Directors' report for the year ended 30 June 2015
FINANCIAL STATEMENTS

The directors have pleasure in submitting their report, which forms part of the financial statements for the year ended 30 June 2015.

Introduction

Hyprop, Africa’s leading specialist shopping centre Real Estate Investment Trust (REIT), operates an internally managed portfolio of shopping centres in major metropolitan areas across South Africa. Hyprop also has a growing presence in sub-Saharan Africa (excluding SA), through a joint venture with Attacq Limited (Attacq) and the Atterbury Group.

The core portfolio consists of premier shopping centres in South Africa, including super regional Canal Walk, large regional centres, Clearwater Mall, The Glen Shopping Centre, Woodlands Boulevard, CapeGate Shopping Centre, Somerset Mall and Rosebank Mall, and regional centre, Hyde Park Corner.

The portfolio also includes interests in Accra Mall and West Hills Mall (both in Accra, Ghana), and Manda Hill Centre in Lusaka, Zambia.

Strategy

Hyprop’s focus remains to invest in high-quality shopping centres. Due to limited acquisition opportunities in South Africa, consideration will be given to investments in other emerging markets, where existing assets can be acquired at attractive yields or where development opportunities exist.

Directors’ interests

The interests of directors in the shares of the company at 30 June 2015 were:

	30 June 2015 beneficial		30 June 2015 non-beneficial	30 June 2014 beneficial		30 June 2014 non-beneficial
	Direct	Indirect	Indirect	Direct	Indirect	Indirect
Non-executive
Gavin Tipper	4 000			4 000
Louis Norval			3 789 869			3 981 768
Stewart Shaw-Taylor	21 500			21 500
Kevin Ellerine		42 666
Executive
Pieter Prinsloo		305 049			305 049
Laurence Cohen		160 154			160 154
	25 500	507 869	3 789 869	25 500	465 203	3 981 768

There were no changes to the interests of the directors between year-end and the date of approval of the financial statements.

Disposals

As previously announced, CapeGate Lifestyle, CapeGate Value Centre and Stoneridge were sold for a total amount of R833 million.

Efforts to sell Willowbridge Centre, Somerset Value Mart and the standalone office portfolio are continuing.

Capital structure

Hyprop became a REIT on 1 July 2013. As part of the REIT conversion process, Hyprop’s combined unit structure was converted to an all-share structure. The necessary resolutions were passed by shareholders and the new all-share structure became effective on 18 August 2014, from which date all future distributions were classified as dividends.

All rental income earned by the group, less property expenses and interest on debt, is distributed to shareholders semi-annually.

Review of activities

The results of the group and the company are commented on in the chairman, chief executive officer and financial director’s report, are set out in the financial statements on financial statements.

Directorate

Directors resigning by rotation at the upcoming annual general meeting are Louis van der Watt, Louis Norval and Thabo Mokgatlha, and being eligible, they offer themselves for re-election.

An abridged curriculum vitae for each director is set out in the Directorate.

Beneficial shareholders holding 5% or more

	30 June 2015	%
Company
Government Employees Pension Fund	33 808 325	13,9
Stanlib	13 005 869	5,4

Subsidiaries, joint arrangements and associates

Disclosure of the company’s investments in subsidiaries, joint arrangements and associate is included in notes 4 to 7 in the financial statements.

Administration and management

Property management and asset management in Hyprop’s South African operations are fully internalised. No property management or asset management fees were paid during the year.

Audit committee report

The audit committee fulfilled its responsibilities during the year (refer to its report for full details). The committee has further satisfied itself as to the independence of the external auditors and their suitability for reappointment for the ensuing year.

Auditors

Grant Thornton will continue in office in accordance with part C of section 90 of the Companies Act of South Africa.

Directors’ interest in contracts

No material contracts in which the directors have an interest were entered into during the year, other than the transactions detailed in note 35 to the financial statements.

Going concern

The directors consider that the group and company have adequate resources to continue operating for the foreseeable future and that it is appropriate to adopt the going-concern basis in preparing the group and company financial statements.

The directors have satisfied themselves that the group and company are in a sound financial position and that they have access to sufficient borrowing facilities to meet their foreseeable cash requirements.

Johannesburg
31 August 2015