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Hyprop Investments Limited
Integrated annual report and consolidated financial statements
2017
91
Review of activities
The results of the group are commented on in the reports by the chairman
and chief executive officer, and the financial director and are set out in the
consolidated financial statements on pages 95 to 98.
Directorate
Independent non-executive director EG Dube resigned from the board on
1 December 2016 and independent non-executive director N Mandindi
was appointed on 8 May 2017.
Directors who served during the financial year are as follows:
GR Tipper
(1)
MJ Lewin
(1)
PG Prinsloo
(3)
L Norval
(2)
LR Cohen
(3)
S Shaw-Taylor
(1)
EG Dube
(resigned 1 December 2016)
(1)
TV Mokgatlha
(1)
KM Ellerine
(2)
N Mandindi (appointed
8 May 2017)
(1)
L Engelbrecht
(1)
(1)
Independent non-executive
(2)
Non-executive
(3)
Executive
An abridged curriculum vitae for each director is set out on pages 72
and 73.
Subsidiaries, joint arrangements and associates
Disclosure of investments in subsidiaries, joint arrangements and associates
is included in notes 4 to 6 in the consolidated financial statements.
Administration and management
Property and asset management in Hyprop’s South African operations are
fully internalised. No property or asset management fees were paid during
the year in South Africa.
Investments in South-Eastern Europe
The group’s investments in South-Eastern Europe are held by a joint
venture investment holding company, Hystead Limited (Hystead), a United
Kingdom registered company, in which the group has a 60% equity
interest. In terms of the Hystead shareholder agreement (the shareholder
agreement), Hyprop has joint control of Hystead.
The shareholder agreement also includes, to the extent that Hystead has
distributable earnings from its property investments, a contractual right
by the Hystead shareholders to receive dividends from Hystead. This
contractual right to receive dividends results in the investment in Hystead
being accounted for as an investment in a financial asset (in terms of IFRS).
Refer to
note 6.3 – 60% – Joint venture – Hystead Limited (Hystead)
.
Hystead’s initial investments in South-Eastern Europe (in Serbia and
Montenegro) were funded with a funding structure in the Netherlands
(the Netherlands funding structure). The Netherlands funding structure
includes third-party bank funding for the majority (ie 99%) of the South-
Eastern European funding requirements, with credit enhancement (in the
form of a guarantee) from Hyprop.
The funding structure also includes loans by Hyprop to two companies in
the Netherlands funding structure, Vondelvlag Holding and Vondelvlag
Stichting, for Hyprop’s share of the remaining 1% of the funding
requirements. Refer to
note 10 – Loans receivable.
The third acquisition by Hystead, that of Skopje City Mall in Skopje,
Macedonia (effective in October 2016), was also funded with third-party
bank funding supported by a guarantee from Hyprop, but with Hystead as
the borrower.
Audit and risk committee report
The audit and risk committee fulfilled its responsibilities during the year
(refer to its report on page 89 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
The auditor is responsible for reporting on whether the consolidated and
separate financial statements are fairly presented in accordance with the
applicable financial reporting framework.
KPMG Inc. was appointed as auditors 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 33 –
Related parties and related-party transactions
to the consolidated
financial statements.
Going concern
The directors consider that the group and its subsidiaries have adequate
resources to continue operating for the foreseeable future and that it is
appropriate to adopt the going concern basis in preparing the consolidated
financial statements.
The directors have satisfied themselves that the group and its subsidiaries
are in a sound financial position and that they have access to sufficient
borrowing facilities to meet their foreseeable cash requirements.
Trading statements
Hyprop uses dividend per share as the relevant measure of financial results
for trading statement purposes.
Approval of the consolidated financial statements
The consolidated financial statements of Hyprop Investments Limited, as
identified in the first paragraph, were approved by the board of directors
on 1 September 2017.
Company annual financial statements
The integrated report includes the audited consolidated financial
statements. The audited financial statements of the company are available
for review and inspection at the registered office of the company.
GR Tipper
PG Prinsloo
Chairman
Chief executive officer
Johannesburg
1 September 2017