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Hyprop Investments Limited

Integrated annual report 2016

ABOUT THIS REPORT

CONTENTS

This integrated annual report covers the activities of Hyprop

Investments Limited (Hyprop) for the financial year ended 30 June

2016, and follows a similar report for the year ended 30 June 2015.

Hyprop provides a broad view of the company’s strategy and

performance in the integrated annual report, with additional

information available online, to enable stakeholders to assess our

ability to create and sustain value over the short, medium and long

term. This report identi es and explains the material economic, social,

governance and environmental issues facing the group and their

impact. We regard this as a valuable opportunity to connect with

our stakeholder groups and to respond to matters raised.

Scope and boundary

Reporting on our sustainability initiatives covers the group holding

company and shopping centres in our sub-Saharan Africa portfolio

(including South Africa) and the South-Eastern European portfolio.

Material changes to the size, structure or ownership of the group

during the year included:

The acquisition of a 75% interest in Ikeja City Mall (Nigeria), and a

60% interest in two South-Eastern European malls, Delta City

Belgrade (Serbia) and Delta City Podgorica (Montenegro)

The sale of non-core assets, Somerset Value Mart and Glenfield

Office Park (post year-end).

Reporting principles and integrated reporting

Hyprop’s sustainable value creation is linked to our approach to

ethical leadership and how we employ our six capitals (financial,

operational/manufactured, intellectual, human, social and relationship,

and natural). This integrated annual report is a holistic presentation

of the group’s performance and we believe it fairly reflects Hyprop’s

commitment to value creation, sustainability, corporate citizenship

and integrated thinking.

We aim to continually improve our integrated reporting. We are

embedding the guiding principles and concepts of the International

Integrated Reporting Council’s (IIRC) framework. Where practical, we

have considered and applied guidelines from King III and the Global

Reporting Initiative (GRI G4), and incorporated feedback from our

stakeholders.

The group annual financial statements were prepared in accordance

with International Financial Reporting Standards (IFRS), the SAICA

financial reporting guides issued by the Accounting Practices

Committee and financial reporting pronouncements issued by the

Financial Standards Council, the JSE Listings Requirements and the

South African Companies Act 2008. Accounting policies applied in

preparing these financial statements are consistent with those applied

in the prior period.

In this reporting period, Hyprop compiled its third submissions to

the Carbon Disclosure Project (CDP), a voluntary and comprehensive

international benchmark on environmental reporting and carbon

disclosure, and to the Global Real Estate Sustainability Benchmark

(GRESB). These submissions underscore our commitment to both

responsible citizenship and best practice in this area.

About this report

IFC

Group overview

Group profile

4

Strategic intent

5

Investment proposition

5

Performance highlights

6

Material focus areas

9

Hyprop’s business structure

10

Management structure

11

Leadership review

Chairman’s report

14

Chief executive officer’s report

16

Financial director’s report

20

Five-year review

24

Value added statement

25

Value creation overview

Hyprop’s business model

28

Stakeholder engagement

30

Risk management

32

Portfolio review

The market in which we operate

42

Property portfolio – South Africa

44

Property portfolio – sub-Saharan Africa

52

Property portfolio – South-Eastern Europe

54

Hyprop’s history

55

Sustainability review

Social and ethics committee report

58

Natural capital: environmental impact

59

Human capital: employee development

63

Social and relationship capital

67

Intellectual capital

69

Governance review

Board of directors

72

Corporate governance

74

King III application (chapter 2)

78

Remuneration review

Remuneration report

84

Group annual financial statements

Approval of the group annual financial statements

93

Declaration of company secretary

93

Report of the audit committee

94

Directors’ report

95

Independent auditor’s report

97

Group annual financial statements

98

Notes to the financial statements

102

Segment analysis

152

Shareholder information

Shareholder analysis

156

Shareholders’ diary

IBC

Distribution details

IBC

Administration

IBC

Separate booklet

Notice of annual general meeting and proxy

Cover: Rosebank Mall, Johannesburg, Gauteng