which an indicative issue price of R15.00 per private placement share has been used in this prospectus; and • the subsequent listing of all the shares of the company in the “Real Estate – Real Estate Holdings and Development” sector of the JSE.
2013
Opening date of the private placement (09:00) Monday, 7 October Closing date of the private placement (12:00)* Wednesday, 9 October Results of the private placement released on SENS on Thursday, 10 October Results of the private placement published in the press on Friday, 11 October Proposed date of listing on the JSE from the commencement of trade on (09:00) Monday, 14 October * Invited investors must advise their CSDP or broker of their acceptance of the private placement shares in the manner and cut-off time stipulated by their CSDP or broker. A copy of this prospectus in English, accompanied by the documents referred to under “Documents available for inspection” as set out in paragraph 37 of this prospectus, was registered by CIPC on Monday, 1 October 2013 in terms of the Companies Act. Important points to note The offer, in the form of the private placement, is being made to invited investors only and will comprise up to approximately 53 333 333 private placement shares at an indicative issue price of R15.00 per private placement share. Applications in terms of the private placement must be for a minimum of 5 000 private placement shares and in multiples of 1 000 private placement shares thereafter. Immediately prior to the private placement and the listing: • the authorised share capital of the company comprised 2 000 000 000 ordinary shares of no par value; • the issued share capital of the company comprised 546 935 469 ordinary shares of no par value; and • the company had 46 427 553 treasury shares in issue. Assuming that the private placement is fully subscribed at the indicative issue price per share of R15.00, immediately after the private placement and the listing: • the authorised share capital of the company will comprise 2 000 000 000 ordinary shares of no par value; • the issued share capital of the company will comprise 600 268 802 ordinary shares of no par value; and • the company will have 46 427 553 treasury shares in issue. On listing on the JSE, assuming that the private placement is fully subscribed at the indicative issue price per share of R15.00, the anticipated market capitalisation of the company should be approximately R9.0 billion. On listing and thereafter, all shares of the company will rank pari passu in respect of all rights. There are no convertibility or redemption provisions relating to any of the private placement shares offered in terms of the private placement. The private placement shares will only be issued in dematerialised form. No certificated private placement shares will be issued. There is no intention to extend a preference on allotment of the private placement shares to any particular company or group, in the event of an oversubscription of the private placement shares pursuant to the private placement. There will be no fractions of private placement shares offered or issued in terms of the private placement. The private placement will not be underwritten. The listing is not conditional on raising a minimum amount in terms of the private placement. The proceeds of the private placement will be used by Attacq to settle interest bearing debt and strengthen the balance sheet for ongoing activities. The JSE has granted Attacq a listing of up to 600 268 802 shares in the “Real Estate – Real Estate Holdings and Development” sector of the JSE, in terms of the FTSE classification, under the abbreviated name: “Attacq”, JSE share code: ATT and ISIN: ZAE000177218 with effect from the commencement of trade on Monday, 14 October 2013, subject to the company having satisfied the Listings Requirements regarding the spread of public shareholders. The directors, whose names are given in paragraph 2 of this prospectus, collectively and individually, accept full responsibility for the accuracy of the information given herein and certify that, to the best of their knowledge and belief, no facts have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that this prospectus contains all information required by law and the Listings Requirements. Each of the corporate advisor, sponsor and bookrunner, the independent transaction sponsor, the independent reporting accountants and auditors, the attorneys, the independent property valuers, the transfer secretaries, the bankers and the company secretary whose names are included in this prospectus, have consented in writing and have not prior to publication of this prospectus, withdrawn their written consent to the inclusion of their names in the capacities stated and, where applicable, to their reports being included in this prospectus. An abridged version of this prospectus was released on SENS on Friday, 4 October 2013 and published in the press on Monday, 7 October 2013.
Corporate advisor, sponsor and bookrunner
Independent reporting accountants and Independent transaction sponsor Attorneys auditors
Independent property valuer Independent property valuer Independent property valuer
Date of issue: Friday, 4 October 2013 This prospectus is only available in English. Copies of this prospectus may be obtained from the registered office of the company, the sponsor or the transfer secretaries whose addresses are set out in the “Corporate information” section of this prospectus from Monday, 7 October 2013 to Monday, 14 October 2013. CORPORATE INFORMATION
Registered office of the company Company secretary Attacq Limited Talana Smith (CA(SA), CIMA, MCom) The Parkdev Building The Parkdev Building 2nd Floor, Brooklyn Bridge 2nd Floor, Brooklyn Bridge 570 Fehrsen Street 570 Fehrsen Street Brooklyn, 0181 Brooklyn, 0181 (PostNet suite 205, Private Bag X20009, Garsfontein, 0042) (PostNet Suite 205, Private Bag X20009, Garsfontein, 0042)
Place and date of incorporation Incorporated in the Republic of South Africa on 17 January 1997
Attorneys Sponsor Edward Nathan Sonnenbergs Inc. Java Capital Trustees and Sponsors Proprietary Limited (Registration number 2006/018200/21) (Registration number 2006/005780/07) 1 North Wharf Square, Loop Street 2 Arnold Road Cape Town, 8001 Rosebank, 2196 (PO Box 2293, Cape Town, 8000) Johannesburg (PO Box 2087, Parklands, 2121)
Corporate advisor and bookrunner Independent reporting accountants and auditors Java Capital Proprietary Limited Deloitte & Touche (Registration number 2002/031862/07) Registered Auditors 2 Arnold Road Riverwalk Office Park, Block B Rosebank, 2196 41 Matroosberg Road, Ashlea Gardens X6 Johannesburg Pretoria, 0081 (PO Box 2087, Parklands, 2121) (PO Box 11007, Hatfield, 0028)
Independent transaction sponsor Independent property valuer Deloitte & Touche Sponsor Services Proprietary Limited Mills Fitchet KZN CC Building 6 (Registration number CK95/43533/23) The Woodlands, 20 Woodlands Drive 29 Petrus Stroom Road Woodmead Dargle, 3265 Sandton, 2196 (PO Box 1339, Howick, 3290) (Private Bag X6, Gallo Manor, 2052)
Independent property valuer Transfer secretaries Old Mutual Investment Group (South Africa) Proprietary Limited Computershare Investor Services Proprietary Limited (Registration number 1993/003023/07) (Registration number 2004/003647/07) Mutual Park, Jan Smuts Drive Ground Floor, 70 Marshall Street Pinelands, 7405 Johannesburg, 2001 (PO Box 878, Cape Town, 8000) (PO Box 61051, Marshalltown, 2107)
Independent property valuer Banker Amanda de Wet Consultants and Investments CC Investec Private Bank, a division of Investec Bank Limited (Registration number 2005/019476/23) (Registration number 1969/004763/06) 16B Maroelana Street Corner Atterbury and Klarinet Streets Hazelwood Menlo Park Pretoria, 0081 Pretoria, 0081 (PO Box 2895, Brooklyn Square, 0075) (PO Box 35209, Menlo Park, South Africa, 0102)
1 Banker Banker The Standard Bank of South Africa Limited Nedbank Limited (Registration number 1962/000738/06) (Registration number 1951/000009/06) 30 Baker Street Nedbank Head Office Corner Oxford Road 135 Rivonia Road Rosebank, 2196 Sandton, 2196 (PO Box 8786, Johannesburg, 2000) (PO Box 1144, Johannesburg, 2000)
Banker Rand Merchant Bank, a division of FirstRand Bank Limited (Registration number 1929/001225/06) 1 Merchant Place Corner Fredman Drive and Rivonia Road Sandton, 2196 (PO Box 786273, Sandton, 2146)
Offers in South Africa only This prospectus has been issued in connection with the private placement in South Africa only and is addressed only to invited investors to whom the private placement may lawfully be made. The distribution of this prospectus and the making of an offer by means of the private placement may be restricted by law. Persons into whose possession this prospectus comes must inform themselves about and observe any and all such restrictions. This prospectus does not constitute an offer of or invitation to subscribe for and/or purchase any shares of the company in any jurisdiction in which the offer would be unlawful. No one has taken any action that would permit a public offering of shares in the company to occur outside South Africa.
Forward-looking statements This prospectus includes forward-looking statements. Forward-looking statements are statements including, but not limited to, any statements regarding the future financial position of the group and its future prospects. These forward-looking statements have been based on current expectations and projections about future results which, although the directors believe them to be reasonable, are not a guarantee of future performance.
2 TABLE OF CONTENTS
The definitions and interpretations commencing on page 8 of this prospectus have been used in the following table of contents:
Page
Corporate information 1
Salient features 5
Important dates and times 7
Definitions and interpretations 8
Prospectus
Section one – Information on the Attacq group 1. Name, address and incorporation 15 2. Directors, other office holders and material third parties 15 3. History, state of affairs and prospects of the group 21 4. Share capital of the company 38 5. Options and preferential rights in respect of shares 39 6. Commissions paid or payable 40 7. Material contracts 40 8. Interests of directors and promoters 40 9. Loans 40 10. Shares issued or to be issued, otherwise than for cash 40 11. Properties, assets and business undertakings acquired or to be acquired 40 12. Amounts paid or payable to promoters 40 13. Preliminary expenses and issue expenses 41 Section two – Details of the private placement 14. Purposes of the private placement and the listing 42 15. Salient dates and times 42 16. Particulars of the private placement 42 17. Minimum subscription 44 Section three – Financial information 18. Adequacy of capital 45 19. Report by directors as to material changes 45 20. Statement as to listing on stock exchange 45 21. Report by auditor of Attacq group 45 22. Forecast statements of comprehensive income 45 23. Consolidated pro forma statement of financial position 45 24. Historical financial information 45 25. Dividends and distributions 46 Section four – Additional material information 26. Relationship information 47 27. Trading information 47 28. Properties, assets and business undertakings disposed of or to be disposed of 47 29. Vendors 47 30. Black economic empowerment strategy 48 31. Government protection and investment encouragement law 48
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32. Exchange Control Regulations 48 33. Corporate governance 48 34. Litigation statement 48 35. Directors’ responsibility statement 49 36. Consents 49 37. Documents available for inspection 49
Annexure 1 Group structure 50 Annexure 2 Details of subsidiaries 51 Annexure 3 Information on the directors, management and material third parties 53 Annexure 4 Current and past directorships 62 Annexure 5 Service contracts 70 Annexure 6 Extracts from the MOI 72 Annexure 7 Details of the direct property portfolio 77 Annexure 8a Independent property valuer’s summary valuation report on the direct property portfolio – OMIGSA 85 Annexure 8b Independent property valuer’s summary valuation report on the direct property portfolio – Amanda de Wet Consultants 99 Annexure 8c Independent property valuer’s summary valuation report on the direct property portfolio – Mills Fitchet 104 Annexure 9 Share capital 109 Annexure 10 Contracts 113 Annexure 11 Material borrowings and loans receivable 119 Annexure 12 Details of acquisitions and vendors 134 Annexure 13 Financial information required in terms of Regulation 79 of the Companies Act in respect of Attacq 137 Annexure 14 Report by the auditor in terms of Regulation 79 of the Companies Act in respect of Attacq 139 Annexure 15 Forecast statements of comprehensive income of the Attacq group 141 Annexure 16 Independent reporting accountant’s assurance report on the forecast statements of comprehensive income of the Attacq group 146 Annexure 17 Consolidated pro forma statement of financial position of Attacq 149 Annexure 18 Independent reporting accountant’s assurance report on the consolidated pro forma statement of financial position of Attacq 154 Annexure 19 Independent reporting accountant’s review report on the value and existence of the assets and liabilities acquired 156 Annexure 20 Historical financial information 157 Annexure 21 Independent reporting accountant’s report on the historical financial information 201 Annexure 22 Details of properties, assets and business undertakings disposed of and to be disposed of 203 Annexure 23 Corporate governance statement 206
Specimen private placement application form (blue) Attached
4 SALIENT FEATURES
The information set out in this salient features section of the prospectus is only an overview and is not intended to be comprehensive. It should be read in conjunction with the information contained in other sections of this prospectus to gain a comprehensive overview of the Attacq group and the private placement.
1. INTRODUCTION Attacq Limited (previously known as Atterbury Investment Holdings Limited) (Registration number 1997/000543/06), was incorporated as a private company on 17 January 1997 and converted to a public company on 19 October 2006.
2. NATURE OF BUSINESS AND BUSINESS STRATEGY The Attacq group focuses on long-term sustainable capital growth achieved through actively investing in and managing land, property development rights and investment properties, held directly or indirectly, and benefiting from key long-term strategic relationships and alignments. The group’s properties, property-related rights and land are in respect of office, mixed use, retail and light industrial properties and developments. A diagram illustrating the group’s corporate structure is set out in Annexure 1. The business of the group is undertaken in two focus areas: investments and developments. Investments comprise completed buildings held directly or indirectly. A number of the group’s investments were developed by Atterbury Property and retained by Attacq. Developments comprise greenfields development of land or brownfields development by refurbishment, upgrade or other improvement to existing buildings. The properties and assets in the group’s investments provide stable income and balance sheet strength for the group to responsibly secure and fund high-growth opportunities within developments. In turn, the group’s developments generate a pipeline of high quality investment properties that grows investments, as developments are generally retained rather than realised. Attacq’s strategy is to have 65% by value of the group’s assets in investments and 35% in developments. Attacq’s weighting of investments to developments, its re-investment of profits from rentals or occasional disposals, and its retention of completed developments as investments rather than their sale and resultant realisation of development profits, are intended to optimise long-term sustainable capital growth and enhance total returns to shareholders. Attacq will be listing on the JSE in the “Real Estate – Real Estate Holdings and Development” sector and will not seek REIT status. The group’s focus on long-term sustainable capital growth differentiates it from other JSE-listed property entities that focus on the generation and regular distribution to shareholders of income derived from rental. The REIT regulatory regime is intended for property entities focused on income distribution rather than capital growth. Attacq holds 25% of Atterbury Property, the successful property development company with which it shares a common history and lineage. The balance of the shareholding in Atterbury Property is held by its founders and management. Attacq’s shareholding in Atterbury Property is strategic and positions Attacq to access and participate in the opportunities and deal flow generated by this dynamic developer. Attacq diversifies its investments geographically. Long-term, the group’s strategy for investments is to invest 70% by value in South Africa, 20% by value in other parts of Africa and 10% by value internationally outside of Africa.
3. PROSPECTS While the board of Attacq recognises the constraints and challenges impacting on the South African economy at present and going forward, it is confident that the group will continue to show positive income and capital growth, given the quality of its investment properties and development pipeline and the nature and strength of the group’s key strategic relationships. The group’s investments in retail, office, mixed use and light industrial properties are high quality, generating stable, growing rental income. Additional investments will result from the group’s roll-out of its existing development pipeline over the next 10 to 15 years, with particular emphasis on the Waterfall pipeline and its long-term potential as a unique infill development centrally located in the Midrand area of the Gauteng region, South Africa’s economic heartland. The group will continue to expand its development pipeline and grow its long-term prospects, through opportunities it secures and through its strategic relationships, particularly with Atterbury Property. The listing of Attacq on the JSE will enable Attacq to access capital efficiently, raise its profile and expand its investor base, all of which is expected to enhance Attacq’s prospects. Attacq is well-positioned to take advantage of the strong growth opportunities on the African continent via its investment in Atterbury Africa. The geographical diversification strategy through the group’s investment into Africa and internationally is expected to mitigate the risk of the exposure of the group to the broader South African economy and the South African interest rate environment.
5 4. DETAILS OF THE PRIVATE PLACEMENT A private placement to raise up to approximately R800 million by way of an offer for subscription to invited investors for up to approximately 53 333 333 private placement shares in the company at an issue price to be determined by demand and for which an indicative issue price of R15.00 per private placement share has been used in this prospectus. The listing is not conditional on raising a minimum amount in terms of the private placement. The listing is conditional on achieving a spread of shareholders, acceptable to the JSE, being a minimum number of 300 public shareholders holding not less than 20% of the issued share capital of the company, by not later than 48 hours prior to the listing. As at the last practical date, Attacq meets these requirements and expects to do so after the private placement. There are no convertibility or redemption provisions relating to the private placement shares being offered in terms of the private placement. Private placement shares will be issued in dematerialised form only. No fractions of private placement shares will be issued pursuant to the private placement. The private placement will not be underwritten.
5. STATEMENT AS TO LISTING ON THE JSE The JSE has granted Attacq a listing of all of its issued shares on the JSE in the “Real Estate – Real Estate Holdings and Development” sector of the JSE under the abbreviated name: “Attacq”, JSE share code: ATT and ISIN: ZAE000177218 with effect from the commencement of trade on Monday, 14 October 2013.
6. ACTION REQUIRED Applications by invited investors for private placement shares must be made in accordance with paragraph 16 of this prospectus and by completing an application form, a specimen of which accompanies this prospectus. Application forms will be made available to invited investors. Applications for private placement shares can only be made for dematerialised shares and must be submitted through a CSDP or broker in accordance with the agreement governing the relationship between the applicant and the CSDP or broker by the cut-off time stipulated by the CSDP or broker. If you are in any doubt as to what action to take, you should consult your broker, attorney or other professional advisor immediately. Applications per investor for private placement shares may only be made for a minimum of 5 000 private placement shares or multiples of 1 000 private placement shares over and above the minimum of 5 000 private placement shares.
7. FURTHER COPIES OF THE PROSPECTUS Copies of the prospectus may be obtained between 08:30 and 17:00 on business days from Monday, 7 October 2013 to Monday, 14 October 2013 at the following addresses: Attacq Limited The Parkdev Building 2nd Floor, Brooklyn Bridge 570 Fehrsen Street Brooklyn, 0181 Java Capital Trustees and Sponsors Proprietary Limited 2 Arnold Road Rosebank, 2196 Johannesburg Computershare Investor Services Proprietary Limited Ground Floor, 70 Marshall Street Johannesburg, 2001 An abridged version of this prospectus was released on SENS on Friday, 4 October 2013 and published in the press on Monday, 7 October 2013.
6 IMPORTANT DATES AND TIMES1
The definitions and interpretations commencing on page 8 of this prospectus apply to these important dates and times: 2013
Abridged prospectus released on SENS on Friday, 4 October Opening date of the private placement (09:00) Monday, 7 October Abridged prospectus published in the press on Monday, 7 October Closing date of the private placement (12:00)2 Wednesday, 9 October Results of the private placement released on SENS on Thursday, 10 October Results of the private placement published in the press on Friday, 11 October Notification of allotments to successful invited investors by Friday, 11 October Accounts at CSDP or broker updated and credited in respect of dematerialised shareholders3 Monday, 14 October Listing of shares and the commencement of trading on the JSE on (09:00) Monday, 14 October
Notes: (1) All references to dates and times are to local dates and times in South Africa. These dates and times are subject to amendment. Any such amendment will be released on SENS and published in the press. (2) Invited investors must advise their CSDP or broker of their acceptance of the private placement in the manner and cut-off time stipulated by their CSDP or broker. (3) CSDPs effect payment on a delivery-versus-payment basis.
7 DEFINITIONS AND INTERPRETATIONS
In this prospectus and the annexures hereto, unless inconsistent with the context, an expression which denotes one gender includes the other genders, a natural person includes a juristic person and vice versa, the singular includes the plural and vice versa and the expressions set out in the first column bear the meaning assigned to them in the second column. “AAM” Atterbury Asset Managers Proprietary Limited (Registration number 2007/004176/07), a private company registered and incorporated in terms of the laws of South Africa which on implementation of the AAM acquisition will be a wholly- owned subsidiary of Attacq as set out in Annexure 10; “AAM acquisition” the transactions entered into in order to internalise the asset management of the direct property portfolio, as further detailed in paragraph 1.3 of Annexure 10, which should be read with note 9 to the consolidated pro forma statement of financial position set out in Annexure 17; “Abacus” Attacq Retail Fund Proprietary Limited (previously known as Abacus Holdings Proprietary Limited) (Registration number 2008/021582/07), a private company registered and incorporated in terms of the laws of South Africa which is an 81.95% held direct subsidiary of Attacq with the remaining 18.05% held by Nedbank Limited; “Abacus Holdings Management” or “Attacq Abacus Holdings Management Proprietary Limited (Registration number Retail Fund Asset and Property Management” 2007/016015/07) (to be renamed Attacq Retail Fund Asset and Property Management or “the manager” Limited), a private company registered and incorporated in terms of the laws of South Africa which following the AAM acquisition will be a wholly-owned subsidiary of AAM; “AIHI” refer to the definition of Atterbury Investment Holdings International; “Amanda de Wet Consultants” one of the independent and professional property valuers of the group, being Amanda de Wet Consultants and Investments CC (Close Corporation number 2005/019476/23), a close corporation registered and incorporated in terms of the laws of South Africa, full details of which are set out in the “Corporate information” section; “APC” Atterbury Parkdev Consortium Proprietary Limited (Registration number 2003/020481/07), a private company registered and incorporated in terms of the laws of South Africa, the owner of the property known as Harlequins Office Park which company was a wholly-owned subsidiary of Attacq prior to the APC disposal; “APC disposal” the disposal by the company of all the issued shares in and shareholders’ claims against APC which held a property known as Harlequins Office Park, as further detailed in paragraph 2.3 of Annexure 10, which should be read with note 7 to the consolidated pro forma statement of financial position set out in Annexure 17; “application form” the application form to be used by invited investors for purposes of subscribing for private placement shares in terms of the private placement, a specimen of which is attached to this prospectus (blue) and which will be made available to invited investors; “Arctospark” Arctospark Proprietary Limited (Registration number 2010/007113/07), a private company registered and incorporated in terms of the laws of South Africa which is a 50% held direct associate of Attacq with the remaining 50% held by a consortium of other investors, Attacq is in the process of selling its holding in Arctospark Proprietary Limited, as more fully described in Annexure 10; “Arctospark restructure” the series of transactions in terms of which Attacq acquired a direct interest in those assets to which it previously held an indirect interest via its holding in Arctospark, namely Karoo and Stenham, exited its holding in Arctospark and disposes of Karoo to MAS in exchange for an increased holding in MAS, as further detailed in paragraph 1.4 of Annexure 10, which should be read with note 10 to the consolidated pro forma statement of financial position set out in Annexure 17; “Artisan disposal” the transaction in terms of which the company disposed of its interest in Caltongate to MAS in exchange for an increased holding in MAS, as further detailed in paragraph 2.1 of Annexure 10, which should be read with note 11 to the consolidated pro forma statement of financial position set out in Annexure 17;
8 “Attacq” or “the company” Attacq Limited (previously known as Atterbury Investment Holdings Limited) (Registration number 1997/000543/06), a public company registered and incorporated in terms of the laws of South Africa and to be listed on the JSE; “Attacq group” or “the group” collectively, Attacq, its subsidiaries and associates; “Attacq Retail Fund” refer to the definition of Abacus; “Attacq Retail Fund Asset and Property refer to the definition of Abacus Holdings Management; Management” “Attacq shareholders” or “shareholders” holders of Attacq shares, as recorded in the share capital of the company; “Attacq shares” or “shares” or “ordinary shares” the issued shares in the share capital of Attacq; “Atterbury Africa” Atterbury Africa Limited (Registration number 106548 C1/GBL), a private company limited by shares and duly incorporated in Mauritius, which company holds a Global Business License (Category 1) and is 25% owned by Attacq’s wholly-owned subsidiary, AIHI, with the balance held by Hyprop Investments Mauritius Limited (37.5%) which is wholly-owned by Hyprop, Atterbury Property Holdings International Limited (22.5%) which is wholly-owned by Atterbury Property and Atterbury Asset Managers International (15%); “Atterbury Asset Managers International” Atterbury Asset Managers International Limited (Registration number C113461/GBL) a private company registered and incorporated in the Republic of Mauritius, which is 50% held by Attman Limited (Registration number 1679958), a company incorporated in the British Virgin Islands, and the remaining 50% held by Atterbury Property Holdings International Limited; “Atterbury House disposal” the disposal by the company of the property known as Atterbury House, as further detailed in paragraph 1.1 of Annexure 10, which should be read with note 4 to the consolidated pro forma statement of financial position set out in Annexure 17; “Atterbury Investment Holdings International” Atterbury Investment Holdings International Limited (Registration number 106518 C1/GBL), a private company registered and incorporated in the Republic of Mauritius and a wholly-owned subsidiary of Attacq; “Atterbury group” collectively, Attacq and Atterbury Property; “Atterbury Property” Atterbury Property Holdings Proprietary Limited (Registration number 1995/003635/07), a private company registered and incorporated in terms of the laws of South Africa, which is a development company undertaking the majority of its developments on behalf of Attacq and a 25% held direct associate of Attacq with the remaining 75% held by Atterbury Manfou Proprietary Limited, which in turn is held 33.33% by the founders of Atterbury Property (including Francois van Niekerk and Louis van der Watt) and the remaining 66.66% held by the management of Atterbury Property; “Atterbury Property Holdings International Atterbury Property Holdings International Limited (Registration number Limited” 106519/C1/GBL), a private company registered and incorporated in the Republic of Mauritius and a wholly-owned subsidiary of Atterbury Property; “Atterbury Theatre disposal” the disposal by the company of the property known as Atterbury Theatre, as further detailed in paragraph 2.4 of Annexure 10, which should be read with note 6 to the consolidated pro forma statement of financial position set out in Annexure 17; “Attfund” Attfund Limited (Registration number 1999/005649/06), a public company registered and incorporated in terms of the laws of South Africa, which was liquidated in 2012; “Attfund Retail” Attfund Retail Limited (Registration number 2010/013504/06), a public company registered and incorporated in terms of the laws of South Africa, which company is a wholly-owned subsidiary of Hyprop; “Attventure” Attventure Proprietary Limited (Registration number 2004/031808/07), a private company registered and incorporated in terms of the laws of South Africa, which company is owned by various private investors including the current and past directors, who hold direct and indirect interests in Attventure including Gideon Oosthuizen, Louis van der Watt and Pieter Faure;
9 “Attvest” Atterbury Investment Managers Proprietary Limited (Registration number 2000/017721/07), a private company registered and incorporated in terms of the laws of South Africa which is 50% held by the Mertech Group and the remaining 50% held by Keurprop Investments Proprietary Limited which is wholly-owned by Suca Trust (Master’s reference number IT7403/99), a family trust of which Louis van der Watt is a trustee and beneficiary; “Attvest transaction” the transaction concluded between Attacq, Attvest and Razorbill to re-implement an existing commercial agreement, referred to in paragraph 1.12 of Annexure 9 and further details of which are set out in note 5 in Annexure 20 under the heading “Attvest transaction”; “AWC” Atterbury Waterfall City Proprietary Limited (Registration number 1996/000904/07), a private company registered and incorporated in terms of the laws of South Africa which is 93.875% held by Atterbury Property and the remaining 6.125% held by Attacq; “AWIC” Atterbury Waterfall Investment Company Proprietary Limited (Registration number 2000/013587/07), the owner of the Waterfall development rights, a private company registered and incorporated in terms of the laws of South Africa which is an 80% held direct subsidiary of Attacq with the remaining 20% owned by AWC; “AWIC acquisition” the transactions in terms of which the company acquired the 1.225% indirect holding in AWIC from the Trinsam Trust, a discretionary family trust of which MC Wilken, the CEO, is a beneficiary, further details of which are set out in paragraph 2.8 of Annexure 10; “board” or “directors” or “board of Attacq” the board of directors of Attacq as set out in paragraph 2 of this prospectus; “Brooklyn Bridge acquisition” the acquisition by the company of the 75% equity in Brooklyn Bridge Office Park Proprietary Limited, the owner of Brooklyn Bridge not already owned by it, as further detailed in paragraph 1.2 of Annexure 10; “business day” any day other than a Saturday, Sunday or official public holiday in South Africa; “CAGR” compound annual growth rate; “CBD” central business district; “certificated shareholders” Attacq shareholders who hold certificated shares; “certificated shares” Attacq shares which have not been dematerialised into the Strate system, title to which is represented by share certificates or other physical documents of title; “CIPC” the Companies and Intellectual Property Commission under the Companies Act; “common monetary area” collectively, South Africa, the Kingdoms of Swaziland and Lesotho and the Republic of Namibia; “Companies Act” or “the Act” the Companies Act, 2008 (Act No 71 of 2008), as amended; “Companies Regulations” the Companies Regulations, 2011 promulgated in Government Gazette No. 34239 in terms of section 223 of the Companies Act; “CSDP” a Central Securities Depository Participant in South Africa appointed by a shareholder for purposes of, and in regard to, dematerialisation and to hold and administer securities or an interest in securities on behalf of a shareholder; “Delta Property Fund” Delta Property Fund Limited (Registration number 2002/005129/06), a public company registered and incorporated in terms of the laws of South Africa and listed on the JSE; “dematerialisation” the process whereby ownership of shares as evidenced by share certificates and/or some other documents of title are converted to an electronic form as dematerialised shares under Strate and recorded in the sub-register of shareholders maintained by a CSDP or broker; “dematerialised shareholders” Attacq shareholders who hold dematerialised shares; “dematerialised shares” Attacq shares which have been incorporated into the Strate system, title to which is no longer represented by share certificates or other physical documents of title;
10 “developments” projects entailing the development of land sites in order to create value through top structures including buildings; “direct property portfolio” those properties held by Attacq and its subsidiaries, as set out in Annexure 7; “documents of title” share certificates, certified transfer deeds, balance receipts and any other documents of title to shares acceptable to the board; “East & West Investments” East & West Investments Proprietary Limited (Registration number 1945/018444/07), a private company registered and incorporated in terms of the laws of South Africa, the operating company of the Moolman family trusts; “Exchange Control Regulations” the Exchange Control Regulations of South Africa issued under the Currency and Exchanges Act, (Act 9 of 1933), as amended; “GLA” gross lettable area, being the total area of a building that can be let to a tenant. GLA comprises primary GLA plus supplementary areas which include for example, storerooms, balconies, terraces, patios and signage/advertising areas dedicated for the use by the tenant and excludes basements and parking. Unless otherwise noted, any reference within the prospectus to m2 is based on GLA; “government” the government of South Africa; “GR” gross rental, being basic rental plus operational costs, excluding rates and taxes, measured in Rands; “Hyprop” Hyprop Investments Limited (Registration number 1987/005284/06), a public company registered and incorporated in terms of the laws of South Africa and listed on the JSE; “independent reporting accountants and Deloitte & Touche, a partnership formed in terms of the laws of South Africa, full auditors” or “independent reporting details of which are set out in the “Corporate information” section; accountants” or “Deloitte & Touche” “independent property valuers” the independent property valuers of the company, being OMIGSA, Mills Fitchet and Amanda de Wet Consultants; “indirect property portfolio” those properties held by Attacq’s associates; “invited investors” those specifically identified individuals including the financial institutions, selected private clients and selected retail investors to whom the offer under the private placement will be addressed and made; “issue price” the indicative price it is assumed, for information purposes in the prospectus, at which the private placement shares will be issued by Attacq pursuant to the private placement, being R15.00 per share; “IFRS” International Financial Reporting Standards; “Java Capital” collectively, Java Capital Proprietary Limited (Registration number 2002/031862/07), the corporate advisor and bookrunner and Java Capital Trustees and Sponsors Proprietary Limited (Registration number 2008/005780/07), the sponsor, full details of which are set out in the “Corporate information” section; “JSE” JSE Limited (Registration number 2005/022939/06), licensed as an exchange under the Financial Markets Act (Act No. 19 of 2012), as amended, and a public company registered and incorporated in terms of the laws of South Africa; “Karoo” collectively, Karoo I and Karoo II; “Karoo I” Karoo Investment Fund S.C.A. SICAV-SIF, a specialised investment fund (fonds d’investissement spécialisé – FIS) organised as an investment company with variable capital in the form of a partnership limited by shares (société en commandite par actions – SCA) governed by the laws of the Grand Duchy of Luxembourg; “Karoo II” Karoo Investment Fund II S.C.A. SICAV-SIF, a specialised investment fund (fonds d’investissement spécialisé – FIS) organised as an investment company with variable capital in the form of a partnership limited by shares (société en commandite par actions – SCA) governed by the laws of the Grand Duchy of Luxembourg;
11 “King III” the Code of Corporate Practices and Conduct in South Africa representing principles of good corporate governance as laid out in the King Report, as amended from time to time; “last practical date” the last trading date before the finalisation of this prospectus, being Tuesday, 24 September 2013; “Lisinfo” Lisinfo 222 Investments Proprietary Limited (Registration number 2008/015483/07), a private company registered and incorporated in terms of the laws of South Africa and a wholly-owned subsidiary of RBH; “listing” the listing of all the issued shares of the company in the “Real Estate – Real Estate Holdings and Development” sector of the JSE, expected to be on Monday, 14 October 2013; “Listings Requirements” the Listings Requirements, as issued by the JSE from time to time; “major subsidiary” a major subsidiary as defined in the Listings Requirements, namely a subsidiary that represents 25% or more of the total assets or revenue of the consolidated group. It is recorded that, as at the date hereof, Attacq Retail Fund is Attacq’s only major subsidiary; “MAS” MAS Real Estate Inc. (formerly MAS plc) (Registration number 175019), a public limited company registered in accordance with the laws of the British Virgin Islands, registered as an external company in South Africa and which has a primary listing on the Euro-MTF market of the Luxembourg Stock Exchange and a secondary listing on the Alternative Exchange of the JSE; “MBT disposal” the turn-key development and disposal of a 26 286m2 warehouse on Waterfall land parcel 22 to MBT Services Proprietary Limited (and which will be occupied by its Tarsus business unit) in consideration for which the group will receive a development fee of R220.8 million on completion of the transaction, as referred to in paragraph 3.8.1 of the prospectus, which should be read with note 12 to the consolidated pro forma statement of financial position set out in Annexure 17; “Mertech group” collectively, BNF Investments Proprietary Limited (Registration number 2008/023015/07), Mergon Foundation NPC (Registration number 2004/023278/08) and Mertech Investments Proprietary Limited (Registration number 2008/023032/07) which is 23.33% held by the Faure Family Trust of which Pieter Faure, a director of Attacq, is a trustee with the balance being held by various private trusts, the beneficiaries of which are unrelated to Attacq. Further details of the shareholders of BNF Investments Proprietary Limited and Mergon Foundation are set out in paragraph 4 of the prospectus; “m²” or “sqm” square metres; “Mills Fitchet” one of the independent and professional property valuers of the group, being Mills Fitchet KZN CC (Registration number CK95/43533/23), a close corporation registered and incorporated in terms of the laws of South Africa, full details of which are set out in the “Corporate information” section; “MOI” the memorandum of incorporation of the company, extracts of which are set out in Annexure 6; “NAV” net asset value, being the value of all the group’s assets after subtracting the value of all of its liabilities as determined in accordance with the consolidated financial statements of Attacq; “OMIGSA” one of the independent and professional property valuers of the group, being Old Mutual Investment Group (South Africa) Proprietary Limited (Registration number 1993/003023/07), a private company duly registered and incorporated in terms of the laws of South Africa, full details of which are set out in the “Corporate information” section; “own-name dematerialised shareholders” dematerialised Attacq shareholders who/which have elected own-name registration; “press” the Business Day newspaper; “primary GLA” the rentable area dedicated to the use of the tenant comprising usable and common area for offices and excluding common area for retail buildings;
12 “private placement” the private placement by Attacq to raise up to approximately R800 million by way of an offer to invited investors to subscribe for up to approximately 53 333 333 private placement shares at an indicative issue price of R15.00 per share; “private placement shares” up to approximately 53 333 333 shares in the company to be offered and issued in terms of the private placement; “promoter” the party(ies) responsible for the formation of a company to be listed, or acquired by an existing issuer, and who earn(s) a fee therefrom, in cash or otherwise; “properties” collectively, the direct property portfolio and the indirect property portfolio; “prospectus” this bound document inclusive of all annexures and accompanying specimen application form dated Friday, 4 October 2013, prepared in compliance with the Companies Act and the Listings Requirements; “RBH” Royal Bafokeng Holdings Proprietary Limited (Registration number 2006/006909/07), a private company registered and incorporated in terms of the laws of South Africa, is the investment arm of the Royal Bafokeng Nation and is the sole shareholder of Lisinfo; “R” or “Rand” or “ZAR” the South African Rand, the lawful currency of South Africa; “Rapfund” Rapfund Holdings Proprietary Limited (Registration number 2006/014857/07), a private company registered and incorporated in terms of the laws of South Africa which is 52% held by Reach with the remaining 48% held by various private shareholders; “Razorbill” Razorbill Properties 91 Proprietary Limited (Registration number 2000/006755/07), a private company registered and incorporated in terms of the laws of South Africa and which is a wholly-owned subsidiary of Attacq and which operates as the group’s treasury company; “Reach” Retail Africa Consortium Holdings Proprietary Limited (Registration number 2010/003656/07), a private company registered and incorporated in terms of the laws of South Africa in which Attacq holds 20% of the share capital and loans immediately convertible into a further 30% of the share capital, with the remaining shares held by various private shareholders; “REIT” Real Estate Investment Trust, a company listed on the JSE which has received REIT status in terms of the Listings Requirements; “rights offer” the R580 million rights offer undertaken by the company during July 2013, on the basis of 10.52501 shares issued for every 100 shares held, further details of which are set out in paragraph 5 of Annexure 9, which should be read with note 3 to the consolidated pro forma statement of financial position set out in Annexure 17; “SARB” South African Reserve Bank; “Sanridge disposal” the disposal by the company of the property known as Sanridge Square, as further detailed in paragraph 2.2 of Annexure 10, which should be read with note 5 to the consolidated pro forma statement of financial position set out in Annexure 17; “SENS” the Securities Exchange News Service of the JSE; “SIM” Sanlam Investment Management, a division of Sanlam Life Insurance Limited (Registration number 1998/021121/06), a public company registered and incorporated in terms of the laws of South Africa; “shareholders” or “Attacq shareholders” holders of Attacq shares, as recorded in the share register of the company; “South Africa” the Republic of South Africa; “Stenham” Stenham European Shopping Centre Fund IC Limited (Registration number 98012), a company incorporated in accordance with the laws of Jersey, and which holds Nova Eventis, a super regional centre in Germany; “Strate” Strate Limited (Registration number 1998/022242/06), a public company registered and incorporated in terms of the laws of South Africa, which is licensed to operate, in terms of the Financial Markets Act (Act No. 19 of 2012), as amended, and which is responsible for the electronic settlement system of the JSE;
13 “tangible NAV” NAV less intangible assets; “the manager” refer to the definition of Attacq Retail Fund Asset and Property Management; “transfer” the registration of transfer of the relevant immovable property into the name of Attacq in the relevant deeds registry office; “transfer secretaries” or “Computershare” Computershare Investor Services Proprietary Limited (Registration number 2004/003647/07) a private company registered and incorporated in terms of the laws of South Africa, full details of which are set out in the “Corporate information” section; “VAT” value-added tax as defined in the Value-Added Tax Act (Act No 89 of 1991), as amended; “VWAP” volume weighted average price; “Waterfall development rights” the leasehold and development rights acquired by AWIC from WDC in order to develop and register long-term lease agreements against the title deeds of the Waterfall land parcels; “Waterfall Business Estate” a development located between the Allandale and Woodmead off-ramps on both sides of the M1/N1 highways in Gauteng and comprising all completed properties, developments and future developments on the Waterfall land parcels; “Waterfall land parcels” – land parcels 3, 8, 9, 10, 10a, 10b, 12 and 24 of portion 1/RE of the Farm Waterfall No. 5; – land parcel 15 on portion 62 of the Farm Waterfall No. 5; – land parcel 20 on portion 706 of the Farm Waterfall No. 5; – land parcel 21 on portion 75 of the Farm Waterfall No. 5; – land parcel 22 on portion 78 of the Farm Waterfall No. 5; “Waterfall pipeline” all current developments and future developments on the Waterfall Business Estate; “WDC” Waterfall Development Company Proprietary Limited, (Registration number 2006/012140/07), a private company registered and incorporated in terms of the laws of South Africa, the previous holder of the Waterfall development rights which was sold to Attacq and is 85% held by Waterfall Investment Company Proprietary Limited (Registration number 2006/001921/07) on behalf of the title-holders of the Waterfall land parcels (as described in paragraph 2.5 of Annexure 10 with the remaining 15% held by Group Five Construction Proprietary Limited (Registration number 1974/003166/07); “Wingspan” Retail Africa Wingspan Investments Proprietary Limited, (Registration number 2005/005858/07), a private company registered and incorporated in terms of the laws of South Africa which is 68.4% held by Reach with the remaining 31.6% held by various private shareholders; and “yield” the distribution available to a holder of a share in any 12-month period or any financial year, as the case may be, divided by the relevant market price of that security.
14 Attacq Limited (previously Atterbury Investment Holdings Limited) (Registration number 1997/000543/06) (JSE share code: ATT) (ISIN: ZAE000177218) (“Attacq” or “the company”)
Directors of the company P Tredoux (Independent non-executive chairman) MC Wilken (Chief executive officer) M Hamman (Financial director) LLS van der Watt (Executive director) BF van Niekerk (Non-independent non-executive director) PH Faure (Non-independent non-executive director) LM Ndala (Non-independent non-executive director) JHP van der Merwe (Non-independent non-executive director) S Shaw-Taylor (Independent non-executive director) HR El Haimer (Independent non-executive director) MM du Toit (Independent non-executive director) WL Masekela (Independent non-executive director) TJA Reilly (Alternative director to JHP van der Merwe) AW Nauta (Alternate director to LM Ndala)
PROSPECTUS
SECTION ONE – INFORMATION ON THE ATTACQ GROUP
1. NAME, ADDRESS AND INCORPORATION Attacq (Registration number 1997/000543/06) was incorporated as a private company on 17 January 1997 and converted to a public company on 19 October 2006. The addresses of the company’s registered office, primary place of business and the transfer secretary’s registered office are set out in the “Corporate information” section. The names, registration numbers, places of incorporation, dates of incorporation, nature of business, and issued capital of all of Attacq’s subsidiaries, are set out in Annexure 2 to this prospectus and the group structure is set out in Annexure 1 to this prospectus.
2. DIRECTORS, OTHER OFFICE HOLDERS AND MATERIAL THIRD PARTIES
2.1 Overview of the board Attacq is driven by passionate entrepreneurial commitment embodied in its people. Proactive and hands-on management coupled with a positive outlook and belief in the future of South Africa, has succeeded in building the company to the respected industry force it is today. Attacq’s top management structure is relatively young by industry standards, but is well-respected with an in-depth understanding of the dynamics of the property market, coupled with a proven delivery capability. The team enjoys a healthy spread of professionals covering various disciplines such as engineers, chartered accountants, lawyers, bankers and investment managers.
15 The board is currently made up of 12 directors of whom 9 are non-executive (5 of whom are independent) and 3 are executive. The positions of chairman of the board and that of chief executive officer are separate, with the chairman, Pierre Tredoux, being an independent non-executive director. The chairman oversees the board’s functioning, and the chief executive officer, Morné Wilken, leads the executive team and attends to the day-to-day functions of the business. Morné is assisted by Louis van der Watt, one of the founders of the Atterbury group, who is an executive director. The company also has the benefit of the experience and knowledge of Francois van Niekerk, the other founder of the Atterbury group, acting as a non-executive director. Melt Hamman has been appointed as the executive financial director. The audit and risk committee, chaired by Stewart Shaw-Taylor (Head of CIB Real Estate Investments at The Standard Bank of South Africa Limited), has considered and is satisfied with the appropriateness of the expertise and experience of the executive financial director. The rest of the board members referred to below have a wealth of relevant expertise and experience and play key executive roles in their respective companies: • Johan van der Merwe – CEO of SIM; • Pieter Faure – CEO of the Mertech Group; • Lucas Ndala – CEO of MOGS Proprietary Limited; • Hellen El Haimer – entrepreneur and Managing Director of The FM Institute Proprietary Limited. Hellen has also held positions at ABSA, SARS and the Department of Public Works; • Thys du Toit – ex CEO of Coronation Fund Managers Limited and current CEO and founder of an investment management business, Rootstock Investment Management; • Lebo Masekela – non-executive director (former CEO) of Infotech Proprietary Limited; • Thomas Reilly (alternate director) – CEO of Sanlam Africa Fund Advisor Proprietary Limited; and • Wilhelm Nauta (alternate director) – manager of Strategic Investments at RBH. 2.2 The names, ages, nationalities, business addresses, qualifications and capacities of the directors of the company, the directors of Attacq Retail Fund, the only major subsidiary of Attacq, and senior management of Attacq are outlined below:
2.2.1 Directors of the company Name, age and nationality Business address Qualification Capacity
Pierre Tredoux 164 Nicolson Street, CA (SA) Independent non-executive 56 Brooklyn, Pretoria, 0181 chairman South African Morné Wilken The Parkdev Building B Eng (Hons) Chief executive officer 42 2nd Floor, Brooklyn Bridge Industrial South African 570 Fehrsen Street Brooklyn, Pretoria, 0181 Melt Hamman The Parkdev Building CA (SA) Financial director 42 2nd Floor, Brooklyn Bridge South African 570 Fehrsen Street Brooklyn, Pretoria, 0181 Louis van der Watt* The Atterbury Building, CIMA, CA (SA) Executive director 46 4 Daventry Street, Lynnwood South African Manor, Pretoria, 0081 Francois van Niekerk* Glenfield Office Park, BA (Econ), MBL Non-independent 73 Mertech Building, Oberon Street, non-executive director South African Faerie Glen, 0043 Pieter Faure Glenfield Office Park, CA (SA), BCom Non-independent 38 Mertech Building, Oberon Street, (Law), HDip non-executive director South African Faerie Glen, 0043 International Tax Lucas Ndala 37 High Street, Block C CA (SA) Non-independent 38 2nd Floor, Melrose Arch, 2076 non-executive director South African
16 2.2.1 Directors of the company (continued) Name, age and nationality Business address Qualification Capacity
Johan van der Merwe 55 Willie van Schoor Avenue CA (SA), MCom Non-independent non- 48 Bellville, 7530 (Tax), MPhil executive director South African Finance Stewart Shaw-Taylor 4th Floor, 30 Baker Street CA (SA) Independent non-executive 61 Rosebank, 2196 director South African Hellen El Haimer 4 Cromwell Street, Midstream BSoc Sci LLB Independent non-executive 39 Midrand Estate, 1692 (Hons) Strategic director South African Management, H Dip Property Investment Thys du Toit 2 Andmar, corner of Ryneveld BSc, MBA Independent non-executive 54 and Church Streets, Stellenbosch director South African 7600 Lebo Masekela 5 Melrose Street, Kosmosdal BSc Eng Independent non-executive 49 Ext 32, Centurion, Pretoria director South African 0157 Thomas Reilly 3A Summit Road BCom (Hons) Alternate director to 41 Dunkeld West, 2196 (Econ) Johan van der Merwe South African Wilhelm Nauta 37 High Street, Block C CA (SA) Alternate director to 42 2nd Floor, Melrose Arch, 2076 Lucas Ndala South African
* The founders of Attacq.
2.2.2 Directors of Attacq Retail Fund (a major subsidiary of Attacq) Names, age and nationality Business address Qualification Capacity
Richard Thomas 1st Floor, Nedbank Clocktower BCom, university Non-executive director 51 Building, V&A Waterfront courses at Wits, South African Cape Town UCT and Stanford (USA) Louis van der Watt Atterbury Building, Lynnwood CA (SA), CIMA Non-executive director 46 Bridge, 4 Daventry Street South African Lynnwwod Manor, Pretoria, 0181 Morné Wilken The Parkdev Building BEng (Hons) Non-executive director 42 2nd Floor, Brooklyn Bridge Industrial South African 570 Fehrsen Street Brooklyn, Pretoria, 0181 Melt Hamman The Parkdev Building CA (SA) Non-executive director 42 2nd Floor South African Brooklyn Bridge 570 Fehrsen Street Brooklyn, Pretoria, 0181
17 2.2.3 Senior management (who are not directors of Attacq) Name, age and nationality Business address Qualification Capacity
Nicolle Weir The Parkdev Building CA (SA) Head of property and 38 2nd Floor, Brooklyn Bridge asset management South African 570 Fehrsen Street Brooklyn, Pretoria, 0181 Helena Austen The Parkdev Building BProc, LLM, Head of legal department 42 2nd Floor, Brooklyn Bridge HDip Tax South African 570 Fehrsen Street Brooklyn, Pretoria, 0181
2.3 The experience and expertise of the directors of the company, the directors of Attacq Retail Fund, the only major subsidiary of Attacq, and senior management who are not directors of Attacq are set out below:
2.3.1 Directors of the company Pierre Tredoux Committees: Remuneration and Nominations | Investment Founder and executive director of the Barnstone group, Pierre is also a former partner and managing director of Deloitte Consulting South Africa. He has advised many of South Africa’s leading organisations on corporate strategy and structure, operational and performance improvement, enterprise applications and corporate governance. Pierre has worked in the financial services, manufacturing, mining and resources, communications, beverages, professional services, tourism and leisure sectors, both locally and internationally. Pierre is also the non-executive chairman of Atterbury Property, the property development company where Attacq holds a 25% interest. He has served on the board of directors of Attacq since 2007 and was appointed as non-executive chairman in 2012. Morné Wilken Committee: Investment Leading Attacq’s strategy to list on the JSE, Morné has extensive experience in property development, property investment, property finance, corporate restructuring and acquisitions. Morné spent 10 years in the Property Finance Division of First National Bank and Rand Merchant Bank (both divisions of FirstRand Bank Limited) where he excelled as a top dealmaker. Morné then led the strategic roll-out and development of the Waterfall Business Estate in Midrand for Attacq before joining Attacq in 2009 as chief operating officer. Morné was appointed as the chief executive officer in 2011. Melt Hamman Committees: Transformation, Social and Ethics | Investment Prior to joining Attacq in July 2013, Melt was chief risk officer at WesBank, a division of FirstRand Bank Limited and appointed to the WesBank Executive Committee. Melt has served as credit risk manager at Nedbank Limited and a director of Loubser du Plessis Consulting Proprietary Limited. Subsequent to this he was head of Credit for FNB Corporate Property Finance Division and a financial director of Eagle Ink Systems Proprietary Limited. Melt has extensive experience in banking and business operations. Louis van der Watt Committee: Investment Louis co-founded the Atterbury group in 1994 and has grown the group into one of the largest and most successful property developers in the country. In 2009 he was awarded the Christo Wiese Medal for Entrepreneurship from the South African Academy for Science and Arts and in 2012 he received the University of Pretoria Alumni Laureate Award. Louis is the current CEO of Atterbury Property and also serves as a non-executive director on the board of Hyprop. Francois van Niekerk Francois co-founded the Atterbury group in 1994. In addition, Francois worked for Mobil Oil, Anglo American, Rembrandt and Armscor before venturing into private enterprise in 1980. Francois is the founder of the Mertech Group. Francois has founded and co-founded several other operating companies still active in various industry sectors. He was a Council member of Unisa until 2012 and is currently a member of the Unisa Council Fincom. Francois has received several academic, business and philanthropy awards.
18 Pieter Faure Committee: Investment Pieter is CEO of Mertech Group comprising an internationally diversified investment portfolio operating across various industries including property, technology, clean energy, logistics and financial services. Pieter also oversees the activities of the Mergon Foundation, an independent charitable foundation established in 1982. Pieter is former Chief Financial Officer of Infotech Proprietary Limited and worked across several professional divisions at PricewaterhouseCoopers, where he ultimately specialised in Corporate International Tax. Lucas Ndala Committees: Audit and Risk | Investment Lucas Ndala qualified as a Chartered Accountant in 2001 and completed his articles with Deloitte. After articles he joined Mettle in their structured finance division and thereafter moved to the Corporate credit division of Barclays Bank. In 2004, Lucas joined Royal Bafokeng Finance as manager of Investments and in 2006, Royal Bafokeng Finance merged with Royal Bafokeng Resources to form RBH. In 2008 Lucas was appointed as the finance director for RBH. Lucas currently serves as CEO of MOGS Proprietary Limited, a company focused on mining, oil and gas services. Johan van der Merwe Committee: Remuneration and Nominations Johan has more than 20 years of financial and investment experience and has been the CEO of SIM for over 10 years. Prior to that Johan was a director and executive committee member of Investec Asset Management, where he was responsible for Private Equity and its Botswana Office. At Investec Asset Management, Johan also served as Global Sector Head of Resources, Head of Equities and Sector Head of SA Resources. In Gencor Industries Inc’s (“Gencor”) Corporate Finance division, Johan was on the core team to finalise the Gencor/BHP Billiton transaction and was responsible for Corporate Finance and Tax at BHP Billiton. Stewart Shaw-Taylor Committees: Audit and Risk | Remuneration and Nominations With nearly 30 years’ experience in investment banking and real estate, Stewart is the Head of CIB Real Estate Investments at Standard Bank. He is responsible for the real estate equity and private equity related activities undertaken by Standard Bank Corporate and Investment Banking Division. Hellen El Haimer Committees: Audit and Risk | Transformation, Social and Ethics Hellen is the managing director of the FM Institute Proprietary Limited, a facilities and property management consulting company, Hellen is an admitted attorney with over 15 years’ post-qualification experience in the legal, property and facilities management fields. Hellen has held senior positions in the Department of Public Works and SARS in property and facilities disciplines and held an executive position at ABSA, responsible for the facilities and property management of their national property portfolio. Hellen also worked as a legal manager at Standard Bank Properties. Thys du Toit Committee: Investment Thys is as investment professional with 28 years of experience, the bulk of which was gained at Coronation Fund Managers. In 1993 he was one of the founding members of Coronation Fund Managers, which listed on the JSE in June 2003. Thys held the position of CEO from 1997 to 2008 and during his tenure with Coronation grew the business into the second largest independent fund manager in South Africa. Thys graduated with a BSc Agric (1980) and MBA cum laude (1982) from the University of Stellenbosch. Thys started his career as a stockbroker at George Huysamer & Partners and in 1990 joined Syfrets Managed Assets as a portfolio manager. Thys is a director of a number of JSE-listed companies, including PSG Group and Pioneer Foods. He now runs an investment management business, Rootstock Investment Management. Lebo Masekela Committees: Audit and Risk | Transformation, Social and Ethics Lebo is the former CEO of Infotech Proprietary Limited, a position he held for eight years. Lebo has over 20 years’ management experience. Lebo’s experience includes business development and growth, strategy development and new business ventures. Prior to this Lebo was CEO of Lechabile Quality Strategies Proprietary Limited. He has also worked as an engineer for SA Breweries, Engen Petroleum and Denel. Lebo has been involved in the founding, running and growing of several private businesses. Thomas Reilly With 19 years’ experience in investment banking, Thomas is the CEO of Sanlam Africa Fund Advisor Proprietary Limited, the appointed advisor to the Sanlam Africa Core Real Estate Fund Limited, which is domiciled in Mauritius. Until recently, he was the CEO of Sanlam Properties Proprietary Limited, a division of Sanlam Capital Markets Limited, and a member of the Sanlam Capital Markets Executive. Thomas was instrumental in repositioning Sanlam Properties Proprietary Limited in the commercial property finance sector and building its real estate fund
19 capability in addition to its property development. Thomas has held key positions in the derivative businesses of ABSA Bank and First Derivatives, a joint venture between First National Bank and Firstcorp Merchant Bank. Wilhelm Nauta Wilhelm is Manager of Strategic Investments at RBH. Wilhelm’s responsibilities include the sourcing, management and growth of strategic investments, mergers and acquisitions, investment strategy and portfolio management. Prior to joining RBH Wilhelm spent 10 years in the Barnard Jacobs Mellet (BJM) equity research team, where he was rated as an investment analyst in many of the financial services and insurance sub-sectors, as well as the real estate sector.
2.3.2 Directors of Attacq Retail Fund (a major subsidiary of Attacq) Richard Thomas Richard has 23 years of property finance experience gained with Nefic, Syfrets and NIB. He is head of Nedbank Corporate Property Finance in Cape Town and previously held the same title in KwaZulu-Natal for five years. Louis van der Watt Refer to paragraph 2.3.1 for a brief description of the experience and expertise of Louis van der Watt. Morné Wilken Refer to paragraph 2.3.1 for a brief description of the experience and expertise of Morné Wilken. Melt Hamman Refer to paragraph 2.3.1 for a brief description of the experience and expertise of Melt Hamman.
2.3.3 Senior management (who are not directors of Attacq) Nicolle Weir Nicolle has extensive financial, auditing and asset management experience. Nicolle joined Attacq in 2008, first as an asset manager and then as a director of AAM in 2009. Under her operational leadership, the AAM team was honoured in 2011 with a prestigious IPD Investment Award for the Attacq fund being the best commercial and overall performer over three years. Nicolle completed her articles with Deloitte and represented Deloitte South Africa in its Global Exchange Programme, gaining three years’ experience in Toronto, Canada, specialising in telecommunications. Nicolle was a senior manager at Deloitte in the Corporate Finance division, and has eight years’ experience in auditing. Helena Austen Committees: Transformation, Social and Ethics Helena Austen joined Attacq as the head of the legal department effective 1 September 2013. Helena was admitted as an attorney in March 2002 and is a former partner in Vorster Pereira and director of Faber Goërtz Ellis Austen Inc. Helena has extensive experience and knowledge on South African tax legislation having assisted and advised on various tax matters. Helena also has experience structuring black economic empowerment transactions, carrying out schemes of arrangement, drafting contracts, corporate governance, general company law and company secretarial work.
2.4 Attacq advisors and company secretary The names and business addresses of the company’s advisors are set out in the “Corporate information” section. Save for a senior employee of Edward Nathan Sonnenbergs Inc., who was not involved in the preparation of this prospectus, who holds 19 010 shares in the company, the company’s advisors do not have any interests in Attacq’s shares. Talana Smith is the company secretary whose name, business address and qualifications are also set out in the “Corporate information” section. As at the last practical date, Talana Smith held the following beneficial interest in Attacq shares:
Number of shares held % of shares Name of shareholder Directly Indirectly Total in issue
Talana Smith 2 899 559 564 828 3 464 387 0.63
2.5 Additional information related to the directors 2.5.1 Annexure 3 contains the following information: 2.5.1.1 directors’ emoluments; 2.5.1.2 borrowing powers of directors; 2.5.1.3 interests in shares and transactions; 2.5.1.4 interests of directors and promoters; and 2.5.1.5 directors’ declarations.
20 2.5.2 Annexure 4 contains details of directors’ other directorships and partnerships currently and in the previous five years. 2.5.3 The salient terms of the service contracts of Morné Wilken and Melt Hamman are set out in Annexure 5. 2.5.4 The provisions of the MOI with regard to the following are set out in Annexure 6: 2.5.4.1 qualifications of directors; 2.5.4.2 remuneration of directors; 2.5.4.3 any power enabling the directors to vote on remuneration to themselves or any member of the board; 2.5.4.4 the borrowing powers exercisable by the directors and how such borrowing powers can be varied; and 2.5.4.5 retirement or non-retirement of directors under an age limit.
3. HISTORY, STATE OF AFFAIRS AND PROSPECTS OF THE GROUP 3.1 History The Atterbury group was founded in 1994 in Pretoria by Louis van der Watt and François van Niekerk with its main focus on developing retail shopping centres and commercial buildings. The Atterbury group consisted of Atterbury Investment Holdings Limited (now renamed Attacq Limited), Atterbury Property (a development company) and a number of subsidiaries, associates and joint ventures. Important milestones in the history of Attacq • 2005 – Attacq is formed as a public unlisted capital growth fund with its main assets comprising its shareholding in Attfund (the retail fund co-founded by Louis van der Watt and François van Niekerk in 2002) and certain other Attacq developments. • 2006 – Attacq converts to a public company on 19 October 2006. • 2008 – Via AWIC, Attacq acquires the Waterfall development rights from WDC, issuing Attacq shares in consideration for the acquisition. • 2009 – Attacq acquires an effective 41.8% interest in Bagatelle – Mall of Mauritius, which opened in September 2011 as Attacq’s first regional shopping centre outside of South Africa. • 2011 – Attacq acquires an interest in MAS, which forms part of Attacq’s international diversification strategy. – Attacq’s main investment company, Attfund, enters into a merger transaction resulting in Attacq receiving Attfund Retail shares. – Attacq receives an offer from and sells its interest in Attfund Retail to Hyprop and utilises the proceeds to fund the repurchase of Attacq shares from WDC. – Attacq acquires a 75.11% interest in the retail fund Abacus. • 2012 – Attacq acquires a 25% shareholding in Atterbury Property. – Attacq acquires an effective 32.5% shareholding in the Mauritius-based Atterbury Africa, a property investment company focused on investing and developing shopping centres on the African continent outside of South Africa. • 2013 – Attacq undertakes the establishment of a new retail fund to be named Attacq Retail Fund. – Attacq acquires a 100% interest in AAM, in effect internalising the asset manager and property manager of Attacq by bringing AAM under its control. – Attacq lists on the JSE. Attacq has delivered a CAGR in NAV per share of more than 20%, from inception. The group’s steady growth in asset value reflects new developments, refurbishments as well as mergers and acquisitions.
3.2 Nature of business The Attacq group actively invests in and manages land, property development rights and investment properties, held directly or indirectly, and benefiting from key long-term strategic relationships and alignments. The group’s properties, property- related rights and land are in respect of office, mixed use, retail and light industrial properties and developments. The group’s focus is on long-term sustainable capital growth, which differentiates it from REITs focused on income and distributions to shareholders. A diagram illustrating the group’s corporate structure is set out in Annexure 1.
21 Attacq will be listing on the JSE in the “Real Estate – Real Estate Holdings and Development” sector and will not seek REIT status. The group’s focus on long-term sustainable capital growth differentiates it from other JSE-listed property entities that focus on the generation and regular distribution to shareholders of income derived from rental. The REIT regulatory regime is intended for property entities focused on income distribution rather than capital growth. 3.3 Investment and growth strategy The business of the group is undertaken in two focus areas: investments and developments. Investments comprise completed buildings, held directly or indirectly. A number of the group’s investments were developed by Atterbury Property and retained by Attacq. Developments comprise greenfields development of land or brownfields development by refurbishment, upgrade or other improvement to existing buildings. The properties and assets in the group’s investments provide stable income and balance sheet strength for the group to responsibly secure and fund high-growth opportunities within developments. In turn, the group’s developments generate a pipeline of high quality investment properties that grows investments, as developments are generally retained rather than realised. Attacq’s strategy is to have 65% by value of the group’s assets in investments and 35% in developments. Attacq’s weighting of investments to developments, its re-investment of profits from rentals or occasional disposals, and its retention of completed developments as investments rather than their sale and resultant realisation of development profits, are intended to optimise long-term sustainable capital growth and enhance total returns to shareholders. Attacq diversifies its investments geographically. Long-term, the group’s strategy for its investments is to invest 70% by value in South Africa, 20% by value in other parts of Africa and 10% by value internationally outside of Africa. As at 31 March 2013, by value, 84% of investments was in South Africa, 6% in other parts of Africa and 10% internationally outside of Africa. The diversification into other emerging and developed markets provides the group with an element of a hedge against geographical concentration and currency or exchange rate risk. The property exposure is held via direct ownership in property or via investments through listed and unlisted entities.
The investments in the rest of Africa are driven by the future potential growth in the group’s target countries as well as a Rand hedge. Attacq has exposure to Mauritius, Ghana, Zambia and Namibia. The international investments outside Africa have been somewhat opportunistic and the group’s strategy in this regard has evolved over the last few years. Attacq regards its investment in MAS as strategic and intends to sell some of its international assets to MAS to increase Attacq’s shareholding in MAS – these sale transactions are referred to in more detail in Annexure 10. Strategically, Attacq does not envisage further direct investments in closed ended funds such as Karoo.
22 The diagram below summarises the group’s strategy and business:
Utilise balance sheet to secure and fund developments
Investments – 65% Developments – 35%
International – 10% Africa – 20% South Africa – 70% Developments • Rand hedge; • Rand hedge mainly US dollar • Stability; • Development profit/revaluation; • Geographical diversity; correlated; • Predictable income flow; • Capital growth; • Geographical diversity; • Capital and income growth; • High growth prospects;
Atterbury Direct portfolio MAS Africa • Officeand mixed use Brownfields • Retail Other Mauritius • Light industrial • Vacant land Greenfields
Other Listed/Unlisted Landholding Funds
Create Pipeline
Provide completed buildings to generate income
Increase in Risk/Return Profile
Attacq offers investors participation in the following: • the Waterfall development rights constitute a unique infill development centrally located in the Midrand area of the Gauteng region, South Africa’s economic heartland. This includes Waterfall City, built around the Mall of Africa, a 116 000 m2 super regional mall well-positioned and tenanted for a catchment area of some 6.7 million people and the adjoining 13 400 m2 open inner city park. The current approved bulk in the Waterfall pipeline is 1.75 million m2. There is the potential to increase these rights over the next 10 to 15 years provided that the City of Johannesburg’s spatial development framework increases. Further details of the development are set out in paragraph 3.8 below and of the approved bulk and development rights in paragraph 2.5 of Annexure 10; • quality retail, office and mixed use and light industrial portfolio with the following landmark properties: – 74 000 m2 Lynnwood Bridge mixed use development in Pretoria (100.0%); – 53 362 m2 Garden Route Mall in George (80.0%); – 80 115 m2 Brooklyn Mall in Pretoria (20.5%); – 53 051 m2 Mooirivier Mall in Potchefstroom (82.0%); – Eikestad Mall Precinct in Stellenbosch: 32 453 m2 Eikestad Mall (65.6%), 3 616 m2 Mill Square (65.6%) and 10 655 m2 Andringa Walk (82.0%); and – 35 671 m2 Massbuild Distribution Centre at Waterfall, Johannesburg (85.9%); • existing landmark developments: • – 116 000 m2 Mall of Africa super regional mall at Waterfall in Johannesburg (85.9%); – 75 000 m² Newtown and Majestic development in the Johannesburg CBD (62.5%); – 44 200 m² Cell C Campus on the Buccleuch interchange in Johannesburg (85.9%); – 23 139 m² Group 5’s new head office at Waterfall in Johannesburg (85.9%); – 26 286 m2 MB Technologies warehouse at Waterfall in Johannesburg (85.9%); – 55 000 m² Mall of Namibia, a regional mall in Windhoek in Namibia (31.3%); and – 15 000 m2 Lynnwood Bridge Phase III in Pretoria (100%); • strategic stake of 25% in Atterbury Property which has more than 19 years’ experience in property development and investments; • Africa exposure via a 32.5% effective shareholding in Atterbury Africa; and • international diversification strategy with a 23.9% shareholding in MAS. The percentages in the paragraphs above represent total effective shareholding.
23 3.4 Prospects While the board recognises the constraints and challenges impacting on the South African economy at present and going forward, it is confident that the group will continue to show positive income and capital growth, given the quality of its investment properties and development pipeline and the nature and strength of the group’s key strategic relationships. The group’s investments in retail, office, mixed use and light industrial properties are high quality, generating stable, growing rental income. Additional investments will result from the group’s roll out of its existing development pipeline over the next 10 – 15 years, with particular emphasis on the Waterfall pipeline and its long-term potential as a unique infill development centrally located in the Midrand area of the Gauteng region, South Africa’s economic heartland. The group will continue to expand its development pipeline and grow its long-term prospects, through opportunities it secures and through its strategic relationships, particularly with Atterbury Property (in which it is a 25% shareholder). The listing of Attacq on the JSE will enable Attacq to access capital efficiently, raise its profile and expand its investor base, all of which is expected to enhance Attacq’s prospects. Attacq is well-positioned to take advantage of the strong growth opportunities on the African continent via its investment in Atterbury Africa. The geographical diversification strategy through the group’s investment into Africa and internationally is expected to mitigate the risk of the exposure of the group to the broader South African economy and the South African interest rate environment.
3.5 Management team The diagram below sets out the structure of the management of Attacq.
CEO Executive director Morné Wilken Louis van der Watt
Head of Asset and Financial Director Company Secretary Head of Legal Property Management Melt Hamman Talana Smith Helena Austen Nicolle Weir
Head Office Portfolio Finance Team Management Team
Attacq benefits from an executive team of experienced individuals with proven track records. The team is headed by Morné Wilken, chief executive officer, and Melt Hamman, financial director. Louis van der Watt, in his capacity as an executive director, provides significant expertise, experience and strategic direction and Attacq is able to leverage off his extensive network to initiate deals for Attacq. Talana Smith, the company secretary, has played a key role since the formation of the group and her extensive regulatory and commercial experience is a valuable asset to the team. Attacq’s head of asset and property management, Nicolle Weir, has five years of asset and property management experience and was the operational director of AAM, the now 100% controlled asset management subsidiary of Attacq. Under Nicolle’s management, Attacq has won the Investment Property Databank award for the best performing commercial fund for three consecutive years. Helena Austen joined Attacq as the head of the legal department with effect from 1 September 2013. Helena is an admitted attorney with significant taxation, corporate and commercial legal experience.
3.6 Asset management Historically, Attacq had outsourced its asset management services to AAM. In line with what it considers to be international best practice for a fund of the size of Attacq and to align the interests of the asset management executives with those of the company and its shareholders, the board took the strategic decision to internalise the asset management function through the acquisition of 100% of AAM. Operationally this was implemented from 1 July 2013 and the terms of the agreement in this regard are summarised in paragraph 1.3 of Annexure 10. Notwithstanding the decision to internalise the asset management function, the board is of the view that in regard to the newly established Attacq Retail Fund it is appropriate to adopt a phased-in approach to the internalisation of the asset management and, accordingly, has entered into a five-year asset and property management agreement with Atterbury Property (via Attacq Retail Fund Asset and Property Management, an AAM subsidiary). As remuneration for all the management duties rendered by Atterbury Property, an annual management fee equivalent to the sum of 0.199% of the Gross Asset Value and 49% of the
24 profit generated by Attacq Retail Fund Asset and Property Management will be paid on a monthly basis. The termination date of this agreement is 30 June 2018. This arrangement allows Attacq to internalise the complete asset management function without taking any performance risks and as an additional benefit it is intended that the retail asset management knowledge will be transferred to Attacq and AAM staff during the life of the agreement. The salient terms of this agreement are set out in paragraph 1.5 of Annexure 10. Attacq’s associate companies retain the services of existing external asset managers, including in respect of the following properties or portfolios: • the Mall of Mauritius and Bagatelle Office, as set out in paragraphs 3.7.6.1 and 3.7.6.2; • Atterbury Africa, as set out in paragraph 3.7.6.3; • Mall of Namibia, as set out in paragraph 3.8.4; • Rapfund, as set out in paragraph 3.7.5.1; • Brooklyn Mall, as set out in paragraph 3.7.2.3; • Wingspan, as set out in paragraph 3.7.5.2; • MAS, as set out in paragraph 3.7.7.1; and • Club 1 and Club Retail, as set out in paragraphs 3.7.1.3 and 3.8.5. These associates are reflected within the group structure as set out in Annexure 1.
3.7 Attacq’s properties
3.7.1 South Africa: offices and mixed use
3.7.1.1 Lynnwood Bridge Development Lynnwood Bridge is a prime 74 000 m² mixed use development in Pretoria East situated on the north east corner of the N1 Highway Lynnwood Road off-ramp. The development has excellent access onto and off the N1 Highway as well as the recently upgraded Lynnwood Road. This development consists of three premium A-grade office buildings, a retail component, a hotel and bulk land under development. Two of the office buildings (known as the Aurecon building and the Adams & Adams building) are single tenanted with long-term leases and the third building is multi- tenanted. Aurecon provides engineering, management and specialist technical services for public and private sector clients globally. Aurecon occupies a building with a GLA of 21 628 m2, which is owned 78.1% by Attacq. Aurecon has signed an 11-year lease expiring in April 2023. The building was completed during 2011 and was the first Green Star rated building in Tshwane. The Green Building Council of South Africa (GBCSA) awarded it a 4-Star Green Star SA Office Design V1 rating. Adams & Adams is a leading South African law firm specialising in intellectual property law, in addition to providing general commercial legal services. Adams & Adams has signed a 12-year lease expiring in October 2022 on a building of 13 565 m2. The third building with a GLA of 3 311 m2 is fully let with well-known tenants including Atterbury Property, Sanlam Private Clients, Pentad and Studio 3 Architects. This building and the Adams & Adams buildings are wholly-owned by Attacq. The retail component of Lynnwood Bridge, which is 100% owned by Attacq, is a 12 550 m2 lifestyle and entertainment centre with Woolworths, Safari & Outdoor, The Pro Shop, Cycle Lab and Planet Fitness as the key lifestyle tenants. The entertainment tenant mix includes eight very successful restaurants and the Atterbury Theatre which was sold and transferred to the Atterbury Trust during July 2013. The tenant mix has created a very strong entertainment node in Pretoria which is the destination of choice amongst the LSM 7 to 10 market. Located in the Lynnwood Bridge development, City Lodge adds a much needed business and leisure accommodation dimension. It has 205 tastefully decorated bedrooms, complemented by three board/ meeting rooms, a coffee shop, a fitness room, a swimming pool and wireless internet throughout the hotel. The three star hotel is wholly-owned by Attacq. Attacq has signed a 10-year lease with City Lodge Hotels Limited which commenced on 1 June 2010. Further details relating to the Phase III development is set out in paragraph 3.8.3 below.
3.7.1.2 Brooklyn Bridge and Lewis House Following the conclusion and implementation of the binding heads of agreement set out in paragraph 1.2 of Annexure 10, Attacq will hold 100% of Brooklyn Bridge Office Park Proprietary Limited (“Brooklyn Bridge”). Brooklyn Bridge is a mixed-use development, completed in June 2008, comprising six stand-alone A-grade office buildings including Lewis House which is located on the
25 opposite side of Fehrsen Street and linked to the main buildings via a pedestrian bridge which also links directly into Brooklyn Mall. Brooklyn Bridge and Lewis House have a combined GLA of 25 742 m². The offices have all been finished to the highest quality providing premium grade office space in a good location. The Brooklyn suburb is a dynamic hub offering high end residential properties and several upmarket mall developments. The Chamber of Advocates, SARS, Standard Bank, and the Irish and Mexican embassies are some of the key tenants within this development along with the award winning Kream restaurant and Pangea Lounge. The Regus Group have taken beneficial occupation of approximately 1 000 m² from 1 September 2013.
3.7.1.3 Club 1 Attacq owns an effective 40% shareholding in Club 1 via The Club Retail Park Proprietary Limited (31%) and Atterbury Property (9%). Club 1 is the first phase of a four phased mixed use precinct located across the road from the Pretoria Country Club on the corner of Dely Road, 18th Street and Pinaster Avenue in Hazelwood. The building is well-located in terms of proximity to the exclusive Waterkloof and Brooklyn suburbs and is easily accessible from the N1 highway through the main arterials like Garsfontein and Atterbury roads. Club 1 has a GLA of 6 082 m² and consists of retail space on the ground floor and 3 levels of A-grade office space. The office space is currently let to a single tenant being Unisa while the ground floor retail consists of Café 41, an interior furniture shop and a vacant shop. Construction is currently underway on phase 2, being Club Retail across the road and completion is targeted for April 2014.
3.7.1.4 Woodmead North Office Park AWIC holds a 50% undivided share in Woodmead North Office Park, the other shareholder being East & West Investments. This 4 471 m² office building is the first development completed by AWIC on Waterfall Business Estate and is the head office for Altech, who took occupation during October 2012 in terms of a 10-year lease expiring September 2022. The building is located adjacent to the Buccleauch Interchange with access onto the N1 highway.
3.7.1.5 Great Westerford Attacq has a 50% undivided share in Great Westerford. The 32 667 m² A-grade office building is situated at 240 Main Road, Rondebosch, Cape Town. The building is the old Southern Life Head Office and has subsequently been renovated and turned into A-grade multi-tenanted office space. The building has a good on-site parking ratio with an additional 335 parking bays at the Newlands parkade which is within walking distance and accessible via a dedicated building shuttle. Great Westerford is currently classified as held for sale.
3.7.2 South Africa: retail
3.7.2.1 Garden Route Mall Attacq owns 80% of the Garden Route Mall via Mantrablox Proprietary Limited and has the option to acquire the remaining 20% from Hyprop. The Garden Route Mall is a 53 360 m² mall and is located on the corner of the N2 highway and Knysna Road (N9) in George. The mall is mature with good solid performing tenants. 87% of the tenants are national tenants with Dischem, Woolworths, Edgars, Game and Pick n Pay being the key anchor tenants within the mall. Foot count and trading densities continue to increase year-on-year despite the challenging retail environment in George. The mall remains the only dominant regional mall in the area between Mossel Bay and Plettenberg Bay.
3.7.2.2 Glenfair Boulevard Glenfair Boulevard is wholly-owned by Attacq and is situated on the corner of Lynnwood and Daventry Roads opposite the Lynnwood Bridge development. The 17 205 m² shopping centre has been the mark of convenience for over 40 years with a loyal customer base, is well-located in relation to the N1 highway and forms part of the Lynnwood Bridge node. Included in the total GLA are offices of 1 500 m2. An extensive refurbishment was completed during 2011 which saw the introduction of Dischem, Superspar and a refurbished Intercare. The centre is also anchored by Checkers on the lower level. The tenants post refurbishment have seen a significant increase in their turnovers and the new modern open feel to the centre has been well-received in the community. A further 1 000 m² of bulk rights were approved early in the year and a lease agreement has been concluded with a Spur franchisee to build a restaurant facing Lynnwood Road adjoining the existing centre.
3.7.2.3 Attacq Retail Fund (previously Abacus) Attacq owns 81.95% of Attacq Retail Fund which owns the Mooirivier Mall (100%) in Potchefstroom and a 25% undivided share in Brooklyn Mall in Pretoria. Attacq Retail Fund also owns the Eikestad Mall precinct which consists of Eikestad Mall (80% undivided share), Mill Square (80% undivided share) and Andringa Walk (100%), all located in Stellenbosch.
26 Attacq intends to acquire the balance of the shares in Attacq Retail Fund which are not already owned by Attacq from Nedbank Limited, being an 18.05% holding, in order to wholly-own the company. Attacq intends to consolidate Garden Route Mall into the Attacq Retail Fund in the near future. Attacq and SIM have been in negotiations to form a joint venture where SIM will acquire 49% of the shares in Attacq Retail Fund. The terms of this transaction are still to be finalised. Mooirivier Mall is a 53 051 m² regional shopping centre situated along the N12 highway at the entrance to Potchestroom along the banks of the Mooirivier. The property is the dominant mall in the area and offers a family friendly environment with shopping and entertainment. The mall has a large national tenant component and trades exceptionally well. The mall has received two awards namely the SACSC National Retail Design and Development Award for Super/Regional Malls and Shopping Centres, as well as the Spectrum Award that celebrates retail excellence across all disciplines and sectors in South Africa. Brooklyn Mall and the adjacent Design Square were merged during September 2011 and the merger has created a more diverse retail experience enhanced by the superior decor offering of Design Square. Brooklyn Mall is a 80 115 m² regional shopping centre situated in the heart of Pretoria’s cosmopolitan Embassy suburbs. Brooklyn Mall combines all the right components to create a vibrant hub of activity for the capital’s most prestigious neighbourhood. Design Square offers a fine selection of exclusive name interior stores ranging from antiques to contemporary furnishings. Brooklyn Mall offers the convenience of one-stop-shopping catering to the requirements of the most discerning shopper. A full complement of national retailers along with approximately 180 specialist retail stores provides a comprehensive and sound matrix of retail choice. Brooklyn Mall is undergoing a refurbishment which has seen the introduction of some high end fashion brands such as Gap and Country Road as well as those brands owned by the Platinum Group. The last phase of the refurbishment will see the introduction of Zara and the seamless connection of Brooklyn Mall with Design Square. Eikestad Mall precinct is situated in the heart of Stellenbosch, the second oldest town in South Africa. The precinct has been part of the Stellenbosch CBD since the 1970’s and continues to change with the town, and has therefore recently undergone a significant upgrade in order to meet the needs of its shoppers. The Eikestad Mall precinct consists of three interconnected multi-use developments namely Eikestad Mall (32 453 m²), Andringa Walk (10 655 m²) and Mill Square (3 616 m²). Eikestad Mall and Andringa Walk were refurbished and connected via a two level pedestrian bridge with an overhaul and introduction of a high-end tenant mix with the conversion of Shoprite into a Checkers store and the opening of the first Virgin Active in Stellenbosch. Other key tenants include Woolworths, Food Lover’s Market and Game, as well as a broad variety of entertainment, food, fashion, beauty and other specialist stores. The mall offers 750 undercover parking bays which is a huge competitive advantage given the severe parking shortage in Stellenbosch. The tenant mix was designed around recapturing the spend of the higher LSM. Mill Square is the last remaining part of the precinct which is still under development and is expected to be completed by the end of 2013. Mill Square was designed around historically protected buildings and will offer an entertainment hub with a number of restaurants opening onto a courtyard. In addition to the entertainment offering there is 2 045 m² of commercial A-grade office space.
3.7.2.4 De Ville De Ville is wholly-owned by Attacq and its recent refurbishment was completed during 2011. The centre is a community centre with a total GLA of 13 455 m² of which 2 558 m² consists of a B-grade office tower above the retail centre. The building is situated on the corner of Wellington and Main roads and is well-positioned in the heart of Durbanville, Cape Town. The refurbished centre has a clean modern feel and provides good parking facilities relative to the surrounding convenience centres and includes 515 undercover parking bays. The anchor tenants are Pick n Pay and Virgin Active, both of whom have signed long-term leases. De Ville is no longer considered to be core to the Attacq portfolio and the intention is to dispose of this property in due course.
3.7.3 South Africa: light industrial Massbuild Distribution Centre The Massbuild Distribution Centre forms part of the security controlled Waterfall Business Estate in Midrand and is located on the corner of Allandale and Old Pretoria Main Road. The site is easily accessible from Pretoria, Sandton and Johannesburg via the N1 highway with good visibility from the N1 highway. It is in close proximity to OR Tambo and Grand Central airports. The Massbuild Distribution Centre, of which Attacq owns an effective 85.9%, via AWIC, is a high tech distribution warehouse. The total GLA, excluding the yard area is 35 671 m² with 380 on-site parking bays. Massbuild took occupation in April 2013 after signing a 15-year triple net lease.
27 3.7.4 South Africa: vacant land Le Chateau Attacq owns 100% of Le Chateau which is situated near the Hartebeestpoort Dam in the Estate D’ Afrique development. The 5.856 hectares of vacant land currently has zoning rights for hotel, retail and high density units. This piece of land was acquired as part of the transaction when Attacq acquired 100% of the Lynnwood Bridge Development. Le Chateau does not form part of Attacq’s core portfolio.
3.7.5 South Africa: indirect property portfolio Reach Reach is invested in two retail portfolios as follows:
3.7.5.1 Rapfund Reach owns 52% of the Rapfund portfolio. Rapfund is focused on convenience centres smaller than 13 000 m² in GLA and is typically anchored by a national food store operator. The following centres are included in Rapfund with the following holdings: • Johannesburg – Eden Meadows Shopping Centres – 100%; – Featherbrooks Village – 100%; – Honeydew Village – 50%; – Kingfisher Corner – 100%; – L’Corro Shopping Centre – 45%; – Parktown Quarter – 50%; – Verdi Shopping Centre – 100%; – Northcliff Shopping Centre – 50%; – Lyttleton Shopping Centre – 100%; • Midrand – Sanridge – 100%; • Pretoria – Waterkloof Corner – 100%; and • Cape Town – Steenberg Village – 100%. The Rapfund portfolio is currently valued at R1.3 billion based on a weighted average capitalisation rate of 8.8%.
3.7.5.2 Wingspan Reach owns 68.4% of the Wingspan portfolio which is a specialised fund of upmarket community and regional shopping centres. The Wingspan portfolio comprises five retail properties valued in excess of R2.2 billion based on a weighted average capitalisation rate of 8.8%. The Wingspan portfolio comprises the following properties with the following holdings: • Fountains Mall in Jeffreys Bay – 32%; • Irene Village Mall in Pretoria – 90%; • Village Mall in Hartebeespoort Dam – 100%; • Weskus Mall in Vredenburg – 91%; and • Westwood Shopping Centre in Durban – 55%. Westwood Shopping Centre is currently undergoing a refurbishment which will result in the introduction of a 3 000 m² Game store.
3.7.6 Africa portfolio
3.7.6.1 Bagatelle – Mall of Mauritius Attacq, via Atterbury Mauritius Consortium Proprietary Limited, owns an effective 41.8% of this 45 000 m² mixed-use development. It opened on 29 September 2011 and comprises a retail centre of 40 000 m², a 220-room hotel and a petrol station. This asset is strategically located in the heart of the most economically active region in Mauritius, between the capital of Port Louis and the emerging Cyber City growth zone.
28 3.7.6.2 Bagatelle Office The office development forms part of the Bagatelle precinct and can accommodate approximately 30 000 m² of commercial bulk. The size of the buildings will be determined by tenants’ requirements. The first building has been completed and 50% of this building has been let to Arup Sigma whose lease expires on 30 June 2023. Arup Sigma has been established in Mauritius since 1975 and offers a broad range of services including structural, civil and environmental engineering.
3.7.6.3 Atterbury Africa Attacq has a direct 25% (effective 32.5%) shareholding in Atterbury Africa via its wholly-owned subsidiary AIHI. Attacq, via AIHI, has committed to invest R250 million over the next few years in this venture. Atterbury Africa invests in existing and to be developed retail centres across sub-Saharan Africa. Hyprop has committed to invest R750 million as Attacq’s investment partners. To date, Attacq has invested US$11.2 million in Atterbury Africa and, with this, Atterbury Africa has secured the following assets: • a 45% interest in West Hills Mall which is situated in the West of Accra, Ghana and will measure approximately 27 700 m² upon completion in October 2014. Key tenants secured to date include Shoprite, Edgars, Jet, Truworths, Identity, Foschini Group and Woolworths; • a 47% interest in Accra Mall in Accra, Ghana and will measure 19 075 m². The retail centre has been fully let. This mall has a long tenant waiting list due to high demand for retail space. Phase 2 is in planning and will increase the GLA of the mall to 42 023 m2; • a 75% interest in Achimota in Accra, Ghana. This site has an area of 3.59 hectares. Atterbury Africa has recently obtained approval to build a shopping centre of approximately 14 000 m² with completion expected by March 2015; and • a 25% interest in Waterfall Mall in Lusaka, Zambia, which is vacant land measuring 8.09 hectares. All these assets are developed in partnership with local investors. For West Hills Mall, the Ghanaian Pension Fund known as the Social Security National Insurance Trust is the key local partner. In addition, Sanlam Core Real Estate Fund Limited holds an effective 47% interest in the Accra Mall.
3.7.7 International portfolio
3.7.7.1 MAS Attacq owns 23.9% of MAS, subject to the full implementation of the Artisan disposal, which is a strategic investment and forms part of Attacq’s international diversification strategy. MAS is listed on the Euro-MTF market of the Luxembourg Stock Exchange where it has its primary listing with a secondary listing on the Alternative Exchange of the JSE. MAS’ strategy is to invest 70% of its funds in core, mature assets with long-term leases, thus providing predictable cash flow used to pay dividends. The strategy is to invest the remaining 30% of its assets in developments that have slightly higher risk and reward profiles. This enables MAS to generate long-term capital growth. Historically MAS has approached Attacq to co-invest in a number of developments as a strategic investment partner, thereby increasing Attacq’s effective exposure to international developments. An example is Caltongate, as set out in paragraph 3.7.7.4 below. MAS raised approximately €23.8 million during February 2013. It is expected that the favourable buying opportunities in the UK market and greater Euro zone will continue for at least another 18 months and MAS is well-positioned to make further acquisitions.
3.7.7.2 Karoo I Attacq has an effective 36.8% interest in Karoo I via Arctospark. Karoo I targets real estate capital markets, including equity and debt investments, in listed and unlisted enterprises. Underlying assets comprise mainly commercial real estate physically located in Western Europe including the United Kingdom, Ireland, North America and Canada. The fund is listed on the Euro-MTF market of the Luxembourg Stock Exchange and has a five-year lock-in until 2015. Attacq’s interest in Karoo I is in the process of being sold to MAS, as set out in paragraph 1.4.2 of Annexure 10.
3.7.7.3 Karoo II Attacq has an effective 39.9% interest in Karoo II via Arctospark. Karoo II has the same investment strategy, lock-in period and target market focus as Karoo I, but is allowed to invest directly in property whereas Karoo I only invests in equity and debt instruments. The fund is invested in many of the same assets as Karoo I, weighting them differently. The material difference between the two funds is
29 Karoo II’s investment in Waterside Shopping Centre in the North East of England composing 39% of its current NAV. Attacq’s interest in Karoo II is in the process of being sold to MAS, as set out in paragraph 1.4.2 of Annexure 10.
3.7.7.4 Caltongate Attacq via AIHI has a direct interest of 26.3% in the Caltongate development, a 70 000 m² mixed-use precinct in Edinburgh, Scotland. Attacq’s interest in Caltongate is in the process of being sold to MAS as set out in paragraph 2.1 of Annexure 10.
3.7.7.5 Bishopsgate Bishopsgate is a student residential development in Birmingham, England. There are 147 student residential units well located in close proximity to the CBD and Birmingham University. Attacq via AIHI has a 29.8% interest in Bishopsgate.
3.7.7.6 Nova Eventis Attacq has an effective interest of 19.7% in Nova Eventis, a 91 000 m2 super-regional retail centre in Germany. Nova Eventis is trading acceptably under difficult macro-economic conditions.
3.8 Attacq’s developments
3.8.1 Waterfall Business Estate
In 2008, AWIC secured the rights to develop the commercial property on the Waterfall Business Estate and the right to obtain the leasehold title thereto. The key terms of the relevant agreements have been summarised in paragraph 2.5 of Annexure 10. Waterfall Business Estate is located between the Allandale and Woodmead off-ramps on both sides of the M1/N1 highway in Johannesburg, Gauteng. The land joins Modderfontein to the east and Kyalami and Sunninghill to the west. It is accessible from Pretoria via the N1, R21 and R55, and from Sandton and Johannesburg via the M1, N1, N3 highways and the R55. Waterfall is expected to close the gap between the Johannesburg and Tshwane corridor. The business estate measures approximately 311ha and 1.75 million m² of developable bulk has to date been approved. The development of Waterfall will be market-driven, and is expected to be rolled out over the next 10 to 15 years. The most significant infrastructure improvement to Waterfall was the upgrade of the Allandale interchange which cost SANRAL approximately R800 million. The upgrade has resulted in a free flow interchange which has significantly improved accessibility. This access creates a significant competitive edge for Waterfall. AWIC has also undertaken various infrastructure developments since 2008 and continues to upgrade the K101 and the Allandale Road. The continuing upgrades west of Allandale Road are critical for the recently announced Mall of Africa which will be the heart of Waterfall City. Key advantageous differentiators for Waterfall Business Estate are its accessibility to major road infrastructure and the fact that the total development is planned as a greenfield development. A greenfield development allows the best urban design principles to be applied in determining infrastructure, services and open public spaces. This ensures a sustainable city whereby all elements integrate seamlessly and efficiently.
30 The Waterfall Business Estate is divided different into 12 land parcels as illustrated in the following diagram:
31 Summary of development of Waterfall land larcels Bulk/GLA status Under Remaining Total construction Remaining development Total land developable and secured undeveloped timeline area bulk Completed pipeline bulk # Land parcel Description (Years) (m2) (m2) (m2) (m2) (m2) 1. Parcel 3 Convenience Corner 8 50 000 15 000 – – 15 000 Waterfall Distribution 2. Parcel 8 Campus 3 405 969 198 132 44 671 – 153 461 3. Parcel 9 Watefall Logistics Precinct 5 331 183 165 592 – 7 500 158 092 4. Parcel 10 Waterfall City 12 1 045 000 800 000 – 142 235 657 765 5. Parcel 10A Corporate City 10 294 200 120 000 – – 120 000 6. Parcel 10B Business Centre 8 53 300 20 000 – – 20 000 7. Parcel 12 Capital City 8 217 483 72 520 – – 72 520 8. Parcel 15 Lifestyle Estate 2 153 162 50 600 – 39 700 10 900 Woodmead North Office 9. Parcel 20 Park Completed 10 487 4 194 4 194 – – 10. Parcel 21 Landmark Park 1 113 998 58 200 – 44 200 14 000 11. Parcel 22 Commercial District 2 253 189 94 000 – 30 960 63 040 12. Parcel 24 Factory Depot 10 308 500 154 250 – – 154 250
3 236 471 1 752 488 48 865 264 595 1 439 028
Details of development of Waterfall land parcels
• Land Parcel 3 – Convenience Corner This land parcel has a land area of 50 000 m² with developable bulk of 15 000 m² for retail. The land has not been proclaimed and no developments have been undertaken to date. The land has been independently valued as non-serviced land as at 30 June 2013.
• Land Parcel 8 – Distribution Campus This land parcel has a land area of 396 264 m² with developable bulk of 198 132 m² for commercial use. This excludes an area of 9 705 m2 which consists of an artificial wetland and land earmarked for the construction of a power substation. The Massbuild Distribution Centre was developed on this land parcel using a land area of 121 106 m². Further details are set out in paragraph 3.7.3 above. Adjacent to the Massbuild Distribution Centre lies a 9 000 m² (GLA) distribution centre for Digistics. Land area of 26 749 m² was used in the development. Digistics is the distributor to KFC and McDonalds. This development was sold after completion to Portimix Proprietary Limited in September 2012 and has been excluded from the valuation as at 30 June 2013. The remaining land portion on the land parcel is 248 409 m². It has been independently valued as serviced land as at 30 June 2013.
• Land Parcel 9 – Logistics Precinct The land parcel has a land area of 331 183 m² with developable bulk of 165 592 m² for commercial use. The land has not been proclaimed and no developments have been undertaken to date. The land has been independently valued as serviced land as at 30 June 2013. Comztek Proprietary Limited, a leading distributor of networking, security, hardware and software products, signed a 10-year lease for 7 500 m2 (GLA) of warehouse space after 30 June 2013. Construction will commence shortly.
• Land Parcel 10 – Waterfall City This land parcel has a land area of 1 045 000 m², with developable bulk of 800 000 m² for mixed use comprising retail, office, hotels, other services and residential. Waterfall City has made headlines in recent months. At the centre of these headlines and the heart of Waterfall City, is the 116 000 m² super regional Mall of Africa (120 000 m2 of developable bluk), with an adjoining 13 400 m² open intercity park. Mall of Africa is a super regional shopping mall that will be completed in a single phase and is expected to commence trading in the first half of 2016. It will have a catchment area of approximately 6.7 million people who live within an hour’s drive away, 4.9 million of whom are within half-an-hour’s drive. This number is expected to grow as more developments are undertaken and completed in the Waterfall Business Estate.
32 Access to Mall of Africa will be easy as a result of the upgraded Allandale off-ramp and the improvements made to the Allandale Road and the extended Maxwell Drive. In addition, Mall of Africa will enjoy the benefits of public transport such as the Gautrain given that the Midrand Gautrain station is only minutes away. Green view lines linking the entire city will be consolidated in the open inner city park. These links will be provided through walk-ways, open exhibition areas, bicycle lanes, and other recreational facilities that can be enjoyed by the city’s residents and the public. In addition to Mall of Africa, Waterfall City will consist of the following: – 400 000 m² of A-grade corporate offices. Demand for office space in the Waterfall/Midrand/Woodmead/ Sunninghill area remains steady and offers a convenient alternative to Sandton and Rosebank; – approximately five hectares of vacant land has been earmarked for hotel developments and represent 30 000 m² of bulk; – a business development of approximately 150 000 m² of bulk; and – 960 high density residential units will be built on a 100 000 m² of bulk area and will be developed in phases. Waterfall City will be managed by means of an umbrella Property Owners Association (POA) which will be based on the same concept as the more commonly known central improvement district. The key objective of this POA will be to manage and maintain the Waterfall City common infrastructure including security in and around the city, public transport (including taxi associations), landscaping, pavements, bicycle lanes, public park areas and the general management of service level agreements with council on basic services including maintenance of roads, traffic light replacement and emergency services. This will result in a world class city that is clean, safe and secure. The aesthetically beautiful and well-maintained public areas are expected to attract blue chip companies and young professionals to the city. Sophisticated security surveillance equipment will be installed throughout the city and the greater Waterfall Business Estate and will be monitored 24 hours a day to ensure safety and security for the residents and the public. The costs to manage the Waterfall City POA will be collected from its members being the owners of the properties within Waterfall City. The first development within the Waterfall City precinct is Maxwell Office Park. The office park will be developed in four phases in association with East & West Investments through a 50/50 joint venture. On completion, this 36 000 m² (GLA) office park will boast seven individual buildings that range from 4 500 m² to 6 000 m² (GLA) and a variety of communal facilities. The land area for the total development is 60 520 m² with developable bulk of 37 000 m². Phase I of the development has already commenced using a land area of 18 300 m² and developable bulk of 11 104 m² and consists of two buildings. The first building with a GLA of 6 198 m² will be a single tenanted building and will be the headquarters of Golder Associates Africa Proprietary Limited for an initial period of 10 years commencing February 2014. Golder Associates Africa Proprietary Limited, is a global group of consulting companies specialising in ground engineering and environmental services. The second building is a multi-tenant building with a GLA of 5 154 m². Cipla, Atterbury Property and Attacq have all signed long-term leases for office space in the second building. As at 30 June 2013, these Phase I buildings have been valued as properties under construction. The remaining land area is 42 220 m² and developable bulk is 25 896 m² and has been independently valued as serviced land. Construction of two more buildings will commence during November 2013 and will form part of Phase II of the development. Premier Foods has signed a ten-year lease for 4 343 m² and the other building measuring 4 360 m² is being constructed on a speculative basis. Phase III and IV will be undertaken on a tenant needs basis. A 150 bed 3-Star City Lodge (6 180 m2) has already been secured through a triple net lease. The hotel will be built to the same standard as the City Lodge Hotel at Lynnwood Bridge. Construction is scheduled to commence in October 2013 and City Lodge will take occupation in November 2014. The remaining land, with hotel rights, makes provision for at least two upmarket (5-Star) hotels to be constructed as required in the future.
• Land Parcel 10a – Corporate City This land parcel measures 294 200 m² with developable bulk of 120 000 m² for offices. The land has not been proclaimed and no developments have been undertaken to date. The land has been independently valued as serviced land as at 30 June 2013.
• Land Parcel 10b – Business Centre The land parcel measures 53 300 m² with developable bulk of 20 000 m² for offices. The land has not been proclaimed and no developments have been undertaken to date. The land has been independently valued as serviced land as at 30 June 2013.
33 • Land Parcel 12 – Capital City The land parcel measures 217 483 m² with developable bulk of 55 000 m² for potential corporate head offices. There is additional bulk of 17 520 m2 on this site that is in the process of being approved. The land has not been proclaimed and no developments have been undertaken to date. The land has been independently valued as serviced land as at 30 June 2013.
• Land Parcel 15 – Lifestyle Estate This land parcel measures 153 612 m² with developable bulk of 50 600 m² for offices, a convenience centre, a lifestyle centre and other uses. Group 5’s Johannesburg operation will be consolidated in a 23 139 m² (GLA) building situated on the corner of Maxwell Drive and Country Lane. The building has been registered as a 5-star Green Star SA Certificate in both the Design and As-built categories. The development lies on a portion of Land Parcel 15 and is scheduled for completion in December 2013. The initial lease period is 12 years. Land area of 51 632 m² and developable bulk of 20 000 m² have been used for the development. This leaves a land area of 101 980 m² and developable bulk of 30 600 m². The land has been independently valued as serviced land as at 30 June 2013. Two more developments commenced post 30 June 2013 on this remaining portion. These are Waterfall Corner Retail Centre and Waterfall Lifestyle. Waterfall Corner Retail Centre is situated on the corners of Maxwell Drive, Country Lane and Woodmead Drive. This 9 284 m² (GLA) development is envisaged as the prime neighbourhood convenience centre that will service the residential communities and the commercial developments in the greater Waterfall area. The centre will be anchored by Checkers, Woolworths and Clicks who have all signed 10-year leases. The centre is expected to commence trading during April 2014. Land area of 50 957 m² and developable bulk of 10 100 m² will be used to complete the development. Waterfall Lifestyle will use a land area of 25 883m² and developable bulk of 8 000 m². 7 277 m² (GLA) will be anchored by Virgin Active. A fourth portion of Land Parcel 15 measuring 25 140 m² in land area and 12 500 m² in developable bulk for special commercial use will be developed in future.
• Land Parcel 20 – Woodmead North Office Park This land parcel measures 10 487 m² with developable bulk of 4 194 m² for offices. A 4 471 m² (GLA) building was completed on Land Parcel 20 and is situated in the Woodmead North Office Park. The Altech Group took occupation of the building during October 2012 after signing a 10-year lease. The building has excellent visibility from the N1 Highway. The development was undertaken through a 50/50 joint venture with East & West Investments. Further details are set out in paragraph 3.7.1.4 above. The building has been independently valued as a completed building as at 30 June 2013. No developable bulk remains on this land parcel.
• Land Parcel 21 – Landmark Park This land parcel measures 113 998 m² with developable bulk of 44 200 m² for offices. The Cell C Campus which will consist of Cell C’s new headquarters, a customer walk-in centre, a data/IT centre and a warehouse is being developed on this land parcel. This 44 200 m² (GLA) development is adjacent to the Buccleuch Interchange and accessible from the upgraded K101. This development will consolidate all of Cell C’s existing facilities with the exception of its call centre operation in Parktown. Cell C will take beneficial occupation in December 2013. The initial lease is for a 15-year period. The site allows for an additional bulk of 14 000 m² which is available for future expansion. The development, including the remaining bulk area, has been independently valued as property under construction as at 30 June 2013.
• Land Parcel 22 – Commercial District This land parcel measures 253 189 m² with developable bulk of 94 000 m² for commercial uses including light industrial and showrooms. A 26 286 m² (GLA) warehouse is in the process of being developed as a turn-key development for MB Technologies for occupation by its Tarsus business. Completion of the warehouse is expected during December 2013. Land area of 175 076 m² and developable bulk of 67 714 m² remain on this land parcel after the construction of the MB Technologies building. The remaining land has been independently valued as serviced land as at 30 June 2013.
34 Dräger South Africa Proprietary Limited, a manufacturer of medical and safety technology, signed a 10-year lease for 4 674 m² (GLA) after 30 June 2013 and construction is expected to commence in September 2013.
• Land Parcel 24 – Factory Depot This land parcel measures 308 500 m² for commercial uses. The land is not proclaimed and no developments have been undertaken to date. The land has been independently valued as serviced land as at 30 June 2013.
3.8.2 Newtown and Majestic development Attacq holds an effective 62.5% of the Newtown and Majestic development which is situated between Museum Africa, Mary Fitzgerald Square and Carr Street in an historic area of Johannesburg. The key terms of the relevant agreements are set out in paragraph 2.6 of Annexure 10. The Newtown and Majestic development is visible from the landmark Nelson Mandela bridge which provides easy access from the north, while the M1 Carr street off-ramp affords excellent access from the south. The phase 1 development is 75 000 m² and consists of two main facets, namely a 39 000 m² office tower anchored by Nedbank Limited and will be built as a 4-star Green Building. Of this 39 000 m², Nieuwtown Property Development Company Proprietary Limited holds 30 000 m² and Majestic Offices Proprietary Limited holds the remaining 9 000 m². The balance is a 36 000 m² retail mall also held by Nieuwtown Property Development Company Proprietary Limited and has an expected completion date of October 2014. The development is centered on the conversion of the old Potato Sheds. The development will retain and restore the historical elements, keeping the heritage of the area.
3.8.3 Lynnwood Bridge – Phase III Phase III is currently under development which will consist of two 7 500 m² A-grade office blocks (building A and building B). Aurecon has signed a nine-year lease on building A which commences on 1 April 2014. This building will be linked by means of a bridge to their current office which is also part of the Lynnwood Bridge development. Attacq’s effective shareholding is 78.1% in building A. Building B, is being developed on a speculative basis.
3.8.4 Mall of Namibia – The Grove Attacq has an effective shareholding of 31.3% in Mall of Namibia. The newly planned regional mall is located in the heart of Kleine Kuppe, Windhoek. The size of the shopping centre is 55 000 m² and is expected to be completed by October 2014. 3.8.5 Club Retail Attacq owns an effective 40% shareholding in Club 1 via Club Retail Park Proprietary Limited (31%) and Atterbury Property (9%). This 6 269 m² mixed-use development has a 4 400 m² retail component and the balance an office component. Woolworths has signed a lease and will occupy 2 200 m². The expected completion date is April 2014.
3.9 Analysis of the properties An analysis of the properties in respect of sectoral, geographic, tenant, vacancy and lease expiry profiles is provided in the tables and graphs below. The information is based on Attacq’s total holding in each property and excludes investments in associates. Unless otherwise stated, values have been calculated on primary GLA.
3.9.1 Sectoral profile
Sectoral profile by GLA Sectoral profile by GR
2.5% 2.8% 4.4% 11.1% 27.3% Hotel Hotel Industrial Industrial
59.3% Office Office 27.1% Retail Retail 65.5%
35 3.9.2 Geographic profile
Geographical profile by GLA Geographical profile by GR
44.3% 38.6% Gauteng 40.0% Gauteng North West North West Western Cape Western Cape 45.7%
15.7% 15.7%
3.9.3 Tenant profile Tenant profile by GLA Tenant profile by GR
8.4% 14.8%
A A 26.0% B B C 35.1% C 65.6% 50.1%
For the tenant profile table, the following key is applicable:
A. Large international and national tenants, large listed tenants and government or smaller tenants in respect of which rental guarantees are issued. These include, inter alia, Nedbank, ABSA, Woolworths, Shoprite Checkers, Massbuild, Truworths, Edcon and Ellerines.
B. Smaller international and national tenants, smaller listed tenants, major franchisees and medium to large professional firms. These include, inter alia, Dischem, The Pro Shop, Planet Fitness and the Cape Union Mart group.
C. Other local tenants and sole proprietors. This comprises approximately 315 tenants.
3.9.4 Lease expiry profile GLA* Retail Office Industrial Other Total
Vacancy 2.6% 21.2% – – 7.3% < 1 year 7.1% 11.5% – – 7.3% 1 – 2 years 8.1% 8.9% – – 7.2% 2 – 3 years 21.6% 10.8% – – 15.7% 3 – 4 years 4.0% 2.3% – – 3.0% 4 – 5 years 27.6% 3.5% – – 17.3% > 5 years 29.0% 41.8% 100.0% 100.0% 42.2% Total 100.0% 100.0% 100.0% 100.0% 100.0% * Based on existing leases at 1 July 2013
36 GR* Retail Office Industrial Other Total
< 1 year 11.4% 12.1% – – 10.8% 1 – 2 years 10.7% 8.5% – – 9.3% 2 – 3 years 26.3% 10.3% – – 20.1% 3 – 4 years 5.5% 2.7% – – 4.4% 4 – 5 years 25.5% 2.6% – – 17.4% > 5 years 20.6% 63.8% 100.0% 100.0% 38.0% Total 100.0% 100.0% 100.0% 100.0% 100.0% * Contractual revenue forecast for years ending 30 June
3.9.5 Vacancy profile The vacancy profile indicated below reflects the vacancy percentage in terms of current GLA by sector: Vacancy % based on Sector total GLA* GLA m2†
Retail 1.5% 4 922 Office 5.8% 18 410 Industrial – – Hotel – – Portfolio vacancy 7.3% 23 332† *Based on existing leases at 1 July 2013 †13 662 m2 of the 23 332 m2 (58.6%) of the vacant m2 relates to properties available for sale
3.9.6 Rental escalations and rental per square metre The annualised weighted average gross rental escalation by GLA in the properties for the year ending 30 June 2014 is presented in the table below. Sector %
Retail 7.9 Office 8.6 Industrial 6.5 Hotel 7.0 Total 8.0
The weighted average gross rental per square metre in the properties for the year ending 30 June 2014 is presented in the table below: Sector R/m² per month
Retail 140.34 Office 170.98 Industrial 47.43 Hotel 135.50 Total 134.76 The average annualised property yield of the properties (based on existing leases) for the year ending 30 June 2014 is 7.3%. This annualised yield includes those properties to be completed during the year ending 30 June 2014 and excludes discontinued operations.
3.10 Valuation reports 3.10.1 The properties in the direct property portfolio were valued by Trevor King, Magdelene Smit, Bruce Eastman, Marc Prins, Kelly Hook and Shaun Crous of OMIGSA, Tom Bate of Mills Fitchet and Amanda de Wet of Amanda de Wet Consultants, who are all independent, external and registered as professional valuers in terms of the Property Valuers Profession Act, No 47 of 2000. 3.10.2 Detailed valuation reports have been prepared in respect of each of the properties and are available for inspection in terms of paragraph 37. The summary of the valuation reports in respect of each of the properties in the direct property portfolio has been included in Annexure 8a, Annexure 8b and Annexure 8c.
37 3.11 Material changes Save for the rights offer details of which are set out in paragraph 5 of Annexure 9, the acquisitions set out in Annexure 12, the disposals set out in Annexure 22 and the private placement contemplated in this prospectus: 3.11.1 there have been no other material changes in the financial or trading position of the group since Attacq published its audited financial information for the nine-month period ended 31 March 2013; 3.11.2 there have been no other changes in the business or trading objects of Attacq during the past five years; 3.11.3 there have been no other major changes in the nature of property, plant and equipment and in the policy regarding the use thereof; 3.11.4 there have been no other material changes in the nature of business of the Attacq group; and 3.11.5 there has been no other material fact or circumstance that has occurred between 31 March 2013, being the latest reported period and the date of this prospectus.
3.12 Material commitments, lease payments and contingent liabilities Save as disclosed in notes 6, 7 and 12 of the historical financial information set out in Annexure 20, there are no other material commitments, lease payments and contingent liabilities.
3.13 Turnover, profit/loss and dividend history As required in terms of Regulation 79 (sub-regulation 3)(g) of the Companies Act, particulars of the gross turnover, the profits or losses (before and after tax) and dividends declared by Attacq in the preceding three periods, being the nine months ended 31 March 2013 and the years ended 30 June 2012 and 30 June 2011 are contained in Annexure 13. The financial information presented in Annexure 13 has been extracted from the audited financial statements of Attacq for the nine- month period ended 31 March 2013 and the years ended 30 June 2012 and 30 June 2011.
4. SHARE CAPITAL OF THE COMPANY
4.1 The authorised and issued share capital of the company as at the last practical date was as follows: Number of shares R’000
Authorised share capital Ordinary shares of no par value 2 000 000 000 – Issued share capital Stated capital – ordinary shares of no par value 546 935 469 3 123 696 Treasury shares Shares held by Razorbill (16 701 037) (123 087) Shares held by Attacq Retail Fund (29 726 516) (250 000) Total 500 507 916 2 750 609
4.2 The authorised and issued share capital of the company after the private placement and the listing is expected to be as follows: Number of shares R’000
Authorised share capital Ordinary shares of no par value 2 000 000 000 – Issued share capital Stated capital – ordinary shares of no par value 600 268 802 3 923 696 Treasury shares Shares held by Razorbill (16 701 037) (123 087) Shares held by Attacq Retail Fund (29 726 516) (250 000) Total 553 841 249 3 550 609 The table above in paragraph 4.2 assumes that the private placement is fully subscribed.
38 4.3 Annexure 9 contains the following salient information relating to the authorised and issued share capital: 4.3.1 authorisations; 4.3.2 rights attaching to shares; 4.3.3 options and preferential rights in respect of shares; 4.3.4 alterations to authorised share capital; 4.3.5 issues and repurchases of shares in the preceding three years; and 4.3.6 statement as to listing on stock exchange.
4.4 Major and controlling shareholders 4.4.1 Set out below are the names of shareholders, other than directors who, directly or indirectly, will be beneficially interested in 5% or more of the issued shares of Attacq immediately before the private placement and the listing:
Number of shares % of shares Name of shareholder Directly Indirectly in issue
BNF Investments Proprietary Limited 31 427 543 – 5.75 Mergon Foundation NPC 81 711 613 – 14.94 Sanlam Life Insurance Limited 105 435 926 – 19.28 Lisinfo 222 Investments Proprietary Limited 78 754 233 – 14.40 Attacq Retail Fund Proprietary Limited 29 726 516 – 5.44 Total 327 055 831 – 59.81
4.4.2 Shareholders of Attacq’s major and controlling shareholders Percentage Percentage holding in holding in Attacq Attacq shareholders Attacq Shareholders shareholder
BNF Investments BNF Trust, a family trust of which Proprietary Limited 5.75 Francois van Niekerk is a trustee 100 Mergon Foundation NPC 14.94 Mergon Foundation directors N/A – PH Faure – BF van Niekerk – GJ Oosthuizen – DA W van der Walt – LJ van der Nest Sanlam Life Insurance Limited 19.28 Various shareholders Listed company Lisinfo 222 Investments Royal Bafokeng Holdings Proprietary Limited 14.40 Proprietary Limited 100 Attacq Retail Fund Proprietary Limited 5.44 Attacq Limited 81.95 Nedbank Limited 18.05
4.4.3 Since incorporation the company has not had a controlling shareholder. There will not be a controlling shareholder post the private placement and the listing.
4.5 Founders of Attacq Attacq was founded by Francois van Niekerk and Louis van der Watt. Details of their beneficial interest in Attacq shares are set out in paragraph 3 of Annexure 3.
5. OPTIONS AND PREFERENTIAL RIGHTS IN RESPECT OF SHARES 5.1 Details of the options or preferential rights in respect of the shares are set out in Annexure 3, Annexure 5 and Annexure 9 in respect of the options granted to Morné Wilken and Melt Hamman. The business addresses of Morné Wilken and Melt Hamman are set out in paragraph 2.2.1 above. 5.2 Nicolle Weir and Helena Austen have been granted options as part of an ad hoc award of share options, further details of which are set out in paragraph 1.4 of Annexure 3.
39 6. COMMISSIONS PAID OR PAYABLE 6.1 No amount has been paid, or accrued as payable, within the preceding three years, as commission to any person, including commission so paid or payable to any sub-underwriter that is the holding company or a promoter or director or officer of the applicant, for subscribing or agreeing to subscribe, or procuring, or agreeing to procure, subscriptions for any securities of the company. 6.2 During September 2010, RBH acquired Attacq shares at R7.37 per share totalling R393 014 978 from various Attacq shareholders. Attacq facilitated the transaction between RBH and its shareholders. RBH paid AAM a total amount of R982 537 to administer the whole process. 6.3 Other than disclosed in paragraph 6.2 above and the capital raising fees payable by the company to Java Capital in respect of the private placement, no other commissions, discounts or brokerages have been paid nor have any other special terms been granted in connection with the issue or sale of any shares in the share capital of the company, in the three years preceding the date of this prospectus. 6.4 The group is not subject to any royalty agreements and no royalties are payable by the group. 6.5 Save as disclosed in paragraph 3.6, the group is not subject to any other management agreements.
7. MATERIAL CONTRACTS 7.1 Other than normal employment contracts as set out in Annexure 5, the company has not entered into any contracts relating to the directors’ and managerial remuneration, secretarial and technical fees and restraint payments. 7.2 Save for those contracts set out in Annexure 10 and the loan agreements, as set out in Annexure 11, the group has not entered into any other material contract, being a contract entered into otherwise than in the ordinary course of business, within the two years prior to the date of this prospectus or at any time containing an obligation or settlement that is material to the group at the date of this prospectus.
8. INTERESTS OF DIRECTORS AND PROMOTERS Details of the directors’ and promoters’ interests in the company are set out in paragraph 4 of Annexure 3.
9. LOANS 9.1 Details of material borrowings advanced to the group as at the last practical date are set out in Annexure 11. 9.2 None of the material borrowings listed in Annexure 11 have any redemption or conversion rights attaching to them. 9.3 No loans have been made or security furnished by the group for the benefit of any director, manager or associate of any director or manager of the group. 9.4 The company has no loan capital outstanding. 9.5 Save as disclosed in Annexure 11, the group has not entered into any other material inter-company financial or other transactions. 9.6 As at the last practical date, the group has not undertaken any off-balance sheet financing.
10. SHARES ISSUED OR TO BE ISSUED, OTHERWISE THAN FOR CASH Save as disclosed in Annexure 12 and otherwise in consideration for the acquisition of assets in respect of acquisitions that were not material, no other shares were issued or agreed to be issued by the company or any of its subsidiaries during the past three years, otherwise than for cash.
11. PROPERTIES, ASSETS AND BUSINESS UNDERTAKINGS ACQUIRED OR TO BE ACQUIRED 11.1 Other than as disclosed in Annexure 12 and paragraph 3.7.2.1, no other material immovable properties and/or fixed assets and/or business undertakings have been acquired by the group within the past three years or are in the process of being or are proposed to be acquired by the group (or which the group has an option to acquire). 11.2 Details relating to the vendors of material properties (“acquisition properties”) purchased by the company in the preceding three years or proposed to be purchased are set out in paragraph 29 and Annexure 12.
12. AMOUNTS PAID OR PAYABLE TO PROMOTERS Details of the promoters’ interests in the company are set out in paragraph 4 of Annexure 3.
40 13. PRELIMINARY EXPENSES AND ISSUE EXPENSES The preliminary and issue expenses (excluding VAT and disbursements) relating to the private placement and the listing which have been incurred or that are expected to be incurred by the group are presented in the table below: Expense Recipient R Capital raising fees* Java Capital 9 500 000 Marketing and launch branding HAAS Collective Proprietary Limited/ Faction Media Proprietary Limited 5 000 000 Independent reporting accountant fees Deloitte & Touche 2 550 000 Auditors fees Deloitte & Touche 2 080 000 Legal and CIPC fees Edward Nathan Sonnenbergs Inc. 2 000 000 Corporate advisory and sponsor fees Java Capital 1 500 000 Listing fees JSE 464 003 Printing and announcements Ince Proprietary Limited 400 000 Valuation fees OMIGSA 310 000 Valuation fees Amanda de Wet Consultants 145 000 Valuation fees Mills Fitchet 25 000 Independent transaction sponsor fees Deloitte & Touche Sponsor Services 110 000 Documentation inspection fees and rulings JSE 69 607 Transfer secretarial fees Computershare 50 000 Administration fee Strate Limited 20 000 Total 24 223 610 * Assuming R800 million is raised pursuant to the private placement
41 SECTION TWO – DETAILS OF THE PRIVATE PLACEMENT
14. PURPOSES OF THE PRIVATE PLACEMENT AND THE LISTING
14.1 The main purposes of the private placement and the listing are to: 14.1.1 provide investors, both institutional and private, with an opportunity to participate over the long-term in the capital growth and the income streams of the company; 14.1.2 enhance the liquidity and tradability of the shares; 14.1.3 provide the company with a platform to raise equity funding to pursue growth and investment opportunities including in respect of the Waterfall pipeline; and 14.1.4 enhance the public profile and general public awareness of Attacq.
14.2 The main purposes of this prospectus are to: 14.2.1 provide investors with relevant information relating to the company and the proposed listing on the JSE; 14.2.2 communicate the strategy and the objectives of Attacq; and 14.2.3 set out the salient details of the private placement and the procedure for participating therein. 14.3 The proceeds of the private placement will be used by Attacq to settle interest bearing debt and strengthen the balance sheet for ongoing activities.
15. SALIENT DATES AND TIMES 2013
Opening date of the private placement (09:00) Monday, 7 October Closing date of the private placement (12:00) Wednesday, 9 October Results of the private placement released on SENS on Thursday, 10 October Results of the private placement published in the press on Friday, 11 October Notification of allotments to successful invited investors by Friday, 11 October Accounts at CSDP or broker updated and debited in respect of dematerialised shareholders Monday, 14 October Listing of shares and the commencement of trading on the JSE on (09:00) Monday, 14 October The dates and times in this prospectus are subject to change and any changes will be released on SENS and published in the press.
16. PARTICULARS OF THE PRIVATE PLACEMENT 16.1 Details of the private placement 16.1.1 A private placement to raise up to approximately R800 million by way of an offer for subscription to invited investors for up to approximately 53 333 333 private placement shares in the company at an issue price to be determined by demand and for which an indicative issue price of R15.00 per private placement share has been used in this prospectus. 16.1.2 The private placement shares issued in terms of this prospectus will be allotted subject to the provisions of the MOI and will rank pari passu in all respects including distributions, with all existing issued shares in the company. 16.1.3 There are no convertibility or redemption provisions relating to any shares. 16.1.4 The private placement shares will only be issued in dematerialised form. No certificated private placement shares will be issued. 16.1.5 No fractions of private placement shares will be offered in terms of the private placement. 16.1.6 The directors will not increase the number of private placement shares offered in terms of the private placement.
16.2 Condition to the listing 16.2.1 The listing is subject to the achievement of a spread of shareholders acceptable to the JSE, being a minimum of 300 public shareholders holding not less than 20% of the issued share capital of the company. As at the last practical date Attacq meets these requirements and expects to do so after the private placement.
42 16.2.2 If the condition precedent fails, the private placement and any acceptance thereof shall not be of any force or effect and no person shall have claim whatsoever against Attacq or any other person as a result of the failure of the condition.
16.3 Procedures for acceptance 16.3.1 The private placement is open to invited investors only. 16.3.2 The private placement shares will only be issued in dematerialised form. No certificated private placement shares will be issued. 16.3.3 Invited investors are to provide Java Capital, the bookrunner, with their completed application form by 12:00 on Wednesday, 9 October 2013. Invited investors will be informed of their allocated private placement shares, if any, by Friday, 11 October 2013. Invited investors must make the necessary arrangements to enable their CSDP or broker, as the case may be, to make payment for the allocated private placement shares on settlement date. The allocated private placement shares will be transferred, on a “delivery-versus-payment” basis, to successful applicants on the settlement date, which is expected to be Monday, 14 October 2013. 16.3.4 The following parties may not participate in the private placement: 16.3.4.1 any person who may not lawfully participate in the private placement; and/or 16.3.4.2 any investor who has not been invited to participate; and/or 16.3.4.3 any person acting on behalf of a minor or deceased estate. 16.3.5 No applications will be accepted after 12:00 on Wednesday, 9 October 2013. Thursday, 10 October will be reserved for auditing the applications. 16.3.6 Applications submitted by invited investors are irrevocable and may not be withdrawn once received by Java Capital. 16.3.7 Application forms must be completed in accordance with the provisions of this prospectus and the instructions contained in the application form, a specimen of which is attached to this prospectus (blue) and which will be made available to invited investors. 16.3.8 Copies or reproductions of the application form will be accepted at the discretion of the directors of the company. 16.3.9 Any alterations on the application form must be authenticated by full signature. 16.3.10 Receipts will not be issued for applications, application monies or supporting documents received. 16.3.11 Each application will be regarded as a single application. 16.3.12 Other than as detailed in the application form, no documentary evidence of capacity to apply need accompany the application form, but the company reserves the right to call upon any applicant to submit such evidence for noting, which evidence will be held on file with the company or the transfer secretaries or returned to the applicant at the applicant’s risk. 16.3.13 The directors of the company reserve the right to accept or refuse any applications, either in whole or in part, or to abate any or all applications (whether or not received timeously) in such manner as they may, in their sole and absolute discretion, determine.
16.4 Issue and allocation of the private placement shares 16.4.1 All private placement shares subscribed for in terms of this prospectus will be issued at the expense of Attacq. 16.4.2 It is intended that notice of the allocations will be given by Friday, 11 October 2013. 16.4.3 Successful applicants’ accounts with their CSDP or broker will be credited with the allocated private placement shares on the settlement date being Monday, 14 October 2013, on a “delivery-versus-payment” basis.
16.5 Payment and delivery of the private placement shares 16.5.1 No payment should be submitted with the application form delivered to the bookrunner, Java Capital. Applicants must make the necessary arrangements to enable their CSDP or broker to make payment for the allocated private placement shares on the settlement date, which is expected to be Monday, 14 October 2013, in accordance with each applicant’s agreement with their CSDP or broker. 16.5.2 The allocated private placement shares will be transferred, on a “delivery-versus-payment” basis, to successful applicants on the settlement date, which is expected to be Monday, 14 October 2013. 16.5.3 The applicant’s CSDP or broker must commit to Strate to the receipt of the applicant’s allocation of private placement shares against payment on Monday, 14 October 2013. 16.5.4 On the settlement date, the applicant’s allocation of private placement shares will be credited to the applicant’s CSDP or broker against payment during the Strate settlement runs, prior to the opening of the market. 16.5.5 The CSDP or broker concerned will receive and hold the dematerialised private placement shares on the applicants’ behalf.
43 16.6 Representation Any invited investor applying for or accepting the private placement shares in the private placement shall be deemed to have represented to Attacq that such investor was in possession of a copy of this prospectus at that time. Any party applying for or accepting private placement shares on behalf of another investor shall be deemed to have represented to Attacq that they are duly authorised to do so and warrant that they and the purchaser for whom they are acting as agent is duly authorised to do so in accordance with all relevant laws and such investor guarantees the payment of the issue price and that a copy of this prospectus was in the possession of such investor for whom they are acting as agent.
16.7 Applicable law The private placement, applications, allocations and acceptances will be exclusively governed by the laws of South Africa and each invited investor will be deemed, by applying for private placement shares, to have consented and submitted to the jurisdiction of the courts of South Africa in relation to all matters arising out of or in connection with the private placement.
16.8 Strate 16.8.1 Shares may be traded only on the JSE in electronic form (as dematerialised shares) and will be trading for electronic settlement in terms of Strate immediately following the listing. 16.8.2 Strate is a system of “paperless” transfer of securities. If you have any doubt as to the mechanics of Strate please consult your broker, CSDP or other appropriate adviser and you are referred to the Strate website (http://www.strate.co.za) for more detailed information. 16.8.3 Some of the principal features of Strate are: 16.8.3.1 electronic records of ownership replace certificates and physical delivery of certificates; 16.8.3.2 trades executed on the JSE must be settled within five business days; 16.8.3.3 all investors owning dematerialised shares or wishing to trade their securities on the JSE are required to appoint either a broker or a CSDP to act on their behalf and to handle their settlement requirements; and 16.8.3.4 unless investors owning dematerialised shares specifically request their CSDP to register them as an “own-name” holder (which entails a fee), their respective CSDP’s or broker’s nominee company holding shares on their behalf, will be the holder (member) of the relevant company and not the investor. Subject to the agreement between the investor and the CSDP or broker (or the CSDP’s or broker’s nominee company), generally in terms of the rules of Strate, the investor is entitled to instruct the CSDP or broker (or the CSDP’s or broker’s nominee company), as to how it wishes to exercise the rights attaching to the shares and/or to attend and vote at shareholder meetings.
16.9 Over subscription 16.9.1 In the event of an oversubscription, the board shall, in its sole discretion, determine an appropriate allocation mechanism, such that the private placement shares will be allocated on an equitable basis, calculated in such a way that a person will not, in respect of his application, receive an allocation of a lesser number of shares than any other invited investor applying for the same number or a lesser number of shares. The board will also take into account the spread requirements of the JSE, the liquidity of the shares and consider the potential shareholder base that the board wishes to achieve. 16.9.2 Depending upon the level of demand, invited investors may receive no private placement shares or fewer than the number of private placement shares applied for. Any dealing in shares prior to delivery of the private placement shares is entirely at the invited investor’s own risk. 16.10 Simultaneous issues No shares are to be issued simultaneously with the issue of private placement shares for which application is being made.
16.11 Underwriting The private placement will not be underwritten.
17. MINIMUM SUBSCRIPTION The listing is not conditional on raising a minimum amount in terms of the private placement.
44 SECTION THREE – FINANCIAL INFORMATION
18. ADEQUACY OF CAPITAL 18.1 The directors of the company are of the opinion that the issued capital is adequate for the purposes of the business of the group, for at least the next 12 months from the date of issue of this prospectus. 18.2 The directors are of the opinion that the working capital available to the Attacq group is sufficient for the group’s present requirements, that is, for at least the next 12 months from the date of issue of this prospectus.
19. REPORT BY DIRECTORS AS TO MATERIAL CHANGES Save for the rights offer details of which are set out in paragraph 5 of Annexure 9, the acquisitions set out in Annexure 12, the certain disposals set out in Annexure 22 and the private placement contemplated in this prospectus, there have been no other material changes in the assets or liabilities of the company or any subsidiary between the end of the nine-month period ended 31 March 2013 of the company, or any subsidiary of the company, being the latest reported period and the date of this prospectus.
20. STATEMENT AS TO LISTING ON STOCK EXCHANGE 20.1 Prior to the private placement and the listing, Attacq does not have any shares listed on any stock exchange. However, Attacq’s shares are currently traded in the over-the-counter market, further details of which are provided in paragraph 27 of this prospectus. 20.2 Subject to the achievement of a spread of public shareholders acceptable to the JSE, being a minimum of 300 public shareholders holding not less than 20% of the issued share capital of the company, respectively, the JSE has granted Attacq approval for the listing of up to 602 268 802 shares with effect from the commencement of business on Monday, 14 October 2013 in the “Real Estate – Real Estate Holdings and Development” sector of the JSE under the abbreviated name “Attacq”, JSE share code: ATT and ISIN: ZAE000177218. As at the last practical date Attacq meets these requirements and expects to do so after the private placement. Accordingly, it is anticipated that the listing will be effective as from the commencement of trade of the JSE on Monday, 14 October 2013.
21. REPORT BY AUDITOR OF ATTACQ GROUP In terms of Regulation 79 of the Companies Act, the auditor is required to prepare a report on the profits and losses, dividends and assets and liabilities of the company. In this regard Annexure 13 and Annexure 14 to this prospectus set out the auditor’s report in respect of these matters.
22. FORECAST STATEMENTS OF COMPREHENSIVE INCOME 22.1 The forecast statements of comprehensive income of the Attacq group (“forecasts”) for the years ending 30 June 2014 and 30 June 2015 are presented in Annexure 15. 22.2 The forecasts, including the assumptions on which they are based and the financial information from which they are prepared, are the responsibility of the directors. The forecasts must be read in conjunction with the independent reporting accountant’s assurance report on the forecasts which is presented in Annexure 16. 22.3 The forecasts have been prepared in compliance with IFRS and in accordance with the group’s accounting policies as set out in Annexure 20.
23. CONSOLIDATED PRO FORMA STATEMENT OF FINANCIAL POSITION 23.1 The consolidated pro forma statement of financial position of the Attacq group is presented in Annexure 17. 23.2 The independent reporting accountant’s assurance report on the consolidated pro forma statement of financial position of the group is presented in Annexure 18. 23.3 The independent reporting accountant’s review conclusion on the value and existence of the assets and liabilities acquired by the group is set out in Annexure 19.
24. HISTORICAL FINANCIAL INFORMATION 24.1 Although the financial year-end of Attacq is 30 June, the JSE has granted Attacq dispensation to provide audited financial information for the nine-month period ended 31 March 2013, which is the last practical date at which audited financial information could be prepared having regard to the proposed listing date.
45 24.2 The audited historical financial information for Attacq for the nine-month period ended 31 March 2013 is presented in Annexure 20. The independent reporting accountant’s report on the historical financial information of Attacq is presented in Annexure 21. 24.3 In terms of Regulation 79 of the Companies Regulations, Annexure 13 includes the historical profits of Attacq for the preceding three periods, being the nine months ended 31 March 2013 and the years ended 30 June 2012 and 30 June 2011, and Attacq’s statement of financial position as at 31 March 2013. The CIPC granted Attacq an exemption in terms of sections 100(9) and 100(10) of the Companies Act in respect of the requirement to report separately on the financial year ended 30 June 2010. 24.4 The aforesaid exemption was requested and granted on the basis that Deloitte & Touche was not the registered auditor of Attacq for the financial year ended 30 June 2010 and that the users of the prospectus will not be unfairly prejudiced by the omission, given that: the financial information for such year ended 30 June 2010 was restated in the audited financial statements for the year ended 30 June 2011; extracts of the audited financial statements for the nine-month period ended 31 March 2013 are presented in the prospectus in Annexure 20 and after the listing, the financial information for the financial year ended 30 June 2013 will be available to users; and the audited financial information for the nine-month period ended 31 March 2013 and the years ended 30 June 2012 and 30 June 2011 are a more recent and accurate reflection of Attacq’s financial position and financial results and, therefore, more relevant to users. The independent reporting accountant’s report in terms of Regulation 79 of the Companies Regulations is presented in Annexure 14. 24.5 The compilation, contents and presentation of all the historical financial information is the responsibility of the directors.
25. DIVIDEND AND DISTRIBUTIONS 25.1 No dividends have been declared by Attacq to-date. As a capital growth fund, Attacq has been focused on growth in NAV per share. This focus results in the retention and re-investment of profits into developments or acquisitions. The board considers the development opportunities currently available to Attacq and, in particular, the Waterfall pipeline, to offer the potential for exceptional returns and to support a policy of re-investment of profits and NAV growth rather than regular dividends. However, the board will periodically re-consider the appropriateness of this policy with regard to the investment and development opportunities available to Attacq and the preferences of its shareholders, with whom the board will regularly consult in this regard. 25.2 There are no arrangements in terms of which future dividend distributions are waived or agreed to be waived.
46 SECTION FOUR – ADDITIONAL MATERIAL INFORMATION
26. RELATIONSHIP INFORMATION 26.1 Other than the directors’ interests in transactions, details of which are set out in paragraph 3.2 of Annexure 3, the directors of Attacq, the directors of its subsidiaries and the promoters, did not have any beneficial interests, direct or indirect, in relation to any property held or property to be acquired by the group nor are they contracted to become a tenant of any part of the property of the group. 26.2 Other than in respect of the directors’ interests in entities, details of which are set out in paragraph 3.2 of Annexure 3, there is no relationship between any parties mentioned in paragraph 2 of the prospectus and another person that may conflict with a duty to the group. 26.3 Save as disclosed in respect of the acquisitions set out in Annexure 12, the vendors did not have any beneficial interest, direct or indirect, in any securities or participatory interests to be issued by the company in order to finance the acquisition of any properties. 26.4 Other than the directors’ interests in transactions, details of which are set out in paragraph 3.2 of Annexure 3, the directors of Attacq, the directors of its subsidiaries and the promoters did not have any material beneficial interest in the acquisition or disposal of any properties of the group during the preceding two years.
27. TRADING INFORMATION Prior to the private placement and the listing Attacq has enjoyed healthy trading in the over‑the‑counter market. For the year ended 30 June 2013 the following share trades took place: 27.1 number of transactions: 305; 27.2 number of shares traded: 43 179 753; 27.3 average price per share traded of R10.72; and 27.4 highest price per share traded of R12.50. From July 2006 to current date, 433 million Attacq shares totalling R3.3 billion in value have traded.
28. PROPERTIES, ASSETS AND BUSINESS UNDERTAKINGS DISPOSED OF OR TO BE DISPOSED OF Other than as disclosed in Annexure 22 and properties held for sale identified in Annexure 1 to the prospectus, no other material immovable properties and/or fixed assets and/or business undertakings have been disposed of in the three years preceding the last practical date or are intended to be disposed of within six months of listing on the JSE.
29. VENDORS 29.1 Details relating to the vendors of material properties (“acquisition properties”) purchased by the group in the preceding three years or proposed to be purchased are set out in Annexure 12. 29.2 The vendors of the acquisition properties have not guaranteed the book debts of the letting enterprises acquired or to be acquired by the group. The agreements entered into governing the acquisition of the acquisition properties contain warranties which are usual for transactions of this nature. 29.3 The agreements entered into between the group and each of the vendors of the acquisition properties do not preclude the vendors of the acquisition properties from carrying on business in competition with the company nor do the agreements impose any other restrictions on the vendors of the acquisition properties and therefore no payment in cash or otherwise has been made in this regard. 29.4 There are no liabilities for accrued taxation that will be settled in terms of agreements with vendors of the acquisition properties. 29.5 Save as disclosed in respect of the acquisitions set out in Annexure 12, Attacq has not purchased any securities in any company. 29.6 Other than the directors’ interests in transactions, details of which are set out in paragraph 3.2 of Annexure 3, no promoter or director (or any partnership, syndicate or other association in which a promoter or director had an interest) had any beneficial interest, direct or indirect, in any transaction relating to any of the assets detailed in Annexure 12. 29.7 No cash or securities have been paid or any benefit given within the three preceding years of this prospectus or is proposed to be paid or given to any promoter (not being a director). 29.8 Other than those acquisitions referred to in paragraph 11 and in Annexure 12, all of the assets acquired have been transferred into the name of the group. The assets referred to in Annexure 12 have not been ceded or pledged to any party.
47 30. BLACK ECONOMIC EMPOWERMENT STRATEGY 30.1 The transformation, social and ethics committee is responsible for implementing Attacq’s strategy for achieving its black economic empowerment transformation objectives, driving environmental responsibility, other sustainability issues and monitors all transformation related activities. 30.2 To date, Attacq has achieved a level 5 rating under the property charter for B-BBEE. This means that Attacq’s BEE procurement level recognition is 80%. There are a number of initiatives, especially on the enterprise development and socio- economic development elements, that will assist Attacq to maintain and improve its B-BBEE score. 30.3 The board has, in principle, agreed to establish a Development Trust which will hold a maximum of 5% of the issued shares in Attacq. The Development Trust will benefit selected disadvantaged, but deserving, young South Africans of all orientations with the main focus on education. The detailed structure, including the funding, is intended to be finalised post listing subject to the necessary regulatory approvals.
31. GOVERNMENT PROTECTION AND INVESTMENT ENCOURAGEMENT LAW 31.1 Save for as mentioned in paragraph 31.2 below, there is no government protection or any investment encouragement law pertaining to any of the businesses operated by the group. 31.2 Atterbury Africa is incentivised with various investment concessions entrenched in the regulations of Mauritius, Zambia and Ghana. These concessions vary from corporate tax rebates to the recovery or non-payment of VAT and import duties in those jurisdictions.
32. EXCHANGE CONTROL REGULATIONS The following summary is intended as a guide and is, therefore, not comprehensive. If you are in any doubt hereto, please consult your attorney, accountant or professional advisor.
32.1 Emigrants from the common monetary area 32.1.1 A former resident of the common monetary area who has emigrated from South Africa may use blocked Rand to purchase shares in terms of the private placement. 32.1.2 All payments in respect of subscriptions for private placement shares by emigrants using blocked Rand must be made through the authorised dealer in foreign exchange controlling the block assets. 32.1.3 Statements issued to dematerialised shareholders will be restrictively endorsed as “NON-RESIDENT”. 32.1.4 If applicable, refund monies in respect of unsuccessful applications, emanating from blocked Rand accounts, will be returned to the authorised dealer administering such blocked Rand accounts for the credit of such applicant’s blocked Rand account. 32.1.5 No residents of the common monetary area may, either directly or indirectly, be permitted to receive an allocation as employees of any offshore subsidiaries.
32.2 Applicants resident outside the common monetary area 32.2.1 A person who is not resident in the common monetary area should obtain advice as to whether any government and/or legal consent is required and/or whether any other formality must be observed to enable an application to be made in terms of the private placement. 32.2.2 This prospectus is accordingly not a private placement in any area or jurisdiction in which it is illegal to make such an offer. In such circumstances this prospectus is provided for information purposes only. Statements issued to dematerialised shareholders will be restrictively endorsed as “NON-RESIDENT”.
33. CORPORATE GOVERNANCE The board has set out the corporate governance statement in Annexure 23.
34. LITIGATION STATEMENT 34.1 There are no legal or arbitration proceedings, including any proceedings that are pending or threatened, of which the Attacq group is aware, that may have or have had in the recent past, being the previous 12 months, a material effect on the group’s financial position. 34.2 Attacq is a co-applicant in a matter against, amongst others, the Townships Board in a review application regarding zoning rights granted to a third party in the vicinity of the Waterfall Business Estate. It is expected that Attacq’s financial exposure for legal costs and otherwise will be immaterial and should not exceed R1 000 000 during the next 24 months.
35. DIRECTORS’ RESPONSIBILITY STATEMENT The directors, whose names are given in paragraph 2.2.1 of this prospectus, collectively and individually, accept full responsibility for the accuracy of the information given herein and certify that, to the best of their knowledge and belief, no facts have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that this prospectus contains all information required by law and the Listings Requirements.
48 36. CONSENTS 36.1 Each of the corporate advisor, sponsor and bookrunner, the independent transaction sponsor, the independent reporting accountant and auditor, the attorneys, the independent property valuer, the transfer secretaries, the bankers and the company secretary have consented in writing to act in the capacities stated and to their names appearing in this prospectus and have not withdrawn their consent prior to the publication of this prospectus. 36.2 The independent reporting accountants and auditors and the independent property valuers have consented to the inclusion of their reports in the form and context in which they are included in the prospectus, which consents have not been withdrawn prior to the publication of this prospectus.
37. DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents will be available for inspection at the company’s registered office and at the sponsor’s office during business hours from date of issue of the prospectus up to and including Monday, 14 October 2013: 37.1 the signed prospectus; 37.2 the MOI of the company and its subsidiaries; 37.3 the material contracts referred to in paragraph 7 and Annexure 10; 37.4 the summary valuation reports prepared by the independent property valuers as set out in Annexure 8a, Annexure 8b and Annexure 8c; 37.5 the detailed valuation reports prepared by the independent property valuers; 37.6 the service contracts of Morné Wilken and Melt Hamman as set out in Annexure 5; 37.7 the signed reports by the independent reporting accountants and auditors, the facts of which are set out in Annexure 14, Annexure 16, Annexure 18, Annexure 19 and Annexure 21; 37.8 review conclusions in respect of the underlying entities used in the consolidated pro forma statement of financial position; 37.9 the letters of consent referred to in paragraph 36 above; and 37.10 the audited results of the Attacq group for the nine months ended 31 March 2013 and the years ended 30 June 2012 and 30 June 2011.
Signed in Johannesburg by Morné Wilken on his behalf and on behalf of all of the directors of the company on 19 September 2013 in terms of powers of attorney granted by them.
______Morné Wilken ______For: Francois van Niekerk, a director, herein represented by Morné Wilken under and in terms of a power of attorney executed on 6 September 2013 ______For: Stewart Shaw-Taylor, a director, herein represented by Morné Wilken under and in terms of a power of attorney executed on 6 September 2013 ______For: Pierre Tredoux, a director, herein represented by Morné Wilken under and in terms of a power of attorney executed on 6 September 2013 ______For: Pieter Faure, a director, herein represented by Morné Wilken under and in terms of a power of attorney executed on 6 September 2013 ______For: Hellen El Haimer, a director, herein represented by Morné Wilken under and in terms of a power of attorney executed on 6 September 2013 ______For: Melt Hamman, a director, herein represented by Morné Wilken under and in terms of a power of attorney executed on 6 September 2013 ______For: Lucas Ndala, a director, herein represented by Morné Wilken under and in terms of a power of attorney executed on 6 September 2013 ______For: Thys du Toit, a director, herein represented by Morné Wilken under and in terms of a power of attorney executed on 6 September 2013 ______For: Louis van der Watt, a director, herein represented by Morné Wilken under and in terms of a power of attorney executed on 6 September 2013 ______For: Johan van der Merwe, a director, herein represented by Morné Wilken under and in terms of a power of attorney executed on 6 September 2013 ______For: Lebo Masekela, a director, herein represented by Morné Wilken under and in terms of a power of attorney executed on 6 September 2013
19 September 2013 49 – TT Annexure 1 – Oct 2014 ^ evelopment, wood Bridge – Phase III, Developments** Attacq building – Dec 2013 Golder & Associates building – Feb 2014 Premier Foods building – Jun 2014 Spec building – Jun 2014 n Waterfall land (85.9%)* Cell C campus – Dec (85.9%) 2013 Group – Jan 5 (85.9%) 2014 Waterfall Corner – Apr (85.9%) 2014 Waterfall Lifestyle – June (85.9%) 2014 MB Technologies warehouse (85.9%)¥ Dec 2013 Mall of Africa – Apr (85.9%) 2016 City Lodge – Nov 2014 (85.9%) Maxwell Office Park (43%)#: o o o o Dräger building – Nov 2014 (85.9%) Comztek building – Sep (85.9%) 2014 Club Retail, Pretoria, GP (40.0%)^ – Apr 2014 Lyn Pretoria, GP (100%)$ – May 2014 Newtown and Majestic d Johannesburg, GP – Oct (62.5%) 2014 Mall of Namibia - The Grove Windhoek, Namibia (31.3%) Waterfall, Johannesburg, GP: • • • • • • • • • • • – – – – – – – – – – Other Portfolio Office and Mixed Use Le Chateau, Hartbeespoort Dam, GP (100%)* Val de Vie, Paarl, (50.0%)*^ WC Geelhoutboom, George, (36.7%)*^ WC Paradise Coast (serviced stands), Mosselbay (44.8%)*^ , WC – – – – Aurecon Building, Pretoria, GP (78.1%) Woodmead North Office Park, Johannesburg, GP (43%)# Great Westerford, Cape (50.0%)¥# WC Town, Lynnwood Bridge, Pretoria, GP (100%) Brooklyn Bridge and Lewis House, Pretoria, GP (100%) Club Pretoria, 1, GP (40.0%)^ – – – – – – – – – – – – – – – – South Africa developer Retail Portfolio Industrial Portfolio strategic investment in property Garden Route Mall, George, (80.0%) WC Brooklyn Mall, Pretoria, GP (20.5%)# Glenfair Boulevard, Pretoria, GP (100%) Mooirivier Mall, Potchefstroom, NW (82%) Mill Square, Stellenbosch, (65.6%)# WC Eikestad Mall, Stellenbosch, (65.6%)# WC Andringa Walk, Stellenbosch, (82%) WC De Ville, Cape (100%)¥ WC Town, Wingspan (34.2%)^¥ Rapfund (26.0%)^¥ Fountains Mall, Jeffreys Bay, EC (35.9%)^ Massbuild Distribution Centre, Johannesburg, GP (85.9%) Atterbury Property (25.0%)^ – – – – – – – – – – – – – – – – – – – – – – – – . Africa Holdings Achimota, Accra, Ghana (24.38%)*^ Accra Mall, Accra, Ghana (15.27%)^ West Hills Mall, Accra, Ghana (14.63%)**^ Waterfall Mall, Lusaka, Zambia (8.13%)*^ (excluding South Africa) Bagatelle – Mall of Mauritius, Port Louis, Mauritius (41.8%)^ Bagatelle Office, Port Louis, Mauritius (41.8%)^ Atterbury Africa^: • • • • – – – – – – Property and Investment TT Legend In the process of being disposed of. Refer to Annexure for 10 further details. Gauteng province Eastern Cape province North West province Western Cape province Attacq’s interest in MAS will increase to approx. following 47.8% implementation of the disposal of Attacq’s interests in Karoo to MAS, further details of which are set out inparagraph of Annexure 1.4 10 effective78.1% shareholding in Building A ; 100% effective shareholding in Building B Undivided share Held for sale Attacq’s effective shareholding in a property (other than in respect of associates) Vacant land In process or to be developed Accounted for as an investment in associate Accounted for as an investment Represents Attacq’s interest in MAS on full implementation of the Artisan disposal International (excluding Africa) * ‡ $ # ¥ ^ ** TT % ^^ EC GP WC NW MAS ( 23.9%)^‡ Karoo I (36.8%)^ and Karoo II (39.9%)^ Nova Eventis , Leipzig, Germany (19.7%)^^ Bishopsgate, Birmingham, England (29.8%)^ – – – – – – – – GROUP STRUCTURE
50 Annexure 2
DETAILS OF SUBSIDIARIES
The following table contains a list, as at the date of this prospectus, of the subsidiary undertakings of the company. All of the subsidiaries are unlisted companies: Issued Date and share Date of Name of company and nature place of Registration capital % becoming a of business incorporation number (R) held subsidiary Direct subsidiaries 1. Atterbury Attfund Investment Company 3 May 2000 2000/008162/07 10 000 100 1 January 2003 No. 1 Proprietary Limited South Africa Investment company 2. Atterbury Attfund Investment Company 9 March 2000 2000/004622/07 10 000 100 1 July 2000 No. 3 Proprietary Limited South Africa Investment company 3. Atterbury Mauritius Consortium 2 December 2005 2005/042785/07 100 80 22 September 2009 Proprietary Limited* South Africa Property investment company 4. Atterbury Property Investments 9 June 2003 2003/012941/07 100 100 22 June 2004 Proprietary Limited South Africa Investment company 5. Atterbury Property Johannesburg 4 August 2003 2003/108462/07 100 100 28 August 2003 Proprietary Limited South Africa Dormant 6. Atterbury Waterfall Investment Company 28 June 2000 2000/013587/07 100 80 1 October 2001 Proprietary Limited** South Africa Property investment and development company 7. De Ville Shopping Centre 13 January 2006 2006/000556/07 1 000 100 28 April 2010 Proprietary Limited South Africa Property investment company 8. Harlequin Duck Properties 204 17 May 2002 2002/011586/07 400 100 1 March 2007 Proprietary Limited South Africa Property investment company 9. Highgrove Property Holdings 13 October 1993 1993/06040/07 1 100 1 July 2005 Proprietary Limited South Africa Investment company 10. Le Chateau Property Development 2 December 2005 2005/042877/07 1 000 100 1 May 2009 Proprietary Limited South Africa Development company 11. Lord Charles & Lady Brooks Office Park 5 February 2001 2001/002401/07 1 000 100 24 April 2003 Holdings Proprietary Limited South Africa Dormant 12. Lady Brooks Proprietary Limited 17 May 2000 2000/009118/07 1 000 100 24 April 2003 Dormant South Africa 13. Lynnwood Bridge Office Park 13 July 2005 2005/024830/07 1 000 100 1 July 2008 Proprietary Limited South Africa Property investment and development company 14. Attacq Retail Fund Proprietary Limited 9 September 2008 2008/021582/07 659 955 82 1 September 2011 Property investment company South Africa 15. Mantrablox Proprietary Limited 2 June 2010 2010/011244/07 100 80 1 September 2011 Property investment company South Africa 16. Lynnaur Investments 8 August 2005 2005/027735/07 100 75 23 September 2005 Proprietary Limited*** South Africa Property investment company
51 Issued Date and share Date of Name of company and nature place of Registration capital % becoming a of business incorporation number (R) held subsidiary
17. Razorbill Properties 91 5 April 2000 2000/006755/07 100 100 17 September 2004 Proprietary Limited South Africa Treasury company 18. Atterbury Investments Holdings 22 November 2011 106518 C1/GBL $1 100 22 November 2011 International Limited Mauritius Investment company 19. Atterbury Asset Managers 9 February 2007 2007/004176/07 972 100 1 July 2013 Proprietary Limited***** South Africa Asset and property management company Indirect subsidiaries 1. Aldabri 96 Proprietary Limited 6 February 2004 2004/002960/07 100 100 1 June 2004 Dormant South Africa 2. Atterbury Waterfall Pocket 22A 12 November 2008 2008/026599/07 100 80 3 January 2009 Proprietary Limited South Africa Property investment and development company 3. Atterbury Attfund Investment Company 22 September 2003 2003/023333/07 100 100 15 October 2003 No. 2 Proprietary Limited South Africa Investment company 4. Design Square Shopping Centre 31 August 1995 1995/009254/07 9 174 653 100 31 October 2005 Proprietary Limited South Africa Property investment company 5. Nieuwtown Property Development 30 August 2006 2006/027097/07 100 50 1 April 2012 Company Proprietary Limited**** South Africa Property investment and development company 6. Majestic Offices Proprietary Limited **** 24 May 2004 2004/013721/07 100 50 1 April 2012 Property investment and development South Africa company 7. Attacq Retail Fund Asset and Property 31 May 2007 2007/016015/07 1 000 100 1 July 2013 Management Proprietary Limited***** South Africa Asset and property management company
* The group has an effective share of 83.75% including its indirect holding via its investment in Atterbury Property Holdings Proprietary Limited. ** The group has an effective share of 85.92% including its indirect holding via its investment in Atterbury Property Holdings Proprietary Limited. *** The group has an effective share of 78.125% including its indirect holding via its investment in Atterbury Property Holdings Proprietary Limited. **** The group has an effective share of 62.5% including its indirect holding via its investment in Atterbury Property Holdings Proprietary Limited. ***** Will become a wholly-owned subsidiary on completion of the AAM acquisition.
52 R Total 78 375 78 75 00075 75 00075 174 000 174 174 000 174 283 125 196 000196 349 000 4 274 0004 274 1 055 5001 055 5 329 5005 329 2 295 000 1 630 000 Annexure 3 – – – – – – – – 75 00075 350 000350 Bonuses payments 1 061 0001 061 and other 1 486 000 1 486 000 performance – – – – – – – – – – – – – R sharing Commission arrangements gain, profit or – – – – – – – – – – R – – – Other benefits material – – – – – – – – – – – – – R scheme Pension contributions – – – – – – – – – – – – – R Expense allowances – – – – – – R 40 875 98 000 99 000 99 000 170 625 170 507 500 507 500 Other fees – – – – R ’ fees 37 50037 75 00075 75 00075 75 00075 75 00075 98 000 112 500 112 548 000 548 000 Directors – – – – – – – – R 274 000274 1 280 000 1 234 000 2 788 000 2 788 000 Basic salaries 0 June 2013 † DIRECTORS’ EMOLUMENTS The emoluments the of directors are set in out the tables below: March to 31 2013 1 July 2012 From Director * Appointed with effect from 26 October 2012 † Resigned with effect from 2 Non-executive P Tredoux BF vanBF Niekerk S Shaw-Taylor* LLS van der Watt OosthuizenGJ Executive WilkenMC WL Masekela JHP van der Merwe PH FaurePH LM Ndala Total INFORMATION ON THE DIRECTORS, MANAGEMENT AND MATERIAL THIRD PARTIES 1.
53 R Total 610 000 610 313 000313 255 000255 255 000255 195 000195 575 000575 320 500 220 000 645 000 343 000 2 331 300 2 331 3 121 5003 121 5 769 9005 769 8 891 4008 891 2 828 600 – – – – – – – – – R – 250 000250 000250 Bonuses and other 1 700 000 1 200 000 payments 1 200 000^ performance – – – – – – – – – – – – – – – R sharing Commission arrangements gain, profit or – – – – – – – – – – – – – – – R benefits Other material – – – – – – – – – – – R 27 300 24 600 51 90051 51 90051 contributions Pension scheme – – – – – – – – – – – R 54 000 54 000 108 000108 108 000108 Expense allowances – – – – – R 25 00025 95 00095 60 000 60 000 (Other 118 000 118 125 500 125 148 000148 130 000130 761 500 761 761 500 761 Other fees committees) – – – – R 195 000 195 195 000 195 195 000 195 195 000 195 000 195 195 000 195 000 195 000 195 300 000 1 860 000 1 860 000 Directors’ fees – – – – – – – – – – R 610 000 610 1 550 0001 550 2 250 0002 250 4 410 0004 410 4 410 0004 410 Basic salaries Melt Hamman received an upfront bonus which he had to utilise to acquire 60 000 Attacq shares. For theFor year ending 30 June 2014 Director ^ Executive WilkenMC M Hamman LLS van der Watt HR El Haimer Non-executive vanBF Niekerk P Tredoux S Shaw-Taylor MM Toit du WL Masekela JHP van der Merwe FaurePH LM Ndala Total
54 1.1 Save as disclosed in the tables above, the directors of the company did not receive any emoluments in the form of: 1.1.1 fees for services as a director; 1.1.2 management, consulting, technical or other fees paid for such services rendered, directly or indirectly, including payments to management companies, a part of which is then paid to a director of the company; 1.1.3 basic salaries; 1.1.4 bonuses and performance-related payments; 1.1.5 sums paid by way of expense allowance; 1.1.6 any other material benefits received; 1.1.7 contributions paid under any pension scheme; or 1.1.8 any commission, gain or profit-sharing arrangements. 1.2 As from 1 July 2013, executive directors are remunerated by the company. 1.3 Save for the share options granted to Morné Wilken and Melt Hamman set out in paragraph 1.5 below and Annexure 5, no other share options or any other right has been given to a director of the company in respect of providing a right to subscribe for shares in the company. 1.4 No shares have been issued and allotted in terms of a share purchase or share option scheme for any of the employees. However, Nicolle Weir and Helena Austen have been granted options on the following basis: 1.4.1 Nicolle Weir has been given the option to acquire 1 000 000 Attacq shares at a price equal to the net asset value per share of the company as at 30 June 2013 as part of an ad hoc award of share options on the following terms: 1.4.1.1 60% may be exercised on 30 June 2017; 1.4.1.2 20% may be exercised on 30 June 2018; and 1.4.1.3 the remaining 20% may be exercised on 30 June 2019. 1.4.2 Helena Austen has been given the option to acquire 500 000 Attacq shares at a price equal to the net asset value per share of the company as at 30 June 2013 as part of an ad hoc award of share options on the following terms: 1.4.2.1 60% may be exercised on 30 September 2016; 1.4.2.2 20% may be exercised on 30 September 2017; and 1.4.2.3 the remaining 20% may be exercised on 30 September 2018. 1.5 Other than as set out in the table below in regard to options awarded to Morné Wilken, no other options have been exercised or vested: Morné Wilken
As at As at As at 24 September 2013 31 March 2013 30 June 2012 Opening balance 700 000 400 000 0 Granted during the period 100 000 300 000 400 000 Exercised during the period (800 000) 0 0 Balance at end of period 0 700 000 400 000 Number of options not yet vested 1 200 000 1 300 000 1 600 000 Number of options not yet exercised 1 200 000 2 000 000 2 000 000
1.6 The executive directors’ services were deemed to be outsourced for the periods prior to 1 July 2013 and therefore no directors remuneration is disclosed in the company’s results. The directors were remunerated by Atterbury Property prior to 30 June 2013. 1.7 The company has not paid any other fees or incurred any fees that are payable to a third party in lieu of directors’ fees. 1.8 Executive directors will qualify for an incentive based on the annual growth in the net asset value per share of the company on a consolidated basis. The annual growth will be determined on the audited financial statements for a full financial year. The following formula will apply: For every basis point the annual growth exceeds 7%, the executive director will receive 1% of his monthly guaranteed salary earned during that specific financial year. If the incentive is more than a certain amount, certain restrictions with respect to timing of pay-out will be applicable. 1.9 The remuneration received by any of the directors will not be varied as a consequence of any transactions disclosed in this prospectus including the listing. 1.10 Other than as detailed in paragraph 3.6 of this prospectus, the business of the group, or any part thereof, is not managed or proposed to be managed by any third party under contract or arrangement. 1.11 The company has not entered into any contracts relating to the directors’ and managerial remuneration, secretarial and technical fees and restraint payments.
55 2. BORROWING POWERS 2.1 The borrowing powers of the group exercisable by the directors are unlimited. The borrowing powers of the group may not be varied unless a special resolution has been passed by shareholders with the support of 75% of voting rights exercised. 2.2 The borrowing powers have not been exceeded during the previous three years. There is no exchange control or other restrictions on the borrowing powers of the group. Further information related to the borrowing powers of directors are set out in Annexure 7.
3. DIRECTORS’ INTERESTS 3.1 Directors’ interests in Attacq shares Set out below are the names of directors (including directors who have resigned in the last 18 months) of Attacq that, directly or indirectly, are beneficially interested in Attacq shares in issue at the last practical date, before the private placement and the listing: Beneficially held Directors Directly Indirectly Total % MC Wilken – 1 335 767 1 335 767 0.24 M Hamman 60 000 – 60 000 0.01 LLS van der Watt 2 284 18 171 242 18 173 526 3.32 P Tredoux – 42 806 42 806 0.01 S Shaw-Taylor 650 000 – 650 000 0.12 BF van Niekerk – 34 916 334 34 916 334 6.38 HR El Haimer – – – 0.00 MM du Toit – – – 0.00 WL Masekela – 134 710 134 710 0.02 JHP van der Merwe – 541 226 541 226 0.10 PH Faure – 3 136 582 3 136 582 0.57 LM Ndala – – – 0.00 AW Nauta – – – 0.00 TJA Reilly – – – 0.00 GJ Oosthuizen‡ – 1 089 449 1 089 449 0.20 Total 712 284 59 368 116 60 080 400 10.97
‡ Resigned with effect from 20 June 2013 3.2 Directors’ interests in transactions The table below provides details of the directors, including a director who resigned during the last 18 months, who have or have had a material beneficial interest, direct or indirect, in transactions, that were effected by the entities listed during the current or immediately preceding financial year or during any earlier financial year and which remain in any respect outstanding or unperformed: Name of director Particulars of contract Nature/Extent of interest P Tredoux 1 Attacq and RBH agreement whereby RBH Sold shares to RBH as an indirect bought R299 million worth of Attacq shares shareholder in Attacq from various shareholders. Attacq facilitated the deal 2 Attacq and Atterbury Property undertook the 5.0% profit share Kingswood Retirement Village Development 3 Victus Capital Proprietary Limited is a 30% 0.8% shareholder and director of Victus shareholder in Attvic Proprietary Limited Capital Proprietary Limited which owns 25% of Lynnuar Investments Proprietary Limited MC Wilken 1 Trinsam Trust owned Hyprop linked units Morné Wilken is a beneficiary of the when Hyprop was one of the largest investments Trinsam Trust held by Attacq 2 Director and shareholder in Atterbury Property Morné Wilken is a director and was a which is the development company undertaking shareholder of Atterbury Property developments on behalf of Attacq and one of the shareholders in AWIC
56 Name of director Particulars of contract Nature/Extent of interest 3 Attacq and RBH entered into an agreement Morné Wilken partook in the agreement by whereby RBH bought R299 million worth of selling Attacq shares to RBH Attacq shares from various shareholders. Attacq facilitated the deal 4 Indirect shareholder of AWIC via shareholding Trinsam Trust had an effective 1.225% in AWC shareholding in AWIC which shareholding has been sold to Attacq in exchange for Attacq shares LLS van der Watt 1 Atterbury Property Director and effective shareholding of 19% in Atterbury Property 2 Attventure owns: Trustee and beneficiary of Suca Trust that (a) an indirect interest in Trevenna owns 25% of Attventure Development Company Proprietary Limited in which Attacq is also a shareholder (b) a direct interest in The Club Retail Park Proprietary Limited of which Attacq is a co-investor (c) a direct interest in Riverwalk Office Park Proprietary Limited (d) a direct interest in Diggers Development Proprietary Limited (e) a direct interest of 7.4% in Atterbury Property which, in turn: (i) owned a direct interest in AAM which has now been internalised, further details of which are set out in paragraph 1.3 of Annexure 10 (ii) owns a direct interest in Paradise Coast Property Development Proprietary Limited of which Attacq is a co- investor (f) 100% direct interest in Attman Limited which was one of the vendors in the Artisan disposal 3 Suca Ventures Proprietary Limited owns: Director and effective shareholding of 100% (a) a 25% direct interest in the Dis-Chem at in Suca Ventures Proprietary Limited Glenfair Boulevard, which is part of the Attacq direct property portfolio (b) a 50% direct interest in TriBeCa Restaurant situated at Lynnwood Bridge, which is part of the Attacq direct property portfolio (c) a 65% interest in Fledge Capital Proprietary Limited which, in turn, owns: (i) a direct interest in Stenham European Shopping Centre Fund IC in which Attacq is also a shareholder (ii) a direct interest of 20% in Safari and Outdoor Warehouse Proprietary Limited, a tenant in a development of Attacq (iii) a direct interest of 10% in Dis-Chem Proprietary Limited, a tenant in various properties owned by Attacq (iv) a direct interest of 40% in Maneki Proprietary Limited which is a tenant in various properties owned by Attacq (v) a 5% direct interest in Attventure
57 Name of director Particulars of contract Nature/Extent of interest 4 Keurprop Investments Proprietary Limited Director and beneficiary of Keurwatt Trust owns: that owns 100% of Keurprop Investments (a) a 30% direct interest in Geelhoutboom Proprietary Limited Estate Proprietary Limited in which Attacq is also an effective 36.7% shareholder (b) a direct interest in Attacq (c) a direct interest in Atterbury Property (d) a 50% interest in Mertech Fund Proprietary Limited (e) a 50% interest in Attvest which, in turn: (i) owns a 33% interest in Paradise Coast Property Development Proprietary Limited of which Attacq is a co- investor (ii) had an interest in the Attvest/ Momentum transaction for which further details are disclosed in note 5 of Annexure 20 under the heading “Attvest transaction” and which Attvest transaction was approved by shareholders on 27 August 2013 BF van Niekerk 1 Effective shareholding in Attvest, where Attvest Effective shareholding of 16.4% in Attvest had an interest in the Attvest/Momentum transaction further details of which are disclosed in note 5 of Annexure 20 under the heading “Attvest transaction” and which Attvest transaction was approved by shareholders on 27 August 2013 2 Indirect shareholding in AAM which external Effective shareholding of 4.9% in AAM asset manager to Attacq has now been internalised, further details of which are set out in paragraph 1.3 of Annexure 10 3 Indirect shareholding in MAS. Attacq currently Effective shareholding of 3.81% in MAS holds a 23.9% shareholding in MAS on full implementation of the Artisan disposal 4 Attventure owns: Effective shareholding of 9.12% in (a) an indirect interest in Trevenna Attventure Development Company Proprietary Limited in which Attacq is also a shareholder (b) a direct interest in The Club Retail Park Proprietary Limited of which Attacq is a co-investor (c) a direct interest in Riverwalk Office Park Proprietary Limited (d) a direct interest in Diggers Development Proprietary Limited (e) a direct interest of 7.4% in Atterbury Property which, in turn: (i) owned a direct interest in AAM which has now been internalised, further details of which are set out in paragraph 1.3 of Annexure 10 (ii) owns a direct interest in Paradise Coast Property Development Proprietary Limited of which Attacq is a co- investor
58 Name of director Particulars of contract Nature/Extent of interest PH Faure 1 Effective shareholding in Attvest, where Attvest Effective shareholding of 5.75% in Attvest owed certain amounts in terms of the Attvest/ Momentum transaction, further details of which are disclosed in note 5 of Annexure 20 under the heading “Attvest transaction” and which Attvest transaction was approved by shareholders on 27 August 2013 2 Indirect shareholding in AAM which external Effective shareholding of 0.4% in AAM asset manager to Attacq has now been internalised, further details of which are set out in paragraph 1.3 of Annexure 10 3 Indirect shareholding in MAS. Attacq currently Effective shareholding of 1.52% in MAS holds a 23.9% shareholding in MAS on full implementation of the Artisan disposal 4 Attventure owns: Effective shareholding of 0.7% in Attventure (a) an indirect interest in Trevenna Development Company Proprietary Limited in which Attacq is also a shareholder (b) a direct interest in The Club Retail Park Proprietary Limited of which Attacq is a co-investor (c) a direct interest in Riverwalk Office Park Proprietary Limited (d) a direct interest in Diggers Development Proprietary Limited (e) a direct interest of 7.4% in Atterbury Property which, in turn: (i) owned a direct interest in AAM which has now been internalised, further details of which are set out in paragraph 1.3 of Annexure 10 (ii) owns a direct interest in Paradise Coast Property Development Proprietary Limited of which Attacq is a co- investor GJ Oosthuizen 1 Gideon Oosthuizen has a 10% shareholding in 10% effective shareholding in Attventure (Resigned from the Attventure, where: board with effect from 20 June 2013) (a) Attventue owned 50.0% of AAM which Effective shareholding of 5.0% in AAM external asset manager to Attacq has now been internalised, further details of which are set out in paragraph 1.3 of Annexure 10 (b) Attventure owns 7.4% of Atterbury Effective shareholding of 0.744% in Property Atterbury Property (c) Attventure 26.0% of The Club Retail Park Effective shareholding of 2.6% in Club 1 Proprietary Limited, a development known as “Club 1” (d) Attventure owns 11.5% of Trevenna Effective shareholding of 1.15% in Travenna Development Company Proprietary Development Company Proprietary Limited Limited (e) Attventure owns 16.7% of Paradise Coast Effective shareholding of 1.67% in Paradise Property Development Proprietary Limited Coast (f) Attventure owned an effective 18% of Effective shareholding of 1.8% in Caltongate Artisan Investment Projects 10 Limited which was disposed of to MAS in return for MAS shares, further details of which are set out in paragraph 2.1 of Annexure 10 (g) Attventure owns an effective 20.0% of Effective shareholding of 2.0% in Bishopsgate Student Residential Limited Bishopsgate
59 Name of director Particulars of contract Nature/Extent of interest (h) Attventure owns an effective 50% of Effective shareholding of 5.0% in Atterbury Atterbury Asset Managers International Asset Managers International (i) Atterbury Asset Managers International is the contracted asset manager for AIHI but this has been internalised (j) Atterbury Asset Managers International Effective shareholding of 0.5% in Caltongate share in an effective 10.0% of the profit to be made by Artisan Investment Projects 10 Limited 2 Gideon Oosthuizen is a potential future discretionary beneficiary of a Trust registered in the Isle of Man. Gideon Oosthuizen has to date not been a Trustee nor beneficiary, nor has he received any remuneration, financial benefit or distribution from the Trust The Trust owns an investment company called 100% Northern Investments Limited, registered in the Isle of Man: (a) Northern owns 185 000 MAS shares Gideon Oosthuizen is a potential future (b) Northern owns an effective 3.8% in Artisan discretionary beneficiary of the trust Real Estate Investors Limited Effective shareholding of 3.8% in Northern (c) Artisan Real Estate Investors Limited is the contracted asset manager for MAS (d) Artisan Real Estate Investors Limited Effective shareholding of 0.6% in Caltongate shares in an effective 15.0% of the profit to be made by Artisan Investment Projects 10 Limited (e) Artisan Real Estate Investors Limited Effective shareholding of 1.5% in Bishopsgate shares in an effective 40.0% of the profit to be made over a IRR hurdle rate of 12.0% to investors in Bishopsgate
4. INTERESTS OF DIRECTORS AND PROMOTERS 4.1 No amount has been paid, or is accrued as payable, within the preceding three years, or is proposed to be paid to any promoter or to any partnership, syndicate or other association of which such promoter is or was a member and no other benefit has been given or is proposed to be given to such promoter, partnership, syndicate or other association within the said period. 4.2 Other than the directors’ interests in transactions, details of which are set out in paragraph 3.2 above and as disclosed in Annexure 12, neither the directors nor the promoters of the company have received any material beneficial interest, direct or indirect, in the promotion of the company and its properties during the three years preceding this prospectus. This includes a partnership, company, syndicate or other association. 4.3 No amount has been paid, or has been agreed to be paid, within the three years preceding the date of this prospectus, to any director of the company or to any company in which such director is beneficially interested, directly or indirectly, or of which he is a director (“the associate company”) or to any partnership, syndicate or other association of which he is a member (“the associate entity”), in cash, securities or otherwise, by any person, either to induce him to become, or to qualify him as a director or otherwise for services rendered by him or by the associate company or the associate entity in connection with the promotion or formation of the group.
5. DIRECTORS’ DECLARATIONS None of the directors have: 5.1 been a director of a company that has been put into liquidation or been placed under business rescue proceedings or has had an administrator or other executor appointed during the period when he was (or within the preceding 12 months had been) one of its directors, or alternate directors or equivalent position; 5.2 either themselves or any company of which he was a director or an alternate director or officer at the time of the offence, been convicted in any jurisdiction of any criminal offence, or an offence under legislation relating to the Companies Act; 5.3 been removed from an office of trust, on grounds of misconduct, involving dishonesty; 5.4 been disqualified by a court from acting as a director of the company, or from acting in management or conduct of the affairs of any company;
60 5.5 been appointed as a director of a company listed on the JSE’s Alternative Exchange; 5.6 been convicted of an offence resulting from dishonesty, fraud, theft, perjury, misrepresentation or embezzlement; 5.7 been adjudged bankrupt or sequestrated in any jurisdiction; 5.8 been a party to a scheme of arrangement or made any other form of compromise with his creditors; 5.9 been found guilty in disciplinary proceedings, by an employer or regulatory body, due to dishonest activities; 5.10 had any court grant an order declaring him to be a delinquent or placed such director under probation in terms of section 162 of the Companies Act and/or 47 of the Close Corporations Act, 1984 (Act No. 69 of 1984) of South Africa; 5.11 been barred from entry into any profession or occupation; 5.12 been convicted in any jurisdiction of any criminal offence, or an offence under legislation relating to the Companies Act; 5.13 has received any official public criticisms by any statutory or regulatory authorities (including recognised professional bodies); 5.14 entered into any compulsory liquidations, administrations or partnership voluntary arrangements of any partnerships where such person is or was a partner at the time of or within the 12 months preceding such event; or 5.15 entered into receiverships of any asset(s) of such person or of a partnership of which the person is or was a partner at the time of, or within the 12 months preceding, such event.
61 Annexure 4
CURRENT AND PAST DIRECTORSHIPS
The table below lists the companies and partnerships of which each director of the company is currently a director or partner as well as the companies and partnerships of which each director of the company was a director or partner over the five years preceding this prospectus:
Directors of the company
Directorships and partnerships held in Director Current directorships and partnerships the last five years
Pierre Tredoux Quattro Filia Investments Proprietary Limited Maxwell Technology Proprietary Limited Atterbury Property Holdings Proprietary Limited Plough-Argo Residents Association NPC Barnstone Corporate Services Proprietary Limited Victus Capital Proprietary Limited Barnstone Fraud Risk Services Proprietary Limited Ports Of Promise Trading 800 Proprietary Limited Barnstone Holdings Proprietary Limited Africon Finance Proprietary Limited Barnstone Investments Proprietary Limited Barnstone Financial Services Proprietary Limited Barnstone Outsourcing Services Proprietary Limited Britehouse Business Process Management Proprietary Limited Barnstone People Dynamic Proprietary Limited Elevation Private Equity Proprietary Limited Cascade Avenue Trading 109 Proprietary Limited Fundisa Communications Proprietary Limited Guideline Software And Technologies Proprietary The Kingswood Crown Cafe Proprietary Limited Limited Attvic SA Proprietary Limited Seven Seasons Trading 172 Proprietary Limited
Morné Wilken Attacq Retail Fund Proprietary Limited Riverport Trading 143 Proprietary Limited Arctospark Proprietary Limited Scarlet Sky Investments 36 Proprietary Limited Aldabri 96 Proprietary Limited The Falls P and P Proprietary Limited Atterbury Attfund Investment Company Number 1 Atterbury Manfou Proprietary Limited Proprietary Limited Atterbury Attfund Investment Company Number 2 Blaizepoint Trading 291 CC Proprietary Limited Atterbury Attfund Investment Company Number 3 Upward Spiral 1285 CC Proprietary Limited Atterbury Parkdev Consortium Proprietary Limited Top Coat Property Investments 5 Proprietary Limited Atterbury Property Investments Proprietary Limited Atterbury Property Johannesburg Proprietary Limited Atterbury Waterfall City Proprietary Limited Atterbury Waterfall Investment Company Proprietary Limited Atterbury Waterfall Pocket 22A Proprietary Limited Bagaprop Limited Brooklyn Bridge Office Park Proprietary Limited Brooklyn Bridge Residential Home Owners Association NPC CC 702 Investments Proprietary Limited Design Square Shopping Centre Proprietary Limited De Ville Shopping Centre Proprietary Limited Harlequin Duck Properties 204 Proprietary Limited Highgrove Property Holdings Proprietary Limited Keysha Investments 213 Proprietary Limited Lady Brooks Proprietary Limited Le Chateau Property Development Proprietary Limited
62 Directorships and partnerships held in Director Current directorships and partnerships the last five years Leipzig Nova Eventis Consortium Proprietary Limited Lord Charles and Lady Brooks Office Park Holdings Proprietary Limited The Club Retail Park Proprietary Limited Lynnaur Investments Proprietary Limited Lynnwood Bridge Office Park Proprietary Limited Majestic Offices Proprietary Limited Mantrablox Proprietary Limited Paradise Coast Property Development Proprietary Limited Razorbill Properties 91 Proprietary Limited Retail Africa Consortium Holdings Proprietary Limited Retail Africa Wingspan Investments Proprietary Limited Geelhoutboom Estate Proprietary Limited Atterbury Investment Holdings International Limited Verbicorp NPC Waterfall City Management Company NPC Almeflex NPC Fountains Regional Mall Proprietary Limited Nieuwtown Property Development Company Proprietary Limited Atterbury Property Holdings Proprietary Limited Atterbury Mauritius Consortium Proprietary Limited Travenna Development Company Proprietary Limited Sinco Investments Six Proprietary Limited MAS (BVI) Holdings Limited Atterbury Africa Limited Atterbury Waterfall Investment Company Proprietary Limited
Melt Hamman Die Koppie Security Village Home Owners Association Rentworks Africa Proprietary Limited NPC Atterbury Waterfall Investment Company Proprietary Limited Attacq Retail Fund Proprietary Limited
Louis van der Watt Business Venture Investments No 1651 Atterbury Attfund Investment Company Number 3 Proprietary Limited (RF) Proprietary Limited Decastyle Proprietary Limited Razorbill Properties 91 Proprietary Limited Attacq Retail Fund Proprietary Limited Attfund Retail Limited Atterbury Investment Managers Proprietary Limited Blown Fibre Proprietary Limited Atterbury Property Developments Proprietary Limited Rossgro Holdings Proprietary Limited Atterbury Property Holdings Proprietary Limited Aldabri 96 Proprietary Limited Atterbury Property One Proprietary Limited Atterbury Asset Managers Proprietary Limited Atterbury Wedge Proprietary Limited Atterbury Attfund Investment Company Number 1 Proprietary Limited Attventure Proprietary Limited Atterbury Attfund Investment Company Number 2 Proprietary Limited Brooklyn Edge Proprietary Limited Atterbury IP Company Proprietary Limited Casaspec Properties Proprietary Limited Atterbury Manfou Proprietary Limited Diggers Development Proprietary Limited Atterbury Mauritius Consortium Proprietary Limited Dis-chem Distribution Proprietary Limited Atterbury Parkdev Consortium Proprietary Limited
63 Directorships and partnerships held in Director Current directorships and partnerships the last five years Dis-chem Pharmacies Proprietary Limited Atterbury Property Cape Proprietary Limited Ferpa Boerdery Proprietary Limited Atterbury Property Consultant Proprietary Limited Fledge Capital Proprietary Limited Atterbury Property Investments Proprietary Limited Fountains Regional Mall Proprietary Limited Atterbury Property Johannesburg Proprietary Limited Geelhoutboom Estate Proprietary Limited Atterbury Teater Proprietary Limited Hyprop Investments Proprietary Limited Atterbury Waterfall City Proprietary Limited Kameeldrift Voere Proprietary Limited Atterbury Waterfall Investment Company Proprietary Limited Keurprop Investments Proprietary Limited Atterbury Waterfall Pocket 22A Proprietary Limited Leopard 220 Investments Proprietary Limited Bella Rosa Development Proprietary Limited Little Swift Investments 487 Proprietary Limited Brooklyn Bridge Office Park Proprietary Limited Mandela Development Corridor Owners Association De Ville Shopping Centre Proprietary Limited NPC Mantrablox Proprietary Limited Design Square Shopping Centre Proprietary Limited Menlopark Property Holdings Proprietary Limited Faircity Quatermain & Falstaff Proprietary Limited Mertech Fund Proprietary Limited Gosforth Park Management Proprietary Limited Rapfund Holdings Proprietary Limited Gosforth Park Properties Proprietary Limited Retail Africa Consortium Holdings Proprietary Limited Hatfield Rendezvous Proprietary Limited Retail Africa Wingspan Investments Proprietary Limited Highgrove Property Proprietary Limited Holdings Riverwalk Office Park Proprietary Limited Integrear Amica Proprietary Limited Scarlet Sky Investments 36 Proprietary Limited Keysha Investments 213 Proprietary Limited Stuur Groete Produksies Proprietary Limited Kraaibosch Residential Estate Proprietary Limited Suca Pharmacy Holdings Proprietary Limited Lady Brooks Proprietary Limited Suca Ventures Proprietary Limited Le Chateau Property Development Proprietary Limited The Club Retail Park Proprietary Limited Leipzig Nova Eventis Consortium Proprietary Limited The Famous Fishhoek Corporation CC Lord Charles and Lady Brooks Office Park Holdings Proprietary Limited TTA Shares Proprietary Limited Movies at Woodlands Proprietary Limited Wattchatt Proprietary Limited National Formatt Property Commercial Consultants Proprietary Limited Wingspan Asset Management Proprietary Limited National Formatt Property Consultants Proprietary Limited Wonderwall Investments 14 Proprietary Limited Nieuwtown Property Development Company Proprietary Limited Atterbury Investment Holdings International Limited No 14 Rhenosterkloof Lodge Proprietary Limited Business Venture Investments No 1651 Nulane Investments 40 Proprietary Limited Proprietary Limited Atterbury Property Holdings International Limited Parkdev Asset Managers Proprietary Limited Atterbury Africa Limited Raceway Industrial Park Phase IV Proprietary Limited West Hills Mall Limited Raceway Industrial Warehouse Proprietary Limited Atterbury Asset Management International Limited Rooihuiskraal Industrial Gateway Proprietary Limited Safari And Outdoor Warehouse Proprietary Limited The Falls P and P Proprietary Limited The Falls Property Development Company Proprietary Limited The Woodlands Home Owners Association Proprietary Limited Tholo George Proprietary Limited Tholo Investments Proprietary Limited Top Coat Property Investments 5 Proprietary Limited Tyger Hills Investments Proprietary Limited Tyger Hills Office Park Proprietary Limited Wonderwall Investments 14 Proprietary Limited Riverport Trading 143 Proprietary Limited Atterbury Cape Projects Holdings Dunrose Investments 200 Proprietary Limited
64 Directorships and partnerships held in Director Current directorships and partnerships the last five years MM Afriads Proprietary Limited Oktavo Beleggings Proprietary Limited Best Cut Proprietary Limited IHO Holdings Proprietary Limited Rodgers Real Estate Proprietary Limited Best Cut Foods Proprietary Limited Miljon Proprietary Limited Muckleneuk Corner Proprietary Limited Atterbury Property Finance Proprietary Limited Attventure Poultry Investments Proprietary Limited NIB 90 Share Block Proprietary Limited Atterbury Decor Centre Proprietary Limited CCG 097 Share Block Company Proprietary Limited Attfund Limited Glenwood Offices Investments Proprietary Limited Formprops 1 Proprietary Limited Fullimput 160 Proprietary Limited Glenfield Property Proprietary Limited Parkdev Proprietary Limited SA Value Marts Proprietary Limited
Francois van Niekerk Atterbury Décor Centre Limited Mertech Fund Proprietary Limited Unitrade Proprietary Limited Artisan Real Estate Investors Proprietary Limited BNF Investments Proprietary Limited MAS Property Advisors Limited Infotech Proprietary Limited Attfund Limited Mergon Foundation NPC Mertech Investments Proprietary Limited Muthobi NPC Northpark Trading 21 Proprietary Limited Mertech Projects Proprietary Limited Mertech Property Proprietary Limited Atterbury Property Finance Proprietary Limited
Pieter Faure Muthobi NPC Mertech Services Proprietary Limited Mergon Foundation NPC 4P Logistics Management Systems Proprietary Limited Molalatladi Capital Proprietary Limited 4P Logistical Solutions Proprietary Limited Mertech Fund Proprietary Limited Pole Position Media Proprietary Limited Mertech Investments Proprietary Limited Artisan Real Estate Investors Proprietary Limited BNF Investments Proprietary Limited MAS Property Advisors Limited Infotech Proprietary Limited Attventure Growth Fund Proprietary Limited Atterbury Investment Managers Proprietary Limited Attventure Poultry Investments Proprietary Limited Mertech Property Proprietary Limited Mystic Blue Trading 614 Proprietary Limited Nelesco 589 Proprietary Limited Mergon Investments Proprietary Limited Attventure Proprietary Limited King Price Financial Services Proprietary Limited King Price Insurance Company Proprietary Limited
65 Directorships and partnerships held in Director Current directorships and partnerships the last five years Lucas Ndala Lisinfo 209 Investments Proprietary Limited Advanced Channel Technologies Proprietary Limited Central Lake Trading 342 Proprietary Limited Channel Risk Management Proprietary Limited Desert Star Trading 496 Proprietary Limited Channelware Proprietary Limited Fraser Alexander Proprietary Limited Cross Point Trading 67 Proprietary Limited Lisinfo 213 Property Proprietary Limited Lisinfo 216 Investments Proprietary Limited Lisinfo 219 Trading Proprietary Limited Lisinfo 220 Trading Proprietary Limited Lisinfo 222 Investments Proprietary Limited Lisinfo 227 Investments Proprietary Limited Lisinfo 238 Investments Proprietary Limited Lisinfo 245 Investments Proprietary Limited Lisinfo 258 Investments Proprietary Limited MB Technologies Proprietary Limited MB Technologies Investments Proprietary Limited Morafe Investments Proprietary Limited Neliscore Proprietary Limited Olympic Park Trading 93 Proprietary Limited Quickvest 399 Proprietary Limited RBH Financial Holdings Proprietary Limited RBH Industrial Holdings Proprietary Limited RBH Resources Holdings Proprietary Limited RBH Services Holdings Proprietary Limited RBH Telecom Holdings Proprietary Limited Riverside Park Trading 288 Proprietary Limited Royal Bafokeng Agri Investments Proprietary Limited Royal Bafokeng Astrapak Proprietary Limited Royal Bafokeng Automotive Proprietary Limited Royal Bafokeng BCT Proprietary Limited Royal Bafokeng Closed Shelf1 Proprietary Limited Royal Bafokeng DHL Proprietary Limited Royal Bafokeng DHL Holding Company Proprietary Limited Royal Bafokeng Finance Proprietary Limited Royal Bafokeng Financial Services Group Proprietary Limited Royal Bafokeng Holdings Proprietary Limited Royal Bafokeng Impala Investment Holding Company Proprietary Limited Royal Bafokeng Libstar Proprietary Limited Royal Bafokeng Management Services Proprietary Limited Royal Bafokeng MB Technologies Proprietary Limited Royal Bafokeng MB Technologies Holding Company Proprietary Limited Royal Bafokeng Metix Proprietary Limited Royal Bafokeng Mogs Proprietary Limited Royal Bafokeng Pasco Proprietary Limited Royal Bafokeng Platinum Holdings Proprietary Limited Royal Bafokeng Properties Proprietary Limited Royal Bafokeng Resources Granite Proprietary Limited Royal Bafokeng Resources Holdings Proprietary Limited Royal Bafokeng Resources Platinum Proprietary Limited Royal Bafokeng Tholo Investment Holding Company Proprietary Limited
66 Directorships and partnerships held in Director Current directorships and partnerships the last five years Royal Bafokeng Wizplat Proprietary Limited Salestalk 268 Proprietary Limited Umkhwene Transports CC Fraser Alexander Holdings Proprietary Limited Port Wild Props 12 Proprietary Limited Umkhwene Trading CC
Johan van der Merwe Atom Funds Management Proprietary Limited Lemon Butta Hermanus Proprietary Limited Blue Ink Investments Partners Proprietary Limited Investec Asset Management Proprietary Limited FOUR Capital Partners Limited Pan-African Asset Management Proprietary Limited Genbel Securities Limited Sanlam Investment Management Proprietary Limited Octane Holdings Limited Simeka Consultants And Actuaries Proprietary Limited Raptocom Proprietary Limited I-Maps Proprietary Limited Sanlam Asset Management Ireland Glacier Financial Holdings Proprietary Limited Sanlam Capital Markets Limited Sanlam Limited Sanlam Collective Investments Limited Investment Management Association of South Africa NPC Sanlam International Investment Partners Limited Sanlam Investment Holdings Limited Sanlam Investment Management Proprietary Limited Sanlam Multi Manager International Proprietary Limited Sanlam International Investments Limited Sanlam Private Investments Proprietary Limited Sanlam Properties Proprietary Limited Sanlam UK SIM International Investments Partners AUSTRALIA Proprietary Limited Wheatfields Investments No. 221 Proprietary Limited
Stewart Shaw-Taylor The Pivotal Fund Limited Clifton Dunes Investments 488 Proprietary Limited The Unisec Group Limited Emerald Fire Investments Proprietary Limited Thirty-Three Bolton Road Proprietary Limited Evening Star Trading 768 Proprietary Limited Standard Bank Properties Proprietary Limited Fountainhead Property Trust Management Limited Proprietary Limited The Milnerton Estates Limited Gleneagles Retail Centre Proprietary Limited Gold Street Property Investments Proprietary Limited Grand Central Shopping Centre Proprietary Limited Newpark Towers Proprietary Limited Outward Investments Proprietary Limited Novelway Investments Proprietary Limited Redefine Income Fund Limited Odyssey Oil Developments Proprietary Limited Redefine Fund Managers Limited LC Golf SA Proprietary Limited Shelly Beach Junction Proprietary Limited Greenfield Newgate Proprietary Limited Western Plaza Two Proprietary Limited Hijob Proprietary Limited Asakhe Realty Investment Fund Proprietary Limited Huddle Investments Proprietary Limited Belhar CBD Development Company Proprietary Limited Hyprop Investments Limited All Square Investments Proprietary Limited Inani Realty Asset Management Proprietary Limited Die Meentgebou Proprietary Limited FHP Managers Proprietary Limited Portion ¾ of Erf 5495 Bryanston Proprietary Limited Main Street 100 Proprietary Limited Soubrette Investments Proprietary Limited Pearl Valley Golf Estates Proprietary Limited SBS Development Company Proprietary Limited Pivotman Proprietary Limited Monchique Proprietary Limited Mogale’s Gate Proprietary Limited Otter Investments Proprietary Limited
67 Directorships and partnerships held in Director Current directorships and partnerships the last five years Blue Bond Investments Limited Erf 224 Edenburg Proprietary Limited Blue Bond Financial Nominees Proprietary Limited New Heights 409 Proprietary Limited Dream Circle Destination Club Proprietary Limited Charmond Investments Proprietary Limited Dream Circle Property Development Keanda Properties Proprietary Limited Proprietary Limited Eldee Proprietary Limited Elderberry Investments 49 Proprietary Limited Blue Waves Properties 78 Proprietary Limited Burnet Investments Limited Gloster Farm Proprietary Limited JSG Developments Proprietary Limited Image Ambassadors Proprietary Limited Redefine International P.L.C. Sortor Proprietary Limited Thirty-Three Bolton Road Proprietary Limited Tiyani Property Consortium Proprietary Limited
Hellen El Haimer Infinity Advisors CC None Main Marshall Improvement District NPC The FM Institute Proprietary Limited
Thys du Toit Rootstock Capital Proprietary Limited Coronation Asset Management Proprietary Limited Rootstock Investment Management Coronation Fund Managers Limited Proprietary Limited PSG Group Limited Coronation Investment Management Proprietary Limited PSG Financial Services Limited Coronation Investment Services Proprietary Limited Pioneer Foods Proprietary Limited Coronation Life Assurance Company Limited ERF 81 Lynnwood Proprietary Limited Coronation Management Company (RF) Proprietary Limited Olifantsdrift Beleggings Nr 1 Proprietary Limited Imvula Capital Proprietary Limited Olifantsdrift Beleggings Nr 2 Proprietary Limited Investment Management Association of South Africa NPC Vredelust/Act of Grace Proprietary Limited Zambia Copper Investments Limited (ZCI) Thibault Investments Proprietary Limited KWV Holdings Limited Thibault Investment Holdings Proprietary Limited Professional Provident Society Investments Proprietary Limited Professional Provident Society Multi-Managers Proprietary Limited
Lebo Masekela 4p Logistical Solutions Proprietary Limited LQ Consulting Proprietary Limited 4pl Group Proprietary Limited Mobiledata Proprietary Limited Allied Energy Technologies Proprietary Limited Psidot Metering Systems Proprietary Limited Ansawell Proprietary Limited Lechabile Quality Strategies Proprietary Limited Balindi Agricultural Co-operative Limited Enermatics Energy Proprietary Limited Franchise Lending Solutions Proprietary Limited Infotech Proprietary Limited Lechabile Quality Manufacturing Proprietary Limited Molalatladi Capital Proprietary Limited Parsec Proprietary Limited Precis-Le Helicopters Win-Le Investments Proprietary Limited
68 Directorships and partnerships held in Director Current directorships and partnerships the last five years Thomas Reilly Jet Cut CC Business Venture Investments No 261 Proprietary Limited Sanlam Africa Core Real Estate Fund Limited Khulela Properties Proprietary Limited Oubaai Stand 228 CC Lexshell 600 Investments Proprietary Limited R Squared Properties Proprietary Limited MCH Properties Proprietary Limited Sanlam Africa Fund Advisor Proprietary Limited Ndawu Investors Proprietary Limited Shelfsoft Proprietary Limited Newshelf 101 Limited Tugboat Property CC Sanlam Properties Proprietary Limited Vendcorp 111 CC Tswelena Developers Proprietary Limited Waterfall Country Estate Home Owners Association NPC Waterfall Golf Estate Proprietary Limited
Wilhelm Nauta Blue Nightingale Trading 254 Proprietary Limited Eris Property Group Proprietary Limited Durafit Vehicle Accessories Proprietary Limited Royal Bafokeng Finance Proprietary Limited Lisinfo 222 Investments Proprietary Limited MB Technologies Proprietary Limited Royal Bafokeng Agri Investments Proprietary Limited Royal Bafokeng Astrapak Proprietary Limited Royal Bafokeng Mogs Proprietary Limited Royal Bafokeng Platinum Holdings Proprietary Limited Royal Bafokeng Resources Holdings Proprietary Limited Royal Bafokeng Ventures Proprietary Limited
The table below lists the major subsidiaries of which each director of the subsidiary company is currently a director or partner as well as the companies and partnerships of which each director of the subsidiary company was a director or partner over the five years preceding this prospectus: Directors of Attacq Retail Fund (a major subsidiary of Attacq)
Directorships and partnerships held in Director Current directorships and partnerships the last five years Richard Thomas Attacq Retail Fund Proprietary Limited Barley Cove Proprietary Limited Bones Development Phase 3 Proprietary Limited Mooirivier Mall Proprietary Limited Capegate Crescent Development Proprietary Limited RZT Zelpy 4558 Proprietary Limited Capricorn Business And Technology Park S A Retail Properties Proprietary Limited Proprietary Limited Ixia Trading 630 Proprietary Limited Syfrets Mortgage Nominees Limited Klein Steenberg Proprietary Limited Visigro Investments Proprietary Limited Lighthouse Developments Proprietary Limited Whirlprops 33 Proprietary Limited Off The Shelf Investments Forty One 30-36 Silverton Road Proprietary Limited Proprietary Limited Onrus Manor Proprietary Limited Steenberg Office Development Proprietary Limited Pacific Coast Investments 23 Proprietary Limited The Green Building Council of South Africa NPC Pacific Eagle Properties 13 Proprietary Limited Precious Prospect Trading 50 Proprietary Limited Robow Investments No 47 Proprietary Limited Royal Albatross Properties 225 CC Stratovest 103 Proprietary Limited Toontjiesrivier Landgoed Proprietary Limited Villager Investments No 1 Proprietary Limited Visigro Investments Proprietary Limited Abacus Holdings Management Proprietary Limited
69 Annexure 5
SERVICE CONTRACTS
The salient features of the current service contracts are: 1. Service contract entered into between Attacq and Morné Wilken effective 1 July 2013 1.1 Commencement date and termination 1.1.1 Morné was appointed as the chief executive officer of Attacq on 1 July 2013. 1.1.2 Notice, in writing, must be given by the employee in the event of his resignation, or from the organisation terminating the employee’s services for reasons related to his conduct or capacity of two months.
1.2 Duties and responsibilities Morné entered into Attacq’s service as chief executive officer reporting directly to the board of directors of the company.
1.3 Remuneration The annual total cost to the company comprises: 1.3.1 a guaranteed salary of R2 250 000; 1.3.2 use of a cell phone and 3G card; 1.3.3 use of a fuel card subject to a maximum of R3 500 per month; and 1.3.4 group life cover.
1.4 Short-term incentives The quantum of the short-term incentive is a function of the annual growth in the net asset value per share of the company on a consolidated basis. The annual growth is based on the information as per the audited financial statements for a full financial year. The following formula is applicable: For every basis point (“BP” for clarity 100BP = 1%) the annual growth exceeds 7%, Morné will receive 1% of his monthly guaranteed salary earned during that specific financial year.
1.5 Long-term incentive 1.5.1 The share options as approved at the shareholders’ meeting on 29 November 2012 will continue on the same terms and conditions as previously approved. In terms of the approval, Morné is entitled to 2 000 000 Attacq shares at a price of R8.50 per share. The first 40% of the share options has already vested and was exercised by Morné. The remaining 60% may be exercised in equal portions of 20% per year on 30 June 2014, 30 June 2015 and 30 June 2016. 1.5.2 If Morné leaves the service of the company voluntarily or is summarily dismissed prior to the vesting date he will forfeit those options which have not yet vested. In the case of death, permanent disability of Morné and/or a change of control of the company, the outstanding balance of the shares will accrue on such date.
1.6 Restraint of trade None.
2. Service contract entered into between Attacq and Melt Hamman effective 1 July 2013 2.1 Commencement date and termination 2.1.1 Melt was appointed as the financial director of Attacq on 1 July 2013. 2.1.2 Notice, in writing, must be given by Melt in the event of his resignation, or from the organisation terminating his services for reasons related to his conduct or capacity of one month.
2.2 Duties and responsibilities Melt entered into Attacq’s service in the position of financial director.
70 2.3 Remuneration Melt’s total annual cost to company comprises: 2.3.1 a guaranteed salary of R1 550 000; 2.3.2 use of a cell phone and 3G card; 2.3.3 use of a fuel card subject to a maximum of R3 500 per month; and 2.3.4 group life cover.
2.4 Short-term incentives 2.4.1 Melt was remunerated in an amount of R1 200 000. The after-tax portion of this incentive was utilised to subscribe for 60 000 Attacq shares at a subscription price of R12.00 per share. These shares may only be disposed of with the prior written approval of the remuneration and nominations committee. 2.4.2 The quantum of the short-term incentive is a function of the annual growth in the net asset value per share of the company on a consolidated basis. The annual growth is based on the information as per the audited financial statements for a full financial year. The following formula is applicable: For every basis point (“BP” for clarity 100BP = 1%) the annual growth exceeds 7%, Melt will receive 1% of his monthly guaranteed salary earned during that specific financial year.
2.5 Long-term incentive The award of share options was approved by the shareholders at the shareholders’ meeting held on 27 August 2013. In terms of the approval, Melt is entitled to 1 200 000 Attacq ordinary shares at a price of R9.50 per share. The award is expected to vest in total over a period provided certain vesting conditions are met. Melt will be entitled to take delivery of the shares into his portfolio within six months of the vesting date. The first 60% of the shares may be exercised on 30 June 2016, the following 20% on 30 June 2017 and the remaining 20% on 30 June 2018.
2.6 Restraint of trade None.
71 Annexure 6
EXTRACTS FROM THE MOI
The MOI of the company contains, inter alia, provisions with the effect of providing for the appointment, qualification, remuneration and borrowing powers, interests of directors and dividends as set out in the extracts below:
“3. PUBLIC COMPANY The Company is a Public Company as it is not a Private Company, a State-Owned Company or a Personal Liability Company.”
“4. POWERS AND CAPACITY OF THE COMPANY 4.1 The Company has the powers and capacity of an Individual. 4.2 No Special Resolution may be put to Holders to ratify any action by the Company or the Directors that is inconsistent with any limit, restriction or qualification regarding the purposes, powers or activities of the Company, or the authority of the Directors to perform an act on behalf of the Company, as contemplated in section 20(2) and section 20(6), in the event that such a Special Resolution would lead to the ratification of an act that is contrary to the Listings Requirements, unless otherwise agreed with the JSE. 4.3 Notwithstanding the omission from this MOI of any provision to that effect, the Company may do anything which the Companies Act empowers a company to do if so authorised by its MOI. 4.4 The following corporate actions shall be undertaken in accordance with the Listings Requirements: 4.4.1 issues of Securities (including options) for cash and convertible Securities granted/issued for cash; 4.4.2 repurchases of Securities; and 4.4.3 alterations of share capital, authorised Securities and rights attaching to classes of Securities.”
“5. AMENDMENTS TO THIS MOI 5.1 Save for: 5.1.1 an amendment which is ordered by a court in terms of section 16(1)(a) and section 16(4); or 5.1.2 correcting errors substantiated as such from objective evidence or which are self evident errors (including, but without limitation ejusdem generis, spelling, punctuation, reference, grammar or similar defects) in this MOI, which the Board is empowered to do, all other amendments of this MOI shall be effected by a Special Resolution passed by the Holders of the ordinary Shares. The Board shall publish a copy of any such correction effected by the Board on the Company’s website. 5.2 Amendments, for the avoidance of doubt, shall include, but shall not be limited to: 5.2.1 the creation of any class of Securities; 5.2.2 the variation of any preferences, rights, limitations and other terms attaching to any class of Securities; 5.2.3 the conversion of one class of Securities into one or more other classes; 5.2.4 an increase or decrease in the number of Securities of a class; 5.2.5 a consolidation of Securities; 5.2.6 a sub-division of Securities; and/or 5.2.7 the change of the name of the Company. 5.3 All amendments to this MOI must be submitted to the JSE for approval before such amendments are submitted to the Holders of the ordinary Shares for approval.”
“7. AUTHORISED SECURITIES, ALLOTMENT AND ISSUE 7.1 The Company is authorised to issue 2 000 000 000 (two billion) ordinary no par value Shares (which includes Shares already issued at any time), which shall entitle the Holder of each such ordinary Share to: 7.1.1 1 (one) vote per ordinary Share that he/she/it holds in respect of every matter that may be decided by voting; 7.1.2 vote at every general meeting and/or Annual General Meeting, in person or by proxy; and 7.1.3 receive the net assets of the Company upon its liquidation. 7.2 Notwithstanding anything to the contrary contained in this MOI, no issue of Securities may be effected by the Company unless those Securities are fully paid up in accordance with section 40.
72 7.3 All Securities of each class shall rank pari passu in respect of all rights, as understood in paragraph 3.29 of the Listings Requirements. 7.4 The Board shall not have the power to amend the authorisation (including increasing or decreasing the number) and classification of Shares (including determining rights and preferences) as contemplated in section 36(2)(b) or section 36(3). 7.5 No rights, privileges or conditions for the time being attached to any class of Securities of the Company nor any interests of that class of Securities may (unless otherwise provided by the terms of issue of the Securities of that class) whether or not the Company is being wound up, be varied in any manner, nor may any variations be made to the rights, privileges or conditions of any class of Securities, such that the interests of another class of Securities is affected, unless a Special Resolution has been passed by the Holders of that class of Securities with the support of at least 75% (seventy five percent) of the Voting Rights Exercised on the Special Resolution at a separate meeting of the Holders of that class. The provisions of this MOI relating to Shareholders’ Meetings shall mutatis mutandis apply to any such separate meeting. In such instances, the Holders of such Shares may be allowed to vote at the meeting of Holders of ordinary Shares, subject to the provisions of clause 19.34. 7.6 The preferences, rights, limitations or other terms of any class of Securities of the Company may not be varied, and no resolution may be proposed to the Holders for rights to include such variation in response to any objectively ascertainable external fact or facts, as provided for in section 37(6) and section 37(7). 7.7 Notwithstanding any implication in this MOI to the contrary, the Board may not authorise any financial assistance by the Company in connection with the subscription for or purchase of its Securities or those of a Related or Inter-related company without complying with section 44(3).”
“8. AUTHORITY TO ISSUE SECURITIES 8.1 The Board shall not have the power to issue authorised Securities (other than as contemplated in clause 8.5) without the prior approval contemplated in clause 8.2 and the approval of the JSE (where necessary). 8.2 As regards the issue of: 8.2.1 Shares contemplated in section 41(1) and section 41(3) or as contemplated in paragraph 5.50 of the Listings Requirements, the Directors shall not have the power to allot or issue same without the prior approval of a Special Resolution; 8.2.2 Shares, other than those contemplated in clause 8.2.1, and other Securities including options in respect thereof, the Directors shall not have the power to allot or issue same without the prior approval of an Ordinary Resolution, provided that such issue has been approved by the JSE. 8.3 No special privileges, such as: 8.3.1 attending and voting at general meetings and the appointment of Directors; and/or 8.3.2 the allotment of Securities, redemption by the Company, or substitution of the debt instrument for Shares of the Company, may be granted to secured and unsecured debt instruments as contemplated in section 43(3). 8.4 Any approval for the allotment or issue of Securities by way of an Ordinary Resolution or a Special Resolution may be in the form of a general authority to the Directors, whether conditional or unconditional, to allot or issue any such Securities contemplated in clause 8.2.1 and clause 8.2.2 in their discretion, or in the form of a specific authority in respect of any particular allotment or issue of such Securities contemplated in clause 8.2.1 and clause 8.2.2. Such authority shall endure for the period provided in the Ordinary Resolution or Special Resolution in question but may be revoked by Ordinary Resolution or Special Resolution, as the case may be, at any time. 8.5 The Board may issue capitalisation Shares or offer a cash payment in lieu of awarding a capitalisation Share in accordance with section 47. 8.6 No Shares of a class which is listed may be issued other than as fully paid up and freely transferable. Notwithstanding the provisions of section 40(5), the JSE will not list Shares that are not fully paid for upon listing.”
“9. PRE-EMPTION ON ISSUE OF EQUITY SECURITIES Equity Securities of a particular class in the Company which are authorised but unissued and which are intended to be issued for cash, shall be offered to the existing Holders of that class of equity Securities by way of a rights offer pro rata to their shareholdings immediately before the offer was made with a reasonable time allowed to subscribe, unless: 9.1 the approvals contemplated in clause 8.1 have been obtained; 9.2 a capitalisation issue, an issue for an acquisition of assets (including another company) or an issue for the purposes of an Amalgamation or Merger, is to be undertaken; 9.3 the equity Securities are to be issued in terms of option or Conversion rights; or 9.4 the equity Securities are to be issued to a share incentive scheme approved by Ordinary Resolution, provided that if any fraction of an equity Security will have to be issued, such fraction will be rounded up to the nearest whole number where the fraction is greater than or equal to 0.5 (zero point five) and rounded down to the nearest whole number where the fraction is less than 0.5 (zero point five). After the expiration of the time within which an offer may be accepted, or on the
73 receipt of an intimation from the Person to whom the offer is made that he/she/it declines to accept the equity Securities offered, the Directors may, subject to the aforegoing provisions, issue such equity Securities in such manner as they think most beneficial to the Company.”
“14. TRANSFER OF SECURITIES 14.1 There is no restriction on the transfer of Securities. 14.2 The transfer of any Securities which are certificated shall be implemented in accordance with using the then common form of transfer. Every instrument of transfer shall be left at the transfer office of the Company at which it is presented for registration, accompanied by the certificate of the Securities to be transferred, and or such other evidence as the Company may require to prove the title of the transferor or his/her/its rights to transfer the Securities. 14.3 All authorities to sign transfer deeds granted by Holders for the purpose of transferring Securities that may be lodged, produced or exhibited with or to the Company at any of its transfer offices shall, as between the Company and the grantor of such authorities, be taken and deemed to continue and remain in full force and effect, and the Company may allow the same to be acted upon until such time as express notice in Writing of the revocation of the same shall have been given and lodged at the Company’s transfer offices at which the authority was lodged, produced or exhibited. Even after the giving and lodging of such notices the Company shall be entitled to give effect to any instruments signed under the authority to sign, and certified by any officer of the Company, as being in order before the giving and lodging of such notice.”
“21. ELECTION OF DIRECTORS, ALTERNATE DIRECTORS AND VACANCIES 21.1 The minimum number of Directors shall be 4 (four) Directors and the maximum shall be 15 (fifteen) Directors. Any failure by the Company at any time to have the minimum number of Directors, does not limit or negate the authority of the Board, or invalidate anything done by the Board or the Company. 21.2 At the Annual General Meeting held in each year, 1/3 (one-third) of the non-executive Directors, or if their number is not a multiple of 3 (three), then the number nearest to, but not less than 1/3 (one third) shall retire from office; provided that in determining the number of Directors to retire no account shall be taken of any Director who has been appointed as the managing director or any other executive Director for a fixed period and his/her contract provides that he/she is not subject to retirement during that fixed period. 21.3 The Directors so to retire at each Annual General Meeting shall be those who have been longest in office since their last election. As between Directors of equal seniority, the Directors to retire shall, in the absence of agreement, be selected from among them by lot; provided that, notwithstanding anything herein contained, if, at the date of any Annual General Meeting any Director will have held office for a period of 3 (three) years since his/her last election or appointment he/she shall retire at such Meeting, either as one of the Directors to retire in pursuance of the foregoing or additionally thereto. 21.4 The length of time a Director has been in office shall be computed from the date of his/her last election. 21.5 A retiring Director shall act as a Director throughout the Meeting at which he/she retires. Retiring Directors shall be eligible for re-election. No Person other than a Director retiring at the Meeting shall, unless recommended by the Directors through their nomination committee for election, be eligible for election to the office of Director at any Annual General Meeting unless, not less than 7 (seven) days nor more than 14 (fourteen) days before the day appointed for the meeting, there shall have been given to the secretary notice, in Writing, by some Holder duly qualified to be Present and vote at the meeting for which such notice is given of the intention of such Holder to propose such Person for election and also notice, in Writing, signed by the Person to be proposed of his/her willingness to be elected. 21.6 If at any Annual General Meeting, the place of any retiring Director is not filled, he/she shall if willing continue in office until the dissolution of the Annual General Meeting in the next year, and so on from year to year until his/her place is filled, unless it shall be determined at such meeting not to fill such vacancy. 21.7 Each of the Directors and the Alternate Directors, other than a Director contemplated in clause 21.17, shall be elected (which in the case of a vacancy arising shall take place at the next Annual General Meeting), in accordance with clause 21.14, to serve for a term of 3 (three) years as a Director or Alternate Director. For the avoidance of doubt, no Director or Alternate Director shall be entitled to a life directorship or to serve as a Director or Alternate Director for an indefinite period. 21.8 Any Shareholder will have the right to nominate Directors and/or Alternate Directors for election to the Board (as contemplated in clause 21.7 and clause 21.14), in accordance with the provisions of clause 21.5. 21.9 Without derogating from the generality of the Shareholders’ rights to nominate Directors and/or Alternate Directors for election to the Board, as contemplated in clause 21.8, for so long as Lisinfo is a Shareholder and holds at least 10% (ten percent) of the issued Shares in the capital of the Company, it shall be entitled, but not obliged, to nominate (in Writing) for election to the Board (as contemplated in clause 21.7 and clause 21.4), in accordance with the provisions of clause 21.5, 1 (one) Director and 1 (one) Alternate Director. In the event that Lisinfo ceases to hold at least 10% (ten percent) of the issued Shares in the capital of the Company, it shall nonetheless have the right to nominate Directors and/or Alternate Directors for election to the Board in the manner contemplated in clause 21.8. 21.10 An Alternate Director shall serve in the place of 1 (one) or more Director(s) named in the resolution electing him/her during the Director’s(s’) absence or inability to act as Director. If a Person is an Alternate Director to more than 1 (one) Director or if an Alternate Director is also a Director, he/she shall have a separate vote, on behalf of each Director he/she is representing in addition to his/her own vote, if any. 21.11 Notwithstanding any provision to the contrary contained in this MOI, the appointment of all Directors shall be subject to Shareholder approval at any general meeting/annual general meeting; provided that the meeting is not conducted in terms of section 60.
74 21.12 There are no general qualifications prescribed by the Company for a Person to serve as a Director or an Alternate Director in addition to the requirements of the Companies Act. The Board, with the assistance of the nominations committee, must make recommendations to the Holders regarding the eligibility of Persons nominated for election as Directors, taking into account their past performance and contribution, if applicable. A brief curriculum vita of each Person standing for election or re-election as a Director at a Meeting or the Annual General Meeting, must accompany the notice of the Meeting. 21.13 No Director shall be entitled to appoint any Person as an Alternate Director to himself/herself. 21.14 In any election of Directors and Alternate Directors, the election is to be conducted as follows: 21.14.1 a series of votes of those entitled to Exercise votes regarding such election, each of which is on the candidacy of a single individual to fill a single vacancy, with the series of votes continuing until all vacancies on the Board at that time have been filled; and 21.14.2 in each vote to fill a vacancy: 21.14.2.1 each Voting Right entitled to be Exercised may be Exercised once; and 21.14.2.2 the vacancy is filled only if a majority of the Voting Rights Exercised support the candidate. 21.15 No Person shall be elected as a Director or Alternate Director, if he/she is Ineligible or Disqualified and any such election shall be a nullity. A Person who is Ineligible or Disqualified must not consent to be elected as a Director or Alternate Director nor act as a Director or Alternate Director. A Person placed under probation by a court must not serve as a Director or an Alternate Director unless the order of court so permits. 21.16 No election of a Director shall take effect until he/she has delivered to the Company a Written consent to serve. 21.17 Any vacancy occurring on the Board may be filled by the Board, but so that the total number of the Directors shall not at any time exceed the maximum number fixed, if any, but the Individual so appointed shall cease to hold office at the termination of the first Shareholders’ Meeting to be held after the appointment of such Individual as a Director unless he/she is elected at such Shareholders’ Meeting. 21.18 The continuing Directors (or sole continuing Director) may act notwithstanding any vacancy in their body, but, if and so long as their number is reduced below the number fixed by or pursuant to this MOI as the minimum, the continuing Directors or Director may act only for the purpose of summoning a Shareholders’ Meeting or filling vacancies not later than 3 (three) months from the date that the number falls below the minimum. 21.19 If there is no Director able and willing to act, then any Holder entitled to Exercise Voting Rights in the election of a Director may convene a Shareholders’ Meeting for the purpose of electing Directors.”
“23. REMUNERATION OF DIRECTORS AND ALTERNATE DIRECTORS AND MEMBERS OF BOARD COMMITTEES 23.1 The Directors or Alternate Directors or members of Board committees shall be entitled to such remuneration for their services as Directors or Alternate Directors or members of Board committees as may have been determined from time to time by Special Resolution within the previous 2 (two) years. In addition, the Directors and Alternate Directors shall be entitled to all reasonable expenses in travelling (including hotels) to and from meetings of the Directors and Holders, and the members of the Board committees shall be entitled to all reasonable expenses in travelling (including hotels) to and from meetings of the members of the Board committees as determined by a disinterested quorum of Directors. If any Director and/or Alternate Director is required to perform extra services, to reside abroad or be specifically occupied about the Company’s business, he/she may be entitled to receive such remuneration as is determined by a disinterested quorum of Directors, which may either be in addition to or in substitution for any other remuneration payable. The Company may pay or grant any type of remuneration contemplated in section 30(6)(b) to section 30(6)(g) (both inclusive) to any executive Directors. 23.2 A Director may be employed in any other capacity in the Company or as a Director or employee of a company controlled by, or itself a major Subsidiary of, the Company and in that event, his/her appointment and remuneration in respect of such other office must be determined by a disinterested quorum of Directors.”
“25. GENERAL POWERS AND DUTIES OF DIRECTORS 25.1 The business and affairs of the Company shall be managed by or under the direction of the Board, which has the authority to exercise all of the powers and perform any of the functions of the Company, except to the extent that the Companies Act or this MOI provides otherwise. 25.2 The Directors may: 25.2.1 establish and maintain any non-contributory or contributory pension, superannuation, provident and benefit funds for the benefit of; and 25.2.2 give pensions, gratuities and allowances to and make payments for or towards the insurance of, any Persons who are employees or ex-employees (including Directors or ex-Directors) of the Company, or of any company which is or was a Subsidiary of the Company or is or was in any way allied to or associated with it or any such Subsidiary, and the wives, widows, families and dependants of such Persons. 25.3 The Board must appoint a chief executive officer and an executive financial Director. The Board may from time to time appoint one or more of the Directors to the office of Managing Director or manager (provided always that the number of Directors so appointed as Managing Director or joint Managing Directors and/or the holders of any other executive office including a chairperson who holds an executive office but not a chairperson who is a non-executive Director shall at all times
75 be less than ½ (one-half) of the number of Directors in office) for such period (not exceeding 5 (five) years) and at such remuneration (whether by way of salary or commission, or participation in profits or partly in one way and partly in another) and generally on such terms it may think fit, and it may be made a term of his/her appointment that he/she be paid a pension, gratuity or other benefit on his/her retirement from office. 25.4 The Board may from time to time entrust to and confer upon a managing Director or manager for the time being such of the powers vested in the Directors as it may think fit, and may confer such powers for such time and to be exercised for such objects and upon such terms and with such restrictions as it may think expedient; and it may confer such powers either collaterally or to the exclusion of, and in substitution for, all or any of the powers of the Directors, and may from time to time revoke or vary all or any of such powers. A managing Director appointed pursuant to the provisions hereof shall not be regarded as an agent or delegate of the Directors and after powers have been conferred upon him/her by the Board in terms hereof he/she shall be deemed to derive such powers directly from this clause 25.4.”
“31. DISTRIBUTIONS 31.1 The Company may make Distributions at any time; provided that: 31.1.1 any such Distribution: 31.1.1.1 is pursuant to an existing legal obligation of the Company, or a court order; or 31.1.1.2 has been authorised by the Board, provided that where the Listings Requirements require the approval of Holders in addition to such authorisation by the Board, the Distribution shall only be made if such approval of Holders is obtained at a Shareholders’ Meeting; 31.1.2 it reasonably appears that the Company will satisfy the Solvency and Liquidity Test immediately after completing the proposed Distribution; 31.1.3 the Board, by resolution, has acknowledged that it has applied the Solvency and Liquidity Test and reasonably concluded that the Company will satisfy the Solvency and Liquidity Test immediately after completing the proposed Distribution; and 31.1.4 no obligation is imposed, if it is a distribution of capital, that the Company is entitled to require it to be subscribed again, and the Company must complete any such Distribution fully within 120 (one hundred and twenty) Business Days after the acknowledgement referred to in clause 31.1.3, failing which it must again comply with the aforegoing. 31.2 The Company must before incurring any debt or other obligation for the benefit of any Holders, comply with the requirements in clause 31.1. 31.3 Dividends shall be paid to Holders registered as at a date subsequent to the date of declaration or date of confirmation of the dividend, whichever is the later. 31.4 Scrip dividends incorporating an election to receive either capitalisation Shares or cash are not prohibited in terms of this MOI. 31.5 No notice of change of address or instructions as to payment given after the determination of a dividend or other Distribution by the Company in terms of clause 31.1.1, shall become effective until after the dividend or other Distribution has been made, unless the Board so determines at the time the dividend or other Distribution is approved. 31.6 The Company must hold all monies due to shareholders in trust, but subject to the laws of prescription. All unclaimed monies due to the Holders shall be held in trust until lawfully claimed, provided that any such monies remaining unclaimed for a period of not less than 3 (three) years from the date on which it became payable may be forfeited by resolution of the Directors for the benefit of the Company. No dividend shall bear interest against the Company. 31.7 The Company shall be entitled at any time to delegate its obligations in respect of unclaimed dividends or other unclaimed Distributions, to any one of the Company’s bankers from time to time. 31.8 Notwithstanding any other provision of this MOI, if: 31.8.1 the Directors declare a dividend or resolve to make any other Distribution to Shareholders in their capacity as such (whether or not Shareholders are offered Shares in terms of a capitalisation issue in lieu of such dividend or Distribution); and 31.8.2 any Shareholder (“the Applicable Shareholder”) would, but for this clause 31.8 be entitled to an aggregate dividend or aggregate Distribution (“the Applicable Shareholder’s dividend or distribution”) of R30.00 (thirty Rand) (which amount shall, escalate on the first day of each new financial year of the Company at the rate equal to the consumer price index, or a similar index published by a competent South African authority from time to time) or less in respect of all the Certificated Shares held by the Applicable Shareholder on the record date as stated in the dividend declaration, the Directors shall have the power to direct that each Applicable Shareholder shall (unless she/he delivers a written request to the contrary to the transfer office prior to the payment date as stated in the dividend declaration) irrevocably and unconditionally forfeit the entitlement to the applicable Shareholder’s dividend or Distribution on the basis that an amount equal to the aggregate of the Applicable Shareholder’s dividend or Distribution of each Applicable Shareholder shall vest in a charity nominated from time to time by the Directors.”
76 Annexure 7 Approximate age of building 3 years 2 years 3 years 2 years Lease expiry period N/A N/A N/A N/A Freehold/ Leasehold Freehold Freehold Freehold Freehold 4 7 946 11 175 11 19 104 19 13 399 13 Rentable area (m²) (primary GLA) 35 157 1 212 177 as at metre (R/m²) Weighted per square per month (See note 9) 30 June 2013 average rental Region Gauteng Gauteng Gauteng Gauteng Physical address No 4 DaventryNo Street (Corner Daventry and Lynnwood Roads) Lynnwood Manor, Pretoria No 4 DaventryNo Street (Corner Daventry and Lynnwood Roads) Lynnwood Manor, Pretoria No 4 DaventryNo Street (Corner Daventry and Lynnwood Roads) Lynnwood Manor, Pretoria No 4 DaventryNo Street (Corner Daventry and Lynnwood Roads) Lynnwood Manor, Pretoria Registered legal description (Erf number) Sections 1 and the 2 of Sectional Title Scheme Lynnwood Bridge Offices 2, Scheme 292/2011, No. situated Portion on Erf 2 of 582 Lynnwood Manor Section the 2 of Sectional Title Scheme Lynnwood Bridge Retail Scheme 434/2011, 1, No. situated Portion on Erf 1 of 582 Lynnwood Manor Section the 1 of Sectional Title Scheme Lynnwood Bridge Retail Scheme 434/2011, 1, no situated Portion on Erf 1 of 582 Lynnwood Manor Section the 3 of Sectional Title Scheme Lynnwood Bridge Offices 2, Scheme 292/2011, no situated Portion on Erf 2 of 582 Lynnwood Manor se portfolio: ixed u Property name Lynnwood Bridge – Offices Lynnwood Bridge – Retail Lynnwood Bridge – City Lodge Hotel Lynnwood Bridge – Aurecon Building DETAILS OF THE DIRECT PROPERTY PORTFOLIO The table below sets the out details the of properties within the property portfolio: Office and m No. 1. 2. 3. 4.
77 Approximate age of building N/A N/A N/A N/A N/A 6 years 1 year Lease expiry period 99 years 99 years N/A 99 years 99 years N/A 99 years Freehold/ Leasehold Leasehold Leasehold Freehold Leasehold Leasehold Freehold Leasehold 4 4 235 5 039 6 058 14 561 14 23 139 23 397 44 200 Rentable area (m²) (primary GLA) – – – – – 21 172 1 as at metre (R/m²) Weighted per square per month (See note 9) 30 June 2013 average rental Gauteng Gauteng Gauteng Gauteng Gauteng Region Gauteng Gauteng No 4 DaventryNo Street (Corner Daventry and Lynnwood Road) Lynnwood Manor, Pretoria Corner Maxwell Drive and Allandale Road, Sunninghill Corner Maxwell Drive and Allandale Road, Sunninghill Corner Pretoria Main Road and Perth Street,(R101) Buccleuch Corner Maxwell Drive and Country Estate Drive, Waterfall Estate Physical address 570 and 531 Fehrsen and Street, 531 570 Brooklyn, Pretoria Land Parcel 20, Woodmead North Office Park, Maxwell Drive, Woodmead Portion Erf 3 of Lynnwood 582 Manor Erven 3600, and 3601 3602, Jukskei View Ext 83 Erven 3600, and 3601 3602, Jukskei View Ext 83 and 432 Erven 433, 431, Buccleuch Ext 10 Jukskei and 1764, Erven 1763 View Ext 47 Registered legal description (Erf number) RE Erf of Brooklyn 875 and Nieuw Portion Erf 2 of 179 Muckleneuk Erf Jukskei 3540, View Ext 7 6 6 6 6 6 ell Office w Property name Lynnwood Bridge Phase III Cell C Campus 5 Group Brooklyn Bridge and Lewis House Maxwell Office Park – Attacq Building Woodmead North Office Park Max Park – Golder & Associates Building No. 5. 10. 11. Office and mixed use portfolio (continued): 6. 9 7. 8.
78 Approximate age of building N/A 55 years55 Lease expiry period Newtown: 90 years from date of completion. Estimated completion date September 2014. The Majestic: 30 years from date of completion with option to renew for a further years 19 thereafter N/A Freehold/ Leasehold Leasehold Freehold 4 38 912 32 272 32 Rentable area (m²) (Offices only) (primary GLA) – 132 as at metre (R/m²) Weighted per square per month (See note 9) 30 June 2013 average rental Gauteng Region Western Cape 120 Carr120 Street, Newtown, Johannesburg Physical address 240 Main Road, Rondebosh Cape Town Erven 45, 46, 47, 48, 49, 50, 51, 50, 51, 48, 49, Erven 46, 47, 45, 564 58, 558, 54, 56, 53, 57, 52, and 568 Newtown of Township, Registration Division I.R Province Gauteng Registered legal description (Erf number) Sections 1 and 2 in Sectional in the Plan SS240/2011 No. scheme known as Great Westerford situated in Rondebosch and an undivided share in the common property 6 evelopment Property name Newtown and Majestic d Great Westerford No. 12. 13. Office and mixed use portfolio (continued):
79 1 10 (Rand) 31 531 885 531 31 23 257 382 40 799 525 31 842 530 31 63 34263 935 22 345 363 22 345 21 995 90021 99 848 309 181 695 816 695 181 169 361 259 361 169 224 372 996224 372 262 546 682 (135 689 822) (135 valuation and acquisition plus development cost Difference between 2 Name of OMIGSA OMIGSA OMIGSA OMIGSA OMIGSA OMIGSA OMIGSA OMIGSA OMIGSA OMIGSA OMIGSA OMIGSA OMIGSA independent property valuer 30-Jun-13 Effective date of valuation 30-Jun-13 30-Jun-13 30-Jun-13 30-Jun-13 30-Jun-13 30-Jun-13 30-Jun-13 30-Jun-13 30-Jun-13 30-Jun-13 30-Jun-13 30-Jun-13 3 (Rand) 67 40067 000 73 00073 000 54 600 000 510 000 000510 158 000 000158 676 000 000676 523 200523 000 184 000184 000 592 000592 000 243 000 000 286 000 000 420 000 000 244 000 000 30 June 2013 Valuation as at 3 (Rand) 2 353 070 2 353 cost as at 58 758 493 758 58 42 957 852 42 957 30 361 263 30 361 33 588 399 33 322 003322 318 125 123 527 123 125 229 393 132 229 393 126 206 474 340 614 044 340 614 136 064136 974 378 500378 222 304 430 624 30 June 2013 Development 3 (Rand) 189 600 189 9 494 216 9 494 1 893 374 1 893 2 279 716 2 279 7 450 0007 450 8 046 248 17 945 216 945 17 36 208 117 16 092 496 16 15 807 343 15 16 043 023 16 282 745 691 282 745 449 934 273 Acquisition cost acquisition 1 June 2011 31 May 200931 May 200931 May 200931 May 200931 31 May 200931 23 June 2009 Effective date of 20 October 2006 8 September 2010 8 September 2010 8 September 2010 8 September 2010 16 November 200616 7 7 7 7 7 7 Under developmentUnder Under developmentUnder developmentUnder Under developmentUnder Operational Operational Operational Operational status Operational Operational Under developmentUnder Operational Operational developmentUnder se portfolio (continued): ell Office w ixed u Cell C Maxwell Office Park – Attacq Building Newtown Development The Majestic Group 5 Group Lynnwood Bridge – Retail Lynnwood Bridge – City Lodge Hotel Lynnwood Bridge – Aurecon Building Property name Lynnwood Bridge – Offices Great Westerford Lynnwood Bridge Phase III Brooklyn Bridge and Lewis House Woodmead North Office park Max Park – Golder & Associates Building 10. 9. 12. 11. 2. 3. 4. Office and m No. 1. 13. 5. 6. 7. 8.
80 8 years 5 years 41 years41 extensive 2 years ago of buildings refurbishment 41 years41 with an Approximate age records since 1974 Reflected in Sanlam’s N/A N/A N/A N/A N/A period Lease expiry Freehold Freehold Freehold Freehold Freehold Freehold/ Leasehold 4 (m²) GLA) 10 376 10 32 196 32 15 400 15 49 104 49 52 095 52 (primary Rentable area 90 155 121 129 124 (R/m²) Weighted (See note 9) 30 June 2013 average rental per month as at per square metre Gauteng Western Cape North West Western Cape Western Cape Region No 3 DaventryNo Street Lynnwood Manor (Corner Daventry and Lynnwood Rd) Garden Route Mall, Confluence the of HighwayN2 and Knysna Road, George Corner Nelson Mandela and Govan Mbeki Drive Potchefstroom 43 Andringa Street Stellenbosch 43 Andringa Street Stellenbosch Physical address Remaining Extent of Erf Lynnwood 485 Manor and Remaining Extent Erf of 476 Lynnwood Manor Ext2 Portion (Portion 326 286)of the of Farm Kraai Bosch 195, No. George Western Cape Erf 1365 situatedErf 1365 in the Baillie of Township and Park 647m²) (2 RE the of Farm Mooi River 707 no ha) (11,7689 Eikestad: Erven 6083 4282 (9,032m²), 7365 (2,674m²), (3,127m²) Stellenbosch (7,580m²), Erf 15733 Stellenbosch. Sect 1 and Sect Sectional 2 of title scheme Andringa Walk (Scheme No. situated 17/2012), Erfon 15733 Registered legal description (Erf number) Glenfair Bouvelard Garden Route Mall Mooirivier Mall Eikestad Mall Andringa Walk Property name 2. 1. 3. 4. 5. Retail portfolio: No.
81 1 N/A (Rand) 24 years extensive 7 602 852 2 years ago 73 801 150 801 73 (97 843(97 036) 203 565 747 203 565 550 512 804 512 550 (24 823 130) (24 of buildings 166 000166 000 (171 242 652) (171 refurbishment valuation and 35 years35 with an acquisition plus Approximate age development cost Difference between 2 N/A N/A N/A period Name of OMIGSA OMIGSA OMIGSA OMIGSA OMIGSA OMIGSA OMIGSA Mills Fitchet independent Lease expiry property valuer 30-Jun-13 30-Jun-13 30-Jun-13 30-Jun-13 30-Jun-13 Effective date of valuation 30-Jun-13 30-Jun-13 30-Jun-13 Freehold Freehold Freehold/ Leasehold Freehold 3 4 (m²) (Rand) GLA) 3 616 80 115 12 84012 (primary 76 00076 000 615 000 000 615 155 000 000 155 199 400 000199 327 500327 000 930 000 000 30 June 2013 2 335 863 0002 335 1 054 000 000 Valuation as at Rentable area 3 – – 178 129 2013) (R/m²) (Rand) Weighted 26 155 119 26 155 13 932 841 932 13 83 698 002 698 83 66 823 130 (See note 9) 145 977 155 145 119 151 343 151 119 132 423 416 132 30 June 2013 Development Cost (30 June average rental per month as at per square metre 3 (Rand) (including written off) goodwill of 72 645 805 645 72 34 000 000 712 501 439 501 712 686 687 917 180 495 294 495 180 170 000 848170 subsequently 888 000 000 R169 376 192 376 R169 1 712 926 780 1 712 Western Cape Gauteng Region Western Cape Acquisition cost 19 November 200819 1 September 2011 1 September 2011 43 Andringa Street Stellenbosch FehrsenC/o and Lange Streets, Nieuw Muckleneuk, Pretoria 1 September 2011 Physical address Effective date of acquisition 1 September 2011 9 December 2008 1 September 2011 1 September 2011 36 Main Rd (Corner Wellington and Main Roads), Durbanville, Cape Town 7 Operational Operational Under developmentUnder Operational Erf 178 Nieuw Erf 178 Muckleneuk, Erf 438 MuckleneukNieuw Erven 2043, 2045, 2046, 2048 and 4803, Stellenbosch, Province Westernof Cape Registered legal description (Erf number) Operational status Operational Operational Operational Operational Erf 2011 Durbanville,Erf 2011 City Cape of Town 6 De Ville Brooklyn Mall Mill Square Mill Square Andringa Walk Brooklyn Mall Property name Property name Garden Route Mall Glenfair Boulevard Mooirivier Mall Eikestad Mall De Ville . . 8 6 6. 7 5. 7. Retail portfolio (continued): No. No. 1. 2. 3. 4. 8. Retail portfolio (continued):
82 1 and N/A N/A N/A plus age of age of between 9 months valuation buildings buildings 34 335 276 34 335 45 462 301 45 Difference cost (Rand) acquisition development Approximate Approximate 2 Name of OMIGSA OMIGSA 8 8 8 independent property valuer Lease expiry period 99 years Lease expiry period 99 years 99 years N/A 30-Jun-13 Freehold/ Leasehold Leasehold Effective date of valuation Freehold/ Leasehold Leasehold Leasehold Freehold 30-Jun-13 4 4 3 ) ) m² m² ( N/A N/A ( (Rand) 35 671 35 26 000 111 900 000 111 243 000 000 Rentable area Rentable area 30 June 2013 (primary GLA) (primary GLA) Valuation as at 3 11 46 N/A N/A 2013) N/A metre (R/m²) (R/m²) (Rand) metre per Weighted Weighted 52 789 114 789 52 per square per square (See note 9) (See note 9) month as at 177 868 750 177 per month as 30 June 2013 Development Cost (30 June average rental average rental at 30 June 2013 3 Region 24 610 775 Gauteng Gauteng Gauteng Acquisition cost (Rand) North West Region 668 949 19 Physical address 31 May 200931 Corner Allandale Road and Pretoria (Old Road) K101 Midrand K101 (Old Pretoria (Old Road) K101 Woodmead Midrand, both on sides the of HighwayN1 between Allandale Road and Buccleuch Interchange Effective date of acquisition Estate Afrique, D’ Hartbeespoort Dam Physical address May 200931 7 : Registered legal description (Erf number) Erf Jukskei 3548 View ext 79 A Portion Erf of 428, Buccleuch Ext 9 Remaining ext portion of of Farm Waterval 5 Reg Div IR Province Gauteng Operational status Erven 98, 99 and Ville 100 d’Afrique Ext 2, Nort West Registered legal description (Erf number) Operational Under developmentUnder 5 11 ortfolio: Property name Massbuild Distribution Centre Waterfall Land MB Technologies warehouse Property name Le Chateau Property name Massbuild Distribution Centre MB Technologies warehouse and p No. Vacant l 1. 1. 2. Light industrial portfolio (continued) No. 2. Light industrial portfolio: No. 1. 2.
83 1 and cost plus (Rand) between valuation (4 311 361) 311 (4 Difference acquisition development 1 558 339 693 339 1 558 2 Name of independent property valuer OMIGSA Amanda de Wet Consultants Effective date of valuation 30-Jun-13 30-Jun-13 3 (Rand) 31 00031 000 30 June 2013 2 254 0002 254 000 Valuation as at 3 – Cost 2013 (Rand) 13 281 533 281 13 as at 30 June Development 3 . 695 660695 307 Acquisition cost (Rand) 22 828 029 . s available state automatically renews for 99 years every six months, except if the lessee gives notice to renew. not 31 May 200931 Effective date of acquisition 8 June 2006 usiness E N/A Operational status N/A 5 complete buildings, weighted no averagerental information i Property name Waterfall Land Le Chateau and portfolio (continued): The difference between the valuation amounts and acquisition costs or development costs is due to the whilefact the acquisitionthat coststhe arevalues negotiated valuesattributed and theby developmenteach costs areindependent amounts property expended to date.valuer are open market values, The properties were valued by the independent at 30 June 2013 property valuers. Figures reflect 100% ownership property of assets. Rentable area is reflected as primary GLA. The Waterfall Land as part of the Vacant Land Portfolio was acquiredrespective for developments. R804As 624 the817. various land parcels are developed, a portion of the original acquisition price is In respectallocated in of to the Externalvaluers valueproperties underwithdevelopmentreferencefairthe completion actual theadjusted to date forof value at costs stillincurred. be to Attacqconservative more appliesa approach when recognising the fair value of properties under construction in its financial statements in that the total fair valuevalue gain/(loss) of the property (being on thedate difference of completion) is recognised between theover theactual period of constructioncosts incurred taking and the fair into account the percentage of gain/(loss)completion; i.e. willthe percentage equal the percentageapplied in completionrecognising of the of property. the fair value The leasehold rights all on properties at the Waterfall B This is calculated as the average occupied gross rental by primary GLA as at 30 June 2013. ThethelossNewtownfor Developmentreflected truea lossisnot given that thevaluation theindependentby property valuer was basedbulk a rather rateon per m² than completeda building. The reasonfor this is that the development is still in the early stages and leasing was at pointa not that management the or independent property valuer were comfortable with determining completion.The costs valuea incurred upon dateto the on building exceed the bulk value and accordingly the building reflects lossa valuation a at level. In the financial statements by takingthe building theis accounted total costsfor incurred to date plus the profit the on land which is determined as the difference between the bulk rate per and m² the actual cost per for m² the land acquired. On completion, this property will be sold to MB Technologies. Refer Annexure of to note 12 17 Vacant l No. 1. 2. Notes: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.
84 Annexure 8a
INDEPENDENT property VALUER’S SUMMARY VALUATION REPORT ON THE DIRECT PROPERTY PORTFOLIO – OMIGSA
“The Directors Attacq Limited The Parkdev Building 2nd Floor Brooklyn Bridge 570 Fehrsen Street Brooklyn Pretoria 0181
19 September 2013
Dear Sirs
PROPERTY VALUATION DIVISION: OLD MUTUAL INVESTMENT GROUP: SOUTH AFRICA PROPRIETARY LIMITED (OMIGSA) JSE LISTING EXERCISE 2013 – VALUATION OF PROPERTIES FOR ATTACQ LIMITED
1. INTRODUCTION This summary valuation report has been prepared in accordance with Section 13.22 for inclusion in the prospectus of Attacq Limited (Attacq) as required in terms of the general provisions of Section 13: Property Companies of the Listings Requirements of the JSE Limited (“Section 13”). Formal written Valuation Reports have been compiled for each of the properties and these reports have been issued to the nominated representatives of Attacq and are available for inspection at the registered office of Attacq. In accordance with your instruction dated 15 March 2013, we confirm that we have visited and inspected the 23 (Twenty Three) properties listed in the attached schedule (“the properties”) during February to May 2013 (Section 13.23 (a) (iii)) and have received all necessary details required to perform an independent valuation in order to provide you with our opinion of the Market Values of each of the properties as at 30th June 2013 (Section 13.23 (c)). The valuation of each of the properties has been carried out by the nominated property valuer, Property Valuation Division, Old Mutual Investment Group South Africa Proprietary Limited (OMIGSA), and the valuation process has been overseen by the OMIGSA Property Valuation Manager, Trevor King, Registered Professional Valuer (No 4718/6), and Chartered Valuation Surveyor (RICS 0097497). Employees of the property valuer having relevant valuation qualifications have inspected each of the properties and careful consideration has been given to all matters pertaining to the requirements of Section 13 for the purposes of these valuations. Each of the formal Valuation Reports submitted includes commentary on the nature of the properties, locality, tenancy, risk profile, forward rent projections, earning capability and exposure to future expenses and property risk. The formal Reports have further addressed the estimated income capability and expenditure for each property taking into account contractual income at the date of valuation, annual escalations in contractual income and also expenditure estimates based on current recorded information and considered projections as to future increases in running and operating costs. The values thus determined for each of the properties indicates our opinion of the Market Value thereof at the date of valuation.
2. BASIS OF VALUATION The basis of valuation for the properties in the subject Attacq portfolio is Market Value. Market value (Section 13.23 (d) is defined by the Royal Institution of Chartered Surveyors, The South African Institute of Valuers and the International Valuations Standards Committee as: “The estimated amount for which a property should exchange on the date of Valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing, wherein the parties had acted knowledgeably, prudently and without compulsion.”
3. VALUATION METHODOLOGY We have utilised the traditional and internationally recognised Income Capitalisation method of valuation to reach our opinion of value as outlined in this report.
85 This approach is generally considered the most applicable valuation technique for income-producing properties, where sufficient market data exists to supply the necessary inputs and parameters for this approach. In a commercial income-producing property this approach capitalizes a market related income stream into perpetuity. This is done using a capitalization rate applied to the first year’s Net Operating Income. The Net Operating Income (NOI) is gross market potential income (GPI), less a vacancy allowance, less operating expenses (but excluding debt service, income taxes, and/or depreciation charges normally applied in preparing IFRS financial statements). We have applied our opinion of market-related rentals to each unit of lettable area, as well as taking into account all applicable prevailing rentals and lease obligations. The income and expense detail of each building was loaded on to our property valuation system and an individual valuation for each individual building was generated. The capitalisation rate is determined by reference to comparable sales, appropriate surveys prepared by IPD/SAPOA, benchmarking against other comparable valuations, and after consultation with experienced and informed people in the property industry including other valuers, brokers, managers and investors. In preparing our income capitalisation valuations we have used the Australian developed Cougar System for the generation of cash flows and net present values. In our calculations we have adopted the information data contained in the projected income and expenditure which Attacq have provided to us.
4 VALUATION ASSUMPTIONS Provisions have been made for the letting up of space presently vacant within a sensible and reasonable time frame at the then estimated market rental and for the adjustment of passing rentals, upwards or downwards, in cases where such rentals differ from our estimates of current market rentals for comparable space. Our estimates of current market rentals are based on our research of the latest available Market letting transactions in the areas where the properties are situated. Certain industry standard assumptions and vacancy allowances based on experience and market evidence have been made to create void periods for income lost due to the letting or re-letting of space. Where such information is either unavailable or of limited application we have relied on our general knowledge of the market and have also, where appropriate, had regard to rental statistics published by recognised organisations.
5. INSPECTIONS, AREAS AND DIMENSIONS All the properties were inspected during the months of February to May 2013. No measured surveys have been carried out by us and we have relied on the floor and/or lettable areas provided to us by the nominated representatives of Attacq. We have assumed that these areas are correct unless otherwise stated in the valuation report for a specific property.
6. SOURCES OF INFORMATION a. Source of information and verification Information on the properties regarding rental income, recoveries, turnovers and other income detail has been provided to us by the current owners and their managing agents. Each valuation is based on the information which has been supplied to us or which we have obtained in response to our enquiries. We have relied on this information provided as being correct and complete and there being no undisclosed matters which would affect each valuation. We have further compared certain expenditures given to us to market norms of similar properties and the historic expenditure levels of the properties themselves. Historical contractual expenditures and municipal services are compared to the past performance of the properties in order to assess potential expenditure going forward. b. Full disclosure These valuations have been prepared on the basis that full disclosures of all information and factors that may affect the valuations have been made to us. Furthermore, we have to the best of our ability researched the market for comparable rental information. c. Leases Sub section 13.23(ix) provides that the summary of the valuation report to be included in the prospectus or circular must include a “high level summary of the actual tenant’s leases or sub leases”. We have not had sight of lease documentation and are thus unable to provide the high level summary required but are able to state that in preparing our cash flows we have had regard to the tenancy schedules provided and also to our assessment of current market rentals and escalation rates for the various elements of accommodation. d. Expenses In estimating the applicable property expenses we have relied on the budgets which have been provided to us by Attacq for the forward 12 months commencing 1st July 2013. Thereafter we have assumed an expense growth rate of 7.5% per annum from 1 July 2014.
86 e. Lessee’s credibility In arriving at our valuations, cognisance has been taken of the lessee’s security and rating. In some cases this has influenced the capitalisation rate by way of a risk consideration. f. Mortgage bonds, loans, etc. The properties have been valued as if wholly-owned with no account being taken of any outstanding monies due in respect of mortgage bonds, loans and other charges. No deductions have been made in our valuations for costs of acquisition. The properties have been valued in a completed state and no deductions have been made for retention or any other set-off or deduction for any purposes which may be made at the discretion of the purchaser when purchasing the properties. g. Calculation of areas All areas quoted within the detailed valuation reports are those stated in the information furnished and verified where plans were available. To the extent that plans were not available, reliance was placed on the information submitted by the managing agents. h. Title Deeds Copies of the Title Deeds of the properties have been provided to us and we have taken account of the conditions contained therein in the preparation of our valuations. (Section 13.23 (a) (xiii)) 4 The valuation of the properties has further been based on information obtained from the local authorities, from a physical inspection as well as detailed research on property sales and lettings within the areas in which the properties are situated. Where appropriate, we have satisfied ourselves that the information on which we have based our valuations is accurate.
7. MATERIAL CONTRAVENTION OF STATUTORY REQUIREMENTS We are not aware of any material contravention of any statutory requirement relating to the properties.
8. PROPERTIES HELD FOR DEVELOPMENT Certain properties valued by us for this Listing exercise are held specifically by Attacq for the purposes of future development. In these circumstances for properties under construction, these properties have been valued by us at the date of valuation on the basis of the estimated calculated value of the fully completed development less the remaining capital expenditure still to be incurred at the date of valuation. The property known as the Waterfall Land Development is being held for future development. We have valued this property on the basis of an industry standard and typical phased township development which calculates the net present value of a series of expected sales income for serviced land and development costs to service the land over an estimated period of time.
9. BRIEF DESCRIPTION The improvements are all well built from quality robust traditional construction materials and finishes and are more fully described in the written Valuation Reports referred to before.
10. UNLET SPACE Assumptions have been made in our valuations as to the likely letting up tempo of vacant accommodation generally and the estimated loss of income during the letting up periods of the affected properties is reflected in the Capitalisation Valuation Methodology adopted for the Attacq Portfolio.
11. VALUATION QUALIFICATIONS Qualifications to our reported values are usually detailed as a consequence of: • leases under negotiation, but not formalized in writing; • uncertainties as to the letting or re-letting of premises considered specialized by virtue of nature and extent; • the specialized nature of a property where the income flow is dependent upon the ability of a single tenant to meet rental obligations; • potential tenant failure where the rental passing is well in excess of market estimates; • expenses required for major repairs are considered to be understated; • inadequate allowance for maintenance and repair necessary to maintain future lettability of the building; and • contingent expropriations or servitudes that may be enforced.
87 12. OPTIONS OR BENEFIT/DETRIMENT OF CONTRACTUAL ARRANGEMENTS We are not aware of any such arrangements.
13. INTRA-GROUP LEASES Having inspected all the tenant schedules we are of the opinion that there are no significant or material intra-group or related party leases contained in the subject Attacq Portfolio.
14. CURRENT STATE OF DEVELOPMENT There are certain properties in the subject portfolio which are currently being developed. Refer to Clause 8. The details of these properties in the course of development are outlined in a separate table attached as an annexure to this letter, so far as it is known and relevant at the valuation date. None of the properties in the course of development are being developed in phases over a lengthy period of time. With regard to the Waterfall Development, which is a property being held for development, we attach a separate note as an annexure to this letter which summarises the property and the expected phased development scenario, so far as it is known and relevant at the valuation date. The development costs still to be incurred to service the vacant land are also disclosed.
15. EXTERNAL PROPERTY None of the subject properties are situated outside the Republic of South Africa.
16. ALTERNATIVE USE FOR A PROPERTY We have valued the properties in accordance with their existing use which represents their market value. Thus alternative use values have not been reported for any of the properties.
17. FUTURE RENTALS Save for considered assumptions being made with regard to vacant space and the renewal of leases, we confirm that the current rental income being achieved in the Attacq property portfolio does not materially differ from the estimated future rental income. Rentals used in our Discounted Cash Flow valuations are based on the terms and conditions contracted in the leases. On expiry of lease, we have assumed that they will revert to market related rentals. The market related rentals have been determined by comparing similar buildings in comparable areas to the properties valued. Due consideration was given to the extent of the lettable areas, their location within the buildings, and tenant profile has been in the determination of the reversionary market rentals. The market rentals have also been compared with rentals listed in various published benchmarking indices. Assumptions regarding the take up of vacant space at the assumed market rental follows a similar methodology as the assumptions made at lease renewal or expiry. These assumptions are detailed in our valuation reports and cash flows
18. OTHER COMMENTS Our valuations exclude any amounts of Value-Added Tax, transfer duty, or securities transfer duty.
19. GENERAL PRINCIPLES OF VALUATIONS AND REPORTS We list below the general Caveats and principles upon which valuations and reports undertaken by OMIGSA Valuation in South Africa are normally prepared and confirm that such principles shall apply in respect of the properties forming the subject of this Attacq listing exercise, unless specifically mentioned otherwise: The Valuer These Valuation Reports have been prepared by the Valuation Division of Old Mutual Investment Group South Africa (OMIGSA). Full Disclosure This valuation has been prepared on the basis that full disclosure of all information and factors which may affect the valuation have been made to ourselves and we cannot accept any liability or responsibility whatsoever for the valuation, unless such full disclosure has been made. Standards We confirm our Valuation Report has been completed in accordance with both international and local standards, namely: The Royal Institution of Chartered Surveyors, RICS Valuation and Appraisal Standards (the Red Book as amended). International Accounting Standards (IAS). International Valuation Standards Committee (IVSC, White Book) The rules and guidelines laid down by the South African Council for the Property Valuers Profession in accordance with the Valuers Act 2000.
88 Mortgage Bonds, Loans or Other Charges Mortgage Bonds, Loans or Other Charges The property has been valued as if wholly owned with no account being taken of any outstanding monies due in respect of mortgage bonds, loans or other charges. Calculation of Areas Where areas quoted within the Valuation Report have been provided by yourselves, we have assumed that they have been arrived at using the S.A.P.O.A. standard method of measurement. Plans All plans included within the Valuation Report are supplied for the purpose of identification only and are not necessarily to scale. Marriage Value We have not reflected in our valuation any element of “marriage value” or “special purchaser value” which could possibly be realised by merger of the freehold and leasehold interests or by sale to an owner or occupier of an adjoining property. Individual Properties The values reported are for the individual properties. No allowance is made for any premium which may be applicable for an assembled portfolio of properties, nor is a discount allowed for any flooding of the market which might exist if all or a majority of the properties were offered for sale simultaneously. Independent Valuers Clause Neither the Valuer, nor Old Mutual Investment Group South Africa, has any present or contemplated interest in this or any other properties or any other interests, which would affect the statements or values contained in this valuation report. The valuation enclosed herewith was therefore undertaken on a completely independent basis. Non-Publication Neither the whole nor any part of this valuation, nor any reference thereto may be included in any published document, circular or statement, nor published in any way without our prior written approval as to the form or context in which it may appear. Third Party This Valuation Report is provided for the stated purpose and for the sole use of the Client. It is confidential to these parties and their professional advisors and consultants, and the Valuers accept no responsibility whatsoever to any other person or third party. Certificate of Compliance We have assumed that the seller will, at his own expense, provide an appropriate Certificate of Compliance issued by an accredited person certifying that the electrical installation of the premises is reasonably safe. Title Deed In the case of freehold properties, we have inspected when available, the relevant Title Deed documents. Where as a result of our inspection some points have caused us concern, we have referred specifically to them in the Report. Where the Title Deed has not been made available or where we are not instructed to inspect the Deed, we have assumed that good title can be shown and that the property is not subject to any unusual or especially onerous restrictions, encumbrances or outgoings. The property boundaries, as indicated to Old Mutual Investment Group South Africa by the instructing client or his appointed agent, or the boundaries as indicated by plans supplied by the client, are assumed to be the legal extent of the property. Any variation of these boundaries by extension or omission, and the resultant inclusion or omission of any improvements as a result of this or these variations, cannot therefore be regarded as the responsibility of Old Mutual Investment Group South Africa. Town Planning Full town planning details and title deeds have been supplied in the detailed valuation reports including conditions and restrictions and the properties have been checked against such conditions. This is to ensure that they comply with town planning regulations and title deeds. There do not appear to be any infringements of local authority regulations or deeds by any of the property. Sources of Information Unless otherwise stated, we have relied on information provided to us by the Client and their consultants for all the information given concerning details of tenure, tenancies, planning consents, planning proposals, contravention of any statutory requirements, outstanding statutory notices and building and site areas etc. Unless already available, the Client is recommended to seek confirmation in writing from the appropriate parties concerning information not supplied to us on the above matters. Improvements Unless advised to the contrary, we have assumed that all fixed and immovable improvements to the subject property will form part of the interest to be valued.
89 Plant and Machinery Our valuation takes account of those items of plant and machinery normally associated with the valuation of land and buildings, such as standard air-conditioning plant, boilers, heating, sprinklers, ventilation systems and the like. Our valuation excludes information technology and process plant, machinery and fixtures and fittings that would normally be taken to be the property of the occupier. Tax No allowance is made in our valuation for liability to taxation, which may arise on acquisition or on disposal, whether actual or notional, e.g. VAT and Capital Gains Tax. All rental and valuation calculations and figures reported are exclusive of VAT. Transactional Costs Seller’s and Purchaser’s costs (such as agent’s commission, legal fees, transfer fees etc) will differ from party to party depending on the individual and specific circumstances of the seller or purchaser. No allowance has therefore been made in our valuation to reflect any seller and purchaser’s costs of sale or realisation of the property asset. Structural Condition The property has been valued in its existing state. In the event of its ownership or use changing in such a manner that the local authority will require the upgrading of the premises to comply with fire protection and other regulations, it may be necessary to reduce the valuation by the amount covering the cost of such compliance. We have not been instructed to carry out a structural survey of the subject property. For the purpose of this Valuation Report we have not inspected those parts of the property, which are covered, unexposed or inaccessible and such parts have been assumed to be in good repair and condition. We cannot express an opinion about or advise upon the condition of uninspected parts and this report should not be taken as making any implied representation or statement about such parts. We have not arranged for any investigation to be carried out to determine whether or not any deleterious or hazardous material has been used in the construction of the property, or has since been incorporated, and we are therefore unable to report that the property is free from risk in this respect. For the purpose of this valuation we have assumed that should such investigation disclose the presence of any such material to any significant extent then appropriate removal and remediation will be carried out by the client prior to disposal of the interest. Contamination In the absence of instructions to the contrary we have assumed that no contaminative or potentially contaminative uses have ever been carried out in or on the subject property. We have not carried out any investigation into past or present uses, either on the property or any immediately neighbouring land, to establish whether there is any contamination or potential for contamination to the subject property from these uses or sites, and have therefore assumed that none exists. However, should it be established subsequently that contamination exists on the subject property or on the immediately neighbouring land, or that the property has been or is being put to a contaminative use, this might reduce the value now reported. Soil Condition We have not carried out any soil or substratum tests on the property and we have assumed that the property is suitable for the purpose for which it would be put without having to provide excessive reinforcement to any structure built thereon. Outgoings It is assumed, except where otherwise stated, that the property is subject to the normal landlord’s outgoings and that there are no onerous restrictions or unusual covenants of which we have no knowledge. In preparing our valuation we have formed our opinion of outgoings. Statutory Enquiries We have assumed for the purpose of this exercise and unless we are specifically advised to the contrary, that the subject property complies with all relevant, applicable and prevailing statute, laws, regulations and bylaws, and that its use is not unlawful.
20. VALUER’S FOR THIS JSE SECTION 13 LISTING PROJECT The following OMIGSA Registered Professional and Associated Valuers have completed the property valuations contained in the subject Attacq Property Portfolio for the purpose of this listing exercise: 1. TREVOR KING (Valuation Manager): BSc DipSurv MRICS Valuer (SA), Registered Professional Valuer No. 4718/6, registration in terms of the Property Valuers Profession Act, No. 47 0f 2000 (South Africa), Member of the Royal Institution of Chartered Surveyors (UK) Chartered Valuation Surveyor, 1st Floor, Westend Retail Mall, Jan Smuts Avenue, Pinelands 7405
90 2. MAGDELENE SMIT (Senior Valuer): Nat Dip (Property Valuation) Registered Professional Associated Valuer No. 3420/9, registration in terms of the Property Valuers Profession Act, No. 47 0f 2000 (South Africa), Member of the South African Institute of Valuers, 1st Floor, Westend Retail Mall, Jan Smuts Avenue, Pinelands, Cape Town 3. BRUCE EASTMAN (Senior Valuer): Nat Dip (Property Valuation) Registered Professional Associated Valuer No. 4582/9, registration in terms of the Property Valuers Profession Act, No. 47 0f 2000 (South Africa, Member of the South African Institute of Valuers, 1st Floor, Westend Retail Mall, Jan Smuts Avenue, Pinelands, Cape Town 4. MARC PRINS (Valuer): BSc HONOURS (Property Studies) Registered Professional Associated Valuer No. 6382/7, registration in terms of the Property Valuers Profession Act, No. 47 0f 2000 (South Africa), Member of the South African Institute of Valuers, 1st Floor, Westend Retail Mall, Jan Smuts Avenue, Pinelands, Cape Town 5. KELLY HOOK (Valuer): BSc HONOURS (Property Studies) Registered Professional Associated Valuer No. 6976/6, registration in terms of the Property Valuers Profession Act, No. 47 0f 2000 (South Africa), Member of the South African Institute of Valuers, 1st Floor, Westend Retail Mall, Jan Smuts Avenue, Pinelands, Cape Town 6. SHAWN CROUS (Valuer): Nat Dip (Real Estate) Chartered Valuation Surveyor, Registered Professional Valuer No. 3718, registration in terms of the Property Valuers Profession Act, No. 47 0f 2000 (South Africa), Member of the Royal Institution of Chartered Surveyors and the South African Institute of Valuers, 19 Alberante, Regent Road, Parklands, 7441 7. AMANDA DE WET (Valuer): B.Proc. LLB (UP) Nat Dip in Real Estate (Unisa), Registered Professional Associated Valuer No. 5542, registration in terms of the Property Valuers Profession Act, No. 47 0f 2000 (South Africa), Member of the South African Institute of Valuers 16b Maroelana Street, Hazelwood, Pretoria
21. AGGREGATE MARKET VALUE OF THE SCHEDULED PROPERTIES The estimated aggregate Market Value of the properties listed in the attached JSE Master Schedule and JSE Matrix forming part of the Attacq Portfolio for the purpose of this formal JSE Listing Exercise at: 30 June 2013 is an amount of R9,997,000,000 (Nine Billion Nine Hundred and Ninety Seven Million Rand). I confirm that to the best of my knowledge and belief there have been no material changes between the date of the valuations and the last practicable date in any circumstances relating to the Properties, which would affect the valuation thereof. (Section13.23 a (xii)) I confirm that I have no pecuniary or other related interest that would conflict with a proper valuation of the properties contained in the Attacq Property Fund, other than normal professional fees. With 30 years experience in property valuation, the undersigned is qualified to express a professional and independent opinion on the value of the subject property fund.
Yours faithfully
For Old Mutual Investment Group: South Africa TREVOR KING BSC DipSurv MRICS Valuer (SA)
Property Valuation Manager: OMIGSA
Registered Professional Valuer No 4718/6 (South Africa) Associate of the Royal Institution of Chartered Surveyors (UK) Chartered Valuation Surveyor (RICS 0097497)”
91 Tenure a [13.23 (vii)] Sectional Title Leasehold Freehold Freehold Freehold Freehold Age of building a (x)] [13.23 Less than 1 year Under Construction Years 41 approximately 8 years 45+yrs sectionOld – years58 New section – 26 years Existing Use a (v)] [13.23 Retail & Commercial Commercial & Light Industrial Under Construction. Retail & Commercial Retail Retail & Commercial Commercial/ Parking retail 2 GLA 10,655m² 44,200m² 32,453m² 53,362m² 17,205m² total GLA (15 705m and 1 500m² offices) Section 1 – 32 667m²; Section 2 parking– 335 bays Site area AreasUnit 9,735m² 13,0295ha 14,833m² 20,0575ha 2,8144ha & in9,960m² extent Section 1 – 42 293m²; Section 2 587m² – 16 Nature of Property a (iv) [13.23 General Business Commercial, Special Access, & Private Open Space General Business Business Zone 1 Special General Business, General Residential Market Value R’000 [13.123(d)] 000 R 155 000 R510 000 R615 R1 054 000 R327 500 R523 200R523 ATTACQ Effective date of valuation [13.23(d)] 30 June 2013 30 June 2013 30 June 2013 30 June 2013 30 June 2013 30 June 2013 JSE SECTION SCHEDULE 13 Date of physical Inspection [13.23(d)] May 2013 16 28 February 2013 May 2013 16 07 March 2013 February19 2013 15 May 2013 15 Address a (ii)] [13.23 43 Andringa Street, Stellenbosch Cnr Maxwell Drive Buccleuch, and R101, Midrand, Gauteng 43 Andringa Street, Stellenbosch, Western Cape Cnr Garden N2 Route Freeway and Knysna GeorgeRoad (N9), Cnr Lynnwood Road and Daventry Street, Lynnwood Manor, Pretoria 240 Main Road, Newlands Name Andringa Walk Cell C Campus Eikestad Mall Garden Route Mall Glenfair Boulevard Great Westerford Description [13.23(d)]] 2015, Portion erven of 1947, 7644, 14264; 1 Unit 2017, Sectionalof Scheme De Waal Erf 2000, & Units 147/1992 34, 30, 33, 22, 23, 26, 27, & 36 Sectional of Scheme ErfDe 2000, Waal 124/1999 Stellenbosch, Western Cape 432,Erven 433, 431, Buccleuch Ext Midrand, 10, Gauteng Erven 4282, 6083 & Stellenbosch,Erf 7365, Western Cape Portion (Portion 326 286) of Farmof Kraai Bosch, Division George of RD, Western Cape Remaining Extent Erf of 485 Lynnwood Manor Township and Lynnwood Erf 476 Manor Ext 2 Gauteng Section 1 and 2, as shown and fully more described Sectionalon Plan No in the scheme SS240/2011 known as Great Westerford in respect the of land and building buildings or situated at Rondebosch No. 1 2 3 4 5 6
92 Tenure a [13.23 (vii)] Leasehold Leasehold Leasehold Sectional Title Sectional Title Sectional Title Sectional Title Leasehold Age of building a (x)] [13.23 Under construction Under Under construction 3 years 3 years 3 years 3 years Existing Use a (v)] [13.23 constructionUnder Commercial Commercial Sectional Title Office scheme Hotel Sectional Title Office scheme Retail Under construction Commercial GLA 23,139m² 6,198m² 5,154m² 21,628m² 7,946m² 16,876m² 12,550m² 15,000m² 35,671m² Site area 5,1632ha 6,0520ha 6,0520ha in 22,597m² extent 10,150m² 13,616m² 13,227m² 5,690m² 18,0190ha Nature of Property a (iv) [13.23 Special Special (permitted use – offices) Special (permitted use – offices) Special Special Special Special Special Commercial Market Value R’000 [13.123(d)] 000R 184 400R67 R54 600 000 R 676 000 R 158 R 420 000 R 286 000 R 244 000 R 243 000 Effective date of valuation [13.23(d)] 30 June 2013 30 June 2013 30 June 2013 30 June 2013 30 June 2013 30 June 2013 30 June 2013 30 June 2013 30 June 2013 Date of physical Inspection [13.23(d)] February19 2013 May29 2013 29 May29 2013 February19 2013 February19 2013 February19 2013 February19 2013 February19 2013 09 April 2013 ohannesburg Address a (ii)] [13.23 Maxwell Drive & Country Estate Lane Maxwell Drive, Midrand, Johannesburg Maxwell Drive, Midrand, J Cnr Lynnwood and Daventry Roads, Lynnwood, Pretoria Cnr Lynnwood and Daventry Roads, Lynnwood, Pretoria Cnr Lynnwood and Daventry Roads, Lynnwood, Pretoria Cnr Lynnwood and Daventry Roads, Lynnwood, Pretoria Cnr Lynnwood and Daventry Roads, Lynnwood, Pretoria and Cnr K101 Allandale Road, Midrand, Pretoria Name 5 Group Maxwell Office Park – Golder & Associates Building Maxwell Office Park – Attacq Building Lynnwood Bridge – Aurecon Building Lynnwood Bridge – City Lodge Hotel Lynnwood Bridge – Offices Lynnwood Bridge – Retail Lynnwood Bridge Phase III Massbuild Distribution Centre kei View, Extensionkei View, 83 Description [13.23(d)]] Jukskei and 1764 Erf 1763 ExtensionView, 47 Erven 3600, & 3602 3601 Jukskei Extension View, 83 Erven 3600, & 3602 3601 Juks Section the 3 of Sectional Title Scheme Lynnwood Bridge Offices 2, Scheme Number 292/2011 Section the 1 of Sectional Title Scheme Lynnwood Bridge Retail Scheme 1, Number 434/2011 Section the 1 of Sectional Title Scheme Lynnwood Bridge Offices 2, Scheme Number 292/2011 Section the 2 of Sectional Title Scheme Lynnwood Bridge Retail Scheme 1, Number 434/2011 Ptn Erf 3 of 582, Lynnwood Manor, Gauteng Erf 3548, Jukskei View Extension Gauteng 79, No. 7 8 9 10 11 12 13 14 15
93 Tenure a [13.23 (vii)] Freehold Freehold Leasehold Leasehold Freehold Freehold Age of building a (x)] [13.23 5years Under construction Approximately 1 year Under Construction Under Construction 5 years Existing Use a (v)] [13.23 Retail Retail and Offices Commercial Commercial & Light Industrial Under Construction. Retail & Commercial Under Construction Commercial GLA 53,051m² 39,000m² Offices, 36,000m² Retail 4,471m² 26,286m² 3 616m² 25,742m² Site area in2,647m² extent & 11,7689ha 38,028m² 1,0487ha 53,407m² 3,816m² 2,5504 ha & in 991m² extent Nature of Property a (iv) [13.23 Business 1 Industrial 1 Special (offices) Commercial General Business Special (permitted uses: business buildings, shops, places refreshment,of places of instruction and one theatre.) Market Value R’000 [13.123(d)] R 930 000 R243 000 R0 R0 000R 73 900 R 111 000R 76 000R 592 Effective date of valuation [13.23(d)] 30 June 2013 30 June 2013 30 June 2013 30 June 2013 30 June 2013 30 June 2013 30 June 2013 30 June 2013 Date of physical Inspection [13.23(d)] March21 2013 20 March 2013 28 February 2013 28 May 2013 May 2013 16 February18 2013 Address a (ii)] [13.23 James140 Moroka Avenue, Potchefstroom Carr Street, Newtown, Johannesburg Maxwell Drive, Woodmead, Johannesburg Beccleuch R101, 43 Andringa Street, Stellenbosch, Western Cape Fehrsen & 531 570 Street, Brooklyn, Pretoria Name Mooirivier Mall Newtown Development Retail and Offices (Newtown Junction) Commercial/ mixed use Woodmead North MB Technologies Mill Square Brooklyn Bridge & Lewis House Description [13.23(d)]] Bailie of Township Erf 1365, Park and Remaining extent of the Farm Mooi River no.77, North-West Lot Newtown 623, Township Erf Jukskei 3540 View GautengExtension 7, A portion Erf of 428, Buccleuch Extension 9 Erf 2043; 2046; 2045; 2048 & 4803 S tellenbosch Rem Erf of Brooklyn 875, and Ptn Erf 2 of 179, Muckleneuk,Nieuw Gauteng No. 16 17 18 19 20 21
94 Tenure a [13.23 (vii)] Freehold Leasehold Age of building a (x)] [13.23 years35 N/A Existing Use a (v)] [13.23 Retail N/A GLA 13,455m² N/A
2 of of 2 Site area 1,8542ha 888,092m commercial land Industrial land and 1,112,016 bulk m Nature of Property a (iv) [13.23 General Business LandVacant Market Value R’000 [13.123(d)] 400 R 199 000R 2 254 Effective date of valuation [13.23(d)] 30 June 2013 30 June 2013 Date of physical Inspection [13.23(d)] 23 May 2013 23-Apr-13 Address a (ii)] [13.23 Cnr Wellington & Main Roads, Durbanville, Cape Town Allandale Road and Buccleach Interchange, Midrand Name De Ville Waterfall Land Description [13.23(d)]] Durbanville,Erf 2011 Cape Town Waterval Farm 5, No Registration Number: I.R, Province Gauteng of No. 22 23
95 Based on development & sale agreement in place. R94 000 000 R121 000R121 000 R491 000R491 000 R498 000R498 000 R476 000R476 000 R750 000 000 VALUE ESTIMATE ON COMPLETION AND AFTER LETTING Based on development & sale agreement in place. R94 000 000 R121 000R121 000 R491 000R491 000 R498 000R498 000 R440 000 000 R750 000 000 VALUE ESTIMATE ON COMPLETION None None None None None None Erven to 434 431 to be notarially tied. Erf 433 to be public open space with no buildings e rected there-on. ONEROUS CONDITIONS ATTACHED TO PLANNING CONSENT Yes Yes Yes Yes Yes Yes Yes PLANNING CONSENT December 2013 December 2013 October 2014 October 2014 January 2014 May 2014 December 2013 EXPECTED OCCUPATION DATE December 2013 December 2013 September 2014 September 2014 January 2014 April 2014 November 2013 EXPECTED COMPLETION DATE 22 November 2012 01 August01 2012 01 December01 2012 01 July 2012 01 01 August01 2012 01 August01 2012 01 June 2012 01 CONSTRUCTION COMENCEMENT FOR 2013 SECTIONFOR 2013 JSE 13 LISTING PROJECT ATTACQ LIMITED – PROPERTY PORTFOLIO as at 30 JUNE 2013 R104 619 125 R104 619 R21 668 469 R77 151 257 R381 761 041 R294 318 141 R207 563 276 R207 500 217 COST TO COMPLETION (as at 30 June 2013) R111 900 000R111 R76 000R76 000 R43 000 000 R200 000 000 R184 000R184 000 R244 000 000 R510 000 000R510 JSE VALUE 30 JUNE 2013 INCL BULK* SINGLE TENANT, OFFICES/ WAREHOUSE MULTI TENANT, RETAIL/OFFICES MULTI-STOREY OFFICE WITH GROUND FLOOR COFFEE SHOP AND RETAIL SINGLE TENANT MULTI-STOREY HEAD OFFICE SINGLE TENANT THREE-STOREY HEAD OFFICE TWO SEPARATE MULTI-STOREY OFFICE BLOCKS -ONE SINGLE LET AND ONE MULTI- TENANTED THREE BUILDINGS CONSISTING OF OFFICE SPACE, WAREHOUSE SPACE, AND A CUSTOMER CARE CENTRE PROPERTY DESCRIPTION ANNEXURE – TABLE CONFIRMING HIGH LEVEL DETAILS PROPERTIES OF UNDER CONSTRUCTION/IN THE COURSE DEVELOPMENT OF MB TECHNOLOGIES MILL SQUARE THE MAJESTIC NEWTOWN JUNCTION GROUP 5 WATERFALL LYNNWOOD BRIDGE PHASE III CELL C WATERFALL PROPERTIES UNDER DEVELOPMENT 7 6 5 4 3 2 1
96
R115 200 000 R115 R137 100 000R137 VALUE ESTIMATE ON COMPLETION AND AFTER LETTING
R115 200 000 R115 R137 100 000R137 VALUE ESTIMATE ON COMPLETION
Erven 3600 to 3602 are notarially tied. Erf 3600 – offices. Erf – used 3601 for access control, road and municipal purposes. Erf 3602 – private open space. Erven 3600 to 3602 are notarially tied. Erf 3600 – offices. Erf 3601 – used for access control, road and municipal purposes. Erf 3602 – private open space. ONEROUS CONDITIONS ATTACHED TO PLANNING CONSENT
Yes Yes PLANNING CONSENT
December 2013 February 2014 EXPECTED OCCUPATION DATE
November 2013 November2013 EXPECTED COMPLETION DATE
15 January15 2013 15 January15 2013 CONSTRUCTION COMENCEMENT R1 410 667 316 R1 410 R54 552 444R54 552 R62 606 272 COST TO COMPLETION (as at 30 June 2013) R1 490 900 000 R54 600 000 R67 400R67 000 JSE VALUE 30 JUNE 2013 INCL BULK*
MULTI-TENANTED OFFICE PARK PART MULTI- OF TENANTED OFFICE PARK BUT SINGLE LET PROPERTY DESCRIPTION TOTAL VALUE JSE LISTINGJUNE 2013 MAXWELL OFFICE PARK – ATTACQ BUILDING MAXWELL OFFICE PARK – GOLDER & ASSOCIATES BUILDING PROPERTIES UNDER DEVELOPMENT
9 8
97 R0* COSTS OF R 74 352 180 352 R 74 R 48 332 761 R 48 332 R 37 329 255 329 R 37 R 54 141 750 R 54 141 R 13 475 789 475 R 13 R 56 990 052 R 43 043 047 R 748 993 854 R 748 R 421 329 020 329 R 421 SERVICE LAND DEVELOPMENT TO ESTIMATED TOTAL R 62 000R 62 000 R 89 000 000 R 42 000 000 R 119 000 000R 119 R 113 000 000R 113 R 156 000 000R 156 R 233 000R 233 000 R 295 000R 295 000 R 1 145 000 000R 1 145 R 2 254 000R 2 254 000 VALUATION OF AT 30AT JUNE 2013 VACANT LAND AS 8 years 5 years 5 years 2 years 3 years 5 years 8 years 3 years 5-7 years5-7 EXPECTED TIMELINES DEVELOPMENT None Commercial Bulk 120.000 of sqm Commercial Bulk 55.000 of sqm Remaining Commercial and Retail Bulk 30.600 of sqm excluding Group 5 Commercial Bulk 65.000 of Sqm excluding MB Technologies Industrial with approved FAR 0.5: of and proclaimed not Basket Rights of to a maximum 820.000 of bulk square meter. Approved and only extension (Maxwell 83 Office Park) proclaimed. Remaining extensions yet not proclaimed which includes Mall Africa of Industrial with approved FAR 0.5: of and proclaimed Earmarked for Retail Outlet Bulk 15.000 of Square meter – approved proclaimed not RIGHTS OBTAINED TO DATE FOR 2013 SECTIONFOR 2013 JSE 13 LISTING PROJECT ATTACQ LIMITED – PROPERTY PORTFOLIO as at 30 JUNE 2013 30.8000 Hectares 29.42 Hectares29.42 21.7483 Hectares 21.7483 Hectares 10.198 excluding Group 5 Hectares 17.5076 excluding MB Technologies 280.63 Hectares 33.1183 Hectares 33.1183 108 Hectares108 was valued and includes the vacant land in respect Mall of Africa of and the phase the 2 of Maxwell Office park. 24.84 Hectares 5 Hectares REMAINING VACANT LAND AFTER COMMENCEMENT OF PROJECTS TO DATE 30.8000 Hectares 29.42 29.42 Hectares 21.7483 21.7483 Hectares 15.3162 Hectares 25.3189 Hectares 311.15 311.15 Hectares 33.1183 Hectares 109.83 109.83 Hectares 40.5969 Hectares 5 Hectares SIZE OF VACANT LAND ANNEXURE – TABLE CONFIRMING HIGH LEVEL DETAILS THE OF WATERFALL LAND PROPERTY Portion the of farm Waterfall no 131 Remaining extent Portionof 1 of farm Waterfall no 131 Jukskei View Ext 49 Jukskei View Ext 47, and 50 51 Buccleuch Ext 9 Jukskei View Ext and 63 64 Jukskei View various extensions Jukskei View Ext and 79 80 Not yetNot proclaimed PROPERTY DESCRIPTION Parcel 24: Waterfall Factory Depot * Valued as unserviced land Parcel 10A: Waterfall Commercial City Parcel Waterfall 12: Corporate City WaterfallParcel 15: Business Centre Parcel 22: Waterfall Commercial District Parcel 9: Waterfall Logistics Centre Parcel and 10b: 10 Waterfall City Parcel 8: Waterfall Distribution Centre Parcel 3: Retail Centre WATERFALL LAND
98 Annexure 8b
INDEPENDENT property VALUER’S SUMMARY VALUATION REPORT ON THE DIRECT PROPERTY PORTFOLIO – amanda de wet consultants
“19 September 2013
The Directors Attacq Limited 2nd Floor, Parkdev Building Brooklyn Bridge 570 Fehrsen Street Brooklyn, Pretoria, 0181
Dear Sirs
INDEPENDENT PROPERTY VALUERS’ REPORT OF THE PROPERTY HELD BY ATTACQ LIMITED AND ITS SUBSIDIARIES In accordance with your instruction of 7 April 2013, I confirm that we have visited and inspected the property listed in the attached schedule (“the property”) on 19 April 2013 (section 13.23(a)(iii)) and have received all necessary details required to perform a valuation in order to provide you with my opinion of the property’s market values as at 30 June 2013 (section 13.23(c)).
1. INTRODUCTION The valuation of the property has been carried out by the valuer who has carefully considered all aspects of the property. This property has a detailed valuation report which has been given to the management of Attacq. The detailed reports include commentary on the current economy, nature of the property, locality, development plan, cost for infrastructure and bulk contributions, and exposure to future expenses and property risk. All these aspects have been considered in the individual valuation reports of the property. The detailed reports have further addressed the bulk rates, sales tempo, discount rates, infrastructure and bulk contributions, potential tenancy income capability and expenditure for each property and tenant. Historic expenditure profile as well as future expenditure increases have been considered. The value thus indicates the fair market value for the property which is detailed in the detailed report and which has been summarised on a summary schedule, attached hereto, for the property. There is one property and the important aspects of the detailed valuation report including the property market value for the property has been summarised in the attached schedule.
2. BASIS OF VALUATION The valuation is based on market value. Market value means the best price, at which the sale of an interest in a property may reasonably be expected to have been completed, unconditionally for a cash consideration on the date of valuation, assuming: a willing seller and a willing buyer in a market; that, prior to the date of valuation, there had been a reasonable period (having regard to the nature of the property and the state of the market) for the proper marketing of the property, for the agreement of price and terms and for the completion of the sale; and that the state of the market, level of values and other circumstances are, on any earlier assumed date of exchange of contracts, the same as on the date of the valuation.
3. VALUE CALCULATION The calculation of the market value of this property has been based on Comparable Sales. This is the fundamental basis on which Development Land will be valued. (section 13.23 (d)). The discounted cash flow value has, also been calculated for each property as a check to ensure that the value calculated is consistent with market norms and expectations.
4. SPARE LAND The property has been valued on a comparative basis compared to similar property of a like nature in the area (when obtaining a value for bulk rates). Value has been attributed to this capability; however, some very minor adjustments have been made to the open market value to provide for this value (Section 13.26).
99 The valuer has taken cognisance of sections 13.26 (a) to (e) where (a) whether or not planning permission has been applied for, whether such application has been granted or refused and the date of such grant or refusal; (b) the nature, and a brief description, of the proposed development; (c) an indication of when it is reasonable to expect development to commence; (d) the expected development duration; and (e) the estimated total costs of the development, including, without limitation, the cost of financial carrying charges, letting commissions and other ancillary costs.
5. BRIEF DESCRIPTION The property is vacant land within a residential estate, situated in Hartbeestpoort area. The Remaining Extent of Portion 85 of the Farm Welgegund No 491 Registration Division: J.Q Province of North West Extent: 5.8560 hectares (58.560 square meters) Held by Deed of Transfer T107378/2006 The property has an approved general plan and will be described as Ville d’ Afrique Ext 2. • Erf 98 Ville d’ Afrique Ext 2 has an extent of 1.0123 hectares • Erf 99 Ville d’ Afrique Ext 2 has an extent of 0.5242 hectares • Erf 100 Ville d’ Afrique Ext 2 has an extent of 5.1172 hectares
6. VALUATION QUALIFICATIONS Qualifications are usually detailed as a consequence of: leases under negotiation that have not yet been formalised; leases of a large nature where the premises are difficult to re-let; specialised property; large exposure to a single tenant; potential tenant failure due to over-rent; expenses required for major repairs; maintenance or other exposure to maintain the lettability of the building; contingent expropriations or servitudes that may be enforced; poor lease recordals whereby the lease may be disputed or rendered invalid. I have, to the best of my knowledge, considered all of these aspects in the valuation of all the property. There are no property that are prejudiced in value by the influence of the above factors. The valuer is however not responsible for the competent daily management of these property that will ensure that this status is maintained, or for the change of any laws, services by local authority or economic circumstances that may adversely impact on the integrity of the buildings or the tenant profile.
7. OPTIONS OR BENEFIT/DETRIMENT OF CONTRACTUAL ARRANGEMENTS To my knowledge there are no contractual arrangements on the property other than the leases as detailed in the report that have a major benefit or are detrimental to the fundamental value base of the property (section 13.23(g)). To the best of my knowledge, there are no options in favour of any parties for any purchase of any of the property (section 13.23(h)).
8. INTRA-GROUP OR RELATED PARTY LEASES To the best of my knowledge, I have no knowledge of intra-group or related party leases.
9. CURRENT STATE OF DEVELOPMENT The property is serviced and zoned, but currently not being developed.
10. EXTERNAL PROPERTY The property is not situated outside the Republic of South Africa.
11. OTHER GENERAL MATTERS AND VALUATION SUMMARY A full valuation report is available on a property by property basis detailing development plan, tenancy, town planning, valuer’s commentary, expenditure and other details. This has been given to the directors of Attacq.
100 12. ALTERNATIVE USE FOR A PROPERTY The property has been valued in accordance with their existing use which represents their market value. No alternative use for the property has been considered in determining their value.
13. OTHER COMMENTS Our valuation excludes any amounts of Value-added Tax, transfer duty, or securities transfer duty.
14. CAVEATS Source of information and verification Information on the property regarding development plan, ROD and zoning approvals, cost for infrastructure and bulk contributions, potential rental income, recoveries, turnovers and other income and expense detail has been provided to me by the current owners and their agents. The cost for infrastructure and bulk contributions were provided by the project’s cost consultant. Full disclosure This valuation has been prepared on the basis that full disclosures of all information and factors that may affect the valuation have been made to myself. I have to the best of my ability researched the market, as well as taken the steps detailed in paragraphs below. Leases Our valuation has not been based on the review of actual tenants’ leases due to the fact that the property is in the process of being developed and it is therefore not possible to provide a high level summary of actual tenant’s leases or subleases. Lessee’s credibility The lessees credibility were not taken into account for purposes of this valuation Mortgage bonds, loans, etc. The property have been valued as if wholly-owned with no account being taken of any outstanding monies due in respect of mortgage bonds, loans and other charges. No deductions have been made in our valuation for costs of acquisition. The valuation is detailed in a completed state and no deductions have been made for retention or any other set-off or deduction for any purposes which may be made at the discretion of the purchaser when purchasing the property. Calculation of areas All areas quoted within the detailed valuation reports are those stated in the information furnished and verified where plans were available. To the extent that plans were not available, reliance was placed on the information submitted by the client. Structural condition The property have been valued in their existing state. I have not carried out any structural surveys, nor inspected those areas that are unexposed or inaccessible, neither have I arranged for the testing of any electrical or other services. Contamination The valuation assumes that a formal environmental assessment is not required and further that none of the property are environmentally impaired or contaminated, unless otherwise stated in our report. Town planning Full town planning details and title deeds have been supplied in the detailed valuation reports including conditions and restrictions and the property have been checked against such conditions. This is to ensure that they comply with town planning regulations and title deeds. There do not appear to be any infringements of local authority regulations or deeds by any of the property. The valuation has further assumed that the improvements have been erected in accordance with the relevant Building and Town Planning Regulations and on inspection it would appear that the improvements are in accordance with the relevant town planning regulations for this property. There is no contravention of any statutory regulations or town planning local authority regulation or contravention of title deed relating to any of the property which infringement could decrease the value of the property as stated.
15. MARKET VALUE I am of the opinion that the aggregate market value of the property as at 30 June 2013 is R31 000 000 (thirty one million Rand) (excluding VAT). A summary of the individual valuations and details of the property is attached.
101 To the best of our knowledge and belief there have been no material changes in circumstances between the date of the valuation, being 30 June 2013, and the date of the summary valuation report which would affect the valuation. I have more than 10 years’ experience in the valuation of all nature of property and I am qualified to express an opinion on the fair market value of the property. I trust that I have carried out all instructions to your satisfaction and thank you for the opportunity of undertaking this valuation on your behalf.
Yours faithfully, for Amanda de Wet Consultant and Investors CC 16b Maroelana Street, Hazelwood, Pretoria PO Box 2895, Brooklyn Square, 0075 Tel: (0027) 83 412 6208
Amanda de Wet A DE WET BProc LLB (UP) Nat Dip in Real Estate (Unisa) Registered as a Professional Associated Valuer (No. 5542) with the SA Council for the Property Valuers Profession in terms of section 19 of the Property Valuers Profession Act, No. 47 of 2000. Member of the South African Institute of Valuers.”
102 Planning permission obtained (Y/N) and date of permission obtained/ refused Y Planning permission applied for (Y/N) Y state current 2013 in2013 30 June (R) as at Valuation R31 000 000 Income projection (R) N/A Estimated cost of carrying out development N/A Expected development duration 3 years Nature of proposed development Hotel, retail and high density residential Zoning, town planning and statutory contravention (if any) N/A
2 SCHEDULE PROPERTY OF 2 000 m Rentable area (GLA) (m²) for retail, site Coverage of .06 and FSR of 30% N/A Tenure of leasehold Freehold Freehold/ Leasehold 19 April19 2013 Valuer’s inspection date Ville d’ Afrique Ext 2; Mixed use development Property description and use The Remaining Extent of Portion 85 of the Farm Welgegund No 491 Registered legal description (Erf number) Estate d’ Afrique Physical address Le Chateau Property name 1 No Properties held for development
103 Annexure 8c
INDEPENDENT PROPERTY VALUER’S SUMMARY VALUATION REPORT ON THE DIRECT PROPERTY PORTFOLIO – mills fitchet
“19 September 2013
The Directors Attacq Limited The Parkdev Building 2nd Floor Brooklyn Bridge 570 Fehrsen Street Brooklyn 0181
Dear Sirs
INDEPENDENT PROPERTY VALUERS’ REPORT OF BROOKLYN MALL HELD BY ATTACQ LIMITED AND ITS SUBSIDIARIES In accordance with your instruction of 15 March 2013, I confirm that we have visited and inspected the property listed in the attached schedule (“the property”) during April 2013 and have received all necessary details required to perform a valuation in order to provide you with my opinion of the property’s market value as at 30 June 2013.
1. INTRODUCTION The valuation of the property has been carried out by the valuer who has carefully considered all aspects of the property. The property has a detailed valuation report which has been given to the management of Attacq. The detailed report includes commentary on the current economy, nature of the property, locality, tenancy, risk profile, forward rent and earning capability and exposure to future expenses and property risk. All these aspects have been considered in the individual valuation report of the property. The detailed report has further addressed the tenancy income capability and expenditure for the property and tenant. Historic expenditure profile as well as future expenditure increases have been considered. The value thus indicates the fair market value for the property which is detailed in the detailed report and which has been summarised on a summary schedule, attached hereto, for the property. There is one property and the important aspects of the detailed valuation report including the property market value for the property has been summarised in the attached schedule.
2. BASIS OF VALUATION The valuation is based on market value. Market value means the best price, at which the sale of an interest in a property may reasonably be expected to have been completed, unconditionally for a cash consideration on the date of valuation, assuming: 2.1 a willing seller and a willing buyer in a market; 2.2 that, prior to the date of valuation, there had been a reasonable period (having regard to the nature of the property and the state of the market) for the proper marketing of the property, for the agreement of price and terms and for the completion of the sale; and 2.3 that the state of the market, level of values and other circumstances are, on any earlier assumed date of exchange of contracts, the same as on the date of the valuation.
3. VALUE CALCULATION The calculation of the market value of the property has been valued using the Discounted Cash Flow (DCF) approach, which values the contracted income and then reverts to market related rentals. The reversion to market, in all cases has been the next day after the expiry of the last lease, all of which are discounted at the appropriate discount rate. Properties traded in the current market reflect similar yield rate relationship between revenue and capital value. This rate is an accurate determinant of the capitalisation rate. The considerations for the DCF valuation are as follows: 3.1 calculating the forward cash flow of all contractual and other income from the property; 3.2 calculating the forward contractual and other expenditure as well as provisions for various expenses in order to provide for void or future capital expenditure to which the property may be exposed; 3.3 the current area vacancy as a percentage of the property is approximately 100% let. In order to apply a conservative approach, I have deducted approximately 0.5% of the net income as a provision for rental that may not be collected as a consequence of vacancy, tenant failure or tenant refitting during the course of the coming year. The current vacancy is market related. The void provision used in the valuation is therefore adequate; 3.4 there is no loss of rental due to renovations or refurbishments currently being carried out on the buildings. There is, however, ongoing external maintenance work and some tenant installation fitting that is currently in progress. There is no loss of rental as a result of these activities;
104 3.5 generally the rentals are market related. This has been determined by examining the contractual rentals against turnover and comparing the rentals against market related rentals in other shopping centres. The rentals are generally not over-rented, and can be re-rented at the same or higher rental rate should such property become vacant. There is therefore minimal potential for rental flow reversion. This is provided that the economy remains in a slow recovery pattern as currently being experienced as that there are no major economic fluctuations which may upset the economy; 3.6 discounting the net contractual income derived from the property for a period of one year in advance at a market-related rate, calculated from 1 July 2013; 3.7 the valuation has considered published market statistics regarding rental rates and expenditure for similar types of property, to determine if the property is over rented or has excessive expenditure; and 3.8 various provisions for capital contingencies were deducted from the capitalised value.
4. SPARE LAND The property has no spare land.
5. BRIEF DESCRIPTION 5.1 Total GLA: 80 115 sqm. 5.2 Location: The property essentially occupies an entire city block bounded by Middel, Fehrsen, Lange and Veale Streets in New Muckleneuk, Pretoria. The development is situated on a prominent corner with good access from both Middel Street and Fehrsen Street. Middel Street is a busy and well-known road in the area, which leads to the N4, N1, Hatfield and Brooklyn. 5.3 Suburb: It is an expensive well-established prime office node that attracts the financial sector including Investec, the Land Bank and SARS. It is constantly expanding and contains a number of well known and prime office developments. These include Brooklyn Bridge and The Point. In summary it is a quality growth location. 5.4 Grade: A+ grade 5.5 Exterior description: The improvements comprise the Design Centre, Brooklyn Mall and Brooklyn Office Tower, which are adjacent to each other. The shopping centres are both A+ grade and were integrated and connected in 2011 and managed as one. The Design Centre was constructed in two phases. The first phase is about 24 years old and the second around 15 years old. The centre has recently been extensively refurbished. Brooklyn Mall is about 24 years old and was refurbished in 2008. It has recently gone through a further refurbishment and extension process. Last year it was extended by approximately 7 000 square metres that has been let to high fashion retailers; a new slab was cast over the back of the mall providing 271 parking bays; the old management offices were converted into retail; and an extensive open area was created in the Design Centre to cater for The Food Lovers Market. Numerous other upgrades have also been carried out or are in the process of being carried out. They include an upgrade to the mall lighting and changing the letting configuration by enlarging certain stores. The overall affect has been significant with a growth in turnover above inflation. The Brooklyn Office Tower is a four storey B grade office building constructed with a reinforced concrete frame, with part plastered and painted and part faced brick infill panels beneath various types of roof. 5.6 Parkades: Brooklyn Mall has three separate three-storey parkades and the Design Centre has one four-storey parkade. The shopping mall operates on several levels with on grade parking. Brooklyn Office Tower also has basement parking for 51 cars. There are a total of 4 289 bays. 5.7 Interior description: The internal finishes have been completed to a high standard, with a general high quality feel largely created by extensive marble flooring. The Design Centre focus is high-end restaurants on the ground floor level and décor on the upper level. Brooklyn Mall on the other hand has the normal range found in any regional shopping centre. It has also been able to attract a number of tenants that are not found in other retail developments. The office tower is B grade. 5.8 Age of improvements: The Design Centre was constructed around 1989 and Brooklyn Mall constructed around 1988. There was a further major extension in 1998 and in 2012. The centres were integrated in 2011. The development has been well-maintained and extensively renovated over time. It currently has an A grade appearance. 5.9 Current and future rental: The contractual rentals are largely at market with no significant upward or downward adjustment having been made to the projected lease rentals. 5.10 High level lease summary: In excess of 75% of the leases comprise national tenants or national franchises. In summary the lease profile is blue chip with most of the key national retailers being present. There is a waiting list of tenants who would like to take space in the centre and a low historic turnover of tenants. The key anchor tenants are set out in the table below: Sqm Checkers 2 995 Dion/Game 4 048 Woolworths Food 1 103 Woolworths Textiles 3 489 Edgars 4 512 Ster Kinekor 3 950 Truworths 2 263 Dischem 1 865
105 The property appears to have been well-constructed, have good architectural merit, aesthetic appeal, sufficient parking facilities and is virtually fully tenanted. The leases tend to be of a general contractual rental nature with provision for the recovery of services consumed by the lessees and turnover rental from various retail outlets. Escalations are market-related.
6. VALUATION QUALIFICATIONS Qualifications are usually detailed as a consequence of: leases under negotiation that have not yet been formalised; leases of a large nature where the premises are difficult to re-let; specialised properties; large exposure to a single tenant; potential tenant failure due to over-rent; expenses required for major repairs; maintenance or other exposure to maintain the lettability of the building; contingent expropriations or servitudes that may be enforced; poor lease recordals whereby the lease may be disputed or rendered invalid. I have, to the best of my knowledge, considered all of these aspects in the valuation of the property. It is not prejudiced in value by the influence of the above factors. The valuer is however not responsible for the competent daily management of the property that will ensure that this status is maintained, or for the change of any laws, services by local authority or economic circumstances that may adversely impact on the integrity of the buildings or the tenant profile.
7. OPTIONS OR BENEFIT/DETRIMENT OF CONTRACTUAL ARRANGEMENTS To my knowledge there are no contractual arrangements on the property other than the leases as detailed in the report that have a major benefit or are detrimental to the fundamental value base of the property. To the best of my knowledge, there are no options in favour of any parties for any purchase of the property.
8. INTRA-GROUP OR RELATED PARTY LEASES It is noted that there are no intra-group or related party leases.
9. CURRENT STATE OF DEVELOPMENT The property is fully developed.
10. EXTERNAL PROPERTY The property is situated inside the Republic of South Africa.
11. OTHER GENERAL MATTERS AND VALUATION SUMMARY A full valuation report is available detailing tenancy, town planning, valuer’s commentary, expenditure and other details. This has been given to the directors of Attacq.
12. ALTERNATIVE USE FOR A PROPERTY The property has been valued in accordance with its existing use which represents its market value. No alternative use has been considered in determining its value.
13. OTHER COMMENTS Our valuation excludes any amounts of Value-added Tax, transfer duty, or securities transfer duty.
14. CAVEATS 14.1 Source of information and verification Information on the property regarding rental income, recoveries, turnovers and other income detail has been provided to me by the current owners and their managing agents. I have received copies of the leases of the major tenants with areas greater than 1 500 square metres. The leases have been read to check against management detail, in order to ensure that management has correctly captured tenant information as per contractual agreement. This has been done to test management information against the underlying agreements. I have further compared certain expenditures given to me, to the market norms of similar properties. This has also been compared to historic expenditure levels of the subject property. Historical contractual expenditures and municipal utility services were compared to the past performance of the property in order to assess potential expenditure going forward. The municipal value on the property is below market. At the current transaction value there is potential for the municipal value to increase by a considerable amount, should the municipality revalue the property, in which event the rates could increase more than two times its current amount. We have been advised by Rates Watch that the valuation roll is unlikely to be reviewed within the current five-year life of the roll. Further, it is anticipated by the property management that any potential increase in rates will be absorbed by the tenants. 14.2 Full disclosure This valuation has been prepared on the basis that full disclosures of all information and factors that may affect the valuation have been made to myself.
106 I have to the best of my ability researched the market as well as taken the steps detailed in paragraph 14.3 below.
14.3 Leases Our valuation has been based on a review of the major tenants’ leases (which includes material terms such as repairing obligations, escalations, break options) and other pertinent details supplied to us by the managing agents and by Attacq. All recovery details in respect of the existing leases e.g. utility cost and other recoveries as provided for in the leases have been disclosed by way of a summary schedule supplied to us. Option terms and other lease information have been supplied to us by the owners and managing agents and we are familiar with such documents. 14.4 Lessee’s credibility In arriving at our valuation, cognisance has been taken of the lessees’ security and rating. 14.5 Mortgage bonds, loans, etc. The property has been valued as if wholly-owned with no account being taken of any outstanding monies due in respect of mortgage bonds, loans and other charges. No deductions have been made in our valuation for costs of acquisition. The valuation is detailed in a completed state and no deductions have been made for retention or any other set-off or deduction for any purposes which may be made at the discretion of the purchaser when purchasing the property. 14.6 Calculation of areas All areas quoted within the detailed valuation report are those stated in the information furnished by the managing agents. We understand that the lettable areas are independently measured. The reported square meterage is therefore considered as correct as possible without a full re-measurement exercise being undertaken. 14.7 Structural condition The property has been valued in its existing state. I have not carried out any structural surveys, nor inspected those areas that are unexposed or inaccessible, neither have I arranged for the testing of any electrical or other services. 14.8 Contamination The valuation assumes that a formal environmental assessment is not required and further that the property is not environmentally impaired or contaminated. 14.9 Town planning Town planning details and title deeds have been supplied in the detailed valuation report including conditions and restrictions and the property has been checked against such conditions. This is to ensure that it complies with town planning regulations and title deeds. There do not appear to be any infringements of local authority regulations or deeds by any of the property. The valuation has further assumed that the improvements have been erected in accordance with the relevant Building and Town Planning Regulations and on inspection it would appear that the improvements are in accordance with the relevant town planning regulations for the property.
15. MARKET VALUE I am of the opinion that the aggregate market value of the property as at 30 June 2013 is R2 395 863 000 less R60 000 000 capex, giving an adjusted value of R2 335 863 000 (two billion, three hundred and thirty-five million, eight hundred and sixty-three thousand Rand), (excluding VAT). A summary of the valuation and details of the property is attached. To the best of our knowledge and belief there have been no material changes in circumstances between the date of the valuation (30 June 2013) and the date of the valuation report which would affect the valuation. I have more than 30 years experience in the valuation of all nature of property and I am qualified to express an opinion on the fair market value of the property. I trust that I have carried out all instructions to your satisfaction and thank you for the opportunity of undertaking this valuation on your behalf.
Yours faithfully, for Mills Fitchet KZN Tom Bate MSc, BSc Land Econ (UK), MRICS, MIV (SA) PROFESSIONAL VALUER Registered without restriction in terms of section 19 of the Property Valuers Profession Act No. 47 of 2000. Registered Professional Valuer (No. 2276/1)”
107 Valuation (R) as at 30 June 2013 R2 863 000 335 Income projection (R) for the period 1 July 2013 to 30 June 2014 R157 915 220 915 R157 Assumed perpetual void vacancy 0.5% Zoning, town planning and statutory contravention (if any) None Building grade A Grade retail and B grade office block Approximate age of building 24 and years 15 Rentable area (GLA) (m²) 80 115 sqm 80 115 SCHEDULE PROPERTIES OF Tenure of Tenure leasehold Full title Freehold/ Leasehold Freehold Valuer’s inspection date 16/4/13 Property description and use Shopping centre and office block Registered legal description (Erf number) Erf and 450 Rem of Erf 415, New Muckleneuk Physical address Corner Veale and Fehrsen Streets Property name Brooklyn Mall No. 1
108 Annexure 9
SHARE CAPITAL
1. AUTHORISATIONS 1.1 The special resolution required to change the name of the company from ‘Atterbury Investment Holdings Limited’ to ‘Attacq Limited’ has been duly passed by the requisite majority of shareholders. 1.2 The special resolution required for the adoption of a new memorandum of incorporation has been duly passed by the requisite majority of shareholders. 1.3 The special resolution required for the board of directors of the company to authorise the company to provide direct or indirect financial assistance to certain restricted categories of persons, on such terms as may be authorised by the board in accordance with section 45 of the Act and subject to the requirements of the Act and the MOI, has been duly passed by the requisite majority of shareholders. 1.4 The special resolution required for the board of directors of the company to authorise the company to provide financial assistance for the subscription of shares to certain restricted categories of persons, in terms of section 44 of the Act and subject to the requirements of the Act and the MOI, has been duly passed by the requisite majority of shareholders. 1.5 The special resolution required by section 41 and 42 of the Act, authorising the board of directors of the company to implement an employee incentive scheme, in order to incentivise executive directors and senior and executive employees, prescribed officers and other employees of the company, has been duly passed by the requisite majority of shareholders. 1.6 The special resolution authorising the board of directors of the company to issue 60 000 shares and grant 1 200 000 options to Melt Hamman has been duly passed by the requisite majority of shareholders. 1.7 The special resolution authorising the board of directors of the company to grant 1 000 000 options to Nicolle Weir has been duly passed by the requisite majority of shareholders. 1.8 The special resolution required for the board of directors of the company to repurchase the company’s shares in terms of a general authority limited to 15% of the shares in issue at the relevant time that such repurchase of the company’s shares is implemented, subject to the MOI, the Act and the Listings Requirements, has been duly passed by the requisite majority of shareholders. This authority remains in force until the next annual general meeting. 1.9 The special resolution required for the authorised but unissued shares limited to 20% of the issued share capital as at 27 August 2013, being the date of this resolution, to be under the control of the directors has been duly passed by the requisite majority of shareholders subject to the provisions of section 38 of the Act and the Listings Requirements. 1.10 The special resolution required for the fees to be payable by the company to the non-executive directors for their services as directors (in terms of section 66 of the Act) during the 2 year period ending 27 August 2015 has been duly passed by the requisite majority of shareholders. 1.11 The ordinary resolution required for the board of directors of the company to issue the company’s shares in terms of a general authority to issue shares limited to 15% of the issued share capital as at 27 August 2013, being the date of this resolution, subject to the MOI, the Act and the Listings Requirements, has been duly passed by the requisite majority of shareholders. This authority remains in force until the next annual general meeting. 1.12 The special resolution required for the proposed transaction to be concluded between Attacq, Attvest and Razorbill to re‑implement the existing commercial agreement, further details of which are set out in note 5 “Legal and regulatory matters” in Annexure 20 under the heading “Attvest transaction”, has been duly passed by the requisite majority of shareholders.
2. RIGHTS ATTACHING TO SHARES 2.1 Extracts of the company’s MOI relating to rights attaching to shares are set out in Annexure 6. 2.2 At any shareholders’ meeting a resolution put to the vote shall be decided on a poll. On a poll every person entitled to vote who is present at the meeting shall have the number of votes determined in accordance with the voting rights associated with the securities in question. 2.3 The chairperson of the shareholders’ meeting may at any time during the shareholders’ meeting provide that any resolution, including, but not limited to, resolutions regarding administrative matters or the order of proceedings, may proceed to be decided by way of a show of hands. If voting is by a show of hands, any person who is present at the shareholders’ meeting (whether as a shareholder or as a proxy for a shareholder), and entitled to exercise voting rights, has one vote, irrespective of the number of voting rights that person would otherwise be entitled to exercise. 2.4 Notwithstanding the above provision, a resolution which the chairperson of the shareholders’ meeting has provided will proceed to be decided by way of a show of hands, shall nevertheless be decided on a poll if such poll is demanded by:
109 2.4.1 not less than 5 persons having the right to vote on that matter; or 2.4.2 a person(s) entitled to exercise not less than 10% of the total voting rights entitled to vote on that matter. 2.5 Dividends must be paid to the shareholders according to their respective rights and interest in proportion to the number of shares held by them. If the company is wound-up the liquidator may distribute among the shareholders in specie the whole or any part of the assets of the company. All the authorised and issued shares are of the same class and rank pari passu in every respect and accordingly, no shares have any special right to dividends, profits or capital or any other right, including redemption rights and rights on liquidation or distribution of capital assets. 2.6 Any variation in rights attaching to shares will require the consent of 75% of shareholders in a general meeting in accordance with the company’s MOI. 2.7 Only such members that are registered in the company’s register on the day when a distribution is declared or on such other day as may be determined by the board as the last date for registration for the distribution, will be entitled to receive the distribution so declared. 2.8 For so long as Lisinfo is a holder and holds at least 10% of the issued shares in the capital of the company, it shall be entitled, but not obliged, to nominate (in writing) for election to the board in accordance with the provisions of the MOI one director and one alternate director. 2.9 Any shareholder shall have the right to nominate a director(s) and/or alternate director(s) for election to the board.
3. OPTIONS AND PREFERENTIAL RIGHTS IN RESPECT OF SHARES 3.1 Save for the options granted to Morné Wilken, Melt Hamman, Nicolle Weir and Helena Austen disclosed in Annexure 3 and Annexure 5, there are no acquisition rights and/or obligations over authorised but unissued share capital or an undertaking to increase the capital nor are there any contracts or arrangements, either actual or proposed, whereby any option or preferential right of any kind has been or will be given to any person to subscribe for any shares in the company. 3.2 There are no preferential conversion and/or exchange rights in respect of any of the shares.
4. ALTERATIONS TO AUTHORISED SHARE CAPITAL 4.1 The company was incorporated as a private company on 17 January 1997 with an authorised share capital of 1 000 ordinary shares of R1 each. 4.2 On 13 February 1997, the authorised share capital of 1 000 ordinary shares was converted into 500 A shares and 500 B shares. 4.3 On 1 March 2000, the A shares and B shares were converted into ordinary shares of R1 each and on the same date the authorised share capital of the company was increased to 10 000 ordinary shares of R1 each. 4.4 On 26 November 2002, a share split was undertaken and the authorised share capital of the company was converted from 10 000 ordinary shares of R1 each into 1 000 000 ordinary shares of R0.01 each. 4.5 On 30 June 2003, the authorised share capital of the company was increased from R10 000 consisting of 1 000 000 ordinary shares of R0.01 each to R50 000 consisting of 5 000 000 ordinary shares of R0.01 each. On the same date a 1 for 100 share split was implemented converting the authorised share capital from 5 000 000 ordinary shares of R0.01 each into 500 000 000 shares of R0.0001 each. 4.6 On 16 July 2008, the authorised share capital of the company was increased to R100 000 consisting of 1 000 000 000 ordinary shares of R0.0001 each. 4.7 On 27 August 2013, the authorised share capital of the company being 1 000 000 000 ordinary shares of R0.0001 each were converted into 1 000 000 000 ordinary shares of no par value. 4.8 On 27 August 2013, the authorised share capital of the company was increased to 2 000 000 000 ordinary shares of no par value. 4.9 There have been no sub-divisions or consolidations of shares during the preceding three years. 4.10 Other than as provided in this paragraph, there have been no other alterations to the authorised share capital of the company in the three years preceding the last practical date.
110 5. ISSUES AND REPURCHASES OF SHARES 5.1 Other than as set out in the table below there have been no other issues, repurchases or offers of securities of the company in the three years preceding the last practical date: Number Price per Date Nature Counterparty of shares share Reason
2010/07/31 Repurchase Mergon Foundation NPC 634 839 R7.43 Repurchase of shares in terms of a general authority approved by shareholders 2010/07/31 Repurchase BNF Investments 400 050 R7.43 Repurchase of shares in Proprietary Limited terms of a general authority approved by shareholders 2010/07/31 Repurchase Mertech Investments 140 021 R7.43 Repurchase of shares in Proprietary Limited terms of a general authority approved by shareholders 2010/07/31 Repurchase Mertech Services 42 627 R7.43 Repurchase of shares in Proprietary Limited terms of a general authority approved by shareholders 2010/07/31 Repurchase Elements Shareholder 952 380 R5.25 Repurchase of shares in Trust terms of a general authority approved by shareholders 2010/07/31 Repurchase Investment Solutions 400 000 R5.60 Repurchase of shares in Trustee Company Limited terms of a general authority approved by shareholders 2010/07/31 Repurchase Prosperito Management 344 818 R5.85 Repurchase of shares in Trust terms of a general authority approved by shareholders 2010/07/31 Repurchase Elements Shareholder 1 249 833 R7.37 Repurchase of shares in Trust terms of a general authority approved by shareholders 2010/07/31 Repurchase BJM Private Client 388 682 R5.87 Repurchase of shares in Services Proprietary terms of a general Limited authority approved by shareholders 2010/07/31 Repurchase PW Jordaan 181 159 R6.26 Repurchase of shares in terms of a general authority approved by shareholders 2010/10/19 Issue Lisinfo 222 Investments 67 708 955 R 7.37 Issue of shares for cash to Proprietary Limited introduce RBH as a shareholder 2011/12/08 Issue Johan en Edna Familie 1 454 545 R5.50 Option given to director Trust which was exercised 2012/06/30 Repurchase Waterval Development 121 580 547 R0.00 Repurchased from Company Proprietary reserves and not share Limited premium 2013/05/12 to Issue Various investors including 1 938 407 R7.37 to To encourage employee 2013/06/30 employees R12.30 participation in Attacq
111 Number Price per Date Nature Counterparty of shares share Reason
2013/07/26 Issue Existing shareholders 50 434 783 R11.50 Issue of shares in terms of a rights offer on the basis of 10.52501 rights offer shares per 100 shares then in issue 2013/08/22 Cancellation Atterbury Investment 36 187 884 R3.76 Refer to paragraph 2.7 Managers Proprietary of Annexure 10 Limited 2013/08/28 Issue Trinsam Trust 800 000 R8.98 Option given to Morné Wilken which was exercised 2013/08/28 Issue Melt Hamman 60 000 R12.00 Issues of shares to Melt Hamman 2013/08/28 Repurchase Atterbury Trust 2 160 853 R10.32 As part payment for the acquisition of the Atterbury Theatre 2013/09/04 Issue Atterbury Investment 36 187 884 R7.18 Refer to paragraph 2.7 Managers Proprietary of Annexure 10 Limited 2013/09/04 Repurchase Atterbury Investment 25 188 346 R10.32 Refer to paragraph 2.7 Managers Proprietary of Annexure 10 Limited
5.2 Save as disclosed in Annexure 12, there were no assets acquired or to be acquired out of the proceeds of any issues. All shares which have been issued, were issued at a price equal to the company’s net asset value per share, which was considered to represent the fair value for the company’s shares and which was a premium to the company’s then par value of R0.0001 per share.
6. STATEMENT AS TO LISTING ON STOCK EXCHANGE The shares of the company are not listed on any other stock exchange. However, the shares of the company are traded in the over- the-counter- market further details of which are set out in paragraph 27 of the prospectus.
112 Annexure 10
CONTRACTS
1. MATERIAL CONTRACTS In addition to the loan agreements described in Annexure 11, the following are details of material contracts, being: (i) contracts entered into otherwise than in the ordinary course of business, within the two years prior to the date of this prospectus or at any time containing an obligation or settlement that is or may be material to the company or its subsidiaries at the last practical date and (ii) contracts that are otherwise considered material by the company.
1.1 Atterbury House disposal 1.1.1 Attacq sold the property known as Atterbury House (comprising Section 1 on Sectional Plan SS747/2006 in the scheme known as Shell House and Ovenstone House and an undivided share in the common property in the scheme) situated at 9 Riebeeck street (Corner Riebeeck and Lower Burg Streets), Cape Town for a cash purchase price of R341 million, payable against transfer which took place on 6 September 2013 to Ascension Properties Limited. 1.1.2 Attacq provided Ascension Properties Limited with a rental guarantee for a period of up to 24 months from the date of transfer in an amount of up to R10 million.
1.2 Brooklyn Bridge acquisition 1.2.1 Dolsid Investments Proprietary Limited (Registration number 1980/003178/07) (“Dolsid”) is the holder of 750 ordinary par value shares in Brooklyn Bridge Office Park Proprietary Limited (“Brooklyn Bridge”) constituting 75% of the issued shares in Brooklyn Bridge (“the Dolsid equity”). Attacq is the holder of 250 ordinary par value shares in Brooklyn Bridge constituting 25% of the issued shares in Brooklyn Bridge. 1.2.2 In terms of binding heads of agreement dated 20 August 2013, it was agreed that Brooklyn Bridge will become a wholly-owned subsidiary of Attacq. 1.2.3 Brooklyn Bridge’s immoveable properties comprise: 1.2.3.1 Remaining Extent of Erf 875, Brooklyn, held by Deed of Transfer T153182/2006; 1.2.3.2 Portion 1 of Erf 875, Brooklyn, held by Deed of Transfer T66383/2009; 1.2.3.3 Portion 2 of Erf 875, Brooklyn, held by Deed of Transfer T66384/2009; 1.2.3.4 Portion 3 of Erf 875, Brooklyn, held by Deed of Transfer T66385/2009; 1.2.3.5 Portion 4 of Erf 875, Brooklyn, held by Deed of Transfer T66386/2009; 1.2.3.6 Portion 6 of Erf 875, Brooklyn, held by Deed of Transfer T66388/2009; 1.2.3.7 Portion 7 of Erf 875, Brooklyn, held by Deed of Transfer T66389/2009; 1.2.3.8 Portion 2 of Erf 179 Nieuw Muckleneuk, held by Deed of Transfer T1718/2011, (collectively, “the Properties”). 1.2.4 Dolsid was the co-developer of Brooklyn Bridge with Attacq, but is otherwise unrelated to the group. 1.2.5 The assets to be acquired in terms of the transaction contemplated in 1.2.2 (“the Dolsid assets”) comprise: 1.2.5.1 the entire issued shares in Adamax Property Projects Brooklyn Proprietary Limited (“Adamax”) that stands to be transferred to Brooklyn Bridge on implementation of the agreement referred to in 1.2.2; 1.2.5.2 any shareholding that Dolsid might hold in a subsidiary company (other than Adamax); and 1.2.5.3 Dolsid’s proportionate share of all operating assets, liabilities, warranties and guaranties related to the conduct of Brooklyn Bridge excluding the 6 residential dwellings on Portions 1, 2, 3, 4, 6 and 7 of Erf 875 Brooklyn Township, Registration Division JR, Gauteng Province, together with the improvements thereon. 1.2.6 The effective date of the proposed transaction is 1 April 2013 (“the effective date”). 1.2.7 The parties will determine the acquisition price with reference to the net equity value of Brooklyn Bridge, with the provisional determination thereof, as on the effective date, being R544 609 084 for the Properties. 1.2.8 Once the acquisition price is determined, the parties have agreed that Dolsid will, on the closing date, be paid as follows: 1.2.8.1 any claim by Dolsid on loan account against Brooklyn Bridge, in cash (“Dolsid claims”); 1.2.8.2 in respect of interest on the Dolsid claims in cash; and 1.2.8.3 in respect of the Dolsid equity in cash.
113 1.2.9 Interest at the prime lending rate of Nedbank Limited minus 1% will be payable by Brooklyn Bridge to Dolsid on the first R17 900 000 of the Dolsid claims, calculated from 1 April 2013 to date of payment, both days inclusive. 1.2.10 Interest accrues on the cash amount payable to Dolsid from the effective date of 1 April 2013 until the payment date. The interest will be at the prime lending rate of Nedbank Limited minus 1%. 1.2.11 The transaction will be conditional upon the fulfilment or waiver of the following suspensive conditions: 1.2.11.1 obtaining Competition Commission approval; 1.2.11.2 agreeing on the acquisition price of the Dolsid assets in accordance with the agreed parameters; 1.2.11.3 receiving the necessary board and shareholder approvals; 1.2.11.4 Adamax being transferred to Brooklyn Bridge; 1.2.11.5 receiving approvals from all applicable statutory and regulatory authorities in South Africa; and 1.2.11.6 comprehensive final agreements concluded between Attacq, Dolsid and Brooklyn Bridge.
1.3 AAM acquisition The internalisation by the group of the asset management in respect of the direct property portfolio is being given effect to by way of the acquisition by Attacq of AAM. This will be implemented through the transactions recorded in the agreements summarised below and entered into on 4 September 2013. As at the last practical date implementation of the transactions remains subject to the fulfilment of various conditions, including receipt of an exemption from the Takeover Regulation Panel. 1.3.1 Subscription by Attacq for shares in AAM 1.3.1.1 In terms of the subscription agreement entered into between Attacq, Attventure, Atterbury Property and AAM (“the AAM subscription agreement”), Attacq agreed to subscribe for 9 028 ordinary shares in AAM, being all of the authorised but unissued ordinary shares of AAM (“AAM shares”) for an aggregate subscription price of R271 088 800 payable to AAM. 1.3.1.2 Each of the existing shareholders of AAM being, Attventure and Atterbury Property, irrevocably and unconditionally waived any pre-emptive rights, options or similar rights to subscribe for AAM shares which they may have had. 1.3.2 Share buy-back agreement between Attventure Proprietary Limited, Atterbury Property and AAM (“the AAM share buy-back agreement”) 1.3.2.1 Prior to entering into the AAM acquisition: 1.3.2.1.1 Attventure held 486 ordinary shares in the issued share capital of AAM (“the Attventure buy-back shares”); 1.3.2.1.2 Atterbury Property held 486 ordinary shares in the issued share capital of AAM (“the APH buy-back shares”); 1.3.2.1.3 AAM was the beneficial owner of 500 ordinary shares of Wingspan Asset Management Proprietary Limited (“WAM”), constituting 50% of the entire issued share capital of WAM (“WAM shares”) and was party to the WAM Asset Management Agreement which is an agreement entered into between AAM and WAM, in terms of which consideration is payable by WAM to AAM in respect of the asset management functions relating to the properties held by Wingspan; and 1.3.2.1.4 AAM and Atterbury Property were parties to the Atterbury Property Asset Management Agreement, in terms of which AAM attended to any asset management functions relating to the properties held by Atterbury Property in return for which consideration was payable by Atterbury Property to AAM. 1.3.2.2 In terms of the AAM share buy-back agreement AAM has agreed to repurchase from Attventure and Atterbury Property as a single, indivisible transaction, the Attventure buy-back shares and the APH buy-back shares (free from all encumbrances) respectively. 1.3.2.3 The repurchase price for each of the Attventure buy-back shares and the APH buy-back shares, respectively, will be calculated as 50%*(B*8.5%*C)/365 where B equals R135 544 400 and C is the number of days from 30 June 2013 to the day Attacq subscribes for the AAM shares in terms of the AAM subscription agreement. 1.3.2.4 Furthermore, AAM must pay to Atterbury Property a fee equivalent to the income AAM earns and which it not associated with the management of Attacq assets from 30 June 2013 to the day Attacq subscribes for the AAM shares in terms of the AAM subscription agreement.
114 1.3.2.5 An outstanding distribution declared by AAM in an amount of R297 444 912 and owed to Atterbury Property and Attventure will be settled as follows: 1.3.2.5.1 in respect of R52 000 000, AAM will cede to each of Atterbury Property and Attventure 50% of the loan account referred to in paragraph 1.3.3; 1.3.2.5.2 in respect of R1 361 262, AAM will cede and transfer to each of Atterbury Property and Attventure 50% of all of the Attacq shares held by AAM; and 1.3.2.5.3 the balance of the outstanding distribution will be set off against all loans owing by Atterbury Property and/or Attventure to AAM.
1.3.3 Sale by AAM of interest in WAM asset management agreement and Atterbury Property asset management agreement Simultaneous with the above transactions AAM will dispose of the WAM asset management agreement and the Atterbury property asset management agreement to Atterbury Property in consideration for Atterbury Property assuming its obligations under those agreements and an amount of R52 million which will remain owing to it by Atterbury Property on interest free loan account.
1.3.4 Subscription agreement between Attacq, Attventure and Atterbury Property (“Attacq subscription agreement”) Atterbury Property and Attvest have undertaken to each subscribe for such number of Attacq shares which equates to R67 772 200 at a subscription price equal to the net asset value per share as at 30 June 2013 per Attacq share. The aggregate subscription price in an amount of R135 544 400 will be paid in cash against the allotment and issue of Attacq shares to Atterbury Property and Attventure.
1.4 Arctospark restructure
1.4.1 Acquisition of a 50% interest in Karoo I, Karoo II and Stenham 1.4.1.1 Attacq entered into a sale and repurchase agreement with Arctospark on 28 August 2013 to acquire 37 194.542 shares in the issued share capital of Karoo I constituting 50% of all of the shares held by Arctospark in the share capital of Karoo I, 9 326.5 shares in the issued share capital of Karoo II constituting 50% of all of the shares held by Arctospark in the share capital of Karoo II and 90 175.805 shares in the issued share capital of Stenham (which owns Nova Eventis, see paragraph 3.7.7.6 of the prospectus), constituting 50% of all of the shares held by Arctospark in the share capital of Stenham for a total purchase consideration of R711 064 389 (“purchase price”) in the following proportions: 1.4.1.1.1 an amount of R448 581 335 in respect of the Karoo I shares; 1.4.1.1.2 an amount of R104 057 533 in respect of the Karoo II shares; and 1.4.1.1.3 an amount of R158 425 250 in respect of the Stenham shares. 1.4.1.2 The purchase price will be settled on the second business day following the date of fulfilment of the last of the conditions precedent (“closing date”), as follows: 1.4.1.2.1 a cash payment in an amount of R155 567 431; and 1.4.1.2.2 the balance of R555 496 958 will be credited as a loan account in favour of Arctospark against Attacq. 1.4.1.3 Furthermore, in terms of the sale and repurchase agreement and with effect from the closing date, Arctospark has agreed to repurchase from Attacq the 533 562 482 ordinary shares in the issued share capital of Arctospark held by Attacq, constituting 50% of the entire issued share capital of Arctospark for an aggregate purchase consideration of R84 434 476. The purchase consideration will be set-off against Attacq’s obligation to pay the balance of the loan account owed by Attacq to Arctospark in respect of the purchase consideration set out in paragraph 1.4.1.1 above. The balance, being a cash consideration of approximately R12 500 000, will be paid by Arctospark to Attacq.
1.4.2 Memorandum of understanding between Attacq and MAS Real Estate Inc. 1.4.2.1 Attacq and MAS has entered into a memorandum of understanding on 17 July 2013 in terms of which Attacq agreed to sell its interests in Karoo I and Karoo II referred to in paragraph 1.4.1 above to MAS in exchange for MAS shares. 1.4.2.2 The purchase price is determined formulaically and has been agreed as follows: 1.4.2.2.1 the Karoo shares NAV (“Karoo NAV”) at the end of June 2013 (“June 13 NAV”) will form the starting point of the pricing mechanism; 1.4.2.2.2 a discount of 15.2% will be applied to the June 13 NAV to arrive at the Forecast Decline Price. This reflects the agreed potential decline in the future NAV of the Karoo shares; and
115 1.4.2.2.3 the Forecast Decline Price is then discounted at an IRR of 7% for 3 years in order to arrive at the “transaction price”. 1.4.2.3 MAS shares will be issued at a price of €1.07 in order to give Attacq such number of shares that equate in value to the value of the Karoo shares at the transaction price. 1.4.2.4 An adjustment mechanism will be implemented to make an adjustment to the number of MAS shares held by Attacq at the earlier of: 1.4.2.4.1 full redemption and wind-up of Karoo I and Karoo II; and 1.4.2.4.2 31 December 2016, whereby a “Realised Price” shall be determined. The Realised Price will be the cash received by MAS from Karoo I and Karoo II on redemption of the Karoo shares, plus the NAV of the unredeemed Karoo shares at 31 December 2016. Where the Realised Price differs from the Transaction Price, an adjustment will be made to the number of MAS shares issued to Attacq. Such adjustment will occur, subject to all necessary regulatory approvals, in the 30 days following the earlier of full redemption, or 31 December 2016, as contemplated above. The pricing of MAS shares for such adjustment will be at the 30 day VWAP at the time of the adjustment. 1.4.2.5 This transaction is conditional on the following: 1.4.2.5.1 Attacq and MAS board approvals; 1.4.2.5.2 the implementation of the acquisition of a 50% interest in Karoo I and Karoo II and Stenham set out in paragraph 1.4.1 above; 1.4.2.5.3 respective South African Reserve Bank and stock exchange approvals; and 1.4.2.5.4 satisfactory completion of KPMG due diligence procedures by KPMG.
1.5 Asset management agreement (“management agreement”) 1.5.1 Atterbury Property has, with effect from 1 July 2013 been appointed asset manager of Attacq Retail Fund in terms of the memorandum of agreement between Attacq Retail Fund and Attacq Retail Fund Asset and Property Management, Atterbury Property and Attacq dated 17 September 2013. 1.5.2 Atterbury Property’s appointment is for a period of 5 years terminating on 30 June 2018. 1.5.3 Atterbury Property’s obligations do not include property management but it will exclusively manage the appointed property manager. 1.5.4 Atterbury Property will receive an annual fee (paid monthly) of 0.199% of the gross asset value of Attacq Retail Fund’s portfolio of property companies, properties, shares in unlisted entities (excluding the Attacq shares held by Attacq Retail Fund), Garden Route Mall and all the assets in Attacq Retail Fund; and 49% of all the profits generated by Attacq Retail Fund Asset and Property Management. 1.5.5 Shareholders of Attacq at a general meeting may terminate the management agreement on a no fault basis in which event Attacq Retail Fund Asset and Property Management will be entitled to give Atterbury Property 3 month’s written notice of the termination of the management agreement (the “early termination notice”). The management agreement will terminate on the expiry of the 3-month notice period calculated from the date of receipt of the early termination notice (the “early termination date”). 1.5.6 In such event Attacq Retail Fund will pay Atterbury Property a cancellation fee equal to actual profit made by Atterbury Property (pre-tax) based on the fees payable in accordance with paragraph 1.5.4 above, (less direct overheads taken over by Attacq Retail Fund Asset and Property Management or Attacq Retail Fund or its designated internal asset management company), over the unexpired portion of the term of the management period present valued to the early termination date using the prime rate as the discount rate.
2. OTHER RELEVANT CONTRACTS AND TRANSACTIONS
2.1 Artisan disposal 2.1.1 Attacq entered into a share and loan note purchase agreement dated 19 August 2013 in terms of which Attacq disposed of its 26% holding of the issued shares and loan notes in Artisan Investment Projects 10 Limited, the entity which houses Caltongate, to MAS. 2.1.2 The consideration in an amount of £2 800 000 will be settled by the issue to Attacq of 3 042 817 shares in MAS at an issue price of €1.07 per MAS share. 2.1.3 The disposal is subject to South African Reserve Bank approval.
116 2.2 Sanridge disposal Attacq entered into a purchase and sale agreement on 11 December 2012 and amended on 31 July 2013 in terms of which Attacq sold its remaining 50% undivided share in Erf 57 Midridge Park Extension 14 Township registration division J.R province of Gauteng, known as Sanridge Square, to Rapfund Investments Proprietary Limited for a purchase consideration of R98 590 296. The purchase price, together with the interest thereon, was paid against transfer of ownership which took place on 20 August 2013.
2.3 APC disposal 2.3.1 Attacq entered into an agreement with Delta Property Fund Limited (“Delta”) on 20 August 2013 to dispose of 100 ordinary shares (“sold shares”) in the issued share capital of Atterbury Parkdev Consortium Proprietary Limited (“APC”) which owns the Harlequins Office Park (“Harlequins”), which shares constituted the entire ordinary share capital of the APC. The shares were disposed of cum any dividend distribution but free from encumbrances. 2.3.2 APC declared a dividend distribution in an amount of R29 764 183 to Attacq (“Attacq Dividend Amount”), which distribution was credited as a loan account in favour of Attacq against APC and was paid to Attacq on 23 August 2013. 2.3.3 The purchase price paid by Delta to Attacq for the APC shares held by Attacq was an amount of R40 800 000 (“Purchase Price”) plus an amount of R1 032 479 (“Escalation Amount”). 2.3.4 On 3 September 2013, Delta paid the Purchase Price and the Escalation Amount to Attacq as follows: 2.3.4.1 by allotting and issuing 4 883 469 Delta linked units which equated to R40 800 000; and 2.3.4.2 by paying the Escalation Amount to Attacq in cash.
2.4 Atterbury Theatre disposal 2.4.1 Atterbury Trust, masters reference number IT4555/1998, (“Atterbury Trust”) is a public benefit organisation having as its primary aim to engage in and promote educational and cultural initiatives and to utilise resources and income to benefit educational and cultural institutions and persons and in particular to promote Afrikaans Christian Education. 2.4.2 Attacq entered into an agreement dated 31 January 2013 to dispose of Atterbury Theatre, situated in the Lynnwood Bridge Development, (see paragraph 3.7.1.1 of the body of the prospectus) to Atterbury Trust for a purchase consideration of R42 300 000 payable in cash. The transfer of Atterbury Theatre to Atterbury Trust took place during July 2013.
2.5 Waterfall development rights and arrangements between Attacq and AWC as shareholders of AWIC In terms of the agreements entered into in this regard, AWIC acquired the exclusive right to develop the Waterfall land parcels in August 2008 (further to which, see the next following paragraph). AWIC’s rights include the right to develop the necessary infrastructure and have townships proclaimed in respect of the land to be developed. On commencement of any development AWIC is entitled to call for the grant of leasehold title over the relevant parcel of land, which is given in the form of a 99-year lease granted over that land by the title-holder, registered against the relevant title deed. Each such lease includes or will include an obligation on AWIC (or its nominee) to pay monthly rental to the titleholder from the date on which it commences receiving rental in respect of that development. The rental to be paid is an amount equal to 6% of “net rental”, defined as “gross rental” after deduction of 25% in the case of shopping centres and 20% in any other case, where “gross rental” is all amounts received from tenants or third parties other than deposits, VAT, municipal charges and tenant installation reimbursements. In the event that any of the Waterfall land parcels are not proclaimed by 31 December 2023, or in the case of Waterfall land parcels 10, 10a and 10b, 31 December 2028 (or any extension of those periods that may be agreed to) its rights may be cancelled in respect of such unproclaimed land. WDC is obliged to extend those dates in the event that any competent authority imposes any restriction (which prevents or delays development) on a development or is unable to provide the required services, provided that any such extension will be limited to a period equal to the duration of the relevant restriction. AWIC bears the responsibility for payment of all rates, taxes and levies, municipal services, refuse removal and other relevant service contributions payable in respect of the Waterfall land parcels. The agreements contain typical commercial terms, including as to breach and dispute resolution. Attacq first acquired the rights to develop the Waterfall land parcels and then sold those to AWIC for a purchase consideration of R804 624 816, which amount remains owing on loan account (the “purchase price claim”). Attacq holds all the ordinary A shares in AWIC (comprising 80% of the issued share capital) and AWC holds all the ordinary B shares in AWIC (comprising 20% of the issued share capital). The A shares carry the right to a preferential dividend calculated at a fluctuating dividend rate equal to the difference between the prime rate of Nedbank Limited from time to time and the corporate tax rate (for instance if the prime rate is 10.5% and the corporate tax rate 28%, the dividend rate will be 7.56%). A share dividends are deemed to accrue monthly and will be declared from time to time at the board’s discretion. The B shares have no right to dividends until the purchase price claim and accrued A share dividends are settled in full, whereafter A and B shares rank pari passu.
117 2.6 Newtown and Majestic development 2.6.1 This development is being undertaken in terms of registered long term lease agreements entered into with the City of Johannesburg Metropolitan Municipality (the “City of Jo’burg”), the title holder of the relevant properties. The lease in respect of the Newtown development is for a period of 90 years from date of completion and the lease in respect of the Majestic development is for a period of 30 years from the date of completion, with the option to extend such lease for a further 19 years. 2.6.2 In respect of the Newtown development the agreement requires the group to expend an amount of approximately R800 million on the development. With effect from the date of completion (actual or deemed) rental becomes payable to the City of Jo’burg equal to the greater of R80 000 per month (escalating at 8% per annum) and an amount equal to 1.75% of net rental plus operating expenses recovered. 2.6.3 In respect of the Majestic development the agreement requires the group to expend an amount of approximately R57 million on the development. With effect from the date of completion (actual or deemed) rental becomes payable to the City of Jo’burg equal to the greater of R15 000 per month (escalating at 8% per annum) and an amount equal to 2.5% of net rental plus operating expenses recovered.
2.7 Attvest transaction The salient details of the Attvest transaction are set out in note 5 “Legal and Regulatory Matters” in Annexure 20, under the heading “Attvest transaction”.
2.8 AWIC acquisition The trustees of the Trinsam Trust (“the Trinsam Trust”) (which trust is related to Morne Wilken, the Chief Executive Officer of Attacq), Attacq and AWC concluded a written sale of shares agreement, in terms of which, inter alia, the Trinsam Trust sold 6 123 ordinary shares in the issued ordinary share capital of AWC (which shares comprised all the ordinary shares held by the Trust in the issued share capital of AWC) to Attacq, in consideration for which Attacq has agreed to allot and issue ordinary shares in its capital to the Trinsam Trust, which consideration shares shall be allotted and issued in two tranches, being a first tranche of R13 509 904.92 divided by the 30 June 2013 net asset value per share of Attacq and the balance being an amount of R11 586 136.00 escalating at the prime rate of interest from 1 July 2013 until the issue date of the second tranche of Attacq shares, in an amount calculated in accordance with a formula related to the happening of certain events related to a change in control occurring in Attacq or Morne Wilken ceasing to be a director of Attacq or part thereof. Such second tranche of Attacq shares will be issued at the 30 day volume weighted average price of such shares (“the 30 Day VWAP”) as traded on the JSE. The number of Attacq shares to be issued to the Trust will be the amount due to the Trinsam Trust divided by the 30 Day VWAP (rounded to the nearest whole number) or calculated based on the value of the secured and/or completed developments of AWIC and developments/ properties disposed of by AWIC as at 30 June 2020 other than secured or completed developments as at 19 August 2013.
118 N/A 44 524 32 00032 249 989 (R’000) of finance and method payable in the To be financedTo next 12 months Capital amount Annexure 11 (Nedbank Limited) To be financedTo with term development loan long-term development loan (Nedbank Limited) To be financedTo with long Loan expites on 1 December 2013 Repayment terms Loan expires in 31 October 2013 Maturity date is December31 2014 Maturity date is March 2014 Mortgage bond by Attacq over Glenfair Boulevard for an amount of R234,4 million Cession and pledge of Attacq’s shareholding in REACH Security Mortgage bond by Attacq over Glenfair Boulevard for an amount of R234,4 million. Cession and pledge of Attacq’s shareholding in REACH Mortgage Bond by AWIC over Waterfall Land Parcels 9 and 12 (R375 million) Mortgage Bond by Attacq over Glenfair Boulevard (security value of R100 million) Cession and Pledge of shares in MAS held by Attacq to the value of millionR150 Cession and Pledge of shares held by Attacq in REACH to the value of R60 million Cession and Pledge of 80% shareholding in Mantrablox Proprietary Limited held by Attacq 1.5% 0.9% Prime 1.65% Interest rate 3 month JIBAR plus 1 month JIBAR plus 1 month JIBAR plus 81 874 81 42 450 44 524 (R’000) 249 989 as limit is R60 million) outstanding (not fully(not drawn Capital amount Portfolio Loan – financing of bulk earthworks for the Mall of Africa development (AWIC) Origination Loan to assist Attacq in acquiring various equities (shares in MAS and REACH), and settle debt associated with acquisition of Attfund Retail Limited shares by Hyprop and to make payments to WDC in terms of the repurchase of shares for the acquisition of the development rights in terms of the Waterfall land Finance against security of Attacq’s share in Mantrablox Proprietary Limited for certain obligations in terms of the Hyprop transaction (Garden Route Mall) Portfolio Loan – financing of bulk earthworks for the Mall of Africa development (Atterbury Waterfall Investment Company) Property finance loan facility (Facility III, Tranche 2) Description Property finance loan Facility 1 Property finance loan Facility 2 Property finance loan facility (Facility III, Tranche 1) Attacq Borrower Attacq Attacq Attacq The Standard Bank of South Africa Limited MATERIAL LOANS PAYABLE BY THE GROUP The following material loans were made to the company and its subsidiaries as at the last practical date: Lender The Standard Bank of South Africa Limited The Standard Bank of South Africa Limited The Standard Bank of South Africa Limited MATERIAL BORROWINGS AND LOANS RECEIVABLE 1.
119 N/A N/A issue 4 451 85 165 85 14 247 14 (R’000) of finance and method rental income rental income payable in the next 12 months Capital amount Proceeds from rights Cash generated from Cash generated from Maturity date is 29 February 2016 120 month term. Remaining term of 99 months. Capital plus interest repayable over term of loan with a residual value of R200 million (loan expires 1 July 2021) Maturity date is 29 February 2016 Repayment terms The loan needs to be settled over 84 months with a residual amount of R80 million. Bullet payments million of R10 needs to be made in months 36, 48, 60 and 72. Repayable 29 June 2014 Mortgage bond by Attacq over Glenfair Boulevard for an amount of R234,4 million Cession and pledge of Attacq’s shareholding inReach Mortgage bond by Lynnwood Bridge Office Park Proprietary Limited over Portion 3 of Erf 582 Lynnwood Manor (Phase 3), Sections 1 and 2 in Sectional Title Scheme known as SS Lynnwood Bridge Retail Portion 1 (on 1 of Erf 582)(Retail City& Lodge) and Sections 1 and 2 in Sectional Title Scheme known as SS Lynnwood Bridge Offices Portion 2 (on 2 of Erf (Adams 582) and Atterbury) for an amount of R1 billion. 450 Suretyship by Attacq limited to R400 million Mortgage bond by Attacq over Glenfair Boulevard for an amount of R234,4 million Cession and pledge of Attacq’s shareholding in Reach Security Guarantee by Atterbury Property of the loan amount up to R60 million Cession Attacq of 25% shareholding in Sinco Investments Six Proprietary Limited Cession of Atterbury of 25% Property shareholding in Sinco Investments Six Proprietary Limited Cession and pledge 000 of 10 000 shares held by Razorbill Properties Proprietary91 Limited in Attacq Prime 1.40% 1.22% Interest rate Prime less 0.5% 1-month JIBAR plus 3-month JIBAR plus Prime rate minus 1% 6 556 85 165 85 96 470 (R’000) 537 757 537 122 193 outstanding Capital amount Portfolio loan – redevelopment and extension of Glenfair Boulevard (DisChem and Intercare) Consolidation of existing debt against the property (excluding Aurecon building and Atterbury Theatre) Portfolio loan – acquisition of Glenfair Boulevard Origination To financeTo the acquisition of ordinary shares in the capital of Wingspan To financeTo equity contribution of Attacq and Atterbury Property in the Mall of Namibia Property finance loan facility (Facility II) Property Loan Facility 1 Property finance loan facility (Facility I) Description Bridging loan Facility with Investec Private Bank against pledge of shares Attacq Lynnwood Bridge Office Park Proprietary Limited Attacq Borrower Attacq Attacq The Standard Bank of South Africa Limited Nedbank Limited The Standard Bank of South Africa Limited Lender Sanlam Life Insurance Limited Investec Bank
120 N/A N/A 1 804 (R’000) of finance and method rental income payable in the next 12 months Capital amount Cash generated from 48-month term. Remaining term of 36 months. Interest repayable over term of loan with a residual value of 100% 132 Month132 term. Remaining term of 121 months. Capital plus interest repayable over term of loan with a residual value of R50 million Repayment terms 24-month term for development. Remaining term months. of 18 120-month-term after development is done. Only interest repayable over the development term. Capital plus interest repayable after development is done over the term of loan with a residual value of R98.7 million Mortgage bond by Lynnaur Investments Proprietary Limited over the property known as Section No. 3 in the Sectional Title Scheme known as SS Lynnwood Bridge Offices 2 (Portion 2 of Erf 582 Lynnwood Manor) for an amount million. of R575 Cross-collaretal security in the form of the mortgage bonds registered by Attacq over the Great Westerford property (for R550 million). Suretyship by Attacq limited to millionR155 Mortgage bond by Lynnaur Investments Proprietary Limited over the property known as Section No. 3 in the Sectional Title Scheme known as SS Lynnwood Bridge Offices 2 (Portion 2 of Erf 582 Lynnwood Manor) for an amount million. of R575 Cross-collaretal security in the form of the mortgage bonds registered by Attacq over the Great Westerford property (for million).R550 Suretyship by Attacq limited to millionR155 Security Mortgage bond by Lynnwood Bridge Office Park Proprietary Limited over Portion 3 of Erf 582 Lynnwood Manor (Phase 3), Sections 1 & 2 in Sectional Title Scheme known as SS Lynnwood Bridge Retail Portion 1 (on 1 of Erf (Retail582) & City Lodge) and Sections 1 and 2 in Sectional Title Schemes known as SS Lynnwood Bridge Offices Portion 2 (on 2 of Erf (Adams 582) and Atterbury) for an amount of R1 billion. 450 Suretyship by Attacq limited to R400 million 10.48% Interest rate 3 month Jibar + 2.95% Prime rate minus 0.5% 75 02975 50 000 (R’000) 446 245 outstanding Capital amount evelopment – Lynnwood Funding against Aurecon building Origination Acquisition of Aurecon building by Lynnaur Investments Proprietary Limited New d Bridg Phase III Property Loan Facility 2 Description Property Loan Facility 1 Property Loan Facility 2 Lynnaur Investments Proprietary Limited Borrower Lynnaur Investments Proprietary Limited Lynnwood Bridge Office Park Proprietary Limited Rand Merchant Bank Lender Rand Merchant Bank Nedbank Limited
121 N/A N/A 70 167 70 55 96055 for sale for sale (R’000) of finance and method payable in the be rolled into a next 12 months Capital amount long-term facility Once development is completed, the loan will Asset is classified as held Asset is classified as held Repayment terms 72-Month term. Remaining term of 63 months. Capital plus interest repayable over termofloan with bulleta payment of R14.6 million. 60-month term. Remaining term 32 months. Capital and interest repayable over the term of the loan, with a residual value of to be 627 597.92 R45 settled February 2016. Building Period Term ending March 31 2014. Interest is to be capitalised to a max of R6.35 million. Once reached interest will be serviced monthly in arrears. Capital and interest will be payable, with a 46% residual value on maturity of the term Remaining term of 21 months. Capital plus interest repayable over term of loan with a bullet payment of R18.6 million. Remaining term of 45 months. Capital plus interest repayable over term of loan with a bullet payment of R15.9 million Security Mortgage bond by De Ville Shopping Centre Proprietary Limited over Durbanville Erf 2011 for million. an amount of R157,5 Suretyship by Attacq limited to an amount of R146 million. Mortgage bond by APC over Erf 606 Groenkloof Extension 9 for an amount million. of R55 Surety is given by Attacq to the value million. of R45 Mortgage Bond by AWIC over the Lease in respect of Portion 736 (a portion of portion of the 1) Farm Waterval 5 (proposed Erf 1794 Jukskei View for the Ext 51) amount million. of R145 Suretyship by Attacq limited to R54 million and by Atterbury Property to R6 million Mortgage bond by De Ville Shopping Centre Proprietary Limited over Durbanville Erf 2011 for million. an amount of R157,5 Suretyship by Attacq limited to an amount of R146 million. Mortgage bond by De Ville Shopping Centre Proprietary Limited over Durbanville Erf 2011 for million. an amount of R157,5 Suretyship by Attacq limited to an amount of R146 million. Prime Prime 10.45% 10.50% 10.50% Interest rate duration of loan 10.85% fixed10.85% for 18 745 18 18 759 18 70 167 70 54 530 34 924 (R’000) outstanding Capital amount ffice Park Acquisition and development of property known as Harlequins O Origination Development of Phase 1 of Waterfall Corner Retail Centre on a lease area in respect of Waterfall LP15 Acquisition of De Ville and revamp Acquisition of De Ville and revamp Acquisition of De Ville and revamp Property loan facility Description Property development facility Loan Facility 1 (fixed portion) Loan Facility 2 (fixed portion) Loan Facility 3 (floating portion) Atterbury Parkdev Consortium Proprietary Limited Borrower Atterbury Watervall Investment Company Proprietary Limited De Ville Shopping Centre Proprietary Limited De Ville Shopping Centre Proprietary Limited De Ville Shopping Centre Proprietary Limited Rand Merchant Bank Lender Nedbank Limited Nedbank Limited Nedbank Limited Nedbank Limited
122 debt N/A 45 881 45 11 097 11 38 740 (R’000) of finance and method payable in the be rolled into a next 12 months Capital amount favour of AWIC. long-term facility issued guarantee in be settled by the sale Once development is Once development is Once development is facility or the property proceeds in terms of an will be sold to settle the completed, the loan will completed, the loan will completed, the loan-will be rolled into a long term oan term. nterest will be payable Loan facility repayable on the final repayment date which is 31 December 2013. 12 months12 from first disbursements for development phase (expiring Dec 31 2013) The development loan converts to various term loans on completion 12 month12 term for development. Interest is to be capitalised to a max of R2 050 000. Once reached interest will be serviced monthly in arrears. Capital and i on completion of the term. Repayment terms Building Period Term ending March 01 2014. Loan becomes payable at end of the l Mortgage Bond by AWIC over the Leases in respect of Remaining extent of Portion 1 of the Farm Waterval No 5 IR for an amount of R130 million, and in respect of proposed Jukskei View Ext 79 for the amount million, of R47 and in respect of proposed Jukskei View Ext 80 for the amount of R54 million. Suretyships by Attacq limited to million R77.8 and by Atterbury Property million to R15 Mortgage Bond by AWIC over the Lease in respect of of Portion 761 the Farm Waterval No 5 IR (proposed township Buccleuch Extension for an 10) amount of R600 million Suretyship by Attacq limited to R160 million Suretyship by Atterbury Property limited to R40 million Mortgage Bond by AWIC over the Lease in respect of Portion (a 759 portion of portion of the 78) Farm Waterval 5 (proposed township Buccleuch Extension for 9) the amount of R300 million. Suretyship by Attacq limited to R80 million. Security Mortgage Bond by AWIC over the Lease in respect of Portion (a 759 portion of portion of the 78) Farm Waterval 5 (proposed township Buccleuch Extension for 9) the amount of R300 million. Prime Interest rate construction) Prime less 1% Prime (during 1.85% plus1.85% costs 1 month JIBAR plus 41 829 41 57 48357 54 563 (R’000) 340 875 outstanding Capital amount evelopment – LP8 Services evelopment – LP21 Cell C evelopment – LP22 Services New d and Infrastructure installation New d development Origination New d and Infrastructure installation Development of MB Technologies Tasus building on a lease area in respect of Waterfall LP22 Property development facility Property development facility Property development facility Description Property development facility Atterbury Waterfall Investment Company Proprietary Limited Atterbury Waterfall Investment Company Proprietary Limited Atterbury Waterfall Investment Company Proprietary Limited Borrower Atterbury Waterfall Investment Company Proprietary Limited The Standard Bank of South Africa Limited Nedbank Limited Nedbank Limited Lender Nedbank Limited
123 356 loan 1 884 115 264 115 (R’000) of finance and method rental income payable in the be rolled into a be rolled into a next 12 months Capital amount long-term facility long-term facility Cash generated from Once development is Once development is To be refinancedTo with long term development completed, the loan will completed, the loan will Repayment terms Loan facility has a development phase after which converts it into a 60 month term loan with repayment profile with a certain residual value on expiry. Loan facility has a development phase after which converts it into a 60-month term loan with repayment profile with a certain residual value on expiry. Loan facility repayable on the final repayment date being 30 November 2017. Loan facility repayable on the final repayment date being October 31 2013. ease emaining imited to imited to R8 million imited million to R27.5 imited to R48.6 million eases in respect of r ease in respect of Portion 736 (a Security Mortgage Bond by AWIC and East & West Investments over the l in respect of Erf 3540 Jukskei View Ext 7 for an amount of R58.4 million Suretyship by Attacq limited to millionR10 Causa suretyship by East & West Investments L Mortgage Bond by AWIC and East & West Investments over the Lease in respect of Portion 766 of the Farm Waterval 5 (proposed Erf 3600 Jukskei View Ext for 83) the amount of R300 million. Suretyships by Attacq limited to R32 million and by Atterbury Property L and causa suretyship by East & West Investments for the amount million.of R87.25 R29.2 million. Mortgage Bond by AWIC over the l Mortgage Bond by AWIC over the l portion of portion of the 1) Farm Waterval 5 (proposed Erven 1763 and Jukskei 1764 View Ext 47) for the amount million. of R470 Suretyship by Attacq limited to millionR110 and by Atterbury Property L extent of Portion 1 of the Farm Waterval No 5 IR for an amount of R300million, and in respect of proposed Jukskei View Ext for 67 the amount of R100 million, and in respect of proposed Jukskei View Ext 86 for the amount of R200 million. Suretyship by Attacq limited to R194.4 million and by Atterbury Property L Interest rate 1.50% plus1.50% costs 1.50% plus1.50% costs 1.70% plus1.70% costs reducing to 1.50%) Margin reducing to 1.70% plus1.70% costs (on 1 month JIBAR plus 3 month JIBAR plus 3 month JIBAR plus 3 month JIBAR plus completion margin is 1.50% on completion1.50% (during construction) 27 315 21 42821 (R’000) 139 989139 166 062166 outstanding Capital amount acq evelopment – LP20 Altech evelopment Maxwell – LP10 evelopment Services – LP10 evelopment Group 5 – LP15 ffice Park Phase 1 (Golder & Origination New d Building New d O Associates building and Att building) New d and Infrastructure installation New d development Description Property development facility Property development facility Property development facility Property development facility Borrower Atterbury Waterfall Investment Company Proprietary Limited Atterbury Waterfall Investment Company Proprietary Limited Atterbury Waterfall Investment Company Proprietary Limited Atterbury Waterfall Investment Company Proprietary Limited Lender The Standard Bank of South Africa Limited The Standard Bank of South Africa Limited The Standard Bank of South Africa Limited The Standard Bank of South Africa Limited
124 N/A N/A N/A 11 128 11 (R’000) of finance and method rental income payable in the next 12 months Capital amount Cash generated from d to make Repayment terms Interest is capitalised during contruction. Various term loans commence from 1 December where 2014 after the Borrower shall be oblige monthly repayments of capital and interest with annual escalations having a maximum residual balance of R250 million at the end of the loan term (being November 2024). Repayment profile in place with annual escalations, fully amortising years, in 15 maturing on 3 April 2028 Repayment profile in place with annual escalations, fully amortising years, in 15 maturing on 3 April 2028 Interest is capitalised for the initial 2 years, where after interest is serviced monthly. ease in respect of the lease area Security Mortgage Bond by Nieutown Property Development Company Proprietary Limited over the Lease in respect of Erven 564 558, 621, and 568 Newtown for an amount of R1.2 billion. Mortgagebond byMajestic Offices Proprietary Limited over the Lease in respect of Erf Newtown 591 for an amount of R100 million. Suretyships by Attacq limited to R250 million and a causa suretyship by Majestic Offices Proprietary Limited limited to R100 million. Mortgage Bond by AWIC over the l on Erf(11,0728ha) 3548 Jukskei View Ext 79 for an amount of R250 million. Suretyship by Attacq to R32 million and by Atterbury Property limited to R8 million. Mortgage Bond by AWIC over the Lease in respect of the lease area on Erf(11,0728ha) 3548 Jukskei View Ext 79 for an amount of R250 million. Suretyship by Attacq to R32 million and by Atterbury Property limited to R8 million. Mortgage Bond by Nieutown Property Development Company Proprietary Limited over the Lease in respect of Erven 564 558, 621, and 568 Newtown for an amount of R1.2 billion. Mortgagebond byMajestic Offices Proprietary Limited over the Lease in respect of Erf Newtown 591 for an amount of R100 million. Suretyships by Attacq limited to R250 million and a causa suretyship by Majestic Offices Proprietary Limited limited to R100 million. 10.58% Interest rate construction) Prime (during Prime plus 5% Prime – 0.50% completion with four term loans on The loan converts to different interest rates (R’000) 109 119 109 153 057 153 130 314 164 872 outstanding Capital amount evelopment – LP8 evelopment – LP8 Origination New d Massbuild development New d Massbuild development To provide To funding for the development of a proposed retail centre and offices for Nedbank known as Newtown To provide To funding for the development of a proposed retail centre and offices for Nedbank known as Newtown ebt acility oan) evelopment evelopment evelopment oan f acility (Senior d oan) Description Property d f l Property l Property d facility (floating portion) Property d facility (fixed portion) (Mezzanine l Borrower Nieutown Property Proprietary Limited Nieutown Property Proprietary Limited Atterbury Waterfall Investment Company Proprietary Limited Atterbury Waterfall Investment Company Proprietary Limited Lender Nedbank Limited Nedbank Limited Sanlam Sanlam
125 issue N/A (R’000) 300 000 of finance and method payable in the next 12 months Capital amount Either restructure or proceeds from rights The loan will be settled on 1 December 2022. Currently only the interest on the loan is paid monthly and after 2 years and 3 months the capital will start to be settled Repayment terms Only servicing the monthly interest with a 100% residual value on expiry of the loan, which is in March 2014. Mortgage Bond by Abacus over Erven 6083, 4282, 7365, 2045, 2048, 4803, 2046/RE, 2043/RE Stellenbosch for R800 million (Eikestad – 80% undivided share in the properties). Mortgage Bond by Abacus over Remainder of the Farm Mooirivier Mall, Farm No. 707 and Erf 1365 Baillie Park for R720 million (Mooirivier). Mortgage Bond by Abacus over undivided25% share in Erven 415, 438, Nieuw Muckleneuk 178 for R390million (Brooklyn Mall). Mortgage Bond by Abacus over Sections 1 and 2 in the sectional title scheme known as “Andringa Walk” together with the undivided share in the common property and the right of exclusive use for R350 million (Skybird/Andringa/ Mill Square). Sectional Covering Bond by Abacus over Sections 22, 1, 23, 26, 30, 34 33, and27, which 36 (of section 36 is to be released and replaced by section 38) in the Scheme “De Waal”, together with an undivided share in the common property and any right of exclusive use, situated on Erf 2000 Stellenbosch for R100 million (Andringa residential). Cession and Pledge of 29 726 516 Attacq shares by Abacus with a minimum value of R250 million. Security Mortgage bond by Mantrablox Proprietary Limited over the Portion 326 of the Farm Kraai Bosch Number George 195 (known as Garden Route Mall) for an amount of R300 million. Interest rate construction) 0.70% plus costs – 1% on completion– 1% Converting to Prime Converting to Prime 1-month JIBAR plus Prime (during – 0.35% (R’000) 479 605479 300 000 outstanding Capital amount cquisition and development Origination New a of property known as Eikestad Mall Funding for the acquisition of Garden Route Mall Description Property Loan Facility (Eikestad) Property Loan facility Borrower Abacus Holdings Proprietary Limited Mantrablox Proprietary Limited Lender Nedbank Limited The Standard Bank of South Africa Limited
126 N/A (R’000) of finance and method payable in the next 12 months Capital amount Repayment terms The loan will be settled on 1 October 2021. Currently only the interest on the loan is paid monthly and after 2 years and 3 months the capital will start to be settled Security Mortgage Bond by Abacus over Erven 6083, 4282, 7365, 2045, 2048, 4803, 2046/RE, 2043/RE Stellenbosch for R800 million (Eikestad – 80% undivided share in the properties). Mortgage Bond by Abacus over Remainder of the Farm Mooirivier Mall, Farm No. 707 and Erf 1365 Baillie Park for R720 million (Mooirivier). Mortgage Bond by Abacus over undivided25% share in Erven 415, 438, Nieuw Muckleneuk 178 for R390 million (Brooklyn Mall). Mortgage Bond by Abacus over Sections 1 and 2 in the sectional title scheme known as “Andringa Walk” together with the undivided share in the common property and the right of exclusive use for R350 million (Skybird/Andringa/ Mill Square). Sectional Covering Bond by Abacus over Sections 22, 1, 23, 26, 30, 34 33, and27, which 36 (of section 36 is to be released and replaced by section 38) in the Scheme “De Waal”, together with an undivided share in the common property and any right of exclusive use, situated on Erf 2000 Stellenbosch for R100 million (Andringa residential). Cession and Pledge of 29 726 516 Attacq shares by Abacus with a minimum value of R250 million. Prime – 1% Interest rate (R’000) 512 149 512 outstanding Capital amount cquisition of property Origination New a known as Mooirivier Mall Description Property Loan Facility (Mooirivier Mall) Borrower Abacus Holdings Proprietary Limited Lender Nedbank Limited
127 N/A (R’000) of finance and method payable in the next 12 months Capital amount Repayment terms The loan will be settled on 1 October 2022. Currently only the interest on the loan is paid monthly and after 2 years and 3 months the capital will start to be settled Security Mortgage Bond by Abacus over Erven 6083, 4282, 7365, 2045, 2048, 4803, 2046/RE, 2043/RE Stellenbosch for R800 million (Eikestad – 80% undivided share in the properties). Mortgage Bond by Abacus over Remainder of the Farm Mooirivier Mall, Farm No. 707 and Erf 1365 Baillie Park for R720 million (Mooirivier). Mortgage Bond by Abacus over undivided25% share in Erf 415, 438, Nieuw Muckleneuk 178 for R390 million (Brooklyn Mall). Mortgage Bond by Abacus over Sections 1 and 2 in the sectional title scheme known as “Andringa Walk” together with the undivided share in the common property and the right of exclusive use for R350 million (Skybird/Andringa/ Mill Square). Sectional Covering Bond by Abacus over Sections 22, 1, 23, 26, 30, 34 33, and27, which 36 (of section 36 is to be released and replaced by section 38) in the Scheme “De Waal”, together with an undivided share in the common property and any right of exclusive use, situated on Erf 2000 Stellenbosch for R100 million (Andringa residential). Cession and Pledge of 29 726 516 Attacq shares by Abacus with a minimum value of R250 million. Prime – 1% Interest rate (R’000) 367 981 outstanding Capital amount cquisition Origination New a Description Property Loan Facility (Brooklyn Mall) Borrower Abacus Holdings Proprietary Limited Lender Nedbank Limited
128 (R’000) 306 599 of finance and method rental income payable in the next 12 months Capital amount Cash generated from Repayment terms The loan will be settled on 1 December 2022. Currently only the interest on the loan is paid monthly and after 2 years and 3 months the capital will start to be settled Security Mortgage Bond by Abacus over Erven 6083, 4282, 7365, 2045, 2048, 4803, 2046/RE, 2043/RE Stellenbosch for R800 million (Eikestad – 80% undivided share in the properties). Mortgage Bond by Abacus over Remainder of the Farm Mooirivier Mall, Farm No. 707 and Erf 1365 Baillie Park for R720 million (Mooirivier). Mortgage Bond by Abacus over undivided25% share in Erven 415, 438, Nieuw Muckleneuk 178 for R390million (Brooklyn Mall). Mortgage Bond by Abacus over Sections 1 and 2 in the sectional title scheme known as “Andringa Walk” together with the undivided share in the common property and the right of exclusive use for R350 million (Skybird/Andringa/ Mill Square). Sectional Covering Bond by Abacus over Sections 22, 1, 23, 26, 30, 34 33, and27, which 36 (of section 36 is to be released and replaced by section 38) in the Scheme “De Waal”, together with an undivided share in the common property and any right of exclusive use, situated on Erf 2000 Stellenbosch for R100 million (Andringa residential). Cession and Pledge of 29 726 516 Attacq shares by Abacus with a minimum value of R250 million. Interest rate Prime – 0.35% – 1% on completion– 1% Converting to Prime (during construction) (R’000) 306 647 outstanding Capital amount cquisition and development Origination New a of Andringa Walk Description Property Loan Facility (Skybird – Andringa Walk) Borrower Abacus Holdings Proprietary Limited Lender Nedbank Limited
129 563 (R’000) of finance and method rental income payable in the next 12 months Capital amount Cash generated from . Repayment terms The loan will be settled on 1 October 2022. Currently only the interest on the loan is paid monthly and after 2 years and 3 months the capital will start to be settled Security Mortgage Bond by Abacus over Erven 6083, 4282, 7365, 2045, 2048, 4803, 2046/RE, 2043/RE Stellenbosch for R800 million (Eikestad – 80% undivided share in the properties). Mortgage Bond by Abacus over Remainder of the Farm Mooirivier Mall, Farm No. 707 and Erf 1365 Baillie Park for R720 million (Mooirivier). Mortgage Bond by Abacus over undivided25% share in Erven 415, 438, Nieuw Muckleneuk 178 for R390 million (Brooklyn Mall). Mortgage Bond by Abacus over Sections 1 and 2 in the sectional title scheme known as “Andringa Walk” together with the undivided share in the common property and the right of exclusive use for R350 million (Skybird/Andringa/ Mill Square). Sectional Covering Bond by Abacus over Sections 22, 1, 23, 26, 30, 34 33, and27, which 36 (of section 36 is to be released and replaced by section 38) in the Scheme “De Waal”, together with an undivided share in the common property and any right of exclusive use, situated on Erf 2000 Stellenbosch for R100 million (Andringa residential). Cession and Pledge of 29 726 516 Attacq shares by Abacus with a minimum value of R250 million. Interest rate Prime-0.75% 563 (R’000) outstanding Capital amount cquisition Origination New a acility oan f Description Secured l Borrower Abacus Holdings Proprietary Limited There are interest no and/capital redemption payments in arrears. Otherthan those loans entitiesto in which directors havean interest asdisclosed inthis prospectus andwhich mayindirectly benefit those directors, thereloan havebeen no furnished or to for the benefit any of director manager or any or associate any of director manager of the of group. As at the last practical date there were loans no advanced by any the of companies in the group other than the inter-company group loans set in out paragraph 3 below MATERIAL LOANS RECEIVABLE BY THE GROUP 2.1 2.2 2.3 Lender Nedbank Limited 2.
130 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A (R’000) of finance and method payable in the next 12 months Capital amount Repayment terms No fixed period or repayment terms No fixed period or repayment terms No fixed period or repayment terms No fixed period or repayment terms No fixed period or repayment terms No fixed period or repayment terms No fixed period or repayment terms No fixed period or repayment terms No fixed period or repayment terms No fixed period or repayment terms No fixed period or repayment terms Security Unsecured None None Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured None None Interest rate Nil Nil Nil Nil Nil Nil Nil Nil Nil Prime Nil 49 189 49 19 295 19 75 98275 91 77791 47 00247 50 388 54 262 42 463 26 006 (R’000) Capital 155 029 155 150 035 150 amount outstanding Origination Inter-company loan used to record operating expenses incurred by one company on behalf of another and to record funding for capital expenditure. Cash, originating on sale of building distributed to shareholder. Cash, originating on sale of shares, distributed to shareholder. Inter-company loan used to record operating expenses incurred by one company on behalf of another and to record funding for capital expenditure. Cash, originating on sale of assets distributed to shareholder. Cash, originating on sale of shares, distributed to shareholder. Cash, originating on sale of assets distributed to shareholder. Cash, originating on sale of shares, distributed to shareholder. New acquisitions Cash, originating on sale of building distributed to shareholder. Inter-company loan used to record operating expenses incurred by one company on behalf of another Description Inter-company loan Loan from subsidiary Loan from subsidiary Inter-company loan Loan from subsidiary Loan from subsidiary Loan from subsidiary Loan from subsidiary Shareholder’s loan Loan from subsidiary Inter-company loans Borrower Design Square Shopping Centre Proprietary Limited Attacq Attacq Highgrove Property Holdings Proprietary Limited Attacq Attacq Attacq Attacq Lynnwood Bridge Office Park Proprietary Limited Attacq Lynnwood Bridge Office Park Proprietary Limited INTER-COMPANY LOANS Lender Highgrove Property Holdings Proprietary Limited Lord Charles and Lady Brooks Office Park Holdings Proprietary Limited Atterbury Attfund Investment Company No 1 Proprietary Limited Attacq Aldabri 96 Proprietary Limited Atterbury Attfund Investment Company No 2 Proprietary Limited Design Square Shopping Centre Proprietary Limited Atterbury Attfund Investment Company No 3 Proprietary Limited Attacq Lady Brooks Proprietary Limited Attacq 3.
131 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A (R’000) of finance and method payable in the next 12 months Capital amount Repayment terms No fixed period or repayment terms No fixed period or repayment terms No fixed period or repayment terms No fixed period or repayment terms No fixed period or repayment terms No fixed period or repayment terms None None None No fixed period or repayment terms. No fixed period or repayment terms No fixed period or repayment terms No fixed period or repayment terms No fixed period or repayment terms Security None Unsecured Unsecured Unsecured Unsecured Unsecured None None None Unsecured Unsecured Unsecured Unsecured Unsecured il Interest rate Nil Nil Nil Nil Nil N Prime Prime Prime Nil Prime Nil Various Nil 4 686 83 717 83 16 889 16 25 02825 98 993 26 343 64 097 (R’000) 189 517 189 Capital 366 191 169 463 169 107 624 107 amount 804 625 287 663 484 728 outstanding Origination Inter-company loan to record funding for capital expenditure and to fund bond repayments’. Repayment of Investec bond Acquisition and development of Property Acquisition and development of Property Repayment of Investec bond. Acquisition and development of property Distribution of cash from holding company. New Development – Waterfall Infrastructure New Development – Waterfall New Development – Waterfall Land Transfer Funding for share purchases Funding for purchasing investment property. Funding for developments in Mauritius: Bagaprop Limited and Mall of Mauritius Limited Funding for development in Newtown Property Proprietary Limited Funding for investments in Africa and other parts of the world. Description Shareholder’s loan Shareholder’s loan Shareholder’s loan Shareholder’s loan Shareholder’s loan Shareholder’s loan Inter-company/Shareholder’s Loan Inter-company/Shareholder’s Loan Inter-company/Shareholder’s Loan Inter-company loan account – subsidiary of Attacq Inter-company loan account – subsidiary of Attacq Inter-company loan account – associate of Atterbury Mauritius Consortium Proprietary Limited Inter-company loan account – subsidiary of Attacq Inter-company loan account – subsidiary of Attacq Borrower De Ville Shopping Centre Proprietary Limited Le Chateau Property Development Proprietary Limited Atterbury Mauritius Consortium Proprietary Limited Atterbury Mauritius Consortium Proprietary Limited Le Chateau Property Development Proprietary Limited Atterbury Property Holdings Proprietary Limited Atterbury Waterfall Investment Company Proprietary Limited Atterbury Waterfall Investment Company Proprietary Limited Atterbury Waterfall Investment Company Proprietary Limited Razorbill Properties 91 Proprietary Limited Mantrablox Proprietary Limited Bagaprop Limited Nieuwtown Property Development Company Proprietary Limited Atterbury Investment Holdings International Limited Lender Attacq Attacq Atterbury Property Holdings Proprietary Limited Attacq Atterbury Property Developments Proprietary Limited Attacq Attacq Atterbury Waterfall City Proprietary Limited Attacq Attacq Attacq Atterbury Mauritius Consortium Proprietary Limited Attacq Attacq
132 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A (R’000) of finance and method payable in the next 12 months Capital amount Repayment terms No fixed period or repayment terms No fixed period or repayment terms Bullet payments of 000R4 000 is to be made in months 36, 48, 60 and 72. A final bullet payment will be paid in month 84 in addition to the interest payments No fixed period or repayment terms No fixed period or repayment terms No fixed period or repayment terms No fixed period or repayment terms No fixed period or repayment terms No fixed period or repayment terms No fixed period or repayment terms No fixed period or repayment terms Security Unsecured Unsecured Cession of shares and loan account in Sinco Investments Six Proprietary Limited Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured None Unsecured Interest rate Prime Prime plus 1.5% Prime minus 0.5% Nil Prime Nil Nil Nil Prime Nil 15 149 15 62 173 19 295 19 66 559 24 055 45 09745 50 485 43 549 13 68413 79 646 (R’000) Capital 483 562 amount outstanding Origination Shareholder’s loan from Attacq to Atterbury Property, Assisting Atterbury Property in the funding obligations to Mall of Mauritius, Assisting Atterbury Property with their funding obligations to Sinco Investments Six Proprietary Limited in Namibia Funding Atterbury Property WBHO deal. Funding from Attacq to Atterbury Property for the Sinco Investments Six Proprietary Limited deal. Funding Funding for developments. Shareholders loan/Funding Funding for developing Mall of Namibia. Funding Funding, following rights issue Funding – operational. Intercompany loan used to record operating expenses incurred by one company on behalf of another Description Inter-company loan account – associate of Attacq Inter-company loan account – associate of Attacq Inter-company loan account – associate of Attacq Inter-company loan account – associate of Attacq Inter-company loan account – associate of Attacq Inter-company loan account – associate of Attacq Inter-company loan account – associate of Attacq Inter-company loan account – associate of Attacq Inter-company loan account – associate of Attacq Inter-company loan account – associate of Attacq Inter-company loan account – subsidiary of Attacq Borrower Atterbury Property Holdings Proprietary Limited Atterbury Property Holdings Proprietary Limited Atterbury Property Holdings Proprietary Limited Keysha Investments 213 Proprietary Limited The Club Retail Park Proprietary Limited Arctospark Proprietary Limited Sinco Investments Six Proprietary Limited Geelhoutboom Estate Proprietary Limited Leipzig Nova Eventis Consortium Proprietary Limited Fountains Regional Mall Proprietary Limited Lynnwood Bridge Office Park Proprietary Limited Lender Attacq Attacq Attacq Attacq Attacq Attacq Attacq Attacq Attacq Attacq Attacq
133 – N/A N/A N/A paid for vendor† Amount goodwill by Annexure 12 N/A N/A N/A within 3 years)† to vendor preceding Cost of asset (if purchased R120 292 233 R189 000 000 N/A N/A 2008 within Date of 3 years† preceding 1 July 2011 Further 7% acquired on 1 May 2011 acquisition acquire 18% (if purchased by the vendor – – – Nil in which Goodwill/ Intangible assets paid and manner accounted for aluation aluation R1 659 315 000 315 R1 659 30 MillsJune 2011 Fitchet valuation for 100% of building R717 500R717 000 30 June 2011 OMIGSA v for 100% of building R564 700 000 30 June 2011 OMIGSA v for 100% of building R392 206 748 Valuation Nedbank bond: R332 568 891 Nedbank Bond: R548 501. 210 Shareholder’s loan to Mooirivier Mall Proprietary Limited: 939 190 R45 Nedbank Limited Bond: R404 772. 189 Abacus Trust loan: R100 000 000 – Loans incurred to finance acquisition – – – – Other – – – Cash portion R392 206 748 Abacus shares issued to Attacq to the value of R95 662 804 Abacus shares issued to Nedbank Limited to the value of 100 000R119 – – Issue of securities Consideration (R) 1 September 2011 1 September 2011 1 September 2011 30 November 2010 Date of acquisition by Attacq and/or its subsidiary‡ Highgrove Property Holdings Proprietary Limited Abacus Trust Abacus Trust N/A Names of beneficial shareholders of vendor Mertech Building, Glenfield Office Park, Faerie Glen, Pretoria 3rd Floor, Eikestad Mall, Andringa Street, Stellenbosch, 7600 3rd Floor, Eikestad Mall, Andringa Street, Stellenbosch, 7600 N/A Address of vendor Design Square Shopping Centre Proprietary Limited Registration number 1995/009254/07 Mooirivier Mall Proprietary Limited Registration number 2006/036007/07 Eikestad Mall Proprietary Limited Registration number 2006/037145/07 N/A Name of Vendor Abacus Holdings Proprietary Limited Registration number 2008/021582/07 Abacus Holdings Proprietary Limited Registration number 2008/021582/07 Abacus Holdings Proprietary Limited Registration number 2008/021582/07 Razorbill Properties 91 Proprietary Limited Registration number 2000/006755/07 Entity which acquired the asset 25% undivided25% share in Brooklyn Mall 100% of Mooirivier Mall 80% of Eikestad Mall Buy-back of Attacqshares from external shareholders. 29053 123 shares bought back at perR7.37 share Name and nature of the asset acquired 4 3 2 1 No. DETAILS OF ACQUISITIONS AND VENDORS The immovable properties, subsidiaries and investments acquired by theto be Attacqacquired are group detailedin in the the tablethree below, togetheryears with thepreceding names andthe addressesconsiderationlast paid by theof vendors.practicablethe vendors of datethe immovableand propertiesimmovable and/or securitiesproperties, purchasedsubsidiaries by Attacqand and/or investmentsits subsidiaries and the
134 N/A N/A None None None paid for vendor† Amount goodwill by N/A N/A N/A cost of within 3 years)† to vendor preceding Cost of asset Construction (if purchased R449 273 934 R219 084 422 N/A N/A 2010 during within Date of in 2008 3 years† Acquired preceding acquisition commenced August 2010. Construction 31 November31 (if purchased by the vendor – – – – N/A in which Goodwill/ Intangible assets paid and manner accounted for A valuation R979 000 000 R631 000R631 000 30 June 2012 OMIGS for 100% of building R876 300 000 30 June 2011 OMIGSA valuation for 100% of building R250 000 000 Valuation R2 815 749 763 749 R2 815 R979 000 000 RMB Bond: 000R450 000 RMB Bond: R50 000 000 The Standard Bank of South Africa Limited Bond: R300 384. 116 Shareholder’s loans: R588 000 721 – Loans incurred to finance acquisition N/A – – Other in specie Distribution paid to settle existing bond R449 273 934 – – – – N/A Cash portion – – – Abacus shares issued to Attacq to the value of R250 000 000 Issue of securities N/A Consideration (R) 30 June 2011 Construction commenced August and 2010 was transferred to Lynnaur Investments 10 Proprietary Limited on 20 April 2012. 1 September 2011 1 September 2011 Date of acquisition by Attacq and/or its subsidiary‡ 1 September 2011 cois van an Waterfall Investment Company Proprietary Limited Group Five Construction Proprietary Limited Attacq Hyprop Limited Attacq Various private investors including the current and past directors, who hold direct and indirect interests in Attfund including Morne Wilken, Pierre Tredoux, Fr Names of beneficial shareholders of vendor Niekerk, Gideon Oosthuizen, Louis van der Watt and Pieter Faure AdOutpost Building, Woodmead North Office Park, 54Maxwell Drive, Jukskei View, Sandton The Atterbury Building, 4 Daventry Street, Lynnwood Manor, Pretoria, 0081 2nd Floor, Parkdev Building, Brooklyn Bridge, Fehrsen570 Street, Brooklyn, Pretoria, 0181 The Atterbury Building, 4 Daventry Street, Lynnwood Manor, Pretoria, 0081 2nd Floor, Parkdev Building, Brooklyn Bridge, Fehrsen570 Street, Brooklyn, Pretoria, 0181 Address of vendor Waterfall Development Company Proprietary Limited Lynnwood Bridge Office Park Proprietary Limited Femtoworx Limited Registration number 2010/013504/06 Razorbill Properties 91 Proprietary Limited Registration number 2000/006755/07 Attfund Name of Vendor Attacq (Registration number 1997/000543/06) Lynnaur Investments 10 Proprietary Limited Mantrablox Proprietary Limited Registration number 2010/011244/07 Abacus Holdings Proprietary Limited Registration number 2008/021582/07 Attacq, subsidiaries and associates Entity which acquired the asset 121 580121 547 Attacq shares bought back from Waterfall Development Company Proprietary Limited Aurecon Building Garden Route Mall. 29 726 516 Attacq29 726 516 shares from Razorbill Properties 91 Proprietary Limited Registration number 2000/006755/07 100% of Attacq’s interest in Attfund Retail Name and nature of the asset acquired 9 8 7 6 5 No.
135 – N/A paid for vendor† Amount goodwill by – N/A within 3 years)† to vendor preceding Cost of asset (if purchased N/A 2010 within Date of 3 years† preceding acquisition (if purchased by the vendor – in which Goodwill/ Intangible assets paid R62 455 619 R62 455 and manner accounted for R711 064R711 389 Valuation R299 460 123 R155 576 431 576 R155 Loans incurred to finance acquisition N/A – share Other Limited Proprietary loan account settlement of R84 434 476 repurchase of Attacq shares in Arctospark R483 562 482 Cash portion R155 567 431 R155 R135 544 399 – Attacq shares to the value of R135 544 399 Issue of securities Consideration (R) 1 April 2013 1 July 2013 Date of acquisition by Attacq and/or its subsidiary‡ Attacq Homestead Group Holdings Limited Exdiem Trust Rameros Investments Proprietary Limited Deketo Trust Franicali Trust De Katwijk Trust Yvette van der Merwe Finlay & Associates Pedal Beleggings Jacobus Theron Gesinstrust Parkdev Investments Atterbury Property Holdings Proprietary Limited Attventure Proprietary Limited Names of beneficial shareholders of vendor Corner Crown and Main Streets, Waterkloof, Pretoria The Atterbury Building, 4 Daventry Street, Lynnwood Manor, Pretoria, 0081 Address of vendor Arctospark Proprietary Limited Registration number 2010/007113/07 Atterbury Asset Managers Proprietary Limited Registration number 2007/004176/07 Name of Vendor Attacq (Registration number 1997/000543/06) Attacq (Registration number 1997/000543/06) Entity which acquired the asset Acquire 50% of assets in Arctospark Proprietary Limited Acquisition of 100% of AAM Name and nature of the asset acquired † The date of acquisition by the vendor, the cost of the property to each vendor and the amount paid^ Date for goodwill when transfer by each took vendor place could or effective not be obtained date due of the to inaccessibility agreement. to the prior‡ All vendor. dates in the table above, with the exception of acquisition number 8, reflect the effective date of the transaction. 11 10 No.
136 Annexure 13
FINANCIAL INFORMATION REQUIRED IN TERMS OF REGULATION 79 OF THE COMPANIES ACT IN RESPECT OF ATTACQ
In terms of Regulation 79 of the Companies Act, Annexure 13 includes the historical profits of Attacq for the preceding three financial periods being the nine months ended 31 March 2013 and the years ended 30 June 2012 and 30 June 2011 as well as its statement of financial position as at 31 March 2013. Extract from the statement of comprehensive income of the group
Financial Financial Nine months year ended year ended ended 30 June 2011 30 June 2012 31 March 2013 R’000 R’000 R’000 Continued operations: Gross rental income 256 277 639 856 429 607 Operating profit/(loss) 60 930 (2 507 654) 172 052 Profit before tax 844 636 745 422 663 619 Profit after tax 757 258 560 381 531 804 Profit from discontinued operations, net of taxation 61 429 24 436 29 934 Dividends declared/paid – – – The operating loss for the year ended 30 June 2012 includes the write-down of the earlier investment in Attfund Limited. Extract from the statement of comprehensive income of the company
Financial Financial year ended Nine months year ended 30 June 2012 ended 30 June 2011 Restated 31 March 2013 R’000 R’000 R’000 Continued operations: Gross rental income 135 932 176 632 31 999 Operating profit/(loss) 61 866 (2 585 638) (103 837) Profit before tax 26 323 1 405 720 5 705 Loss/(profit) after tax (14 361) 1 228 462 2 824 Profit from discontinued operations 68 786 66 688 21 859 Other comprehensive income/(loss), net of taxation 544 122 (753 834) 465 400 Dividends declared/paid – – – The operating loss for the year ended 30 June 2012 includes the write-down of the earlier investment in Attfund Limited.
137 Extract from the statement of financial position of the company and the group as at 31 March 2013
Company Group R’000 R’000 ASSETS Non-current assets 3 305 491 10 402 446 Property, plant and equipment 333 3 537 Investment properties 316 085 9 059 502 Straight-line lease debtor 9 414 118 889 Deferred initial lease expenditure 6 942 6 946 Investment in associates 715 327 1 155 395 Investment in subsidiaries 2 199 477 – Other investments 57 913 57 913 Deferred tax assets – 264 Current assets 3 585 245 1 207 116 Inventories – 41 660 Taxation receivable – 4 349 Trade and other receivables 8 560 86 023 Loans to associates and joint ventures 840 480 878 019 Loans to subsidiaries 2 605 388 – Other financial assets 44 971 46 891 Cash and cash equivalents 85 846 150 174 Non-current assets classified as held for sale 689 271 962 488 Total assets 7 580 007 12 572 050 EQUITY AND LIABILITIES Equity attributable to owners of the holding company 5 502 481 5 181 247 Issued capital and share premium 2 808 061 2 196 594 Distributable reserves 1 479 627 2 979 846 Available-for-sale reserve 1 209 991 – Equity-settled employee benefit reserve 4 802 4 802 Foreign currency translation reserve – 5 Minority interests – 354 277 Total equity 5 502 481 5 535 524 Liabilities Non-current liabilities 661 971 4 950 858 Long-term borrowings and other financial liabilities 278 139 3 572 115 Deferred tax liabilities 309 362 688 644 Provision for liabilities relating to associates 63 378 63 378 Provision for liabilities relating to subsidiaries 11 092 – Finance lease liability – 626 721 Current liabilities 1 183 555 1 686 145 Loans from subsidiaries 498 890 – Finance lease liability – 6 480 Taxation payable 43 070 48 427 Trade and other payables 46 811 276 047 Provisions – 17 491 Current portion of long-term borrowings and other financial liabilities 594 784 1 337 700 Non-current liabilities directly associated with assets held for sale 232 000 399 523 Total liabilities 2 077 526 7 036 526 Total equity and liabilities 7 580 007 12 572 050
138 Annexure 14
REPORT BY THE AUDITOR IN TERMS OF REGULATION 79 OF THE COMPANIES ACT IN RESPECT OF ATTACQ
“The Directors Attacq Limited The Parkdev Building 2nd Floor Brooklyn Bridge 570 Fehrsen Street Brooklyn 0181
INDEPENDENT AUDITOR’S REPORT IN TERMS OF REGULATION 79 OF THE COMPANIES ACT OF SOUTH AFRICA ON THE FINANCIAL INFORMATION INCLUDED IN THE PROSPECTUS Introduction Deloitte & Touche are the appointed auditors of Attacq Limited (“the Company”). Regulation 79 of the Companies Act of South Africa requires us to report on the following financial information (“financial information”), which is included in the prospectus of the Company to be issued on or about 7 October 2013: • The consolidated and separate profits or losses of the company in respect of the 9 months ended 31 March 2013 and years ended 30 June 2012 and 30 June 2011 in Annexure 13 of the prospectus; • The consolidated and separate assets and liabilities of the company as at 31 March 2013, as set out in Annexure 13 to the prospectus; • The dividends paid by the Company in respect of each class of securities for the 9 months ended 31 March 2013 and financial years ended 30 June 2012 and 30 June 2011 as set out in Annexure 13 to the prospectus, including particulars of each class of share on which dividends were paid and cases where no dividends were paid in respect of a particular class of shares. The financial information has been extracted from the audited consolidated financial statements of the Company for the 9 months ended 31 March 2013 and the years ended 30 June 2012 and 30 June 2011, which were prepared in accordance with International Financial Reporting Standards and the Companies Act of South Africa. We expressed an unqualified audit opinion on those audited consolidated financial statements in our reports dated 9 September 2013, 7 November 2012 and 7 November 2011, based on our audit which was conducted in accordance with International Standards on Auditing. This financial information does not reflect the effects of events that may have occurred subsequent to the date of our audit report on those audited consolidated annual financial statements. Furthermore, the financial information does not contain all the disclosures required by the International Financial Reporting Standards and the requirements of the Companies Act of South Africa and therefore reading the financial information is not a substitute for reading the audited consolidated financial statements of the Company.
Extraction of financial information As a result of the financial information being extracted from the audited consolidated financial statements, we can report that in the context of the audit performed on these annual financial statements: • The financial information is not materially misstated and is prepared on a basis consistent with the Companies Act of South Africa; • The debtors and creditors included in the financial information did not include any material amounts that were not trade accounts; • The provision for doubtful debts included in the financial information did not appear to be materially misstated; • The provisions for inventory obsolescence or inventory overvaluation did not appear to be materially misstated; and • In respect of the consolidated financial information, the intercompany profits have been eliminated.
Responsibility of the directors for the financial information The directors are responsible for the audited consolidated financial statements, the extraction of the financial information therefrom, and the presentation of the financial information in accordance with the requirements of the Companies Act of South Africa.
REPORT OF FACTUAL FINDINGS ON THE MATERIAL CHANGES IN THE ASSETS AND LIABILITIES In accordance with Regulation 79(4)(b)(v) we are required to include a statement in our report, as to whether there have been any material changes in the assets and liabilities of the Company and its subsidiaries since the consolidated 9 month financial statements dated 31 March 2013. As a result, we have performed the following procedures which were agreed with you: • We reviewed the latest management accounts including the consolidated management accounts of the Company and compared the categories of assets and liabilities to the consolidated statement of financial position dated 31 March 2013. Where movements in the assets and liabilities were in excess of 20%, these have been reported in the findings below.
139 • We reviewed minutes of meetings of the board of directors of the Company and its subsidiaries since 31 March 2013 to identify any matters regarding material changes in the assets and liabilities, such as the sale or purchase of a significant asset. • We obtained a letter of representation from management confirming that there have been no material changes in the assets and liabilities of the Company and its subsidiaries since 31 March 2013. Our engagement was undertaken in accordance with the International Standard on Related Services (ISRS) 4400: Engagements to Perform Agreed-Upon Procedures Regarding Financial Information. The procedures were performed solely to assist you in complying with Regulation 79(4)(b)(v) of the Companies Act of South Africa.
Responsibilities of the directors The directors have the responsibility for the accuracy and completeness of the records, documents, explanations and other information provided to us for the purpose of performing the procedures and for determining whether the nature and scope of our work specified in this factual findings report is sufficient for the purposes of evaluating the material changes in the assets and liabilities of the Company and its subsidiaries.
Responsibilities of the auditor An agreed upon procedure engagement involves applying our expertise to perform procedures as agreed by us and the directors and reporting the factual findings from the procedures performed. We have complied with relevant ethical requirements, including the principles of integrity, objectivity, professional competence and due care. Since an agreed upon procedure engagement is not an assurance engagement, we are not required to verify the accuracy or completeness of the information management has provided to us to complete the agreed upon procedure engagement. Because the above procedures do not constitute either an audit or a review made in accordance with International Standards on Auditing or International Standards on Review Engagements, we do not express any assurance on the material changes in the assets and liabilities of the Company and its subsidiaries. Had we performed additional procedures or had we performed an audit or review of the financial statements in accordance with International Standards on Auditing or International Standards on Review Engagements, other matters might have come to our attention that would have been reported.
Findings We report our findings as follows: • On 9 September 2013, we compared the below categories of assets and liabilities per the management accounts for the year ended 30 June 2013 to the consolidated statement of financial position for the period ended 31 March 2013. –– Non-current assets; –– Current assets; –– Non-current assets classified as held for sale; –– Non-current liabilities; –– Current liabilities; and –– Non-current liabilities directly associated with assets classified as held for sale. • For these categories of assets and liabilities, no movements in excess of 20% were identified. Our findings relate only to the accounts and items specified above and do not extend to any financial statements of the Company taken as a whole.
Consent We consent to the inclusion of this report, which will form part of the prospectus to the shareholders of Attacq Limited, to be issued on or about 7 October 2013, in the form and context in which it appears. Our report should not to be used for any other purpose or be distributed to any other parties.
Deloitte & Touche Registered Auditor Per: Z Jasper Partner
Deloitte & Touche Registered Auditors Riverwalk Office Park, Block B 41 Matroosberg Road, Ashlea Gardens X6 Pretoria, 0081 (PO Box 11007, Hatfield, 0028)
19 September 2013”
140 Annexure 15
FORECAST STATEMENTS OF COMPREHENSIVE INCOME OF THE ATTACQ GROUP
Set out below are the forecast statements of comprehensive income of the Attacq group (“forecasts”), incorporating the aggregated property portfolio, for the years ending 30 June 2014 and 30 June 2015 (“forecast periods”). The forecasts, including the assumptions on which they are based and the financial information from which they are prepared, are the responsibility of the directors. The forecasts must be read in conjunction with the Independent Reporting Accountant’s limited assurance report thereon which is attached as Annexure 16. The forecasts have been prepared in compliance with IFRS and in accordance with the Group’s accounting policies as set out in Annexure 20. Forecast for the Forecast for the year ending year ending R’000 30 June 2014 30 June 2015 Continuing operations Gross rental income 836 434 1 163 467 Rental income 732 936 1 021 753 Straight-line lease income adjustments 103 498 141 714 Property expenses (239 268) (289 922) Net rental income 597 166 873 545 Other income 12 770 147 Operating and other expenses (42 609) (63 449) Operating profit before fair value adjustments 567 327 810 243 Fair value adjustments 959 416 978 868 Investment properties 521 860 773 040 Investment properties under development 437 556 205 828 Net income from associates 81 123 94 183 Profit before finance costs, investment income and capital items 1 607 866 1 883 294 Investment income 39 661 41 806 Finance costs (539 609) (666 963) Other finance costs (424 436) (566 310) Finance lease interest (115 173) (100 653) Profit before capital items 1 107 918 1 258 137 Profit on disposal of investment property 51 466 – Loss on disposal of subsidiary (1 195) – Profit on disposal of associate 21 500 – Loss on disposal of other investment (89 814) – Gain arising on bargain purchase adjustment 41 647 – Profit before taxation 1 131 522 1 258 137 Taxation (230 262) (244 120) Current tax (19 896) (23 461) Deferred tax (173 324) (220 659) Capital Gains Tax (37 042) – Profit for the year from continuing operations 901 260 1 014 017 Discontinued operations Profit from discontinued operations (net of tax) 34 655 18 324 Sold during the year (9 503) – Held for sale at the end of the year 44 158 18 324 Total comprehensive income for the year 935 915 1 032 341 Attributable to: Owners of the company 828 154 841 899 Non-controlling interests 107 761 190 442
141 Forecast for the Forecast for the year ending year ending R’000 30 June 2014 30 June 2015 Reconciliation between earnings, headline earnings and distributable earnings: Total comprehensive income attributable to owners 828 154 841 899 Adjusted for (net of tax and non-controlling interests): Fair value adjustments (713 623) (645 673) Profit on disposal of investment property (41 869) – Loss on disposal of subsidiary 972 – Profit on disposal of associate (26 838) – Loss on disposal of other investment 73 065 – Gain arising from bargain purchase (41 647) – Headline earnings 78 214 196 226 Straight-line lease income adjustments (64 657) (84 793) Finance lease adjustments 65 895 55 268 Finance lease interest 68 540 59 347 Actual lease payments (2 645) (4 079) Net income from associates (66 569) (76 620) Distributable earnings 12 883 90 081 Number of shares in issue (’000) 571 953 571 953 Weighted average number of shares in issue (’000) 547 110 571 953 Earnings per share – from continuing and discontinued operations (cents) 151.37 147.20 – from continuing operations (cents) 145.03 143.99 – from discontinued operations (cents) 6.34 3.21 Headline earnings per share – from continuing and discontinued operations (cents) 13.67 34.31 – from continuing operations (cents) 13.84 33.99 – from discontinued operations (cents) (0.17) 0.32
Notes: Continuing operations represent the forecasts for Attacq’s “core” properties which are further broken down into those properties that are operational for the entire forecast and those that come into operation during a forecast year. A more detailed breakdown of the forecast operational profit for each of the forecast years is provided below:
1. Detail on continuing operations forecast for the year ending 30 June 2014 Investment Investment Forecast properties properties for the (held for full (held for partial year ending R’000 financial year) financial year) 30 June 2014 Continuing Operations Gross rental income 665 923 170 511 836 434 Rental income 605 927 127 009 732 936 Straight line lease income adjustments 59 996 43 502 103 498 Property expenses (206 482) (32 786) (239 268)
Net rental income 459 441 137 725 597 166
Valuation as at 30 June 2013 5 406 151 1 503 110 6 909 261
1.1 “Investment properties (held for full financial year)” comprises the following:
% of property % effective non- Property consolidated controlling interest Glenfair Boulevard 100.0 – Eikestad Mall 80.0 14.4 Andringa Walk 100.0 18.0 Mill Square 80.0 14.4 Mooirivier Mall 100.0 18.0 Brooklyn Mall 25.0 4.5 Lynnwood Bridge 100.0 – Garden Route Mall 100.0 20.0 Massbuild Distribution Centre 100.0 –
142 1.2 “Investment properties (held for partial financial year)” comprises the following: % effective % of property non-controlling Rental income Developments consolidated interest Inclusion date (R’000) Cell C Campus 100.0 14.1 1 December 2013 43 917 Group 5 100.0 14.1 1 January 2014 24 823 Golder & Associates 50.0 7.0 1 January 2014 3 406 Attacq Building 50.0 7.0 1 February 2014 2 957 Lynnwood Bridge Phase III 100.0 – 1 April 2014 6 882 % effective % of property non-controlling Rental income Acquisitions consolidated interest Acquisition date (R’000) Brooklyn Bridge 100.0 – 31 October 2013 45 024
Total 127 009
2. Detail on continuing operations forecast for the year ending 30 June 2015 Investment properties Investment properties Forecast for (held for full (held for partial the year ending R’000 financial year) financial year) 30 June 2015
Continuing operations Gross rental income 1 025 172 138 295 1 163 467 Rental income 912 761 108 992 1 021 753 Straight-line lease income adjustments 112 411 29 303 141 714 Property expenses (269 901) (20 021) (289 922)
Net rental income 755 271 118 274 873 545
2.1 “Investment properties (held for full financial year)” comprises the following:
% effective % of property non-controlling Property consolidated interest
Glenfair Boulevard 100.0 – Eikestad Mall 80.0 14.4 Andringa Walk 100.0 18.0 Mill Square 80.0 14.4 Mooirivier Mall 100.0 18.0 Brooklyn Mall 25.0 4.5 Lynnwood Bridge 100.0 – Garden Route Mall 100.0 20.0 Massbuild Distribution Centre 100.0 14.1 Brooklyn Bridge 100.0 – Cell C Campus 100.0 14.1 Group 5 100.0 14.1 Golder & Associates 50.0 7.0 Attacq Building 50.0 7.0 Lynnwood Bridge Phase III 100.0 –
2.2 “Investment properties (held for partial financial year)” comprises the following:
% effective % of property non-controlling Rental income Developments consolidated interest Inclusion date (R’000) Newtown 100.0 37.5 1 October 2014 95 605 The Majestic 100.0 37.5 1 September 2014 13 387
Total 108 992
143 3. Discontinued operations Discontinued Operations represent properties that have been sold during the forecast period or are classified as available for sale. Attacq has disposed of or will dispose of the following at the specified dates during the forecast period:
Property Disposal date Sanridge Square 20 August 2013 Harlequins Office Park 23 August 2013 Atterbury House 30 September 2013 MB Technologies 30 November 2013
Great Westerford and De Ville are classified as held for sale and have been included under discontinued operations for the entire forecast period on the assumption that the directors remain committed to the plan to dispose of these properties in the future and that all other requirements of IFRS 5: Non-current Assets Held for Sale and Discontinued Operations are being met.
ASSUMPTIONS The forecasts incorporate the following material assumptions in respect of revenue and expenses that can be influenced by the directors: 1. Attacq’s management forecasts for the years ending 30 June 2014 and 30 June 2015 are based on analysis of historical information and information provided by Attacq’s internal and external property managers; 2. Attacq will acquire the following subsidiaries: –– Brooklyn Bridge Office Park Proprietary Limited, owner of the property known as Brooklyn Bridge, effective 31 October 2013, by acquiring the remaining 75% it does not already own; and –– AAM, effective 31 October 2013; 3. the following properties under development come into operation during the forecast periods and have been valued by the independent property valuers: –– Cell C Campus – 1 December 2013; –– Group 5 – 1 January 2014; –– Maxwell Office Park – Golder & Associates – 1 January 2014; –– Maxwell Office Park – Attacq Building – 1 February 2014; –– Maxwell Office Park – Premier Foods – 1 June 2014; –– Lynnwood Bridge Office Park (Phase III) – 1 April 2014; –– The Majestic – 1 September 2014; and –– Newtown – 1 October 2014; With the exception of Maxwell Office Park – Premier Foods, the forecasts for these properties include the related revenues, operating costs, interest and taxation;
4. the following properties under development come into operation during the forecast periods and have been valued based on management assumptions regarding net rental income, capitalisation rates, total costs of development and time to completion: –– Waterfall Corner – 1 March 2014; –– Dräger – 1 June 2014; –– Maxwell Office Park – Premier Foods – 1 June 2014; and –– City Lodge – 1 November 2014. For these properties only fair values adjustments and related taxation have been taken into account in the forecasts;
5. contracted revenue is based on existing lease agreements including stipulated increases, all of which are valid; 6. uncontracted revenue comprises 9.3% and 15.5% of rental income for the years ending 30 June 2014 and 30 June 2015, respectively, made up as follows: –– properties operational for the forecast periods comprise 8.5% and 14.2% of rental income for the years ending 30 June 2014 and 30 June 2015, respectively; –– properties under development which come into operation during the forecast periods or are acquired during the forecast periods comprise 0.8% and 1.3% of rental income for the years ending 30 June 2014 and 30 June 2015, respectively; 7. current vacant space has been forecast on a property-by-property basis and has been assumed to remain vacant unless it is deemed probable that such space will be let, in which case rental is forecast at prevailing market rates; 8. leases expiring during the forecast periods have been forecast on a lease-by-lease basis, and have been assumed to renew at current market rates unless the lessee has indicated its intention to terminate the lease; 9. property operating expenditure has been forecast on a line-by-line basis for each property based on management’s review of historical expenditure and discussion with the Property Manager; 10. fair value adjustments to: –– investment properties have been forecast based on expected net property incomes and capitalisation rates used by the independent property valuers at 30 June 2013 as set out in Annexure 8; and –– investment properties under development have been forecast in accordance with Attacq’s accounting policies as more fully set out in Annexure 20. External valuers value properties under development with reference to the fair value at date of completion adjusted for the actual costs still to be incurred. Attacq applies a more conservative approach when recognising the fair value of properties under construction in its financial statements in that the total fair value gain or loss (being the difference between the actual costs incurred and the fair value of the property on the date of completion) is recognised over the period of construction taking into account the percentage of completion; i.e. the percentage applied in recognising the fair value gain or loss will equal the percentage of completion of the property.
The forecasts incorporate the following material assumptions in respect of revenue and expenses that cannot be influenced by the directors: 1. existing interest-bearing borrowings advanced by various South African banks and financial institutions, will incur interest at the current prevailing interest rates; 2. the gross rights offer proceeds of R580 million are utilised to settle short-term liabilities; 3. it has been assumed that in terms of the private placement, 53.3 million Attacq shares are issued at R15.00 per Attacq share raising gross proceeds of R800 million; 4. the combined gross private placement proceeds of R800 million are assumed to be applied as follows: –– to settle restructuring and issue expenses of R24.2 million; –– to settle short-term debt of R275.8 million; and –– the balance of R500 million held in cash for later deployment into developments; and 5. there will be no unforeseen economic factors that will affect the lessees’ abilities to meet their commitments in terms of existing lease agreements.
144 Material items of expenditure within the property expenses line item include: • R79 million in electricity and R66 million in rates in respect of the year ending 30 June 2014; • R113 million in electricity and R103 million in rates in respect of the year ending 30 June 2015; Rates are expected to increase by more than 15% from historical cost due to the increase in the size of the portfolio. The forecasts incorporate Attacq’s proportionate share of forecast total comprehensive income of the following associates: • Atterbury Africa; • Atterbury Property; • Bagaprop Limited; • Mall of Mauritius at Bagatelle Limited; • MAS; • Brooklyn Bridge Office Park Proprietary Limited (prior to acquisition of the remaining 75% effective 31 October 2013); • REACH; • Sinco Investments Six Proprietary Limited; and • Travenna Development Company Proprietary Limited.
145 Annexure 16
INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON THE FORECAST STATEMENTS OF COMPREHENSIVE INCOME OF THE ATTACQ GROUP
“The Directors Attacq Limited The Parkdev Building 2nd Floor, Brooklyn Bridge 570 Fehrsen Street Brooklyn 0181
INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON THE PROPERTY FORECAST INCLUDED IN THE PROSPECTUS
We have examined the property forecast statements of comprehensive income and the underlying assumptions of Attacq Limited (“the Company” or “the Group”) for the financial years ending 30 June 2014 and 30 June 2015, as set out in Annexure 15 to the prospectus to the Company’s unitholders to be dated on or around 7 October 2013, and the forecast vacancy profile, by sector and by gross lettable area and the forecast lease expiry profile based on existing lease agreements, as set out in paragraph 3.9 of the prospectus (collectively “forecast information”). The forecast information has been prepared and presented in accordance with the JSE Listings Requirements. In terms of the JSE Listings Requirements, the forecast statements of comprehensive income must be prepared on an aggregated basis for the property portfolio on the basis of the future accounting policies of the Group which must be in accordance with International Financial Reporting Standards. Directors’ responsibility The directors are responsible for the preparation and presentation of the forecast information in accordance with the JSE Listings Requirements, including the assumptions set out in Annexure 15, on which it is based, and for the financial information from which it has been prepared. This responsibility includes determining whether: • The assumptions, barring unforeseen circumstances, provide a reasonable basis for the preparation of the forecast information; • The forecast information has been properly compiled on the basis stated; • The forecast information has been properly presented and that all material assumptions are adequately disclosed; and • The forecast information is presented on a basis consistent with the accounting policies of the Group.
Reporting accountant’s responsibility Our responsibility is to express a limited assurance conclusion on the reasonableness of the assumptions used in the forecast information and whether the forecast information has been prepared on the basis of those assumptions and is presented in accordance with the JSE Listings Requirements, based on the procedures we have performed and the evidence we have obtained. We conducted our assurance engagement in accordance with the International Standard on Assurance Engagement (“ISAE”) 3400: The Examination of Prospective Financial Information, issued by the International Auditing and Assurance Standards Board and the SAICA circular entitled “The reporting accountant’s reporting responsibilities in terms of section 13 of the Listings Requirements of the JSE Limited”. This standard requires that we plan and perform the engagement to obtain sufficient appropriate evidence on which to base our limited assurance conclusion as to whether or not: • Management’s best-estimate assumptions on which the forecast information is based are not unreasonable and are consistent with the purpose of the information; • The forecast information is properly prepared on the basis of the assumptions; • The forecast information is properly presented and all material assumptions are adequately disclosed; • The forecast information is prepared and presented on a basis consistent with the accounting policies of the Group in question for the period concerned; and • The property forecast reflects a profit before taxation of more than R8 million after taking into account the headline earnings adjustments and before any distributions to security holders as required by JSE Listings Requirements 13.3(a). In a limited assurance engagement, the evidence-gathering procedures vary in nature from, and are less in extent than for a reasonable assurance engagement and, therefore, less assurance is obtained than in a reasonable assurance engagement. We believe that the evidence obtained is sufficient and appropriate to provide a basis for our limited assurance conclusion.
146 Information and sources of information In arriving at our conclusion, we have relied upon forecast financial information prepared by management of the Group and other information from various public, financial and industry sources. The principal sources of information used in arriving at our conclusion are as follows: • The audited historical financial information of the Group for the 9 months ended 31 March 2013 and year ended 30 June 2012. • Management prepared forecasts for the years ending 30 June 2014 and 30 June 2015. • Discussions with the management of the Group regarding the forecasts presented. • Discussions with management of the Group regarding the prevailing market and economic conditions. • Discussions with the property managers with regard to the forecast expenses. • Lease agreements for a sample of the leases as set out below. • Valuation reports in respect of some of the properties. • Property management agreements, asset management agreements, acquisition agreements, agreements with promoters and debenture trust deed. • Term sheets and loan agreements from bankers.
Procedures In arriving at our limited assurance conclusion we performed the following procedures and evaluated the overall presentation of the forecast information: Rental income • The forecast contracted rental income streams per the profit forecast, were selected for a sample of properties and agreed to the underlying lease agreements. The total coverage obtained was 75% of the forecast contracted rental income. • The rental income streams from the above sample were recalculated to test the accuracy of the information contained in the profit forecast. • For that same sample of properties, forecast recoveries were compared to historical recoveries and the forecast operating expenditure to test for reasonableness. The terms of the leases were considered so as to test that the basis of the recoveries was correct. • Forecast rental income resulting from profit warranties provided by the seller was agreed to the relevant purchase agreement. • Existing lease agreements that will expire during the period under review were discussed individually with the property managers. Unless the existing tenant has indicated that it intends to vacate the premises, it has been assumed that the existing tenant will renew the lease agreement and the resultant uncontracted rental income has been included in the forecast. • Space that is currently empty has been excluded from the forecast except where the property manager has demonstrated that the vacant space is in the process of being let but that the lease agreement in that regard had not been signed on the date of posting the prospectus. • The vacancy levels per the forecast model were compared to the historical vacancy levels to test for reasonableness. Uncontracted rental income comprises 9.3% and 15.5% of the total forecast revenue for the years ending 30 June 2014 and 30 June 2015 respectively. Rental income (development properties) • The business plan in connection with the property development was reviewed and discussed with the property developer. • The levels of expected tenancy and the forecast rental escalations were compared to the market averages to test for reasonableness. • Letters of consent from potential tenants were reviewed and discussed on an individual basis with the property developer and the future property manager. • The forecast rental income was compared to the historical revenues of similar listed companies to test for reasonableness, and explanations were obtained for significant differences. Expenses For a sample of properties, forecast expenses were compared to the historical expenses and explanations were obtained for any significant differences. The total expenses tested amounted to 72% and 72% of the total forecast expenses for the years ending 30 June 2014 and 30 June 2015, respectively. The detailed forecast expenditure was reviewed to ensure that all material expenditure items, as required by paragraphs 13.6 (a)(v) of the JSE Listings Requirements, were disclosed. Portfolio expenses The forecast interest income, interest expense, property management fees and other portfolio expenses were assessed for reasonableness and, where applicable, recalculated.
147 Application of accounting policies We ascertained that the accounting policies to be applied by the Group in the future were applied consistently in arriving at forecast income, and that they are in compliance with International Financial Reporting Standards. Model review We determined that the assumptions tested in the procedures described above were those used in the forecast model. Vacancy profile and lease expiry profile We compared the vacancy profile and lease expiry profile included in paragraph 3.9 of the prospectus to the vacancy profile and lease expiry profile in the model.
Inherent limitations Achievability of the results The forecast information is based on assumptions about events that may occur in the future and possible actions by the Group. It is highly subjective in nature and its preparation requires the exercise of considerable judgement. While evidence may be available to support the assumptions on which the forecast information is based, such evidence is itself generally future oriented and, therefore, speculative in nature. Therefore we are unable to express an opinion as to whether the results shown in the forecast information will be achieved. Accuracy of the information The objective of our engagement is to provide a limited assurance conclusion on the reasonableness of the assumptions used in the forecast information, whether the forecast information has been prepared on the basis of those assumptions and is presented in accordance with the JSE Listings Requirements. We have relied upon and assumed the accuracy and completeness of the information provided to us in writing, or obtained through discussions from the management of the Group. While our work has involved an analysis of historical financial information and consideration of other information provided to us, our assurance engagement does not constitute an audit or review of historical financial information conducted in accordance with International Standards on Auditing or International Standards on Review Engagements. Accordingly, we do not express an audit or review opinion thereon and assume no responsibility and make no representations in respect of the accuracy or completeness of any information provided to us, in respect of the property forecast and relevant information included in the prospectus. Limited Assurance Conclusion Based on our examination of the evidence obtained, nothing has come to our attention that causes us to believe that: • The assumptions, barring unforeseen circumstances, do not provide a reasonable basis for the preparation of the forecast information; • The forecast information has not been properly compiled on the basis stated; • The forecast information has not been properly presented in accordance with the JSE Listings Requirements and all material assumptions are not adequately disclosed; and • The forecast information is not presented on a basis consistent with the accounting policies of the Company or the Group in question. Actual results are likely to be different from the forecast, since anticipated events frequently do not occur as expected and the variation may be material. Restriction on Distribution Our report and the conclusion contained herein is provided solely for the benefit of the directors of the Company and existing and prospective unitholders of the Group for the purpose of their consideration of the listing of the Company on the Johannesburg Stock Exchange. This letter is not addressed to and may not be relied upon by any other third party for any purpose whatsoever.
Consent We consent to the inclusion of this report, which will form part of the prospectus to the unitholders of the Company, to be issued on or about 7 October 2013, in the form and context in which it appears.
Deloitte & Touche Registered Auditors Per: Z Jasper Partner
Deloitte & Touche Registered Auditors Riverwalk Office Park, Block B 41 Matroosberg Road, Ashlea Gardens X6 Pretoria, 0081 (PO Box 11007, Hatfield, 0028) 19 September 2013”
148 Annexure 17
CONSOLIDATED PRO FORMA STATEMENT OF FINANCIAL POSITION OF ATTACQ
Set out below is the consolidated pro forma statement of financial position of Attacq based on the audited statement of financial position of Attacq as at 31 March 2013. The consolidated pro forma statement of financial position has been prepared to reflect the financial position of Attacq after adjusting for the Attvest transaction, rights offer, Atterbury House disposal, Sanridge disposal, Atterbury Theatre disposal, APC disposal, Brooklyn Bridge acquisition, AAM acquisition, Arctospark restructure, Artisan disposal, MBT disposal, the increase in AWIC shareholding, sundry share capital transactions and the private placement (collectively, “the adjustments”), on the assumption that the adjustments took place on 31 March 2013 and on the basis set out in the notes to the consolidated pro forma statement of financial position below. The consolidated pro forma statement of financial position is the responsibility of the directors of Attacq and has been prepared for illustrative purposes to illustrate the effects of the adjustments on Attacq’s financial position at 31 March 2013. Due to the nature of the consolidated pro forma statement of financial position, it may not give a fair reflection of the financial position, changes in equity, results of operations or cash flows of Attacq after the adjustments. The independent reporting accountant’s report on the consolidated pro forma statement of financial position is set out in Annexure 18. The independent reporting accountant’s report on the value and existence of the assets and liabilities to be acquired by the company is set out in Annexure 19. The consolidated pro forma financial information has been prepared in terms of IFRS, The Guide on Pro forma Financial Information issued by SAICA and the accounting policies of the company set out in Annexure 20.
149 - fter 264 a 6 175 3 728 4 904 50 715 62 456 370 815 100 212 257 138257 458 337 159 609159 899 028 299 460 (159 609)(159 9 553 313 9 553 1 425 674 1 537 5421 537 9 712 922 Pro forma 11 87911 685 13 763 69613 763 – – – – – – – – – – – – – – – – – – 15 Private 500 000 500 000 500 000 placement – 264 6 175 3 728 4 904 ments, 50 715 Attacq 62 456 private prior to 370 815 925 674 100 212 257 138257 458 337 159 609159 399 028 299 460 (159 609)(159 9 553 313 9 553 1 537 5421 537 9 712 922 placement 11 87911 685 13 263 696 post-adjust- – – – – – – – – – – – – – – – – – – 14 share trans- 31 356 31 31 356 31 31 356 31 capital actions Sundry – – – – – – – – – – – – – – – – – – – – – 13 share- holding Increase in AWIC – – – – – – – – – – – – – – – 12 MBT 70 80970 17 34017 70 80970 (53 469) (53 (53 469) (53 (53 469)(53 disposal – – – – – – – – – – – – – – – – 11 34 606 12 029 34 606 (22 577) Artisan (22 577) disposal – – – – – – – – – – – – – – 10 12 50012 90 331 158 425 158 401 332 401 559 757 559 (481 926)(481 (469 426) Arctospark restructure – – – – – – – – – – – – 9 191 180 9 791 9 460 AAM 62 456 29 362 107 243 270 (128 808)(128 (118 837) (118 acquisition – – – – – – – 8 375 496 3 824 4 736 (2 701) (2 40 720 Bridge (82 745) (82 (53 791) (53 (76 511) (76 (40 720)(40 547 280 588 000 534 705 458 194 Brooklyn acquisition – – – – – – – – – – – – – – 7 (338) APC 36 537 40 800 36 199 40 800 (38 729) disposal (115 728) (115 – – – – – – – – – – – – – – – – – – 6 (41 660)(41 (41 660)(41 (41 660)(41 disposal Theatre Atterbury – – – – – – – – – – – – – – – – – 5 4 951 103 541 103 (98 590) 103 541103 disposal Sanridge – – – – – – – – – – – – – – – 4 (1 267) (1 (1 267)(1 House (85 436)(85 205 664 205 664 disposal (289 833) Atterbury – – – – – – – – – – – – – – – – – – – – – 3 offer Rights – – – – – – – – – – – – – – – – – – – – – 2 Attvest transaction – – 1 264 3 537 4 349 6 946 57 913 57 46 891 41 66041 86 023 Before 150 174 150 878 019 118 889 118 962 488 (118 889) (118 9 178 391 9 178 1 155 395 1 155 9 059 5029 059 1 207 116 12 572 050 10 40210 446 Straight-line lease debtor Per valuationPer Cash and cash equivalents Other financial assets Loans to associates and joint ventures Trade and other receivables Taxation receivable Current assets Inventories Deferred tax assets Other investments Investment in associates Goodwill Intangible asset Deferred initial lease expenditure Straight-line lease debtor Total assets R’000 Assets Non-current assets Property, plant and equipment Investment properties Non-current assets classified as held for sale
150 5 fter a 6 480 4 802 17 733 17 63 378 (13 220)(13 142 861 142 115 307115 142 885142 774 041774 626 721 288 752 342 401 3 873 061 4 108 650 7 150 265 2 707 627 5 480 086 6 807 864 Pro forma – – – – – – – – – – – – – – – – 15 Private 775 776 775 776 775 776 placement 5 6 480 4 802 17 733 17 ments, Attacq 63 378 private (13 220)(13 prior to 142 861 142 115 307115 142 885142 774 041774 626 721 288 752 342 401 3 332 874 3 332 6 374 4896 374 3 873 061 2 707 627 6 032 088 5 480 086 placement post-adjust- – – – – – – – – – – – – – – 14 7 573 share 1 736 trans- 22 047 29 620 29 620 capital actions Sundry – – – – – – – – – – – – – 13 290 share- 13 510 13 11 586 11 (11 876) (11 (13 220) (13 (11 586)(11 holding Increase in AWIC – – – – – – – – – – – – 12 (644) 8 929 MBT 20 152 20 152 20 152 (11 741) (11 (11 097) (11 disposal – – – – – – – – – – – – – – – 11 2 682 9 347 9 347 9 347 Artisan disposal – – – – – – – – – – – – 10 (2 143) (2 (10 023) (10 (53 070) (53 155 567 155 (53 070)(53 (53 070)(53 153 424153 Arctospark restructure – – – – – – – – – – – 9 242 8 179 AAM 83 915 83 15 389 15 83 915 135 545 135 135 545 135 545 acquisition – – – – – – – – – – 8 6 761 59 741 59 16 80916 41 64741 50 684 Bridge 282 552 101 388101 101 388101 350 045 Brooklyn acquisition – – – – – – – – – – – – 7 863 APC (2 235) (2 29 646 29 646 29 646 (11 043) (11 (11 043) (11 disposal – – – – – – – – – – – – – – 6 179 (19 539) (19 (22 300) (41 839) (41 (41 839) (41 disposal Theatre Atterbury – – – – – – – – – – – – – 5 4 253 6 878 4 253 4 253 (6 180) (6 (6 180) (6 disposal Sanridge – – – – – – – – – – – – – 4 House 40 247 35 50935 35 50935 35 50935 (29 192) (29 192) disposal Atterbury – – – – – – – – – – – – – – – 3 offer Rights (85 165) (85 580 000 580 000 580 000 – – – – – – – – – – – – – – – – – 2 Attvest 347 737 (347 737) transaction 5 – 1 6 480 4 802 17 491 17 63 378 63 Before 48 427 276 047276 626 721 216 440216 126 076 354 277354 688 644 2 196 594 2 196 3 446 039 2 979 846 5 181 247 5 181 5 535 5245 535 4 950 858 Trade and other payables Taxation payable Finance lease liability Current liabilities Other financial liabilities Finance lease liability Provision for impairment of associates Other financial liabilities Deferred tax liabilities Equity attributable to owners of holding company Total equity Non-current liabilities Long-term borrowings Minority interest Foreign currency translation reserve Change in ownership reserve Distributable reserves Share based payments reserve R’000 Equity and liabilities Issued capital and share premium Provisions
151
fter Business a 1 190 1 326 1 127 3: , effective 25 211 563 211 921 782 350 649 6 613 431 6 613 Pro forma IFRS 13 763 69613 763 571 953 208 – 15 beens received by Attacq in Private 500 000 (275 776)(275 (275 776)(275 (275 776)(275 placement 53 333 333 333 53 (“Atterbury Trust”) ”), effective 1 October 2013, for an 1 312 1 163 1 093 Dolsid ments, Attacq private prior to 211 563 211 . In terms of the approval granted by Attacq 626 425 1 197 558 6 889 207 placement 13 263 696 518 619 875 619 518 post-adjust- – – 14 share 1 736 1 736 trans- qualified audit opinion. Annexure 20 31 356 31 capital actions Sundry 2 827 836 Annexure 20 while the terms and sales value of the transaction – – – 13 share- 11 58611 11 58611 holding Increase in AWIC 1 174 775 1 174 – – 12 MBT 8 929 (2 812) (2 17 34017 disposal ”) from Dolsid Investments Proprietary Limited (“ – – 11 2 682 2 682 12 029 Artisan disposal – – 10 90 331 (10 023) (10 143 401143 Brooklyn Bridge Office Park Arctospark restructure – – 9 Annexure 20 and the agreement entered into between Lynnwood Bridge Office Park and the Atterbury Trust. Atterbury Theatre was ”), a wholly-owned subsidiary of Attacq, to the public benefit organisation known as Atterbury Trust AAM . The financial statements were audited by Deloitte who & Touche issued an un Annexure20while the sales value and terms have been extracted from the signed agreement entered into between APC and Delta Property 23 810 . 107 725 243 270 11 755 802 755 11 acquisition – – 8 6 761 Bridge 458 194 356 806 5 181 382 5 181 Brooklyn ”), effective on 1 October 2013, for an amount of R341.0 million. The net proceeds of R337.7 million after sales commission of R3.3 acquisition . – 7 APC Lynnwood Bridge Office Park (1 372) (1 Ascension (55 960)(55 (38 729) (68 375) disposal – – 6 179 179 (41 660)(41 disposal Theatre Atterbury (2 160 853) 160 (2 – – 5 698 4 951 6 878 disposal Sanridge Annexure 20 while the sales value and terms of disposal have been extracted from the signed agreement entered into between Attacq and Ascension. Further details are set out in – 4 House 40 247 (85 436)(85 disposal (132 000)(132 (120 945) Atterbury . – – 3 offer Rights (494 835) (494 (580 000) (580 000) 50 434 783 – – – – – 2 forma statement of financial position, no valuations of assets and liabilities were performed at the effective date and instead the financial information pertaining to Brooklyn Bridge Office Park was extracted from the audited financial statements Attvest pro transaction . 1 1 153 1 153 1 306 Before 399 523 1 121 2601 121 1 686 145 7 036 526 12 572 050 449 406 150 of Brooklyn Bridge Office Park as at 30 June which2012 (on an unqualified audit opinion was issued by Deloitte adjusted & Touche), by the revaluation of Brooklyn Bridge Office Park to the valuation determined by the independent property valuer as March at 31 2013. Particulars of the amountmillion. R156.5 of The purchase price was settled bythe receipt R96.7of million in cash Combinations.and the balance million R59.7 ofFor the throughpurpose the of issue382 newthis Attacq 181 5 of shares atan issue per price share. R11.53 of The financial information has been prepared in terms of shareholders, shares previously issued to Attvest were effectively cancelled and replaced withRepresents new shares. the issue The share of 50 434 value 783 shares of the newly issuedat a price Attacq perof R11.50 share shares in terms was higherofon thethe early Attacq than settlement the rights original thereof. offer transaction that took place and during resulted July in an2013, raising increase a intotal the total of R580.0 equity million. of Attacq. RepresentsThe full proceeds were applied to settle the short-term third party disposaldebt owing by Attacq. No break costs were of incurred the Atterbury House property by Attacq to Ascension Properties Limited (“ Represents the reimplementation of the transaction entered into between Attacq and Attvest as approved by Attacq shareholders at the Attacq shareholders’ meeting held on 27 August 2013 and as more fully set out in note 5 of The “Before” column is extracted from the audited financial statements of Attacq for the nine months ended March 31 as 2013 set out in Annexure 20 Represents the disposal of Attacq’s shareholding in andsubsidiary loans Attacqtoof APCprior totheto disposal. Delta PropertyThe escalation Fund, amounteffective has been calculated owing30 Juneby APC 2013, in atanfavour foragreed theofAttacq. rate disposal9.89%of per annumThe disposal compounded priceprice monthly of has R40.8from been July1 until 2013 partly millionthe date settledpayment, of plus being anby the 23issueAugust escalation883of4 469 Delta applied2013, Property tothe sum amounttheof disposal Fund units of R1.06to Attacq price million.and R29a which dividend 764183 equates amount APCto R40.8 holdsmillion. the The propertybalance ofthe knowndisposal as price Harlequinsas well as the dividend Officeamount, Parkbeing andR30.9 wasmillion, a whollyha owned June 2013, for an amount of R42.3 million. The disposal was settled by way of the Atterburythe purchase Trust transferring consideration. TheAttacq 2 160 853 financial shares to Attacqinformation at a price has of R10.32 beenper share extractedclassified and a donation from by Attacq as the inventory audited to the financial in Atterbury the March 31 financial 2013 Trust statements of R20.0 statements. million of Attacq to provide as Further March at 31 it with as 2013 details funds set out in to settle are set the out in balance paragraph of 2.4 of Annexure 10 cash.The financial information pertaining APCto has been extracted Fund.from the Further audited financial details arestatements set out in paragraphAttacqof as 31 March 2013atas set 2.3 outin of Annexure 10 Represents the acquisition by Attacq of the remaining 75% of the issued shares in and the shareholder loans to Brooklyn Bridge Office Park Proprietary Limited (“ Represents the disposal of the Sanridge Square property by Attacq to Rapfund, effective 31 July 2013, for an amount of R103.5 million, being the disposal price of R98.6 million escalated at a rate of 7.9% per annum from 1 January 2013 until million were used financial to statements settle paragraph of Annexure of 1.1 debt 10 Attacq of R132.0 as million at advanced 31 March20 August against 2013, the date of transfer 2013 of the theproperty. The financial as have property information been extracted pertaining from set the signed agreementto the with Sanridge entered into between outSquare property Attacq the andhas Rapfund. been inextracted Further details balancefrom the audited are set out infinancial paragraph 2.2 statements of Annexure of of Attacq 10 as at March31 R205.7 2013 as set out in million held in cash. The financial information pertaining to the Atterbury House assets and liabilities has been extracted from the audited Represents the disposal of the Atterbury Theatre property held by Lynnwood Bridge Office Park Proprietary Limited (“ Total liabilities Total equity and liabilities Shares in issue^ Non-current liabilities classified as held for sale Net asset value per share excluding deferred tax (cents) Net asset value per share (cents) Tangible net asset value per share (cents) R’000 Current portion of long-term borrowings 3. 4. 2. ^ Adjusted for 73 583 treasury 735 shares as March at 31 2013 Notes: 1. 7. 8. 5. 6.
152 . . Post-31 March. Post-31 2013, the building was transferred to 10 and 11, MAS and 10 11, will continue tobeaccounted for as an investment Annexure 20 opinion was issued by Deloitte & Touche) adjusted for additional identified assets and formastatement financialof position,775new Attacq 174 1 shares are assumed haveto been issued theto Trinsam pro qualified review Combinations,additionalno assets (intangible otherwise)or wereidentified resultasa Brooklynof Bridge Office Park changing from Business ”), effective 30 November 2013, for an amount of R220.8 million. Disposal proceeds are assumed to be used to settle debt advanced on the 3: . MBT IFRS (6 978) (6 R’000 62 456 (83 849) (83 292 883 271 089 299 460 278 067 (299 861) Annexure20 while the sales value and terms have been extracted from the agreement entered into between Attacq and MAS. Further details are set out in paragraph ”) to MAS, effective 30 September 2013, for an amount of GBP2 800 000 settled by the issue of 3 042 MAS817 shares to Attacq at an issue price of €1.07 per MAS share. Artisan . . The directors believe that there was no material change to the financial position of Brooklyn Bridge Office Park at 30 June 2012 other than the fair value adjustments. Further details are set out in paragraph % in% AWIC held by the Trinsam Trust, discretionarya family trust of which MC Wilken is beneficiary,a for an amount of R25.1 million that will be settled by the issue of R13.6 million in new Attacq shares at an issue price equal 1.225 Combinations, the most significant being an intangible asset of R299.5 million relating to the asset management contract owned by AAM. Recognition of this asset and the related deferred taxation of Business 3: IFRS . Although. Attacq’s shareholding in MAS is expected toincrease March as at31 toapproximatelyfrom 2013 21.1% Octoberfrom 31 47.8% following 2013 completion theof transactions set outin notes . Annexure10 the acquisition of Attacq’s attributable share of Arctospark’s holdingsArctospark in Karoo against I, Karoo Attacq II and and subsequently Stenham set-off for a total against purchase an existing consideration shareholder ofmillion R711.1 loanthe of R483.6subsequentpartly million share settled in favour buy-back of Attacq; by wayby Arctospark of a cash payment of Attacq’s of millionR155.6 entire shareholdingwith theresulting balance in Arctospark difference ofmillion R555.5 of R12.5creditedfor millionan aggregate as paid a loan by Arctospark purchasein favour to Attacq of consideration as the net of cashR84.4 consideration;million, set-off andthe against subsequent disposal Attacq’s obligation of Attacq’s investments to pay the balance in Karoo I and of the Karoo R71.9 million II to MAS loan for a considerationaccount referred of €34.9 million to in paragraph settled by the above10.1 issue with shares 479 of 631 32 the in MAS at an issue price of €1.07 per MAS share. the issue of 800 000 Attacq shares to the Trinsam Trust at an issue price of R8.98 per share for a total consideration of R7the 000; 184 issue of 60 000 Attacq shares to M Hamman at an issue price of R12.00 per share for a total consideration of R720the 000 disposal in terms Attacq 671 of of his 1 910 employment shares contract (included and in treasury as approved by shareholders shares; i.e. on 27 August a debit to stated 2013; capital) held by Razorbillthe disposal to third Attacq parties of 165 57 shares for a total (included consideration in treasury of R22 during 101 751 shares; the period 1 Aprili.e. a debit to to 2013 stated 30 September capital) and 2013 the related held by Lynnwood tax Bridge payable; Office and Park for a total consideration of R700 843 during the period 1 April to 2013 30 September and 2013 the related tax payable. Goodwill Deferred tax Contracts Assets acquired Liabilities acquired Net assets of AAM Purchase consideration Intangible asset recognised in terms of IFRS 3 Allocated to: Assets and liabilities acquired before adjusting for intangible asset detailed below The financial information of AAM has been extracted from the reviewed financial statements of AAM as at 31 March 2013 (on which an un liabilities, as required by Represents the restructuring of Attacq’s investment in Arctospark by way of: 10.1 10.2 10.3 The effective date of the disposal of Karoo I and Karoomemorandum II has of understanding been assumed entered to be into October31 between 2013. AttacqA ZAR:EUR and MAS. exchange Further details rate of areR13.26:€1.00 set out in paragraphs was assumed. and 1.4 of Annexure 1.5 The financial 10 information is extracted from the signed agreement entered into between Attacq and Arctospark and the signed R83.8 million resulted in goodwill of R62.5 million. The purchase consideration has been determined with reference to the agreement entered into between Attacq and the shareholders of AAM. Further details are set out in paragraph 1.3 of Annexure 10 in associate based on the assessment of control in terms of both current and enacted IFRS. Represents the disposal of the MB Technologies building currently under development by AWIC to MBT Services Proprietary Limited (“ development of the property and tax arising on developmentdisposal of the MB Technologiesof the building.property. TheThe financial disposal information proceeds pertaining have been to thedetermined MB Technologies buildingas per has beenthe extractedagreement fromentered the audited into financialbetween statementsAWIC and of Attacq MBT. The asdebt Marchat 31 settled 2013 as set out in from the proceeds is calculated based on the forecast debt balance utilised to fund the Artisanholds the development inEdinburgh known as Caltongate. Attacq’s holding inMAS investments increased 23.9%tofollowing in Artisan from 21.1% completion has theof transaction been extracted and exchange from the audited rates €0.84:GBP1.00financialof 2.1of and R15.72:GBP1.00 were assumed.statements Theof Attacq financial as March at 31 informationas 2013 set out in pertaining Attacq’sto Represents the disposal of Attacq’s shareholding in and loan to Artisan Investment Projects 10 Limited (“ Trust at a price per Attacq of R11.53 share. Further details are set out in paragraph 2.8 of Annexure 10 Represents the impact of the following transactions on the stated capital of Attacq: 14.1 14.2 14.3 14.4 Representsthe private placement prior listing,to assuming new Attacq333 that 333 53 Shares are issued anatissueof the Mallprice perR15.00shareof of Africaraising total whilea R800.0of R24.2million. millionhas It been assumed of the totalthat proceedsR500.0 million willtheof total be usedproceeds to fundwill the expensesberetained incash relating beusedto inthe development to the listing and the balance of R275.8 million used to reduce debt. The expenses relating to the listing have been set-off against stated capital. inventory and has been disposed as such. Representsthe acquisition of the effective interest of to the 30 June net 2013 asset value per Attacq share, as per the consolidated auditedincontrol financial occurring statements,inAttacq WilkenMC or plus anceasing amount million of R11.6 directorbetoa escalatingAttacqof anor amount calculated at the prime rate of interest,interms formulaa of or a partin2020. Forthe thereof,purpose payablethisof onconsolidated the earlier of 30 June 2020 or the happening of certain events relating to a change an investment in an associate to an investment in a subsidiary post the acquisition1.2 of Annexure 10 Represents the acquisition by Attacq of the entire issued share capitalProprietary of AAM,Limited, effectiveare in the process 1 Julyof subscribing 2013, for an amountfor and ofbeing R271.1 millionissued so promany settled formaAttacq statement entirelyshares of financial asin equals cash.million R135.5 position,In terms 802 755 Attacqat pricea 11 of theequivalent sharesAAMto areAttacq’s acquisition, assumedaudited toand30 have Junethe net representing 2013 been asset vendors subscribed ofvalue AAM, theper forshare right and issuednamely toas theper assetthe to theconsolidated Atterbury AAM management vendors audited Property of certain at a price perfinancial share of R11.53 Holdings which Attacq equates Proprietarystatements. properties million to R135.5 For the has thatLimitedpurpose been will recognised ofand this be received Attventureconsolidated and by Attacq a reconciliation in cash. is An provided intangible below: asset arising from the acquisition purchaseconsideration and related terms have been extracted from theagreement entered intobetween Attacq and Dolsid. theForpurpose of 9. 10. 12. 11. 14. 15. 13.
153 Annexure 18
INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON THE CONSOLIDATED PRO FORMA STATEMENT OF FINANCIAL POSITION OF ATTACQ
“The Directors Attacq Limited The Parkdev Building 2nd Floor Brooklyn Bridge 570 Fehrsen Street Brooklyn 0181
INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON THE COMPILATION OF PRO FORMA FINANCIAL INFORMATION INCLUDED IN THE PROSPECTUS
We have completed our assurance engagement to report on the compilation of pro forma financial information of Attacq Limited by the directors. The pro forma financial information, in Annexure 17 to the prospectus, consists of the consolidated pro forma statement of financial position and related notes. The pro forma financial information has been compiled on the basis of the applicable criteria specified in the JSE Limited (“JSE”) Listings Requirements. The pro forma financial information has been compiled by the directors to illustrate the impact of the corporate action or event, described in Annexure 17, on the group’s financial position as at 31 March 2013, and the group’s financial performance for the period then ended, as if the corporate action or event had taken place at 31 March 2013 and for the period then ended. As part of this process, information about the group’s financial position and financial performance has been extracted by the directors from the company’s financial statements for the period ended 31 March 2013, on which an auditor’s report was issued on 9 September 2013.
Directors’ Responsibility for the Pro Forma Financial Information The directors are responsible for compiling the pro forma financial information on the basis of the applicable criteria specified in the JSE Listings Requirements and described in Annexure 17. Reporting Accountant’s Responsibility Our responsibility is to express an opinion about whether the pro forma financial information has been compiled, in all material respects, by the directors on the basis specified in the JSE Listings Requirements based on our procedures performed. We conducted our engagement in accordance with the International Standard on Assurance Engagements (“ISAE”) 3420: Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus. This standard requires that we comply with ethical requirements and plan and perform our procedures to obtain reasonable assurance about whether the pro forma financial information has been compiled, in all material respects, on the basis specified in the JSE Listings Requirements. For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the pro forma financial information, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the pro forma financial information. As the purpose of pro forma financial information included in a prospectus is solely to illustrate the impact of a significant corporate action or event on unadjusted financial information of the entity as if the corporate action or event had occurred or had been undertaken at an earlier date selected for purposes of the illustration, we do not provide any assurance that the actual outcome of the event or transaction would have been as presented. A reasonable assurance engagement to report on whether the pro forma financial information has been compiled, in all material respects, on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used in the compilation of the pro forma financial information provides a reasonable basis for presenting the significant effects directly attributable to the corporate action or event, and to obtain sufficient appropriate evidence about whether: • The related pro forma adjustments give appropriate effect to those criteria; and • The pro forma financial information reflects the proper application of those adjustments to the unadjusted financial information. Our procedures selected depend on our judgement, having regard to our understanding of the nature of the company, the corporate action or event in respect of which the pro forma financial information has been compiled, and other relevant engagement circumstances. Our engagement also involves evaluating the overall presentation of the pro forma financial information. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
154 Opinion In our opinion, the pro forma financial information has been compiled, in all material respects, on the basis of the applicable criteria specified by the JSE Listings Requirements and described in Annexure 17.
Deloitte & Touche Registered Auditors Per Z Jasper Partner
Deloitte & Touche Registered Auditors Riverwalk Office Park, Block B 41 Matroosberg Road, Ashlea Gardens X6 Pretoria, 0081 (PO Box 11007, Hatfield, 0028)
19 September 2013”
155 Annexure 19
INDEPENDENT REPORTING ACCOUNTANT’S REVIEW REPORT ON THE VALUE AND EXISTENCE OF THE ASSETS AND LIABILITIES ACQUIRED
“The Directors Attacq Limited The Parkdev Building 2nd Floor Brooklyn Bridge 570 Fehrsen Street Brooklyn 0181
Dear Sirs
REVIEW CONCLUSION ON THE VALUATION AND EXISTENCE OF THE ASSETS AND LIABILITIES ACQUIRED BY ATTACQ LIMITED (“ATTACQ”)
Introduction We have reviewed the assets and liabilities acquired by Attacq reflected in the acquisition adjustment columns 7, 8, 9, 10, 11 and 13 of the pro forma statement of financial position included in Annexure 17 to the prospectus to be issued on or about 7 October 2013 (“the prospectus”) relating to the assets and liabilities to be acquired by Attacq prior to the listing on the JSE Limited. The directors are responsible for the compilation, contents and preparation of the adjustment columns of the pro forma statement of financial position. Our responsibility is to express a review conclusion on the value and existence of the assets and liabilities acquired reflected in the adjustment columns in accordance with the accounting policies adopted by Attacq and the recognition and measurement criteria of International Financial Reporting Standards (“IFRS”).
Scope of review We conducted our review in accordance with International Standards on Review Engagements 2410: Review Of Interim Financial Information Performed By The Independent Auditor Of The Entity. This standard requires that we plan and perform the review to obtain moderate assurance on the valuation and existence of the assets and liabilities acquired by Attacq reflected in the adjustment columns of the pro forma statement of financial position. Our review conclusion is included in this prospectus in accordance with paragraph 13.16(e) of the JSE Listings Requirements. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion Based on our review, nothing has come to our attention that causes us to believe that the assets and liabilities acquired by Attacq reflected in the adjustment columns 7, 8, 9, 10, 11 and 13 of the pro forma statement of financial position included in Annexure 17 to the prospectus are not fairly valued, do not exist or are not fairly presented, in all material respects, in accordance with the accounting policies adopted by Attacq, IFRS and in the manner required by the Companies Act, 2008 (No. 71 of 2008).
Deloitte & Touche Registered Auditors Per: Z Jasper Partner
Deloitte & Touche Registered Auditors Riverwalk Office Park, Block B 41 Matroosberg Road, Ashlea Gardens X6 Pretoria, 0081 (PO Box 11007, Hatfield, 0028)
19 September 2013”
156 Annexure 20
HISTORICAL FINANCIAL INFORMATION
Set out below are extracts from the audited consolidated financial statements (“financial statements”) of Atterbury Investment Holdings Limited (“AIH”) (renamed Attacq Limited) and its subsidiaries for the nine months ended 31 March 2013 and the year ended 30 June 2012. These extracts are the responsibility of AIH’s directors. The financial statements for the nine months ended 31 March 2013 and the year ended 30 June 2012, from which the information below was extracted, were prepared in accordance with International Financial Reporting Standards and interpretations adopted by the International Accounting Standards Board and which were audited by Deloitte & Touche in accordance with International Standards on Auditing, who issued an unqualified audit opinion on the financial statements for the nine months ended 31 March 2013 and the year ended 30 June 2012. The audited financial statements for the nine months ended 31 March 2013 and the year ended 30 June 2012 are available for inspection at the company’s registered address. The independent reporting accountant’s report on the historical financial information is presented in Annexure 21. 1. NATURE OF BUSINESS Atterbury Investment Holdings Limited (“AIH”) carries on the business of a property holding, development and investment group through the ownership of: • directly held investment properties; and • subsidiaries, associates, joint ventures and other investments with directly held investment properties and property investments. AIH was previously managed by Atterbury Asset Managers Proprietary Limited, appointed in terms of an evergreen contract, subject to strict performance criteria set by the board. The following directors and officers of the Group have an interest, directly or indirectly, in the asset manager: LLS van der Watt, GJ Oosthuizen, PH Faure, BF van Niekerk, F Smit and T Smith. The Group has agreed to internalise the asset manager with effect from July 2013. The business of the Group is to invest in and develop quality A-grade properties as long-term investments which generate quality rental income and sustainable long term capital growth for its shareholders over the long term. 2. THE FOLLOWING SPECIAL RESOLUTIONS WERE UNANIMOUSLY APPROVED AT THE GENERAL MEETINGS HELD SINCE THE ISSUING OF THE 30 JUNE 2012 ANNUAL REPORT: Meeting held on 29 November 2012 1. THAT the Board is authorised, on behalf of the Company, pursuant to the provisions of Article 109 of the Company’s Memorandum of Incorporation, read together with the relevant provisions of the Companies Act No. 71 of 2008, as amended (“the Companies Act”), to repurchase issued shares of the Company, subject to the Board of Directors of the Company (“the Board”), save as provided in Proposed Special Resolution 3 in this Notice, complying with the following protocols: • within the aforementioned period culminating at the next Annual General Meeting of the Company, no more than 10% (ten percent) of the shares in issue, in aggregate, may be acquired by the Company; • no more than 3% (three percent) in aggregate of the shares in issue, may be acquired from any one shareholder; • with regard to any of the transactions contemplated for the repurchase of shares by the Company, the maximum price per share, with regard to any such repurchase, is limited to 90% (ninety percent) of the net asset value per share, determined with reference to the latest available consolidated financial statements of the Company for the period either ending 30 June, or 31 December, as the case may be, in the affected year, without any adjustment with respect to any potential increase in such net asset value; and • that these authorities shall terminate on the date of the next Annual General Meeting of the Company, subsequent to the date of the meeting at which this Special Resolution has been passed. 2. THAT the Company provides direct or indirect financial assistance to a related or inter-related company subject to the Board being satisfied: • that immediately, after providing such direct or indirect financial assistance, the Company will satisfy the solvency and liquidity test (referred to in Section 4 of the Companies Act); and • that the terms under which such direct or indirect financial assistance is proposed to be given are fair and reasonable to the Company; and • that there is otherwise compliance with the Board Charter, Annexure “A” to the Company’s Memorandum of Incorporation; and
157 • that, where applicable, any relevant Board committee and/or director/s and/or prescribed officers seized with the treasury functions on behalf of the Company (in terms of the powers and authorities delegated to such relevant Board committee and/or director/s and/or prescribed officers) are satisfied insofar as the said financial assistance is concerned and that any such director being a member of such Board committee and/or prescribed officer involved in the treasury function be authorized and empowered to sign all such documents as are necessary to give effect to the resolutions of the Board in accordance with the a foregoing; and • that it has otherwise complied with the provisions of section 45(2), read with section 45(3)(a)(ii) and other applicable provisions of the said Section 45, read with the other applicable sections of the Act; and • that the foregoing resolutions be valid and enforceable for a period being the earlier of 2 (two) years from the date of this meeting or the second Annual General Meeting of the Company occurring after the date of this Meeting. 3. THAT the Company is hereby authorised in terms of and subject to the provisions of section 44 of the Companies Act 71 of 2008, as amended (“the Companies Act”) to provide financial assistance by way of a loan, guarantee, security or otherwise to Razorbill Property 91 Proprietary Limited, Registration No. 2000/006755/07 (“Treasury Co”), a wholly-owned subsidiary of the Company to purchase any securities of the Company or a related or inter-related company subject to sub-section 3 and 4 of section 44 of the Act. The funding or assistance will be pursuant to a special resolution approved by the shareholders of the Company approving financial assistance in general and the Board being satisfied that, immediately after the provision of the financial assistance, the Company complies with the solvency and liquidity test referred to in section 4 of the Act, and the terms under which the financial assistance is proposed to be given to Treasury Co are fair and reasonable to the Company. • Notwithstanding anything to the contrary in the foregoing provisions accepted, Treasury Co may not at any time hold more than 10% (ten percent) of the issued shares in the Company; and • The provisions of the foregoing Special Resolution 1 shall be read in conjunction herewith. 4. THAT the Company approves, pursuant to the provisions of Section 45 (and, if applicable, section 44) of the Act, the grant of AIH share options to the executive director, MC Wilken, in terms whereof the said option holder shall be entitled to exercise his options to acquire 2 000 000 (two million) shares in the Company at a price of R8.50 (Eight Rand Fifty Cents) per share on an even pro rata basis over a 5 (five)-year period, with the first year of accrual 30 June 2012. Should the option holder resign as director of the Company, the unaccrued portion of shares will lapse. In case of death, permanent disability and change of control, the outstanding balance of the shares will accrue on such a date. 5. Subject to the passing of Special Resolution No. 4, THAT the Company approves, pursuant to the provisions of section 41 of the Act, the grant of AIH share options to the executive director, MC Wilken, in terms whereof the said option holder shall be entitled to exercise his options to acquire 2 000 000 (two million) shares in the Company at a price of R8.50 (Eight Rand Fifty Cents) per share on an even pro rata basis over a 5 (five)-year period, with the first year of accrual ending 30 June 2012. Should the option holder resign as director of the Company, the un accrued portion of shares will lapse. In case of death, permanent disability and change of control, the outstanding balance of the shares will accrue on such a date. Meeting held on 27 August 2013: 1. The conversion of all the ordinary authorised (including the issued) par value shares in the capital of the Company, being 1 000 000 000 (one billion) authorised shares with a par value of R0.0001 (zero point zero zero zero one Rand) each, to 1 000 000 000 (one billion) ordinary no par value shares, was approved by 100% (one hundred percent) of the Shareholders present in person or by proxy. 2. The increase of the authorised share capital of the Company, from 1 000 000 000 (one billion) ordinary no par value shares to 2 000 000 000 (two billion) ordinary no par value shares (which shares shall rank parri passu with the existing ordinary no par value shares in the authorised share capital of the Company in all respects) was approved by 99.99% (ninety-nine point nine-nine percent) of the Shareholders present in person or by proxy. 3. The change of the Company’s name from “Atterbury Investment Holdings Limited” to “Attacq Limited” was approved by 100% (one hundred percent) of the Shareholders present in person or by proxy. 4. The adoption of a new memorandum of incorporation (“MOI”) was approved by 100% (one hundred percent) of the Shareholders present in person or by proxy. 5. Financial assistance 5.1 The financial assistance, as contemplated in section 45(3)(a)(ii) and section 45(3)(b) of the Companies Act, and subject to the requirements of the Companies Act and the Company’s MOI, if any, in terms of which the Company was authorised to provide direct or indirect financial assistance (“Section 45 Financial Assistance”), by way of loans, loan facilities, advances for expenses, assisting with administration of transactions, making payments, extending credit, discharging debts, performing obligations, contractual undertakings, sureties or guarantees, providing related security (including, without limitation, by way of mortgages or pledges of property, cessions of rights, bonds, charges or otherwise) or any other manner of providing financial assistance, on such terms as may be authorised by the Board in accordance with the following: 5.1.1 Section 45 Financial Assistance can be provided to current and future subsidiaries of the Company, and to current and future associated companies of the Company (where an associate means any entity in which the Company owns between 20% (twenty percent) and 50% (fifty percent) of the equity);
158 5.1.2 Section 45 Financial Assistance can be provided to individuals pursuant to a share incentive scheme of the Company; 5.1.3 Section 45 Financial Assistance can be provided in respect of the facilitation of the acquisition of equity in the Company by “BEE” companies or “Black Persons”, as contemplated in the Broad Based Black Economic Empowerment Act, read with the Codes of Good Practice thereto; and 5.1.4 Section 45 Financial Assistance may be provided at any time during a period commencing on the date of adoption of this resolution and ending 2 (two) years from such date; provided that any related corporate action must be duly authorised in compliance with the JSE Listings Requirements (“the Listings Requirements”) (post-listing) and the Companies Act, was approved by 99.99% (ninety-nine point nine-nine percent) of the Shareholders present in person or by proxy. 6. Authorisation to provide financial assistance for the subscription of shares in terms of section 44 of the Companies Act 6.1 The financial assistance, as contemplated in section 44 of the Companies Act, and subject to compliance with the requirements of the Company’s MOI, if any, and the Companies Act, in terms of which the Company was authorised to provide financial assistance (“Section 44 Financial Assistance”) by way of loans, loan facilities, advances for expenses, assisting with administration of transactions, making payments, extending credit, discharging debts, performing obligations, contractual undertakings, sureties or guarantees, providing related security (including, without limitation, by way of mortgages or pledges of property, cessions of rights, bonds, charges or otherwise) or any other manner of providing financial assistance, on such terms as may be authorised by the Board in accordance with the following: 6.1.1 Section 44 Financial Assistance can, without limitation, be provided for the purpose of, or in connection with, the subscription of any option, or any securities, issued or to be issued by the Company or a related or inter- related company or for the purchase of any securities of the Company or a related or inter-related company as contemplated in section 44 of the Companies Act; 6.1.2 Section 44 Financial Assistance in relation to the acquisition of securities or related securities contemplated in section 44(2) of the Companies Act can be provided to the following categories of potential recipients: 6.1.2.1 any present or future company or corporation related or inter-related to the Company; and 6.1.2.2 any present or future director or prescribed officer of the Company, or any employee in terms of an employee incentive scheme of the Company, or in terms of a BEE transaction; the specific financial assistance granted to Morné Wilken for the subscription by Morné Wilken, or his nominee, for shares in the Company, as previously approved by the Shareholders on 29 November 2012; 6.1.3 Section 44 Financial Assistance may be provided at any time during a period commencing on the date of adoption of this resolution and ending 2 (two) years from such date; provided that any related corporate action must be duly authorised in compliance with the Listings Requirements (post listing) and the Companies Act, was approved by 99.99% (ninety-nine point nine-nine percent) of the Shareholders present in person or by proxy. 7. Authorisation for the implementation of an employee incentive scheme(s) 7.1 The implementation of an employee incentive scheme (or schemes) in order to incentivise executive directors, senior and executive employees, prescribed officers and other employees of the Company (and its subsidiaries), as recommended by the Company’s remuneration committee (“the Scheme(s)”), subject to compliance with the requirements of the Company’s memorandum of incorporation, if any, the Companies Act, and the Listings Requirements (post-listing), was approved by 100% (one hundred percent) of the Shareholders present in person or by proxy. 7.2 The Scheme(s) may include, but shall not be limited to, the issue of ordinary shares, or the issue of a specified class of shares in the capital of the Company, or the granting of options, as contemplated in section 42 of the Companies Act, to executive directors, senior and executive employees, prescribed officers and other employees of the Company or its subsidiaries (“the Employees”). In the event that the Employees so require, the Company may loan the Employees the necessary amounts in order for such Employees to acquire the Company’s shares and to exercise their options on terms and conditions as may be determined by the Board. Should the Company loan the Employees amounts as aforesaid, such loan amounts shall accrue interest at the prevailing prime rate or such other interest rates as the Board may from time to time determine; provided that such interest rates are market related. The issue price of the shares shall be determined by the Board from time to time in consultation with the Company’s remuneration committee, subject to compliance with the Companies Act and the Listings Requirements post the listing of the Company’s shares on the JSE. 7.3 In order for the Board to implement the Scheme(s), the following elements of the Scheme(s) were approved: 7.3.1 in terms of and subject to the provisions of section 41(1) of the Companies Act: the provision of authority to the Board, subject to compliance with the requirements of the Company’s MOI, if any, and the Companies Act, and to the extent required in terms of the Scheme(s), to authorise the Company to grant options and to issue shares as contemplated in section 42 of the Companies Act to the Employees or to a person related or inter-related to such Employees; (b) person related or inter-related to the Company or (c) nominee of a person contemplated in (a) or (b); and
159 7.3.2 in terms of and subject to the provisions of section 44 of the Companies Act, the provision of authority to the Board, subject to compliance with the requirements of the Company’s MOI, if any, and the Companies Act, and to the extent required in terms of the Scheme, to authorise the Company to provide financial assistance by way of a loan, guarantee, the provision of security or otherwise to any senior or executive employee of the Company, as contemplated in the Scheme, for the purpose of, or in connection with, the subscription of any option, or any securities, issued or to be issued by the Company or a related or inter-related company, or for the purchase of any securities of the Company or a related or inter-related company at any time during a period commencing on the date of adoption of this resolution and ending 2 (two) years from such date. 8. Authorisation for the issue of shares and granting of options to Melt Hamman The following corporate actions in respect of Melt Hamman (Identity No. 710426 5047 08 7), in his capacity as an executive director of the Company (which appointment is ratified by the shareholders in terms of an Ordinary Resolution), subject to compliance with the requirements of the Company’s MOI, if any, the Companies Act, and the Listings Requirements (post-listing), was approved by 100% (one hundred percent) of the Shareholders present in person or by proxy: 8.1 remunerate Melt Hamman an amount of R1 200 000 (one million, two hundred thousand Rand), a portion of which amount shall be utilised by Melt Hamman to subscribe for 60 000 (sixty thousand) shares in the capital of the Company, at a subscription price of R12.00 (twelve Rand). Correspondingly, the Company shall, in accordance with the provisions of section 41(1) of the Companies Act, allot and issue 60 000 (sixty thousand) shares in the capital of the Company to Melt Hamman at the aforesaid subscription price; 8.2 in accordance with the provisions of section 41(1) of the Companies Act, grant options, as contemplated in section 42 of the Companies Act, to Melt Hamman, in terms whereof the said option holder shall be entitled to exercise his options to acquire 1 200 000 (one million, two hundred thousand) shares in the capital of the Company at a price of R9.50 (nine Rand fifty cent), on the following terms: 8.2.1 the options may be exercised, as to 60% (sixty percent) thereof on 30 June 2016, as to 20% (twenty percent) thereof on 30 June 2017, and as to the remaining 20% (twenty percent) thereof on 30 June 2018; 8.2.2 should the option holder resign as a director of the Company or be dismissed as an employee of the Company, the unaccrued portion of the shares shall lapse; and 8.2.3 in the case of death, permanent disability and/or change of control, the outstanding balance of the shares shall accrue on such a date, and/or on such other terms and conditions as the Board may determine from time to time, and subject to the Company and the option holder entering into a written agreement in order to give effect to the aforesaid options; 8.2.4 to the extent required in respect of the corporate actions contemplated in paragraphs 8.1 and/or 8.2, and in terms of and subject to the provisions of section 44 of the Companies Act, provide financial assistance, by way of loans, loan facilities, advances for expenses, assisting with administration of transactions, making payments, extending credit, discharging debts, performing obligations, contractual undertakings, sureties or guarantees, providing related security (including, without limitation, by way of mortgages or pledges of property, cessions of rights, bonds, charges or otherwise) or any other manner of providing financial assistance, to Melt Hamman, for the purpose of, or in connection with, the subscription of the shares contemplated in paragraph 8.1, issued or to be issued by the Company, or the exercising of the options contemplated in paragraph 8.2, granted or to be granted by the Company, or for the purchase of any securities of the Company at any time during a period commencing on the date of adoption of this resolution and ending 2 (two) years from such date; and 8.2.5 to the extent required in respect of the corporate actions contemplated in paragraphs 8.1 and/or 8.2, and in terms of and subject to the provisions of section 45 of the Companies Act, provide financial assistance, by way of loans, loan facilities, advances for expenses, assisting with administration of transactions, making payments, extending credit, discharging debts, performing obligations, contractual undertakings, sureties or guarantees, providing related security (including, without limitation, by way of mortgages or pledges of property, cessions of rights, bonds, charges or otherwise) or any other manner of providing financial assistance, to Melt Hamman, for the purpose of, or in connection with, the corporate actions contemplated in paragraphs 8.1 and/or 8.2, at any time during a period commencing on the date of adoption of this resolution and ending 2 (two) years from such date. 9. Authorisation for the granting of options to Nicolle Weir The following corporate actions in respect of Nicolle Weir (Identity No. 741017 0139 08 7), in her capacity as a prescribed officer of the Company, subject to compliance with the requirements of the Company’s MOI, if any, the Companies Act, and the Listings Requirements (post listing), was approved by 100% (one hundred percent) of the Shareholders present in person or by proxy: 9.1 in accordance with the provisions of section 41(1) of the Companies Act, grant options, as contemplated in section 42 of the Companies Act, to Nicolle Weir, in terms whereof the said option holder shall be entitled to exercise her options to acquire 1 000 000 (one million) shares in the capital of the Company at a price equal to the net asset value of the Company as at 30 June 2013, on the following terms:
160 9.1.1 the options may be exercised, as to 60% (sixty percent) thereof on 30 June 2017, as to 20% (twenty percent) thereof on 30 June 2018, and as to the remaining 20% (twenty percent) thereof on 30 June 2019; 9.1.2 should the option holder resign as a director of the Company or be dismissed as an employee of the Company, the unaccrued portion of the shares shall lapse; and 9.1.3 in the case of death, permanent disability and/or change of control, the outstanding balance of the shares shall accrue on such a date, and/or on such other terms and conditions as the Board may determine from time to time, and subject to the Company and the option holder entering into a written agreement in order to give effect to the aforesaid options; 9.2 to the extent required in respect of the corporate actions contemplated in paragraph 9.1, and in terms of and subject to the provisions of section 44 of the Companies Act, provide financial assistance, by way of loans, loan facilities, advances for expenses, assisting with administration of transactions, making payments, extending credit, discharging debts, performing obligations, contractual undertakings, sureties or guarantees, providing related security (including, without limitation, by way of mortgages or pledges of property, cessions of rights, bonds, charges or otherwise) or any other manner of providing financial assistance, to Nicolle Weir, for the purpose of, or in connection with, the exercising of the options contemplated in paragraph 9.1, granted or to be granted by the Company, or for the purchase of any securities of the Company at any time during a period commencing on the date of adoption of this resolution and ending 2 (two) years from such date; and 9.3 to the extent required in respect of the corporate actions contemplated in paragraph 9.1, and in terms of and subject to the provisions of section 45 of the Companies Act, provide financial assistance, by way of loans, loan facilities, advances for expenses, assisting with administration of transactions, making payments, extending credit, discharging debts, performing obligations, contractual undertakings, sureties or guarantees, providing related security (including, without limitation, by way of mortgages or pledges of property, cessions of rights, bonds, charges or otherwise) or any other manner of providing financial assistance, to Nicolle Weir, for the purpose of, or in connection with, the corporate actions contemplated in paragraph 9.1 at any time during a period commencing on the date of adoption of this resolution and ending 2 (two) years from such date. 10. General authority to repurchase securities 10.1 The general authority, in terms of section 5.67(B)(b), read with Section 5.72 of the Listings Requirements, to repurchase the Company’s securities, subject to compliance with the requirements of the Company’s MOI, if any, the Companies Act and the Listings Requirements, limited to 15% (fifteen percent) of the securities in issue at the relevant time that the repurchase of the Company’s securities is implemented, was approved by 99.99% (ninety-nine point nine-nine percent) of the Shareholders present in person or by proxy. The aforesaid general authorisation shall be valid from the date of adoption of this resolution until the Company’s next annual general meeting, or for a period commencing on the date of adoption of this resolution and ending 15 (fifteen) months from such date, whichever period is shorter. 11. Issue of shares by the Company 11.1 The allotment and issue of an amount of the authorised unissued share capital of the Company equal to 20% (twenty percent) of the issued share capital as at the date of this resolution was placed under the control of the Board. Subject to compliance with the Listings Requirements, the Board was authorised, as it in its discretion thinks fit, to allot, issue and grant options or any other rights exercisable for, authorised but unissued shares in the Company from time to time (including, without limitation, in terms of any transaction falling within section 41(1) of the Companies Act) on such terms as may be determined by the Board in its discretion, for such monetary or other consideration (whether payable in cash or otherwise) and to such person or persons as it in its discretion deems fit, including, without limitation, to: 11.1.1 executive directors, senior and executive employees, prescribed officers and other employees, or future executive directors, future senior and executive employees, future prescribed officers and other future employees of the Company, or to a person related or inter-related to such persons; or 11.1.2 nominee of a person contemplated in paragraph 11.2.1 The above resolution was approved by 99.99% (ninety-nine point nine-nine percent) of the Shareholders present in person or by proxy. 12. Directors’ remuneration The payment of remuneration to its directors, in accordance with the provisions of section 66(8) and section 66(9) of the Companies Act, for their services as directors, on a market related basis, as shall be determined by the Company’s remuneration and nominations committee, was approved by 100% (one hundred percent) of the Shareholders present in person or by proxy. The Company shall be authorised to pay the aforesaid remuneration at any time during a period commencing on the date of adopting this resolution and ending 2 (two) years from such date. 13. Additional directors’ remuneration The payment of the following additional remuneration, in accordance with the provisions of section 66(8) and section 66(9) of the Companies Act, to the following persons, for additional services performed in relation to the listing of the Company on the JSE, was approved by 100% (one hundred percent) of the Shareholders present in person or by proxy:
161 13.1 chairperson of the Board – R250 000 (two hundred and fifty thousand Rand); and 13.2 chairperson of the audit committee – R250 000 (two hundred and fifty thousand Rand). 14. The conclusion of the Proposed Transaction between the Company, Atterbury Investment Managers (Pty) Ltd (“Attvest”) and Razorbill Properties 91 (Pty) Ltd (“Razorbill”), subject to the Board complying with the related requirements of the Companies Act, was approved. Accordingly, in order to give effect to the implementation of the Proposed Transaction, the following elements of the Proposed Transaction were approved by 99.99% (ninety-nine point nine-nine percent) of the Shareholders present in person or by proxy: 14.1 the conclusion and implementation by the Company of the Subscription and Repurchase Agreement, in substantially the same form as the copy of the Subscription and Repurchase Agreement which has been available for inspection at the Company’s offices from the date of the notice of the Meeting, together with any addenda to such Subscription and Repurchase Agreement concluded from time to time; 14.2 subject to compliance with the requirements of the Company’s MOI, if any, and the Companies Act, the cancellation of the share certificates in respect of the Initial Attvest Shares and the amendment of the share register of the Company to remove the Initial Attvest Shares from the share register, and/or of any other documents required to give effect to such cancellation; 14.3 to the extent required by section 44 of the Companies Act, the provision of authority to the Board, in accordance with section 44(2) of the Companies Act, and subject to the requirements of the Companies Act, and the MOI of the Company, if any, to authorise the Company to provide the Subscription Financial Assistance to Attvest; 14.4 subject to the implementation of the Subscription and Repurchase Agreement, the provision of authority to the Board, the provisions of the Companies Act, and the MOI of the Company, if any, to issue the Attvest Subscription Shares to Attvest at an issue price of R7.18 (seven Rand and eighteen cent) per share on the terms and conditions contained in the Subscription and Repurchase Agreement; 14.5 subject to the implementation of the Subscription and Repurchase Agreement, to the extent required, the authorisation of the Company, in accordance with the provisions of section 41(1) of the Companies Act, to allot and issue the Attvest Subscription Shares to Attvest in accordance with the terms and conditions of the Subscription and Repurchase Agreement, given that Attvest is related to a director of the Company; 14.6 subject to the provisions of section 48(8) of the Companies Act, the provision of authority to the Board, subject to compliance with the Companies Act and the MOI of the Company, if any, to authorise the Company to repurchase the Buy-back Shares from Attvest at the market value price of R10.32 (ten Rand and thirty two cent) per share (out of the reserves of the Company, and shall not reduce its “contributed tax capital” (as such term is defined in the Income Tax Act, No. 58 of 1962 (as amended)), being an amount equal to the Repurchase Price in accordance with the terms and conditions of the Subscription and Repurchase Agreement; 14.7 in terms of and subject to the provisions of section 45 of the Companies Act, the provision of authority to the Board, subject to compliance with the requirements of the Company’s MOI, if any, and the Companies Act, to authorise the Company to provide direct or indirect financial assistance to Attvest, being a related or inter-related company of a director of the Company, by the Set-Off, being the set-off of Attvest’s obligation to pay the Attvest Amount against the Company’s obligation to pay the Repurchase Price in accordance with the terms and conditions of the Subscription and Repurchase Agreement (to the extent that the Set-Off constitutes financial assistance); and to do all things necessary to implement the Proposed Transaction.
3. AUTHORISED AND ISSUED SHARE CAPITAL As at 31 March 2013, AIH had an authorised share capital of 1 000 000 000 ordinary par value shares of R0.0001 each. The total number of issued shares at year-end is 522 989 885 shares. If the AIH shares held by AIH subsidiaries (Lynnwood Bridge (Pty) Limited, Abacus Holdings (Pty) Limited and Razorbill Properties 91 (Pty) Limited) are excluded, the total number of issued shares totals 449 406 150 shares. During the Annual General meeting, the unissued shares were placed under the control of the directors, subject to certain conditions. No additional shares were issued during the nine months ended 31 March 2013. The net asset value per share of the Group at 31 March 2013 is calculated at R11.53 (30 June 2012: R10.32) per issued share. This is based on a net asset value at 31 March 2013 of R5,181 billion and the 449 406 150 issued shares mentioned above. According to the records of AIH, shareholders registered as holding five percent or more of the issued share capital at 31 March 2013 are as follows: Number of shares March 2013 June 2012 Abacus Holdings (Pty) Limited 29 726 516 29 726 516 BNF Investments (Pty) Limited 45 447 323 47 282 129 Mergon Foundation (association incorporated under section 21) 72 112 440 75 024 045 Sanlam Life Insurance Limited 95 395 536 95 395 536 Razorbill Properties 91 (Pty) Limited 43 800 054 43 800 054 Lisinfo 222 Investments (Pty) Limited (Royal Bafokeng Holdings) 67 708 955 67 708 955
162 4. INVESTMENT PROPERTY Net additions to investment properties to the value of R1,006 billion were made during the current financial period, consisting of: Property Held by Nature of addition Cost value R’000
Brooklyn Mall, Pretoria Abacus Holdings Proprietary Limited Capital extension 16 578 Glenfair Centre, Pretoria Atterbury Investment Holdings Limited Refurbishment 4 488 De Ville Centre, Cape Town De Ville Shopping Centre Proprietary Limited Refurbishment 1 280 Harlequins Office Park, Pretoria Atterbury Parkdev Consortium Proprietary Limited Capital extension 112 Great Westerford, Cape Town Atterbury Investment Holdings Limited Capital extension 304 Sanridge Square, Midrand Atterbury Investment Holdings Limited Capital extension 106 Atterbury House, Cape Town Atterbury Investment Holdings Limited Capital extension 6 312 Lynnwood Bridge Office Park Lynnwood Bridge Office Park Proprietary Limited Development 54 818 Andringa Walk, Stellenbosch Abacus Holdings Proprietary Limited Capital extension 24 906 Eikestad Mall, Stellenbosch Abacus Holdings Proprietary Limited Capital extension 3 409 Newtown Junction, Newtown Nieuwtown Property Development Company Proprietary Limited Development 138 644 Majestic, Newtown Majestic Offices Proprietary Limited Development 7 524 Mill Square, Stellenbosch Abacus Holdings Proprietary Limited Capital extension 48 896 West Hills Mall, Ghana West Hills Mall Limited Development 59 843 Waterfall, Gauteng Atterbury Waterfall Investment Company Proprietary Limited Development 639 151 1 006 370
The Group has formally approved the sale of the following investment properties and therefore they were classified as held for sale as at 31 March 2013: Valued at Anticipated Property Held by March 2013 date of sale R’000
Great Westerford Atterbury Investment Holdings Limited 253 584 Feb 2014 Harlequins Office Park Atterbury Parkdev Consortium Proprietary Limited 115 728 Aug 2013 Atterbury House Atterbury Investment Holdings Limited 287 869 Sep 2013 Sanridge Square Atterbury Investment Holdings Limited 95 821 Aug 2013 De Ville Shopping Centre De Ville Shopping Centre Proprietary Limited 188 730 Feb 2014 941 732
5. LEGAL AND REGULATORY MATTERS Attvest transaction 5.1 Also refer to the Special Resolution Number 14 of the special general shareholders meeting held on 27 August 2013. 5.2 A transaction was entered into by AIH during 2006 in terms of which, inter alia, Atterbury Investment Managers Proprietary Limited (“Attvest”) indemnified AIH (“the Indemnity Agreement”) in respect of 50% (fifty percent) of all amounts which AIH would have to pay to FirstRand Bank Limited (acting through its Rand Merchant Bank Division) (“RMB”) pertaining to a guarantee provided by RMB for the payment by AIH of the balance of the purchase price of a letting enterprise acquired by AIH. In consideration for Attvest granting the aforesaid indemnity, AIH agreed to allot and issue 36 187 844 (thirty-six million, one hundred and eighty-seven thousand, eight hundred and forty-four) shares in the share capital of AIH to Attvest (“the Initial Attvest Shares”). 5.3 Subsequent to the conclusion and implementation of the Indemnity Agreement, it transpired that the issuing of the Initial Attvest Shares was void ab initio by virtue of such shares not being fully paid-up at the time of the allotment and issue thereof by AIH to Attvest, as contemplated in section 92(1) of the Companies Act, 61 of 1973 (as amended) and therefore all subsequent transactions in relation to the Initial Attvest Shares are void ab initio. 5.4 The parties agreed to regularise the aforesaid transaction and thereby give effect to the original commercial intent of the parties, that is, Attvest being granted the right to subscribe for 36 187 844 (thirty-six million, one hundred and eighty-seven thousand, eight hundred and forty-four) shares in the capital of AIH at an issue price of R3.77 (three Rand and seventy- seven cents) escalated at 12% (twelve percent) per annum (nominal annual compounded annually in arrears) per share in consideration for having indemnified AIH in terms of the Indemnity Agreement.
163 5.5 Broadly speaking, the regularisation of the above transaction involved AIH allotting and issuing 36 187 844 (thirty- six million, one hundred and eighty-seven thousand, eight hundred and forty-four) shares to Attvest, and buying back 25 188 346 (twenty-five million, one hundred and eighty-eight thousand, three hundred and forty-six) of AIH’s shares held by Attvest, with the net effect being that AIH and Attvest were placed in the same commercial position. The full details of this transaction are set out in the minutes of the AIH shareholders’ meeting held on 27 August 2013, at which meeting the shareholders of AIH approved the aforesaid regularisation of the transaction between AIH and Attvest by way of a special resolution. Own shares held The Companies Act limits the number of shares that a holding company`s subsidiaries can own in its holding company to not more than 10%, in aggregate of the number of issued shares. This requirement was incorrectly applied by AIH on a subsidiary by subsidiary basis, instead of on the basis of all its subsidiaries taken together, resulting in AIH’s subsidiaries exceeding the 10% limit. The reason for AIH exceeding the aforesaid limit was due to an acquisition by Razorbill Properties 91 Proprietary Limited (“Razorbill”) of shares in the share capital of AIH from Attvest, which shares formed part of the shares issued to Attvest by AIH pursuant to the transaction contemplated above. As the issue of shares to Attvest was void ab intio (as described in paragraph 5.3 above), the purported transfer of AIH shares by Attvest to Razorbill was also void ab initio. As such, AIH’s subsidiaries do not legally exceed the 10% limit.
6. POST-YEAR-END TRANSACTIONS The following notable transactions have occurred since 31 March 2013: Listing and related matters The board resolved to proceed with the listing of AIH on the Johannesburg Securities Exchange. The anticipated listing date will be during October 2013. The company is in the process of obtaining all the required approvals for listing. The board recommended that the name of AIH be changed to Attacq Limited. Shareholders’ approval was granted for the proposed name change. Shareholders’ approval was obtained to convert AIH’s current 1 000 000 000 R0.0001 par value shares to 2 000 000 000 non-par value shares. The board has made the decision to acquire all of the shares in Atterbury Asset Management Proprietary Limited (“AAM”) and thereby effectively internalise the asset management of AIH’s direct portfolio to be in line with the rest of the market, to create synergies between AIH and the asset manager and to remove any conflicts of interest that may exist between AIH and the asset manager. AIH is in the process of acquiring 100% of the issued shares in AAM for a purchase consideration of R271 million, which will be settled in cash. AIH will subsequently issue R135.5 million in AIH shares at a price equal to the audited 30 June 2013 net asset value per share, on a consolidated basis, to Atterbury Property Holdings Proprietary Limited (“Atterbury Property”) and Attventure Proprietary Limited (“Attventure”). Atterbury Property (the previous 50% shareholder) will have a lock-in period for five years in respect of 1 600 000 AIH shares. Rights Offer A Non-Renounceable Rights Offer of R580 000 000 was made to existing shareholders. The Rights Offer, which closed on 24 July 2013, was at a price of R11.50 per share. The purpose of the rights offer was to: • enhance AIH’s ability to take advantage of local and international acquisition opportunities that are available to AIH; • partly fund AIH’s future developments, particularly the Waterfall development; and • strengthen AIH’s balance sheet improving its ability to use cash to conclude transactions. The Rights Offer was 44% oversubscribed. Excesses were allocated on an equitable basis and 50 434 782 shares were issued pursuant to the Rights Offer. Sale of Atterbury House AIH reached an agreement on the disposal of the Atterbury House property to Ascension Properties Ltd for an amount of R341 million. All the suspensive conditions have been met and transfer of the property is expected to take place during September 2013. Sale of 50% undivided share in Sanridge Square AIH reached an agreement with Rapfund Holdings Proprietary Limited (“Rapfund”) for the disposal of AIH’s 50% undivided share in the Sanridge Square property to Rapfund for an amount of R102 million, being the purchase consideration of R99 million escalated at a rate of 7.9% per annum from 1 January 2013 until the expected date of transfer. The transfer took place on 20 August 2013. Sale of Atterbury Theatre Lynnwood Bridge Office Park Proprietary Limited, a wholly-owned subsidiary of AIH, reached an agreement on the disposal of the Atterbury Theatre property to the Atterbury Trust for an amount of R42.3 million, settled by way of a transfer of 2 160 853 AIH
164 shares and the balance in cash. The transaction is in the process of final implementation as the property was transferred during July 2013. Sale of Atterbury Parkdev Consortium Proprietary Limited (Harlequins office park) AIH entered into an agreement with Delta Property Fund Limited (“Delta”) on 20 August 2013 to dispose of 100% of the issued shares in Atterbury Parkdev Consortium Proprietary Limited (“APC”), which owns the office park known as Harlequins Office Park, and which shares constituted the entire ordinary share capital of APC held by AIH. The shares were disposed of cum any dividend distribution but free from encumbrances. APC has declared a dividend distribution in an amount of R29 764 183 to AIH, which distribution was credited as a loan account in favour of AIH against APC and was paid to AIH on 3 September 2013. The purchase price paid by Delta to AIH for the shares was an amount of R40 800 000 plus an escalation amount. Delta paid the purchase price and the escalation amount to AIH as follows: • by allotting and the issuing of 4 883 469 Delta linked units which equates to R40 800 000; and • the escalation amount of R1 032 479 in cash on 3 September 2013. Purchase of 75% of the issued shares in Brooklyn Bridge Office Park Proprietary Limited Currently, AIH holds a 25% interest in this office development via its shareholding in Brooklyn Bridge Office Park Proprietary Limited (“Brooklyn Bridge”). The board approved the purchase of the remaining 75% shareholding in Brooklyn Bridge for a purchase consideration of approximately R170 000 000. A part of the purchase price will be payable in AIH shares. The transaction is still suspensive on a number of conditions. Atterbury Waterfall Investment Company debt restructure AIH reached an agreement with AWC on the restructure of the shareholder funding of AWIC by way of an investment by AIH in a preference share issued by Atterbury Waterfall City Proprietary Limited (“AWC”) and the shareholder loan advanced by AWC to AWIC directly. Unbundling of Attfund International (Arctospark Proprietary Limited) AIH reached an agreement on the restructuring of AIH’s investment in Arctospark. After the fulfilment of all suspensive conditions and post the restructure, AIH will own its share of Karoo I, Karoo II and Stenham European Shopping Centre Fund IC Limited directly and its shares in Arctospark will be cancelled. The investments in Karoo I, Karoo II and Stenham European Shopping Centre Fund IC Limited will be held via asset swap facilities with Sasfin and Investec. Sale of shareholding in Karoo 1 and 2 to MAS Real Estate Inc. (“MAS”) Subsequent to the unbundling of Arctospark, AIH has reached an agreement with MAS Real Estate Inc. to sell its investments in Karoo I and Karoo II to MAS in terms of which MAS will settle the purchase price by the issuing of shares in MAS at an issue price of €1.07 per MAS share. The transaction is still suspensive on a number of conditions. Disposal of AIH’s shares in Artisan Investment Projects 10 Limited (Caltongate development) AIH reached agreement with MAS Real Estate Inc. on the disposal of AIH’s shareholding in and loan to Artisan Investment Projects 10 Limited to MAS for an amount of GBP2 800 000 to be settled by the issue of 3 042 817 shares in MAS at an issue price of €1.07 per MAS share. The transaction is still subject to Reserve Bank approval. Construction and disposal of the MB Technologies property AIH reached an agreement with MBT Services Proprietary Limited, effective 30 November 2013, for the sale of the MB Technologies building currently under development for an amount of R220.8 million. Acquisition of the Trinsam Trust’s shares in Atterbury Waterfall City Proprietary Limited (“AWC”) Morne Wilken has an indirect benefit in the Trinsam Trust which is an existing shareholder in AWC. This shareholding was part of his incentive when he joined the Atterbury Group in 2008. The Board has requested the disposal of the shareholding in AWC, which is the 20% shareholder in Atterbury Waterfall Investment Company Proprietary Limited (“AWIC”), to prevent potential conflicts of interest. AIH and Morne Wilken have reached agreement whereby AIH will acquire the shares in AWC with AIH then effectively increasing its shareholding in AWIC. Acquisition of the Abacus Trust’s shares in Abacus Holdings Proprietary Limited AIH has reached agreement with the Abacus Trust to acquire the Abacus Trust’s shares and claims, which it holds via Abacus Trust and Mooirivier Mall Proprietary Limited, in Abacus Property Holdings Proprietary Limited. The agreement is subject to some suspensive conditions. NEW DEVELOPMENT APPROVALS: Mall of Africa – Waterfall Land Parcel 10 Previously, the board approved bulk earthworks on this project up to R73 million, and subsequent to March 2013, the board approved the increase of this amount to R140 million. The Board has now given approval to proceed with the Mall of Africa development, subject to certain financing terms and pre-letting requirements.
165 The Mall of Africa will consist of a super-regional mall of 116,000m², two office blocks of 22 000m² and parking structures of 41 000m². Total capital costs amount to R3 476 050 000. Waterfall Lifestyle – Waterfall Land Parcel 15 The board approved the development of this retail centre with the anchor tenant being Virgin Active. The total capital cost amounts to R103 600 000. Waterfall Allandale/K101 intersection upgrade The board approved the upgrade of the intersection. The upgrading of the intersection will greatly relieve the current traffic congestion in the area and will increase access into surrounding sites and the marketability of the site. The upgrading of this intersection also forms part of the servicing of Land Parcel 9, which is a condition for clearance certificates. The total capital costs amount to R16 500 000.
7. DIVIDENDS No dividends were declared by AIH.
166 STATEMENT OF FINANCIAL POSITION GROUP 31 March 2013 30 June 2012 Notes R’000 R’000 ASSETS Non-current assets Property, plant and equipment 3 537 2 367 Investment properties 1 9 059 502 8 497 139 Per valuation (excluding goodwill) 9 178 391 8 607 082 Straight-line lease debtor (118 889) (109 943) Straight-line lease debtor 118 889 109 943 Deferred initial lease expenditure 6 946 4 351 Goodwill 2 – 16 929 Investment in associates 4 1 155 395 1 156 943 Other investments 5 57 913 476 997 Other financial assets 8 – – Deferred tax assets 10 264 4 194 10 402 446 10 268 863 Current assets Inventories 3 41 660 41 644 Taxation receivable 4 349 711 Trade and other receivables 13 86 023 81 351 Loans to shareholders 7 – 6 308 Loans to associates and joint ventures 6 878 019 621 652 Other financial assets 8 46 891 104 199 Cash and cash equivalents 9 150 174 200 501 1 207 116 1 056 366 Non-current assets classified as held for sale 11 962 488 262 122 Total assets 12 572 050 11 587 351 EQUITY AND LIABILITIES Issued capital and share premium 14 2 196 594 2 196 596 Distributable reserves 2 979 846 2 442 040 Share based payments 4 802 – Foreign currency translation reserve 5 (668) Equity attributable to owners of the holding company 5 181 247 4 637 968 Minority Interest 354 277 395 348 Total equity 5 535 524 5 033 316 Liabilities Non-current liabilities Long-term borrowings 15 3 446 039 3 560 378 Deferred tax liabilities 10 688 644 591 838 Other financial liabilities 8 126 076 127 331 Provision for liabilities relating to associates 63 378 58 202 Provision for liabilities relating to other investments – 9 049 Finance lease liability 12 626 721 440 148 4 950 858 4 786 946 Current liabilities Loans from shareholders 7 – – Loans from associates and joint ventures 6 – 9 284 Other financial liabilities 8 216 440 293 177 Finance lease liability 12 6 480 114 018 Taxation payable 48 427 7 198 Trade and other payables 16 276 047 150 231 Provisions 17 17 491 – Current portion of long-term borrowings 15 1 121 260 1 062 004 1 686 145 1 635 912 Non-current liabilities directly associated with assets held for sale 11 399 523 131 177 Total liabilities 7 036 526 6 554 035 Total equity and liabilities 12 572 050 11 587 351 Issued shares (adjusted for treasury shares held) 449 406 150 449 406 150 Net asset value per share (cents) 1 153 1 032 Tangible net asset value per share (cents) 1 153 1 028
167 ACCOUNTING POLICIES FOR THE NINE MONTHS ENDED 31 MARCH 2013
1. PRESENTATION OF FINANCIAL STATEMENTS The financial statements have been prepared in accordance with International Financial Reporting Standards, and the Companies Act of South Africa, 2008. The financial statements have been prepared on the historical cost basis, except for the measurement of investment properties and financial instruments at fair value or amortised cost, and incorporate the principal accounting policies set out below. They are presented in South African Rands. These accounting policies are consistent with the previous periods. These nine-month financial statements have been prepared in order for the company to be able to list on the JSE. The board believes it is appropriate to include the results for the year ended 30 June 2012 as a comparative. 1.1 Consolidation Basis of consolidation The consolidated financial statements incorporate the financial statements of the company and all entities, including special purpose entities, which are controlled by the company. Control exists when the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The results of subsidiaries are included in the consolidated financial statements from the effective date of acquisition to the effective date of disposal. All intra-company transactions, balances, income and expenses are eliminated in full on consolidation. Non-controlling interests in the net assets of consolidated subsidiaries are identified and recognised separately from the company’s interest therein, and are recognised within equity. Losses of subsidiaries attributable to non-controlling interests are allocated to the non-controlling interest even if this results in a debit balance being recognised for non-controlling interest. The difference between the fair value of consideration paid or received and the movement in non-controlling interest for such transactions is recognised in equity attributable to the owners of the parent. The company accounts for business combinations using the acquisition method of accounting. The cost of the business combination is measured as the aggregate of the fair values of assets given, liabilities incurred or assumed and equity instruments issued. Costs directly attributable to the business combination are expensed as incurred, except the costs to issue debt which are amortised as part of the effective interest and costs to issue equity which are included in equity. Business consolidations The acquiree’s identifiable assets, liabilities and contingent liabilities which meet the recognition conditions of IFRS 3 Business Combinations, are recognised at their fair values at acquisition date. On acquisition, the company assesses the classification of the acquiree’s assets and liabilities and reclassifies them where the classification is inappropriate for company purposes. Non-controlling interest arising from a business combination is measured either at their share of the fair value of the assets and liabilities of the acquiree or at fair value. The treatment is not an accounting policy choice but is selected for each individual business combination, and disclosed in the note for business combinations. Goodwill is determined as the consideration paid, plus the fair value of any shareholding held prior to obtaining control, plus non-controlling interest and less the fair value of the identifiable assets and liabilities of the acquiree. Goodwill is not amortised but is tested on an annual basis for impairment. If goodwill is assessed to be impaired, that impairment is not subsequently reversed. If a bargain purchase is calculated, this amount is accounted for directly in the statement of comprehensive income. Investment in associates An associate is an entity over which the company has significant influence and which is neither a subsidiary nor a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. An investment in associate is accounted for using the equity method. Under the equity method, investments in associates are carried in the consolidated statement of financial position at cost adjusted for post acquisition changes in the company’s share of net assets of the associate, less any impairment losses. Losses in an associate in excess of the company’s interest in that associate are recognised only to the extent that the company has incurred a legal or constructive obligation to make payments on behalf of the associate. Any goodwill on acquisition of an associate is included in the carrying amount of the investment, however, a gain on acquisition is recognised immediately in profit or loss. Profits or losses on transactions between the company and an associate are eliminated to the extent of the company’s interest therein.
168 1.2 Investment property Investment properties are properties held to earn rentals and/or capital appreciation (including property under construction for such purposes). Investment property is recognised as an asset when it is probable that the future economic benefits that are associated with the investment property will flow to the enterprise, and the cost of the investment property can be measured reliably. Investment property is initially recognised at cost. Costs include costs incurred initially, transaction costs and costs incurred subsequently to add to, or to replace a part of, or service a property. If a replacement part is recognised in the carrying amount of the investment property, the carrying amount of the replaced part is derecognised. Where a property is under construction with the purpose of holding the completed property for long-term rental yields or for capital appreciation, such property is classified as investment property under construction. Maintenance and repairs, which neither materially add to the value of the properties nor prolong their useful lives, are charged against income. Tenant installations are cost paid by the lessor on behalf of the lessee on signature of the lease agreement for cost spent by the lessor to ensure the building is in the condition suitable for the lease. Tenant installations on the first lease are capitalised against the project, while tenant installations on subsequent leases signed are capitalised and expensed through the statement of comprehensive income over the lease period. Fair value Subsequent to initial measurement investment property is measured at fair value. A gain or loss arising from a change in fair value is included in net profit or loss for the period in which it arises. If the fair value of investment property under construction is not determinable, it is measured at cost until the earlier of the date it becomes determinable or construction is complete. In the current period the Group made the calculation of such fair value gain more specific, by applying the percentage of completion method to the present value of the expected fair value gain or loss. Refer note 1.15 for further details on this change in estimate. 1.3 Property, plant and equipment Property, plant and equipment are carried at cost less accumulated depreciation and any impairment losses. Depreciation is provided on all property, plant and equipment to write down the cost, less residual value, using the straight line method of depreciation, over the items’ estimated useful lives. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, annually. An asset’s carrying amount is written down immediately to its recoverable amount if its carrying amount is greater that it’s estimated recoverable amount. 1.4 Investment in joint ventures In respect of its interest in jointly controlled assets, the Group recognises in its financial statements: • its share of the jointly controlled assets, classified according to the nature of the assets; • any liabilities that it has incurred; • its share of any liabilities incurred jointly with the other venturers in relation to the joint venture; • any income from the sale or use of its share of the output of the joint venture, together with its share of any expenses incurred by the joint venture; and • any expenses that it has incurred in respect of its interest in the joint venture. 1.5 Financial instruments Initial recognition and measurement The Group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement. Financial assets and financial liabilities are recognised on the statement of financial position when the Group becomes party to the contractual provisions of the instrument. Financial assets and liabilities are recognised initially at fair value. In the case of financial assets or liabilities not classified at fair value through profit and loss, transaction costs that are directly attributable to the acquisition or issue of the financial instruments are added to the fair value. For financial assets carried at fair value, the change in fair value is recognised in profit or loss or in equity, as appropriate. Subsequent measurement Financial instruments at fair value through profit or loss are subsequently measured at fair value, with gains and losses arising from changes in fair value being included in profit or loss for the period. Net gains or losses on the financial instruments at fair value through profit or loss exclude dividends and interest. Loans and receivables are subsequently measured at amortised cost, using the effective interest method, less accumulated impairment losses.
169 Held-to-maturity investments are subsequently measured at amortised cost, using the effective interest method, less accumulated impairment losses. Available-for-sale financial assets are subsequently measured at fair value. This excludes equity investments for which a fair value is not determinable, which are measured at cost less accumulated impairment losses. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in equity until the asset is disposed of or determined to be impaired. Interest on available-for-sale financial assets calculated using the effective interest method is recognised in profit or loss as part of other income. Financial liabilities at amortised cost are subsequently measured at amortised cost, using the effective interest method. Fair value determination The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Group establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same and reference to the proportionate interest held by the Group en the net equity of the investee. Impairment of financial assets At each reporting date the Group assesses all financial assets, to determine whether there is objective evidence that a financial asset or group of financial assets has been impaired. For amounts due to the Group, significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy and default of payments are all considered indicators of impairment. Impairment losses are recognised in profit or loss. Impairment losses are reversed when an increase in the financial asset’s recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to the restriction that the carrying amount of the financial asset at the date that the impairment is reversed shall not exceed what the carrying amount would have been had the impairment not been recognised. Reversals of impairment losses are recognised in profit or loss except for equity investments classified as available-for-sale. Loans to/(from) group companies These include loans to and from holding companies, fellow subsidiaries, subsidiaries, joint ventures and associates and are recognised initially at fair value plus direct transaction costs. Loans to group companies are classified as loans and receivables. Loans from group companies are classified as financial liabilities measured at amortised cost. Loans to shareholders, directors, managers and employees These financial assets are classified as loans and receivables. Inventories Inventories are measured at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. The cost of inventories comprises of all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. When inventories are sold, the carrying amount of those inventories are recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value, are recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs. Trade and other receivables Trade and other receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method to the extent that significant differences occur. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition. Trade and other payables Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method to the extent that significant differences occur.
170 Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initially and subsequently recorded at fair value. Cash from financing activities and cash from investing activities are calculated as the gross amount in the respective accounts. Bank overdraft and borrowings Bank overdrafts and borrowings are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the Group’s accounting policy for borrowing costs. Derivatives Derivative financial instruments, which are not designated as hedging instruments, consisting of interest rate swaps, are initially measured at fair value on the contract date, and are re-measured to fair value at subsequent reporting dates. Derivatives are classified as financial assets at fair value through profit or loss. 1.6 Tax Current tax assets and liabilities Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset. Current tax liabilities/(assets) for the current and prior periods are measured at the amount expected to be paid to/(recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred tax assets and liabilities A deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss). A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised. A deferred tax asset is not recognised when it arises from the initial recognition of an asset or liability in a transaction at the time of the transaction, affects neither accounting profit nor taxable profit/(tax loss). A deferred tax asset is recognised for the carry forward of unused tax losses to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilised. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Tax expenses Current and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the extent that the tax arises from: • a transaction or event which is recognised, in the same or a different period, to other comprehensive income; or • a business combination. Current tax and deferred taxes are charged or credited to other comprehensive income if the tax relates to items that are credited or charged, in the same or a different period, to other comprehensive income. Current tax and deferred taxes are charged or credited directly to equity if the tax relates to items that are credited or charged, in the same or a different period, directly in equity. 1.7 Leases A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership. The Group as lessor – operating leases Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term. The Group as lessee – finance leases Assets held under finance leases are initially recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the consolidated statement of financial position as a finance lease obligation.
171 Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately in profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Group’s general policy on borrowing costs (see 1.13). Contingent rentals are recognised as expenses in the periods in which they are incurred. 1.8 Non-current assets held for sale Non-current assets are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification. 1.9 Impairment of assets The Group assesses at each end of the reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the Group estimates the recoverable amount of the asset. Irrespective of whether there is any indication of impairment, the Group also tests goodwill for impairment annually. If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss. The impairment loss is allocated to reduce the carrying amount of the assets of the unit in the following order: • first, to reduce the carrying amount of any goodwill allocated to the cash-generating unit; and • then, to the other assets of the unit, pro rata on the basis of the carrying amount of each asset in the unit. An entity assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for assets other than goodwill may no longer exist or may have decreased. If any such indication exists, the recoverable amounts of those assets are estimated. 1.10 Share capital and equity Ordinary shares are classified as equity. Mandatorily redeemable preference shares are classified as liabilities. If the Group reacquires its own equity instruments, the consideration paid, including any directly attributable incremental costs (net of income taxes) on those instruments are deducted from equity until the shares are cancelled or reissued. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Group’s own equity instruments. Consideration paid or received shall be recognised directly in equity. 1.11 Provisions and contingencies Provisions are recognised when: • the Group has a present obligation as a result of a past event; • it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and • a reliable estimate can be made of the obligation. The amount of a provision is the present value of the expenditure expected to be required to settle the obligation. Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement shall be recognised when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement shall be treated as a separate asset. The amount recognised for the reimbursement shall not exceed the amount of the provision. Contingent assets and contingent liabilities are not recognised. 1.12 Revenue Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for services provided in the normal course of business, net of trade discounts and volume rebates, and value-added tax. Interest is recognised, in profit or loss, using the effective interest rate method. Dividends are recognised, in profit or loss, when the Group’s right to receive payment has been established. 1.13 Borrowing costs Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of that asset until such time as the asset is ready for its intended use. The amount of borrowing costs eligible for capitalisation is determined as follows: • Actual borrowing costs on funds specifically borrowed for the purpose of obtaining a qualifying asset less any temporary investment of those borrowings. • Weighted average of the borrowing costs applicable to the entity on funds generally borrowed for the purpose of obtaining a qualifying asset. The borrowing costs capitalised do not exceed the total borrowing costs incurred.
172 The capitalisation of borrowing costs commences when: • expenditures for the asset have occurred; • borrowing costs have been incurred, and • activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation is suspended during extended periods in which active development is interrupted. Capitalisation ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete. All other borrowing costs are recognised as an expense in the period in which they are incurred. 1.14 Translation of foreign currencies Foreign currency transactions A foreign currency transaction is recorded, on initial recognition in Rands, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. At the end of the reporting period: • foreign currency monetary items are translated using the closing rate; • 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 • non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements are recognised in profit or loss in the period in which they arise. When a gain or loss on a non-monetary item is recognised to other comprehensive income and accumulated in equity, any exchange component of that gain or loss is recognised to other comprehensive income and accumulated in equity. When a gain or loss on a non-monetary item is recognised in profit or loss, any exchange component of that gain or loss is recognised in profit or loss. Cash flows arising from transactions in a foreign currency are recorded in Rands by applying to the foreign currency amount the exchange rate between the Rand and the foreign currency at the date of the cash flow. Investments in subsidiaries, joint ventures and associates The results and financial position of a foreign operation are translated into the functional currency using the following procedures: • assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position; • income and expenses for each item of profit or loss are translated at exchange rates at the dates of the transactions; and • all resulting exchange differences are recognised to other comprehensive income and accumulated as a separate component of equity. Exchange differences arising on a monetary item that forms part of a net investment in a foreign operation are recognised initially to other comprehensive income and accumulated in the translation reserve. They are recognised in profit or loss as a reclassification adjustment through to other comprehensive income on disposal of net investment. 1.15 Critical accounting judgements and key sources of estimation uncertainty In the application of the Group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. The following are the key assumptions and judgements concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
173 Trade receivables, held to maturity investments and loans and receivables The Group assesses its trade receivables, held to maturity investments and loans and receivables for impairment at the end of each reporting period. In determining whether an impairment loss should be recorded in profit or loss, the Group makes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from a financial asset. Effective date of property transactions In the event of an investment property being disposed/acquired, the effective date of the transaction is generally treated as the date when all suspensive conditions have been met, and the buyer becomes contractually entitled to the income and expenses associated with the property, and not when the property is transferred. Fair value estimation The fair value of financial instruments traded in active markets is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the Group is the current bid price. The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at the end of each reporting period. Quoted market prices or dealer quotes for similar instruments are used for long-term debt. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments. The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows. The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments. Fair value on property investments under construction – change in estimate During the current period, the Group made the recognition of a gain or a loss on investments under construction, more specific. Previously, the estimate typically resulted in a gain only being recognised close to completion of the project, whereas a loss would be recognised once determinable. More specific criteria were created to assist to determine the quantum of the gain or loss. A loss will be provided in full once determinable, whereas a gain will be accounted for based on applying the percentage of completion to the present value of the final anticipated profit on completion of the building. Management believe this better reflects the gain or loss as the developments progresses towards completion. The value of the gain or loss is determined by calculating the expected valuation of the building on completion, less the expected cost to complete the building. If a loss, the full loss is recognised. A gain is present valued by applying a discount rate of the bank interest rate plus cost of capital (being 13.75%). The percentage of completion of the building is then applied to this present valued gain. The percentage of completion is determined by reference to the PPS on the project, using the cost incurred on the top structures to the reporting period, compared to the total cost of the project on top structures. The asset under construction is therefore shown at initial costs, plus the portion of fair value gain or loss so calculated. The change in estimate has an impact on Investment properties (refer note 3). Impairment testing The recoverable amounts of cash-generating units and individual assets have been determined based on the higher of value- in-use calculations and fair values less costs to sell. These calculations require the use of estimates and assumptions. The Group reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. In addition, goodwill is tested on an annual basis for impairment. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets and liabilities. If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets. Expected future cash flows used to determine the value in use of goodwill and tangible assets are inherently uncertain and could materially change over time. They are significantly affected by a number of factors including industry specific and macroeconomic variances. For direct and indirect foreign investments and loans, the group also takes into account foreign currency fluctuations and international markets. Provisions Provisions are recognised when the group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the provision. Provisions were raised and management determined an estimate based on the information available.
174 Expected manner of realisation for deferred tax Deferred tax is provided for on the fair value adjustments of investment properties based on the expected manner of recovery, i.e. sale or use. This manner of recovery affects the rate used to determine the deferred tax liability. Impairment of goodwill Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires the directors to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Useful lives of property, plant and equipment The Group reviews the estimated useful lives of property, plant and equipment at the end of each reporting period. Item Useful life Cleaning equipment 3 years Computer equipment 3 years Motor vehicles 5 years Kitchen equipment 3 years Other fixed assets 5 to 10 years
Valuation of financial instruments The Group uses valuation techniques that include inputs that are not based on observable market data to estimate the fair value of certain types of financial instruments. Note on Financial instruments provides detailed information about the key assumptions used in the determination of the fair value of financial instruments, as well as the detailed sensitivity analysis for these assumptions. The directors believe that the chosen valuation techniques and assumptions used are appropriate in determining the fair value of financial instruments. 1.16 Segmental reporting Determination and presentation of operating segments The group determines and presents operating segments based on information that is provided internally to the Chief Operating Decision-Maker. Segmental results that are reported to the Chief Operating Decision-Maker include items directly attributable to a segment or a region, as well as those that can be allocated on a reasonable basis. On a primary basis, the operations are organised into the following business segments – office and mixed use, retail, vacant land, projects and light industrial. The Chief Operating Decision-Maker, however, assesses each investment property on an individual basis in making decisions about its performance. Any capital expenditure relating to investment property will be accounted for as under note 1.2 (Investment property) and will be shown separately in note 1 (Investment Property) of the financial statements. 1.17 New accounting pronouncements The Group has not yet adopted the following pronouncements which have been issued by the International Accounting Standards Board. The Group does not currently believe the adoption of these pronouncements will have a material impact on its results, financial position or cash flow: Accounting standard/interpretation Effective date IFRS 9 Financial Instruments 1 January 2015 IFRS 10 Consolidated Financial Statements 1 January 2013 IAS 27 Separate Financial Statements 1 January 2013 IFRS 11 Joint Arrangements 1 January 2013 IFRS 12 Disclosure of Interests in Other Entities 1 January 2013 IFRS 13 Fair Value Measurement 1 January 2013 IAS 12 Income Taxes 1 January 2013 IAS 28 Investment in Associated 1 January 2013 IAS 32 Financial Instruments: Presentation 1 January 2014 IFRS 7 Financial Instruments: Disclosure 1 January 2013 IAS 19 Employee Benefits Revised 1 January 2013
175 EXTRACT OF NOTES TO THE FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED 31 MARCH 2013 1. Investment properties Group March 2013 June 2012 R’000 R’000 Fair value Balance at beginning of the year 8 497 139 4 840 709 Additions 1 006 370 795 700 Additions via business combinations – 2 127 079 Provision for tenant installations (273) (9 119) Net gain from fair value adjustment 870 026 1 047 720 Continued operations 817 570 1 020 769 Discontinued operations 52 456 26 951 Transfer to inventory – (41 627) Transfers to held for sale and disposal (1 249 585) (263 323) Disposed via sale of subsidiary (63 055) – Foreign currency effect (1 120) – Balance at end of the year 9 059 502 8 497 139 Reconciled as follows: Cost 7 200 587 6 353 788 Fair value adjustment 3 168 942 2 444 295 Provision for tenant installations 3 733 4 006 Transfer to inventory – (41 627) Transfers to assets held for sale and disposals (1 249 585) (263 323) Disposed via sale of subsidiary (63 055) – Foreign currency effect (1 120) – Total value 9 059 502 8 497 139
Fair valuations The effective date of the re-valuations was 31 March 2013. The previous valuations were done on 30 June 2012. Investment properties and properties under construction Buildings and buildings under construction The revaluations for investment property buildings and buildings under construction were performed by the Valuation Division of Old Mutual Investment Group South Africa (“OMIGSA”), a registered independent and professional valuer. The independent valuers at OMIGSA, and the OMIGSA property valuation manager, Mr.Trevor King (Registered Professional Valuer and Chartered Valuation Surveyor), are not connected to the Group and have recent and substantial experience in the location and category of the investment properties being valued. The industry accepted capitalisation of normalised net income methodology has been adopted for valuation of the investment properties, and includes the following: • consideration of market norm operating costs, including letting commission and tenant installations; • inclusion of perpetual vacancy factors, as well as short-term vacancy provisions on specific buildings; and • application of market norm market rentals, capitalisation rates and discount rates. Cap rates used for valuations ranged between 6.75% to 10% (2012: 7.25% to 10%). In addition to the valuations performed, certain cost provisions and obligations were included in determining the fair value of the properties disclosed. The value of buildings under construction or refurbishment was determined with reference to the cost incurred to date plus a portion of the final anticipated fair value gain upon completion of the building. The final anticipated fair value gain upon completion of the buildings is the difference between the total costs of development and the value of the building calculated using the capitalised net income method. The realised fair value gain, being a portion of the present value of the anticipated fair value gain, is determined with reference to the stage of completion of the building. The stage of completion of the building is determined with respect to the cost to date of the top structure and the total anticipated costs excluding the land and the related funding costs. The final anticipated fair value of the building is determined upon completion of the building using the external valuation upon completion.
176 Development Land Except for the directors valuations that were done on Le Chateau, the revaluations for the development land was performed by an independent valuer Amanda de Wet (B. Proc LLB (UP), Nat Dip in REES (Unisa), a member of the SA Institute of Valuers, who is not connected to the Group and has recent experience in the location and category of the investment properties being valued. Waterfall leasehold and development rights The effective date of the revaluations on Waterfall Land and Waterfall Buildings including buildings under construction was 31 March 2013. Revaluations were performed by the Valuation Division of Old Mutual Investment Group South Africa (OMIGSA), a registered independent and professional valuer. The independent valuers at OMIGSA, and the OMIGSA property valuation manager Mr Trevor King (Registered Professional Valuer and Chartered Valuation Surveyor), are not connected to the Group and have recent and substantial experience in the location and category of the investment properties being valued. In 2012 and 2011 these revaluations were performed by an independent valuer, A de Wet. A de Wet is not connected to the company and has recent experience in location and category of the investment property being valued. The acquisition of the Waterfall leasehold and development rights were subject thereto that 20% thereof vests in the Atterbury Property Holdings Proprietary Limited, as developer of the infrastructure and improvements on the land parcels referred to above. To facilitate the vesting of the said 20%, the leasehold and development rights were transferred applying section 45 of the Income Tax Act (with the effect that the original base cost remains unchanged) to Atterbury Waterfall Investment Company Proprietary Limited (AWIC), effective 31 May 2009. The transfer price of R804 624 817 (initial transfer value of R750 000 000 escalating at a rate equal to the prime interest lending rate from 27 October 2008 to 31 May 2009) was settled by way of an inter-company loan raised between AWIC and Atterbury Investment Holdings Limited. Waterfall Land In 2009 the company entered into a sale of development rights and lease agreements with Waterfall Development Company Proprietary Limited in terms of which it obtained the right to develop the parcels of land listed below and call for the registration of long-term lease agreements against the title deeds of these parcels (it is anticipated that all the lease agreements will be registered within the foreseeable future). For all periods presented, Waterfall comprises development rights obtained relating to: • land parcel 3, 8, 9, 10, 10a, 10b, 12 and 24 of portion 1/RE on the Farm Waterfall No. 5; • land parcel 15 on portion 62 of the Farm Waterfall No. 5; • land parcel 20 on portion 706 of the Farm Waterfall No. 5; • land parcel 21 on portion 75 of the Farm Waterfall No. 5; and • land parcel 22 on portion 78 on the Farm Waterfall No. 5. The valuation is done by applying the residual-land valuation model and includes the following key assumptions: • an estimated development plan spanning 1 to 8 years; • serviced land prices between R386 and R2 800 (2012: R450 and R3 000) per square metre, depending on service installed and usage; • estimated capital outlays and professional fees as per independent quantity surveyor; • provision for additional costs, e.g. agents commission and marketing; • inflation linked escalations of costs and income of 0% (2012 & 2011: 10%) per annum; and • discount rates for present value calculations between 0% and 25% (2012: 15% to 22%). Waterfall Buildings including buildings under construction The valuation of buildings and buildings under construction were done by applying the industry accepted capitalisation of normalised net income methodology, and includes the following: • consideration of market norm operating costs, including letting commission and tenant installations; • inclusion of perpetual vacancy factors, as well as short-term vacancy provisions on specific buildings; and • application of market norm market rentals, capitalisation rates, and discount rates. The following buildings are currently under development during the current financial year on the relevant land parcels: • Woodmead North Office Park was developed on land parcel 20 on portion 706 of the Farm Waterfall No. 5. The valuation included in the annual financial statements is also only 50% of the value as 50% of the development rights and the building was sold to the Moolman Group during the previous year, through a 50/50 joint venture between the two parties; and • The Massbuild Distribution Warehouse was developed on land parcel 8 on portion 1/RE on the Farm Waterfall No. 5. The following buildings are currently under construction on the relevant land parcels: • Cell C Multi-Use-Premise on land parcel 21 on portion 75 of the Farm Waterfall No. 5; • Group 5 Head Office on land parcel 15 on portion 62 of the Farm Waterfall No. 5; • Maxwell Office Park (Phase I) on land parcel 10 of portion 1/RE on the Farm Waterfall No. 5; and • MB Technologies Warehouse on land parcel 22 on portion 78 on the Farm Waterfall No. 5.
177 The value of these developments was determined with reference to the cost incurred to date plus a portion of the final anticipated fair value gain upon completion of the building. The final anticipated fair value gain upon completion of the buildings is the difference between the total costs of development and the value of the building calculated using the capitalised net income method. The realised fair value gain, being a portion of the present value of the anticipated fair value gain, is determined with reference to the stage of completion of the building. The stage of completion of the building is determined with respect to the cost to date of the top structure and the total anticipated costs excluding the land and the related funding costs. The final anticipated fair value of the building is determined upon completion of the building using the external valuation upon completion. Refer to note 12 for description of the finance lease liability linked to this investment property. The change in estimate`s impact in the current reporting period, being the additional fair value gain recognised given the stage of completion of buildings under construction, is as follows: Net effect Fair value gain Tax effect after tax R’000 R’000 R’000 Investment property (Lynnwood bridge phase 3, Newtown, Majestic Offices) 34 800 (6 490) 28 311 Investment property (Cell C; Group 5 Head Office, Maxwell Office Park, MB Technologies building) 57 379 (10 700) 46 679 Total 92 179 (17 190) 74 990
2. Goodwill Group March 2013 June 2012 R’000 R’000 Carrying value at beginning of the year 16 929 17 961 Goodwill written off (16 929) – Transferred to assets held for sale – (1 032) Carrying value at end of the year – 16 929 The goodwill balance can be allocated to investments that represent cash-generating units. These investments are Highgrove Proprietary Limited, the Investec Building and De Ville Shopping Centre. The portion transferred to assets held for sale in the prior year relates to the Investec Pretoria Offices building which was held for sale at year-end. Goodwill is tested for impairment annually, or when there is an indication of impairment. For impairment testing purposes, goodwill is allocated to a cash-generating unit, of which the recoverable amount is determined based on value in use. Management has assessed the cash flows off the cash-generating units that the goodwill can be allocated to, and decided to write off the existing goodwill. This amount has been written off in the statement of comprehensive income under “operating and other expenses”. Management does not believe the goodwill represents additional future value to be unlocked in the assets that is currently not reflected in the fair value as determined in the valuations.
3. Inventories Group March 2013 June 2012 R’000 R’000
Carrying value at end of the year 41 660 41 644 The Atterbury theatre was constructed with the intent to be sold to the Atterbury Trust. Inventory is valued at the lower of cost and net realisable value.
178 4. Investment in associates Group March 2013 June 2012 R’000 R’000 Fair value Balance at beginning of the year 1 098 741 3 380 809 Additions 175 425 537 808 Transfers from other investments (9 049) 23 450 Write down of investment – (2 800 850) Share in retained profits/(losses) 36 234 (43 208) Adjustment for minorities due to cross-shareholding (42 900) – Transfers (150 839) – Foreign currency effect 2 552 732 Impairment – – Provision for surety (18 147) – Balance at end of the year – net of provision for impairment 1 092 017 1 098 741 Disclosed as follows: Total investment in associates 1 155 395 1 156 943 Provision for liabilities relating to associates (63 378) (58 202) Total value 1 092 017 1 098 741 Reconciled as follows: Cost 711 927 536 502 Share of net retained profits since acquisition 591 976 562 239 Adjustment for minorities due to cross shareholding (42 900) – Provision for surety (18 147) – Transfers (150 839) – Balance at end of the year – net of provision for impairment 1 092 017 1 098 741
Proportional interest held in associates: Group March 2013 June 2012 % %
Attfund Limited (liquidated October 2012 ) – 42.5 Rapfund Holdings Proprietary Limited – – Atterbury Parkdev Consortium Proprietary Limited – – Paradise Coast Property Development Proprietary Limited 33.3 33.3 Keysha Investments 213 Proprietary Limited (‘Val de Vie’) 50.0 50.0 Mall of Mauritius at Bagatelle Limited 49.9 49.9 Brooklyn Bridge Office Park Proprietary Limited 25.0 25.0 Travenna Development Company Proprietary Limited 36.0 36.0 Atterbury Africa Limited 25.0 50.0 Geelhoutboom Estate Proprietary Limited 36.7 36.7 The Club Retail Park Proprietary Limited 31.0 31.0 Waterfall Mall Limited – 25.0 Accra Mall Limited – 50.0 Artisan Investment Projects 10 Limited 26.3 26.3 Retail Africa Consortium Holdings Proprietary Limited 20.0 20.0 Arctospark Proprietary Limited 50.0 50.0 Bagaprop Limited 49.9 49.9 Atterbury Property Holdings Proprietary Limited 25.0 25.0 Bishopsgate Student Residential Limited 30.0 30.0 MAS Real Estate Inc. 21.1 23.7 Fountains Regional Mall Proprietary Limited* 12.73 9.5 Sinco Investments Six Proprietary Limited 25.0 –
179 The assets and revenue of the Group’s associates are as follows: Name Assets Liabilities Revenue Profit/(Loss) R’000 R’000 R’000 R’000 March 2013 Paradise Coast Property Development Proprietary Limited 24 930 27 017 – (1 323) Keysha Investments 213 Proprietary Limited (‘Val de Vie’) 28 580 83 753 279 (6 313) Mall of Mauritius at Bagatelle Limited 572 440 125 634 24 951 (8 587) Brooklyn Bridge Office Park Proprietary Limited 636 706 421 271 53 165 10 677 Travenna Development Company Proprietary Limited 384 766 204 564 22 282 26 579 Geelhoutboom Estate Proprietary Limited 8 462 60 293 – (5 566) The Club Retail Park Proprietary Limited 203 022 211 932 7 547 (15 685) Atterbury Africa Limited 366 723 362 960 7 331 (2 417) Artisan Investment Projects 10 Limited 120 945 86 950 360 (343) Retail Africa Consortium Holdings Proprietary Limited 632 605 54 368 960 (2 946) Arctospark Proprietary Limited 1 458 825 1 292 839 140 781 95 284 Bagaprop Limited 1 196 776 733 403 91 478 76 450 Atterbury Property Holdings Proprietary Limited 634 720 308 394 19 585 36 916 Bishopsgate Student Residential Limited 141 581 78 732 2 989 1 235 MAS Real Estate Inc. 1 034 063 260 500 4 380 11 325 Fountains Regional Mall Proprietary Limited 351 449 458 869 30 827 (59 119) Sinco Investments Six Proprietary Limited 203 066 203 690 – (304) * During the current period, shareholding in Fountains Regional Mall Proprietary Limited was diluted increasing the effective interest of the Group to 24.98%.
5. Other investments Group March 2013 June 2012 R’000 R’000 Fair value Balance at beginning of the year 467 948 67 174 Additions 12 981 1 765 838 Disposals (458 438) (1 400 915) Transfer to associates 9 049 (23 450) Net gain from fair value adjustments 26 373 59 301 Balance at end of the year 57 913 467 948 Disclosed as follows: Total other investments 57 913 476 997 Provision for liabilities relating to other investments (9 049) Balance at end of the year 57 913 467 948 Reconciled as follows: Cost 85 130 428 219 Fair value adjustment (27 217) 39 729 Balance at end of the year 57 913 467 948
180 The Group held investments in the following companies: Group March 2013 June 2012 % % Unlisted Isibaya House Proprietary Limited – 18.75 Fountains Regional Mall Proprietary Limited – 9.50 Rainprop Proprietary Limited 2.00 2.00 Stenham European Shopping Centre Fund IC 4.50 4.50 Retail Africa Wingspan Investments Proprietary Limited – – Listed Hyprop Limited – 2.22
Investment through foreign investment allowance During 2008, the Group acquired an investment in Stenham European Shopping Centre Fund IC (“SESCF”), an entity listed on the Channel Island Stock Exchange, which is held through the foreign portfolio investment allowance of Investec Securities Limited. The underlying asset of SESCF is Nova Eventis Regional Shopping Centre, a 96 000m2 regional mall located near Leipzig, Germany. The fair value of the foreign investment allowance, as determined by the directors and based on the equity of (SESCF was calculated on 34 657 shares (2012: 20 517 shares) held by the Group in SESCF. The management accounts shows a value of Euro 150.98 per share (2012: Euro 224.9) at currency exchange rate of R11.83/Euro (2012: R10.50/Euro). Management, however, decided to make an additional impairment of Euro 25,59 per share due to market conditions. The value therefore used to value Stenham European Shopping Centre Fund IC (‘SESCF’) was Euro 125,39 per share. During 2009 the Group entered into an option agreement with Wattchatt Proprietary Limited (a related entity), to acquire Leipzig Nova Eventis Consortium Proprietary Limited, which holds an additional 30 545 shares (2012: 17 374 shares)(3.81% shareholding) in SESCF. This option was still in place at period-end.
6. Loans to/(from) associates and joint ventures Loans have been made to/(received from) the following associates and joint ventures: Group March 2013 June 2012 R’000 Loan amount Impairment Total Loan amount Impairment Total
Associates Paradise Coast Property Development Proprietary Limited 3 936 (14) 3 922 4 046 (12) 4 034 Brooklyn Bridge Office Park Proprietary Limited 2 648 – 2 648 2 305 – 2 305 Keysha Investments 213 Proprietary Limited 26 264 (8 355) 17 909 25 058 (20 789) 4 269 Geelhoutboom Estate Proprietary Limited 13 876 – 13 876 10 947 (4 119) 6 828 Atterbury Africa Limited 60 510 – 60 510 – – – Fountains Regional Mall Proprietary Limited 13 303 – 13 303 10 579 (3 502) 7 077 Mall of Mauritius at Bagatelle Limited 7 504 – 7 504 – – – Sinco Investments Six Proprietary Limited 38 805 – 38 805 – – – The Club Retail Park Proprietary Limited 47 572 (9 387) 38 185 40 836 (9 387) 31 449 Travenna Development Company Proprietary Limited – – – (9 284) – (9 284) Arctospark Proprietary Limited – Attfund International 483 562 – 483 562 495 562 – 495 562 Atterbury Property Holding Proprietary Limited 175 217 – 175 217 49 603 – 49 603
181 Group March 2013 June 2012 R’000 Loan amount Impairment Total Loan amount Impairment Total Artisan Investment Projects 10 Limited 22 578 – 22 578 20 525 – 20 525 Current assets 878 019 621 652 Current liabilities – (9 284) Total 878 019 612 368
For all periods presented, the loans from or to associates and joint ventures bear interest at the prime rate, are unsecured and no repayment terms have been set, except the loans noted below which do not bear interest or interest at different rates: • Keysha Investments 213 Proprietary Limited (no interest); • Arctospark Proprietary Limited – Attfund International (no interest); • Sinco Investments Six Proprietary Limited (Mall of Namibia) (no interest); • Geelhoutboom Estate Proprietary Limited (no interest); • Fountains Regional Mall Proprietary Limited (interest on out of parity loan balances only); • The Club Retail Park Proprietary Limited (interest on out of parity loan balances only); and The fair value of the loans to/(from) the entities listed above are considered by management to approximate the carrying value of the loans. The interest rates of the loans are considered to be market related and have no fixed terms of repayment. In terms of the group policy, intercompany loans within the Group bear no interest.
7. Loans to/(from) shareholders Group March 2013 June 2012 R’000 R’000 Atterbury Property Developments Proprietary Limited – 6 308 The loans are interest free, unsecured and have no specific terms of repayment, except for the loan with Atterbury Property Holdings Proprietary Limited, which beared interest at prime. Current assets – 6 308 Current liabilities – – The fair value of the loans to/(from) the entities listed above are considered by management to approximate the carrying value of the loans as the interest rates charged on the loans are considered to be market related, no fixed terms of repayment have been determined.
8. Other financial assets/liabilities Group March 2013 June 2012 R’000 Loan amount Impairment Total Loan amount Impairment Total
Loans and receivables/ (payables) Atterbury Property Development Proprietary Limited 3 172 (10 677) (7 505) 10 677 (10 677) – Atterbury Waterfall Pocket 22A Proprietary Limited 15 (14) 1 3 – 3 Atterbury Waterfall City Proprietary Limited (4 555) – (4 555) (4 275) – (4 275) Association for People with Disabilities 88 (88) – 88 (88) – Leipzig Nova Eventis Consortium Proprietary Limited 87 056 (43 508) 43 548 83 288 (7 963) 75 325 Rainprop Proprietary Limited 403 – 403 316 (244) 72
182 Group March 2013 June 2012 R’000 Loan amount Impairment Total Loan amount Impairment Total Scarlett Sky Investment 36 Proprietary Limited 3 925 (3 012) 913 3 613 (3 013) 600 TTA Shares Proprietary Limited – – – 1 – 1 Zwelinzima Holdings Proprietary Limited 263 (263) – 263 (263) – Atterbury Foundation 1 749 – 1 749 1 641 – 1 641 Waterfalls Zambia Limited (AA) – – – 76 – 76 Lynx Golfing 133 – 133 – – – Waterfalls Mall Limited (AA) – – – 1 388 – 1 388 Accra Mall Limited (AA) – – – 14 795 – 14 795 Lynnwood Bridge Property Owners Association (900) – (900) – – Loan receivable – Nasek Investments Limited (AA) – – – 10 140 – 10 140 Loan – Sanlam Capital Markets (AA) – – – (78 288) – (78 288) Nedbank Limited (304) – (304) (304) – (304) Abacus Trust (412) – (412) (412) – (412) Hyprop Limited (117 600) – (117 600) (117 600) – (117 600) Atterbury Property Holdings International Limited (AIHI) – – – (12 298) – (12 298) Atterbury Property Holdings International Limited (AA) – – – 15 – 15 West Hills Mall Limited 143 – 143 143 – 143 Sanlam (85 165) (85 165) (80 000) – (80 000) Loans and receivables 46 891 104 199 Current liabilities (216 440) (293 177) Total (169 549) (188 978) Unless specified, the loans are unsecured and indefinite, and terms are the same for all periods presented. Furthermore, the loans bear no interest except those listed below. A portion of the loan to Atterbury Property Development Proprietary Limited relates to an advance with regard to the Beau Rivage development. The repayment thereof is linked to the sale of residential stands on this development. Due to the uncertainty pertaining the timing of recovery of the loan in short term, the loan has been fully impaired during the previous year. The current year loan relates to loan advances by Atterbury Property Developments Proprietary Limited to the group not relating to the Beau Rivage development. The following loans bear interest at prime: • Atterbury Waterfall City Proprietary Limited; and • Sanlam. The loan from Hyprop Limited bears interest at 8.5% (2012: 8.5%). In 2011, the loan to Atterbury Investment Managers Proprietary Limited was in respect of 50% of a guarantee issued by Rand Merchant Bank Limited payable 30 June 2012 and carried terms correlating to that of the guarantee. The loan was secured by a cession of Atterbury Investment Holdings Limited shares by Atterbury Investment Managers Proprietary Limited in favour of the Group to the value of R255,000,000. The loan has been repaid during the previous year by transfer of shares in Atterbury Investment Holdings Limited at NAV price at 30 June 2012 to the treasury company of the Group. The fair value of the loans to/(from) the entities listed above are considered by management to approximate the carrying value of the loans. The terms of the loans are considered to be market related, have no fixed terms of repayment (other than the loan to Atterbury Investment Managers Proprietary Limited in the prior year) and neither party has deferred payment of the loans. Due to the uncertainty pertaining the timing of the recovery thereof some loans have been impaired as disclosed above.
183 Group March 2013 June 2012 R’000 R’000 Held at fair value through profit and loss Derivative financial assets and liabilities utilised for hedging against interest rates: Carrying value at the beginning of the year (127 331) (44 193) Derivatives realised (750) – Fair value adjustment 2 005 (83 138) Derivative financial assets – – Derivative financial liabilities (126 076) (127 331)
The derivatives are interest rate swap agreements entered into by the Group with various financial institutions. The derivatives were valued by each financial institution involved by referring to the market swap curve as at 31 March 2013 and on 30 June 2012. The swap agreements entail a flow of funds, calculated on the difference between interest at a floating and fixed rates on the outstanding capital amount. Total non-current financial assets – – Total current financial assets 46 891 104 199 Total non-current financial liabilities (126 076) (127 331) Total current financial liabilities (216 440) (293 177)
9. Cash and cash equivalents Bank accounts and cash on hand 150 174 200 501 The Group has an overdraft facility to the amount of R105 000 000 (2012: R45 000 000) with Nedbank Limited. A letter of undertaking for the amount of R20 000 000 (2012: R20 000 000) for Atterbury Investment Holdings Limited and R5 000 000 (2012: R5 000 000) for Atterbury Waterfall Investment Company Proprietary Limited issued by Nedbank Property Partners relating to the Waterfall development has also been provided as security. The Group also has an overdraft facility to the amount of R80 000 000 with The Standard Bank of South Africa Limited Limited, secured by a mortgage bond over Waterfall Land Parcel 10A. The overdraft facilities bear interest at prime.
10. Deferred tax Group March 2013 June 2012 R’000 R’000
The balance comprises: Deferred tax asset Advance receipts – – Assessed losses (48) (17 597) Pre-payments – – Wear and tear allowance – 1 240 Straight-line debtor – 681 Deferred initial lease expenditure – – Pre-production interest – 1 773 Bad debt allowance (192) (201) Unutilised interest expense on foreign investments – – Fair value adjustment on derivatives – – Capital gains on fair value adjustments and equity accounting – 2 345 Other (25) – Assessed loss not recognised – 7 565 (264) (4 194)
184 Group March 2013 June 2012 R’000 R’000 Reconciliation of deferred tax asset At beginning of the year (4 194) (9 124) Originating temporary difference on advance receipts – 58 290 Increase in tax losses available for set-off against future taxable income 17 549 (17 598) Originating temporary difference on pre-payments – (8 403) Originating temporary difference on wear and tear allowance (1 240) (4 138) Originating temporary difference on straight-line debtor (681) 681 Originating temporary difference on deferred initial lease expenditure – (37 707) Originating temporary difference on pre-production interest (1 773) 1 886 Originating temporary difference on bad debt allowance 9 5 731 Originating temporary difference on unutilised interest expense on foreign investments – 9 127 Originating temporary difference on fair value adjustment on derivatives – (12 849) Originating temporary difference on capital gains on fair value adjustments and equity accounting (2 345) 2 345 Originating temporary difference on other movements (25) – Originating temporary difference on assessed losses not recognised (7 565) 7 565 (264) (4 194) Deferred tax liability Advance receipts (2 015) 2 315 Assessed losses (141 474) (100 290) Pre-payments 1 563 1 346 Wear and tear allowance 18 909 26 275 Straight line debtor 38 420 26 032 Deferred initial lease expenditure 1 571 (13 502) Pre-production interest 25 846 46 937 Bad debt allowance (777) (380) Unutilised interest expense on foreign investments (13 643) (13 023) Fair value adjustment on derivatives (12 292) (26 120) Capital gains on fair value adjustments and equity accounting 824 702 644 326 Other (52 165) (2 078) 688 644 591 838 Reconciliation of deferred tax liability At beginning of the year 591 838 537 925 Originating temporary difference on advance receipts (4 330) (55 024) Increase in tax losses available for set-off against future taxable income (41 184) (23 556) Originating temporary difference on prepayments 217 9 671 Originating temporary difference on wear and tear allowance (7 366) 3 860 Originating temporary difference on straight-line debtor 12 388 5 259 Originating temporary difference on deferred initial lease expenditure 15 073 22 693 Originating temporary difference on pre-production interest (21 091) 4 790 Originating temporary difference on bad debt allowance (397) (5 754) Originating temporary difference on unutilised interest expense on foreign investments (620) (10 341) Originating temporary difference on fair value adjustment on derivatives 13 828 (897) Originating temporary difference on capital gains on fair value adjustments and equity accounting 180 376 105 290 Originating temporary difference on other movements (50 087) (2 078) 688 644 591 838
Use and sales rate The deferred tax rate applied to the fair value adjustments of investment property/financial asset is determined by the expected manner of recovery. Where the expected recovery of the investment property/financial assets is through sale, the Capital Gains Tax rate of 18.65% for 2013 and 2012 is used. If the expected manner of recovery is through definite use the normal tax rate of 28% is
185 applied. If the manner of recovery is partly through use and partly through sale, a combination of capital gains rate and normal tax rate is used. The applicable tax rates on timing differences are based on management’s best estimate of the manner in which these timing differences will realise. Gains in the fair value of investment property give rise to taxable timing differences, being the difference between the original cost price and the market value as determined annually by external valuers. Refer to note 1 for valuation details. Market value of investment properties represents the best estimate of value to be realised in the open market between a willing buyer and a willing seller. Thus, disposal of investment properties will primarily give rise to Capital Gains Tax. In determining the amount of deferred tax to be raised, accounting standards require: • The revaluation of land to be separated from that of buildings and deferred tax to be calculated using the consequences of sale; and • In respect of the buildings, management is required to estimate the expected period of use until sale and an estimated sales value (residual value). The fair value adjustment is then split between a use value and a sale value component and the respective tax consequences applied to each component. Given the overall nature of the Group’s investment property portfolio and the historic performance of the portfolio as a whole as well as the individual properties, management estimates the expected future sale value (residual value) of the investment properties to at least be equal to the market values at year end. Thus, the fair value attributable to the value in use component of the investment properties is most likely to be nil. There is thus no benefit to value land separately for determining deferred tax consequences. Consequently: • Net fair value gains on investment properties are included at Capital Gains Tax rates; • Straight line rentals are included at Normal Tax rates; • Future recoupment of wear and tear allowances on individual depreciable components of investment properties are included Normal Tax rates; and • Deferred initial lease costs are included at Normal Tax rates.
11. Assets and liabilities held for sale 11.1 Non-current assets held for sale The following investment properties are presented as held for sale: Group March 2013 June 2012 R’000 R’000
Great Westerford 253 584 – Harlequins Office Park 115 728 – Atterbury House 287 868 – San Ridge Square 95 822 – De Ville Shopping Centre 188 730 – Digistics building LP 8 Waterfall development – 47 246 Investec building – 129 977 Building G – 83 867 941 732 261 090 Goodwill relating to the Investec Building – 1 032 Straight-line debtor relating to investment property 20 756 – 962 488 262 122
186 11.2 Non-current liabilities held for sale Mortgage bonds over investment properties presented as held for sale: Group March 2013 June 2012 R’000 R’000
Harlequins Office Park 55 960 – Momentum guarantee facility 232 000 – De Ville Shopping Centre 111 563 – Digistics Building LP 8, in favour of Atterbury Waterfall Investment Company Proprietary Limited – 22 867 Investec building, in favour of Investec Bank Limited – 52 436 Building G, in favour of Rand Merchant Bank Limited – 55 874 399 523 131 177
11.3 Discontinued operations of non-current assets held for sale Profit and loss Income 92 108 23 135 Fair value adjustments on investment properties 52 456 26 951 Expenses (106 020) (18 028) Net profit before tax 38 544 32 058 Tax (8 610) (7 622) 29 934 24 436 Other assets and liabilities 7 124 424 Trade and other receivables 4 740 329 Trade and other payables 35 136 2 468 The sale of the Sanridge Building situated in Midrand was in August 2013. Atterbury House’s (situated in Cape Town) expected date of sale is in September 2013. The shares in APC, which holds the Harlequins Office Park (situated in Pretoria), were sold in August 2013. A contract for the sale of Great Westerford (situated in Cape Town) is being drafted and the expected date of sale is in the next twelve months. Management are in the process of seeking a buyer for the De Ville Shopping Centre (situated in Cape Town).
12. Finance lease liability Group March 2013 June 2012 R’000 R’000
Atterbury Waterfall Investment Company Proprietary Limited 577 286 501 373 Majestic Offices Proprietary Limited 4 746 4 572 Nieuwtown Property Development Company Proprietary Limited 51 169 48 221 633 201 554 166 The figures above are reconciled as follows: Atterbury Waterfall Investment Company Proprietary Limited Lessor: Waterfall Development Company Proprietary Limited Minimum lease payments due: within one year 6 480 128 287 in second to fifth year inclusive 171 212 394 319 later than five years 696 433 429 121 874 125 951 727 Less: Future finance charges (296 839) (450 354) Present value of minimum lease payments 577 286 501 373
187 Group March 2013 June 2012 R’000 R’000
Present value of minimum lease payments due: within one year 6 480 113 236 in second to fifth year inclusive 133 681 239 171 later than five years 437 125 148 966 577 286 501 373 Majestic Offices Proprietary Limited Lessor: City of Johannesburg Minimum lease payments due: within one year 201 190 in second to fifth year inclusive 1 273 923 later than five years 20 468 20 970 21 942 22 083 Less: Future finance charges (17 196) (17 510) Present value of minimum lease payments 4 746 4 573 Present value of minimum lease payments due: within one year – 181 in second to fifth year inclusive – 700 later than five years 4 746 3 692 4 746 4 573 Nieuwtown Property Development Company Proprietary Limited Lessor: City of Johannesburg Minimum lease payments due: within one year 998 641 in second to fifth year inclusive 6 326 4 585 later than five years 12 282 652 12 285 150 12 289 976 12 290 376 Less: Future finance charges (12 238 807) (12 242 156) Present value of minimum lease payments 51 169 48 220 Present value of minimum lease payments due: within one year – 601 in second to fifth year inclusive – 3 477 later than five years 51 169 44 142 51 169 48 220 Non-current liabilities 626 721 440 148 Current liabilities 6 480 114 018
In 2009 the Group entered into a sale of development rights and lease agreements with Waterfall Development Company Proprietary Limited in terms whereof it obtained the right to develop the relevant land parcels of land and call for the registration of long-term lease agreements against the title deeds of these land parcels (it is anticipated that all the lease agreements will be registered within the foreseeable future). These agreements are treated as finance leases in which the Investment property is recognised and measured at fair value, and a liability is recognised based on the terms set out below. In terms of the Waterfall agreements Atterbury Waterfall Investment Company Proprietary Limited (“AWIC”) is obliged to pay, to the land owner, an amount equal to 6% of the net rentals from the leasehold improvements. This obligation is inseparable from the leased land, and is treated as a finance lease liability as mentioned above. The 6% net rental obligation is calculated based on: • anticipated market rentals for commercial-, retail- and industrial- leasehold improvements, with annual escalations of 0% p.a. (2012: 6%); • staggered rental income streams based on anticipated completion dates of the various leasehold improvements/disposal of leasehold rights; • discounting of anticipated cash flow streams to determine the present value of the obligation. Also refer to note 1 for further description of the Waterfall investment property.
188 The Group entered into a finance lease agreement in the name of Majestic Offices Proprietary Limited with the City of Johannesburg for a 90 year lease on Erf 591, Newtown, Johannesburg. The effective finance lease starting date was 3 February 2011 with the basic monthly instalment starting at R15 000 (escalating at 8% compounded annually). Once the development is completed the basic rental changes to 2.5% of rental income for the year. The Group entered into a finance lease agreement in the name of Nieuwtown Property Development Company Proprietary Limited with the City of Johannesburg for a 90-year lease on Erven 45, 46, 47, 56, 57 and 58 Newtown, Johannesburg. The effective finance lease starting date is 16 September 2010 with the basic monthly instalment starting at R80,000 (escalating with 8% compounded annually). Once the development is completed the basic rental is payable as follows: 1.75% of rental income for year 1 to 30, 1.9% of rental income for year 31 to 60 and 2% of rental income for year 61 to 90.
13. Trade and other receivables Group March 2013 June 2012 R’000 R’000
Deposits 3 012 708 Sundry receivables 43 979 41 011 Trade debtors 10 202 7 465 Value-Added Tax receivable 33 404 34 028 Allowance for doubtful debt (4 574) (1 861) 86 023 81 351 The fair value of deposits, sundry receivables, VAT and trade debtors are deemed to be the same as the carrying value. Trade and other receivables past due but not impaired Trade and other receivables which are less than 1 month past due are not considered to be impaired. At 31 March 2013, R5 281 575 (2012: R2 561 510) were not past due. Trade receivables with a total value of R4 920 337 (2012: R4 903 709) were past due at period-end. Trade and other receivables impaired As of 31 March 2013, trade and other receivables of R4 574 005 (2012: R1 861 604) were impaired and provided for. Trade receivables ageing analysis excluding amounts impaired and provided for: Group March 2013 June 2012 R’000 R’000 Current 5 282 2 562 30 days 403 941 60 days 679 2 605 90 days 430 749 120 days and more 3 408 609 Movement in the allowance for doubtful debt Opening balance 1 861 2 896 Impairment losses recognised on receivables 2 893 1 444 Impairment losses reversed (180) (2 479) Balance at end of the year 4 574 1 861 The creation and release of provision for impaired receivables have been included in operating expenses in the statement of comprehensive income. Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash. In considering any impairments on debtor accounts, the Group takes into account deposit held, bank guarantees issued by the debtor, additional sureties provided by the principals of the debtors and running Transunion (ITC) checks on debtors and their principals.
189 14. Issued Capital, Share Premium and Stated Capital Group March 2013 June 2012 R’000 R’000
Reconciliation of number of shares issued: Reported at beginning of the year 522 989 885 521 535 340 Issue of share capital – 1 454 545 Buy back of shares – – Total issued shares in terms of share capital 522 989 885 522 989 885 Adjust for treasury shares held by: Razorbill Properties 91 Proprietary Limited (43 800 054) (43 800 054) Abacus Holdings Proprietary Limited (29 726 516) (29 726 516) Lynnwood Bridge Office Park Proprietary Limited (57 165) (57 165) Total adjusted issued shares 449 406 150 449 406 150 Authorised 1 000 000 000 Ordinary shares of R0.0001 each 100 100 Reconciliation of shares issued in Rand value: Reported at the beginning of the year 54 52 Issue of share capital * (2) 2 Buy back of shares – – Total issued shares 52 54 Adjust for treasury shares held by: Razorbill Properties 91 Proprietary Limited (4) (4) Abacus Holdings Proprietary Limited (3) (3) Total adjusted issued shares 45 47 Issued Ordinary 45 47 Share premium 2 196 549 2 196 549 2 196 594 2 196 596 * The adjustment relate to a rounding item in the prior year, corrected in the current period. 477 010 115 (2012: 477 010 115) unissued ordinary shares are under the control of the directors in terms of resolution of members passed at the last annual general meeting. This authority remains in force until the next annual general meeting. Group March 2013 June 2012 R’000 R’000 Equity-settled employee benefit reserve: Balance at beginning of the year – – Arising on share-based payments 4 802 – Balance at end of the year 4 802 –
190 15. Long-term borrowings Group March 2013 March 2013 June 2012 June 2012 R’000 R’000 R’000 R’000 Short-term Short-term Loan amount portion Loan amount portion
Held at amortised costs Long-term borrowing are secured by way of mortgage bonds registered over investment properties, shares pledged and surety ship provided by the Group. Investec Bank Limited 85 241 5 464 6 795 6 795 Atterbury Investment Holdings Limited 79 777 – – – Riverport Trading 143 Proprietary Limited – – 52 436 7 139 Investec Pretoria Office Loans bearing interest between prime and prime minus 1.28% per annum and repayable in structured monthly payments. The loans were fully repayable by April 2017. This facility was settled when the asset was sold in the previous year. Transferred to held for sale liabilities. – – (52 436) (7 139) Mall of Namibia (Sinco Investments Six Proprietary Limited) 79 777 – – – Loan bearing interest at prime less 0.5%. The loan needs to be settled over 84 months with a residual amount of R80 million. Bullet payments of R10 million needs to be made in months 36, 48, 60 and 72. Le Chateau Property Development Proprietary Limited 5 464 5 464 6 795 6 795 Loan bearing interest at prime and repayable in July 2013 with a residual of R4,845,368. Nedbank Limited 2 534 443 86 758 2 342 132 21 145 Atterbury Investment Holdings Limited – – – – Overdraft facility secured by Waterfall land parcel 20. Nieuwtown Property Development Company Proprietary Limited 50 588 – – – Development loan bearing interest at prime and repayable over a period of 10 years starting from 1 December 2014, which is the estimated completion date of the development. Lynnwood Bridge Office Park Proprietary Limited 595 815 14 247 548 902 9 580 Fixed instalment servicing interest and capital until July 2021 with a residual of R200 million. Surety provided of R250 million, bearing interest at between prime minus 1% and prime minus 0.5% per annum. The development loan on phase 3 of Lynnwood Bridge bears interest at prime less 0.5% and is repayable by September 2024 with a residual amount of R98 700 000. Estimated repayment starts at September 2014 which is the estimated completion date of the development.
191 Group March 2013 March 2013 June 2012 June 2012 R’000 R’000 R’000 R’000 Short-term Short-term Loan amount portion Loan amount portion An interest rate swap agreement has been entered into with respect to the abovementioned secured loans with a value between R93 million and R300 million and interest rates ranging between 11.08% and 11.43%. Maturity dates range between March 2014 and March 2021. De Ville Shopping Centre Proprietary Limited 111 563 111 563 120 042 11 264 Loans bearing interest between prime and 10.5% per annum and is repayable in structured monthly payments. The maturity date of the loan is June 2021. Joint and several suretyship to the amount of R146 million is provided by Atterbury Investment Holdings Limited. Transferred to held for sale liabilities. (111 563) (111 563) – – Atterbury Waterfall Investment Company Proprietary Limited 247 694 71 947 39 854 – Land Parcel 22 45 881 45 881 39 854 – Total available facility of R78 mil bearing interest at prime less 1%, with an interest roll-up of R2 050 000. The loan needs to be settled in December 2013. Cell C 190 716 14 969 – – Development loan bearing interest at prime. Once completed this loan will convert to three term loans with rates ranging between JIBAR plus 2.5% and prime plus 2.5%, repayable between 12 months and 10 years. Estimated completion date is 1 December 2013. MB Technologies building 11 097 11 097 – – Development loan bearing interest at prime. The loan will be settled at the estimated completion date of the development at March 2014. Abacus Holdings Proprietary Limited 1 640 346 564 1 633 334 301 Brooklyn Mall 358 215 – 344 734 – Loan bearing interest at prime – 1%. The facility has to be settled by October 2022. Mooirivier Mall 499 624 – 478 903 – Loan bearing interest at prime – 1%. The facility has to be settled by October 2021. Andringa Walk 306 600 – 284 004 123 Loan bearing interest at prime – 0.35%, while development is taking place and prime -1% after completion of development. Repayment of the capital amount has to take place 120 months after development has been completed. The estimated date of settling the capital amount is December 2022.
192 Group March 2013 March 2013 June 2012 June 2012 R’000 R’000 R’000 R’000 Short-term Short-term Loan amount portion Loan amount portion Eikestad Mall 475 343 – 424 309 178 Loan bearing interest at prime – 0.35%, while development is taking place and prime -1% after completion of development. Repayment of the capital amount has to take place 120 months after development has been completed. The estimated date of settling the capital amount is December 2022. Abacus Holdings Proprietary Limited 564 564 101 384 – Loan bearing interest at prime – 0.75%. All Abacus Holdings Proprietary Limited bonds are secured by the properties held in the fund and a cession of cash of R50 million. Rand Merchant Bank (RMB) 501 578 6 672 917 032 368 791 Atterbury Investment Holdings Limited – – 358 407 358 407 Guarantee facility issued at a fixed interest rate of 12% per annum, capitalised, with a settlement in April 2014. 232 000 232 000 – – Transferred to held for sale liabilities. (232 000) (232 000) – – Momentum – – 358 407 358 407 Guarantee facility issued at a fixed interest rate of 12% per annum with settlement in December 2012. Lynnaur Investments Proprietary Limited 496 710 1 804 494 326 614 Two loans are secured with RMB. The first loan of R450 million is fixed and fully payable by April 2023. The second loan of R50 million services interest monthly and is linked to three month JIBAR plus 2.95%; a capital amount is due February 2016. Majestic Offices Proprietary Limited 4 868 4 868 4 571 4 571 A loan facility for the development of the property known as Majestic bearing interest at prime. The bond will be settled in April 2013. Atterbury Parkdev Consortium Proprietary Limited 55 960 55 960 59 728 5 199 A loan facility bearing interest at 10.85%. The facility has annual capital instalments and is fully repayable by February 2016. The loan has a residual value of R45 627 597. Transferred to held for sale liabilities. (55 960) (55 960) – – The Standard Bank of South Africa Limited 1 063 191 800 357 1 300 509 609 359
193 Group March 2013 March 2013 June 2012 June 2012 R’000 R’000 R’000 R’000 Short-term Short-term Loan amount portion Loan amount portion
Atterbury Investment Holdings Limited 480 649 299 481 963 546 572 512 Interim operational loan – – 80 000 80 000 During the previous year a loan was provided at a rate of JIBAR +1.44 payable monthly until the overdraft facility has been activated. Glenfair Boulevard Shopping Centre 103 678 4 452 99 190 2 719 Loans bearing interest at 1-month JIBAR plus 1.22% and 3-month JIBAR plus 1.4%. The facility has annual capital instalments and the maturity date is February 2016. Garden Route Mall 250 175 250 175 258 000 8 011 The loan bearing interest at 1-month JIBAR plus 0.9% plus costs. This loan expires September 2013. Atterbury Waterfall Investment Company Proprietary Limited – Mall of Africa 44 854 44 854 – – Loan bearing interest at 3-month JIBAR plus 1.65% plus costs. The loan expires October 2013. Standard Bank Limited* – Bridging facility 81 942 – 419 458 419 458 Loan facility bearing interest at 1-month JIBAR + 1.5% plus costs. The facility has minimum fixed repayment terms and the maturity date is December 2014. Atterbury Waterfall Investment Company Proprietary Limited – Land Parcel 8 – – 106 898 62 324 Loan facility bearing interest at 1-month JIBAR +1.75% and the maturity date is June 2013. Atterbury Waterfall Investment Company Proprietary Limited 237 911 156 245 – – Land Parcel 8 38 740 38 740 – – Infrastructure loan bearing interest at 1-month JIBAR plus 1.85% plus cost. The loan expires 30 June 2013. Land Parcel 10 115 264 115 264 – – Infrastructure loan bearing interest at 3-month JIBAR plus 1.50% plus cost. The loan expires October 2013. Woodmead North Office Park 27 531 356 – – Term loan bearing interest at 1-month JIBAR plus 1.50% plus cost. The loan expires November 2017. Group 5 55 913 1 885 – – Development loan bearing interest at 3-month JIBAR plus 1.70% plus cost. The loan expires January 2019. Maxwell Office Park 463 – – – Loan bearing interest at 3-month JIBAR plus 1.70% plus cost. The loan expires April 2019.
194 Group March 2013 March 2013 June 2012 June 2012 R’000 R’000 R’000 R’000 Short-term Short-term Loan amount portion Loan amount portion Mantrablox Proprietary Limited 300 217 300 217 300 116 – Bond of R300 million, servicing interest until September 2013 at 1-month JIBAR rates plus 0.7% plus cost. – Nieuwtown Property Development Company Proprietary Limited 44 414 44 414 36 847 36 847 Development loan at JIBAR + 1.2% service interest. The loan is repayable in April 2013. Sanlam 382 740 221 903 55 758 55 758 Atterbury Waterfall Investment Company Proprietary Limited 177 520 16 683 55 758 55 758 Development loan facility of R200 million, a R12 million interest roll-up facility and a VAT facility of R8 million. Interest roll-up at prime less 0.5%. The final maturity date of the loan is May 2028. Atterbury Investment Holdings Limited 205 220 205 220 – – Short-term loan bearing interest at a fixed rate of 8.5%.The loan is repayable by August 2013. Atterbury Waterfall Investment Company Proprietary Limited – – – – Atterbury Waterfall Investment Company Proprietary Limited – – 22 866 22 866 Development loan bearing interest at prime. Loan is repayable on demand. Transferred to held for sale liabilities – – (22 866) (22 866) Wesbank 106 106 157 157 Atterbury Investment Holdings Limited 106 106 157 157 Hire purchase facility repayable over a period of 17 (2012: 26) remaining monthly instalments bearing interest at prime rate. The facility is secured over a motor vehicle. Non-current liabilities 3 446 039 – 3 560 378 – Current liabilities – 1 121 260 – 1 062 004 Total 4 567 299 4 622 382 The fair value of the borrowings listed above are considered by management to approximate the carrying value of these borrowings. Rates and repayments terms are regarded as market related, given that financial institutions takes cognisance of market conditions, the risk profile of the Group and surety provided on every transaction.
16. Trade and other payables Group March 2013 June 2012 R’000 R’000 Trade payables 255 814 52 061 Deposits held 14 202 16 155 Amounts received in advance 1 812 4 592 Value-Added Tax payable 4 190 7 613 Sundry payables 29 69 810 276 047 150 231 The fair value of trade payables, deposits held, VAT, amounts received in advance and sundry payables are deemed to be the same as the carrying value. Trade payables include amounts due relating to buildings under construction.
195 17. Provisions Provision for the transfer of an undivided share of a building within the Lynnwood Bridge development to a third party Group March 2013 June 2012 R’000 R’000 Opening balance – 15 153 Utilised during the year – (15 153) Provision for payment on profit from Lynnwood phase 3 to Atterbury Property Developments Proprietary Limited 17 491 – 17 491 –
The provision of the previous year related to the Group entering into an agreement with a third party which would result in the transfer of an 25% undivided share in one of the office buildings in the Lynnwood Bridge development. This transaction was implemented during the previous year.
18. Operating lease receivables Group March 2013 June 2012 R’000 R’000 Value of minimum lease payments receivable within one year 431 726 345 755 in second to fifth year inclusive 1 604 984 894 153 later than 5 years 2 412 204 626 064 4 448 914 1 865 972 Lease agreements are entered into with tenants on variable terms depending on the location and nature of the lettable area. The lease term for office buildings are generally longer than for retail outlets.
19. Related parties Relationship Related parties are defined as those entities with which the Group transacted during the year and in which the following relationship(s) exist: Shareholding Direct subsidiaries Atterbury Attfund Investment Company No. 1 Proprietary Limited Atterbury Attfund Investment Company No. 3 Proprietary Limited Atterbury Mauritius Consortium Proprietary Limited Atterbury Property Investments Proprietary Limited Atterbury Property Johannesburg Proprietary Limited Atterbury Waterfall Investment Company Proprietary Limited De Ville Shopping Centre Proprietary Limited Harlequin Duck Properties 204 Proprietary Limited Highgrove Property Holdings Proprietary Limited Le Chateau Property Development Proprietary Limited Lord Charles & Lady Brooks Office Park Holdings Proprietary Limited Lynnwood Bridge Office Park Proprietary Limited Atterbury Parkdev Consortium Proprietary Limited Abacus Holdings Proprietary Limited Mantrablox Proprietary Limited Lynnaur Investments Proprietary Limited
196 Direct associates Attfund Limited Paradise Coast Property Development Proprietary Limited Brooklyn Bridge Office Park Proprietary Limited Geelhoutboom Estate Proprietary Limited Keysha Investments 213 Proprietary Limited Rapfund Holdings Proprietary Limited Travenna Development Company Proprietary Limited Sinco Investments Six Proprietary Limited The Club Retail Park Proprietary Limited Arctospark Proprietary Limited – Attfund International Atterbury Africa Limited Atterbury Property Holdings Proprietary Limited Indirect subsidiaries and associates Aldabri 96 Proprietary Limited Atterbury Attfund Investment Company No. 2 Proprietary Limited Design Square Shopping Centre Proprietary Limited Mall of Mauritius at Bagatelle Limited (Mauritian) Bagaprop Limited (Mauritian) Razorbill Properties 91 Proprietary Limited Nieuwtown Property Development Company Proprietary Limited Majestic Offices Proprietary Limited Waterfall Mall Limited Accra Mall Limited Artisan Investment Projects 10 Limited Bishopsgate Student Residential Limited Retail Africa Consortium Holdings Proprietary Limited Directorships BF van Niekerk LLS van der Watt GJ Oosthuizen MC Wilken PH Faure P Tredoux JHP van der Merwe WL Masekela L Ndala S Shaw-Taylor AW Nauta M Hamman Management Key management and Prescribed officers: P Smit T Smith Transactions between Group companies which are eliminated on consolidation are not disclosed. All transactions with related parties are considered to be market related.
197 82 7 715 4 121 11 856 11 35 058 35 14 290 14 69 238 69 24 272 150 610 150 114 670 114 702 519 702 (R’000) 118 560 118 503 555 503 114 906 114 550 556 550 700 452 292 459 292 396 912 396 551 042 551 336 593 336 148 507 148 300 749 128 797 128 536 066536 710 234 710 944 750 2 525 5062 525 1 633 0951 633 Total liabilities 17 191 17 23 417 49 852 49 42 196 54 950 34 027 (R’000) 101 318 101 152 501 152 491 416 491 157 567 157 274 710 274 935 135 935 120 216 120 331 930 331 306 810 320 633 320 475 988 475 578 880 578 690 849 373 040373 202 209 2 253 999 2 253 1 021 846 1 021 1 054 326 2 271 189 2 456 627 1 439 622 3 897 569 Total assets – 79 191 191 2 172 6 801 6 526 1 293 1 756 5 497 2 403 4 488 1 480 14 213 14 18 757 18 17 271 17 11 326 11 70 671 70 13 479 13 11 509 11 21 126 21 32 705 32 15 844 15 18 943 18 36 059 58 685 (R’000) 153 689 153 102 024102 Other assets 21 661 21 39 793 39 53 469 53 49 773 49 32 734 32 17 00017 95 82295 (R’000) 115 728 115 951 175 951 361 714 361 150 329 150 457 231 457 150 766 150 316 086 316 567 371 567 253 584 253 188 730 188 654 790 654 303 362 920 922 287 868 484 890 property 1 021 622 1 021 2 253 999 2 253 2 302 938 1 380 937 3 795 545 2 270 999 Investment Statement of financial position Region Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng North West North West Western Cape Western Cape Western Cape Western Cape Western Cape Western Cape Western Cape – – – GLA 3 616 4 471 5 450 9 000 11 352 11 80 115 10 655 10 13 455 13 53 051 53 32 453 32 52 372 52 17 205 17 21 628 21 12 045 12 53 362 53 32 667 32 23 139 26 242 26 286 44 200 66 000 142 830 142 275 957 179 977179 teau a Maxwell Office Park Group 5 Group MB Technologies Cell C egmental analysis S theFor period ended March 31 2013 Business segment: Investment property Atterbury House (Held for sale) Aurecon Building Harlequins Office Park (Held for sale) Glenfair Boulevard Shopping Centre Great Westerford (Held for sale) Altech Building Office and mixed use De Ville Shopping Centre (Held for sale) San Ridge Square (Held for sale) Garden Route Mall Lynnwood Bridge Eikestad Mall Retail Brooklyn Mall Mooirivier Mall Le Ch Andringa Walk Mill Square Waterfall – Land Vacant land Newtown Majestic Offices Waterfall – Infrastructure and Services Developments 20.
198 1 291 70 919 70 22 152 74 379 74 39 033 39 56 785 152 091 152 (R’000) (R’000) 283 191 283 105 582 105 241 307 241 230 375 230 375 123 389 123 445 482 445 544 148 366 794 543 368 500 366 642 206 992 567 7 036 526 2 370 2432 370 6 043 959 1 842 239 Total liabilities Total liabilities 35 535 35 48 393 99 862 96 924 (R’000) (R’000) 118 191 118 515 714 515 517 710 517 658 617 658 141 764 141 459 095 459 253 892 253 253 892 253 291 699 291 301 126 301 146 062 146 202 522 907 339 980 786 809 062 2 253 150 2 253 2 820 471 3 509 932 10 318 900 318 10 12 572 050 572 12 Total assets Total assets 35 205 7 814 8 953 1 146 7 065 3 078 3 078 6 403 4 566 7 346 11 851 11 33 318 33 31 710 31 15 432 15 13 057 13 16 086 16 23 363 82 028 (R’000) (R’000) 110 645 110 317 667 317 216 965 216 Other assets Other assets 47 247 47 83 867 83 92 798 35 500 35 (R’000) (R’000) 141 559 141 451 281 451 250 814 250 250 814 250 193 569 193 793 631 793 113 626 113 625 299 625 289 275 285 296 285 796 694 957 423957 129 977129 508 368 486 000 property property 2 603 506 3 427 904 10 001 232 10 Investment Investment Statement of financial position Statement of financial position Region Region Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng Gauteng North West Western Cape Western Cape Western Cape Western Cape Western Cape Western Cape GLA GLA 7 919 4 471 5 450 6 302 9 000 80 115 10 655 10 13 455 13 53 051 53 32 453 32 35 671 35 52 372 52 17 205 17 21 628 21 12 045 12 53 362 53 32 667 32 26 242 35 671 35 166 051 166 272 341 634 435 Head Office/Other Total according to financials Total theFor period ended 30 June 2012 San Ridge Square (held for sale) Garden Route Mall Glenfair Boulevard Shopping Centre Brooklyn Mall Mooirivier Mall Aurecon Building Light industrial Andringa Walk Eikestad Mall Retail De Ville Shopping Centre (held for sale) Altech Building Digistics Building (held for sale) Office and mixed use Business segment: Investment property Business segment: Investment property Massbuild Atterbury House (held for sale) Harlequins Office Park (held for sale) Lynnwood Bridge Great Westerford (held for sale) Investec Building (held for sale) Building G (held for sale)
199 9 354 12 567 12 93 66093 (R’000) 278 251 278 683 350 683 384 478 692 704 6 554 035 1 264 371 5 289 664 Total liabilities 15 193 15 24 280 (R’000) 176 746 176 320 337 320 521 363 521 2 223 130 2 238 323 2 497 262 9 090 089 11 587 351 11 Total assets 28 193 9 131 3 472 9 324 20 025 23 525 (R’000) 331 843 331 Other assets 24 251 15 000 15 (R’000) 173 274 173 300 312 497 838 property 2 213 999 2 213 8 758 2468 758 2 228 999 Investment Statement of financial position Region Gauteng Gauteng Gauteng Gauteng North West – – – GLA 9 000 66 000 75 00075 513 392 513 Business segment: Investment property Le Cheteau Waterfall – Land Vacant land Majestic Offices Newtown Waterfall – Infrastructure and Services Developments Total Head Office/Other Total according to financials
200 Annexure 21
INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE HISTORICAL FINANCIAL INFORMATION
“The Directors Attacq Limited The Parkdev Building 2nd Floor, Brooklyn Bridge 570 Fehrsen Street Brooklyn 0181
INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE HISTORICAL FINANCIAL INFORMATION INCLUDED IN THE PROSPECTUS
Introduction We have audited the historical financial information of Attacq Limited (“the Company”) in respect of the nine months ended 31 March 2013 as set out in Annexure 20 to the prospectus and we have reviewed the historical financial information of the Company in respect of the year ended 30 June 2012 as set out in Annexure 20 to the prospectus. The historical financial information in respect of each period comprises of the Consolidated Statement of Financial Position as at the period, and the notes, comprising a summary of significant accounting policies and other explanatory information.
Directors’ Responsibility for the Historical Financial Information The company’s directors are responsible for the preparation and fair presentation of the historical financial information in accordance with the requirements of the JSE Listings Requirements, and for such internal control as the directors determine is necessary to enable the preparation of historical financial information that is free from material misstatement, whether due to fraud or error. The JSE Listings Requirements require the historical financial information in respect of each period to be prepared in accordance with the conceptual framework, the measurement and recognition requirements of International Financial Reporting Standards (“IFRS”), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and also, as a minimum, to be presented and contain the disclosures required by the JSE Listings Requirements.
Auditor’s Responsibility Our responsibility is to express an opinion or conclusion on the historical financial information based on our audit or review. We conducted our audit of the historical financial information in accordance with International Standards on Auditing (“ISAs”) and the review of the historical and interim financial information was conducted in accordance with International Standard on Review Engagements (“ISRE”) 2410: Review of Interim Financial Information Performed by the Independent Auditor of the Entity. Both standards require that we comply with ethical requirements. We plan and perform the audit to obtain reasonable assurance about whether the historical financial information is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the historical financial information, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation of the historical financial information in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the historical financial information. ISRE 2410 requires us to conclude whether anything has come to our attention that causes us to believe that the historical financial information is not prepared in all material respects in accordance with the applicable financial reporting framework. A review of interim financial statements in accordance with this standard consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the ISAs and consequently does not enable the auditor to obtain assurance that the auditor would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. We believe that the evidence we have obtained in our audit or review is sufficient and appropriate to provide a basis for our opinion or conclusion, respectively.
201 Opinion In our opinion, the historical financial information in respect of the period ended 31 March 2013 is prepared, in all material respects, in accordance with the requirements of the JSE Listings Requirements, as set out in note 1 to the historical financial information. Based on our review of the historical financial information of the Company in respect of the year ended 30 June 2012 nothing has come to our attention that causes us to believe that the historical financial information of Attacq for the year ended 30 June 2012 is not prepared, in all material respects, in accordance with the requirements of the JSE Listings Requirements, as set out in note 1 to the historical financial information.
Other information in the Prospectus As required by paragraph 8.53 of the JSE Listings Requirements, we have read the prospectus in which the historical financial information is contained, for the purpose of identifying whether there are material inconsistencies between the prospectus and the historical financial information which has been subject to audit or review. The prospectus is the responsibility of the directors. Based on reading the prospectus we have not identified material inconsistencies between this report and the historical financial information which has been subject to audit or review. However, we have not audited the prospectus and accordingly do not express an opinion on it.
Consent We consent to the inclusion of this report, which will form part of the prospectus to the shareholders of the Company, to be issued on or about 7 October 2013, in the form and context in which it appears.
Deloitte & Touche Registered Auditors Per: Z Jasper Partner
Deloitte & Touche Registered Auditors Riverwalk Office Park, Block B 41 Matroosberg Road, Ashlea Gardens X6 Pretoria, 0081 (PO Box 11007, Hatfield, 0028)
19 September 2013”
202 Annexure 22 Directors’ interest in any such transaction None None Address of beneficial shareholders of purchaser 3rd Floor, Eikestad Floor, 3rd Mall Andringa Street, Stellenbosch, 7600 floor,3rd Eikestad Mall Andringa Street, Stellenbosch, 7600 Rivonia135 Road Sandown, 2196 Parkdev2nd Floor, Building, Brooklyn Bridge Fehrsen570 Street Brooklyn, Pretoria N/A Names of beneficial shareholders of purchaser Abacus Trust Mooirivier Mall Nedbank Limited Attacq Limited Listed entity with various shareholders Address of purchaser 3rd Floor, Eikestad Floor, 3rd Mall, 43 Andringa Street, Stellenbosch, 7600 2nd Floor, 2nd Floor, Craddock Heights, Cradock21 Avenue, Rosebank, 2196 ion numberion t Name of purchaser Hyprop Investments Limited. Registra Abacus Holdings Proprietary Limited Registration number 2008/021582/07 1987/005284/06 Valuation R2 388 080 532 Agreed purchase price determined at the time the transaction was concluded based on an offer from Hyprop for 100% of the shares in Attfund Retail 315 R1 659 Mills30 June 2011 Fitchet valuation for building100% of Consideration received 32 145 916 Hyprop 916 145 32 shares and in R796 508 616 cash Abacus shares issued to Attacq to the value of R95 662 804 ¥ ¥ Sale of 17 521 963 963 521 Sale 17 of shares in Attfund Retail to Hyprop. 1 September 2011 Name of property and date of disposal 25% undivided25% share in Brooklyn Mall. 1 September 2011 1 DETAILS OF PROPERTIES, ASSETS AND BUSINESS UNDERTAKINGS DISPOSED OF AND TO BE DISPOSED OF The following table sets the out details regarding any material property disposed during of the past three years as at the last practical date to be or disposed of: No. 2
203 Directors’ interest in any such transaction None None Lynnaur Investments Proprietary Limited is 25% owned by Attvic SA Proprietary Limited. Attvic SA Proprietary Limited is held by 70% Atterbury Property. Louis van is der a director Watt of Atterbury Property. Attvic SA Proprietary Limited is 30% held by Victus Capital Proprietary Limited. Pierre is Tredoux a director and effective 0.8% shareholder Victus of Capital Proprietary Limited. treet Address of beneficial shareholders of purchaser 3rd Floor, Eikestad Floor, 3rd Mall, Andringa Street, Stellenbosch, 7600 Eikestad Floor, 3rd Mall, Andringa S Stellenbosch, 7600 Rivonia135 Road Sandown, 2196 Parkdev2nd Floor, Building, Brooklyn Bridge, Fehrsen570 Street, Brooklyn, Pretoria N/A Parkdev2nd Floor, Building, Brooklyn Bridge, Fehrsen570 Street Brooklyn, Pretoria The Atterbury Building, 4 Daventry Street, Lynnwood Manor, Pretoria, 0081 Names of beneficial shareholders of purchaser Abacus Trust Mooirivier Mall, Nedbank Limited Attacq Limited Open ended fund available– not Attacq Attvic SA Proprietary Limited Address of purchaser 3rd Floor, Eikestad Floor, 3rd Mall, 43 Andringa Street, Stellenbosch, 7600 Protea5th Floor, Place corner Protea Road and Dreyer Street, Claremont, 7708 The Atterbury Building, 4 Daventry Street Lynnwood Manor Pretoria, 0081 Name of purchaser Abacus Holdings Proprietary Limited Registration number 2008/021582/07 Leaf Property Fund Master’sTrust Reference Number IT3278/2009 Lynnaur Investments Proprietary Limited Registration number 2005/027735/07 Valuation R250 000 000 1 September 2011 R282 000 000 30 June 2011 OMIGSA valuation for 100% of building 000R631 000 30 June 2012 OMIGSA valuation for 100% of building Consideration received Abacus shares to the value of R250 000 000 R342 540 772 934 273 R449 ¥ ∏ ∏ Disposal 726 29 of Attacq shares516 in Razorbill to Abacus 1 September 2011 Hampton Office Park 30 March 2012 Aurecon Building 20 April 2012 Name of property and date of disposal 3 4 5 No.
204 Directors’ interest in any such transaction None None None Refer to Annexure 3 , paragraph 3.2 for vanBF Niekerk and interest Faure’s PH in MAS Address of beneficial shareholders of purchaser N/A N/A N/A N/A Names of beneficial shareholders of purchaser Open ended fund available– not N/A Listed fund – N/A Listed fund – N/A Address of purchaser 5th Floor, Protea5th Floor, Place, corner of Protea Road and Dreyer Street, Claremont, 7708 N/A Long 14 5th Floor, Street, Cape Town MAS Real Estate Inc. Athol25 Street Douglas, Isle of Man, IM1 1 LB Name of purchaser Leaf Property Fund Master’sTrust Reference Number IT3278/2009 Various public shareholders Ascension Properties LimitedRegistration number 2006/026141/06 Registration number in the BVI 1750199 00 000 3 2 Valuation 2013 30 June 2013 OMIGSA valuation for 100% for building R520 382 985 382 R520 R52 R295 000 000 30 June 2013 OMIGSA valuation for 100% for building 898 824 R462 MAS 479 631 (32 shares per at €1.07 share and R13.26 per €1.00) Consideration received R520 382 985 382 R520 R273 482 353 R341 000 000 MAS 479 631 32 shares ∏ ¥ ∏ ¥ Attacq sold 7 926 Hyprop shares032 from 14 September until 29 2011 to November 2012 various public shareholders Atterbury House 2013 September 12 50% Great of Westerford 8 March 2013 Disposal of investments in Karoo I and Karoo II to MAS Name of property and date of disposal 6 8 7 9 No. Notes: ¥ = effective date of disposal ∏ = date of transfer
205 Annexure 23
CORPORATE GOVERNANCE STATEMENT
1. BOARD OF DIRECTORS The board of directors consists of 3 executive directors and 9 non-executive directors, 5 of whom are considered independent. The chairman, Pierre Tredoux, is an independent non-executive director whose role is separate from that of the chief executive officer (“CEO”), Morné Wilken. The non-executive directors are individuals of calibre, credibility and have the necessary skills and experience to provide judgment that is independent of management on issues of strategy, performance, resources, transformation, diversity and employment equity, standards of conduct and evaluation of performance. The current board’s diversity of professional expertise and demographics make it a highly effective board with regards to Attacq’s current strategies. The board through the remuneration and nominations committee shall ensure that in appointing successive directors, the board as a whole will continue to reflect, whenever possible, a diverse set of professional and personal backgrounds ensuring a clear balance of power and authority so that no one director has unfettered powers of decision making. The information needs of the board are reviewed annually and directors have unrestricted access to all company information, records and documents to enable them to conduct their responsibilities sufficiently. In terms of the company’s memorandum of incorporation, one-third of the non-executive directors must be re-elected annually. Board meetings will be held at least quarterly, with additional meetings convened when circumstances necessitate. The board sets the strategic objectives of Attacq and determines Attacq’s investment and performance criteria as well as being responsible for its sustainability, proper management, control, compliance and ethical behaviour of the businesses under its direction. The board has established specific committees to give detailed attention to certain of its responsibilities and which operate within defined, written terms of reference which are capable of amendment by the board from time to time as the need arises. The board will establish a formal orientation programme to familiarise incoming directors with the company’s operations, senior management and its business environment, and to induct them in their fiduciary duties and responsibilities. New directors with no or limited board experience will receive development and education to inform them of their duties, responsibilities, powers and potential liabilities. Directors will ensure that they have a working understanding of applicable laws. The board will ensure that the company complies with applicable laws and considers adherence to non-binding industry rules and codes and standards. In deciding whether or not non-binding rules shall be complied with, the board will factor the appropriate and ethical considerations that must be taken into account. The board will appraise the chairperson’s performance and ability to add value on an annual or such other basis as the board may determine. The remuneration and nominations committee, will appraise the performance of the CEO and other senior executives, at least annually. The board as a whole, as well as individual directors will have their overall performance periodically reviewed in order to identify areas for improvement in the discharge of their functions on an annual basis. This review will be undertaken by the chairperson and, if so determined by the board, an independent service provider. An overview of the appraisal process, results and action plan will be disclosed in the group’s integrated report. Nominations for the re-appointment of a director will only occur after the evaluation of the performance and attendance of the director. The board will determine a policy for detailing the procedures for appointments to the board. Such appointments are to be formal and transparent and a matter for the board as a whole assisted where appropriate by the remuneration and nominations committee. The board has approved a charter setting out its responsibilities for the adoption of strategic plans, monitoring of operational performance and management, determination of policy and processes to ensure the integrity of the company’s risk management and internal controls, communication policy and director selection, orientation and evaluation. The group member companies shall adopt the governance framework, policies, processes and procedures as set by Attacq’s board in consultation with the directors of its various subsidiaries. The board has delegated certain functions to the audit and risk committee, the remuneration and nominations committee, the transformation, social and ethics committee and the investment committee. The board is conscious of the fact that such delegation of duties is not an abdication of the board members’ responsibilities.
2. AUDIT AND RISK COMMITTEE The board, in accordance with the requirement set out in Attacq’s MOI, has established an audit and risk committee comprising Stewart Shaw-Taylor (chairperson), Lucas Ndala, Hellen El Haimer and Lebo Masekela who are all independent non-executive directors except for Lucas Ndala who is a non-independent non-executive director. All of the members are financially literate.
206 The committee’s primary objective is to provide the board with additional assurance regarding the efficacy and reliability of the financial information used by the directors to assist them in the discharge of their duties. The committee monitors the existence of adequate and appropriate financial and operating controls and ensures that significant business, financial and other risks have been identified and are being suitably managed, and satisfactory standards of governance, reporting and compliance are in operation. In compliance with its oversight role in relation to the preparation of this report, the audit and risk committee has had due regard to all factors and risks that may impact on the integrity of the integrated report. Within this context, the committee is responsible for the company’s systems of internal, financial and operational control. The executive directors are charged with the responsibility of determining the adequacy, extent and operation of these systems. Comprehensive reviews and testing of the effectiveness of the internal control systems in operation will be performed by the appointed asset and property managers and accompanied by external audits conducted by external practitioners whose work will be overseen by, and reported to, the audit and risk committee. These systems are designed to provide reasonable, but not absolute, assurance as to the integrity and reliability of the financial statements, to safeguard, verify and maintain accountability of the company’s assets, and to identify and minimise significant fraud, potential liability, loss and material misstatement while complying with applicable laws and regulations. The audit and risk committee is governed by a charter which was approved by the board. The internal audit function is outsourced to PricewaterhouseCoopers Advisory Services Proprietary Limited. The audit and risk committee meets at least three times a year. Executives and managers responsible for finance and the external auditors attend the audit and risk committee meetings. The audit and risk committee is responsible for reviewing the finance function of the company on an annual basis. The audit and risk committee may authorise engaging for non-audit services with the appointed external auditors or any other practising firm of auditors, after consideration of the following: • the essence of the work to be performed may not be of a nature that any reasonable and informed observer would construe as being detrimental to good corporate governance or in conflict with that normally undertaken by the accountancy profession; • the nature of the work being performed will not affect the independence of the appointed external auditors in undertaking the normal audit assignments; • the work being done may not conflict with any requirement of generally accepted accounting practice or principles of good corporate governance; • consideration to the operational structure, internal standards and processes that were adopted by the audit firm in order to ensure that audit independence is maintained in the event that such audit firm is engaged to perform accounting or other non- audit services to its client base. Specifically: –– the company may not appoint a firm of auditors to improve systems or processes where such firm of auditors will later be required to express a view as to the functionality or effectiveness of such systems or processes; and –– the company may not appoint a firm of auditors to provide services where such firm of auditors will later be required to express a view on the fair representation of information based on the result of these services to the company; • the total fee earned by an audit firm for non-audit services in any financial year of the company, expressed as a percentage of the total fee for audit services, may not exceed 35% without the approval of the board; and • a firm of auditors will not be engaged to perform any management functions (e.g. acting as curator) without the express prior approval of the board. A firm of auditors may be engaged to perform operational functions, including that of bookkeeping, when such firm of auditors are not the appointed external auditors of the company and work is being performed under management supervision. The audit and risk committee may delegate the approval of the appointment of a firm of auditors for non-audit services to management when the cumulative total budgeted cost for an assignment or assignments does not exceed R50 000 from the date of the last report-back of the use of the appointed external auditors or any other practising firm of auditors, to the audit and risk committee. Management shall report back on the use of the appointed external auditors or any other practising firm of auditors at meetings of the audit and risk committee. Information relating to the use of non-audit services from the appointed external auditors of the company shall be disclosed in the notes to the annual financial statements. Separate disclosure of the amounts paid to the appointed external auditors for non-audit services as opposed to audit services, shall be made in the annual financial statements. The audit and risk committee must consider on an annual basis and satisfy itself of the appropriateness of the expertise and experience of the financial director and the company must confirm this by reporting to shareholders in its annual report that the audit and risk committee has executed this responsibility. The audit and risk committee has satisfied itself of the appropriateness of the expertise and experience of the financial director, Melt Hamman.
3. REMUNERATION AND NOMINATIONS COMMITTEE The remuneration and nominations committee is comprised of Johan van der Merwe (Chairperson), Pierre Tredoux and Stewart Shaw-Taylor, all of whom are non-executive directors. The remuneration and nominations committee is responsible for reviewing the group’s board structures, the size and composition of the various boards within the group and to make recommendations in respect of these matters as well as an appropriate split between executive and non-executive directors and independent directors. This committee also assists in identification and nomination of
207 new directors for approval by the board. It considers and approves the classification of directors as independent, oversees induction and training of directors and conducts annual performance reviews of the board and various board committees. The remuneration and nominations committee is also responsible for ensuring the proper and effective functioning of the group’s boards and assists the chairman in this regard. The remuneration and nominations committee further has the responsibility and authority to consider and make recommendations to the board on, inter alia, remuneration policy of the company, the payment of performance bonuses, executive remuneration, short, medium and long-term incentive schemes and employee retention schemes. The remuneration and nominations committee uses external market surveys and benchmarks to determine executive directors’ remuneration and benefits as well as non-executive directors’ base fees and attendance fees. Attacq’s remuneration philosophy is to structure packages in such a way that long and short term incentives are aimed at achieving business objectives and the delivery of shareholder value.
4. INVESTMENT COMMITTEE The board has appointed an investment committee. The investment committee comprises Pierre Tredoux (Chairman), Morné Wilken, Louis van der Watt, Melt Hamman, Pieter Faure, Thys du Toit and Lucas Ndala. The investment committee meets when necessary to consider acquisitions, redevelopments and sales of investment properties. The investment committee has met twice during the nine months ended 31 March 2013.
5. INTERNAL CONTROLS To meet the company’s responsibility to provide reliable financial information, the company maintains financial and operational systems of internal control. These controls are designed to provide reasonable assurance that transactions are concluded in accordance with management’s authority, that the assets are adequately protected against material losses, unauthorised acquisition, use or disposal, and those transactions are properly authorised and recorded. The systems include a documented organisational structure and division of responsibility, established policies and procedures which are communicated throughout the group, and the careful selection, training and development of people. The company monitors the operation of the internal control systems in order to determine if there are deficiencies. Corrective actions are taken to address control deficiencies as they are identified. The board of directors, operating through the audit and risk committee, oversees the financial reporting process and internal control systems. There are inherent limitations on the effectiveness of any system of internal control, including the possibility of human error and the circumvention or overriding of controls. Accordingly, an effective internal control system can provide only reasonable assurance with respect to financial statement preparation and the safeguarding of assets.
6. THE COMPANY SECRETARY The board of directors have direct access to the company secretary, Talana Smith, who provides guidance and assistance in-line with the requirements outlined in the Act, King III and the JSE Listings Requirements. The company secretary will be subjected to an annual evaluation by the board wherein the board will satisfy itself as to the competence, qualifications and experience of the company secretary. The company secretary, where necessary, arranges training on changing regulations and legislation and could involve the group’s sponsors, auditors or organisations such as the institute of directors. The company secretary is not a member of the board and an arms-length relationship exists between the board of directors and the company secretary. The board is satisfied that an arms-length relationship is maintained between the company and Talana Smith through the provisions of a service agreement entered into between the company and Talana Smith which limits the duties of the company secretary to only those related to the corporate governance of the company and the administration of company documentation.
7. DIRECTORS’ DEALINGS AND PROFESSIONAL ADVICE The company will operate a policy of prohibiting dealings by directors, the company secretary and certain other managers in periods immediately preceding the announcement of its interim and year-end financial results, any period while the company is trading under cautionary announcement and at any other time deemed necessary by the board. The board will establish a procedure for directors, in furtherance of their duties, to take independent professional advice, if necessary, at the company’s expense. All directors have access to the advice and services of the company secretary.
8. COMMUNICATION It will be the policy of Attacq to meet regularly with institutional shareholders, private investors and investment analysts, as well as to provide presentations on the company and its performance and shall promote a stakeholder inclusive approach in operating the company. The board appreciates that shareholder perceptions affect the company’s reputation and in this regard will establish policy for the engagement of the company’s stakeholders. The board will encourage shareholders to attend annual general meetings.
208 9. INTEGRATED REPORTING The group’s annual report and accounts include detailed reviews of the company, together with a detailed review of the financial results and financing positions. In this way the board seeks to present a balanced and understandable assessment of the group’s position and prospects. The group will establish comprehensive management reporting disciplines which include the preparation of monthly management accounts, detailed budgets and forecasts. Monthly results, the financial position and cash flows of operating units will be reported against approved budgets and compared to the prior period. Profit and cash flow forecasts will be reviewed regularly and working capital levels are monitored on an ongoing basis. Sustainability reporting and disclosure shall be integrated with the company’s financial reporting. The financials will state the company’s positive and negative impacts and detail whatever steps have been taken to ameliorate the negative impacts. The board will ensure the integrity of the group’s integrated report.
10. TRANSFORMATION, SOCIAL AND ETHICS COMMITTEE The transformation, social and ethics committee is a sub-committee of the board of directors. The committee comprises Lebo Masekela, Hellen El Haimer, Melt Hamman and Helena Austen. The committee is chaired by an independent non-executive director, Lebo Masekela. Attendance of the committee include the company secretary and persons from legal and marketing disciplines within the group. The mandate of the committee includes the following: • monitoring the impact of legislation and compliance with the relevant Acts; • monitoring the company’s activities with regards to matters relating to corruption; • monitoring the company’s activities to promote and adherence to the B-BBEE Act; • monitoring employment equity and fair labour practices; • monitoring good corporate citizenship and the elimination of corruption; • monitoring the contribution to development of the communities; • reviewing the ethical standard of the board; • monitoring customer relationships, including the compliance to the consumer laws; and • monitoring the impact of the company’s building developments on the environment.
11. BUSINESS RESCUE The board will consider business rescue proceedings or other turn-around mechanisms as soon as the company is financially distressed as defined in the Companies Act. In this regard the board will ensure the company’s solvency and liquidity is continuously monitored. A suitable practitioner will be appointed in the event that business rescue is adopted.
12. APPLICATION OF PRINCIPLES IN THE KING CODE Preamble Attacq is committed to the principles of transparency, integrity, fairness and accountability as also advocated in the King Code. It therefore strives to meet those objectives in accordance with the content of the table below. Key – Level of compliance: 1 – Not applied/will not be applied 2 – In process/partially applied 3 – Full application
209 LEVEL OF PRINCIPLE COMPLIANCE COMMENTS 1. Ethical leadership and corporate citizenship 1.1 The board should provide effective leadership based 3 Ethics form part of the values of the board and group on an ethical foundation 1.2 The board should ensure that the company is, and is 3 The group identifies and contributes to selected seen to be, a responsible corporate citizen corporate social investment initiatives 1.3 The board should ensure that the company’s ethics 3 The board meets regularly to review management of are managed effectively the company 2. Board and Directors 2.1 The board should act as the focal point for and 3 Contained in board charter as guiding principle custodian of corporate governance 2.2 The board should appreciate that strategy, risk, 3 Contained in board charter as guiding principle performance and sustainability are inseparable 2.3 The board should provide effective leadership based 3 Contained in board charter as guiding principle on an ethical foundation 2.4 The board should ensure that the company is and is 3 The group identifies and contributes to selected seen to be a responsible corporate citizen corporate social investment initiatives 2.5 The board should ensure that the company’s ethics 3 The board meets regularly to review management of are managed effectively the company 2.6 The board should ensure that the company has an 3 Audit and risk committee is in operation effective and independent audit committee 2.7 The board should be responsible for the governance 3 Contained in board charter as guiding principle of risk 2.8 The board should be responsible for information 3 Contained in board charter as guiding principle technology (IT) governance 2.9 The board should ensure that the company complies 3 Contained in board charter as guiding principle and with applicable laws and considers adherence to reviewed regularly non-binding rules, codes and standards 2.10 The board should ensure that there is an effective risk- 3 A risk based internal audit function is in operation based internal audit 2.11 The board should appreciate that stakeholders’ 3 Contained in board charter as guiding principle perceptions affect the company’s reputation 2.12 The board should ensure the integrity of the 3 Board reviews integrated report company’s integrated report 2.13 The board should report on the effectiveness of the 3 Included in the audit and risk committee report to company’s system of internal controls shareholders 2.14 The board and its directors should act in the best 3 Contained in board charter as guiding principle interests of the company 2.15 The board should consider business rescue 3 None of the related companies are currently in proceedings or other turnaround mechanisms as soon business rescue as the company is financially distressed as defined in the Act 2.16 The board should elect a chairman of the board who 3 Board has elected a chairman. The chairman is is an independent non-executive director. The CEO independent and is not the CEO of the company should not also fulfil the role of chairman of the board 2.17 The board should appoint the chief executive officer 3 The board has appointed a CEO and a delegation of and establish a framework for the delegation of authority is in place authority 2.18 The board should comprise a balance of power, with a 3 The board consists of 12 directors of which 9 are majority of non-executive directors. The majority of non-executive and 5 of those non-executives are non-executive directors should be independent independent
210 LEVEL OF PRINCIPLE COMPLIANCE COMMENTS 2.19 Directors should be appointed through a formal 3 A formal and transparent process is in place for process appointed directors. The remuneration and nominations committee assists with the process of identifying suitable candidates 2.20 The induction of and ongoing training and 3 Continuous training of board members is taking place development of directors should be conducted through formal processes 2.21 The board should be assisted by a competent, suitably 3 The board considers the company secretary to be qualified and experienced company secretary suitably qualified and experienced and in a position to advise the company independently 2.22 The evaluation of the board, its committees and the 3 The board delegates certain functions to the following individual directors should be performed every year committees: Executive committee, audit and risk committee, remuneration and nominations committee, transformation, social and ethics committee and investment committee 2.23 The board should delegate certain functions to 3 The board has formed standing committees to well-structured committees without abdicating its perform certain function and ad hoc committees are own responsibilities formed as and when required 2.24 A governance framework should be agreed between 2 Attacq’s existing governance framework is currently the group and its subsidiary boards being implemented across subsidiaries 2.25 Companies should remunerate directors and 3 Directors’ remuneration is determined annually based executives fairly and responsibly on market related benchmarks by the remuneration and nominations committee chaired by an independent director 2.26 Companies should disclose the remuneration of each 3 The company discloses directors’ remuneration in the individual director and certain senior executives annual report 2.27 Shareholders should approve the company’s 2 The policy was approved by the remuneration and remuneration policy nominations committee and will be tabled at a future AGM 3. Audit Committees 3.1 The board should ensure that the company has an 3 The board has an audit and risk committee in effective and independent audit committee compliance with King III 3.2 Audit committee members should be suitably skilled 3 Committee consists suitably qualified and and experienced independent, non-executive directors experienced independent directors (subsidiary exemption) 3.3 The audit committee should be chaired by an 3 The committee is chaired by Stewart Shaw-Taylor, independent non-executive director independent director 3.4 The audit committee should oversee the integrated 3 The committee reviews the integrated report prepared reporting (integrated reporting, financial, by management sustainability and summarised information) The audit committee should be responsible for 3 All significant judgements and reporting decision are evaluating the significant judgements and reporting reported to the committee decisions affecting the integrated report The audit committee’s review of the financial reports 3 The audit and risk committee reviews all integrated should encompass the annual financial statements, reports, interim results and any provisional results interim reports, preliminary or provisional result announcements announcements, summarised integrated information, any other intended release of price-sensitive financial information, trading statements, circulars and similar documents 3.5 The audit committee should ensure that a combined 2 The committee has engaged with an external service assurance model is applied to provide a coordinated provider to implement a formal assurance model approach to all assurance activities
211 LEVEL OF PRINCIPLE COMPLIANCE COMMENTS 3.6 The audit committee should satisfy itself of the 3 The committee performs an annual review of the expertise, resources and experience of the company’s finance function of the group through discussion with finance function management 3.7 The audit committee should be responsible for 3 Internal audit reviews are undertaken as and when overseeing of internal audit deemed necessary by the committee in which case it will oversee the internal audit process 3.8 The audit committee should be an integral 3 The company has a combined audit and risk component of the risk management process committee 3.9 The audit committee is responsible for recommending 3 The committee oversees the external audit functions the appointment of the external auditor and and reviews the appropriateness and independence of overseeing the external audit process the external auditor annually 3.10 The audit committee should report to the board and 3 The committee formally reports to the shareholders in shareholders on how it has discharged its duties the annual report and on a frequent basis to the board 4. The governance of risk 4.1 The board should be responsible for the governance 3 Contained in board charter as guiding principle of risk 4.2 The board should determine the levels of risk 3 The audit and risk committee operates within its tolerance approved charter, framework and policy which is reviewed on an annual basis 4.3 The risk committee or audit committee should assist 3 The audit and risk committee operates within its the board in carrying out its risk responsibilities approved charter, framework and policy which is reviewed on an annual basis 4.4 The board should delegate to management the 3 Management has reviewed the application of the risk responsibility to design, implement and monitor the framework risk management plan 4.5 The board should ensure that risk assessments are 2 The board, with the assistance of the audit and risk performed on a continual basis committee is in the process of formalising its risk review process 4.6 The board should ensure that frameworks and 3 The audit and risk committee operates within its methodologies are implemented to increase the approved charter, framework and policy which will be probability of anticipating unpredictable risks reviewed on an annual basis 4.7 The board should ensure that management considers 3 Management reports any material risks and its and implements appropriate risk responses approach to the audit and risk committee on a regular basis 4.8 The board should ensure continual risk monitoring by 3 Management reports any material risks and its management approach to the audit and risk committee on a regular basis 4.9 The board should receive assurance regarding the 2 The board is in the process of formalising its risk effectiveness of the risk management process review process 4.10 The board should ensure that there are processes in 3 The board is comfortable with the existing processes place enabling complete, timely, relevant, accurate which are in place and accessible risk disclosure to stakeholders 5. The governance of Information Technology 5.1 The board should be responsible for information 2 The board is in the process of finalising its IT technology (IT) governance governance framework 5.2 IT should be aligned with the performance and 2 The board is in the process of finalising its IT sustainability objectives of the company governance framework 5.3 The board should delegate to management the 2 The board is in the process of finalising its IT responsibility for the implementation of an IT governance framework governance framework
212 LEVEL OF PRINCIPLE COMPLIANCE COMMENTS 5.4 The board should monitor and evaluate significant IT 3 IT investments and expenses forms part of the normal investments and expenditure budgeting process, and is therefore approved by the board 5.5 IT should form an integral part of the company’s risk 2 The board is in the process of finalising its IT management governance framework 5.6 The board should ensure that information assets are 2 The board is in the process of finalising its IT managed effectively governance framework 5.7 A risk committee and audit committee should assist 2 Once the IT governance framework is finalised, it will the board in carrying out its IT responsibilities be monitored by the audit and risk committee 6. Compliance with laws, codes, rules and standards 6.1 The board should ensure that the company complies 3 The board requires management to report on with applicable laws and considers adherence to compliance on a regular basis nonbinding rules, codes and standards 6.2 The board and each individual director should have a 3 Training is provided to board members from time to working understanding of the effect of the applicable time as required laws, rules, codes and standards on the company and its business 6.3 Compliance risk should form an integral part of the 3 The audit and risk committee operates within its company’s risk management process approved charter, framework and policy which will be reviewed on an annual basis 6.4 The board should delegate to management the 3 Management is responsible for compliance processes implementation of an effective compliance framework and processes 7. Internal audit 7.1 The board should ensure that there is an effective risk- 3 PricewaterhouseCoopers Advisory Services based internal audit Proprietary Limited is the service provider of the internal audit function 7.2 Internal audit should follow a risk-based approach to 2 The effectiveness of the internal audit function will its plan improve with the assistance of the external service provider 7.3 Internal audit should provide a written assessment of 2 Our external service provider will attend future audit the effectiveness of the company’s system of internal and risk committee meetings where written control and risk management assessments are tabled and discussed 7.4 The audit committee should be responsible for 3 Operationally the internal audit function reports overseeing internal audit directly into the audit and risk committee 7.5 Internal audit should be strategically positioned to 2 Operationally the internal audit function reports achieve its objectives directly in to the audit and risk 8. Governing stakeholder relationships 8.1 The board should appreciate that stakeholders’ 3 The board monitors stakeholder perceptions perceptions affect a company’s reputation 8.2 The board should delegate to management to 3 Management is responsible for dealing proactively proactively deal with stakeholder relationships with stakeholder relationships 8.3 The board should strive to achieve the appropriate 3 All stakeholders are considered during decision balance between its various stakeholder groupings, in making processes the best interests of the company 8.4 Companies should ensure the equitable treatment of 3 The board considers the equitable treatment of shareholders shareholders in decision making 8.5 Transparent and effective communication with 3 Communication to stakeholders is the responsibility stakeholders is essential for building and maintaining of the executive team and company secretary, and is their trust and confidence monitored by the board 8.6 The board should ensure that disputes are resolved as 3 All disputes communicated to the board are resolved effectively, efficiently and expeditiously as possible effectively
213 LEVEL OF PRINCIPLE COMPLIANCE COMMENTS 9. Integrated Reporting and disclosure 9.1 The board should ensure the integrity of the 3 The board ensures the integrity of the integrated company’s integrated report report 9.2 Sustainability reporting and disclosure should be 2 The board subscribes to reporting to stakeholders on integrated with the company’s financial reporting the sustainability of the company and is in the process of implementing a comprehensive process 9.3 Sustainability reporting and disclosure should be 2 The board is currently reviewing this process independently assured
214 PRINTED BY INCE (PTY) LTD REF. W2CF16657 Attacq Limited (previously Atterbury Investment Holdings Limited) (Registration number 1997/000543/06) (JSE share code: ATT) (ISIN: ZAE000177218) (“Attacq” or “the company”)
SPECIMEN PRIVATE PLACEMENT APPLICATION FORM Not for completion or delivery. Application forms will be provided to invited investors by the bookrunner, Java Capital.
TO BE COMPLETED BY INVITED INVESTORS An offer to subscribe for shares in Attacq (“private placement shares”) at an issue price of R•• (“issue price”) (“the private placement”), to invited investors in terms of the prospectus to be issued on or about Friday, 4 October 2013. Successful applicants will be advised of their allotment of private placement shares by Friday, 11 October 2013. Please refer to the instructions overleaf before completing this application form. Dematerialised shares The allocated private placement shares will be transferred to successful applicants in dematerialised form only. Accordingly, all successful applicants must appoint a Central Securities Depository Participant (“CSDP”) directly, or a broker, to receive and hold the dematerialised shares on their behalf. Should a shareholder require a physical share certificate for his Attacq shares, he will have to at his own cost certificate his Attacq shares following the listing and should contact his CSDP or broker to do so. As allocated private placement shares will be transferred to successful applicants on a delivery-versus-payment basis, payment will be made by your CSDP or broker on your behalf. Invited investors should complete this application form in respect of the private placement and hand deliver, or email it to: If delivered by hand or by courier: If emailed: Attention: Richard Mauchle [email protected] Java Capital Proprietary Limited 2nd Floor 2 Arnold Road Rosebank, 2196 This application form must be stamped and signed by an applicant’s CSDP or broker. Failure to do so will result in application forms being rejected. This application form must be received by no later than 12:00 on Wednesday, 9 October 2013. Invited investors must contact their CSDP or broker and advise them that they have submitted the application form as instructed above. Pursuant to the application, invited investors must make arrangements with their CSDP or broker for payment to be made as stipulated in the agreement governing their relationship with their CSDP or broker, in respect of the private placement shares allocated to them in terms of the private placement by the settlement date, expected to be Monday, 14 October 2013. Condition precedent The listing is conditional on achieving a spread of shareholders, acceptable to the JSE, being a minimum of 300 public shareholders holding not less than 20% of the issued share capital of the company, by not later than 48 hours prior to the listing. As at the last practical date Attacq meets these requirements and expects to do so after the private placement. Reservation of rights The board shall, in its sole discretion, determine an appropriate allocation mechanism, such that the private placement shares will be allocated on an equitable basis, as far as possible, taking into account the spread requirements of the JSE, the liquidity of the shares and considering the potential shareholder base that the board wishes to achieve. The directors of Attacq reserve the right to accept or reject, either in whole or in part, any application form should the terms contained in the prospectus, of which this application form forms part, and the instructions herein not be properly complied with. Applications per investor for private placement shares may only be made for a minimum of 5 000 private placement shares and in multiples of 1 000 private placement shares thereafter. To the directors: Attacq Limited 1. I/We, the undersigned, confirm that I/we have full legal capacity to contract and, having read the prospectus, hereby irrevocably apply for and request you to accept my/our application for the undermentioned value to subscribe for private placement shares under the private placement set out in the prospectus to which this application form is attached and in terms of the terms and conditions set out therein and that may, in your absolute discretion, be allotted to me/us, subject to the MOI of Attacq. 2. I/We wish to receive my/our allocated private placement shares in dematerialised form and will deliver this application form to Java Capital Proprietary Limited, and will provide appropriate instructions to my/our CSDP or broker, as the case may be, with regard to the application herein and the payment thereof, as stipulated in the agreement governing my/our relationship with my/our CSDP or broker, as the case may be. I/We accept that payment in respect of this application will be, in terms of the custody agreement entered into between me/us and my/our CSDP or broker, as the case may be, on a delivery-versus-payment basis. 3. I/We understand that the subscription for private placement shares in terms of the prospectus is conditional on the granting of a listing of the shares of Attacq, by Monday, 14 October 2013 or such later date as the directors may determine, on the JSE.
Dated 2013 Telephone number ( ) Signature Mobile phone number Assisted by (where applicable)
Surname of individual or Name of corporate body Mr
Mrs
Miss
Other title
Full names (if individual)
Postal address (preferably PO Box address)
Postal code
Telephone number ( )
Mobile phone number
E-mail address
Rand value of private placement shares applied for (Note: minimum of 5 000 private placement shares) R (Enter figures only – not words)
If you are currently an Attacq shareholder, please indicate the number of Attacq shares which you currently hold (Enter figures only – not words)
Required information must be completed by CSDP or broker* with their stamp and signature affixed hereto:
CSDP name
CSDP contact person
CSDP contact telephone number
SCA or bank CSD account number
Scrip account number
Settlement bank account number
Stamp and signature of CSDP or broker
This application will constitute a legal contract between Attacq and the applicant. Application forms will not be accepted unless the above information has been furnished. Instructions: 1. Applications are irrevocable and120 may not be withdrawn once submitted. 2. CSDP’s and brokers will be required to retain a copy of this application form for presentation to the directors if required. 3. Please refer to the terms and conditions of the private placement set out in paragraph 16 of the prospectus. Applicants should consult their broker or other professional advisor in case of doubt as to the correct completion of this application form. 4. Applicants need to have appointed a CSDP or broker and must advise their CSDP or broker in terms of the custody agreement entered into between them and their CSDP or broker. Payment will be made on a delivery-versus-payment basis. 5. No payment should be submitted with this application form to Attacq or Java Capital. 6. If payment is dishonoured, or not made for any reason, Attacq may, in its sole discretion, regard the relevant application as invalid or take such other steps in regard thereto as it may deem fit. 7. No receipts will be issued for application forms, application monies or any supporting documentation. 8. All alterations on this application form must be authenticated by full signature of the applicant and his CSDP or broker. 9. As allocated private placement shares are being transferred to successful applicants on a delivery-versus-payment basis, no payment will be required to be made if the private placement or the listing is not successful. * If an applicant has more than one account, please attach a separate schedule with all relevant details.