Measuring our success · 2017-06-15 · Measuring our success 2004 - 2011 As Vukile’s record shows, we have advanced rapidly but steadily, step by carefully calculated step. At

With an annual compound return of 26.75%, Vukile has been ranked in the top two South African property shares on the JSE over a fi ve year period. This is a clear measure of the success of its strategy of investing in properties with strong contractual cash fl ows for long-term sustainability, capital appreciation and growing income distributions for linked unitholders.

OVERVIEW01 Company highlights | 01 Corporate profi le01 Salient features of the results | 02 Property portfolio04 Integrated reporting | 08 Chairman’s report | 11 Market overview12 Board of directors | 14 Group structure | The executive committee

REPORT TO STAKEHOLDERS16 Report to fi nancial stakeholders | 30 Report to commercial stakeholders36 Report to the community

GOVERNANCE AND REMUNERATION REPORT42 Corporate governance report | 47 Remuneration report

ANNUAL FINANCIAL STATEMENTS52 Directors’ responsibility statement | 52 Declaration by the company secretary 53 Report of the independent auditors | 54 Directors’ report58 Report of the audit and risk committee | 60 Statements of fi nancial position61 Income statements | 62 Statements of comprehensive income63 Distribution statements | 64 Statements of changes in equity65 Statements of cash fl ow | 66 Notes to the annual fi nancial statements108 Unitholders’ analysis

UNITHOLDERS’ INFORMATION110 Notice of annual general meeting113 Summarised annual fi nancial statements | 117 Form of proxy118 Notes to the form of proxy | 119 Corporate information119 Unitholders’ diary

VUKILE PROPERTY FUND LIMITEDJSE code VKE | NSX code VKN

First Floor, Meersig Building, Constantia Boulevard, Constantia Kloof, 1709PO Box 5995, Weltevreden Park, 1715

www.vukileprops.co.za

Measuring our success

VUKILE PROPERTY FUND LIMITEDINTEGRATED ANNUAL REPORT 2011


VU

KILE

PR

OP

ER

TY

FU

ND

LIMIT

ED

Integrated Annual R

eport 2011













VU

KILE

PR

OP

ER

TY

FU

ND

LIMIT

ED

Integrated Annual R

eport 2011

Measuring our success2004 - 2011

As Vukile’s record shows, we have advanced rapidly but steadily, step by carefully calculated step. At the same time, we have demonstrated that we do not stand back from a challenge nor are we content to just mark time. Vukile is a driven business: driven to create value and driven to generate returns.

GROUP HIGHLIGHTS

PROPERTY ACQUISITIONS/UPGRADES

SHARE PRICE AND PORTFOLIO GROWTH

2004 2005 2006 2007 2008 2009 2010 2011

JSE CODE: VKE

24 June - Listed on the JSE Limited

Acquisition of 75% of MICC

Vukile achieves fi ve-year BEE equity target from R439 million

investment by BEEShareCo(Lazarus Capital (Pty) Ltd)

NSX CODE: VKN

11 July - listed on the Namibian Stock Exchange

Balance of acquisition of MICC grows gross assets

Property portfolio consists of 74 properties with a gross lettable

area of 920 232m2

Rated the best performing property loan stock company listed on

the JSE Limited in 2009 by Catalyst Fund Managers

Acquisition by Vukile of the property asset management business of

Sanlam PropertiesResponsible for rendering property asset management services to Sanlam Life’s entire commercial

property portfolio

PHOENIX PLAZA, KWAZULU-NATAL OAKHURST, PARKTOWN, GAUTENG NO 50, SIXTH ROAD, HYDE PARK, GAUTENG WEST STREET, HOUGHTON, GAUTENG BPI HOUSE, WINDHOEK

R80 million expansion and upgrading project launched for

Phoenix Plaza and Dobsonville Shopping Centres

R34.4 million acquisition of the Oakhurst offi ce building in

Parktown

Acquisition of 50, 6th Road, Hyde Park in Sandton for

R57 million

Successful completion of expansions at Oshakati Shopping Centre, Nelspruit Truworths and

Hellman International, on time and below budget

Option to acquire a R500 million property portfolio from Sanlam and a right of fi rst refusal on the remainder of the

Sanlam property portfolio

Acquisition of nine properties for R541 million:

• Amanzimtoti Jeffels Road Warehouse

• Kimberley Kim Park• Nelspruit Sanlam Centre• Pinetown Westmead Kyalami

Park • Pretoria Hatfi eld Sanlam Building • Pretoria Sanwood Park • Rustenburg Edgars Building • Sandton St Andrews Complex • Sandton Sunninghill Place

Acquisition of offi ce complex in West Street in Houghton, Johannesburg,

for outlay of R33.9 million

Expanded Namibian portfolio through the acquisition of BPI House in

Windhoek for about R113 million

Successful completion of Moratiwa Crossing shopping centre and

Allandale mini-factory and warehousing developments, on time

and below budget

1 600

1 400

1 200

1 000

800

600

400

SHARE PRICE – cents

24 June 2004

31 March 2011

1.86

4.54.9

Property portfolio (billion rand) Share price at year endMarch 2004 - 2011

3.5 3.86

4.3

2004 2005 2006 2007 2008 2009 2010 2011

2004 2005 2006 2007 2008 2009 2010 2011

6

5

4

3

2

1

0

PROPERTY VALUE – billion rand

5.37

119VUKILE PROPERTY FUND LIMITEDIntegrated annual report 2011

Corporate information

DIRECTORSAnton Dirk Botha (e) (Chairman)

Gerhard van Zyl (a,g) (Chief executive)

Michael John Potts (a,g) (Financial director)

Hermina Christina Lopion (a) (Executive director: asset management)

Hendrik Schalk Conradie Bester (b,g)Peter John Cook (c,d) Jonathan Mlungisi Hlongwane (e,g) Peter Sipho Moyanga (c)Mervyn Hymie Serebro (c,f)Urbanus (Banus) Johannes van der Walt

(a) Executive

(b) Chairman of audit and risk committee

(c) Member of audit and risk committee

(d) Chairman of human resources and nomination committee

(e) Member of human resources and nomination committee

(f) Chairman of investment committee

(g) Member of investment committee

SECRETARY AND REGISTERED OFFICEJOHANN NEETHLING• First Floor, Meersig Building, Constantia Boulevard,

Constantia Kloof, 1709• PO Box 5995, Weltevreden Park, 1715

VUKILE PROPERTY FUND LIMITEDRegistration Number: 2002/027194/06

Designed and produced by du Plessis Associates

Our website is regularly updated to provide the latest information on the company.


• Financial year end 31 March 2011• Publication of abridged

fi nancial statements 23 May 2011• Financial report and

notice of AGM posted by 30 June 2011• AGM 31 August 2011• Interim period end 30 September 2011

Unitholders’ diary

AUDITORSGRANT THORNTON• 137 Daisy Street, corner Grayston Drive

Sandown, 2196• Private Bag X28, Benmore, 2010

PRINCIPAL BANKERSABSA BANK LIMITED • 3rd Floor, Absa Towers East, 160 Main Street

Johannesburg, 2001• PO Box 7335, Johannesburg, 2000

SPONSORSSOUTH AFRICAOne Capital• 17 Fricker Road, Illovo, 2196• PO Box 784573, Sandton, 2146NAMIBIAIJG Group• First fl oor, Heritage Square, 100 Robert Mugabe

Avenue, Windhoek• PO Box 186, Windhoek

TRANSFER SECRETARIESLINK MARKET SERVICES SOUTH AFRICA (PTY) LTD• 13th Floor, Rennie House, 19 Ameshoff Street,

Braamfontein, 2001• PO Box 4844, Johannesburg, 2000

LISTING INFORMATIONVukile was listed on the JSE Limited on 24 June 2004 and on the Namibian Stock Exchange on 11 July 2007.• JSE Code VKE• NSX code VKN • ISIN ZAE000056370• Sector Financials – Real Estate

INVESTOR AND MEDIA RELATIONS HELEN McKANE OF DU PLESSIS ASSOCIATES• Central House, 40 Central Street, Houghton, 2198• Tel +27 (0)11 728 4701• Fax +27 (0)11 728 2547• E-mail [email protected]• PO Box 87386, Houghton, 2041

UN

ITHO

LDE

RS

’ INFO

RM

ATION



GROUP HIGHLIGHTS



2004 2005 2006 2007 2008 2009 2010 2011

JSE CODE: VKE





NSX CODE: VKN




area of 920 232m2





property portfolio





Parktown


R57 million















and below budget

1 600

1 400

1 200

1 000

800

600

400


24 June 2004

31 March 2011

1.86

4.54.9


3.5 3.86

4.3

2004 2005 2006 2007 2008 2009 2010 2011

2004 2005 2006 2007 2008 2009 2010 2011

6

5

4

3

2

1

0


5.37








(a) Executive



























UN

ITHO

LDE

RS

’ INFO

RM

ATION


Vukile is a property loan stock company which was listed on the JSE Limited on 24 June 2004 (JSE code: VKE) and on the Namibian Stock Exchange on 11 July 2007 (NSX code: VKN). Its listing was promoted by Sanlam, which contributed a signifi cant share of Vukile’s start-up portfolio.

Vukile’s market capitalisation was approximately R4.99 billion at 31 March 2011 and its property portfolio was valued at R5.35 billion at year end. There were 351 015 218 Vukile linked units in issue.

• Annual distribution increased by 9%• Successful acquisition of R541 million

property portfolio• Vacancies contained at 5.1% of gross

rentals (2010: 4.1%)• Successful re-fi nancing of R462 million

securitisation debt• Ranked second best performing property

company listed on the JSE in 2010, after being ranked fi rst in 2009 by Catalyst Fund Managers (Pty) Ltd

• Ranked 27th of Top 100 Listed Companies in 2010 by the Business Times

• Further improvement in recurring cost to property revenue ratios

SALIENT FEATURES OF THE RESULTS

2011 2010 Cents per Cents per Audited year ended 31 March R000 linked unit R000 linked unit

• Profi t for the year before debenture interest 428 870 122.18 337 186 101.56

• Headline earnings attributable to linked unitholders 426 508 124.36 328 244 107.89

• Net Asset Value (NAV) 3 521 465 1 003 3 272 255 986*

* Adjusted to account for additional linked units issued in September 2010 to 932 cents per linked unit.

Company highlights

Corporate profi le

02 VUKILE PROPERTY FUND LIMITEDIntegrated annual report 2011

Property portfolioRetail, offi ces and industrial

NAMIBIA

SOUTH AFRICA

ZAMBIA

ANGOLA

BOTSWANA

Western Cape

Northern Cape

Karas

Hardap

Khomas

ErongoOmaheke

Otjozondjupa

Kunene

Omusati Ohangwena

OshikotoKavango

Caprivi

Top 10 properties

Other properties

2

10 ARIVIA.KOM BUILDING

MidrandRentable area: 15 634m2

Valuation per m2: R9 406

9 ROODEPOORT HILLFOX POWER CENTRE

RoodepoortRentable area: 36 103m2


8 DAVEYTON SHOPPING CENTRE

DaveytonRentable area: 16 983m2


OFFICES (continued)

Building Region TownSandton St Andrews Complex Gauteng SandtonSandton Sunninghill Place Gauteng SandtonRandburg Triangle Gauteng RandburgDe Tijger Offi ce Park Western Cape Cape Town

INDUSTRIALSony Building Gauteng MidrandSupra Hino Gauteng JohannesburgHellman International Gauteng JohannesburgValley View Industrial Park KwaZulu-Natal DurbanVillage Main Industrial Park Gauteng JohannesburgJohn Griffi n Gauteng JohannesburgAAD Western Cape Cape TownRichmond Park KwaZulu-Natal DurbanCenturion N1 Gauteng CenturionMidrand Allandale undeveloped land Gauteng MidrandMidrand Sanitary City Gauteng MidrandParow Industrial Park Western Cape Cape Town

OFFICESBuilding Region TownArivia.kom Building Gauteng MidrandDLV Building Gauteng PretoriaBarlow Place Gauteng SandtonMutual and Federal Gauteng PretoriaPinepark Western Cape Cape TownEva Park Gauteng JohannesburgLouis Leipoldt Hospital Western Cape BellvilleNelspruit Prorom Mpumalanga NelspruitBedfordview GIS Gauteng Johannesburg259 West Street Gauteng CenturionEast London Sanlam Park Eastern Cape East LondonDurban Embassy KwaZulu-Natal DurbanOakhurst Parktown Gauteng Johannesburg50 6th Road Hyde Park Gauteng SandtonWaymark Offi ces Gauteng CenturionWest Street Houghton Gauteng HoughtonPretoria Hatfi eld Sanlam Building Gauteng PretoriaPretoria Sanwood Park Gauteng Pretoria

7Oshana


North West

MOZAMBIQUE

ZIMBABWE

Eastern Cape

Free State

Mpumalanga

Gauteng

Limpopo Province

KwaZulu-Natal

65

8

4

3

910

1

7 OSHAKATI SHOPPING CENTRE

OshakatiRentable area: 22 269m2


6 DURBAN EMBASSY

DurbanRentable area: 32 346m2


5 PINE CREST (50%)

PinetownRentable area: 40 202m2


4 DOBSONVILLE SHOPPING CENTRE

SowetoRentable area: 23 177m2


3 RANDBURG SQUARE

RandburgRentable area: 51 370m2


2 BELLVILLE LOUIS LEIPOLDT

BellvilleRentable area: 22 311m2


1 DURBAN PHOENIX PLAZA

DurbanRentable area: 24 342m2


RETAIL (continued)

Building Region TownMoratiwa Crossing Limpopo Jane FurseKimberley Kim Park Northern Cape KimberleyNelspruit Sanlam Centre Mpumalanga NelspruitRustenburg Edgars Building North West RustenburgRoodepoort Hillfox Power Centre Gauteng RoodepoortMala Plaza Limpopo MalamuleleMasingita Spar Centre Limpopo GiyaniPiet Retief Shopping Centre Mpumalanga Piet RetiefQualbert Centre KwaZulu-Natal DurbanKokstad Game Centre KwaZulu-Natal KokstadThe Victoria Centre KwaZulu-Natal PietermaritzburgMeadowdale Land Gauteng JohannesburgMeadowdale Mall Gauteng JohannesburgOshakati Shopping Centre Namibia OshakatiOshikango Ellerines Centre Namibia OshikangoOndangwa Shoprite Checkers Namibia OndangwaKatatura Checkers Centre Namibia KataturaBPI House Namibia Windhoek

INDUSTRIAL (continued)

Building Region TownMidrand Allandale Park Gauteng MidrandGermiston R24 Gauteng GermistonRandburg Trevallyn Gauteng RandburgPinetown Westmead Kyalami Park KwaZulu-Natal PinetownRandburg Tungsten Gauteng RandburgRobertville Mini Factories Gauteng Johannesburg

RETAILTruworths Centre Mpumalanga NelspruitGrosvenor Shopping Centre Gauteng JohannesburgPine Crest Centre KwaZulu-Natal DurbanLichtenburg Sanlam Centre North West LichtenburgBarlows Audi Western Cape Cape TownBloemfontein Plaza and Parkade Free State BloemfonteinDaveyton Shopping Centre Gauteng JohannesburgDobsonville Shopping Centre Gauteng JohannesburgDurban Phoenix Plaza KwaZulu-Natal DurbanRandburg Square Gauteng Randburg

LESOTHO


One of the main differences between King III and the previous King Reports is the requirement for integrated reporting, whereby the operational, fi nancial and sustainability (environmental, social and governance) issues are discussed in relation to the key drivers of the business. In this report, therefore, we explain how the executives of the group have considered these issues while developing the business’s strategy during the fi nancial year ended 31 March 2011.

King III was adopted by the JSE Limited as from 1 March 2010 as a listing requirement, with an “apply or explain” approach. Vukile’s approach to the integrated report is in line with the following comment made by the King III committee chairman Mr Mervyn King: “Integrated reporting is a journey. Organisations are unlikely to achieve perfection in the fi rst year.” Compliance with any particular code for the integrated report is therefore not an objective for the group at this stage – compliance with International Financial Reporting Standards (“IFRS”) on the fi nancial statements is the only standard which we have applied to this integrated report. Future reports will provide further detail and data on our material issues once data-gathering systems are implemented and stakeholder-engagement processes formalised.

There are areas where Vukile can improve its reporting and we are committed to addressing these areas in subsequent editions of our integrated report. In particular, formal data-gathering systems for sustainability data must still be implemented. Nonetheless, we believe that this integrated report is a credible fi rst step on the journey towards best practice, and provides stakeholders with a balanced view of our activities for the year.

REPORTING FRAMEWORK FOR 2011The Vukile board of directors (“the board”) has recognised that our integrated report is the most suitable vehicle to describe our business model and the quality of decisions that have led to our fi nancial results.

Vukile’s business comprises two main aspects and, in the table alongside, we detail how our sustainability and fi nancial objectives inter-relate. The scope and boundaries for this integrated report were determined by considering:• The infl uence and control available to the group in its business activities, and the

fact that our decisions in terms of winnowing strategies, choice of suppliers and relationship with communities and tenants determine whether our success will be sustainable.

• The material* issues relevant to our various stakeholders (refer to the stakeholder table alongside).

* “Material” refers to the importance of the information required by each stakeholder to make informed decisions about doing business/interacting with the group.

Integrated reporting

Vukile Property Fund Limited and its subsidiaries (“the group” or “Vukile”) hereby present the group’s fi rst integrated annual report (“integrated report”) aimed towards meeting the principles of the King Code of Governance Principles for South Africa 2009 (“King III”), which was published in 2009 by the Institute of Directors of Southern Africa, and is applicable to all listed companies with fi nancial years ending 28 February 2011 or later.


Business activity

Property fund• A listed property

fund that owns and manages its own portfolio of offi ce, retail and industrial properties.

Property asset manager • An asset manager

providing asset management services to Sanlam Life Insurance Limited (“Sanlam”), in respect of their investment property portfolio.

Management approach

• Internal asset management.

• Outsourced property management.

• Internal asset management.

• Outsourced property management.

Sustainability and fi nancial objectives

• Building and preserving an investment property portfolio with strong contractual cash fl ows for long-term sustainability, capital appreciation and growing income distributions for linked unitholders.

• Building partnerships with suppliers, tenants, capital providers and our communities.

• Maintaining strong performance through excellent service delivery to ensure the sustainability of the revenue stream.

• Employing winnowing strategies to enhance Sanlam’s portfolio.

• Building partnerships with suppliers, tenants and our communities.

Reporting scope and boundary

• Portfolio analysis, valuations, winnowing strategy, fi nancial engineering in accordance with board mandate.

• Directing our property managers in respect of tenant matters, supplier selection and community involvement.

• Portfolio analysis, valuations, winnowing strategy in accordance with the Sanlam mandate.

• Directing our property managers in respect of tenant matters, supplier selection and community involvement.

Stakeholder

• Institutional, individual and corporate investors.

• Commercial and investment banks;

debt capital market investors.

Relationship

• Linked unitholders.

• Financiers.

Material issue

• Distribution growth.• Linked unit price

appreciation.• Liquidity.• Quality of

management.

• Ability to service debt.

• Ability to refi nance maturing facilities.

• Adherence to fi nancial covenants.

Report reference

• Report to fi nancial stakeholders.

• Report to fi nancial stakeholders.

Financial stakeholders

INTEGRATED OBJECTIVES

STAKEHOLDER ANALYSIS Vukile is accountable to its stakeholders and through this integrated report the group aims to provide each of these stakeholders with the essential information required to sustain their partnerships with us. We have designed this report according to the three broad groupings of stakeholders, as indicated in the table below:

KEY STAKEHOLDERS


Integrated reporting (continued)

Stakeholder

• Property asset management client.

• Occupiers of retail, offi ce and industrial space.

• Property management companies.

• Security, cleaning, construction, development and professional service providers etc.

• Surrounding communities and the general public.

Relationship

• Customer.

• Tenants.

• Suppliers.

• Suppliers.

• Neighbours to our properties.

• Customers of our tenants.

Material issue

• Service delivery levels.

• Winnowing strategy.

• Terms and conditions of lease agreement.

• Safe and secure environment.

• Complementary mix of tenants.

• Compliance with OHS Act, Building Act and other regulations.

• BEE rating (specifi cally for government leases).

• Compliance with management agreements.

• Application of procurement and other policies.

• Service delivery.• Management of

tenant complaints.• Timeous payment of

fees.

• Procurement criteria. • Localisation.• Quality and price. • Timeous payment of

fees.

• Corporate Social Responsibility (“CSR”) programmes.

• BEE and transformation.

• Facilitating the collection of social grants (refer story of Moratiwa pages 39 to 40).

Report reference

• Report to commercial stakeholders.



• Report to the community.

• Report to the community.

Commercial stakeholders

KEY STAKEHOLDERS (continued)

Community stakeholders


In addition to the stakeholders mentioned before, the group also considers Government and the group’s employees (refer to the Report of fi nancial stakeholders and Remuneration report) to be important stakeholders.

FUTURE PLANS TO INTEGRATE SUSTAINABILITY INTO THE GROUP’S BUSINESS STRATEGYOur focus areas in respect of future sustainability reporting and the integration of sustainability into our business strategy, include:• Formalising a framework to ensure that

sustainability is considered during strategy formulation and embedded in our operations.

• Implementation of environmental and social monitoring systems for key properties. These will include energy, water and waste management monitoring as well as formal tenant surveys.

• Enhancing our staff demographics with respect to employment equity.

• Formalising a cohesive Black Economic Empowerment (“BEE”) plan to address all the relevant BEE target areas.

Progress on all of the above will be reported in our integrated report for the fi nancial year ending 31 March 2012.

STRATEGY, OBJECTIVES AND VALUESSTRATEGYVukile’s strategy is to build and preserve an investment portfolio of properties with strong contractual cash

fl ows for long-term sustainability, capital appreciation and growing income distributions for linked unitholders.

Our strategy is achieved through the implementation of the following key objectives:• Balancing our sector and geographical portfolio

profi le, to ensure sustainability throughout the real estate cycle.

• Continually maintaining and periodically improving our portfolio through planned maintenance and specifi c refurbishments and redevelopments.

• Capitalising on our partnership with Sanlam by acquiring quality investment properties through our right of fi rst refusal.

• Managing our fi nancial risk through conservative gearing, sound credit management policies and limiting interest rate risk through hedging.

• Utilising the skills and expertise of our employees and service providers to achieve operational effi ciency.

• Balancing the interests of all our stakeholders.

VALUESWhile pursuing the group’s strategy and objectives, we pride ourselves on the fact that we continuously act according to our values. Our core values are:• Our people drive our performance.• We take ownership.• We value our stakeholders.• We build and nurture lasting partnerships.• We operate with integrity.


ANTON BOTHA

The theme for this year’s integrated report, the company’s fi rst in

accordance with the requirements of King III and the new Companies

Act, is “Measuring our Success”, which is a celebration of our success

in pursuing our strategy of investing in properties with strong contractual

cash fl ows and growing income distributions for linked unitholders.

As Vukile’s record shows, we have advanced rapidly but steadily, step

by carefully calculated step. At the same time, we have demonstrated

that we do not stand back from a challenge nor are we content to just

mark time. Vukile is a driven business: driven to create value and driven

to generate returns. This integrated report details how far that drive

has brought us to date, and where we are going from here. Vukile’s

excellent track record is best demonstrated by the following key facts:

• Vukile was rated by Catalyst Fund Managers as the best performing

property company on the JSE for the 2009 calendar year.

• The following year, we almost repeated that performance (from the

high base of the previous year), and were rated by Catalyst Fund

Managers as the second best performing property company on the

JSE for the 2010 calendar year.

• Vukile was ranked 27th in the Business Times Top 100 Companies,

published on 7 November 2010, with a compound return of 26.75%

per annum over fi ve years (this performance was rivalled by only

one other company from the Property Loan Stock sector).

Chairman’s report


Distribution to linked unitholders grows by 9% in challenging market

Unitholders approved the acquisition of nine properties for R541 million

NOVEMBER 2010SEPTEMBER 2010AUGUST 2010

Vukile successfully refi nancedR462 million through securitisation debt

In the face of volatile international markets, muted global growth and a continued fall-out from the global fi nancial woes caused by the sub-prime crisis, the South African listed property sector delivered a robust performance during the 2010 calendar year as illustrated by the fact that the South African Listed Property Index reached a record high of 385.70 in October last year. This was attributed mainly to strong demand from both institutional and retail investors. The demand for listed property investments, as well as the listing of a few smaller funds, caused the market capitalisation of the sector to grow over the last year from R100 billion to R125 billion.

It is therefore not surprising to note that, according to Catalyst Fund Managers, listed property with a total return of 29.6% was the best performing of the four traditional asset classes in South Africa over the 2010 calendar year, beating equities (19.0%), bonds (14.96%) and cash (6.9%).

Although the listed sector performed admirably, conditions at the coalface remained tough. Vacancies were still high and bad debts and arrears have not started to improve from previous levels. This, coupled with the fact that retail sales have remained depressed while energy costs and rates and taxes have increased signifi cantly, has caused rental levels to remain under pressure and business conditions were as challenging as at any time during the past two to three years.

It is therefore extremely gratifying to report that, despite these diffi cult trading conditions, the review period has, once again, been a very good one for the company. The distribution to linked unitholders for the 12 months increased by 9% and the net asset value grew by 7.6%. In addition to these robust results, there were many highlights during the year, chief among which were:• The successful bedding down of the asset

management business of the Sanlam property portfolio which was acquired from Sanlam Properties in January last year.

• The acquisition of nine properties from Sanlam Life for R541 million, which not only enhanced the quality of Vukile’s property portfolio, but also increased the value of its assets to just over R5.4 billion.

• The successful refi nancing of R462 million securitisation debt at a very favourable overall cost of fi nance of 9.76%, which is 0.44% lower than the previous level.

• The acquisition of the 9 443m² Giyani Plaza in Limpopo for R71.9 million after the year end. The acquisition of this property, anchored by a 1 804m² Pick n Pay store, is in line with our strategy of investing in properties with strong contractual cash fl ows in selected lower income areas. The initial yield is expected to be 10.2%.

• The containment of our vacancies at 5.1% of gross rentals. This is higher than the 4.1% vacancy fi gure at 31 March 2010 but compares well with the vacancy level of 5.3% at 30 September 2010.

We are of the opinion that the outlook for property, given that the economy has experienced several successive quarters of growth, is more positive than negative. Consumer spending remains weak, however, and, as the property cycle lags the general economy by 12 to 18 months, we consider any possible recovery over the next 12 months may be muted and fairly fragile. Higher municipal rates and electricity tariffs remain a cause for concern and this will continue to make rental bargaining diffi cult and keep vacancy levels under pressure.

We are also concerned about the impact of the new Consumer Protection Act on lease agreements. The Act includes, inter alia, a section which grants tenants 20 working days to arbitrarily cancel lease agreements. It also limits lease agreements to a maximum of two years, after which the lease would continue on a month-to-month basis unless a new one is signed. Both these issues could have serious consequences for the industry and we are currently consulting our advisors about the impact of the Act on our operations.


In addition, the South African Property Owners Association (SAPOA) is seeking to obtain clarity on some of the provisions of the Act from the Department of Trade and Industry.

The impact of the King III report on corporate governance and the new Companies Act will also have a considerable effect on statutory reporting and the manner in which board and sub-committees are constituted and how they function. Further details of how we are progressing in meeting these new statutory obligations are provided in the Directors’ report and the report on corporate governance elsewhere in this integrated report.

Earlier this year, we announced to linked unitholders that we had elected not to continue with the call option to acquire further properties from Sanlam Life, valued at approximately R500 million. This was done after it became apparent that we were not going to reach agreement on the values of these properties and we decided that, given the asking price, the proposed acquisition did not meet our stringent risk/reward criteria. Although the option has now lapsed, Vukile still has a right of fi rst refusal over the whole of the Sanlam commercial property portfolio, including the option properties.

This development, however, does not mean that Vukile’s appetite for acquisitions has been diminished and we are actively seeking new ways of enhancing the desirability of our property portfolio through the addition of good quality new properties as well as the expansion and renovation of our existing properties. Our primary focus area in this regard is retail centres in selected lower income areas. This component of our portfolio has been particularly resilient and successful during the past couple of years and we intend to increase our exposure to this segment of the market. We will also continue our rigorous pursuit of cost control, tenant retention, credit control and energy savings.

Taking into account all the factors discussed above, the board is of the opinion that Vukile will again be able to deliver reasonable growth in distributions for the coming year.

During the course of the year, Gerhard van Zyl gave notice of his resignation from the company and the board of Vukile Property Fund. On receipt of his resignation, the board initiated a process to fi nd a successor for Gerhard and, following the successful conclusion of this process, Laurence Rapp has been appointed as the new CEO effective from 1 August 2011. Laurence has extensive experience in

the fi nancial services environment, spanning investment

banking, private equity, retail banking, insurance and

asset management. For the past nine years, he has

been a director of Standard Bank, most recently as the

head of the Insurance and Asset Management division

and, prior to that, was in charge of the Strategic

Investments and Alliances division.

Gerhard was Vukile’s fi rst CEO and over the past seven

years, he has led the company with distinction and was

instrumental in growing Vukile’s assets from R1.8 billion

to R5.4 billion. During his tenure, the company provided

a total return to unitholders of close to 28% per annum.

The board would like to thank Gerhard for his

dedication, care and commitment to Vukile throughout

his term in offi ce, and especially for the past year when

he agreed to remain through the extended period that

it has taken to fi nd his successor. He leaves Vukile in

excellent condition and with a very sound base for his

successor to build on. We wish him well in the career

and life choices he will make after leaving Vukile.

I would also like to take this opportunity of thanking my

fellow board members. Their enormous experience in

the property sector as well as their astute insight and

innovative thinking give context and clear direction

to our strategic deliberation. In addition, I would

like to thank Vukile’s management team and staff

for their astute and effective management of the

company and its property portfolio, as well as our

property managers, namely JHI, Kuper Legh Property

Management, Hermans and Roman Property Solutions

and Old Mutual Property Group, for managing Vukile’s

properties as well as they have.

Finally, I would like to thank our other business partners

and advisors as well as our funders, our tenants, our

major client, Sanlam, and our linked unitholders for

their continued support.

Anton Botha

Chairman

Roodepoort

23 May 2011

Chairman’s report (continued)


Hardest hit in terms of vacancies was the offi ce sector which recorded a vacancy fi gure of 9.9% in December 2010, followed by the industrial sector with vacancies of around 8% and the retail sector with vacancies around 4%. Offi ce rentals remained fl at due to landlord concessions to retain current tenants or to attract new tenants.

In spite of the generally weak trading conditions, the SA listed property sector recorded a total return of 29.6% for the 2010 calendar year, outperforming the other traditional asset classes over the short and longer investment time horizon.

Asset Annual- class (%) 2006 2007 2008 2009 2010 ised

• SA listed property 28.4 26.5 (4.5) 14.1 29.6 18.07

• Equities** 41.2 19.2 23.2 32.1 19.0 15.24• Cash*** 7.5 9.3 11.7 10.3 6.9 9.14• Bonds* 5.5 4.2 17.0 (1.0) 14.96 7.92

Source: I-Net Bridge, BESA all bond index*, All share index**, STEFI 12 month cash index***, Catalyst Fund Managers.

The strong performance during 2010 was supported by a good performance of the capital markets and fi rming long bond yields. At 31 December 2010, the historic rolled income yield for SA listed property was 7.7%. The outlook for distribution growth in 2011 remains reasonable with expected distribution growth between 6% and 7%. Rising discount rates, due to an expectation of higher bond yields, will probably have a negative impact on capital growth during 2011.

In general, a gradual and varied recovery is expected during 2011. Vacancies remain a concern, but are expected to gradually decrease during the year. An upward movement in offi ce rentals will most probably only be seen once vacancies have reduced substantially.

The general outlook for the retail property market is more optimistic with some retail sectors performing better than others due to changing demographics, the growing middle class, government grants, etc.

The fact that operating costs will continue to rise faster than income growth, mainly due to rates and taxes and electricity charges, remains a huge concern for the industry. Although most of these costs are normally recovered from tenants, they will impact on tenants’ total cost of occupation and could ultimately reduce rental growth for landlords.

The construction industry is still going through a tough time. Due to fewer new developments and a lag on government infrastructure projects, this is expected to continue into 2012.

The impact of the Consumer Protection Act, which came into effect in April 2011, on the commercial property industry remains unclear while industry bodies are seeking clarity on some provisions of the Act. While the Act provides additional protection for consumers, it might have severe implications for landlords, developers and owners.

Property fundamentals weakened over the past two years with higher arrear rentals, bad debts and increasing vacancies.

Market overview


MEMBERS OF THE AUDIT AND RISK COMMITTEE

OTHER BOARD MEMBER

GERHARD VAN ZYL (51)Chief executiveB Eng (Hons) Hons B (B & A), MBAGerhard has 20 years’ experience in the property industry and was the president of the South African Property Owners Association (SAPOA) during 2003/2004. He worked at the Department of Water Affairs of Namibia from 1984 to 1985 whereafter he studied full time towards an MBA degree at the University of Stellenbosch. Following this, he was appointed as senior engineer at MBB Consulting Engineers. Between 1988 and 2003, he held various positions in the Sanlam Group and was managing director of Gensec Property Services prior to joining Vukile.

MICHAEL JOHN POTTS (56)Financial directorCA(SA), HDip Tax Law (Wits)Michael was previously an independent advisor to the Bridge Capital Group on property transactions, property portfolio assembly, fi nancial structuring and capital raising. Prior to that, he was managing and fi nancial director of the South African group that forms part of the UK-based Hanover Acceptances Group and was involved in the restructuring of the South African group and the introduction of effective management reporting systems and strategic planning methodologies. Michael was also a non-executive director of Hanover Acceptances Limited (United Kingdom) and Outspan International Limited for six and seven years respectively.

HERMINA CHRISTIANA LOPION (51)Executive director: asset managementBSc, University of Stellenbosch, Sanlam Executive Development Programme: Manchester Business SchoolIna has 20 years’ property experience and six years’ life insurance experience within the Sanlam Group. She is responsible for asset management of the Sanlam investment property portfolio and the Vukile group property portfolio.

ANTON DIRK BOTHA (57)Non-executive chairmanBCom, BProc, BCom (Hons), Stanford Executive ProgrammeAnton is a director and co-owner of Imalivest, an investment group that manages proprietary capital provided by its owners and the Imalivest Flexible Funds. He also serves as a non-executive director on the boards of the JSE Limited, the University of Pretoria, African Rainbow Minerals Limited, Sanlam Limited and Sanlam subsidiaries. He is a past president of the Afrikaanse Handelsinstituut and is actively involved in organised business.

HENDRIK SCHALK CONRADIE BESTER (60)Independent non-executive directorBCom (Hons), FIA, Harvard ISMP:AMPHendrik was a senior general manager and later an executive director of Sanlam between 1997 and 2000. Before 1997, he held various positions in the Sanlam group. Other previous directorships include Gensec, Sankorp, Sanlam Unit Trusts, Sanlam Properties, SA Retail, SAGDB and Barnard Jacobs Mellet Holdings. He is a past president of SAPOA, a former director of the Board of Quantity Surveyors and served on the Van Huysteen Commission on government properties.

Board of directors

MERVYN SEREBROPETER MOYANGAPETER COOKHENDRIK BESTER

INA LOPION


MEMBERS OF THE INVESTMENT COMMITTEE

MEMBERS OF THE HUMAN RESOURCES AND NOMINATION COMMITTEE

PETER JOHN COOK (64)Non-executive directorBSc Eng (Wits), MBA (Wharton)Peter retired as an executive director of Sanlam’s fi nancial engineering subsidiary Sanlam Capital Markets (SCM) in 2005. He continues to serve on the board and board committees of SCM and other Sanlam subsidiaries. Peter was the deputy chief executive of Gensec Bank (now SCM) from 2001 to 2004 and the executive director responsible for fi nance, risk management and other support functions of investment banking group Genbel Securities from 1997 to 2000. From 1993 to 1997, Peter was the fi nance and administration director of the oil company, Engen. Prior to 1993 he held various executive fi nancial and investment positions in the mining fi nance house, Gencor.

JONATHAN MLUNGISI HLONGWANE (47)Non-executive directorMlungisi is a director and shareholder of Isolenu Group Holdings, which owns a commercial property portfolio across the country, both in the unlisted and listed sectors. He has been involved in civic and community movements since 1979 and is the past national president of the South African National Civic Organisation (SANCO). He serves as chairman of Lazarus Capital (Pty) Ltd.

PETER SIPHO MOYANGA (46)Independent non-executive directorPeter is a well-recognised expert in the fi eld of franchising, property and business development. He was employed by McDonalds Corporation in 1995 where his initial function was as a senior property network developer responsible for strategic physical brand positioning. In 1999, Peter was appointed franchising manager for McDonalds (South Africa) (Pty) Ltd and later in 2001 he was promoted to multi department head, responsible for fi eld service, information and technology department, operations development and franchising.

MERVYN HYMIE SEREBRO (64)Independent non-executive directorMervyn is the chief executive offi cer of Vusani Property Investments, a fully empowered privately held consortium embracing retail and offi ce properties. He spent 32 years with the OK Bazaars Group within which he held a number of key positions and directorships, including that of group managing director. Mervyn was integrally involved in the establishment of a South African Bone Marrow Registry after the untimely death of his son Darren of leukemia. He is also the vice chairman of Reach for a Dream.

URBANUS JOHANNES VAN DER WALT (61)Non-executive directorB Econ (Hons), Advanced Executive ProgrammeBanus was the previous managing director of Sanlam Properties and Gensec Property Services. He has in excess of forty years of property experience with the Sanlam Group. Banus previously served as non-executive director of Martprop, Acucap, SA Retail and iFour and is a past president of the SAPOA. He is currently a non-executive director of Sanlam Properties, PEC Management Services, Vusani Property Investments and Capital Property Fund Limited.

GERHARD VAN ZYLMIKE POTTSMLUNGISI HLONGWANEHENDRIK BESTERMERVYN SEREBRO

PETER COOKANTON BOTHA

MLUNGISI HLONGWANE BANUS VAN DER WALT


MICC PROPERTIES (PTY) LTD

MICC PROPERTIES NAMIBIA (PTY) LTD

The Namibian properties are held in individual holding companies

100%

3.5% 96.5%

100%

Katima Mulilo Properties (Pty) Ltd

Kavango West Properties (Pty) Ltd

Oluno Properties (Pty) Ltd

Oshakati Properties (Pty) Ltd

Super Deca Properties (Pty) Ltd

MICC House Namibia (Pty) Ltd

Oshikango Properties (Pty) Ltd

Katatura Properties (Pty) Ltd

The South African properties are held in the name of MICC properties

South African properties

MICC PROPERTY INCOME FUND LIMITED

VUKILE PROPERTY FUND

Group structure

GERHARD VAN ZYL (51)Chairman of the ExcoChief executive offi cerB Eng (Hons) Hons B (B & A), MBA

The executive committeeThe executive committee (Exco) supports the CEO in carrying out the duties delegated to him in terms of the approval framework. The Exco meets regularly to ensure that strategy is implemented, internal controls and governance practices are functioning properly and that operations are being performed effectively. The Exco consists of:

RALPH WELLHONER (46)Senior fi nancial managerBCom, BCom (Hons)

MICHAEL JOHN POTTS (56)Financial directorCA(SA), HDip Tax Law (Wits)

HERMINA CHRISTIANA LOPION (51)Executive director: asset managementBSc, University of Stellenbosch, Sanlam Executive Development Programme: Manchester Business School

EXCO MEMBERS

100%

RE

PO

RT TO

STA

KE

HO

LDE

RS

Report to stakeholders

As a direct result of synergy between its physical and human capital, Vukile has accomplished a number of remarkable achievements over the past few years, consistently outperforming its peers in its pursuit of long-term sustainability, capital appreciation and income growth for its linked unitholders.



FINANCIAL AND NON-FINANCIAL HIGHLIGHTS

Report to fi nancial stakeholders

DISTRIBUTION HISTORY

GROWTH IN DISTRIBUTIONS


FINANCIAL RESULTSGroup profi t available for distribution increased by 26.2% from R323.3 million to R408.1 million.

The distribution for the full year ended 31 March 2011 is 117.65 cents per linked unit. The fi nal distribution of 67.12 cents per linked unit represents an increase of 10.2% over the comparable six month period and the full distribution increase is 9.0% higher than the previous year’s distribution of 107.90 cents per linked unit.

The 9.7 cents per linked unit increase in distributions year-on-year is made up as follows:

2011 2010 Cents per Cents per linked unit linked unit

• Contributions to increased rental income • Increased rentals on new and renewed leases reduced by

increased vacancies 10.3 15.7 • Additional rentals from property acquisition 12.8 – • Additional municipal service recoveries and other 3.7 8.1 26.8 23.8• Increase in property expenditure (7.6) (11.2)• Increase in net group property revenue 19.2 12.6• Additional net income from asset management business 11.9 1.0 Less: adjusted prior year asset management fees for full year (8.5) –• Increased net fi nance costs (6.6) (0.5)• Increased administrative expenses, taxation and retained income (0.7) (2.7)• Adjustment for issue of additional linked units (2.3) (3.7)• Less: R10 million distribution foregone by Sanlam Properties (3.3) 3.3• Net increase in distribution 9.7 10.0

The net asset value of the group has increased over the reporting period by 7.6% from 932 cents per linked unit (adjusted for additional units in issue) to 1 003 cents per linked unit at 31 March 2011.

The change in net asset value per linked unit, based on 351 015 218 linked units in issue at year end, is set out in the NAV bridge graph on page 18.

LINKED UNIT PRICE

Investment portfolio at 31 March 2011 Retail Offi ces Industrial Total

Value (Rbn) 2.8 1.6 0.9 5.3Number of properties 32 25 17 74GLA 433 914 226 245 259 968 920 127% of total GLA 47 25 28 100Net property income (Rm) 289 166 83 538% of net property income 54 31 15 100Value per m² 6 568 7 026 3 343 5 769Average contracted escalation (%)* 8.6 8.4 9.0 8.6Average lease period (years) 2.42 2.90 1.61 2.31

* For the year ending 31 March 2012.

RE

PO

RT TO

STA

KE

HO

LDE

RS


Report to fi nancial stakeholders (continued)

The asset management business segment performed well during the year. Asset management fees of R33.6 million were earned which was R3.1 million higher than the income forecast in the circular to shareholders dated 26 November 2009. Likewise, net sales commission of R29.6 million was R5.3 million higher than forecast in the circular due to higher than expected disposals in the Sanlam portfolio. Costs were well contained at R20 million.

Group corporate administration expenditure of R25.5 million refl ected an increase of R1.7 million (7.3%) over the previous year.

Group fi nance costs, net of investment and other income, increased by R16.1 million, from R133.3 million to R149.4 million. This increase is primarily due to the additional bank debt of R201.8 million raised to fi nance the acquisition of the property portfolio from Sanlam.

NAV BRIDGE

GROUP NET CASH FLOW 12 MONTHS ENDED 31 MARCH 2011

The group net cash fl ow, refl ecting the composition of cash generated and utilised during the year under review, is set out in the graph below.


RE

PO

RT TO

STA

KE

HO

LDE

RS

2011 2010 Group Group Note R000 R000

Calculation of distributable earningsNet profi t from property operations excluding straight-line income adjustments 542 521 475 011Net income from the asset management business 1 44 913 3 067Investment and other income 2 14 380 21 188Administrative expenses (25 509) (23 781)Finance costs 3 (161 803) (145 340)Taxation (excluding deferred tax on revaluation adjustments) (6 401) (6 880)Available for distribution 408 101 323 265

Note 1: The asset management business operated only for three months in the previous year with insignifi cant sales commission generated during that period.

Note 2: The decrease in investment and other income is due to a once-off dividend of R8.8 million received from VIPS in the prior year.

Note 3: The additional fi nance costs are as a result of bank debt of R201.8 million utilised in the acquisition of the R541 million portfolio from Sanlam in September 2010.

LIQUIDITYDuring the 12 months ended 31 March 2011, 66.7 million linked units were traded (2010: 67 million linked units) which equates to approximately 5.6 million linked units per month. This represents 43% of the free-fl oat, when evaluated against the background that approximately 53% of the linked units held by the Sanlam Group and the BEE shareholders are not traded. This compares favourably with other PLS companies.

LINKED UNIT PRICE PERFORMANCE

BORROWINGSThe group’s borrowing capacity is, in terms of its memorandum of incorporation, not limited. The board policy is to limit gearing to 45%. The group’s gearing ratio at the end of the fi nancial year was 31.5% compared to the bank and securitisation covenants of 50% and 65% respectively. The group has unutilised bank facilities of R279 million.

On 8 November 2010, securitisation debt of R462 million was successfully refi nanced via the securitisation vehicle at an all-in cost of fi nance of 9.76%, which is 0.44% lower than the previous rate of 10.2%. The issue was 2.7 times over-subscribed.

Following the extension of certain interest rate swaps and the above securitisation refi nancing, the group’s cost of debt has reduced from 10.4% per annum at 31 March 2010 to 9.77% per annum inclusive of margins and costs at 31 March 2011.

SIMPLIFIED INCOME STATEMENT



Directors’ valuation at 31 March Valuation Rentable 2011 % Rand Location area m² R000 of total per m²

Durban Phoenix Plaza Durban 24 342 414 222 7.7 17 017Bellville Louis Leipoldt Hospital Bellville 22 311 218 317 4.1 9 785Randburg Square Randburg 51 370 209 272 3.9 4 074Dobsonville Shopping Centre Soweto 23 177 194 375 3.6 8 387Pine Crest (50%)* Pinetown 40 202 188 215 3.5 9 364Durban Embassy Durban 32 346 182 028 3.4 5 628Oshakati Shopping Centre Oshakati 22 269 159 458 3.0 7 161Daveyton Shopping Centre Daveyton 16 983 157 820 2.9 9 293Roodepoort Hillfox Power Centre Roodepoort 36 103 155 069 2.9 4 295Arivia.kom Building (Midrand) Midrand 15 634 147 052 2.7 9 406 284 737 2 025 828 37.7 7 655

* Vukile owns 50% of the Pine Crest Centre in Pinetown. The other 50% is owned by SA Corporate Real Estate Fund.

The geographical and sectoral distribution of the group’s portfolio is indicated in the graphs opposite. The portfolio is well-represented in most of the provinces, with the bulk in Gauteng and KwaZulu-Natal.

BORROWINGS (continued)Bank loans to a subsidiary of R452 million mature in July and August 2011. Four banks have been approached to refi nance these loans. At this stage, indicative facility letters have been received from certain of the above banks at favourable interest rates. We intend to fi nalise the refi nancing of these expiring loans at all-in hedged rates which are lower than the current fi xed and hedged rates.

98% of the group’s total interest bearing debt was hedged at year end.

The borrowings and particulars of interest rate swaps are detailed in note 18 to the annual fi nancial statements included in this integrated report.

PROPERTY PORTFOLIOThe group’s investment strategy incorporates the following:• New acquisitions should exceed R50 million in value.• Retail centres to be located preferably in lower income or previously disadvantaged areas where transport support

(i.e. taxi ranks) is in close proximity.• Centres in the lower income areas should be tenanted by at least 75% national retailers.• Offi ces must be “A” grade quality, located in sought after areas with good quality tenants.• Industrial developments must preferably be mini units; larger unit developments will be driven by tenant demand, (i.e., no

“spec” developments will be undertaken) with a lease term of at least fi ve years and good quality tenants.

The portfolio is continuously assessed to ensure that any risks to properties are identifi ed timeously and remedial action taken where required. This could entail a revamp or expansion of a building to maximise trading opportunities or the sale of properties which are no longer considered to be core and replaced with higher quality properties in preferred locations.

The group property portfolio at 31 March 2011 consisted of 74 properties with a gross lettable area of 920 127m².

Net property revenue, excluding straight-line rental income accrual, increased from R475 million to R542.5 million (14.2%) primarily as a result of the acquisition of the R541 million portfolio from Sanlam, good rental escalations and improved recoveries of electricity and municipal consumption costs. If acquisitions and disposals are excluded, on a “like for like” basis, group net property revenue increased by 9.5% from 2010 to 2011.

Full details of the property portfolio are set out in note 33 to the annual fi nancial statements included in this integrated report.

TOP 10 PROPERTIES BY VALUE


RE

PO

RT TO

STA

KE

HO

LDE

RS

The group is of the opinion that the current sectoral and geographical profi le broadly conforms to the requirements of a well-balanced mixed portfolio and there is, therefore, no specifi c strategy to increase or decrease these profi les. These profi les are largely unchanged from the previous year.

New leases and renewals of 204 795m² with a contract value of R945.5 million were concluded during the year, including a renewal of a 15 year lease at Louis Leipoldt Hospital with Medi-Clinic at a contract value of R486 million.

82% of leases that expired during the year ended 31 March 2011 were renewed or are in the process of being renewed (2010: 90%). The reduction in renewals is mostly due to government leases that were still in the process of being renewed at year end as well as a number of lease renewals that were held back, pending possible large refurbishments. The group is implementing a process to improve the renewals percentage.

GEOGRAPHICAL PROFILE GEOGRAPHICAL PROFILE

SECTORAL PROFILE SECTORAL PROFILE



GROUP LEASE EXPIRY PROFILE

RETAIL LEASE EXPIRY PROFILE

OFFICES LEASE EXPIRY PROFILE


RE

PO

RT TO

STA

KE

HO

LDE

RS

The group lease expiry profi le graph refl ects that at least 38% and 19% of the leases are due for renewal in 2012 and 2013 respectively. This means that in the year ahead, approximately 40% of leases will be renewed at market related rates.

The rental escalation graph below refl ects that contracted rental escalations are between 8.4% and 9.0% for the year ending 31 March 2012.

At 31 March 2011, the portfolio’s vacancy (measured as a percentage of gross rental) was 5.1% compared to 4.1%

at 31 March 2010. This is a slight improvement on the vacancy of 5.3% at 30 September 2010, which is partly as a

result of an increase in letting enquiries, aggressive broker launches and advertising.

The largest vacancy in the portfolio is at Randburg Square which refl ected a vacancy at year end of 5 103m². This is

due to a major revamp of the centre at an estimated cost of R64 million. This revamp, which will commence shortly,

entails a re-mix of tenants and the introduction of new tenants. Vacancies have not been fi lled pending this major

revamp.

The properties with higher than normal vacancies are actively marketed through advertising campaigns, broker

functions and continuous pressure on the property managers to source tenants.

INDUSTRIAL LEASE EXPIRY PROFILE

CONTRACTED RENTAL ESCALATION PROFILE AVERAGE ANNUAL ESCALATION

VACANCY PROFILE


GLA summary GLA m²

Balance at 1 April 2010 896 921GLA adjustments (303)Disposals (62 982)Acquisitions and extensions 86 491 Balance at 31 March 2011 920 127

Vacancy summary Area m² %

Balance at 1 April 2010 40 615 4.5Leases expired (230 503)• Renewals of expired leases 162 561• Contracts to be renewed 67 942Tenants vacated (49 245) 0.08New letting of vacant space 42 234Leases terminated in lease period (978)Balance at 31 March 2011 48 604 5.3

2011 2010 Financial performance Rm Rm %

GROUPGross property revenue 836.1 742.1 12.7%Property expenses (293.6) (267.1) (9.9%)Net property income(1) 542.5 475.1 14.2%Property expense ratios* 34.1% 34.5%

(1) Property interest paid and received has been reclassifi ed to fi nance costs and investment income respectively and internal asset management fees have been reversed.

* Recurring cost to property revenue ratios (including rates and electricity costs).

Recurring property expenses have decreased slightly year on year as discussed in more detail below. As the rising costs of electricity and rates and taxes items are negatively impacting on our tenants’ ability to pay their rent, we have implemented the following measures to try and alleviate these costs:• Appointing a specialist at a cost of R0.8 million over

a three year period to value all the group’s properties where the municipal valuations appear to be higher than market and to lodge the appropriate objections and appeals. Annual savings of rates and taxes of R8.6 million have been achieved as a result thereof. An appropriate percentage of such savings are refunded to the tenants.

• Apart from the obvious steps taken to reduce energy consumption by replacing older technology with newer, more energy effi cient technology, the group has embarked on an in-depth pilot study in respect of two of its larger properties to formulate a comprehensive strategy to reduce energy consumption costs.


VACANCY PROFILE OF INDIVIDUAL PROPERTIESVACANCY PROFILE OF INDIVIDUAL PROPERTIES

}


RE

PO

RT TO

STA

KE

HO

LDE

RS

RECURRING COST TO PROPERTY REVENUE RATIOS

PORTFOLIO TENANT PROFILE

AVERAGE CONTRACTUAL BASE RENTALINDUSTRIAL

The group continuously evaluates methods of containing costs in the portfolio.

As a result of the measures referred to earlier, the recurring costs to property revenue ratios (excluding electricity and rates and taxes) have decreased from 16.48% to 15.26% year on year.

The portfolio tenant profi le is set out in the graph below:



Average Gross Rental RetailAVERAGE CONTRACTUAL BASE RENTALRETAIL

AVERAGE CONTRACTUAL BASE RENTALOFFICES

The average monthly rental rate per sector at 31 March 2011 is as follows:

Property R/m²

• Retail 71.36• Offi ces 71.86• Industrial 34.58


RE

PO

RT TO

STA

KE

HO

LDE

RS

The graph below indicates the actual escalations of contract rentals achieved on renewals compared to the expiry rentals for the year ended 31 March 2011.

In line with the trend in the market, the renewal escalations for retail of 6.5% have been lower than that of the industrial and offi ce sectors.

The above graph refl ects the fact that, during the year under review, new leases were being concluded below our budget for the industrial and offi ces sectors.

PROPERTY ACQUISITIONS AND DISPOSALSACQUISITIONS COMPLETEDThe following properties were acquired on 3 September 2010.

Total rentable Purchase area price Property Region m² Rm*

Amanzimtoti Jeffels Road Warehouse KwaZulu-Natal 22 645 62 007Kimberley Kim Park Northern Cape 10 494 47 915Nelspruit Sanlam Centre Mpumalanga 13 934 39 963Pinetown Westmead Kyalami Park KwaZulu-Natal 16 914 59 390Pretoria Hatfi eld Sanlam Building Gauteng 5 358 41 875Pretoria Sanwood Park Gauteng 6 388 55 464Rustenburg Edgars Building North West 9 784 83 750Sandton St Andrews Complex Gauteng 10 169 76 805Sandton Sunninghill Place Gauteng 8 774 73 986 104 460 541 155

* Includes transaction costs.

This portfolio acquisition was fi nanced as follows:

Rm

• Issue of linked units 235.7• Bank fi nance 201.8• Surplus cash 103.7Total 541.2

RENEWAL RENTAL ESCALATION TO EXPIRY RENTALS

NEW TRANSACTIONS: RENTALS CONCLUDED/BUDGETED



FUTURE ACQUISITIONSGiyani PlazaThe group announced on SENS on 11 April 2011 that Giyani Plaza is to be acquired from Sanlam Life Insurance Limited at a total capital outlay of R71.9 million, including transaction costs.

This 9 443m² centre is located in Giyani, approximately 70 kilometres east of Makhado (Louis Trichardt) in the Limpopo Province. The major tenant is Pick n Pay (1 804m²). The centre has 80% national tenants and an initial yield of 10.2% is forecast.

EXPANSIONS, REVAMPS AND DISPOSALSThe expansion/revamps undertaken to the Oshakati Shopping Centre and Oshikango Centre were completed during the year within budget.

New revamps/income protecting capital projects are summarised below:

Malamulele: Bellville: Grosvenor Mala Plaza Louis Leipoldt Corner upgrade extension Hospital upgrade Hillfox Centre

Approved capital R7.5m R16.75m R33.50m R12.5mExtensions R16.75m R12.5mUpgrade R7.5m – – –Refurbishment – – R33.50m –Additional GLA – 1 222m² 0m² 1 337m²Year 1 yield 0.0% 9.3% 0.0% 10%Completion date 30 Nov 2011 31 Mar 2011 30 April 2013 30 Nov 2011Progress Tenants information Practical Work is in Work is in meeting held completion progress progress Plans for council achieved on submission being done 31 March 2011

The total cost of acquisitions, developments and tenant installations for the year ended 31 March 2011 amounted to R622.9 million (2010: R58 million).

Properties sold as part of the group’s winnowing strategy are set out below:

Sales price Property R000

Randburg Hillcrest Centre 16 750Pongola City Shopping Centre 31 100Pretoria 227 Andries Street 43 131JHB Atlas Road Complex 28 700Benoni Kleinfontein Offi ces: Erven 36 to 39 5 120Benoni Kleinfontein Offi ces: Erf 24 1 400Benoni Kleinfontein Offi ces: Erven 43 to 45 5 250Amanzimtoti Jeffels Road (Warehouse) 63 400Nelspruit Game 25 000Cape Town Ndabeni Business Park 25 000Total 244 841

The proceeds from property sales will be utilised to acquire properties that meet our quality requirements and/or to fund expansions and revamps, thereby further enhancing the quality of the portfolio.


RE

PO

RT TO

STA

KE

HO

LDE

RS

QUALITY OF MANAGEMENTThe group’s performance and sound fi nancial position are a direct result of the synergy between its two primary capital sources, namely our physical capital and human capital. Vukile’s human capital enables the group to employ its physical capital, a diverse property portfolio, in order to deliver above average results for our linked unitholders.

Linked unitholders have enjoyed the results of this synergy, with Vukile achieving a number of remarkable achievements over the past few years. These achievements include being ranked second and fi rst by Catalyst Fund Managers for individual stock performance in the 2010 and 2009 calendar years respectively. These rankings indicate that Vukile has consistently outperformed its peers in the preceding two years in terms of total returns generated for linked unitholders.

However, Vukile’s greatest achievement and a true testimony to its ability to achieve the objective of producing long-term sustainability, capital appreciation and income growth for linked unitholders, is evidenced by it achieving 27th place out of the Top 100 Companies listed on the JSE Limited. The Top 100 rankings, as published by the Business Times - the business supplement of the Sunday Times newspaper - during November 2010, showed that Vukile achieved compound annual returns of 26.75% per annum over the preceding fi ve year period. The ranking also showed that this performance was rivalled by only one other company from the Property Loan Stock sector.

It is therefore clear that Vukile’s performance track record speaks not only of the quality of our property assets, but more so of the quality of our management team and people.

MANAGEMENT MODEL AND EXPERIENCEVukile took the strategic decision to adopt an internal asset management model (“IAM model”) in September 2009. Prior to the adoption of the IAM model, the asset management function was outsourced to Sanlam Properties (Pty) Ltd (“Sanlam Properties”). In addition to adopting the IAM model, Vukile acquired the asset management business of Sanlam Properties, which is responsible for the property asset management of the Sanlam investment property portfolio, with effect from 1 January 2010. As a result of the aforementioned, the staff complement has grown signifi cantly and stood at 30 individuals at 31 March 2011.

The majority of the staff members that joined as a result of the acquisition of the property asset management business had a prior working relationship with Vukile. Some individuals were involved with the listing of Vukile on the JSE and others have been rendering property asset management and support function services to Vukile since its listing. As a result, the integration of culture, systems and processes has been relatively seamless.

The group prides itself on the fact that we have one of the most experienced management teams within the property industry with a collective property industry experience of 363 years, an attribute that is not easily matched within our industry.

OUTSOURCED PROPERTY MANAGEMENT FUNCTION Vukile has outsourced the day-to-day management of our buildings to four property management companies, namely JHI Property Services, Hermans and Roman Property Solutions, Kuper Legh Property Management and Old Mutual Properties (“property managers”). These property managers deal with daily property operations such as leasing, invoicing of tenants, debt collection, maintenance, tenant interaction, fi nancial administration and the management of relationships with service providers and local government. Monthly meetings are held with the property managers to monitor performance and operational issues.

TRAINING AND DEVELOPMENTVukile believes that, not unlike physical capital, human capital needs to be maintained, improved and developed over time. The group encourages its people, especially younger employees, to further their academic studies in areas that are appropriate to the group’s business. Approximately 20% of the staff complement is currently enrolled for studies with recognised institutions in areas such as accountancy, fi nancial management and industrial psychology. Vukile supports these candidates by providing fi nancial support for tuition, academic materials and study aids and paid study leave of up to 10 days per annum.

The group ensures that employees maintain sound industry and technical knowledge by facilitating regular attendance of training courses, seminars and other industry initiatives by employees at the group’s expense. Employees belonging to professional bodies are encouraged to maintain their Continuous Professional Development (“CPD”) status in line with the relevant professional body’s standards.


Report to commercial stakeholders

PROPERTY ASSET MANAGEMENT CLIENTThrough the asset management business acquisition, Vukile assumed responsibility for the property asset management of the investment property portfolio of ±R9bn owned by Sanlam. The asset management business contributes 7.2% of Vukile’s total turnover. Therefore Sanlam remains one of Vukile’s key stakeholders.

The Sanlam property committee was established to facilitate quarterly feedback to Sanlam on the performance of its portfolio. The strategic direction for the Sanlam portfolio, Vukile’s mandate for sales and acquisitions and Vukile’s performance targets are also determined by this committee. The new reporting lines to Sanlam via the property committee and its members have been bedded down and there is a healthy working relationship and mutual respect between the two entities.

TENANTS

Our philosophy remains to offer our tenants best value for money in a specifi c area, by offering an enhanced shopping or business experience which is aligned with the aspirational needs of our clients. We also understand that the success of our tenants’ businesses is closely linked to that of our own. We continuously utilise our fi nancing facilities and free cash from disposals to invest in the upgrade of our portfolio, thereby providing better facilities to our tenants. In time, improved facilities will attract customers and allow our tenants to perform better, thus improving their ability to meet their rental payments.

When we acquire a property, be it retail, offi ce or industrial, we do so after a rigorous process of internal risk assessment. In particular, we consider the long-term demand for the premises, its age, accessibility and suitability for tenants’ needs. We take a long-term view of these properties and, as such, are committed to ensuring that they provide a solid platform from which our tenants can build their own businesses.


RE

PO

RT TO

STA

KE

HO

LDE

RS

GENERAL MARKET TRENDS AND TENANT RETENTIONDue to the fact that a substantial portion of Vukile’s retail portfolio is situated in rural and township areas of South Africa, it was relatively protected from the impact of the recent global fi nancial crisis. Further protection resulted from the high percentage of national tenants in our centres selling staples with a strong brand loyalty.

We believe that retail and industrial premises have weathered the storm and are over the worst. On the offi ce side, however, the pressure is still being felt in the market as demand is slow to recover due to over-supply, as well as rapidly rising costs of electricity and rates and taxes. Our response has been to focus on cost reduction and tenant retention, since retaining existing tenants is much more cost effective than placing new tenants.

In South Africa, the trend for companies to move out of the CBDs has persisted. About 25% of our offi ce sector GLA is exposed to the Pretoria CBD, but due to the fact that 75% of our offi ce portfolio in Pretoria is occupied by government, vacancies have remained stable. New developments in the Hatfi eld, Lynnwood and Menlyn areas of Pretoria present a risk to vacancies and letting in the CBD. Government is also aggressively cutting costs in light of the budget defi cit. Given the cost of relocation and the shortage of suitable premises, it is unlikely that government tenants will relocate, but rentals on renewals may be subject to downward reversion.

82% of leases that expired during the year ended 31 March 2011 were renewed or are in the process of being renewed (2010: 90%). Management is implementing plans to improve tenant retention.

An important part of protecting the group against the likelihood of our tenants from defaulting on their lease agreements, is our credit vetting process prior to the acceptance of a tenant. We have developed a comprehensive screening system for each applicant, which assesses the tenant according to type (national, government, SMMEs, etc), nature of business, main shareholders and other relevant characteristics, and in the case of renewals, payment history.

The most signifi cant cash fl ow risk faced by our business is the inability to collect rental payments timeously. We are particularly negatively impacted by late payments resulting from changes in governmental payment systems and processes.

As such, it is important to closely monitor our arrears book and any changes to government payment processes. We measure the effectiveness of our collections process based on the percentage collections made by the fi fth business day of each month. On average, our collection percentages on the fi fth business day for the last two years were as follows:

Property 2011 2010

• Offi ce 77.0% 79.6%• Retail 76.1% 76.9%• Industrial 66.6% 67.7%

Our average lease period is 2.4 years. We consider our tenant concentration risk to be moderate as the top 10 tenants account for 20.9% of total GLA. Government is the single largest tenant, occupying 6.8% of total GLA. Approximately 54% of tenants are grade A and B tenants which include listed companies, government departments, national tenants and medium to large professional fi rms.

A further consideration is the right mix of tenants. While we do not offer exclusivity to a particular type of retailer in any of our retail premises, we are obviously mindful of the complementary mix of line retailers to complement our national tenants. This is balanced with the fact that non-competition between competitive tenants is not allowed in terms of the Competition Act.

32

Report to commercial stakeholders (continued)

As a result of these efforts, we can report that, for the fi nancial year ended 31 March 2011, incidents of safety and security have been minimal:• Zero cash heists. • Six armed robberies.• Five fi res.

Three of the fi res mentioned above resulted in insurance claims under our asset-all-risk insurance policy. The increased monitoring and reporting of Occupational Health and Safety Act (“OHS Act”) compliance on all our premises is designed to prevent any incidents of this nature from affecting our insurance terms.

The table below shows the breach of safety and security incidents for the past three years:

Incidents 2011 2010 2009

• Cash heists – 3 2• Armed

robberies 6 10 5• Fires 5 4 2

In order to ensure that our tenants’ businesses experience minimal interruption due to safety-related incidents, we have placed strict performance criteria on our property managers to monitor, report and manage incidents or

potential risks of this nature. These include the following:

SAFETY AND SECURITY

Given the high levels of crime in South Africa, we are mindful of our duty as landlords to provide our tenants with safe and secure environments in which to trade and conduct their businesses. Related to this, is the safety of the staff and clientele of our tenants. Part of our role as landlords, therefore, is to mitigate risks common to the tenant and landlord, in order to maintain and improve tenant retention and stability of rental revenue.

• Continuous OHS Act inspections performed by our

property managers in accordance with the various

property management agreements.

• Annual inspections by external health and safety

specialists for compliance with the OHS Act. These

inspections include tenant premises. The full range

of legal requirements is covered in these inspections,

such as demolition and construction work, asbestos,

electrical installations, electrical machinery,

environmental regulations (such as lighting, ventilation,

noise, fi re precautions, critical equipment and

evacuation), sanitation facilities, fl ammable liquids and

hazardous chemicals, stacking, lifts and elevators.

• Tenant health and safety forums have been

established at our major premises, and the local

emergency services are invited to these meetings.

• All lease agreements contain a clause stipulating that

each tenant must comply with the requirements of the

OHS Act.

It is unavoidable that signifi cant amounts of cash will be

concentrated at our retail centres, or will be in transit at

ATMs and bank outlets. Given the layouts and sizes of

our retail centres, it is not possible to have dedicated

areas for the handling of cash away from the public.

It is also not possible for us to enforce the timing of

refi lling of ATMs outside of normal business hours.

VUKILE PROPERTY FUND LIMITEDIntegrated annual report 2011


RE

PO

RT TO

STA

KE

HO

LDE

RS

TENANT INTERACTIONThe property management agreements entered into between the property managers and the group include a compulsory minimum number of site visits to all tenants. For our larger retail centres, the property managers occupy a dedicated offi ce on the premises. In order to fi nd ways to further enhance customer satisfaction at our centres, we will conduct customer surveys on a sample basis in future.

Although we currently rely on our property management companies to inform us of any tenant complaints, we will in future have tenant surveys done through independent consultants at key retail centres.

RATES AND TAXESAn expense category which has been widely publicised, is rates and taxes levied by municipalities. In addition to the problems experienced with the Johannesburg City Council in respect of incorrect billing, the fi nancial year ended 31 March 2011 saw an additional 18% increase in rates and taxes for commercial property, over and above the general 10% annual increases. This additional increase is currently being contested by SAPOA.

Vukile has further employed independent valuation consultants to contest the valuations of our properties by municipalities at a cost to date of approximately R0.8 million. Annual savings of rates and taxes of R8.6 million have been achieved as a result of these objections and appeals. An appropriate percentage of such saving is refunded to the tenant.

Our efforts with regards to protecting our tenants and their customers from the risks of crime during the fi nancial year ended 31 March 2011, included the following:• Where possible, we have joined a local

security forum with the attendance of the local police force.

• Through our property managers, we are represented on the Shopping Centre Council’s anti-crime forums in conjunction with Business Against Crime.

• Where incidents of robberies have occurred, and where appropriate, we have installed additional cameras and security guards. Furthermore, when increased retail volume is expected, such as over Christmas shopping periods, we ensure that additional security measures are implemented on a pro-active basis with no increase to the rentals payable by tenants.

• We have formalised the provision of parking attendants in the parking lots of our retail facilities. The performance standards and conduct of these guards is stipulated in signed agreements with a contractor. As these guards are unarmed, no training in human rights or legal proceedings is required.

• Any incidents are reported by the property managers in their Occurrence Book and, where appropriate, full incident reports are submitted for insurance purposes.

34

ENERGY AND GREEN BUILDING INITIATIVES

ENERGYThe increasing cost of energy and the risk of supply interruptions have been an area of concern for the commercial property industry since the initial load shedding and much publicised problems faced by ESKOM, in 2007.

The impact of ESKOM’s supply problems has led to signifi cant increases in energy costs. The compounding effect of three consecutive 25% increases in electricity cost from 2010 – 2012 will be material to operating cost structures. Given the current challenges of higher than normal arrears, defaults and vacancies, this places more pressure on an already strained commercial property sector.

The Green Building Council estimates that electricity costs could rise in the near future to approximately 70% – 80% of the cost of utilities consumed by a building and will therefore soon dominate buildings’ operational expenses. Our biggest concern for the commercial property sector is whether tenants will be able to absorb these additional operating costs.

While the commercial property sector in South Africa still has to quantify its carbon footprint, we feel that our response should be to manage the operational costs of energy management. Thus, we are performing research and collecting relevant data to better understand opportunities for cost savings, which could alleviate the pressure of this increased cost on our tenants. At present, our observations are that the majority of the potential cost saving gains, to tenant and landlord, will be as a result of basic management practices such as responsible lights and air conditioning usage, especially at night and over weekends.

GREEN BUILDING INITIATIVES Vukile is a member of the Green Building Council of South Africa (“GBC”). We embrace the vision and mission of the GBC as detailed below.

Vision - The GBC will lead the transformation of the South African property industry to ensure that all buildings are designed, built and operated in an environmentally sustainable way that will allow South Africans to work and live in healthy, effi cient and productive environments.

Report to commercial stakeholders (continued)

MAINTENANCE AND UPGRADESOne of the key objectives in terms of which we achieve our strategy, is the continuous maintenance of our properties. As such, we have current service level agreements in place to ensure that our properties are maintained to the highest relevant standards. This process helps to ensure that our tenants are operating in an environment that remains acceptable to their customers.

The following examples demonstrate our commitment to continuous upgrading and redevelopment of our properties:• A major refurbishment project valued at

R46 million at Bellville Louis Leipoldt, a specialist healthcare property anchored by the Medi-Clinic Hospital Group.

• Expansion projects at Oshakati Shopping Centre and Oshikango Centre in Namibia and Mala Plaza Shopping Centre in the Limpopo Province, valued at R55 million.

• Upgrading and expansion projects at Hillfox Power Centre, Roodepoort, Grosvenor Crossing, Bryanston and Kim Park Shopping Centre, Kimberley.

VUKILE PROPERTY FUND LIMITEDIntegrated annual report 2011


RE

PO

RT TO

STA

KE

HO

LDE

RSMission - To promote, encourage and facilitate green

building in the South African property and construction

industry through market-based solutions, by:

• Promoting the practice of green building in the

commercial property industry.

• Facilitating the implementation of green building

practice by acting as a resource centre.

• Enabling the objective measurement of green

building practices by developing and operating a

green building rating system.

• Improving the knowledge and skills base of green

building in the industry by enabling and offering

training and education.

In terms of our green buildings initiatives, we have

appointed a green building consultancy and have

launched a pilot project consisting of two buildings,

namely Bloemfontein Plaza Shopping Centre and

Durban Embassy Offi ce Tower, for a full green building

analysis. Based on the results of the pilot project,

further roll-outs will be made in due course.

Other current energy and green building-related

actions undertaken include:

• The collection and analysis of data in respect of

energy and water consumption for all properties.

• The installation of test meters at selected

properties as a control measure for council meter

readings.

• The allocation of responsibility to a senior

executive as green building champion and GBC

representative for Vukile.

• The investigation of green leases that provide a

level of co-operation between the landlord and the

tenant on sustainability issues and assisting those

businesses qualifying for inclusion in a Carbon

Reduction Commitment.

Green building practices are already being applied

in terms of waste management. Projects have been

initiated at two industrial properties within the portfolio.

The projects entail the sorting and separate storing

of waste within the paper, plastics, glass and tin

categories, and then on-selling this waste to recyclers.

Further projects will be rolled out later in the year.


Report to the community

Vukile is involved in a number of socio-economic development projects with the communities that are served by our properties, especially our retail centres. The following projects are currently in operation:• In Phoenix, served by the Phoenix Plaza Shopping Centre, we offer a bursary scheme

aimed at grade 12 learners in the area to study at university. The project is a partnership between Vukile, Sanlam and our tenants. The response to this project has been very favourable, and it has received signifi cant praise from the local media.

• In Dobsonville, Soweto, we have established the Dobsonville Trust – a Section 21 company aimed at job creation, skills development and the support of worthy community based charities. Vukile has contributed approximately R1 million towards this trust fund over the years since its inception.

In addition to these projects, we regularly support various charities and community projects in areas such Magaung, Daveyton, Phoenix and Soweto and provide premises at low or zero rentals to Community Based Organisations (“CBOs”) such as the Blood Bank, Tower of Hope and the Jacob Zuma RDP Educational Trust.

During the fi nancial year ended 31 March 2011, we contributed R105 000 to NOAH, a charity organisation which helps children who have been left orphaned or vulnerable due to HIV and Aids in Africa.

CORPORATE SOCIAL RESPONSIBILITY

In many respects, South Africa remains a deeply divided society, with communities in many areas still having specifi c aspirational needs and economic limitations.

On 15 October 2010 the Department of Trade and Industry published the Draft Property Sector Charter in terms of the Codes of Good Practice for Broad Based Black Economic Empowerment (“BB-BEE”), in order to clarify the role of property in redressing these imbalances. The following notable points are, among others, included in the Charter:• Property ownership is the basis for wealth creation in society and that, prior to 1994, black

people could not own property and hence had limited opportunities for wealth creation.• Property ownership in South Africa is concentrated in institutional investors, and the

sector has done little in terms of skills development, employment equity and enterprise development.

• There is a lack of property investment in under-serviced areas.

Given that our retail properties are generally located in rural areas or smaller towns, or in townships which were previously neglected, we are deeply aware of the difference that our premises can make to the communities which surround and depend on our facilities for their business or trade.

We are proud of our record in investing in these under-serviced areas and see growth opportunities in areas servicing the emerging black commercial base.


RE

PO

RT TO

STA

KE

HO

LDE

RS

Vukile’s BEE rating was fi nalised during the year ended 31 March 2011, a process that commenced before the internalisation of the asset management function and the acquisition of the Sanlam asset management business. The rating indicated that our BEE status requires signifi cant improvement, with the ownership of a 21.05% equity stake in Vukile by Lazarus Capital (Pty) Ltd, a black controlled entity, representing our most signifi cant BEE compliance component. Vukile, in its new model and staff complement, will have signifi cantly more scope to implement BEE plans and strategies.

We realise that BEE is an important factor in securing long-term government leases, and is also a factor in building a sustainable relationship with the communities around our properties. For example, we understand that the Department of Public Works only enters into long-term leases (beyond two years) with black-owned landlords. As mentioned earlier, about 25% of our offi ce sector gross lettable area (“GLA”) is exposed to the Pretoria CBD, but 75% of our offi ce portfolio in Pretoria is occupied by the government.

Being a South African employer, we recognise the importance of transformation and employment equity as part of a sustainable business model. Given our relatively small staff complement of 30 people, comprised primarily of highly qualifi ed and experienced people, as well as having a very low staff turnover, we have found it diffi cult to fi nd candidates from previously disadvantaged groups to join the group at senior management and executive level.

Our commitment to sustainable employment equity, as opposed to a “tick the box” approach, led the board to authorise the establishment of the Vukile Black Professional Development Programme (“the programme”). The programme is aimed at introducing highly trained and culturally integrated candidates from previously disadvantaged backgrounds into the senior and executive management structure of the group over the medium-term.

The programme is structured as follows:• Identifying a suitable candidate, based on specifi c

profi ling, with the help of a specialist head-hunter and making an appointment.

• Designing a competency matrix of technical and managerial skills required for the specifi c position and the relevant assessment criteria.

• Developing a mentoring programme with fi rm deliverables.

• Formal training programmes and continuous assessment.

• Identifying opportunities for the candidate within the current succession plan.

The programme was offi cially launched on 1 September 2010 with the appointment of Mr Thulani Makubu in the capacity of trainee asset manager. As at 31 March 2011, Mr Makubu has completed 60% of the deliverables required for the successful completion of the programme and it is envisaged that 100% should be achieved during the second quarter of 2012.

TRANSFORMATION AND BLACK ECONOMIC EMPOWERMENT (“BEE”)

Thulani Makubu is the fi rst trainee asset manager of the Black Professional

Development Programme.


Report to the community (continued)

PREFERENTIAL PROCUREMENTProcurement is a signifi cant opportunity for Vukile to improve its BEE rating. In addition to this, we see localisation of procurement as an important means to build the relationship between a shopping centre and the local community, and hence sustain the loyalty of the community to the retailers. This needs to be managed in line with quality of service, and our screening process for suppliers therefore considers not only BEE credentials, but also price and track record.

A formal procurement exercise is conducted every three years for general services, such as security, maintenance and cleaning. Our next procurement exercise will be conducted during the 2012 fi nancial year. Some of the criteria on which we rate applicants for selection are as follows:• Financial status and stability, including insurance cover.• BEE credentials, including racial composition of management,

experience and training of personnel.• Capability and service excellence, including after-hours service

and service during holidays.• Environmental and risk management.• Affi liation with regulatory councils and associations.

Vukile endeavours to promote local suppliers from the community which our properties service. For example, at our Daveyton Shopping Centre, a community forum has been established to consider various community issues, including local procurement and new suppliers that can be utilised by Vukile in support of enterprise development.

MEMBERS OF THE PUBLIC

In order to gain a better insight into the minds and thought processes of our tenants’ customers, we will focus on monitoring the following responses from members of the public who frequent our shopping centres during the year ending 31 March 2012:• Whether the tenant mix refl ects the retailers that shoppers

would like to see.• Cleanliness, safety, security, etc.• Adequacy of signage, parking, toilets and other common

amenities.• Additional functions (such as fl ea markets or entertainment

events) or promotions (such as mardi-gras, beauty pageants, etc) which would attract the public.

Since members of the public frequent all of our properties, we have ensured that adequate insurance cover is in place in respect of public liability. Although there have been a few reported incidents at our properties, (mostly “slips and trips” claims in retail centres) the majority of these claims prove not to be the fault of the landlord.


RE

PO

RT TO

STA

KE

HO

LDE

RS

Drawing on the experience of our staff from developing rural shopping

centres during the early nineties, Vukile in November 2006 entered into

negotiations with a developer for the construction of a 12 000m2 GLA

centre at Monsterlus, 30 kilometres north-east of Groblersdal. As this was

the fi rst development of this nature by Vukile, we included several features

to ensure that the proposition was a successful one.

The developer identifi ed the need for a centre in the region based on

demographic studies. These studies researched the detailed composition

and growth potential of the customer base in the area based on a

transport catchment model. We were involved at the earliest stages of the

project. In particular, we ensured that community support for the project

was obtained. The taxi associations, local community leaders and ward

councillors were all consulted on a very detailed level and their support for

the project secured.

The developer negotiated with the land owner, a prominent black family, to

do the development on a joint venture basis. This implied that, after the

land value was included in the project, the project had a 5.5% residual BEE

shareholding once we had bought out the developer. This was of critical

importance when negotiating not only with the community stakeholders,

but also with the local authority which was not able to provide the required

services. We therefore had to develop all the services to the project, such

as drilling our own boreholes to secure water supply, provide electricity to

the site and building sewage treatment facilities, as well as arranging our

own refuse removal services.

There were also other unique features associated with this development

which we implemented to ensure its success:

• We required a higher than normal national tenant occupancy of

85%. This was done to ensure the long-term sustainability of our

tenants. Fortunately, the demographic studies performed at the outset

provided them with a suffi ciently robust business case to support their

participation in the centre.

BUILDING SUSTAINABLE COMMUNITIES

We recognise the important roles that retail facilities play in the shaping and empowerment of communities. The public use these centres to gather, socialise, shop, bank, collect social grants and generate local economic activity. In this regard we present the case study of Moratiwa Crossing.

BUILDING SUSTAINABLE COMMUNITIES (continued)


• It was imperative that we enlisted the support of the

taxi associations as they would provide transport to

the majority of customers to the centre. We also

developed a formal taxi rank with ablution facilities,

roof covers and waiting areas. This enabled us to

provide a much lower parking ratio – normal retail

centres require six parking bays per 100m² of GLA,

but since a taxi delivers on average 14 customers per

vehicle, we were able to develop the centre with three

bays per 100m².

We have noticed that many of the pensioners and mothers

who travel to the centre to receive their pensions and

social grants, stand in long queues for their payments. In

order to protect them from the heat of the sun and the rain,

we are planning to build covered waiting areas. These

visitors to the centre will be more likely to conduct their

purchases at the centre once their payments are received,

thereby showing the benefi ts to the tenants of our efforts

to accommodate the community’s needs.

Moratiwa Crossing was opened in November 2007 and

the success of the centre is evident. Based on this

positive result, we are currently investigating similar types

of centres for lower income areas and are confi dent that

the lessons learnt from Moratiwa will ensure the ongoing

success of this component of our portfolio.

Report to the community (continued)

GO

VE

RN

AN

CE

AN

D R

EM

UN

ER

ATION

RE

PO

RT

Governance and remuneration report

The group’s corporate governance systems and practices are the platform from which sustainable value is created.



King III governance element

Ethical leadership and corporate citizenship.

Boards and directors: composition of the board and performance assessment.

Boards and directors: director development.

Audit committees: responsibilities of the audit committee.

Dispute resolution.

Integrated reporting and disclosure.

Vukile Property Fund Limited subscribes to impeccable ethical standards and the principles of corporate governance. The group’s corporate governance systems and practices are the platform from which sustainable value is created by meeting our objective to invest in properties with strong contractual cash fl ows for long-term sustainability, capital appreciation and growing income distributions for linked unitholders.

REGULATORY COMPLIANCE ENVIRONMENTVukile Property Fund Limited (“Vukile”) is a group incorporated in South Africa under the provisions of the Companies Act. The group operates in South Africa and Namibia and is listed on both the JSE Limited (“JSE”) and Namibian Stock Exchange (“NSX”).

APPLICATION OF KING IIIThe board of Vukile has considered the principles as contained within King III and strives to apply the principles in a manner that refl ects our stature, market position and size. In line with the aforementioned, management, assisted by KPMG Advisory Services, is currently fi nalising a review of the board charter and the terms of reference of each board committee in line with King III. Adoption of the revised charter and terms of reference is expected to take place in August 2011.

Although many of the principles contained in King III were applied during the year ending 31 March 2011, the board has identifi ed the following focus areas for the year ending 31 March 2012:

Corporate governance report

Principles not fully applied/Focus areas 2012

• A newly drafted terms of reference for the Social and Ethics Committee (“SEC”) is currently under review.

• The SEC will ensure that social, ethical, and corporate citizenship matters are formally embedded in the group’s operations and decision making.

• The majority of non-executive directors are currently not considered to be independent.

• A formal board evaluation, in respect of composition, skills and performance is planned for 2012.

• A formal training and development plan for directors will be implemented during 2012.

• A combined assurance model to ensure a co-ordinated approach to all assurance activities will be developed during 2012.

• A formal dispute resolution process for adoption by the board will be developed during 2012.

• The appropriateness of independent assurance on sustainability reporting and disclosure will be considered during 2012.

GO

VE

RN

AN

CE

AN

D R

EM

UN

ER

ATION

RE

PO

RT


THE BOARD The board is collectively responsible to the group’s stakeholders for the long-term success of the group and for the overall strategic direction and control of the group. This responsibility is explicitly assigned to the board in its charter and, to some extent, in the company’s memorandum of incorporation (“MOI”).

The board exercises this control through the governance framework of the group which includes detailed reporting to the board and its committees, a system of internal controls and has approved a delegation of authority through an approval framework. The board discharges its responsibilities as contained within its charter.

SUMMARY OF BOARD CHARTER The main functions of the board covered by the charter are:• Determining the overall objectives of the group,

developing the strategies to meet those objectives and monitoring performance.

• Balancing the interests of all stakeholders of the company.

• Determining and reviewing mandates and terms of reference of board committees.

• Appointing the CEO and delegating authority.• Monitoring performance of the CEO and directors.• Approving and reviewing company policies.• Approving other major group activities, including

staffi ng and remuneration policies, capital funding, the fi nancial statements, acquisitions, sales and capital expenditure in terms of an approval framework approved by the board.

• Ensuring that a budgeting process exists and measuring actual performance against budgets.

• Taking ultimate responsibility for the adequacy of operational and fi nancial systems as well as regulatory compliance.

• Any other non-fi nancial issues that have not specifi cally been mandated to any sub-committee.

COMPOSITION AND APPOINTMENT OF DIRECTORSThe details of the directors appear on pages 12 to 13 of the integrated report.

DirectorsAt the date of this report, the board consists of 10 directors:ChairmanAD (Anton) Botha

Executive directorsG (Gerhard) van Zyl (Chief executive offi cer)MJ (Michael) Potts (Financial director)HC (Ina) Lopion (Executive director: asset management)

Non-executive directorsHSC (Hendrik) BesterPJ (Peter) CookJM (Mlungisi) Hlongwane

PS (Peter) MoyangaMH (Mervyn) SerebroUJ (Banus) van der Walt

Three of the seven non-executive directors have been determined by the board to be independent in accordance with the criteria of the JSE and King III. Messrs Botha, Cook, van der Walt and Hlongwane are not considered independent in accordance with the defi nitions contained in King III.

Messrs Botha, Cook and van der Walt hold various directorships within the Sanlam Group, currently the largest linked unitholder in Vukile. Mr Hlongwane holds an indirect interest of 14.6% in Lazarus Capital (Pty) Ltd (“Lazarus Capital”), Vukile’s BEE equity partner and currently the second largest linked unitholder in the group.

The board currently comprises 20% historically disadvantaged South Africans. In terms of the MOI, one-third of directors must retire at every annual general meeting and are eligible for re-election.

Chairman and lead independent directorThe roles of the chairman and chief executive offi cer are separate and the offi ce of the chairman is occupied by a non-executive director. Since Mr Botha is deemed not independent, due to his directorships held within the Sanlam Group, the board has appointed Mr Bester as lead independent director, in line with the recommendations of King III.

Chief executiveThe board appoints the chief executive offi cer (“CEO”). The appointment is made on the recommendation of the human resources and nomination committee.

During the year under review the current CEO, Mr van Zyl, indicated his intention to resign from this position by the earlier of 30 September 2011 or upon the appointment of a new CEO. On receipt of his resignation, the board initiated a process to fi nd a successor for Mr van Zyl and, following the successful conclusion of this process, Laurence Rapp has been appointed as the new CEO effective from 1 August 2011.

Compulsory retirement age During the year under review, the board extended the compulsory retirement age of non-executive directors from 65 to 70 in line with market practice.

INFORMATION AND PROFESSIONAL ADVICEThe directors are entitled to seek independent professional advice at the group’s expense concerning group affairs and have access to any information they may require in discharging their duties as directors. They also have unrestricted access to the services of the company secretary.


Corporate governance report (continued)

BOARD EVALUATIONAn independent review of the composition, skills and performance of the board will be conducted during the year ending 31 March 2012.

DEALING IN GROUP SECURITIESDirectors, executives and senior employees are prohibited from dealing in Vukile’s securities during certain prescribed restricted periods. A formal securities dealings policy has been developed to ensure directors’ and employees’ compliance with the JSE Listing Requirements and the insider trading legislation in terms of the Securities Services Act.

DIRECTORS’ DECLARATIONS AND CONFLICT OF INTERESTSDirectors’ declarations of interests are tabled and circulated at every board meeting. All directors are encouraged to assess any potential confl ict of interest and to bring such circumstances to the attention of the chairman.

COMPANY SECRETARYMr Johann Neethling is the company secretary and took offi ce on 27 July 2010, after the resignation of the previous company secretary.

Director induction and training are part of the company secretary’s responsibilities. He is responsible to the board for ensuring the proper administration of board proceedings, including the preparation and circulation of board papers, drafting annual work plans, ensuring that feedback is provided to the board and board committees and preparing and circulating minutes of board and board committee meetings.

He provides practical support and guidance to the board and directors on their responsibilities within the prevailing regulatory and statutory environment.

BOARD MEETING ATTENDANCEThe board met seven times during the fi nancial year. Four of these meetings were scheduled in advance and three were to deal with specifi c business. The attendance for each director appears at the bottom of the page.

KEY ACTIVITIES OF BOARD IN 2011During the year, the board performed the following key activities, including the consideration and approval of:• The annual fi nancial statements, annual report, group

property valuations and fi nal distribution for the year ended 31 March 2010.

• The condensed fi nancial statements, interim results, group property valuations and interim distribution for the six months ended 30 September 2010.

• The property valuation policy and methodology of group.• The acquisition of the R541 million property portfolio.• The new long term and short term incentive schemes,

annual bonuses and salary increases for employees.• The critical performance areas (“CPA”) of the

Exco members.• The information technology governance charter.• The Competition Act policy.• The re-fi nancing of R462 million securitisation debt.• The appointment of a new company secretary.• The specifi c course of action in relation to a potential

corporate action.• Property sales in excess of R10 million.• Leases with a value in excess of R15 million.

The board further initiated the following processes:• A review of the board charter and various board

committee terms of references.• A review of the group’s risk management, compliance

policy and dealing in company securities policies.• The recruitment of a new CEO.

BOARD COMMITTEES AUDIT AND RISK COMMITTEEThe report by the audit and risk committee (“AR committee”) is set out on pages 58 to 59 of the integrated report.

BOARD MEETING ATTENDANCE

(Special) (Special) (Special) 19 May 27 Jul 31 Aug 20 Oct 18 Nov 24 Feb 17 Mar 2010 2010 2010 2010 2010 2011 2011

• AD Botha • • • • • • •• HSC Bester • • • • • • •• PJ Cook • – • • • • •• JM Hlongwane • • • • • • •• HC Lopion • • • ^ • • •• PS Moyanga • • • • • • •• MJ Potts • • • ^ • • •• MH Serebro • • • • • • •• UJ van der Walt • • – • • • •• G van Zyl • • • • • • •

• Indicates attendance.– Indicates absence with apology.^ Certain executive directors recused themselves at request of the chairman.

GO

VE

RN

AN

CE

AN

D R

EM

UN

ER

ATION

RE

PO

RT


INVESTMENT COMMITTEECurrent members• Mervyn Serebro (Chairman)• Hendrik Bester• Mlungisi Hlongwane• Gerhard van Zyl• Michael Potts

The investment committee is an important element of the board’s system to implement its winnowing strategy through acquisitions, disposals and redevelopment and refurbishments. The committee comprises two executive directors and three non-executive directors, of which two are independent.

Summary of terms of referenceThe investment committee’s purpose and function is:• To consider recommendations from management for

acquisitions, capital expenditure or disposals.• To authorise and approve such transactions

and capital expenditure as fall within its approval mandate.

• To make recommendations to the board regarding transactions and capital expenditure that fall outside its approval mandate.

Investment committee attendanceThe committee conducted all of its business on a round-robin basis during the fi nancial year.

Key activities of the investment committee in 2011During the year the investment committee performed the following key activities:• Review and recommendation to the board of the

R541 million portfolio acquisition.• Approval of the extensions to the Mala Plaza

Shopping Centre in Malamulele.• Approval of the new Cashbuild outlet and the

contribution to the tenant installation cost for Fruit and Veg City at Hillfox Power Centre in Roodepoort.

• Approval of the purchase of the Giyani Plaza Retail Centre in Giyani.

INTERNAL CONTROL It is the board’s responsibility to oversee the group’s system of internal control and to keep its effectiveness under review. The system is designed to provide reasonable assurance against material misstatement and loss. The system of internal fi nancial control is designed to provide assurances on the maintenance of proper accounting records and the reliability of fi nancial information used within the business and for publication. The internal control system includes a reasonable division of responsibility and the implementation of policies and

procedures which are communicated throughout the group.

INTERNAL AUDITThe group has outsourced its internal audit function to KPMG. Internal audit is responsible for assisting the board and management in maintaining an effective internal control environment by evaluating those controls continuously to determine whether they are adequately designed, operating effi ciently and effectively and to recommend improvements.

EXTERNAL AUDITGrant Thornton is the external auditor of Vukile and its subsidiaries, including the Namibian subsidiaries. The independence of the external auditor is recognised, and annually reviewed, by the AR committee with the auditors. The external auditors attend all AR committee meetings and have unrestricted access to the chairman of the AR committee.

RISK MANAGEMENT REVIEWOUR APPROACHThe group has formalised its approach to risk management in a formal policy. The strategic intent of our risk management policy is to create an environment in which risk management is applied at a consistent high level across the group, enabling management to take informed decisions, to achieve business objectives and maximise returns for linked unitholders.

Our risk management principles are based on the principles of King III and the Committee of Sponsoring Organisations of the Treadway Commission (“COSO”) Enterprise Risk Management Framework.

Our risk management process covers the following components: • Business context: considering the internal and

external factors driving our business.• Internal environment: considering our relevant risk

tolerances and appetite for risk.• Objective setting: the group’s specifi c business

objectives.• Risk identifi cation: the formal process to identify

risks that may impact the objectives.• Risk analysis: analysing the key risks in terms of

impact and likelihood.• Risk treatment: determining whether to treat,

terminate, transfer or tolerate risks.• Communication of information about key risks,

signifi cant risk incidents and emerging risks to the relevant forums.

• Monitoring: continuously monitoring risks and treatment actions.


Corporate governance report (continued)

Key risk identifi ed

Outsourced property management service delivery failures or below standard performance.

Energy and infrastructure-related services interruption and cost impact thereof.

Inability to obtain, retain and develop a balanced quality management team.

Loss of Sanlam asset management contract and right of fi rst refusal due to poor performance.

Increasing compliance requirements and cost impact thereof.

Refi nancing of maturing debt facilities.

Inadequate Black Economic Empowerment (BEE) rating.

Potential impact

• Operational losses/process failures.

• Poor tenant service levels.• Damaged reputation with tenants

and service providers.

• Power interruption leading to tenant losses.

• Pressure on capital expenditure due to alternative power supply requirements.

• Health and safety risks in respect of water supply.

• Pressure on cost structure due to rising energy cost and rates and taxes.

• Loss of competitive edge.• Operational losses/system

failures.• Damaged reputation with

investment community and potential workforce.

• Loss of revenue.• Loss of deal pipeline.• Damaged reputation with

investment community.

• Possible non-compliance with a myriad of legislation and regulations.

• Pressure on operational cost structure to ensure compliance.

• Inability to secure adequate facilities timeously.

• Increased margins and refi nancing costs.

• Increased cost of capital exceeding acquisition yields.

• Non-compliance with legislation and industry charter.

• Inability to secure long-term leases with government.

Mitigation strategy

Treat (control) • Strict implementation of

performance clauses in management agreements.

• Continuous close monitoring.

Treat (control)• Supporting SAPOA in liaising

with government on these matters.

• Installation of generators based on tenant demand and profi le.

• Energy-effi ciency programmes.

Treat (control)• Implementation of attractive

remuneration structure.• Creation of a balanced and

enjoyable workplace.• Launching of the Black

Professional Development Programme.

• Appointment of a new CEO.

Treat (control)• Strong operational focus.• Clear communication with

Sanlam.• Focused incentives for staff.

Treat (control)• Interaction with SAPOA on

various legal matters.• Internal compliance functions and practices.

Treat (control)• Strong relationships with a

diverse range of fi nanciers.• Access to both conventional and

capital market funding.• Timeous refi nancing discussions.

Treat (control)• Launch of the Black Professional

Development Programme.• Implementation of projects in line

with charters and codes.

OUR KEY RISKSThis section identifi es the key risks that may affect the group’s fi nances and operations:

GO

VE

RN

AN

CE

AN

D R

EM

UN

ER

ATION

RE

PO

RT


Dear linked unitholder

I am pleased to introduce Vukile’s remuneration report for the year ended 31 March 2011.

Executive remuneration has become one of most debated topics in business today with shareholders, politicians and the public at large providing their opinions on this matter. Over the course of the year, with the launch of King III, there have been further signifi cant changes to corporate governance requirements in respect of remuneration practices, which the human resources and nominations committee (“HRN committee”) will continue to incorporate in its policy making.

The HRN committee believes that remuneration is a key instrument to attract and retain competent and skilful individuals in order to become more competitive and effi cient than our competitors. It is also a tool that will enable us to add more value through people and become an employer of choice.

Attracting and retaining employees has become more signifi cant to Vukile with the internalisation of the asset management operations late in 2009 and the acquisition of the asset management business relating to Sanlam’s commercial property portfolio early in 2010. As a result, the Vukile workforce has more than quadrupled over the past 18 months.

In the past year, Vukile has seen the resignation of its CEO, Gerhard van Zyl. Gerhard will leave offi ce at the end of July 2011 and will be replaced by Laurence Rapp as new CEO on 1 August 2011.

The HRN committee would like to extend its appreciation to Gerhard van Zyl for his leadership, vision and commitment as CEO since the listing of Vukile in 2004 as refl ected in the group’s outstanding performance since then. We would also like to thank him for delaying the effective date of his resignation to afford us time to recruit a suitable replacement. We wish him well in his future endeavours.

Peter CookChairman, human resources and nominations committee

Roodepoort23 May 2011

Remuneration reportIntroduction from the chairman of the human resources and nominations committee


HUMAN RESOURCES AND NOMINATIONS COMMITTEECURRENT MEMBERS• Peter Cook (Chairman)• Anton Botha• Mlungisi Hlongwane• Banus van der Walt

All the members of the committee are non-executive directors. In line with the recommendations of King III, the chief executive offi cer and executives responsible for remuneration matters attend the meetings of the committee on invitation, but may not vote and are requested to leave the meeting before any decisions relating to them are made.

SUMMARY OF TERMS OF REFERENCEThe terms of reference of the human resources and nominations committee (“HRN committee”) include, inter alia, the following:• The determination and review of the group’s human

resource philosophy and principles.• The group’s remuneration policy.• Performance measurement policy.• The recommendation to the board of discretionary

bonuses and the annual percentage salary increase of staff and executives.

• The recommendation to the board on the remuneration of non-executive directors.

• Recommendations to the board on the appointment of new executive as well as non-executive directors.

• Succession planning for the chairman and chief executive positions.

HRN COMMITTEE ATTENDANCEThe committee met four times during the fi nancial year. Three of these meetings were scheduled in advance and one was to deal with specifi c business. The attendance for each director appears at the bottom of the page.

KEY ACTIVITIES OF HRN COMMITTEE IN 2011During the year, the HRN committee performed the following key activities:• Reviewing and recommending for approval to the board

the new long-term and short-term incentive schemes, annual bonuses and salary increases, and annual directors fees.

• Assisted the board in the recruitment of a new CEO.

REMUNERATION POLICYOur approach to remunerationVukile is dependent on its people. Future success and achievements will be inextricably linked to the development

and retention of appropriately skilled employees. Success in this area will determine whether Vukile will be recognised as an employer of choice. This recognition will depend on creating a culture and working environment that will provide challenging opportunities for all employees. This clearly also requires compensation commensurate with performance and an alignment of employees’ objectives with those of the group.

To meet these challenges, it will be necessary to continuously update and align our remuneration policies and practices due to demands and trends from an ever more challenging and continuously changing business environment. This will require remuneration market benchmarking through reputable human resources consultancies and more emphasis on performance based or linked variable remuneration components and incentives, including short-term and long-term incentive schemes.

OUR CORE REMUNERATION PRINCIPLESVukile remunerates its people based on the following core principles:• Attraction and retention Remuneration is a key instrument to attract and retain

talent and to leverage and align such talent with the strategic goals of the group. A core aim is to maximise the impact on employee motivation and to infl uence behaviour in desired directions.

• Pay for performance Performance forms the cornerstone of the remuneration

philosophy. All remuneration practices must be structured in such a way that they provide for clear differentiation between individuals with regards to performance.

It is expected from management to make a clear and meaningful distinction between high performers, average performers and under performers and to distribute remuneration and incentives accordingly. An aggressive approach to differentiate between the different levels of performance, in order to drive a high performance culture consistently, must be followed.

Strong incentives must be created for superior performance. This means that top performers must be awarded higher incentives than other employees.

Under performers must not be rewarded and active steps must be taken to either encourage such individuals to improve performance and conform to agreed performance standards or to leave the group, in line with accepted practices.

(Special) 19 May 18 Nov 10 Mar 17 Mar HRN committee 2010 2010 2011 2011

• PJ Cook • • • •• AD Botha • • • •• JM Hlongwane • • • •• UJ van der Walt • • • •

• Indicates attendance.

Remuneration report (continued)

GO

VE

RN

AN

CE

AN

D R

EM

UN

ER

ATION

RE

PO

RT


• Leverage and alignment Reward consequences for individual employees

must as far as possible be aligned with, linked to and infl uenced by the group or business strategy; the performance of the group as a whole; employee contribution; and key business results. They may also be modifi ed by performance against group values.

• Best practice Reward packaging and practices must refl ect

best practice but with proper recognition of the peculiarities of the economic and social conditions of the principal market(s) in which the group does business.

• Consistency Individual pay rates relative to others in the group

should be fair, consistent and explainable. No unfair discrimination will be allowed and equal opportunities in respect of service practices and benefi ts will be guaranteed. Differentiation between employees on the grounds of performance is, however, imperative.

• Competitiveness Remuneration packages must enable the group

to attract and retain employees with appropriate relevant specialised skills of the highest quality.

Rates of pay must be fair relative to what can be earned in similar organisations (similar size, type and standing) competing in the same market(s). Where possible, the focus will be on the market-relatedness per job or job family.

• Communication The remuneration philosophy and practices, as well

as the process to determine individual pay levels, must be transparent and be communicated to all employees.

Remuneration policy and its application must be kept as simple as possible, be readily available, understandable and the relevant components communicated to all that they apply to.

The privacy of individuals will, however be respected.

• Quantum and structure of pay elements The quantum of the different components of the

overall remuneration package must be determined as follows:

• The guaranteed component is based on market benchmarks together with performance, competence and potential.

• The short-term variable component of remuneration is based exclusively on individual critical performance areas (“CPAs”) and annual performance.

• The long-term variable component is based on performance, potential, and the individual’s overall value to the business.

A clear distinction is made between short and long-term incentive instruments and they are kept separate.

OUR REMUNERATION COMPONENTS • Salary Salary represents the fi xed or guaranteed

remuneration component, inclusive of relevant allowances, and contributions to retirement funds. Fixed remuneration is aimed at approximately the market midpoint (the 50th percentile) on average, and a lead-lag strategy relative to the market is followed. Deviations from this principle will be considered and approved by the HRN committee or the chief executive offi cer, as appropriate, to support sound business decisions or specifi c needs, strategies or requirements. Fixed remuneration does take into account the supply and demand of certain skills or candidates for specifi c job categories which may necessitate and dictate the number or extent of the deviations from the market midpoints.

• Short-term incentive bonus scheme The principles of the short-term bonus scheme

(“bonus scheme”) are as follows: • Board discretion The board has absolute discretion with regards

to the rules of the bonus scheme, the amounts earned, and the participants in the bonus scheme and annual amounts to be awarded. In addition, no bonuses will be paid unless the group has achieved at least its budgeted distribution.

• Participants in the scheme Senior staff members earning in excess of

R400 000 per annum participate in the bonus scheme. Staff members earning less than R400 000 per annum are paid an annual bonus equal to 15% of their annual cost to group packages, subject to the group achieving its budgeted distribution for the year and subject to the achievement of the staff members of their individual CPA targets.

• Principle of determination of bonus pool The bonus pool is determined based on growth

in relative and actual distributions to linked unitholders.

• Bonus amount actually paid out The payment of the net bonus amounts as

calculated is spread over a two year period with 50% of the calculated bonus paid out in May following the fi nancial year end, and 50% paid out in March of the following year.

• Long-term retention and incentive scheme The long-term retention and incentive scheme

(“LTRI”) was submitted and approved by linked unitholders on 31 August 2010. The purpose of the LTRI is to attract, retain, motivate and reward eligible employees who are able to infl uence the performance of the group on a basis that will align their interests with those of the group’s linked unitholders.

The principles of the LTRI are as follows: • The maximum annual amount to be paid by

the group in order to implement the scheme will not exceed 0.25% of the average market capitalisation of the group in the year in which the payment is made.


Remuneration report (continued)

• The total exposure of any individual in the scheme will not exceed fi ve times his/her annual cost of group package. This maximum exposure will include participation in circumstances where, in the event that the HRN committee is of the opinion that a larger short-term bonus than is allowed in terms of the rules of the bonus scheme is appropriate (only applicable to executive directors and only in exceptional circumstances), the excess portion be “incorporated” in the scheme as is currently proposed with similar vesting periods, but that only 50% of such excess portion be subject to the achievement of performance goals and CPA targets, as applicable. The maximum exposure that any individual can have in terms of this mechanism will not exceed two times his/her annual cost to group package.

• The maximum number of linked units that any individual can obtain in terms of the scheme will be 800 000.

• If any participant resigns from Vukile prior to the expiry of four years or if the participant’s employment is terminated for cause, the participant’s proportionate share of the linked units at the time of termination will be sold and the proceeds paid to Vukile.

• In other circumstances of cessation of employment (disability, ill health, redundancy, retirement or analogous reasons for departure of a “good leaver” nature) of an employee prior to expiry of the four year period, a proportionate share of the linked units will be released, subject to the pro rata actual achievement of performance goals and/or CPA targets and pro rata to the period to date.

• Eligible employees whose normal retirement falls within the required vesting period of four years will participate in the scheme, but will, on retirement, be treated as indicated above, i.e. a proportionate share of the linked units will be released, subject to the pro rata actual achievement of performance goals and/or CPA targets and pro rata to the period to date.

• If, in the opinion of the HRN committee, early vesting is appropriate or necessary (possibly in the event of death or occasions such as takeover of the group or sale or transfer of the business where awards are not being rolled over into equivalent awards in the successor entity or new employer), awards will vest taking into account the pro rata actual achievement of performance goals and/or CPA targets and pro rata to the period to date.

• There will be no retesting of performance conditions. • The scheme will have a “life” of seven years (three

year period for awards and four years for vesting). • All participants will have an exposure to the scheme

equivalent to a multiple of one times annual cost to group package that is subject to the achievement of CPA targets (to be defi ned and agreed with the individual participants) as well as, in the case of senior employees and executive directors only, an exposure to the scheme equivalent to a multiple not exceeding two times annual cost to group package that is subject to the achievement of pre-determined group performance measures.

The salient features of the scheme are as follows: • The HRN committee will, on an annual basis,

recommend to the board of directors for fi nal approval the specifi c employees and the magnitude of their participation in the scheme, i.e. the multiple of annual cost to group package per individual.

• The principle of the scheme is that an amount equivalent to the specifi c multiple of total annual cost to company salary package per participating employee is paid to a service provider who will utilise the amount to acquire Vukile linked units in the market. All distributions paid by the group during the four year period must be utilised by the service provider to purchase additional Vukile linked units in the market.

• At the expiry of four years after the initial payment has been made to the service provider, the number of linked units acquired by the service provider, after providing for PAYE, are awarded to the participants who are still employees of the group as follows:

- The individual’s performance relative to his/her CPA targets is measured and the appropriate numbers of linked units, based on a sliding scale, are released after making provision for PAYE tax. The sliding scale is based on the individual’s performance relative to his/her CPA targets over the four year period. The sliding scale is structured such that if the individual’s relative performance is below 75%, none of the CPA related linked units are released to the participant. If the individual’s relative performance is equal to 90%, 70% of the CPA related linked units are awarded to the participant. If the individual’s relative performance is 100% or better, 100% of the CPA related linked units are released to the participants. Any linked units not awarded to the participants will be sold and the proceeds paid to the group.

- If an individual has also been awarded group performance related linked units, the group’s performance relative to pre-determined targets is measured and the appropriate number of linked units, based on a sliding scale, are released after making provision for PAYE tax. The sliding scale is based on the group’s performance relative to the PLS sector over the four year period. The relative performance is determined as the increase in distribution of the group, weighted 70%, relative to the increase in distribution of the PLS sector, and the increase in linked unit price of the group, weighted 30%, relative to the increase in the PLS sector index over the four year period. The sliding scale is structured such that if the group’s weighted relative performance is below 100%, none of the group performance measure related linked units are released to the participants. If the group’s weighted relative performance is equal to 100%, only 25% of the group performance measure related linked units are awarded to the participants. If the group’s weighted relative performance is 110% or better, 100% of the group performance measure related linked units are released to the participants. Any linked units not awarded to the participants will be sold and the proceeds paid to the group.

AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS

Annual fi nancial statements

It is extremely gratifying to report that, despite tough trading conditions, the review period has, once again, been a very good one for the company.



The company secretary hereby certifi es, in accordance with the Companies Act of South Africa, that all returns and notices required have been fi led with the Registrar of Companies and that all such returns are true and correct.

Johann NeethlingCompany secretary


Declaration by the company secretary

The annual fi nancial statements set out on pages 54 to 107 of this integrated report are the responsibility of the directors. The directors are responsible for selecting and adopting sound accounting practices, for maintaining an adequate and effective system of accounting records, for the safeguarding of assets, and for developing and maintaining a system of internal controls that, amongst other things, will ensure the preparation of fi nancial statements that achieve fair presentation. After conducting appropriate procedures, the directors are satisfi ed that the group will be a going concern for the foreseeable future and have continued to adopt the going concern basis in preparing the fi nancial statements. The annual fi nancial statements were approved by the directors and are signed on their behalf by:

Anton Botha Gerhard van ZylChairman Chief executive


Directors’ responsibility statement

AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS


Grant ThorntonChartered Accountants (SA)Registered Auditors

per V R de VilliersChartered Accountant (SA)Registered Auditor

23 May 2011

Grant Thornton Offi ce Park137 Daisy StreetSandown2196

Report of the independent auditorsTo the members of Vukile Property Fund Limited

We have audited the group annual fi nancial statements and annual fi nancial statements of Vukile Property Fund Limited, which comprise the consolidated and separate statements of fi nancial position as at 31 March 2011, and the consolidated and separate statements of comprehensive income, changes in equity and cash fl ows for the year then ended, and a summary of signifi cant accounting policies and other explanatory notes, and the directors’ report, as set out on pages 54 to 107.

DIRECTORS’ RESPONSIBILITY FOR THE FINANCIAL STATEMENTSThe company’s directors are responsible for the preparation and fair presentation of these fi nancial statements in accordance with International Financial Reporting Standards and in the manner required by the Companies Act of South Africa. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of fi nancial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

AUDITORS’ RESPONSIBILITYOur responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the fi nancial statements 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 entity’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 fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

OPINIONIn our opinion, the fi nancial statements present fairly, in all material respects, the consolidated and separate fi nancial position of Vukile Property Fund Limited as at 31 March 2011, and its consolidated and separate fi nancial performance and consolidated and separate cash fl ows for the year then ended in accordance with International Financial Reporting Standards and in the manner required by the Companies Act of South Africa.


OVERVIEWYour directors have pleasure in submitting their seventh directors’ report, which forms part of the audited annual fi nancial statements of the group and company for the year ended 31 March 2011.

Vukile was listed on 24 June 2004 with a market capitalisation of approximately R1.3 billion. The company’s primary objective was, and still is, to acquire properties with strong contractual cash fl ows in order to achieve meaningful capital appreciation, long-term sustainability and growth in income distributions to its linked unitholders. The company’s market capitalisation has increased substantially to R4.99 billion as at 31 March 2011 (R3.97 billion: 2010), representing an annualised increase of 27% per annum from the date of listing.

It is pleasing to announce that the group has performed well over the review period and that profi t available for distribution has increased by 26.2% from R323.3 million to R408.1 million for the period ended 31 March 2011.

SUMMARY OF FINANCIAL PERFORMANCE AND DISTRIBUTIONSThe information presented for the 12 months ended 31 March 2011 has been prepared in accordance with International Financial Reporting Standards (“IFRS”) and the group’s accounting policies. The presentation of the results also complies with the relevant sections of the South African Companies Act, 1973, as amended and the JSE Listing Requirements. The annual fi nancial statements have been audited by Grant Thornton.

The board has approved a fi nal distribution of 67.12 cents per linked unit for the six months ended 31 March 2011, which brings the total distribution for the year ended 31 March 2011 to 117.65 cents per linked unit compared to the distribution of 107.90 cents per linked unit in 2010, an increase of 9.0% for the year and an increase of 10.2% over the comparable six month period.

NATURE OF BUSINESSVukile is a property holding and investment company through the direct and indirect ownership of immovable property. Vukile also provides asset management services in respect of the Sanlam Group’s long-term commercial investment property portfolio. The company is listed on the JSE Limited and the NSX in Namibia under the Real Estate sector.

CAPITAL STRUCTUREThe linked unit structure comprises ordinary shares indivisibly linked to debentures on a one to one basis. Collectively, the linked shares and debentures comprise the linked units which are traded together as indivisible units.

The authorised capital comprises 800 000 000 ordinary shares with a par value of one cent each. Each linked unit comprises one share of one cent (and a share premium of nine cents) linked to one debenture of 490 cents. Interest payable on one debenture is 499 times greater than the dividend payable per share.

18 994 341 new linked units were issued on 3 September 2010 to partly fund the R541 million property portfolio acquisition.

There were 351 015 218 linked units in issue at 31 March 2011.

MANAGEMENT AND ADMINISTRATIONThe management of Vukile is responsible for the property asset management functions of the group.

Vukile has contracted the following property managers to undertake the day to day management of the group’s property portfolio:• Gensec Property Services Limited trading as JHI.• Kuper Legh Property Management (Pty) Ltd.• Hermans and Roman Property Solutions (Pty) Ltd.• Old Mutual Investment Group Property Investments (Pty) Ltd.

Directors’ report

AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS


SPECIAL RESOLUTIONSNo special resolutions were passed during the period under review.

SUBSIDIARIESDetails of the company’s subsidiaries are set out in note 7 to the annual fi nancial statements included in this integrated report. Net profi t after taxation of subsidiaries included in the group is as follows:

R000 2011 2010

• MICC Property Income Fund Limited 64 582 77 778• Vukile Investment

Properties Securitisation(Pty) Ltd (“VIPS”) 94 143

DIRECTORSDetails of the directors, providing their full names, ages, qualifi cations and a brief curriculum vitae, are set out on pages 12 to 13 of this integrated report.

In terms of the articles of association of the company, one third of non-executive directors have to retire annually by rotation. Non-executive directors are obliged to retire at the annual general meeting following their 70th birthday. Any new directors that have been appointed during a year, also have to retire at the next annual general meeting. All retiring directors will subsequently be eligible for re-election.

The composition of the board of directors and its sub-committees is detailed in the table below.

There have been no changes to directors’ interests between the end of the fi nancial year and 23 May 2011.

Mr Jonathan Mlungisi Hlongwane has an effective holding of 1.55% in Vukile through his 50% holding in the Isolenu Group Holdings, which holds 100% interests in Propinvest 10 and Panavest, which hold 31.7% and 5% interests respectively in Buhlobo Properties. Buhlobo Properties has a 40% interest in Lazarus Capital, which, in turn, holds 21.05% of Vukile’s linked units.

DIRECTORS’ INTEREST IN MATERIAL CONTRACTSThe directors have no interest in material contracts or transactions, other than those directors involved in the

operation of the company as set out in this report. There have been no bankruptcies or voluntary arrangements of the above-named persons. The executive directors of Vukile have not acted as directors with an executive function of any company at the time of or within the 12 months preceding any of the following events taking place: receiverships, compulsory liquidations, creditors’ voluntary liquidations, administrations, company voluntary arrangements or any composition or arrangement with its creditors generally or any class of its creditors. The directors of Vukile have not been the subject of public criticisms by statutory or regulatory authorities (including professional bodies) and have not been disqualifi ed by a court from acting as directors of a company or from acting in the management or conduct of the affairs of any company. There have been no offences involving dishonesty by the directors of Vukile. EXECUTIVE DIRECTORS’ SERVICE CONTRACTSThe executive directors do not have fi xed term contracts with the company. A six months notice period is required by both parties for the termination of services. Details of remuneration and incentive bonuses are set out on the following page.

SECRETARYThe company secretary is Johann Neethling, 1st Floor, Meersig Building, Constantia Boulevard, Constantia Kloof, 1709 (PO Box 5995, Weltevreden Park, 1715).

DISTRIBUTIONSA distribution of 50.525 cents per linked unit was paid on 21 December 2010. The board of directors has declared a fi nal distribution of 67.12 cents per linked unit for the six months ended 31 March 2011, which brings the total distribution for the year to 117.65 cents per linked unit (2010: 107.90 cents), an increase of 9.0% over the previous year.

The last day to trade the linked units cum distribution is Thursday 9 June 2011 and trading commences ex distribution on Friday 10 June 2011. The record date to participate in the distribution is Friday 17 June 2011.

Payment of the distribution will be made to linked unitholders on Monday 20 June 2011. In respect of dematerialised unitholders, the distribution will be transferred to the Central Securities Depositary Participant or Brokers account on Monday 20 June 2011. Certifi cated unitholders’ distributions will be mailed on or about Monday 20 June 2011.

BOARD OF DIRECTORS

Human re- Date Audit sources and of and risk nomination Investment Composition of board appointment committee committee committee

• Non-executive directors • Anton Dirk Botha (Chairman) 17 May 2004 Member • Hendrik Schalk Conradie Bester~* 17 May 2004 Chairman Member • Peter John Cook 17 May 2004 Member Chairman • Peter Sipho Moyanga~ 17 May 2004 Member • Mervyn Hymie Serebro~ 17 May 2004 Member Chairman • Jonathan Mlungisi Hlongwane 29 May 2006 Member Member • Urbanus Johannes van der Walt** 6 Sept 2007 Member

• Executive directors • Gerhard van Zyl (CEO) 24 Apr 2004 Member • Michael John Potts (FD) 17 May 2004 Member • Hermina Christina Lopion 1 Jan 2010

* Appointed as lead independent director on 18 March 2009.** Appointed as member of the human resources and nomination committee on 16 March 2010.~ Independent.


Directors’ report (continued)

DIRECTORS’ REMUNERATION

Total Total Short- remu- remu- Directors’ term neration neration Rand fees Salary bonus 2011 2010

• Non-executive directors • AD Botha 397 620 – – 397 620 314 000 • HSC Bester 343 620 – – 343 620 301 500 • PJ Cook 303 120 – – 303 120 264 000 • PS Moyanga 235 620 – – 235 620 201 500 • MH Serebro 276 120 – – 276 120 239 000 • JM Hlongwane 271 620 – – 271 620 189 000 • UJ van der Walt 231 120 – – 231 120 164 000 2 058 840 – – 2 058 840 1 755 000 • Executive directors • G van Zyl (CEO) 1 705 430 3 500 000 5 205 430 3 733 000 • MJ Potts (FD) 1 197 237 2 328 000 3 525 237 2 764 252 • HC Lopion (Executive director:

asset management) 1 189 807a –° 1 189 807 261 750* 4 092 474 5 828 000 9 920 474 8 514 002 • Other senior executives^

• F Rootman (Asset manager) 908 406 –° 908 406 214 000* • JJ Ferreira (Asset manager) 903 377 –° 903 377 426 754~

• NJ Els (Senior manager: acquisitions and sales) 892 152 –° 892 152 420 000~

3 992 474 – 9 820 474 1 060 754

^ Disclosure in terms of principle 2.26 of King III. * Individual was employed for three months of the fi nancial year.~ Individual was employed for six months of the fi nancial year.° Individuals that joined Vukile, as a result of the asset management internalisation and the acquisition of the Sanlam asset management

business, started participating in the Vukile group’s short-term bonus scheme as from 1 July 2010.a The amount includes company contributions to the MICC pension fund equal to 20% of the pensionable portion of total cost-to-

company.

DIRECTORS’ INTERESTS IN LINKED UNITS

Indirect Direct Indirect non- Linked units benefi cial benefi cial benefi cial Total

• Non-executive directors 190 200 25 000 – 215 200 • HSC Bester – 25 000 – 25 000 • MH Serebro 20 000 – – 20 000 • UJ van der Walt 170 200 – – 170 200 • Executive directors 662 408 452 013 – 1 114 421 • G van Zyl (CEO) 336 282 452 013 – 788 295 • MJ Potts (FD) 317 244 – – 317 244 • HC Lopion 8 882 – – 8 882 852 608 477 013 – 1 329 621

AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS


MOVEMENT OF DIRECTORS’ INTERESTS IN LINKED UNITS

Acquired Disposed of Held at Held at during during the 31 March Linked units 1 April 2010 the period period 2011

• Non-executive directors 219 100 – 3 900 215 200 • HSC Bester 25 000 – – 25 000 • MH Serebro 20 000 – – 20 000 • UJ van der Walt 174 100 – 3 900 170 200• Executive directors 115 101 1 676 855 677 535 1 114 421 • G van Zyl (CEO) 102 600 1 150 800 465 105 788 295 • MJ Potts (FD) 12 500 511 461 206 717 317 244 • HC Lopion 1 14 594 5 713 8 882*Number of linked units 334 201 1 676 855 681 435 1 329 621

* Not on share register as Sanlam Capital Markets (Pty) Ltd (“SCM”) still has to transfer these shares into HC Lopion’s private account.

CONDITIONAL INDIRECT BENEFICIAL DIRECTORS’ INTERESTSIn terms of the company’s long-term share based incentive scheme, linked units in Vukile have been acquired by SCM as outlined below.

The potential, conditional indirect benefi cial interests of Vukile’s executive directors in the abovementioned incentive scheme are summarised as follows:

Vukile units G van Zyl MJ Potts HC Lopion

Summary of units held by SCMBalance at 1 April 2010 1 552 951 690 033 –Acquisition utilising cash paid to SCM 286 154 127 110 91 562(1)

Acquisitions utilising cash from distributions 198 393 88 155 2 100Adjustments (3 557) (1 565) –Units vested (1 150 800) (511 461) – 883 141 392 272 93 662Less: Units forfeited through resignation (as approved by the human resources and nomination committee) to be sold (225 830) – –Balance at 31 March 2011 657 311 392 272 93 662 R000 R000 R000Distributions not yet utilised to acquire additional linked units (cash)(2) 332 198 47

(1) 46 990 units acquired by SCM by virtue of the take-over of the asset management business from Sanlam Properties (Pty) Ltd. Sanlam shares previously held by HC Lopion were sold and the cash proceeds paid to Vukile to settle the acquisition of the abovementioned Vukile units. 44 572 units were acquired by SCM in terms of the fi rst allocation of units to HC Lopion in terms of the new long-term retention and incentive scheme, details of which are set out on pages 49 to 50.

(2) As Vukile has been and still is in a closed period, no linked units in Vukile have been acquired with the available cash.

No changes in directors’ interests have occurred between 31 March 2011 and 23 May 2011.


TERMS OF REFERENCEThe AR committee has adopted formal terms of reference. Management is currently fi nalising a review of the terms of reference to ensure alignment with the principles of King III. COMPOSITIONThe committee consists of four non-executive directors, of which three are independent. At 31 March 2011 the AR committee comprised of the following directors:

Director Period served

• HSC Bester (Chairman) 17 May 2004 - current• PJ Cook 17 May 2004 - current• PS Moyanga 24 May 2007 - current• MH Serebro 17 May 2004 - current

The chief executive offi cer, the fi nance director, senior fi nancial executives of the group and representatives from the external and internal auditors attend the committee meetings by invitation only. The internal and external auditors have unrestricted access to the AR committee.

MEETINGSThe AR committee held three meetings during the period. All these meeting were scheduled in advance. The attendance for each director was as follows:

12 May 10 Nov 10 Mar Director 2010 2010 2011

• HSC Bester (Chairman) • • •• PJ Cook • • •• PS Moyanga • • •• MH Serebro • • •

• Indicates attendance.

Report of the audit and risk committeefor the year ended 31 March 2011

The audit and risk committee (“AR committee”) is a committee of the board of directors which, in addition to having specifi c statutory responsibilities to the shareholders in terms of the Companies Act, assists the board through advising and making submissions on fi nancial reporting, oversight of the risk management process and internal fi nancial controls, external and internal audit functions and statutory and regulatory compliance of the company.

AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS


STATUTORY DUTIESIn the execution of its statutory duties during the past fi nancial year, the AR committee:• Nominated for appointment as auditor, Grant Thornton

who, in our opinion, is independent of the company.• Determined the fees to be paid to Grant Thornton as

disclosed in note 26.• Determined Grant Thornton’s terms of engagement.• Developed and implemented a policy setting out the

categories of non-audit services that the external auditors may and may not provide, split between permitted, permissible and prohibited services.

• Pre-approved all non-audit service contracts with Grant Thornton.

• Received no complaints relating to the accounting practices and internal audit of the company, the content or auditing of its fi nancial statements, the internal fi nancial controls of the company, and any other related matters.

• Made submissions to the board on matters concerning the company’s accounting policies, fi nancial control, records and reporting.

• Recommended for approval the annual fi nancial statements, integrated annual report, group property valuations and fi nal distribution for the year ended 31 March 2010.

• Recommended for approval the fi nancial statements, interim results, group property valuations and interim distribution for the six months ended 30 September 2010.

DELEGATED DUTIESIn addition to its statutory duties, the AR committee also performed the following duties:• Overseeing the risk management and internal audit

functions.• Reviewed and approved the key risks facing the group.• Assisted the board in its review of the group’s risk

management and compliance polices.• Reviewed the expertise and experience of the fi nancial

director.

REGULATORY COMPLIANCEThe AR committee has complied with all applicable legal

and regulatory responsibilities.

EXTERNAL AUDITBased on processes followed and assurances received, nothing has come to our attention with regards to the external auditor’s independence. Details of the external auditor’s fees are set out in note 26. Based on our satisfaction with the results of the activities outlined above, we have recommended to the board that Grant Thornton should be reappointed for the fi nancial year ending 31 March 2012.

FINANCE FUNCTIONWe believe that Mr Michael John Potts, the group fi nancial director, possesses the appropriate expertise and experience to meet his responsibilities in that position as required by the JSE Limited. We are satisfi ed with the:• expertise and adequacy of resources within the fi nance

function, and the• experience of the senior fi nancial management staff. In making these assessments, we have obtained feedback from both external and internal audit. Based on the processes and assurances obtained, we believe that the accounting practices are effective. INTEGRATED REPORTBased on processes and assurances obtained, we have recommended the integrated report to the board for approval.

On behalf of the audit committee

Hendrik Schalk Conradie BesterChairman of the audit and risk committee



Statements of fi nancial positionat 31 March 2011

2011 2010

Group Company Group Company Note R000 R000 R000 R000

ASSETSNon-current assets 5 487 419 4 628 861 5 272 170 4 470 765Investment properties 4 984 840 3 757 675 4 725 437 3 562 304• Investment properties 3 5 083 993 3 837 470 4 811 152 3 628 108• Straight-line rental income adjustment 4 (99 153) (79 795) (85 715) (65 804)Other non-current assets 502 579 871 186 546 733 908 461• Intangible asset 5 312 832 312 832 362 767 362 767• Straight-line rental income asset 4 99 153 79 795 85 715 65 804• Development expenditure 2 723 2 723 1 391 1 391• Furniture, fi ttings and computer equipment 6 1 774 28 1 510 40• Investment in subsidiaries 7 – 462 780 – 462 780• Available-for-sale fi nancial asset 8 10 208 7 088 13 601 10 229• Financial asset at amortised cost 9 4 782 4 782 5 450 5 450• Goodwill 10 71 107 – 76 299 –• Derivative fi nancial instruments 18 – 1 158 – –Current assets 409 218 366 175 261 066 260 467Trade and other receivables 12 71 409 49 259 46 741 31 395Loan to subsidiary 13 – 48 260 – –Taxation – – – 6Debenture interest receivable – 73 491 – 44 700Cash and cash equivalents 11 337 809 195 165 214 325 184 366Non-current assets held for sale 281 422 256 145 92 333 92 333Investment properties 280 142 255 154 91 983 91 983• Investment properties 3 281 422 256 145 92 333 92 333• Straight-line rental income adjustment 4 (1 280) (991) (350) (350)Straight-line rental income asset 1 280 991 350 350Total assets 6 178 059 5 251 181 5 625 569 4 823 565

EQUITY AND LIABILITIES Equity attributable to owners of the parent 1 404 550 1 098 218 1 381 502 1 144 314Share capital 14 3 510 3 510 3 320 3 320Share premium 15 28 753 28 753 24 276 24 276Reserves 16 1 372 287 1 065 955 1 353 906 1 116 718Non-current liabilities 3 909 613 3 706 058 3 463 718 2 852 932Linked debentures and premium 17 2 116 916 2 116 916 1 890 753 1 890 753Other interest bearing borrowings 18 1 226 282 1 226 282 1 012 203 587 906Derivative fi nancial instruments 18 21 867 – 28 136 995Deferred taxation liabilities 19 544 548 362 860 532 626 373 278Current liabilities 863 896 446 905 780 349 826 319Trade and other payables 20 173 277 125 051 136 275 91 330Short-term borrowings 18 449 600 – 460 727 460 727Amounts owing to subsidiaries 7 – 82 111 – 93 288Current taxation liabilities 5 416 4 140 2 373 –Linked unitholders for distribution 235 603 235 603 180 974 180 974Total equity and liabilities 6 178 059 5 251 181 5 625 569 4 823 565


Income statements for the year ended 31 March 2011

2011 2010


Property revenue 22 836 124 633 916 742 072 555 223Straight-line rental income accrual 4 14 368 14 632 7 041 4 488Gross property revenue 850 492 648 548 749 113 559 711Property expenses 23 (293 603) (227 756) (267 061) (207 668)Net profi t from property operations 556 889 420 792 482 052 352 043Income from asset management business 22, 24 65 146 64 582 10 208 10 208Expenditure - asset management business 24 (20 233) (12 844) (7 141) (3 168)Corporate administrative expenses 25 (25 509) (25 456) (23 781) (23 118)Investment and other income 27 14 380 99 993 21 188 98 340Operating profi t before fi nance costs 590 673 547 067 482 526 434 305Finance costs 28 (161 803) (123 787) (145 340) (109 235)Profi t before debenture interest 428 870 423 280 337 186 325 070Debenture interest (403 948) (403 948) (319 231) (319 231)Profi t before capital items 24 922 19 332 17 955 5 839(Loss)/profi t on sale of investment properties (14 798) (17 219) 1 387 –Amortisation of debenture premium 2 519 2 519 1 361 1 361Goodwill written-off on sale of properties by subsidiary 10 (5 192) – – –Impairment of intangible asset 5 (49 935) (49 935) – –(Loss)/profi t before fair value adjustments (42 484) (45 303) 20 703 7 200Fair value adjustments 78 494 (11 316) 293 975 196 615Gross change in fair value of investment properties 3 92 862 3 316 301 016 201 103Straight-line rental income adjustment 4 (14 368) (14 632) (7 041) (4 488)Net profi t/(loss) before taxation 36 010 (56 619) 314 678 203 815Taxation 29 (25 488) 2 485 (79 081) (46 139)Net profi t/(loss) for the year 10 522 (54 134) 235 597 157 676

Earnings per linked unit (cents) 120.85 – 182.37 –Diluted earnings per linked unit (cents) 120.85 – 182.37 –

AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS


2011 2010

Group Company Group Company R000 R000 R000 R000

Profi t/(loss) for the year 10 522 (54 134) 235 597 157 676

Other comprehensive income

Cash fl ow hedges 6 602 1 946 (11 436) (266)

• Current period (losses)/profi t (16 616) 667 (22 390) (1 149)

• Reclassifi cation to profi t or loss 23 218 1 279 10 954 883

Available-for-sale fi nancial assets – current period losses (3 556) (1 731) (6 486) (5 980)

Other comprehensive income/(loss) for the year 3 046 215 (17 922) (6 246)

Total comprehensive income/(loss) for the year 13 568 (53 919) 217 675 151 430

Statements of comprehensive incomefor the year ended 31 March 2011


AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS

Distribution statementsfor the year ended 31 March 2011

Distribution to Vukile unitholders for the year ended 31 March 2011Interest distribution 403 948 168 825 50.43 235 123 66.98Dividend distribution 824 344 0.10 480 0.14Total distribution 404 772 169 169 50.53 235 603 67.12

FIRST SECOND

Total Cents per Cents per R000 R000 linked unit R000 linked unit

FIRST SECOND

Total Cents per Cents per R000 R000 linked unit R000 linked unit

Distribution to Vukile unitholders for the year ended 31 March 2010Interest distribution 319 231 138 626 46.90 180 605 60.78Dividend distribution 651 283 0.10 368 0.12Total distribution 319 882 138 909 47.00 180 973 60.90(1)

(1) Adjusted for the reduced distribution in respect of the 36 470 000 linked units to Sanlam Properties (Pty) Ltd as follows:

R000

Distribution for period 1 January 2010 to 31 March 2010 10 983Less: Distribution foregone in terms of sale of business agreement 10 000Distribution attributable to Sanlam Properties (Pty) Ltd 983Distribution attributable to other unitholders 318 899Total distributions for the year ended 31 March 2010 319 882

2011 2010

Total number of linked units in issue at 31 March 351 015 218 332 020 877Weighted average number of linked units in issue 342 949 128 304 243 726

R000

Distribution in respect of new units issued for period 3 September 2010 to 31 March 2011 14 165Distribution to other unitholders 390 607Total distribution for the year ended 31 March 2011 404 772


GROUPBalance at 31 March 2009 2 956 17 341 1 137 743 (9 788) (16 854) 13 703 1 145 101Issue of share capital 364 6 935 – – – – 7 299Dividend distribution – – – – – (651) (651) 3 320 24 276 1 137 743 (9 788) (16 854) 13 052 1 151 749Profi t for the year – – – – – 235 597 235 597Change in fair value of investment properties – – 301 016 – – (301 016) –Deferred taxation on change in fair value of investment properties and straight-line rental accrual – – (72 201) – – 72 201 –Share-based remuneration – – 12 078 – – – 12 078Transfer to non-distributable reserve – – 1 387 – – (1 387) –Other comprehensive income Revaluation of available-for-sale fi nancial asset – – – (6 486) – – (6 486)Revaluation of cash fl ow hedges – – – – (11 436) – (11 436)Balance at 31 March 2010 3 320 24 276 1 380 023 (16 274) (28 290) 18 447 1 381 502Issue of share capital 190 4 477 – – – – 4 667Dividend distribution – – – – – (824) (824) 3 510 28 753 1 380 023 (16 274) (28 290) 17 623 1 385 345Profi t for the year – – – – – 10 522 10 522Change in fair value of investment properties – – 92 862 – – (92 862) –Deferred taxation on change in fair value of investment properties and straight-line rental accrual – – (11 958) – – 11 958 –Share-based remuneration – – 6 177 – – – 6 177Transfer to non-distributable reserve – – (77 054) – – 77 054 –Other comprehensive income Revaluation of available-for-sale fi nancial asset – – – (3 556) – – (3 556)Revaluation of cash fl ow hedges – – – – 6 062 – 6 062Balance at 31 March 2011 3 510 28 753 1 390 050 (19 830) (22 228) 24 295 1 404 550

COMPANY Balance at 31 March 2009 2 956 17 341 963 821 (9 788) (883) 5 473 978 920Issue of share capital 364 6 935 – – – – 7 299Dividend distribution – – – – – (651) (651)Net profi t for the year – – – – – 157 676 157 676Change in fair value of investment properties – – 201 103 – – (201 103) –Deferred taxation on change in fair value of investment properties and straight-line rental accrual – – (46 425) – – 46 425 –Share based remuneration – – 7 316 – – – 7 316Other comprehensive income – – – – – – –Revaluation of available-for-sale fi nancial asset – – – (5 980) – – (5 980)Revaluation of cash fl ow hedges – – – – (266) – (266)Balance at 31 March 2010 3 320 24 276 1 125 815 (15 768) (1 149) 7 820 1 144 314Issue of share capital 190 4 477 – – – – 4 667Dividend distribution – – – – – (824) (824) 3 510 28 753 1 125 815 (15 768) (1 149) 6 996 1 148 157Loss for the year – – – – – (54 134) (54 134)Change in fair value of investment properties – – 3 316 – – (3 316) –Deferred taxation on change in fair value of investment properties and straight-line rental accrual – – 11 150 – – (11 150) –Share-based remuneration – – 3 980 – – – 3 980Transfer from non-distributable reserves – – (72 359) – – 72 359 –Other comprehensive income Revaluation of available-for-sale fi nancial asset – – – (1 731) – – (1 731)Revaluation of cash fl ow hedges – – – – 1 946 – 1 946Balance at 31 March 2011 3 510 28 753 1 071 902 (17 499) 797 10 755 1 098 218

Revaluation of Non- available- distribu- for-sale Cash- Share Share table fi nancial fl ow Retained R000 capital premium reserves assets hedges earnings Total

Statements of changes in equityfor the year ended 31 March 2011


Statements of cash fl owfor the year ended 31 March 2011

2011 2010


Cash fl ow from operating activities 570 910 420 185 452 245 323 656Profi t/(loss) before taxation 36 010 (56 619) 314 678 203 815Adjustments 31.1 533 087 493 525 148 166 135 238Net changes in working capital 31.2 12 335 (12 933) (4 020) (16 096)Less: Net current assets acquired through business combination – – 2 2Taxation (paid)/refunded 31.3 (10 522) (3 788) (6 581) 697

Cash fl ow from investing activities (371 782) (287 017) (410 110) (316 215)Acquisition of business combination – – (363 898) (363 898)Acquisition of and improvements to investment properties (627 460) (569 746) (59 413) (41 210)Acquisition of furniture, fi ttings and computer equipment (799) (11) (417) (9)Net movement of available-for-sale fi nancial asset (164) 1 410 (5 121) (5 121)Proceeds on sale of investment property 242 261 181 337 2 986 –Proceeds on sale of furniture, fi ttings and equipment – – 15 1 133Investment and other income 14 380 99 993 21 188 98 340Acquisition of fi nancial asset – – (5 450) (5 450)

Cash fl ow from fi nancing activities (75 644) (122 369) 111 383 147 331Proceeds from interest bearing borrowings advanced 202 953 177 649 189 644 189 487Proceeds from issue of share capital 233 349 233 349 364 993 364 993Finance costs (161 803) (123 787) (145 340) (109 235)Distributions paid 31.4 (350 143) (350 143) (297 914) (297 914)Loan to subsidiary – (50 737) Loans from subsidiary repaid – (8 700)

Net increase in cash and cash equivalents 123 484 10 799 153 518 154 772Cash and cash equivalents at the beginning of the year 214 325 184 366 60 807 29 594Cash and cash equivalents at the end of the year 337 809 195 165 214 325 184 366

AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS


1 ACCOUNTING POLICIES The annual fi nancial statements have been prepared

in accordance with International Financial Reporting Standards, AC 500 standards as issued by the Accounting Practices Board, or its successor, the JSE Limited Listings Requirements and the Companies Act of South Africa, 1973, as amended.

1.1 BASIS OF PREPARATION The annual fi nancial statements have been

prepared on the historical cost basis, except for the measurement of investment properties and certain fi nancial instruments at fair value and incorporate the principal accounting policies set out below. These accounting policies have been applied consistently with the previous year.

1.2 INVESTMENT PROPERTIES Investment properties, which are stated at fair

market value, constitute land and buildings held by the group for rental producing purposes until or unless a property is no longer considered a core property and does not meet strategic requirements. At that stage a sale of the property will be approved and the property will be transferred to non-current assets held for sale. Investment property is initially recorded at cost which includes transaction costs directly attributable to the acquisition thereof. The directors value all the properties bi-annually to fair market value. At least 50% of all properties are valued every six months on a rotational basis by qualifi ed independent external property valuers and any differences between the respective valuations are reported in the notes to the fi nancial statements.

Costs include costs incurred initially and costs incurred subsequently to add to, or to replace a part of a property. Tenant installation costs are capitalised to the cost of a building. All these items are included in the fair value of investment properties. If a replacement part is recognised in the carrying amount of the investment property, the carrying amount of the replaced part is derecognised.

Fair market value is the open market value, which, in the opinion of the directors, is the fair market price at which the property would have been sold unconditionally on a willing buyer-willing seller basis for a cash consideration on the date of the valuation. Gains and losses arising from changes in the fair value of investment properties are recognised in net profi t and loss for the period in which they arise. Such gains or losses are excluded from the calculation of distributable earnings.

Gains or losses on the disposal of investment properties are recognised in net profi t or loss, and are calculated as the difference between the net selling price and the fair value of the property as valued in the most recent annual fi nancial statements. Such gains or losses are excluded from the calculation of distributable earnings.

1.3 DEVELOPMENT EXPENDITURE Expenditure incurred on a “grass roots” property

development is measured initially at cost. Once the development is completed the property is stated at fair market value. If a decision is taken not to proceed with the development the costs incurred to the date of that decision are expensed through the income statement.

1.4 TAXATION The charge for current taxation is based on the

results for the year as adjusted for items which are non-assessable or disallowable and any adjustment for tax payable or receivable for previous years.

Current tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the taxation authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the reporting date.

Temporary differences are differences between the carrying amounts of assets and liabilities for fi nancial reporting purposes and their tax base. The amount of deferred tax provided is based on the tax rates and tax laws in the expected manner of realisation or settlement of the carrying amount of assets and liabilities that have been enacted by the reporting date.

A deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from:

(a) the initial recognition of goodwill; or (b) goodwill for which amortisation is not

deductible for tax purposes; or (c) the initial recognition of an asset or liability in a

transaction which: (i) is not a business combination; and (ii) at the time of the transaction, affects

neither accounting profi t nor taxable profi t (tax loss).

A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profi t will be available against which the deductible temporary difference can be utilised, unless the deferred tax asset arises from the initial recognition of an asset or liability in a transaction that:

(a) is not a business combination; and (b) at the time of the transaction, affects neither

accounting profi t nor taxable profi t (tax loss).

The effect on deferred tax of any changes in tax rates is recognised in the income statement, except to the extent that it relates to items previously charged or credited directly to other comprehensive income or equity. Deferred tax assets are offset against deferred tax liabilities.

Notes to the annual fi nancial statementsat 31 March 2011


AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS

A deferred tax asset is recognised to the extent that it is probable that future taxable profi ts will be available, against which the associated unused tax losses and deductible temporary differences can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefi t will be realised.

1.5 FINANCIAL INSTRUMENTS Financial assets and fi nancial liabilities are

recognised in the statement of fi nancial position when a company has become party to the contractual provisions of the instrument.

• Financial assets (excluding derivative instruments)

The group’s principal fi nancial assets are trade receivables, cash and cash equivalents, reimbursement rights, fi nancial assets at amortised cost and loans to subsidiaries. These fi nancial assets are initially measured at fair value. Loans and receivables are subsequently measured at amortised cost. Other fi nancial assets are subsequently measured at fair value.

• Financial liabilities (excluding derivative instruments)

The group’s principal fi nancial liabilities are debentures, interest bearing bank loans, trade and other payables and other non-interest bearing borrowings. Interest bearing bank loans and overdrafts are initially recorded at the proceeds received net of direct issue costs. Interest bearing bank loans, debentures and trade and other payables are subsequently measured at amortised cost.

• Gains and losses on subsequent measurement

Gains and losses arising from a change in the fair value of the fi nancial instruments, excluding available-for-sale fi nancial assets, are included in net profi t or loss in the period in which the change arises. Such gains and losses are excluded from the calculation of distributable earnings. Gains and losses arising from a change in the fair value of available-for-sale fi nancial assets are included in other comprehensive income in the period in which the change arises.

• Derivative instruments The group uses derivative fi nancial

instruments including interest rate swaps, swaptions, forward rate agreements and interest rate caps to hedge its exposure to interest rates. It is the policy of the group not to trade in derivative fi nancial

instruments for speculative purposes. Derivative fi nancial instruments are initially and subsequently recognised at fair value.

In terms of hedge accounting, hedges are either (a) fair value hedges, which hedge the exposure to changes in the fair value of a recognised asset or liability or (b) cash fl ow hedges, which hedge exposure to variability in cash fl ows.

In the case of fair value hedges, any gains or losses from changes in the fair value of the hedging instrument are recognised immediately in the profi t or loss for the period.

Gains and losses on the effective portion of cash fl ow hedging instruments in respect of forecast transactions are recognised directly in other comprehensive income. Any ineffective portion of a cash fl ow hedge is recognised in profi t or loss for the period.

At the time the hedged item affects profi t or

loss, any gain or loss previously recognised in other comprehensive income is reclassifi ed from equity to profi t or loss and presented as a reclassifi cation adjustment within other comprehensive income. However, if a non-fi nancial asset or liability is recognised as a result of the hedged transaction, the gains and losses previously recognised in other comprehensive income are included in the initial measurement of the hedged item.

1.6 EQUITY AND RESERVES Share capital represents the nominal value of

shares that have been issued.

Share premium includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefi ts.

The revaluation reserve within equity comprises gains and losses due to the revaluation of investment property. Gains and losses on certain fi nancial instruments are included in reserves for available-for-sale fi nancial assets and cash-fl ow hedges respectively.

Retained earnings include all current and prior period retained profi ts.

1.7 PROVISIONS Provisions are recognised when the group has

a present legal or constructive obligation as a result of past events, for which it is probable that an outfl ow of economic benefi ts will occur.


1.8 REVENUE RECOGNITION Revenue comprises operating lease income,

operating expense recoveries charged to tenants and interest income.

Dividends are recognised when the company’s right to receive payment is established.

Operating lease income and recoveries are recognised as income on a straight-line basis over the lease term.

Interest is brought to account using the effective interest method.

Contingent rents (turnover rental) are included in revenue when the amounts can be reliably measured.

The asset management business generates revenue from the rendering of services, namely asset management income, sales commission earned on the sales of properties on behalf of the Sanlam Group and other service related income.

Asset management fees are measured by reference to the fair value of consideration received for services rendered.

Sales commission is recognised when all the suspensive conditions pertaining to a property sale agreement have been fulfi lled.

1.9 LETTING COMMISSIONS Letting commissions are capitalised and amortised

over the lease period. The carrying value is included with investment properties.

1.10 CASH AND CASH EQUIVALENTS For the purpose of the statement of cash fl ows,

cash and cash equivalents comprise cash on hand, deposits held at call with banks and investments in money market instruments, net of bank overdrafts, all of which are available for use by the group.

1.11 BASIS OF CONSOLIDATION The group annual fi nancial statements include

the fi nancial statements of the company and its subsidiaries. The operating results of the subsidiaries are included from the effective dates of acquisition up to the effective dates of disposal.

Inter-company balances and transactions are eliminated.

Subsidiaries apply the same accounting policies as those used by the company.

Investment in subsidiaries is carried at cost in the company’s fi nancial statements, less any accumulated impairment.

1.12 GOODWILL Goodwill arising on consolidation represents the

excess of the cost of acquisition over the group’s interest in the fair value of the identifi able assets, liabilities and contingent liabilities of a subsidiary, at the date of acquisition. Goodwill is recognised as an asset at the carrying amount less any accumulated impairment. Goodwill is evaluated annually for impairment.

Negative goodwill is recognised in profi t or loss immediately.

1.13 INTANGIBLE ASSETS Intangible assets with an indefi nite useful life

are stated at cost less accumulated impairment losses. Intangible assets are tested for impairment annually by comparing their recoverable amount with their carrying amount. Useful life is reviewed in each period to determine whether events and circumstances continue to support an indefi nite useful life assessment. If they do not, the change in useful life assessment from indefi nite to fi nite is accounted for as a change in estimate.

1.14 IMPAIRMENT LOSSES At each reporting date the carrying amounts of

the tangible and intangible assets are assessed to determine whether there is any indication that those assets may have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Irrespective of whether there is an indication of impairment, the group also:

• Tests intangible assets with an indefi nite life for impairment annually by comparing the carrying amount with the recoverable amount.

• Tests goodwill acquired in a business combination for impairment annually by comparing its carrying amount with its recoverable amount.

Where it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is estimated. Value in use, included in the calculation of the recoverable amount, is estimated taking into account future cash fl ows, forecast market conditions and the expected lives of the assets.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, its carrying amount is reduced to the recoverable amount. The impairment loss is fi rst allocated to goodwill and then to the other assets of the cash generating unit. Subsequent to the recognition of an impairment loss, the depreciation or amortisation charge for assets is adjusted to allocate the remaining carrying value, less any residual value, over the remaining useful life. Impairment losses are recognised in profi t and loss.

Notes to the annual fi nancial statements (continued)


AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS

If any impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount but limited to the carrying amount that would have been determined had no impairment loss been recognised in prior years. A reversal of an impairment loss is recognised in profi t or loss.

For the purpose of impairment testing, goodwill is allocated to each of the cash-generating units expected to benefi t from the synergies of the combination. No goodwill impairment losses are subsequently reversed. The attributable amount of goodwill is included in the profi t or loss on disposal when the relevant business is sold.

1.15 FURNITURE, FITTINGS AND COMPUTER EQUIPMENT

Furniture, fi ttings and computer equipment are stated at cost less accumulated depreciation and any impairment losses.

Depreciation is charged so as to write-off the cost less residual value of assets over their estimated useful lives, using the straight-line basis. The principal useful lives used for this purpose are:

Computer equipment 3 years Computer software 2 years Furniture and equipment 6 years

The residual value and useful life of an asset are reviewed at each fi nancial year end.

1.16 BORROWING COSTS Borrowing costs directly attributable to the

acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets. Capitalisation of such borrowing costs ceases when the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specifi c borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs capitalised. Other borrowing costs are expensed in the period in which they are incurred.

1.17 SHARE-BASED PAYMENTS Services received or acquired in a share-

based payment transaction are recognised as the services are received. A corresponding increase in equity is recognised if the services were received in an equity-settled share-based payment transaction or a liability if the services were acquired in a cash-settled share-based payment transaction.

For equity-settled share-based payment transactions, the goods or services received, and the corresponding increase in equity, are measured directly at the fair value of the goods or services received, unless that fair value cannot be estimated reliably.

If the fair value of the goods or services received cannot be estimated reliably, their value and the corresponding increase in equity are measured indirectly by reference to the fair value, at grant date, of the equity instruments granted.

When the services received or acquired in a share-based payment transaction do not qualify for recognition as assets, they are recognised as expenses.

For cash-settled share-based payment transactions, the services acquired and the liability incurred are measured at the fair value of the liability. Until the liability is settled, the fair value of the liability is re-measured at each reporting date and at the date of settlement, with any changes in fair value recognised in profi t or loss for the period.

If the share-based payments granted do not vest until the counterparty completes a specifi ed period of service, Vukile accounts for those services on a straight-line basis over the vesting period.

If the share-based payments vest immediately, the services received are recognised immediately in full.

1.18 NON-CURRENT ASSETS HELD FOR SALE Non-current assets held for sale are assets

that will be recovered principally through a sale transaction. These assets are measured at the lower of their carrying amounts and fair value less costs to sell.

1.19 OPERATING SEGMENTS In identifying its operating segments,

management reviews the performance of its asset management business and its investment properties held by the group on an individual basis.

The measurement policies the group uses for segment reporting under IFRS 8 are the same as those used in its fi nancial statements, except that the following items inter alia are not included in arriving at operating profi t of the operating segments:

• Corporate administrative expenditure. • Investment and other income.


Effective for accounting periods beginning Statement on or after Summary of key points Impact on Vukile

1.20 REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS NOT YET ADOPTED The following revisions to International Accounting Standards, relevant to the group, have not been adopted.


IAS 27 Consolidated and Separate Financial Statements.

IFRS 3 Business Combinations.

1 July 2010

1 July 2010

• Amends the transition requirements to apply certain consequential amendments arising from the 2008 IAS 27 amendments prospectively, to be consistent with the related IAS 27 transition requirements effective for year ending 31 March 2012.

• Clarifi es that contingent consideration balances arising from business combinations that occurred before an entity’s date of adoption of IFRS 3 (Revised 2008) shall not be adjusted on the adoption date. Also provides guidance on the subsequent accounting for such contingent consideration balance.

• The choice of measuring a Non-Controlling Interest (“NCI”) either at fair value or at the proportionate share in the recognised amounts of an acquirer’s identifi able net assets, is now limited to NCI that are present ownership instruments and entitle their holders to a proportionate share of the acquiree’s net asset in the event of liquidation. Clarifi es that all other components of NCI shall be measured at their acquisition-date fair values, unless another measurement basis is required by IFRS.

• No material impact for Vukile expected.



AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS


IFRS 3 Business Combinations (continued)

IFRS 7 Financial Instruments: Disclosures.

IFRS 9 Financial Instruments.

1 January 2011

1 January 2013

• Clarifi es the guidance for the accounting of share-based payment transactions of the acquiree that were voluntarily replaced by the acquirer and acquiree awards that the acquirer chooses not to replace.

• IFRS 3 will become effective for the year ending 31 March 2012.

• Clarifi es the disclosure requirements of the standard to remove inconsistencies, duplicative disclosure requirements and specifi c disclosures that may be misleading effective for the year ending 31 March 2012.

• IFRS 9 Financial Instruments was issued in November 2009 and amended in October 2010. The standard introduces new requirements for the classifi cation and measurement of fi nancial assets and fi nancial liabilities effective for the year ending 31 March 2013.


• Management have yet to assess the impact that this new and amended standard is likely to have on the fi nancial statements of the group.

• IFRS 9 can be early adopted with transitional provisions that does not require the restatement of comparatives (the transitional provisions will be effective for the 2011 or 2012 fi nancial year ends only).

• If IFRS 9 is not early adopted, the statement requires restatement of comparatives which will result in presentation of a third column in the statement of fi nancial position.

• Management has elected not to early adopt the standard for the March 2011 fi nancial year end.




IAS 34 Interim Financial Reporting.

IAS 24 Related party disclosure.

IAS 12 Deferred Taxation.

1 January 2011

1 January 2011

Effective for accounting periods beginning on or after 1 January 2012.



• Management has elected not to early adopt the standard for the March 2011 fi nancial year end.

• Management needs to assess the impact of this statement as it will have a material effect on the fi nancial statements when adopted.

• Aims to improve interim fi nancial reporting by clarifying disclosures required, including the interaction with recent improvements to the requirements of IFRS 7 Financial Instruments: Disclosures.

• The IASB has amended the defi nition of a related party to clarify the intended meaning and remove some inconsistencies. For example, the revised Standard makes it explicitly clear that, in the defi nition of a related party, an associate includes subsidiaries of the associate and a joint venture includes subsidiaries of the joint venture.

• The amendment to the standard is relevant only when the entity elects to use the fair value model for measurement in IAS 40 Investment Property.

• The amendments introduce a rebuttable presumption that in such circumstances, an investment property is recovered entirely through sale.

• The presumption is rebutted if the investment property is held within a business model whose objective is to consume substantially all of the economic benefi ts embodied in the investment property over time, rather than sale.

1.20 REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS NOT YET ADOPTED (continued)


AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS


IAS 12 Deferred Taxation (continued)

• Previously, a blended rate was utilised to calculate the deferred tax; going forward the CGT rate will be consistently applied.

• Amendments to IAS 12 must be adopted for the fi rst time for the group’s interim reporting period ending 30 September 2012. Early adoption is permissible.

• The amendment constitutes a change in accounting policy and must be retrospectively applied. A third column statement of comprehensive income and a statement of fi nancial position will be required on adoption.


2 KEY ESTIMATIONS AND UNCERTAINTIES Estimates and assumptions are an integral part of fi nancial reporting and as such have an impact on the amounts reported in

the group’s income, expenses, assets and liabilities. Judgement in these areas is based on historical experience and reasonable expectations relating to future events.

Information on the key estimations and uncertainties that have had the most signifi cant effect on the amounts recognised in the fi nancial statements are set out in the following notes in the fi nancial statements:

• Accounting policies – notes 1.2, 1.4, 1.5, 1.7, 1.8, 1.12, 1.13, 1.14, 1.16 and 1.17. • Investment property valuation – note 3. • Deferred taxation – note 19. • Trade and other receivables – note 12. • Goodwill – note 1.12 and 10. • Intangible assets – note 1.13 and 5. • Available-for-sale fi nancial asset – note 8.


2011 2010


3 INVESTMENT PROPERTIES STATED AT FAIR VALUE • Property acquisitions 3 151 135 2 416 317 2 698 058 2 013 343 • Capital expenditure and tenant installations 162 895 148 514 146 817 133 412 • Acquisition costs 96 069 85 346 137 451 82 220 • Net gain from fair value adjustment of investment properties 1 941 594 1 434 351 1 906 610 1 481 331 FAIR VALUE 5 351 693 4 084 528 4 888 936 3 710 306 • Lease commissions 13 722 9 087 14 549 10 135 At end of year 5 365 415 4 093 615 4 903 485 3 720 441 Less: Fair value of investment properties held for sale (281 422) (256 145) (92 333) (92 333) 5 083 993 3 837 470 4 811 152 3 628 108

3.1 DETAILS OF INVESTMENT PROPERTIES The directors have valued the group’s property portfolio at R5.35 billion as at 31 March 2011 (R4.90 billion: 31 March 2010)

using the discounted cash fl ow of the future income stream method.

This is R462.8 million or 9.4% higher than the valuation as at 31 March 2010.

The external valuations performed by C B Richard Ellis (Pty) Ltd and Colliers Property and Facilities Management (Pty) Ltd at 31 March 2011 on 56.5% of the total portfolio were R181 million or 6% higher than the directors’ valuations of the same properties. However, the 6% difference is within acceptable industry norms.

The group’s properties were valued by the valuation division of the group. These valuations were reviewed and approved by the directors of the company, whose experience is refl ected in the directors’ report.

The group’s properties are encumbered as security for the securitised debt and bank loans to the value of R1.74 billion (note 18).


AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS

3 INVESTMENT PROPERTIES (continued) 3.2 VALUATION ASSUMPTIONS The range of the reversionary capitalisation rates

applied to the portfolio are between 10.25% and 17.75% with the weighted average being approximately 11.57%.

The discount rates applied range between 12.23% and 19.77% with the weighted average being approximately 13.59%.

In determining future cash fl ows for valuation purposes, vacancies are forecast for each property based on estimated demand.

3.3 MOVEMENT FOR THE YEAR Investment properties at 1 April 4 903 485 3 720 441 4 545 731 3 479 204 Capital expenditure and tenant installations 21 691 16 987 23 079 20 374 Acquisitions and development costs 601 166 548 378 35 242 19 504 Change in fair value of investment properties 92 862 3 316 301 016 201 103 Disposal of investment properties (252 962) (194 459) (1 599) – Lease commissions (amortised)/capitalised (827) (1 048) 16 256 Investment properties at 31 March 5 365 415 4 093 615 4 903 485 3 720 441 Refl ected on the statement of fi nancial position under: • Non-current assets 5 083 993 3 837 470 4 811 152 3 628 108 • Non-current assets held for sale 281 422 256 145 92 333 92 333 5 365 415 4 093 615 4 903 485 3 720 441

4 STRAIGHT-LINE RENTAL INCOME ADJUSTMENT Balance at 1 April 86 065 66 154 79 024 61 666 Current year movement 14 368 14 632 7 041 4 488 Balance at 31 March 100 433 80 786 86 065 66 154 • Non-current portion 99 153 79 795 85 715 65 804 • Non-current assets held for sale 1 280 991 350 350 100 433 80 786 86 065 66 154

5 INTANGIBLE ASSET Balance at 1 April 362 767 362 767 362 767 362 767 Impairment (49 935) (49 935) – – Balance at 31 March 312 832 312 832 362 767 362 767

The intangible asset arose on the acquisition of the property asset management contract in respect of the long-term commercial property portfolio of the Sanlam Group.

The asset management agreement is evergreen and can only be terminated in specifi c circumstances. These circumstances have been assessed and are not currently foreseeable. Consequently the intangible asset has been determined to have an indefi nite useful life.

2011 2010



5 INTANGIBLE ASSET (continued) The intangible asset was tested for impairment by comparing the

estimated recoverable amount with the carrying value.

The recoverable amount, which is based on a revised forecast income profi le, was calculated using the discounted cash fl ow method. The change in the forecast income profi le, together with the increase in the discount rate, has resulted in the recoverable amount being forecast at R49.93 million lower than the carrying value. An impairment charge of R49.93 million has been raised.

The forecast cash fl ows were discounted at a rate equivalent to the government R208 rate at 31 March 2011 plus an appropriate risk premium.

6 FURNITURE, FITTINGS AND COMPUTER EQUIPMENT Cost 2 512 189 1 719 181 Accumulated depreciation (738) (161) (209) (141) Carrying value 1 774 28 1 510 40

6.1 MOVEMENT FOR THE YEAR Net carrying value at 1 April 1 510 40 119 88 Additions 800 11 417 9 Additions in business combination acquired – – 1 129 1 129 Disposals to subsidiary – – – (1 129) Disposals – – (19) (7) Depreciation (534) (23) (136) (50) Net carrying value at 31 March 1 774 28 1 510 40

7 INVESTMENT IN SUBSIDIARIES DIRECT HOLDING Linked units at cost 100% holding in MICC Property Income Fund Limited (2010 – 100%)(1) 462 780 462 780 INDIRECT HOLDING MICC Properties (Pty) Ltd(1) – – MICC Properties Namibia (Pty) Ltd(2) – – Katima Mulilo Properties (Pty) Ltd(2) – – Katatura Properties (Pty) Ltd(2) – – Kavango West Shopping Centre (Pty) Ltd(2) – – Oluno Properties (Pty) Ltd(2) – – Oshakati Properties (Pty) Ltd(2) – – Oshikango Properties (Pty) Ltd(2) – – Super Deca Properties (Pty) Ltd(2) – – MICC House Namibia (Pty) Ltd(2) – – All the companies are 100% held within the MICC Group SPECIAL PURPOSE ENTITY Vukile Investment Property Securitisation (Pty) Ltd (“VIPS”)(1) – – Total investment in subsidiaries 462 780 462 780 (1) Incorporated in the Republic of South Africa. (2) Incorporated in Namibia.

2011 2010



2011 2010

Company Company R000 R000


AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS

7 INVESTMENT IN SUBSIDIARIES (continued) LOANS (TO)/FROM SUBSIDIARIES MICC Property Income Fund Limited(1) (2 477) – Katima Mulilo Properties (Pty) Ltd(2) 3 071 3 071 Katatura Properties (Pty) Ltd(2) 20 295 20 295 Kavango West Shopping Centre (Pty) Ltd(2) 2 420 2 420 Oluno Properties (Pty) Ltd(2) 11 631 11 631 Oshakati Properties (Pty) Ltd(2) 2 024 2 024 Oshikango Properties (Pty) Ltd(2) 160 8 860 Super Deca Properties (Pty) Ltd(2) 44 987 44 987 82 111 93 288

(1) This loan was repaid in April 2011 and is not interest bearing. (2) The loans bear interest at market related deposit rates and are repayable on 45 days written notice.

8 AVAILABLE-FOR-SALE FINANCIAL ASSET Re-imbursement right 10 208 7 088 13 601 10 229 Balance at 1 April 13 601 10 229 11 088 11 088 Additional units recognised 1 318 1 318 – – New performance and retention long-term incentive scheme approved 3 107 451 8 999 5 121 Less: Units vested (16 638) (16 638) – – Movement of executive rights 6 560 9 223 (13 536) (12 587) Fair value adjustment of re-imbursement right 4 327 3 882 7 050 6 607 Adjustment for units forfeited on resignation (1 996) (1 377) – – 10 208 7 088 13 601 10 229

The terms and conditions of the new long-term retention and incentive scheme were approved by unitholders at the annual general meeting held on 31 August 2010.

2011 2010

Company Company R000 R000

2011 2010




8 AVAILABLE-FOR-SALE FINANCIAL ASSET (continued) SCM has assumed the obligation to discharge Vukile’s conditional fi nancial

obligations towards its executives and management as follows:

A Based on 25% retention and 75% performance 7.8(i) July 2012 B Based on 25% critical performance area targets and 75% performance 4.8(i) July 2013 C Based on 25% critical performance area targets and 75% performance 0.6(i) July 2012 - 2013 D Based on 25% critical performance area targets and 75% performance 2.4(ii) July 2014 E Based on retention 0.4(iii) July 2011 - 2013

The executive directors have been allocated the following percentages of the schemes set out in A to D above: (i) G van Zyl 65.386% (i) MJ Potts 29.043% (ii) HC Lopion 25.340% (iii) The Vukile group employed one additional individual from Sanlam Properties on 1 January 2011 and assumed responsibility

for inter alia, the rights and obligations regarding a long-term share-based retention scheme pertaining to said employee, against a payment from Sanlam Properties of R0.4 million. Vukile, through its subsidiary, MICC Property Income Fund Limited (“MICC IF”) which has employed the former Sanlam Properties’ employee, paid R0.4 million to discharge its obligations in this regard to SCM.

MICC IF has paid an amount of R2.4 million to SCM in respect of units awarded to the employees of MICC IF as part of the long-term retention and incentive scheme. This re-imbursement right is stated at fair value after deduction of executive and management rights.

Further details of the long-term retention and incentive share scheme are set out on page 49 to 50.

9 FINANCIAL ASSET AT AMORTISED COST Balance at 1 April 5 450 5 450 5 450 5 450 Less: Amortised (668) (668) – – Balance at 31 March 4 782 4 782 5 450 5 450

The fi nancial asset comprises an interest rate hedge premium of R5.45 million paid in respect of interest swap number 1, refer to note 18, which premium is amortised over the term of this underlying interest rate swap.

Vesting Rm dates

2011 2010



AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS

2011 2010

Group Group R000 R000

10 GOODWILL Balance at 1 April 76 299 76 299 Less: Goodwill written-off on properties sold by a subsidiary during the year (5 192) – Balance at 31 March 71 107 76 299

Goodwill arose on the acquisition of 100% of MICC IF and represents a premium paid on the net assets and liabilities on each property purchased. Each operating segment relative to the acquisition is defi ned as a cash-generating unit.

Goodwill written off comprises the goodwill allocated to the cash generating units (investment properties), arising on the acquisition of MICC IF in 2006, which have been sold, as follows:

• Kleinfontein Offi ces 620 • Ndabeni Business Park 1 870 • Nelspruit Game Centre 2 702 5 192 The remaining cash-generating units have been valued using the discounted cash fl ow method in both reporting periods

at amounts signifi cantly in excess of net asset value and goodwill. The discount rate used was 11.90% based on the Government R208 rate at 31 March 2011 plus a risk premium of 3.25%.

Goodwill of R71.1 million is, therefore, not impaired.

Available- Financial for-sale asset at Loans and fi nancial amortised receivables asset cost R000 R000 R000

11 FINANCIAL INSTRUMENTS BY CATEGORY – GROUP The accounting policies for fi nancial instruments have been applied to the line items below:

31 March 2011 Assets per statement of fi nancial position Cash and cash equivalents 337 809 – – Available-for-sale fi nancial asset – 10 208 – Trade and other receivables (excluding prepayments) 69 170 – – Financial asset at amortised cost – – 4 782

R000



31 March 2010 Assets per statement of fi nancial position Cash and cash equivalents 214 325 – – Available-for-sale fi nancial asset – 13 601 – Trade and other receivables (excluding prepayments) 45 680 – – Financial asset at amortised cost – – 5 450

Available- Financial for-sale asset at Loans and fi nancial amortised receivables asset cost R000 R000 R000

Other fi nancial liabilities at Derivatives amortised used for cost hedging R000 R000

31 March 2010 Liabilities per statement of fi nancial position Other interest bearing borrowings 1 012 203 – Linked debenture and premium 1 890 753 – Derivative fi nancial instruments – 28 136 Trade and other payables 136 275 – Short-term bank fi nance 460 727 –

The following table presents fi nancial assets and liabilities measured at fair value in the statement of fi nancial position in accordance with the fair value hierarchy. This hierarchy groups fi nancial assets and liabilities into two levels based on the signifi cance of input used in measuring the fair value of the fi nancial assets and liabilities. The fair value hierarchy has the following levels:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly

(i.e. as prices) or indirectly (i.e. derived from prices). • Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

11 FINANCIAL INSTRUMENTS BY CATEGORY – GROUP (continued) 31 March 2011 Liabilities per statement of fi nancial position Other interest bearing borrowings 1 226 282 – Linked debenture and premium 2 116 916 – Derivative fi nancial instruments – 21 867 Trade and other payables 173 277 – Short-term bank fi nance 449 600 –

Other fi nancial liabilities at Derivatives amortised used for cost hedging R000 R000


AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS

2011 2010

31 March Level 1 Level 2 Total Level 1 Level 2 Total

11 FINANCIAL INSTRUMENTS BY CATEGORY – GROUP (continued)

The level within which the fi nancial asset or liabilities is classifi ed, is determined based on the lowest level of signifi cant input to the fair value measured.

The fi nancial assets and liabilities measured at fair value in the statement of fi nancial position are grouped into the fair value hierarchy as follows:

Assets:

• Available-for-sale fi nancial assets 10 208 – 10 208 13 601 – 13 601 Total 10 208 – 10 208 13 601 – 13 601 Liabilities:

• Derivative fi nancial instruments – (21 867) (21 867) – (28 136) (28 136) Total – (21 867) (21 867) 13 601 (28 136) (28 136) Net fair value 10 208 (21 867) (11 659) 13 601 (28 136) (14 535)

There have been no signifi cant transfers between Levels 1 and 2 in the reporting period under review. There were no transfers in or out of Level 3 in the reporting period under review.

MEASUREMENT OF FAIR VALUE The methods and valuation techniques used for the purpose of measuring fair value are unchanged compared to the

previous reporting period.

AVAILABLE-FOR-SALE FINANCIAL ASSETS This comprises cash settled share based long-term incentive re-imbursement rights stated at fair value. Fair value has been determined by reference to Vukile’s quoted closing price at the reporting date, after deduction of

executive and management rights.

DERIVATIVE FINANCIAL INSTRUMENTS The fair values of these swap contracts are determined by ABSA Capital using a valuation technique that maximises the

use of observable market inputs. Derivatives entered into by the group are included in Level 2 and consist of interest rate swap contracts.



12 TRADE AND OTHER RECEIVABLES Gross rental receivables 21 056 16 986 21 807 16 302

Impairment of receivables (9 911) (8 445) (10 248) (8 211)

Prepaid expenses 2 239 309 1 061 1 059

Sundry debtors 58 025 40 409 34 121 22 245

Total 71 409 49 259 46 741 31 395

Further information on receivables is set out in note 21.

13 LOAN TO SUBSIDIARY Vukile Investment Property Securitisation (Pty) Ltd (“VIPS”) – 48 260 – –

The loan to subsidiary comprises the proceeds on the sale of two securitised properties, Hillcrest Centre and Pongola Shopping

Centre. The proceeds are held by VIPS as security for loans to the company. The proceeds earn interest at market related deposit

rates and are available to fi nance the acquisition of an investment property that meets the required securitisation covenants.

14 SHARE CAPITAL Authorised – par value shares

800 000 000 ordinary shares of one cent each 8 000 8 000 4 000 4 000

Issued

351 015 218 (2010: 332 020 877) ordinary shares of

one cent each

Issued for the acquisition of properties 2 283 2 283 2 093 2 093

Issued as consideration for the acquisition of

MICC Property Income Fund Limited 863 863 863 863

Issued as consideration for the acquisition of

the asset management business 364 364 364 364

In issue at end of the year 3 510 3 510 3 320 3 320

2011 2010


2011 2010



AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS

2011 2010 Company Company Number of Number of linked units linked units 000 000

14 SHARE CAPITAL (continued) Opening balance 332 021 295 551 Issued on 1 January 2010 – 36 470 Issued on 3 September 2010 18 994 – Balance at 31 March 351 015 332 021

In terms of the memorandum of association and the debenture trust deed, the shares are linked with unsecured, subordinated, variable-rate debentures of four hundred and ninety cents each. This linkage means that each share may only be issued and traded together with the debenture with which it is indivisibly linked.

SHARES UNDER CONTROL OF THE DIRECTORS 5% of the unauthorised shares of the company are under the control of the directors. This authority expires at the next

annual general meeting.

15 SHARE PREMIUM Arising on the acquisition of properties 12 156 12 156 7 679 7 679 Arising on the acquisition of MICC Property Income Fund Limited 9 662 9 662 9 662 9 662 Arising on the acquisition of asset

management business 6 935 6 935 6 935 6 935 Balance at the end of the year 28 753 28 753 24 276 24 276

16 RESERVES Non-distributable reserves 1 347 992 1 055 200 1 335 459 1 108 898 Retained earnings 24 295 10 755 18 447 7 820 1 372 287 1 065 955 1 353 906 1 116 718 Non-distributable reserves comprise the

following: Investment property revaluation surplus net

of deferred taxation and transfers 1 365 928 1 054 739 1 358 778 1 109 332 (Loss)/profi t on mark-to-market valuation of cash

fl ow hedges (22 228) 797 (28 290) (1 149) Valuation adjustments to available-for-sale

fi nancial assets (19 830) (17 499) (16 274) (15 768) Share-based payment reserve 24 122 17 163 21 245 16 483 1 347 992 1 055 200 1 335 459 1 108 898

2011 2010




17 LINKED DEBENTURES AND PREMIUM Issued 351 015 218 (2010: 332 020 877) unsecured

subordinated, variable-rate debentures of 490 cents each 1 719 975 1 719 975 1 626 902 1 626 902

Debenture premium 396 941 396 941 263 851 263 851 2 116 916 2 116 916 1 890 753 1 890 753

The issue of each debenture is linked to one ordinary share in the share capital of the company, together comprising one linked unit. Any further issues of linked units will be in the same ratio. In terms of the debenture trust deed, the aggregate interest entitlement of every debenture linked to each ordinary share in respect of any fi nancial year shall not be less than 99% of distributable earnings of an income nature unless the directors exercise their discretion to reduce this percentage below 99%, but not less than 90%, prior to 31 March each year. The debentures will be redeemed at their par value in accordance with the provisions of this trust deed and/or the relevant supplemental Debenture Trust Deed in the ordinary course as and when they fall due for payment. The issue of debentures will be redeemable by the company in full at any time after 25 (twenty-fi ve) years after the date of allotment of the relevant debentures. The debenture holders may exercise the right to require the debentures to be redeemed in accordance with the debenture trust deed, only by special resolution, whereafter the debentures shall be redeemed by the company at their nominal value on the last Friday, which must be a business day, prior to the 5th (fi fth) anniversary of the date on which the special resolution is passed.

The debenture premium is amortised over 25 years and discounted at a rate equivalent to the Government R208 rate at 31 March 2011 plus an appropriate risk premium.

2011 2010


18 OTHER INTEREST BEARING BORROWINGS Secured fi xed rate loans – 1 013 199 251 222 554 937

Nedbank Limited – – 251 222 –

Vukile Investment Property Securitisation

(Pty) Ltd (“VIPS”) – 1 020 000 – 558 000

Less: Net debt raising fee offset against borrowings – (6 801) – (3 063)

Secured variable rate loans 1 226 282 213 083 760 981 32 969

Noteholders 1 020 000 – 558 000 –

Less: Net debt raising fee offset against borrowings (6 801) – (3 063) –

ABSA facility 214 181 214 181 206 287 33 000

Less: Net debt raising fees offset against borrowings ( 1 098) (1 098) (243) (31)

Interest bearing borrowings 1 226 282 1 226 282 1 012 203 587 906

Interest bearing borrowings – current 449 600 – 460 727 460 727

ABSA facility/noteholders 198 378 – 460 727 460 727

Nedbank Limited 251 222 – – –

2011 2010



AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS

18 OTHER INTEREST BEARING BORROWINGS (continued)

DETAILS OF INTEREST BEARING BORROWINGS – 31 MARCH 2011

Vukile Investment Property Securitisation (Pty) Ltd (“VIPS”) is Vukile’s securitisation vehicle which issued R1 020 million of

variable rate notes to noteholders. The funds so raised were on-lent to Vukile as a fi xed interest rate loan.

• Fixed rate loans

VIPS

Facility utilised R1 020 million

Dates of repayment R462 million – November 2013 (3 year loan)

R250 million – May 2012 (3 year loan)

R308 million – November 2012 (7 year loan)

Fixed interest rate 9.76%, 9.82% and 10.24% (NACQ) all-in rate

Repayment terms Interest only, quarterly in arrears. Capital on maturity.

Overall fi nancial covenants

Loan to investment property

valuation ratio (borrower) 65% (currently 28.7%)

Interest cover ratio 2.0:1 (currently 4.5:1)

Security Secured by way of mortgage bonds over Vukile’s securitised

investment properties and a pledge of rentals receivable.

Nedbank

Amount R251.2 million

Date of repayment August 2011

Term 5 years

Fixed interest rate (NACQ) 10.94%

Repayment terms Interest only, quarterly in arrears. Capital on maturity.

Loan to investment property ratio 50% (currently 35.5%)

• Variable rate loans ABSA Bank Total facility available R548 million Facility drawn down R413 million Date of repayment May 2012 (Vukile: R214 million) May 2012 (MICC: R199 million) Variable interest rate Prime less 2.1% and 3 month JIBAR plus 1.40% to 1.69% Repayment terms Interest only, monthly in arrears. Capital on maturity. Loan to non-securitised investment Vukile loans: 70% (currently 24.5%)(1)

property valuation ratio MICC loans: 50% (currently 35.5%) Interest cover ratio 1.8:1 times after inter-company adjustment

(currently 3.0:1): MICC 2.0:1 times after inter-company adjustments

(currently 3.5:1): Vukile Security Secured by way of mortgage bonds over MICC and

Vukile’s non-securitised investment properties and a pledge of rentals receivable.

(1) This ratio for the ABSA loans to Vukile is calculated by adding any negative mark-to-market valuation of the group’s interest rate swaps to Vukile’s loans in respect of the non-securitised investment properties.



18 OTHER INTEREST BEARING BORROWINGS (continued) DETAILS OF INTEREST BEARING BORROWINGS – 31 MARCH 2011 • Owing to noteholders by VIPS Amount R1 020 million Dates of repayment R462 million – November 2013 (3 year loan) R250 million – May 2012 (3 year loan) R308 million – November 2012 (7 year loan) Variable interest rate 3 months JIBAR plus note margins Repayment terms Interest only quarterly in arrears. Capital on maturity Loan to investment property valuation

ratio (borrower) 65% (currently 28.7%) Interest cover ratio 2.0:1 (currently 4.5:1) Security Secured by way of mortgage bonds over securitised investment properties

and a pledge of rentals receivable.

ABSA Bank Access facility R100 million Facility utilised Nil Date of repayment On demand Variable interest rate Prime less 2.1%

An overdraft facility of R45 million and a hedging facility of R112.5 million have been provided by ABSA Bank to the group. These facilities are also secured by mortgage bonds over the non-securitised investment properties and rentals receivable.

Derivative fi nancial instruments Interest rate swaps – cash fl ow hedges (21 867) 1 158 (28 136) (995)

Interest rate swaps Nominal value (Rm) 462.0 308.0 250.0 201.8 33.0 88.5 54.8 Swap period 3 years 7 years 2.8 years 3 years 3 years 5 years 3.5 years Maturity date Nov 2013 Nov 2012 May 2012 Sept 2013 May 2012 May 2012 May 2012 Rate(1) (NACQ) 9.76% 10.24% 9.82% 8.60% 8.41% 9.40% 9.60%

(1) All-in rates including note margins plus amortised transactions costs. NACQ – Nominal Annual Compounded Quarterly. JIBAR – Johannesburg Interbank Acceptance Rate.

BORROWING POWERS The borrowing capacity of the company and its subsidiaries, in terms of their articles of association, is unlimited, but is subject to

loan covenants as detailed in this note.

Swap 1 Swap 2 Swap 3 Swap 4 Swap 5 Swap 6 Swap 7

2011 2010

Group Company Group Company Assets/ Assets/ Assets/ Assets/ (liabilities) (liabilities) (liabilities) (liabilities) R000 R000 R000 R000


AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS

19 DEFERRED TAXATION Deferred taxation liabilities comprise the following: Fair value adjustments 522 371 345 342 506 374 352 395 Straight-line rental income adjustment 20 454 14 426 24 493 18 523 Other temporary differences 1 723 3 092 1 759 2 360 544 548 362 860 532 626 373 278 Movement Balance at 1 April 532 626 373 278 461 420 327 202 Fair value adjustment 15 997 (7 053) 70 139 45 168 Capital gains tax losses utilised 540 540 – – Straight-line rental income adjustment (4 039) (4 097) 2 062 1 257 Other temporary differences (1 694) (926) 141 787 Under-provision of other temporary differences in prior year (18) (18) – – Deferred tax asset – tax losses 1 136 1 136 (1 136) (1 136) Balance at 31 March 544 548 362 860 532 626 373 278

20 TRADE AND OTHER PAYABLES Trade creditors 20 272 15 881 19 919 13 242 Accrued expenses 119 418 84 454 88 881 58 272 Tenant deposits 33 587 24 716 27 475 19 816 173 277 125 051 136 275 91 330

21 FINANCIAL RISK MANAGEMENT The group’s fi nancial instruments consist mainly of interest rate swaps, fi nancial assets, deposits with banks, accounts

receivable and payable, long-term borrowings and loans to and from subsidiaries. In respect of all fi nancial instruments listed above, the book value approximates fair value. The group purchases or issues fi nancial instruments to fi nance operations and to manage interest rate risks that may arise from time to time.

The board of directors has overall responsibility for the establishment and oversight of the group’s risk management framework. The audit and risk committee is responsible for developing and monitoring the group’s risk management policies. The audit and risk committee reports regularly to the board of directors on its activities.

The group’s risk management policies are established to identify and analyse the risks faced by the group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to refl ect changes in market conditions and the group’s activities.

The audit and risk committee oversees how management monitors compliance with the group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the group. The audit and risk committee is assisted in its oversight role by the internal auditors, KPMG. KPMG undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit and risk committee.

CREDIT RISK MANAGEMENT Potential areas of credit risk comprise mainly cash and trade receivables. In order to minimise any possible risks relating

to such investments, surplus funds can only be invested in the “Big 5” banks and AAA rated money market funds up to pre-determined levels. Trade receivables consist of a large, widespread tenant base. Management has established a credit policy in terms of which each new tenant is analysed individually for credit worthiness before the group’s standard payment terms and conditions are offered which include, in the majority of cases, the provision of a deposit of at least one month’s rental. When available, the group’s credit review includes external ratings. The group monitors the fi nancial position of its tenants on an ongoing basis. Adjustment is made for impairment of specifi c bad debts and at year end management did not consider there to be any material credit risk exposure, not covered by an allowance for doubtful debts. The group impairment allowance for doubtful debts amounted to approximately R9.9 million (2010: R10.2 million) net of tenant deposits held as security.

2011 2010



21 FINANCIAL RISK MANAGEMENT (continued) The group held tenant cash deposits amounting to R33.6 million at 31 March 2011 (2010: R27.5 million) as collateral for the rental commitments of tenants.

The individually impaired receivables relate mainly to non-national tenants which have been summonsed for non-payment of rentals, or who have vacated the premises due to diffi cult economic conditions. It was assessed that a portion of the receivables is expected to be recovered. The ageing of the provision for bad debts in respect of the impaired receivables is as follows:

Not more than 30 days 1 184 1 027 1 357 1 306 More than 30 days but not more than 60 days 1 354 1 263 1 317 1 180 More than 60 days but not more than 90 days 1 186 1 143 1 373 1 186 More than 90 days 6 187 5 012 6 201 4 539 At 31 March 9 911 8 445 10 248 8 211

At reporting date there were no specifi c concentrations of credit risk.

DISCLOSURE OF RECEIVABLES – PAST DUE BUT NOT IMPAIRED Past due – Amounts uncollected one day or more beyond their contractual due date are “past due”.

Trade receivables that are less than three months past due and that are subject to a dispute are not considered impaired until the resolution of the dispute. As of 31 March 2011, group trade receivables of R11.1 million (2010: R11.6 million) were past due but not impaired. Company trade receivables of R8.5 million (2010: R8.1 million) were past due but not impaired at 31 March 2011. These related to a number of independent customers for whom there is no recent history of default.

The age analysis of these trade receivables is as follows: Not more than 30 days 6 717 5 657 7 607 5 259 More than 30 days but not more than 60 days 2 248 1 342 1 638 1 302 More than 60 days but not more than 90 days 653 431 863 689 More than 90 days 1 527 1 111 1 451 841 11 145 8 541 11 559 8 091 Movements on the group allowance for impairment of trade receivables are as follows: At 1 April 10 248 8 211 6 519 4 791 Allowance for receivables impairment 2 310 2 363 7 211 6 415 Receivables written off during the year as uncollectable (2 647) (2 129) (3 482) (2 995) At 31 March 9 911 8 445 10 248 8 211


2011 2010


2011 2010



AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS

21 FINANCIAL RISK MANAGEMENT (continued) Allowance for impaired receivables and receivables written off have been included in “operating costs” in note 23 to

the annual fi nancial statements. Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash.

MARKET RISK Interest rate risk management At 31 March 2011, the group had interest bearing borrowings of R1 683.8 million. 98% of the interest bearing debt has

been fi xed.

The group’s interest rate risk management position and maturity analysis of other interest bearing borrowings are summarised below:

Fixed 10.94% 251.2 Aug 2011 Fixed Floating Prime less 2.1% 88.5 July 2011 Hedged at 9.40%(1)

Floating 3 month JIBAR 462.0 Nov 2013 Hedged at 9.76% Floating 3 month JIBAR 250.0 May 2012 Hedged at 9.82% Floating 3 month JIBAR 308.0 Nov 2012 Hedged at 10.24% Floating 3 month JIBAR 201.8 May 2012 Hedged at 8.60%(1)

Floating 3 month JIBAR 12.4 May 2012 Hedged at 8.41%(1)

Floating Prime less 2.1% 54.8 July 2011 Hedged at 9.60%(1)

Floating Prime less 2.1% 55.1 May 2012 Variable Total 1 683.8

(1) Includes bank and note margins and amortised transaction costs.

The short-term fl oating access facility of R100 million is not hedged. It is estimated that for the year ended 31 March 2011, a 1% change in interest rates would have affected the group’s profi t before debenture interest by approximately R551 300.

Details of the group’s interest rate swap contracts are set out in note 18 of the annual fi nancial statements.

Current Non-current Non-current 12 months 1-5 years > 5 years R000 R000 R000

Maturity analysis Other interest bearing borrowings 449 600 1 226 282 Linked debentures and premium – – 2 116 916 Trade and other payables 173 277 – –

Liquidity risk management Liquidity risk is the risk that the group will not be able to meet its fi nancial obligations as they fall due. The group’s policy is

to optimise its exposure to liquidity risk by balancing its exposure to interest rate risk and to refi nancing risk.

Rate Amount Maturity Interest Debt % Rm date rate



21 FINANCIAL RISK MANAGEMENT (continued) In effect, the group seeks to borrow for as long as possible at the lowest acceptable cost. The group regularly reviews the maturity

profi le of its fi nancial liabilities and seeks to avoid concentration of maturities through the regular replacement of facilities and by using a selection of maturity dates.

The tables on page 89 set out the maturity analysis of the group’s fi nancial liabilities based on the undiscounted contractual cash fl ows.

On expiry of the R1 020 million notes issued to note holders by VIPS, it is intended to roll over this debt, in terms of the securitisation programme, by way of a fresh issue of R1 020 million.

The linked debentures are redeemable after 25 years from date of allotment, which redemption will be fi nanced by way of a new issue of linked debentures of an equivalent amount.

New long-term loans will be entered into with relevant banks on the expiry of existing bank debt facilities.

Cash fl ows are monitored on a monthly basis to ensure that cash resources are adequate to meet funding requirements.

In terms of covenants with Nedbank and in respect of the ABSA loans to a subsidiary, the nominal value of long-term interest bearing bank debt may not exceed 50% of the value of non-securitised assets. The securitisation loan to value covenant is 65% of the external values of securitised property assets. In terms of the ABSA loans to Vukile the nominal value of long-term interest bearing debt together with the value of any negative mark-to-market valuation of interest rate hedges may not exceed 70% of the external value of the non-securitised properties. Full details hereof are set out in note 18. The directors have imposed a 45% loan to value ratio in determining the limit of the company’s external borrowings.

Value of property assets 5 351 693 4 888 936 45% thereof 2 408 262 2 200 021 Nominal value of borrowings utilised at year end (1 683 838) (1 477 509) Potential borrowing capacity 724 424 722 512

22 REVENUE Property revenue 836 124 633 916 742 072 555 223 Income from asset management business 65 146 64 582 10 208 10 208 Included in property revenue: Turnover rental 8 486 5 200 8 427 5 230

2011 2010


2011 2010



AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS

2011 2010


23 PROPERTY EXPENSES Municipal fi xed charges 63 028 50 981 57 163 45 033 Municipal consumption costs 114 231 82 248 94 258 70 152 Operating costs 79 948 61 749 69 143 57 760 Repairs and maintenance 16 018 12 253 15 310 12 083 Asset management fees – 5 126 11 130 8 289 Property management fees 20 378 15 399 20 057 14 351 293 603 227 756 267 061 207 668

24 PROFIT FROM ASSET MANAGEMENT BUSINESS Income 65 146 64 582 10 208 10 208 Income asset management fees 33 583 33 583 8 468 8 468 Sales commission 29 687 29 687 546 546 Less: Sales fee paid (390) (390) (146) (146) Management and other fees 2 266 1 702 1 340 1 340 Expenditure (20 233) (12 844) (7 141) (3 168) Administration costs (4 029) (12 844) (2 110) (3 168) Depreciation (512) – (86) – Staff costs (14 424) – (4 680) – Rent paid (1 268) – (265) – Profi t from asset management business 44 913 51 738 3 067 7 040

25 CORPORATE ADMINISTRATIVE EXPENSES Administration expenses include: Administration costs 5 233 5 691 4 622 4 480 Depreciation of furniture, fi ttings and computer

equipment 534 23 50 50 Operating lease: Premises 1 268 – 234 234 Share-based remuneration 6 177 3 980 8 200 7 316 Corporate staff and related costs (excluding

directors’ remuneration) 1 467 1 467 1 291 1 294 Internal audit fee 262 262 369 369 Loss on disposal of furniture, fi ttings and computer

equipment – – 4 3

SHARE-BASED REMUNERATION As reported previously, the board of Vukile has replaced the original long-term incentive bonus scheme with a new

long-term retention and incentive scheme which is based on individual performance relative to personal critical performance area targets (25%) and company’s performance relative to industry benchmarks (75%). Refer to note 8 in this regard together with pages 49 to 50 of the integrated report.

The charges to the company income statement for the year ended 31 March 2011 amounted to R1.19 million (old scheme) and R3.35 million (new scheme) and to the MICC Property IF’s income statement R2.12 million (asset management business). Following the resignation of two employees, credits of R560 000 (Vukile) and R351 000 (MICC) have arisen which will reduce the above charges.

As the above are equity-settled share-based payments, the accounting treatment is to recognise the share-based payments on a straight-line basis over the vesting periods.



2011 2010


26 AUDITORS’ REMUNERATION Audit fees Current year 1 704 931 1 339 825 Other services 47 47 38 38 1 751 978 1 377 863

27 INVESTMENT AND OTHER INCOME Debenture interest received from subsidiary – 85 996 – 80 215 Proceeds on termination of swaps – – 8 879 – Dividends received from subsidiary and securitisation

preference share trust – 19 – 5 700 Interest on deposits and receivables 12 419 10 464 12 027 9 833 Management fees received 240 1 923 – 2 310 Other income 1 721 1 591 282 282 14 380 99 993 21 188 98 340

28 FINANCE COSTS Secured loans 154 416 119 435 140 435 105 990 Amortisation of debt raising fees 3 684 3 684 2 538 2 538 Fair value losses on interest rate swaps 3 703 668 2 367 707 161 803 123 787 145 340 109 235

29 TAXATION Normal taxation 6 303 3 196 7 513 – Capital gains tax on property sales 7 129 5 205 – – 13 432 8 401 7 513 – Secondary taxation on companies (“STC”) and NRST 672 72 362 63 Deferred taxation under-provision in prior year (18) (18) – – Deferred taxation on straight-line rental accrual (4 039) (4 097) 2 062 1 257 Deferred taxation asset – tax losses utilised 1 136 1 136 (1 136) (1 136) Deferred taxation on fair value adjustment of

investment properties 15 998 (7 053) 70 139 45 168 Deferred taxation on other temporary differences (1 693) (926) 141 787 25 488 (2 485) 79 081 46 139

Reconciliation of tax rate Standard tax rate 28.00 28.00 28.00 28.00 Permanent differences (6.25) (9.75) 0.52 (0.54) STC/NRST 0.18 0.04 0.12 0.03 Change in use (2.49) (2.67) (4.22) (4.85) Prior year adjustment (0.02) – – – Namibia rate differential 1.31 – 0.76 – Deferred tax asset not recognised 0.52 0.56 (0.07) – Other 0.88 1.31 0.02 – Effective tax rate 22.15 17.49 25.13 22.64

% % % %


AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS

2011 2010

Group Cents per Group Cents per R000 linked unit R000 linked unit

30 RECONCILIATION OF GROUP NET PROFIT TO HEADLINE EARNINGS AND TO PROFIT AVAILABLE FOR DISTRIBUTION

Attributable profi t after taxation 10 522 3.07 235 597 77.44 ADJUSTED FOR: Debenture interest 403 948 117.79 319 231 104.93 Earnings per linked unit 414 470 120.86 554 828 182.37 Change in fair value of investment properties (78 494) (22.89) (293 975) (96.62) Total tax effects of adjustments 23 126 6.74 70 139 23.05 Change in goodwill on properties sold by a subsidiary 5 192 1.51 – – Loss/(profi t) on sale of revalued properties 14 798 4.31 (1 387) (0.46) Impairment of intangible asset 49 935 14.56 – – Amortisation of debenture premium (2 519) (0.73) (1 361) (0.45) Headline earnings of linked units 426 508 124.36 328 244 107.89 Straight-line rental accrual net of deferred taxation (18 407) (5.36) (4 979) (1.64) Adjustment for reduced distribution in respect of

new issue of shares – – – 3.29 Available for distribution 408 101 119.0 323 265 109.54

2011 2010


CALCULATION OF DISTRIBUTABLE EARNINGS Net profi t from property operations 556 889 482 052 Less: Straight-line income adjustment (14 368) (7 041) Investment and other income 14 380 21 188 Net income from the asset management business 44 913 3 067 Administrative expenses (25 509) (23 781) Finance costs (161 803) (145 340) Taxation (excluding deferred tax on revaluation adjustments) (6 401) (6 880) Available for distribution 408 101 323 265



2011 2010


31 STATEMENT OF CASH FLOWS The following convention applies to fi gures

under “adjustments” below. Infl ows of cash are represented by fi gures in brackets, while outfl ows of cash are represented by fi gures without brackets.

31.1 ADJUSTMENTS Gross change in fair value of investment

properties (92 862) (3 316) (301 016) (201 103) Finance costs 161 803 123 787 145 340 109 235 Debenture interest 403 948 403 948 319 231 319 231 Investment and other income (14 380) (99 993) (21 188) (98 340) Share-based remuneration 6 177 3 980 12 078 7 316 Interest swaption amortisation (207) (207) 207 207 Amortised available-for-sale fi nancial asset 668 668 – – Share-based remuneration refunded by

Sanlam Properties – – (3 878) – Loss on disposal of fi xed assets – – 4 3 Change in goodwill on sale of properties by a

subsidiary 5 192 – – – Loss/(profi t) on sale of investment properties 14 798 17 219 (1 387) – Impairment of intangible asset 49 935 49 935 Depreciation on furniture, fi ttings and

equipment 534 23 136 50 Amortisation of debenture premium (2 519) (2 519) (1 361) (1 361) 533 087 493 525 148 166 135 238

31.2 NET CHANGES IN WORKING CAPITAL Movement in working capital Increase in trade and other receivables (24 667) (46 654) (17 613) (15 786) Increase/(decrease) in trade and other payables 37 002 33 721 13 593 (310) 12 335 (12 933) (4 020) (16 096)

31.3 TAXATION PAID/(REFUNDED) Amount owing at beginning of year 2 373 (6) 1 079 (766) Capital gains taxation 6 590 4 666 – – Current taxation 29 6 303 3 196 7 513 – Secondary taxation on companies and

non-resident shareholders’ tax 672 72 362 63 15 938 7 928 8 954 (703) Net amount owing at end of year (5 416) (4 140) (2 373) 6 Tax paid/(refunded) during year 10 522 3 788 6 581 (697)

31.4 DISTRIBUTION TO LINKED UNITHOLDERS Distribution to linked unitholders owing at

beginning of year 180 974 180 974 159 006 159 006 Debenture interest per income statement 403 948 403 948 319 231 319 231 Dividends declared 824 824 651 651 Distribution to linked unitholders owing at

end of year (235 603) (235 603) (180 974) (180 974) Distribution paid during the year 350 143 350 143 297 914 297 914


AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS

2011 2010

Amounts Amounts owed owed Amount to/(by) Amount to/(by) paid/ related paid/ related Type of (received) parties (received) parties transaction R000 R000 R000 R000

32 RELATED PARTY TRANSACTIONS GROUP Details of the transactions with directors,

including key management, are set out in the Directors’ report. Apart from the executive directors, no employees are considered to be key management personnel.

The following are related party transactions:

• Sanlam Life Insurance Limited Lease rentals 1 269 (6 196) 500 – Asset management and other fees received (63 270) – (10 074) (5 953)

• Sanlam Properties (Pty) Ltd Asset management and other fees 1 603 419 8 933 472

Consulting fees (1 431) – (280) –

• Sanlam Capital Markets Assumption of (Pty) Ltd company’s conditional fi nancial obligations to senior management 430(1) – 8 998(1) –

• Gensec Property Services Property Limited trading as JHI management and other fees 19 469 1 487 19 538 3 331

• Kuper Legh Property Group Property management and other fees 5 373 327 7 021 371

(1) Included in this amount is R0.4 million which has been reimbursed by Sanlam Properties (Pty) Ltd (“SP”) in respect of the long-term incentive scheme liabilities assumed by the Vukile Group on the take-over of the SP employees involved in the asset management business.

All above amounts were paid or received by May 2011.

Sanlam Properties (Pty) Ltd, Sanlam Life Insurance Limited and Sanlam Capital Markets (Pty) Ltd are subsidiaries of Sanlam Limited which held directly and indirectly through Lazarus Capital (Pty) Ltd a total of 131 727 393 or 37.5% of the issued linked units of Vukile Property Fund Limited at 31 March 2011. Sanlam Limited sold its minority interest in Gensec Property Services Limited trading as JHI, during the year. Kuper Legh Property Group is controlled by an individual who is also a signifi cant unitholder in Vukile.



Directors’ Gross Effective valuation Properties owned lettable Purchase date of at 31 Mar Expen- by the group at area price acqui- 2011 Revenue diture March 2011 Region Town m2 R000 sition R000 R000 R000

33 OPERATING SEGMENT REPORT OFFICES Arivia.kom Building Gauteng Midrand 15 634 78 238 Apr 2004 147 052 20 027 4 049 DLV Building Gauteng Pretoria 2 872 13 469 Apr 2004 18 848 3 306 791 Barlow Place Gauteng Sandton 2 460 8 660 Apr 2004 25 220 3 572 1 199 Mutual and Federal Gauteng Pretoria 12 093 54 712 Apr 2004 68 349 17 150 4 762 Pinepark Western Cape Cape Town 2 804 13 347 Apr 2004 23 523 3 186 1 011 Eva Park Gauteng Johannesburg 10 911 30 657 Apr 2004 51 399 9 169 3 873 Louis Leipoldt Hospital Western Cape Bellville 22 311 106 937 Apr 2004 218 317 20 484 1 902 Nelspruit Prorom Mpumalanga Nelspruit 6 181 16 108 Apr 2004 27 382 6 273 3 412 Bedfordview GIS Gauteng Johannesburg 6 759 26 396 Apr 2004 34 101 6 358 3 181 259 West Street Gauteng Centurion 5 180 17 979 Apr 2004 36 700 5 933 2 067 East London Sanlam Park Eastern Cape East London 9 069 59 236 Apr 2004 62 344 9 303 2 648 Durban Embassy KwaZulu-Natal Durban 32 346 107 041 Apr 2004 182 028 33 915 13 290 Oakhurst Parktown Gauteng Johannesburg 9 085 34 400 Mar 2006 67 310 11 084 3 866 50 6th Road Hyde Park Gauteng Sandton 4 181 56 573 Sept 2006 57 602 7 984 1 788 Waymark Offi ces Gauteng Centurion 3 480 34 174 Mar 2008 37 307 4 342 611 West Street Houghton Gauteng Houghton 4 415 33 504 Sept 2007 46 082 6 518 2 390 Pretoria Hatfi eld Sanlam Building Gauteng Pretoria 5 358 41 875 Sept 2010 43 035 3 589 1 298 Pretoria Sanwood Park Gauteng Pretoria 6 388 55 464 Sept 2010 54 507 3 915 1 286 Sandton St Andrews Complex Gauteng Sandton 9 902 76 805 Sept 2010 85 640 6 908 2 460 Sandton Sunninghill Place Gauteng Sandton 8 774 73 986 Sept 2010 75 121 6 420 1 942 Randburg Triangle Gauteng Randburg 3 047 12 725 Oct 2003 16 602 2 966 1 281 De Tijger Offi ce Park Western Cape Cape Town 4 159 25 856 Oct 2003 29 027 5 047 1 822 187 409 978 142 1 407 496 197 449 60 929

INDUSTRIAL Sony Building Gauteng Midrand 11 001 33 530 Apr 2004 56 108 8 136 4 100 Supra Hino Gauteng Johannesburg 2 840 14 264 Apr 2004 25 025 2 147 295 Hellman International Gauteng Johannesburg 5 241 5 807 Apr 2004 29 349 3 659 736 Valley View Industrial Park KwaZulu-Natal Durban 30 790 53 795 Apr 2004 77 299 10 593 2 723 Village Main Industrial Park Gauteng Johannesburg 8 057 5 400 Apr 2004 16 934 3 704 2 254 John Griffi n Gauteng Johannesburg 9 774 5 298 Apr 2004 14 853 2 857 1 220 AAD Western Cape Cape Town 3 024 7 845 Apr 2004 12 864 1 689 135 Richmond Park KwaZulu-Natal Durban 7 940 10 800 Apr 2004 22 798 4 707 2 008 Centurion N1 Gauteng Centurion 11 413 12 990 Apr 2004 47 489 4 488 1 448 Midrand Allandale undeveloped land Gauteng Midrand 5 655 Apr 2004 29 500 Midrand Sanitary City Gauteng Midrand 6 342 15 277 Apr 2004 32 674 3 093 402 Parow Industrial Park Western Cape Cape Town 19 834 28 059 Apr 2004 51 202 7 573 1 134 Midrand Allandale Park Gauteng Midrand 21 344 23 175 Apr 2004 68 254 10 619 6 011 Germiston R24 Gauteng Germiston 34 977 53 520 Apr 2004 138 247 17 206 4 954 Randburg Trevallyn Gauteng Randburg 32 006 48 324 Apr 2004 114 742 15 902 6 145 Pinetown Westmead Kyalami Park KwaZulu-Natal Pinetown 16 914 59 390 Sept 2010 60 172 4 905 1 899 Randburg Tungsten Gauteng Randburg 10 365 13 336 Oct 2003 34 563 5 487 1 616 Robertville Mini Factories Gauteng Johannesburg 28 106 15 983 Oct 2003 66 535 12 230 6 117 259 968 412 448 898 608 118 995 43 197


AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS

Linked Interest Gross deben- bearing weighted Properties owned tures and borrow- average Va- by the group at Goodwill premiums ings rental cancy March 2011 Region Town R000 R000 R000 R/m2 pm %

33 OPERATING SEGMENT REPORT (continued) OFFICES Arivia.kom Building Gauteng Midrand 58 168 46 049 75.54 DLV Building Gauteng Pretoria 7 456 5 902 87.32 11.55 Barlow Place Gauteng Sandton 9 976 7 897 88.71 Mutual and Federal Gauteng Pretoria 27 036 21 403 51.59 Pinepark Western Cape Cape Town 9 305 7 366 70.00 Eva Park Gauteng Johannesburg 20 331 16 096 72.22 23.96 Louis Leipoldt Hospital Western Cape Bellville 86 358 68 366 71.71 Nelspruit Prorom Mpumalanga Nelspruit 10 831 8 575 75.77 2.49 Bedfordview GIS Gauteng Johannesburg 13 489 10 679 58.80 17.23 259 West Street Gauteng Centurion 14 517 11 493 76.48 0.38 East London Sanlam Park Eastern Cape East London 24 661 19 523 76.05 Durban Embassy KwaZulu-Natal Durban 72 003 57 002 66.87 9.06 Oakhurst Parktown Gauteng Johannesburg 26 625 21 078 78.79 6.86 50 6th Road Hyde Park Gauteng Sandton 22 785 18 038 132.05 Waymark Offi ces Gauteng Centurion 14 757 11 683 85.01 West Street Houghton Gauteng Houghton 18 228 14 431 92.92 Pretoria Hatfi eld Sanlam Building Gauteng Pretoria 17 023 13 476 99.61 0.48 Pretoria Sanwood Park Gauteng Pretoria 21 561 17 069 78.58 46.17 Sandton St Andrews Complex Gauteng Sandton 33 876 26 818 75.17 1.26 Sandton Sunninghill Place Gauteng Sandton 29 715 23 524 78.09 14.79 Randburg Triangle Gauteng Randburg 1 688 6 567 5 199 52.75 De Tijger Offi ce Park Western Cape Cape Town 3 403 11 482 9 090 92.03 16.04 5 091 556 750 440 757

INDUSTRIAL Sony Building Gauteng Midrand 22 194 17 570 52.08 18.82 Supra Hino Gauteng Johannesburg 9 899 7 837 55.13 Hellman International Gauteng Johannesburg 11 609 9 191 49.96 Valley View Industrial Park KwaZulu-Natal Durban 30 576 24 206 28.06 Village Main Industrial Park Gauteng Johannesburg 6 698 5 302 29.55 John Griffi n Gauteng Johannesburg 5 875 4 651 16.19 AAD Western Cape Cape Town 5 089 4 028 45.36 Richmond Park KwaZulu-Natal Durban 9 018 7 139 37.22 Centurion N1 Gauteng Centurion 18 785 14 871 40.31 16.08 Midrand Allandale undeveloped land Gauteng Midrand 11 669 9 238 Midrand Sanitary City Gauteng Midrand 12 925 10 232 38.58 Parow Industrial Park Western Cape Cape Town 20 253 16 034 31.67 2.75 Midrand Allandale Park Gauteng Midrand 26 999 21 374 39.84 18.59 Germiston R24 Gauteng Germiston 54 685 43 292 35.07 1.00 Randburg Trevallyn Gauteng Randburg 45 387 35 932 35.73 5.73 Pinetown Westmead Kyalami Park KwaZulu-Natal Pinetown 23 802 18 843 34.49 1.69 Randburg Tungsten Gauteng Randburg 1 769 13 672 10 823 40.49 11.17 Robertville Mini Factories Gauteng Johannesburg 2 120 26 319 20 836 28.86 8.26 3 889 355 454 281 399



Directors’ Gross Effective valuation Properties owned lettable Purchase date of at 31 Mar Expen- by the group at area price acqui- 2011 Revenue diture March 2011 Region Town m2 R000 sition R000 R000 R000

33 OPERATING SEGMENT REPORT (continued) RETAIL Truworths Centre Mpumalanga Nelspruit 1 920 7 336 Apr 2004 27 603 2 708 490 Grosvenor Shopping Centre Gauteng Johannesburg 4 664 31 381 Apr 2004 35 234 7 853 3 256 Pine Crest Centre KwaZulu-Natal Durban 20 101 99 338 Apr 2004 188 215 32 522 9 716 Lichtenburg Sanlam Centre North West Lichtenburg 8 460 18 706 Apr 2004 34 926 5 166 1 698 Barlows Audi** Western Cape Cape Town 3 100 24 025 Apr 2004 37 022 3 687 380 Bloemfontein Plaza and Parkade Free State Bloemfontein 38 448 45 726 Apr 2004 130 355 34 257 18 789 Daveyton Shopping Centre Gauteng Johannesburg 16 983 49 883 Apr 2004 157 820 22 988 7 963 Dobsonville Shopping Centre Gauteng Johannesburg 23 177 56 118 Apr 2004 194 375 29 039 10 456 Durban Phoenix Plaza KwaZulu-Natal Durban 24 342 189 140 Apr 2004 414 222 60 096 20 167 Randburg Square Gauteng Randburg 51 370 70 668 Apr 2004 209 272 49 815 24 997 Moratiwa Crossing Limpopo Jane Furse 10 697 61 540 Nov 2007 75 203 11 710 3 429 Kimberley Kim Park Northern Cape Kimberley 10 494 47 915 Sept 2010 38 210 5 824 3 178 Nelspruit Sanlam Centre Mpumalanga Nelspruit 13 934 39 963 Sept 2010 41 211 6 717 3 873 Rustenburg Edgars Building North West Rustenburg 9 784 83 750 Sept 2010 85 336 6 256 554 Roodepoort Hillfox Power Centre Gauteng Roodepoort 36 103 62 098 Oct 2003 155 070 26 394 11 618 Mala Plaza Limpopo Malamulele 4 865 11 758 Oct 2003 45 540 4 400 891 Masingita Spar Centre Limpopo Giyani 5 485 13 947 Oct 2003 22 949 4 982 1 634 Piet Retief Shopping Centre Mpumalanga Piet Retief 7 542 20 818 Oct 2003 51 329 6 192 1 389 Qualbert Centre KwaZulu-Natal Durban 4 777 24 432 Oct 2003 43 752 6 977 1 183 Kokstad Game Centre KwaZulu-Natal Kokstad 12 867 37 666 Oct 2003 85 854 10 300 2 699 The Victoria Centre KwaZulu-Natal Pietermaritzburg 11 021 55 685 Oct 2003 77 682 12 168 3 208 Meadowdale Land Gauteng Johannesburg 16 650 Meadowdale Mall Gauteng Johannesburg 35 339 66 170 Oct 2003 115 023 24 081 12 732 Oshakati Shopping Centre Namibia Oshakati 22 269 76 929 Oct 2003 159 458 25 415 9 920 Oshikango Ellerines Centre Namibia Oshikango 9 163 19 542 Oct 2003 93 487 8 744 895 Ondangwa Shoprite Checkers Namibia Ondangwa 5 739 17 959 Oct 2003 38 595 5 431 632 Katatura Checkers Centre Namibia Katatura 10 587 41 157 Oct 2003 71 442 13 649 5 056 BPI House Namibia Windhoek 12 840 110 803 Jul 2007 118 331 15 321 3 503 416 071 1 384 453 2 764 166 442 692 164 306

HELD FOR SALE VWL Building* Gauteng Pretoria 16 933 67 346 Apr 2004 84 961 17 611 6 596 Glencairn Building* Gauteng Johannesburg 13 378 41 875 Apr 2004 53 787 14 001 4 812 Midtown Building* Gauteng Pretoria 8 086 34 947 Apr 2004 38 572 4 910 1 339 Botbyl Subaru Building* Gauteng Pretoria 4 603 23 637 Apr 2004 13 659 2 526 1 016 Truworths Building* Gauteng Johannesburg 6 919 40 550 Apr 2004 65 166 6 421 538 Kleinfontein Offi ces* Gauteng Johannesburg 439 6 413 Oct 2003 1 700 3 363 1 073 Oshakati Beares Furnishers* Namibia Oshakati 2 566 4 502 Oct 2003 5 657 878 165 Rundu Ellerines* Namibia Rundu 1 283 4 330 Oct 2003 2 288 138 99 Katima Mulilo Pep Stores* Namibia Katima Mulilo 2 472 6 149 Oct 2003 15 632 1 920 189 56 679 229 749 281 422 51 768 15 827


AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS

Linked Interest Gross deben- bearing weighted Properties owned tures and borrow- average Va- by the group at Goodwill premiums ings rental cancy March 2011 Region Town R000 R000 R000 R/m2 pm %

33 OPERATING SEGMENT REPORT (continued) RETAIL Truworths Centre Mpumalanga Nelspruit 10 919 8 644 105.78 Grosvenor Shopping Centre Gauteng Johannesburg 13 937 11 034 102.14 25.02 Pine Crest Centre KwaZulu-Natal Durban 74 450 58 940 96.65 5.12 Lichtenburg Sanlam Centre North West Lichtenburg 13 815 10 937 46.97 7.37 Barlows Audi** Western Cape Cape Town 14 644 11 593 95.04 Bloemfontein Plaza and Parkade Free State Bloemfontein 51 563 40 821 54.56 4.31 Daveyton Shopping Centre Gauteng Johannesburg 62 427 49 421 79.64 3.89 Dobsonville Shopping Centre Gauteng Johannesburg 76 887 60 869 82.28 4.55 Durban Phoenix Plaza KwaZulu-Natal Durban 163 850 129 714 165.02 0.79 Randburg Square Gauteng Randburg 82 780 65 533 53.40 9.93 Moratiwa Crossing Limpopo Jane Furse 29 747 23 550 74.88 0.08 Kimberley Kim Park Northern Cape Kimberley 15 114 11 965 65.78 16.36 Nelspruit Sanlam Centre Mpumalanga Nelspruit 16 301 12 905 55.04 5.19 Rustenburg Edgars Building North West Rustenburg 33 756 26 723 70.71 Roodepoort Hillfox Power Centre Gauteng Roodepoort 8 239 61 339 48 560 42.35 5.10 Mala Plaza Limpopo Malamulele 1 524 18 014 14 261 75.38 7.04 Masingita Spar Centre Limpopo Giyani 1 808 9 078 7 187 61.50 4.92 Piet Retief Shopping Centre Mpumalanga Piet Retief 2 726 20 304 16 074 67.17 Qualbert Centre KwaZulu-Natal Durban 3 212 17 307 13 701 111.30 Kokstad Game Centre KwaZulu-Natal Kokstad 4 951 33 960 26 885 61.12 2.41 The Victoria Centre KwaZulu-Natal Pietermaritzburg 7 358 30 728 24 326 86.94 Meadowdale Land Gauteng Johannesburg 6 586 5 214 Meadowdale Mall Gauteng Johannesburg 8 716 45 498 36 019 38.03 0.35 Oshakati Shopping Centre Namibia Oshakati 10 425 63 075 49 934 74.11 Oshikango Ellerines Centre Namibia Oshikango 2 751 36 980 29 275 89.10 Ondangwa Shoprite Checkers Namibia Ondangwa 2 390 15 267 12 086 76.01 Katatura Checkers Centre Namibia Katatura 5 613 28 260 22 372 78.16 BPI House Namibia Windhoek 46 807 37 056 92.19 5.37 59 713 1 093 393 865 599

HELD FOR SALE VWL Building* Gauteng Pretoria 33 607 26 605 59.09 1.30 Glencairn Building* Gauteng Johannesburg 21 276 16 843 68.58 3.73 Midtown Building* Gauteng Pretoria 15 257 12 079 46.16 Botbyl Subaru Building* Gauteng Pretoria 5 403 4 277 88.38 51.95 Truworths Building* Gauteng Johannesburg 25 777 20 407 73.8 Kleinfontein Offi ces* Gauteng Johannesburg 88 673 532 54.41 Oshakati Beares Furnishers* Namibia Oshakati 674 2 238 1 772 27.70 Rundu Ellerines* Namibia Rundu 536 905 717 34.91 54.95 Katima Mulilo Pep Stores* Namibia Katima Mulilo 1 116 6 183 4 895 65.70 2 414 111 319 88 127



Directors’ Gross valuation Properties owned lettable Purchase at 31 Mar Expen- by the group at area price 2011 Revenue diture March 2011 m2 R000 R000 R000 R000

33 OPERATING SEGMENT REPORT (continued) Total group 920 127 3 004 792 5 351 692 810 904 284 259 Lease commissions 13 723 – – Asset management business – 64 904 19 992 Group total (excluding sold properties) 5 365 415 875 808 304 251 Sold properties 25 220 9 344 Group total 901 028 313 595

* Investment property held for sale. ** Leasehold property.

Add: Excluded items Intangible asset 312 832 Development expenditure 2 723 Furniture, fi ttings and computer equipment 1 774 Available-for-sale fi nancial asset 10 208 Derivative fi nancial instrument 4 782 Goodwill 71 107 Trade and other receivables 71 409 Cash and cash equivalents 337 809 Total assets 6 178 059

Total group 71 107 2 116 916 1 675 882 Lease commissions – – – Asset management business – – – Group total 71 107 2 116 916 1 675 882 Linked debentures and premiums and interest bearing borrowings 3 792 798


Add: Excluded items Equity and reserves 1 404 550 Derivative fi nancial instruments 21 867 Deferred taxation 544 548 Trade and other payables 173 277 Taxation payable 5 416 Linked holders for distribution 235 603 Total liabilities 6 178 059

Linked Interest deben- bearing Properties owned tures and borrow- by the group at Goodwill premiums ings March 2011 R000 R000 R000


AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS

Directors’ Gross Effective valuation Properties owned lettable Purchase date of at 31 Mar by the group at area price acqui- 2010 Revenue March 2010 Region Town m2 R000 sition R000 R000

33 OPERATING SEGMENT REPORT (continued) OFFICES Arivia.kom Building Gauteng Midrand 15 634 78 238 Apr 2004 144 843 19 038 DLV Building Gauteng Pretoria 2 872 13 469 Apr 2004 20 286 1 780 VWL Building Gauteng Pretoria 16 933 67 346 Apr 2004 91 303 17 700 Barlow Place Gauteng Sandton 2 460 8 660 Apr 2004 25 187 3 366 Glencairn Building Gauteng Johannesburg 13 378 41 875 Apr 2004 48 551 12 664 Mutual and Federal Gauteng Pretoria 12 093 54 712 Apr 2004 70 187 13 109 Pinepark Western Cape Cape Town 2 804 13 347 Apr 2004 22 560 2 867 Midtown Building Gauteng Pretoria 8 086 34 947 Apr 2004 45 105 5 503 Eva Park Gauteng Johannesburg 10 918 30 657 Apr 2004 58 519 9 764 Louis Leipoldt Hospital Western Cape Bellville 22 311 106 937 Apr 2004 218 326 17 988 Nelspruit Prorom Mpumalanga Nelspruit 6 181 16 108 Apr 2004 28 328 5 219 Bedfordview GIS Gauteng Johannesburg 6 759 26 396 Apr 2004 32 583 6 278 259 West Street Gauteng Centurion 5 180 17 979 Apr 2004 36 922 4 718 227 Andries Street Gauteng Pretoria 9 604 12 990 Apr 2004 40 058 9 148 East London Sanlam Park Eastern Cape East London 9 069 59 236 Apr 2004 63 270 8 576 Durban Embassy KwaZulu-Natal Durban 32 346 107 041 Apr 2004 193 115 31 857 Oakhurst Parktown Gauteng Johannesburg 9 085 34 400 Mar 2006 64 490 10 310 50 6th Road Hyde Park Gauteng Sandton 4 181 56 573 Sept 2006 59 097 8 095 Waymark Offi ces Gauteng Centurion 3 480 34 174 Mar 2008 36 997 4 111 West Street Houghton Gauteng Houghton 4 415 33 504 Sept 2007 36 784 6 187 Randburg Triangle Gauteng Randburg 3 047 12 725 Oct 2003 15 147 2 669 Kleinfontein Offi ces Gauteng Johannesburg 4 537 6 413 Oct 2003 12 373 2 932 De Tijger Offi ce Park Western Cape Cape Town 4 158 25 856 Oct 2003 32 752 4 328 209 531 893 583 1 396 783 208 207

INDUSTRIAL Sony Building Gauteng Midrand 11 274 33 530 Apr 2004 66 153 6 970 Supra Hino Gauteng Johannesburg 2 840 14 264 Apr 2004 24 617 2 001 Hellman International Gauteng Johannesburg 5 241 5 807 Apr 2004 28 247 3 261 Valley View Industrial Park KwaZulu-Natal Durban 30 790 53 795 Apr 2004 75 863 11 019 Village Main Industrial Park Gauteng Johannesburg 8 057 5 400 Apr 2004 17 273 3 034 John Griffi n Gauteng Johannesburg 9 774 5 298 Apr 2004 14 506 2 555 AAD Western Cape Cape Town 3 024 7 845 Apr 2004 14 091 1 481 Richmond Park KwaZulu-Natal Durban 7 940 10 800 Apr 2004 21 188 3 932 Centurion N1 Gauteng Centurion 11 413 12 990 Apr 2004 44 140 5 255 Midrand Allandale undeveloped land Gauteng Midrand 5 655 Apr 2004 29 500 Midrand Sanitary City Gauteng Midrand 6 342 15 277 Apr 2004 32 772 2 813 Parow Industrial Park Western Cape Cape Town 19 834 28 059 Apr 2004 61 651 6 511 Midrand Allandale Park Gauteng Midrand 21 344 23 175 Apr 2004 62 427 8 871 Germiston R24 Gauteng Germiston 34 977 53 520 Apr 2004 133 841 15 158 Randburg Trevallyn Gauteng Randburg 32 006 48 324 Apr 2004 116 251 14 645 Randburg Tungsten Gauteng Randburg 10 365 13 336 Oct 2003 32 414 5 117 Robertville Mini Factories Gauteng Johannesburg 28 106 15 983 Oct 2003 63 797 11 373 Ndabeni Business Park Western Cape Cape Town 9 431 16 898 Oct 2003 24 102 3 891

252 758 369 956 862 833 107 887



Linked Interest Gross deben- bearing weighted Properties owned Expen- tures and borrow- average Va- by the group at diture Goodwill premiums ings rental cancy March 2010 Region Town R000 R000 R000 R000 R/m2 pm %

33 OPERATING SEGMENT REPORT (continued) OFFICES Arivia.kom Building Gauteng Midrand 4 032 45 460 43 638 75.21 DLV Building Gauteng Pretoria 1 649 6 367 6 112 86.34 10.19 VWL Building Gauteng Pretoria 7 191 28 656 27 508 58.82 1.30 Barlow Place Gauteng Sandton 1 293 7 905 7 588 81.38 Glencairn Building Gauteng Johannesburg 3 853 15 238 14 627 65.56 3.73 Mutual and Federal Gauteng Pretoria 6 031 22 029 21 146 47.85 Pinepark Western Cape Cape Town 1 565 7 081 6 797 68.02 Midtown Building Gauteng Pretoria 1 611 14 156 13 589 60.13 Eva Park Gauteng Johannesburg 4 536 18 367 17 630 68.40 27.26 Louis Leipoldt Hospital Western Cape Bellville 1 741 68 523 65 777 62.90 Nelspruit Prorom Mpumalanga Nelspruit 1 963 8 891 8 535 58.19 2.49 Bedfordview GIS Gauteng Johannesburg 2 996 10 226 9 817 38.62 1.46 259 West Street Gauteng Centurion 1 548 11 588 11 124 70.77 227 Andries Street Gauteng Pretoria 4 787 12 572 12 069 57.45 East London Sanlam Park Eastern Cape East London 3 109 19 858 19 062 70.11 Durban Embassy KwaZulu-Natal Durban 13 605 60 610 58 181 61.89 Oakhurst Parktown Gauteng Johannesburg 3 700 20 240 19 429 70.02 4.41 50 6th Road Hyde Park Gauteng Sandton 2 807 18 548 17 805 120.89 Waymark Offi ces Gauteng Centurion 786 11 612 11 146 77.99 West Street Houghton Gauteng Houghton 2 215 11 545 11 082 75.51 0.20 Randburg Triangle Gauteng Randburg 1 032 1 408 4 754 4 563 48.63 Kleinfontein Offi ces Gauteng Johannesburg 783 710 3 883 3 728 55.00 3.31 De Tijger Offi ce Park Western Cape Cape Town 1 189 2 861 10 279 9 867 85.96 18.64 74 022 4 979 438 388 420 820

INDUSTRIAL Sony Building Gauteng Midrand 2 160 20 762 19 930 48.02 20.92 Supra Hino Gauteng Johannesburg 351 7 726 7 417 51.52 Hellman International Gauteng Johannesburg 585 8 865 8 510 45.95 Valley View Industrial Park KwaZulu-Natal Durban 3 501 23 810 22 856 25.95 Village Main Industrial Park Gauteng Johannesburg 1 622 5 421 5 204 26.49 5.39 John Griffi n Gauteng Johannesburg 1 005 4 553 4 370 14.85 AAD Western Cape Cape Town 185 4 423 4 245 42.00 Richmond Park KwaZulu-Natal Durban 1 581 6 650 6 383 34.13 Centurion N1 Gauteng Centurion 1 977 13 854 13 299 39.49 27.60 Midrand Allandale undeveloped land Gauteng Midrand 9 259 8 888 Midrand Sanitary City Gauteng Midrand 459 10 286 9 873 35.08 Parow Industrial Park Western Cape Cape Town 1 070 19 350 18 574 28.28 6.16 Midrand Allandale Park Gauteng Midrand 5 249 19 593 18 808 39.19 21.21 Germiston R24 Gauteng Germiston 4 589 42 007 40 323 32.06 1.00 Randburg Trevallyn Gauteng Randburg 5 108 36 486 35 024 33.43 2.66 Randburg Tungsten Gauteng Randburg 2 142 1 476 10 173 9 766 37.91 Robertville Mini Factories Gauteng Johannesburg 4 536 1 768 20 023 19 221 26.12 Ndabeni Business Park Western Cape Cape Town 997 1 870 7 564 7 261 27.30 37 117 5 114 270 805 259 952


AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS


33 OPERATING SEGMENT REPORT (continued)

RETAIL

Botbyl Subaru Building Gauteng Pretoria 4 603 23 637 Apr 2004 29 294 4 207

Truworths Centre Mpumalanga Nelspruit 1 920 7 336 Apr 2004 26 305 2 310

Grosvenor Shopping Centre Gauteng Johannesburg 4 664 31 381 Apr 2004 41 586 7 725

Truworths Building Gauteng Johannesburg 6 919 40 550 Apr 2004 65 182 6 058

Pine Crest Centre KwaZulu-Natal Durban 40 484 99 338 Apr 2004 197 257 29 969

Lichtenburg Sanlam Centre North West Lichtenburg 8 460 18 706 Apr 2004 35 674 4 975

Barlows Audi** Western Cape Cape Town 3 100 24 025 Apr 2004 42 852 3 708

Bloemfontein Plaza &

Parkade Free State Bloemfontein 38 438 45 726 Apr 2004 116 799 31 299

Daveyton Shopping Centre Gauteng Johannesburg 16 983 49 883 Apr 2004 138 433 21 493

Dobsonville Shopping Centre Gauteng Johannesburg 23 133 56 118 Apr 2004 175 074 26 462

Durban Phoenix Plaza KwaZulu-Natal Durban 24 342 189 140 Apr 2004 390 944 56 457

Randburg Square Gauteng Randburg 51 370 70 668 Apr 2004 208 179 46 810

Moratiwa Crossing Limpopo Jane Furse 12 366 61 540 Nov 2007 71 363 10 744

Roodepoort Hillfox

Power Centre Gauteng Roodepoort 36 103 62 098 Oct 2003 143 401 24 795

Mala Plaza Limpopo Malamulele 4 804 11 758 Oct 2003 30 006 3 887

Masingita Spar Centre Limpopo Giyani 5 485 13 947 Oct 2003 23 344 4 110

Piet Retief Shopping

Centre Mpumalanga Piet Retief 7 541 20 818 Oct 2003 39 913 5 528

Nelspruit Game Centre Mpumalanga Nelspruit 5 600 24 432 Oct 2003 23 586 6 240

Qualbert Centre KwaZulu-Natal Durban 4 777 24 432 Oct 2003 51 182 6 287

Kokstad Game Centre KwaZulu-Natal Kokstad 12 867 37 666 Oct 2003 83 352 9 694

The Victoria Centre KwaZulu-Natal Pietermaritzburg 11 021 55 685 Oct 2003 75 699 11 355

Meadowdale Land Gauteng Johannesburg 16 650

Meadowdale Mall Gauteng Johannesburg 35 339 66 170 Oct 2003 104 641 22 470

Oshakati Shopping Centre Namibia Oshakati 20 521 76 929 Oct 2003 123 486 23 015

Oshakati Beares Furnishers Namibia Oshakati 2 566 4 502 Oct 2003 5 282 804

Oshikango Ellerines Centre Namibia Oshikango 5 967 19 542 Oct 2003 49 121 6 523

Ondangwa Shoprite Checkers Namibia Ondangwa 5 739 17 959 Oct 2003 34 751 4 756

Katatura Checkers Centre Namibia Katatura 10 586 41 157 Oct 2003 63 038 11 548

Rundu Ellerines Namibia Rundu 1 283 4 330 Oct 2003 1 841 96

Katima Mulilo Pep Stores Namibia Katima Mulilo 2 472 6 149 Oct 2003 14 267 1 714

BPI House Namibia Windhoek 12 841 110 803 Jul 2007 114 485 13 716

422 294 1 316 425 2 536 987 408 755



Linked Interest Gross deben- bearing weighted Properties owned Expen- tures and borrow- average Va- by the group at diture Goodwill premiums ings rental cancy March 2010 Region Town R000 R000 R000 R000 R/m2 pm %

33 OPERATING SEGMENT REPORT (continued)

RETAIL

Botbyl Subaru Building Gauteng Pretoria 2 120 9 194 8 826 58.02 32.91

Truworths Centre Mpumalanga Nelspruit 289 8 256 7 925 110.35

Grosvenor Shopping Centre Gauteng Johannesburg 3 254 13 052 12 529 92.67 2.89

Truworths Building Gauteng Johannesburg 549 20 458 19 638 71.16

Pine Crest Centre KwaZulu-Natal Durban 9 915 61 910 59 429 88.85 4.36

Lichtenburg Sanlam Centre North West Lichtenburg 1 659 11 196 10 748 43.76 9.81

Barlows Audi** Western Cape Cape Town 330 13 449 12 910 88.00

Bloemfontein Plaza &

Parkade Free State Bloemfontein 15 918 36 658 35 189 50.81 2.50

Daveyton Shopping Centre Gauteng Johannesburg 7 435 43 448 41 707 73.32 2.18

Dobsonville Shopping Centre Gauteng Johannesburg 9 533 54 948 52 746 74.03 2.56

Durban Phoenix Plaza KwaZulu-Natal Durban 19 214 122 700 117 783 151.14 0.31

Randburg Square Gauteng Randburg 23 886 65 338 62 720 49.28 5.34

Moratiwa Crossing Limpopo Jane Furse 2 634 22 398 21 500 69.75

Roodepoort Hillfox

Power Centre Gauteng Roodepoort 11 367 6 871 45 007 43 204 39.38 5.37

Mala Plaza Limpopo Malamulele 1 053 1 301 9 418 9 040 72.30 0.02

Masingita Spar Centre Limpopo Giyani 1 352 1 543 7 327 7 033 56.93 6.05

Piet Retief Shopping

Centre Mpumalanga Piet Retief 1 102 2 303 12 527 12 025 59.94 2.50

Nelspruit Game Centre Mpumalanga Nelspruit 371 2 703 7 403 7 106 93.31

Qualbert Centre KwaZulu-Natal Durban 1 039 2 703 16 064 15 420 111.30 0.54

Kokstad Game Centre KwaZulu-Natal Kokstad 2 464 4 168 26 160 25 112 54.61 0.93

The Victoria Centre KwaZulu-Natal Pietermaritzburg 3 196 6 161 23 759 22 807 82.40 4.45

Meadowdale Land Gauteng Johannesburg 5 226 5 016

Meadowdale Mall Gauteng Johannesburg 11 056 7 321 32 842 31 526 33.24 0.43

Oshakati Shopping Centre Namibia Oshakati 8 335 8 512 38 757 37 204 72.96 1.93

Oshakati Beares Furnishers Namibia Oshakati 244 498 1 658 1 591 21.88

Oshikango Ellerines Centre Namibia Oshikango 739 2 162 15 417 14 799 76.99

Ondangwa Shoprite Checkers Namibia Ondangwa 968 1 987 10 907 10 470 68.49

Katatura Checkers Centre Namibia Katatura 4 639 4 554 19 785 18 992 71.83

Rundu Ellerines Namibia Rundu 120 479 577 555 40.00 88.31

Katima Mulilo Pep Stores Namibia Katima Mulilo 176 680 4 477 4 298 60.26

BPI House Namibia Windhoek 3 534 12 260 35 932 34 492 88.80 9.15

148 491 66 206 796 248 764 340


AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS


33 OPERATING SEGMENT REPORT (continued) HELD FOR SALE PROPERTIES Hillcrest Centre* Gauteng Johannesburg 5 963 5 963 April 2004 16 050 3 144 Atlas Road Complex* Gauteng Johannesburg 18 516 13 551 April 2004 30 441 6 755 Pongola Shopping Centre* KwaZulu-Natal Pongola 9 771 27 124 April 2004 45 842 7 324 Total group 918 833 2 626 602 4 888 936 742 072 Lease commissions 14 549 4 903 485 742 072 Asset management business 10 208 Group total 4 903 485 752 280


Add: Excluded items Intangible asset 362 767 Development expenditure 1 391 Furniture, fi ttings and computer equipment 1 510 Available-for-sale fi nancial asset 13 601 Derivative fi nancial instrument 5 450 Goodwill 76 299 Trade and other receivables 46 741 Cash and cash equivalents 214 325 Total assets 5 625 569

HELD FOR SALE PROPERTIES Hillcrest Centre* 2 800 5 037 4 836 34.09 48.20 Atlas Road Complex* 3 024 9 554 9 171 23.06 1.08 Pongola Shopping Centre* 1 607 14 388 13 811 57.09 32.07 Total group 267 061 76 299 1 534 420 1 472 930 Lease commissions – – – – 267 061 76 299 1 534 420 1 472 930 Asset management business 7 141 – 356 333 – Group total 274 202 76 299 1 890 753 1 472 930


Add: Excluded items Equity and reserves 1 381 502 Derivative fi nancial instruments 28 136 Deferred taxation 532 626 Trade and other payables 136 275 Taxation payable 2 373 Linked holders for distribution 180 974 Total liabilities 5 625 569

Linked Interest Gross deben- bearing weighted Properties owned Expen- tures and borrow- average Va- by the group at diture Goodwill premiums ings rental cancy March 2010 R000 R000 R000 R000 R/m2 pm %



2011 2010


34 CAPITAL MANAGEMENT The group’s capital management objectives are: • To ensure the group’s ability to continue as a going concern. • To provide an adequate return to shareholders by pricing services

commensurately with the level of risk.

The group monitors capital on the basis of the carrying amount of equity plus its unitholders’ linked debenture loans, less cash equivalents and cash fl ow hedges recognised in equity.

Capital for the reporting periods under review is summarised as follows: Total equity 3 499 238 3 272 255 Cash fl ow hedges 22 228 28 136 Cash and cash equivalents (337 809) (214 325) Capital 3 183 657 3 086 066 Total equity 3 183 657 3 272 255 Borrowings 1 683 838 1 477 509 Overall fi nancing 4 867 495 4 749 764 Capital-to-overall fi nancing ratio 0.65 0.65

The board’s policy is to maintain a strong capital base, comprising its unitholders’ interest, so as to maintain investor, creditor and market confi dence and to sustain future development of the business. It is the group’s stated purpose to deliver long-term sustainable growth in distributions per linked unit. Generally, at least 99% of net profi ts, as defi ned in the debenture trust deed, are distributed on a six monthly basis.

The board of directors monitors the level of distributions to unitholders and ensures compliance with the terms of the debenture trust deed. There were no changes in the group’s approach to capital management during the year. Neither the company nor any of its subsidiaries are subject to externally imposed capital requirements.


AN

NU

AL FIN

AN

CIA

L STATE

ME

NTS

35 FUTURE MINIMUM LEASE INCOME Receivable within one year 527 528 398 718 472 598 350 487

Receivable between one and fi ve years 882 080 658 895 708 726 511 012

Receivable after fi ve years 511 554 382 625 51 644 40 281

Total future contractual lease revenue 1 921 162 1 440 238 1 232 968 901 780

Rental straight-line adjustment already accrued (100 433) (80 786) (86 065) (66 154)

Future straight-line lease revenue 1 820 729 1 359 452 1 146 903 835 626

36 COMMITMENTS Operating lease commitments

Premises

Payable within one year 1 285 – 1 166 –

Payable between one and fi ve years 1 016 – 2 299 –

2 301 – 3 465 –

Other

Payable within one year 1 228 – 1 468 –

Payable between one and fi ve years 1 261 – 2 559 –

2 489 – 4 027 –

Maintenance and other property related contracts

Payable within one year – – 22 752 18 803

Payable between one and fi ve years – – – –

– – 22 752 18 803

Capital commitments

Authorised and contracted 71 900 71 900 46 521 46 521

Authorised but not contracted 179 853 89 159 102 597 87 089

It is intended that the above capital expenditure will be funded by way of bank facilities and surplus cash.

37 POST BALANCE SHEET EVENTS The company announced on SENS on 11 April 2011 that Giyani Plaza is to be acquired from Sanlam Life Insurance at a

total outlay of R71.9 million, including estimated transaction costs.

2011 2010


Unitholders’ analysisat 31 March 2011


Number % % of total of of Number issued holders unitholders of units share capital

ANALYSIS OF UNITHOLDINGS• 1 - 1 000 1 044 28.29 213 675 0.06• 1 001 - 10 000 1 855 50.26 8 422 544 2.40• 10 001 - 100 000 645 17.47 17 771 939 5.06• 100 001 - 1 000 000 108 2.93 31 765 262 9.05• 1 000 001 and more 39 1.05 292 841 798 83.43Total 3 691 100.00 351 015 218 100.00

MAJOR BENEFICIAL UNITHOLDERS(5% and more of the linked units in issue)• Lazarus Capital (Pty) Ltd 73 887 720 21.05• Sanlam Limited and its subsidiaries 59 791 287 17.03• Sanlam Properties (Pty) Ltd 36 470 000 10.39

MAJOR INSTITUTIONAL UNITHOLDERS(5% and more of the linked units in issue)• Stanlib 38 615 390 11.00• Investec 21 335 570 6.08

UNITHOLDER SPREAD• Non-public 8 0.22 171 021 733 48.72 • Directors 5 0.14 872 726 0.25 • Holdings > 10% of issued capital 3 0.08 170 149 007 48.47 • Associates – – – –• Public 3 683 99.78 179 993 485 51.28Total 3 691 100.00 351 015 218 100.00

DISTRIBUTION OF UNITHOLDERS• Banks 18 0.49 2 479 937 0.71• Close corporations 40 1.08 1 271 898 0.36• Individuals 2 909 78.81 26 924 974 7.67• Insurance companies 11 0.30 70 151 229 19.99• Medical aid schemes 6 0.16 311 996 0.09• Collective investment schemes and mutual funds 109 2.95 122 635 248 34.94• Trusts 392 10.62 11 455 734 3.26• Other corporations 89 2.41 4 809 205 1.37• Pension funds 60 1.63 34 036 052 9.70• Private companies 57 1.55 76 938 945 21.91Total 3 691 100.00 351 015 218 100.00

UN

ITHO

LDE

RS

’ INFO

RM

ATION

Unitholders’ informationVukile’s appetite for acquisitions has not diminished and we are actively seeking new ways of enhancing our property portfolio through the addition of high quality new assets as well as the expansion and renovation of our existing properties.



Notice of annual general meeting

Notice is hereby given that the 7th annual general meeting of the linked unitholders of Vukile Property Fund Limited (“Vukile” or “the company”) will be held in the Vukile Boardroom, First Floor, Meersig 1 Building, Constantia Boulevard, Constantia Kloof, 1709, Gauteng, at 11:00 on Wednesday 31 August 2011.

All meeting participants, including proxies, will be required to provide identifi cation reasonably satisfactory to the chairman of meeting.

A summarised form of the annual fi nancial statements is set out on pages 113 to 116. The complete annual fi nancial statements are set out on pages 54 to 107 of the integrated annual report. The purpose of the meeting is to transact the business set out below, and to consider and, if deemed fi t, to pass, with or without modifi cation, the resolutions set out below:

1 SPECIAL RESOLUTION NO.1 INTRA-GROUP FINANCIAL ASSISTANCE “Resolved that the directors of the company be and are authorised to provide fi nancial assistance, as

envisaged and subject to the provisions of section 45 of the Companies Act, 2008 (Act 71 of 2008) (“the Companies Act”) to any company constituting a 100% held subsidiary of the company.”

In order for this special resolution number 1 to be adopted, the support of at least 75% of the total number of votes, which the linked unitholders present or represented by proxy at this meeting are entitled to cast, is required.

2 SPECIAL RESOLUTION NO.2 NON-EXECUTIVE DIRECTOR REMUNERATION “Resolved that the company be and is authorised, in terms of section 66 of the Companies Act, to pay

remuneration to its directors for their services as directors for a period of one year from the passing of this resolution; and with effect of 1 April 2011, that annual retainers and meeting fees payable to non-executive directors be and are fi xed as follows:

Basic retainer • Non-executive director retainer R106 000 per annum Chairman retainers (inclusive of basic retainers) • Board R291 000 per annum • Audit and risk committee R225 000 per annum • Human resources and nominations committee R136 000 per annum • Investment committee R150 500 per annum Meeting fees • Board R14 850 per meeting attended • Audit and risk committee R16 500 per meeting attended • Human resources and nominations committee R14 850 per meeting attended • Investment committee An annual fee of R30 000 is payable due to the investment committee’s business primarily being conducted on a round-robin basis.”

UN

ITHO

LDE

RS

’ INFO

RM

ATION


The overall increase in non-executive directors’ remuneration for the year is equal to 10%. The board will conduct a comprehensive survey of non-executive directors’ fees during the year ending 31 March 2012 to ensure that directors’ fees continue to be aligned with the market norm.

In order for this special resolution number 2 to be adopted, the support of at least 75% of the total number of votes which the linked unitholders present or represented by proxy at this meeting are entitled to cast, is required.

3 ORDINARY RESOLUTION NO.1 ANNUAL FINANCIAL STATEMENTS To present and adopt the annual fi nancial statements for

the year ended 31 March 2011, including the reports of the directors, audit committee and independent auditors.

“Resolved to adopt the annual fi nancial statements for the year ended 31 March 2011, including the reports of the directors, audit committee and independent auditors.”

In order for this ordinary resolution number 1 to be adopted, the support of a majority of votes cast by linked unitholders present or represented by proxy at this meeting is required.

4 ORDINARY RESOLUTION NO.2 RE-APPOINTMENT OF AUDITORS The board and audit committee have evaluated the

performance of Grant Thornton and recommend their re-appointment as auditors of the company.

“Resolved to re-appoint Grant Thornton (with the designated registered auditor being VR de Villiers) as auditors of the company for the year ending 31 March 2012.”


5 ORDINARY RESOLUTION NO.3 AUDITORS’ REMUNERATION “Resolved that the directors be and are authorised to fi x

and pay the auditors’ remuneration for the year ended 31 March 2011.”


6 ORDINARY RESOLUTION NO.4 RE-ELECTION OF DIRECTORS To elect directors in place of those retiring in accordance

with the provisions of the company’s memorandum of incorporation (“MOI”).

“Resolved that the following retiring directors, who retire in terms of articles 72 and 88 of the company’s MOI, but being eligible, offer themselves for re-election, be and are hereby re-elected each on a separate (and not collective) basis:

6.1 Mr PS Moyanga. 6.2 Mr MH Serebro. 6.3 Mr UJ van der Walt.”

Brief CVs of all the directors appear on pages 12 to 13 of the integrated report.


7 ORDINARY RESOLUTION NO.5 ELECTION OF MEMBERS TO AUDIT AND RISK

COMMITTEE “Resolved that the following directors, who meet the

requirements of Section 94(4) of the Companies Act, be and are hereby elected on a separate (and not collective) basis as members of the audit and risk committee until the next annual general meeting:

7.1 Mr HSC Bester. 7.2 Mr PJ Cook. 7.3 Mr PS Moyanga. 7.4 Mr MH Serebro.”

Brief CVs of all the directors appear on pages 12 to 13 of the integrated report.


8 ORDINARY RESOLUTION NO.6 ISSUE OF SHARES “Resolved that the directors be and are hereby authorised

to allot and issue a portion of the unissued ordinary shares of R0.01 each in the capital of the company up to a maximum of 5% of the issued shares of the company, at such time or times to such persons, company or companies and upon such terms and conditions as they may determine, subject to the requirements of the Companies Act, and the JSE Limited Listing Requirements, provided that each ordinary share is linked to a debenture of R4.90 each, such authority to expire at the next annual general meeting of the company.”


9 ORDINARY RESOLUTION NO.7 REMUNERATION POLICY “To consider and endorse, by way of a non-binding

advisory vote, the company’s remuneration policy as set out on pages 48 to 50 of the integrated report.”


10 ORDINARY RESOLUTION NO.8 IMPLEMENTATION OF RESOLUTIONS “Resolved that any director of the company, and where

applicable the secretary of the company, be and is hereby authorised to do all such things, sign all such documents and take all actions as may be necessary to implement the above ordinary and special resolutions.”


Notice of annual general meeting (continued)


GENERAL NOTES• A member entitled to attend and vote at the annual general

meeting may appoint a proxy to attend, speak and vote in his or her stead. A proxy need not be a member of the company.

• All forms of proxy or other instruments of authority must be deposited with the transfer secretaries, so as to be received no later than 11:00 on the record date being, Tuesday 30 August 2011. Unitholders who are companies or other body corporates may, by resolution of its directors or other governing body, authorise any person to act as its representative at the annual general meeting.

• Unitholders who have not dematerialised their linked units and own-name dematerialised unitholders who are unable to attend the annual general meeting and wish to be represented thereat, must complete the attached form of proxy in accordance with the instructions therein and return it to the transfer secretaries, so as to be received no later than 11:00 on the record date being, Tuesday 30 August 2011.

• Unitholders who have dematerialised their linked units with a CSDP or broker, other than with own-name registration, should advise their CSDP or broker with their voting instruction in terms of the agreement entered into between them and their CSDP or broker. Unitholders who have dematerialised their linked units and wish to attend the annual general meeting must contact their CSDP or broker who will furnish them with the necessary authority to attend the annual general meeting.

• Unitholders who have dematerialised their linked units, other than with own-name registration, must not return the form of proxy to the transfer secretaries. Their instructions must be sent to their CSDP or broker for action.

• On a show of hands, every member present in person or every proxy representing unitholders, shall have only one vote, irrespective of the number of linked units he or she holds.

• On a poll, every unitholder present in person or represented by proxy shall have one vote for every linked unit held by such unitholder.

• A resolution put to the vote shall be decided on a show of hands unless, before or on the declaration of the results on the show of hands, a poll shall be demanded by any person entitled to vote at the annual general meeting and unless a poll is so demanded, a declaration by the chairman that a resolution has, on a show of hands been carried, or carried unanimously, or by a regular majority, or lost, and an entry to that effect in the minute book of the company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favour of, or against, such resolution. If a poll is so demanded, the resolution put to the vote shall be decided on a poll.

On behalf of the boardVukile Property Fund Limited

Johann NeethlingCompany secretary


Registered offi ceGround FloorMeersig 1 BuildingConstantia BoulevardConstantia Kloof1709

Transfer secretaries Link Market Services South Africa (Proprietary) Limited13th FloorRennie House19 Ameshoff Street Braamfontein2001


Summarised annual fi nancial statements

2011 2010 Group Group R000 R000

AssetsNon-current assets 5 487 419 5 272 170Investment properties 4 984 840 4 725 437• Investment properties 5 083 993 4 811 152• Straight-line rental income adjustment (99 153) (85 715)Other non-current assets 502 579 546 733• Intangible asset 312 832 362 767• Straight-line rental income asset 99 153 85 715• Development expenditure 2 723 1 391• Furniture, fi ttings and computer equipment 1 774 1 510• Available-for-sale fi nancial asset 10 208 13 601• Financial asset at amortised cost 4 782 5 450• Goodwill 71 107 76 299Current assets 409 218 261 066Trade and other receivables 71 409 46 741Cash and cash equivalents 337 809 214 325Investment properties held for sale 281 422 92 333Total assets 6 178 059 5 625 569

Equity and reserves 1 404 550 1 381 502Non-current liabilities 3 909 613 3 463 718Linked debentures and premium 2 116 916 1 890 753Other interest bearing borrowings 1 226 282 1 012 203Derivative fi nancial instruments 21 867 28 136Deferred taxation liabilities 544 548 532 626Current liabilities 863 896 780 349Trade and other payables 173 277 136 275Short-term borrowings 449 600 460 727Current taxation liabilities 5 416 2 373Linked unitholders for distribution 235 603 180 974Total equity and liabilities 6 178 059 5 625 569

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 31 March 2011

UN

ITHO

LDE

RS

’ INFO

RM

ATION


Property revenue 836 124 742 072Straight-line rental income accrual 14 368 7 041Gross property revenue 850 492 749 113Property expenses (293 603) (267 061)Net profi t from property operations 556 889 482 052Profi t from asset management business 44 913 3 067Corporate administrative expenses (25 509) (23 781)Investment and other income 14 380 21 188Operating profi t before fi nance costs 590 673 482 526Finance costs (161 803) (145 340)Profi t before debenture interest 428 870 337 186Debenture interest (403 948) (319 231)Profi t before capital items 24 922 17 955(Loss)/profi t on sale of investment properties (14 798) 1 387Amortisation of debenture premium 2 519 1 361Goodwill written off on sale of properties (5 192) –Impairment of intangible asset (49 935) –(Loss)/profi t before fair value adjustments (42 484) 20 703Fair value adjustments 78 494 293 975Gross change in fair value of investment properties 92 862 301 016Straight-line rental income adjustment (14 368) (7 041)Profi t before taxation 36 010 314 678Taxation (25 488) (79 081)Profi t for the year 10 522 235 597Other comprehensive incomeCash fl ow hedges 6 602 (11 436)• Current period losses (16 616) (22 390)• Reclassifi cation to profi t or loss 23 218 10 954Available-for-sale fi nancial assets – current period losses (3 556) (6 486)Other comprehensive income/(loss) for the year 3 046 (17 922)Total comprehensive income for the year 13 568 217 675Earnings per linked unit (cents) 120.86 182.37Diluted earnings per linked unit (cents) 120.86 182.37

Reconciliation of group net profi t to headline earnings and to profi t available for distribution

Summarised annual fi nancial statements (continued)

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 March 2011

2011 2010 Group Group R000 R000

2011 2010 2011 Cents per 2010 Cents per Group linked Group linked R000 unit R000 unit

Attributable profi t after taxation 10 522 3.07 235 597 77.44Adjusted for:Debenture interest 403 948 117.79 319 231 104.93Earnings per linked unit 414 470 120.86 554 828 182.37Change in fair value of investment properties (78 494) (22.89) (293 975) (96.62)Total tax effects of adjustments 23 126 6.74 70 139 23.05Change in goodwill on sale of subsidiary 5 192 1.51 – –Loss/(profi t) on sale of re-valued properties 14 798 4.31 (1 387) (0.46)Impairment of intangible asset 49 935 14.56 – –Amortisation of debenture premium (2 519) (0.73) (1 361) (0.45)Headline earnings of linked units 426 508 124.36 328 244 107.89Straight-line rental accrual net of deferred taxation (18 407) (5.36) (4 979) (1.64)Adjustment for reduced distribution in respect of new issue of shares – – – 3.29Profi t available for distribution 408 101 119.00 323 265 109.54


Share Non- Re-valuation capital distri- of available- and share butable for-sale fi n- Cash fl ow Retained R000 premium reserves ancial assets hedges earnings Total

GroupBalance at 31 March 2009 20 297 1 137 743 (9 788) (16 854) 13 703 1 145 101Issue of share capital 7 299 – – – – 7 299Dividend distribution – – – – (651) (651) 27 596 1 137 743 (9 788) (16 854) 13 052 1 151 749Profi t for the year – – – – 235 597 235 597Change in fair value of investment properties – 301 016 – – (301 016) –Deferred taxation on change in fair value of investment properties and straight-line rental accrual – (72 201) – – 72 201 –Share-based remuneration – 12 078 – – – 12 078Transfer to non-distributable reserve – 1 387 – – (1 387) –Other comprehensive incomeRevaluation of available-for-sale fi nancial asset – – (6 486) – – (6 486)Revaluation of cash fl ow hedges – – – (11 436) – (11 436)

Balance at 31 March 2010 27 596 1 380 023 (16 274) (28 290) 18 447 1 381 502Issue of share capital 4 667 – – – – 4 667Dividend distribution – – – – (824) (824) 32 263 1 380 023 (16 274) (28 290) 17 623 1 385 345Profi t for the year – – – – 10 522 10 522Change in fair value of investment properties – 92 862 – – (92 862) –Deferred taxation on change in fair value of investment properties and straight-line rental accrual – (11 958) – – 11 958 –Share-based remuneration – 6 177 – – – 6 177Transfer from non-distributablereserve – (77 054) – – 77 054 –Other comprehensive incomeRevaluation of available-for-sale fi nancial asset – – (3 556) – – (3 556)Revaluation of cash fl ow hedges – – – 6 062 – 6 062Balance at 31 March 2011 32 263 1 390 050 (19 830) (22 228) 24 295 1 404 550

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITYfor the year ended 31 March 2011

UN

ITHO

LDE

RS

’ INFO

RM

ATION


Cash fl ow from operating activities 570 910 452 245Cash fl ow from investing activities (371 782) (410 110)Cash fl ow from fi nancing activities (75 644) 111 383Net increase in cash and cash equivalents 123 484 153 518Cash and cash equivalents at the beginning of the year 214 325 60 807Cash and cash equivalents at the end of the year 337 809 214 325

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW for the year ended 31 March 2011

2011 2010 Group Group R000 R000

Summarised annual fi nancial statements (continued)

UN

ITHO

LDE

RS

’ INFO

RM

ATION


Spe

cial

reso

lutio

n no

.1:

To a

utho

rise

Intr

a-gr

oup

fi nan

cial

ass

ista

nce

Spe

cial

Res

olut

ion

no.2

: To

aut

horis

e th

e pa

ymen

t of d

irect

ors

and

appr

ove

the

follo

win

g no

n-ex

ecut

ive

dire

ctor

s’ re

mun

erat

ion:

2.

1 N

on-e

xecu

tive

dire

ctor

s’ re

tain

er

2.2

Cha

irman

’s re

tain

er –

boa

rd

2.3

Cha

irman

’s re

tain

er –

aud

it an

d ris

k co

mm

ittee

2.

4 C

hairm

an’s

reta

iner

– h

uman

reso

urce

and

nom

inat

ions

com

mitt

ee

2.5

Cha

irman

’s re

tain

er –

inve

stm

ent c

omm

ittee

2.6

Mee

ting

fees

– b

oard

2.

7 M

eetin

g fe

es –

aud

it an

d ris

k co

mm

ittee

2.

8 M

eetin

g fe

es –

hum

an re

sour

ces

and

nom

inat

ions

com

mitt

ee

2.9

Mee

ting

fees

– in

vest

men

t com

mitt

ee O

rdin

ary

reso

lutio

n no

.1:

To re

ceiv

e an

d ad

opt t

he a

nnua

l fi n

anci

al s

tate

men

ts fo

r th

e ye

ar e

nded

31

Mar

ch 2

011

Ord

inar

y re

solu

tion

no.2

: To

re-a

ppoi

nt G

rant

Tho

rnto

n as

aud

itors

Ord

inar

y re

solu

tion

no.3

: To

aut

horis

e th

e di

rect

ors

to fi

x an

d pa

y th

e au

dito

rs’

rem

uner

atio

n O

rdin

ary

reso

lutio

n no

.4:

To re

-ele

ct th

e fo

llow

ing

dire

ctor

s re

tirin

g by

rota

tion:

4.

1 M

r P

S M

oyan

ga

4.2

Mr

MH

Ser

ebro

4.

3 M

r U

J va

n de

r W

alt

Ord

inar

y re

solu

tion

no.5

: To

ele

ct th

e fo

llow

ing

dire

ctor

s as

mem

bers

of t

he

audi

t and

risk

com

mitt

ee:

5.

1 M

r H

SC

Bes

ter

5.

2 M

r P

J C

ook

5.

3 M

r P

S M

oyan

ga

5.4

Mr

MH

Ser

ebro

Ord

inar

y re

solu

tion

no.6

: To

pla

ce th

e un

issu

ed s

hare

s un

der t

he c

ontro

l of t

he

dire

ctor

s O

rdin

ary

reso

lutio

n no

.7:

To e

ndor

se th

e co

mpa

ny’s

rem

uner

atio

n po

licy

Ord

inar

y re

solu

tion

no.8

: To

aut

horis

e th

e di

rect

ors

and

com

pany

sec

reta

ry to

im

plem

ent t

he o

rdin

ary

and

spec

ial r

esol

utio

ns

and

gene

rally

to a

ct a

s m

y/ou

r pr

oxy

at th

e sa

id a

nnua

l gen

eral

mee

ting

of th

e un

ithol

ders

.

Sig

ned

at

th

is

da

y of

2011

Sig

natu

re

A

ssis

ted

by (w

here

app

licab

le)

Tel N

o

Cel

l No

Fax

No

Form

of p

roxy

Ann

ual g

ener

al m

eetin

g

VU

KIL

E P

RO

PE

RT

Y F

UN

D L

IMIT

ED

(“Vu

kile

” or

“th

e co

mpa

ny”)

•

(I

ncor

pora

ted

in th

e R

epub

lic o

f Sou

th A

frica

)(R

egis

trat

ion

Num

ber

2002

/027

194/

06)

•

ISIN

: ZA

E00

0056

370

JSE

Cod

e: V

KE

•

N

SX

Cod

e: V

KN

FOR

US

E B

Y C

ERTI

FIC

ATED

LIN

KED

UN

ITH

OLD

ERS

AN

D D

EMAT

ERIA

LIS

ED L

INK

ED

UN

ITH

OLD

ERS

WIT

H O

WN

NA

ME

REG

ISTR

ATIO

NS

AT

THE

AN

NU

AL

GEN

ERA

L M

EETI

NG

OF

LIN

KED

UN

ITH

OLD

ERS

TO

BE

HEL

D IN

TH

E VU

KIL

E B

OA

RD

RO

OM

, FI

RS

T FL

OO

R,

MEE

RS

IG 1

BU

ILD

ING

, C

ON

STA

NTI

A B

OU

LEVA

RD

, C

ON

STA

NTI

A

KLO

OF,

170

9 AT

11:

00 O

N W

EDN

ESD

AY 3

1 A

UG

US

T 20

11.

A U

NIT

HO

LDE

R E

NT

ITLE

D T

O A

TT

EN

D A

ND

VO

TE

AT

TH

E A

NN

UA

L G

EN

ER

AL

ME

ET

ING

IS

EN

TIT

LED

TO

AP

PO

INT

ON

E O

R M

OR

E P

RO

XIE

S T

O A

TT

EN

D,

SP

EA

K A

ND

VO

TE

IN

HIS

/HE

R S

TE

AD

. A

PR

OX

Y N

EE

D N

OT

BE

A M

EM

BE

R

OF

TH

E C

OM

PA

NY.

Link

ed u

nith

olde

rs w

ho h

ave

dem

ater

ialis

ed t

heir

linke

d un

its,

othe

r th

an w

ith o

wn-

nam

e re

gist

ratio

n, m

ust

info

rm t

heir

CS

DP

or

brok

er o

f th

eir

inte

ntio

n to

atte

nd t

he

annu

al g

ener

al m

eetin

g in

ord

er t

o ob

tain

nec

essa

ry a

utho

risat

ions

or

alte

rnat

ivel

y,

shou

ld th

ey n

ot w

ish

to a

ttend

, the

y m

ust a

dvis

e th

eir C

SD

P o

r bro

ker a

s to

wha

t act

ion

they

wis

h to

take

. Th

is m

ust b

e do

ne in

term

s of

the

agre

emen

t ent

ered

into

bet

wee

n th

em a

nd th

eir C

SD

P o

r bro

ker.

Lin

ked

unith

olde

rs w

ho h

ave

dem

ater

ialis

ed th

eir l

inke

d un

its, o

ther

tha

n w

ith o

wn-

nam

e re

gist

ratio

n, m

ust

not

retu

rn t

he fo

rm o

f pro

xy t

o th

e tr

ansf

er s

ecre

tarie

s. T

heir

inst

ruct

ions

mus

t be

sent

to th

eir C

SD

P o

r bro

ker f

or a

ctio

n.

I/We

(ple

ase

prin

t ful

l nam

es)

of (p

leas

e pr

int a

ddre

ss)

bein

g th

e re

gist

ered

hol

der

of

lin

ked

units

in V

ukile

her

eby

appo

int

1

of

o

r fai

ling

him

/her

2

of

o

r fai

ling

him

/her

the

chai

rman

of t

he a

nnua

l gen

eral

mee

ting

of li

nked

uni

thol

ders

as

my/

our

prox

y to

at

tend

, spe

ak a

nd v

ote

or a

bsta

in fr

om v

otin

g on

my/

our b

ehal

f at t

he a

nnua

l gen

eral

m

eetin

g of

the

lin

ked

unith

olde

rs t

o be

hel

d in

the

Vuk

ile B

oard

room

, Fi

rst

Floo

r, M

eers

ig 1

Bui

ldin

g, C

onst

antia

Bou

leva

rd, C

onst

antia

Klo

of, 1

709,

Gau

teng

at 1

1:00

on

Wed

nesd

ay 3

1 A

ugus

t 201

1 an

d at

any

adj

ourn

men

t or p

ostp

onem

ent t

here

of, o

n th

e re

solu

tions

to b

e pr

opos

ed a

t the

ann

ual g

ener

al m

eetin

g as

follo

ws:

Ple

ase

indi

cate

with

an

“X”

the

inst

ruct

ions

to y

our

prox

y in

the

spac

es p

rovi

ded

belo

w.

In th

e ab

senc

e of

suc

h in

dica

tion,

the

prox

y w

ill be

ent

itled

to v

ote

or a

bsta

in

from

vot

ing

as h

e/sh

e se

es fi

t. (S

ee n

otes

ove

rleaf

).

FO

R

AG

AIN

ST

A

BS

TAIN


Notes to the form

of proxyA

nnual general meeting

VU

KILE

PR

OP

ER

TY

FU

ND

LIMIT

ED

(“Vukile” or “the company”) • (Incorporated in the R

epublic of South A

frica)(R

egistration Num

ber 2002/027194/06) • ISIN

: ZAE

000056370JS

E C

ode: VK

E • N

SX C

ode: VK

N

1 This form

of proxy shall serve as proxy for both shares and debentures in Vukile.

2 E

ach mem

ber is entitled to appoint one or more proxies (none of w

hom need be a m

ember

of the company) to attend, speak and vote in place of that m

ember at the annual general

meeting of linked unitholders.

3 E

very person present and entitled to vote at the annual general meeting as a linked unitholder

or as a proxy or as a representative of a body corporate shall, on a show of hands, have one

vote only, irrespective of the number of linked units such person holds or represents, but

in the event of a poll, a linked unitholder holding linked units will be entitled to one vote per

linked unit held.

4 P

lease insert the relevant number of linked units and indicate w

ith an ”X” in the appropriate space on the face hereof, how

you wish your votes to be cast. If you return this form

of proxy duly signed but w

ithout any specifi c directions, the proxy may vote or abstain from

voting as he/she thinks fi t.

5 A

deletion of any printed matter and the com

pletion of any blank spaces need not be signed or initialled. A

ny alteration or correction must be initialled by the authorised signatory/ies.

6 The chairm

an of the annual general meeting shall be entitled to decline to accept the

authority of a person signing this form of proxy:

(a)

under a power of attorney; or

(b)

on behalf of a company,unless that person’s pow

er of attorney or authority is deposited w

ith the transfer secretaries by no later than 11:00 on the record date being, Tuesday 30 A

ugust 2011.

7 You m

ay insert the name of any person(s) w

hom you w

ish to appoint as your proxy in the blank space(s) provided for that purpose.

8 The com

pletion and lodging of this form of proxy w

ill not preclude the mem

ber who grants

this proxy from attending the annual general m

eeting and speaking and voting in person thereat to the exclusion of any proxy appointed in term

s hereof should such mem

ber wish

to do so.

9 D

ocumentary evidence establishing the authority of a person signing this form

of proxy in a representative capacity m

ust be attached to this form of proxy unless previously recorded by

the transfer secretaries of Vukile or waived by the chairm

an of the annual general meeting.

The chairman of the annual general m

eeting may reject any form

of proxy not completed and/

or received in accordance with these notes or w

ith the Articles of A

ssociation and Debenture

Trust Deed of Vukile.

10 C

ompleted form

s of proxy should be returned to the transfer secretaries, Link Market S

ervices S

outh Africa (P

ty) Ltd, 13th Floor, Rennie H

ouse, 19 Am

eshoff Street, B

raamfontein, 2001,

(PO

Box 4844, Johannesburg, 2000) to be received no later than 11:00 on the record date

being, Tuesday 30 August 2011.



GROUP HIGHLIGHTS



2004 2005 2006 2007 2008 2009 2010 2011

JSE CODE: VKE





NSX CODE: VKN




area of 920 232m2





property portfolio





Parktown


R57 million















and below budget

1 600

1 400

1 200

1 000

800

600

400


24 June 2004

31 March 2011

1.86

4.54.9


3.5 3.86

4.3

2004 2005 2006 2007 2008 2009 2010 2011

2004 2005 2006 2007 2008 2009 2010 2011

6

5

4

3

2

1

0


5.37








(a) Executive



























UN

ITHO

LDE

RS

’ INFO

RM

ATION













VU

KILE

PR

OP

ER

TY

FU

ND

LIMIT

ED

Integrated Annual R

eport 2011

Documents

Measuring our success · 2017-06-15 · Measuring our success 2004 - 2011 As Vukile’s record shows, we have advanced rapidly but steadily, step by carefully calculated step. At