STENPROP LIMITED (Incorporated in Bermuda) Registration number: 47031 BSX share code: STP.BH JSE share code: STP ISIN: BMG8465Y1093 Provisional Annual Results for the year ended 31 March 2017 Highlights EUR1.59 10.28 cents 4.5 cents 1.1% diluted diluted adjusted final dividend per increase in EPRA* NAV EPRA earnings share full year dividend per share per share declared per share against prior year Stenprop Limited, which has a primary listing on the Johannesburg Stock Exchange ('JSE') and a secondary listing on the Bermuda Stock Exchange ('BSX'), presents its results for the year ended 31 March 2017 ('the reporting date'). Financial - Declaration of a final dividend on 7 June 2017 of 4.5 cents per share which, together with the interim dividend declared on 23 November 2016 of 4.5 cents, results in a total dividend for the year ended 31 March 2017 of 9.0 cents per share (2016: 8.9 cents). The final dividend is payable in cash on 4 August 2017 - The total dividend equates to a historic dividend yield of 7.1% on the share price of EUR1.26^ at 5 June 2017, or 5.7% on the diluted EPRA NAV of EUR1.59 at 31 March 2017 - Diluted adjusted EPRA EPS* of 10.28 cents for the year ended 31 March 2017, representing a 1.2% decrease on the diluted adjusted EPRA EPS at 31 March 2016, due entirely to the decline in the value of Sterling. Diluted IFRS EPS was 6.16 cents (2016: 17.66 cents) - This equates to a historic earnings yield of 8.2% on the share price of EUR1.26^ at 5 June 2017, or 6.5% on the diluted EPRA NAV of EUR1.59 at 31 March 2017 - Diluted EPRA net asset value per share of EUR1.59, a decrease of 4.8% since the prior year end, a major part of which is due to the decline in the value of Sterling. Diluted IFRS net asset value per share was EUR1.53 per share (2016: EUR1.61) - Stenprop repurchased 9,026,189 of its own shares during the year for EUR11.4 million in a limited programme of share buy-backs. Excluding the dividend, the average price paid was EUR1.217 per share which compares favourably with the year end diluted EPRA NAV per share of EUR1.59. FX rates in period Average foreign exchange rates in the year: GBP1.00:EUR1.190; CHF1.00:EUR0.923 (2016: GBP1.00:EUR1.366; CHF1.00:EUR0.932) Year end foreign exchange rates: GBP1.00:EUR1.169; CHF1.00:EUR0.935 (2016: GBP1.00:EUR1.265; CHF1.00:EUR0.915) * 'EPRA' means European Public Real Estate Association. 'EPS' means earnings per share. ^ JSE closing price on 5 June 2017 was ZAR17.99. ZAR:EUR rate at the same date was 14.294 Industrial Portfolio Acquisition - Subsequent to the year end on 6 June 2017, contracts were exchanged in an off-market transaction to acquire all of the interests in a portfolio of 25 separate multi let industrial estates situated across the United Kingdom for a purchase consideration which valued the portfolio at GBP127 million, excluding costs. The portfolio comprises properties with a gross lettable area of approximately 2 million square feet and contractual rent (including contractual fixed uplifts) of approximately GBP9.1 million per annum representing an average rent of GBP5.15 psf. There are over 400 tenants creating a diversified base of earnings. Completion is due to take place on 30 June 2017 - On the same date, Stenprop exchanged contracts to acquire C2 Capital Limited, the management platform responsible for aggregating and managing the portfolio for a purchase consideration of GBP3.5 million, to be settled by the issue of 3,270,500 Stenprop shares,valued at EUR1.22 per share. By structuring the acquisition in this way, Stenprop has acquired a strategic portfolio of sufficient scale in the multi let industrial sector together with a specialist operating platform and team. This is expected to form the foundation for ongoing earnings enhancing acquisitions of similar properties Bank Refinancing - The EUR84.9 million of debt on the Bleichenhof property located in the core of Hamburg has been refinanced on an interest only basis for a five year term, until 28 February 2022, at an all- in fixed rate of 1.58 % per annum. This compares with the previous all-in fixed rate of 1.90 % per annum - All of the bank loans in respect of the Swiss properties which expired on 31 March 2017 have been extended on a short term ongoing rolling basis pending their sales. The refinancing is aligned with Stenprop's stated strategy to sell these assets. The extended loans have no swaps and interest is charged at Swiss LIBOR plus a margin of between 1.05% and 1.5%. Since Swiss LIBOR is currently negative, the margin represents the current interest rate.This compares very favourably with the previous all-in rates of approximately 2.75% - GBP12.4 million of debt on a portfolio of UK regional properties was refinanced on 26 May 2016 for a five year period, at an all in interest rate of 3.46% and no capital repayments Sales - On 29 November 2016, Stenprop sold its first Swiss property in Interlaken, Switzerland at valuation (CHF6.8 million) - Stenprop owns a 28.42% share in Stenham European Shopping Centre which owns a shopping centre known as Nova Eventis situated near Leipzig. Contracts were exchanged on 6 February 2017 to sell this asset at a valuation of GBP208.5 million. All closing conditions have been met and the sale is scheduled to complete on 22 June 2017. Commentary Stenprop is pleased to report its Group annual financial statements for the year ended 31 March 2017. Investment strategy Stenprop's core strategy is to grow a portfolio of investment properties capable of delivering sustainable and growing earnings, distributions and capital growth to shareholders. A key aspect of this strategy is the need to continuously evaluate new opportunities which are likely to show superior growth in earnings , distributions and capital value going forward. Stenprop also actively monitors its existing portfolio to identify assets which need to be sold as they are no longer likely to meet these growth expectations for various micro or macro factors. This strategy is behind the exit from Switzerland which is currently underway, and the post year-end acquisition of a UK industrial portfolio of multi let industrial assets for a purchase consideration that values the portfolio at GBP127 million. As discussed later in this report, the acquisition represents a strategic opportunity for Stenprop to invest significantly in an asset class that, based on a number of positive fundamentals, Stenprop believes will deliver sustainable earnings. Stenprop intends to utilise its newly acquired platform to pursue further opportunities in this sector quickly and decisively, in an effort to establish itself as a leading player in the UK multi let industrial space. Current policy is to distribute at least 85% of its EPRA earnings which are available for distribution on a bi-annual basis. Business review Portfolio summary As at 31 March 2017, including Assets Held for Sale, the Company's real estate portfolio comprised an interest in 54 properties valued at EUR848.1 million, with 40.3% in the United Kingdom, 41.7% in Germany and 18% in Switzerland (by value). The portfolio, which has a gross lettable area of approximately 252,700 m2 and gross annual rent of EUR52.5 million(1), is predominantly in the office and retail sectors which account for 54.7% and 31% of rental income respectively. Top five properties by value as at 31 March 2017 Stenprop Annualised Weighted share of gross rental average Market Ownership market Lettable (Stenprop unexpired value interest value area share) lease term Property (EUR million) % (EUR million) Sector (m2) (EUR million) (years) Bleichenhof, Hamburg 127.5 94.9 121.0 Mixed use 20,067 5.5 4.5 Pilgrim Street, London 91.2 100 91.2 Office 9,655 5.1 4.2 Euston House, London 90.8 100 90.8 Office 10,204 4.8 4.2 Trafalgar Court, Guernsey 73.1 100 73.1 Office 10,564 4.9 10.1 Berlin daily needs cluster* 70.6 100 70.6 Retail 35,347 4.5 8.8 Total 453.2 446.7 85,837 24.8 6.3 (1) Includes Stenprop's share of the properties held within the associate and joint venture investments. * Comprising the properties known as Isabel, Hermann and Victoria. These five properties account for 53% of the total portfolio asset value. The value of the two Central London properties shown above accounts for 21% of the total portfolio asset value (27% including Stenprop's share of 25 Argyll Street). The Berlin daily needs cluster refers to three centrally located properties and highlights the importance of these strongly performing retail centres to the portfolio. Additions and disposals On 29 November 2016, Stenprop sold its property in Interlaken, Switzerland at valuation (CHF6.8 million). The remaining Swiss portfolio is currently being marketed for sale and is expected to be sold within the next six to 12 months. A policy of actively managing the disposal timeline had previously been followed in order to minimise the impact of cash drag prior to redeployment. Now that Stenprop has contracted to acquire the multi let industrial portfolio we intend to speed up the Swiss disposal process. Stenprop owns a 28.42% share in Stenham European Shopping Centre Fund Limited ('SESCF'). SESCF owns a regional shopping centre known as Nova Eventis situated near Leipzig. Contracts to dispose of this asset at a valuation of EUR208.5 million which represents its fair value at 31 March 2017, were exchanged on 6 February 2017. The buyers paid a deposit of EUR11 million. All closing conditions have been met, and the sale is scheduled to complete on 22 June 2017. The disposal is expected to generate approximately EUR18.3 million for Stenprop. There were no additions in the period. Financial Review Earnings The basic earnings attributable to ordinary shareholders for the year ended 31 March 2017 were EUR17.5 million (2016: EUR49.3 million). This equates to a diluted IFRS EPS of 6.16 cents (2016: 17.66 cents). The variance compared with the prior year is almost entirely due to downward property valuation adjustments, which including Stenprop's share of associates and joint ventures, amounted to EUR11.8 million (2016: EUR22.9 million uplift) and the impact of the average Sterling exchange rate in force for the period of GBP1.00:EUR1.19 (2016: GBP1.00:EUR1.37). Headline earnings were EUR33.1 million (2016: EUR26.7 million) equating to a diluted headline EPS of 11.68 cents (2016: 9.56 cents). In accordance with reporting standards widely adopted across the real estate industry in Europe, the board of directors feels it is appropriate and useful, in addition to providing the IFRS disclosed earnings, to also disclose EPRA(2) earnings. Adjusted EPRA earnings attributable to shareholders were EUR29.1 million (2016: EUR29.0 million), equating to a diluted adjusted EPRA EPS of 10.28 cents (2016: 10.41 cents). This represents a 1.2% decrease on the diluted adjusted EPRA EPS at 31 March 2016 and is entirely as a result of the weakening of Sterling over the period. If exchange rates had been constant compared with the prior year, the diluted adjusted EPRA EPS at 31 March 2017 would have risen by 5.6% to 10.99 cents. Management fee income relates to fees earned by the management companies on management and administration services provided to certain managed property syndicates and funds. During the year the Group earned fees relating to the disposal of assets held by managed syndicates of EUR1.7 million (2016: EUR0.9 million). Annual management fees made up the balance of the external management fee income which totalled EUR3.7 million for the year ended 31 March 2017 (2016: EUR2.9 million). Dividends On 7 June 2017, the directors declared a final dividend of 4.5 cents per share (2016: 4.7 cents) which, together with the interim dividend of 4.5 cents (2016: 4.2 cents) declared on 23 November 2016, results in a total dividend for the year ended 31 March 2017 of 9.0 cents (2016: 8.9 cents). The final dividend will be a cash dividend. An announcement containing details of the dividend and the timetable will be made separately. Share repurchases Towards the end of June 2016 the Company began a limited programme of share repurchases and during June and July 2016, the Company repurchased 1,356,567 shares for an aggregate purchase price of EUR1.8 million. The programme continued in November and December 2016 with the repurchase of a further 7,669,622 shares for an aggregate purchase price of EUR9.6 million. The combined average price per share of the repurchased shares was EUR1.262. The shares were purchased with the benefit of the dividend thereby effectively reducing the average price per share acquired to EUR1.217. All shares repurchased are held as treasury shares. (2) The European Public Real Estate Association ('EPRA') issued Best Practices Policy Recommendations in November 2016, which provide guidelines for performance measures relevant to real estate companies. Their recommended reporting standards are widely applied across this market, aiming to bring consistency and transparency to the sector. The EPRA earnings measure is intended to show the level of recurring earnings from core operational activities with the purpose of highlighting the Group's underlying operating results from its property rental business and an indication of the extent to which current dividend payments are supported by earnings. The measure excludes unrealised changes in the value of investment properties, gains or losses on the disposal of properties and other items that do not provide an accurate picture of the Group's underlying operational performance. The measure is considered to accurately capture the long-term strategy of the Group, and is an indication of the sustainability of dividend payments. Net asset value The IFRS (basic and diluted) net asset value per share at 31 March 2017 was EUR1.53 (2016: EUR1.61). As is the case with regard to the disclosure of EPRA earnings, the directors feel that it is appropriate and useful, in addition to IFRS NAV, to also disclose EPRA NAV(3).The diluted EPRA NAV per share at 31 March 2017 was EUR1.59 (2016: EUR1.67). 63% of the decrease over the year is due to foreign exchange and the decline in the value of Sterling, and the balance driven by declines in property valuations, mainly the Nova Eventis asset, and UK properties following the Brexit vote. See also the 'Foreign exchange' and 'Portfolio valuation' sections below. Foreign exchange Approximately 47% of Stenprop's net asset value is in Sterling. Consequently the Sterling:Euro exchange rate has a material impact on reported Euro earnings and net asset values. In broad terms a 10% decline in Sterling against the Euro will result in an overall 4.5% decline in earnings or net asset values reported in Euros. Euro rates against Sterling at the start of April 2016 were GBP1.00:EUR1.27 and devalued by 7.9% over the year to GBP1.00:EUR1.17. Stenprop matches the currency of borrowings to the underlying asset, and, where the timing and amount of a liability has been determined, and is to be met from the proceeds of a sale which is known in terms of timing and amount, the currency risk is managed through hedging instruments. Stenprop's diversification across the UK, Germany and Switzerland (until the Swiss portfolio is sold) continues to provide a natural spread of currencies and it remains our policy not to hedge this natural spread, thereby maintaining a multi-currency exposure, Portfolio valuation Including the Company's share of associates and joint ventures, its investment properties were valued at EUR848.1 million (2016: EUR891 million), of which EUR156.2 million were classified as Assets Held for Sale at 31 March 2017 (2016: nil). Assets Held for Sale consist of the entire Swiss portfolio, and a small part of a German asset. On a like for like basis the valuation of the portfolio decreased by 4.2% of which 2.9% resulted from currency movements. The UK properties have been translated to Euros at a rate of GBP1.00:EUR1.17, which is 7.9% lower than the exchange rate of GBP1.00:EUR1.27 at 31 March 2016. Net initial Weighted yield average Portfolio Market Annualised 31 March unexpired by value gross 2017 lease term market 31 March rental (weighted ('WAULT') value 2017 Area income average) (by rental) Combined portfolio (%) (EUR million) Properties m2 (EUR million) (%) (years) United Kingdom 34.7 294.1 13 63,555 18.5 5.57 5.7 Germany 30.2 256.3 23 92,264 14.5 4.95 6.6 Assets Held for Sale 18.4 155.9 12 47,111 9.6 4.33 7.2 Germany 0.3 2.7 - 250 0.2 6.40 1.2 Switzerland 18.1 153.2 12 46,861 9.4 4.29 7.3 Total 83.3 706.3 48 202,930 42.6 5.07 6.3 Share of joint ventures and associates 16.7 141.8 6 49,730 9.9 5.69 6.4 Total 100.0 848.1 54 252,660 52.5 5.18 6.3 (3) The objective of the EPRA NAV measure is to highlight the fair value of net assets on an ongoing, long-term basis. EPRA NAV is used as a reporting measure to better reflect underlying net asset value attributable to shareholders. Assets and liabilities that are not expected to crystallise in normal circumstances such as the fair value of financial derivatives and deferred taxes on property valuation surpluses are therefore excluded. The EPRA measure thus takes into account the fair value of assets and liabilities as at the balance sheet date, other than fair value adjustments to financial instruments, deferred tax and goodwill. As the Group has adopted fair value accounting for investment property per IAS40, adjustments to reflect the EPRA NAV include only those relating to the revaluation of financial instruments and deferred tax. United Kingdom The UK portfolio (excluding Stenprop's share of 25 Argyll Street), was independently valued at GBP251.5 million, a decrease of 1.02% on the prior year end valuation of GBP254.1 million. This decrease in value of GBP2.6 million over the year was primarily due to a 5.5% downward valuation (GBP4.5 million) of the Pilgrim Street property which is located in the financial centre of London. This was mainly as a result of valuers increasing the yield slightly to reflect the increased risks as a result of Brexit, particularly relevant to properties and tenants located in the City of London. The reduction was offset by gains in Stenprop's regional portfolios and at Euston House in London (a landmark building adjacent to Euston station and currently benefitting from demand in that area from media , technology and communications related companies like Google, Facebook and others). The UK properties are all fully let with a weighted average unexpired lease term ('WAULT') of 5.7 years. Germany The German portfolio (excluding associates and joint ventures) was independently valued at EUR259.1 million (31 March 2016: EUR252.6 million). The year on year increase of EUR6.5 million is driven by a EUR3.8 million uplift at Stenprop's Bleichenhof property including EUR0.7 million capex, in central Hamburg. The property has benefitted from positive market development seen in core assets in prime cities and also new lettings at market rental levels. Elsewhere, all properties experienced uplifts with the three Central Berlin retail centres improving EUR2.1 million in aggregate. Switzerland The Swiss portfolio was valued at CHF163.9 million, a 0.3% increase on the like for like 2016 year end valuation of CHF163.5 million. Following a decision to sell these lower yielding and more mature assets, the Swiss portfolio has been classified as held for sale in the financial statements. All properties are being marketed for sale and are at various stages in the sale process. As a result of negative interest rates and negative Swiss bond yields (to 10 years), real estate investment remains compelling to local investors. Sales are expected to crystallise as the year progresses and an update will be provided in the next interim report. Joint ventures and associates The Care Homes portfolio was independently valued at EUR35.4 million, an increase of 3.5% on the prior year valuation of EUR34.2 million. The uplift reflects the extension of the lease at Dessau and the strength of the sector in general. Stenprop's 50% interest in 25 Argyll Street, a property located in the heart of London's West End, is valued at GBP40.5 million and broadly unchanged against the 30 March 2016 valuation of GBP40.9 million. Stenprop owns a 28.42% share in Stenham European Shopping Centre Fund Limited ('SESCF'). SESCF owns the Nova Eventis regional shopping centre situated near Leipzig. As previously reported, the directors of SESCF are in the process of selling this asset and a closing date of 22 June 2017 has been scheduled. The sale price was based on a valuation of EUR208.5 million (2016 SESCF directors' valuation: EUR265 million). Capital management The value of the property portfolio as at 31 March 2017, including the Group's share of associate and joint venture properties and Assets Held for Sale, was EUR848.1 million. Bank debt at the same date was EUR438.0 million resulting in an average loan to value ratio of 51.6%, unchanged from 31 March 2016. However, excluding the Swiss portfolio and Nova Eventis which are in the process of being sold , the average loan to value ratio is 49%. Stenprop currently targets an average gearing ratio of 50%. The weighted average debt maturity stood at 2.4 years at 31 March 2017 compared with 2.2 years at 31 March 2016. However, excluding the Swiss portfolio and Nova Eventis, the weighted average debt maturity at 31 March 2017 stands at 3.2 years. This is driven by the EUR84.9 million refinance of the Bleichenhof loan which was extended for five years with the existing lender, Berlin Hyp AG. The new loan matures on 28 February 2022 and the all-in interest rate now stands at 1.58% (previously 1.90%). Annual amortisation payments since the year end remain broadly unchanged in Germany and Switzerland. However, excluding the Swiss portfolio and Nova Eventis, amortisation has dropped from EUR6.15 million to EUR1.37 million. All remaining amortisation relates to German loans; in the UK, total amortisation payments have been reduced by GBP0.7 million to nil following the GBP12.4 million refinancing of the UK regional portfolio. The all-in contracted weighted average cost of debt dropped to 2.53% from 2.80% at 31 March 2016. This is primarily due to the refinancing of the Swiss debt, where, in line with the disposal strategy, interest rates have not been hedged. Due to the persistent negative interest rate environment, the impact of paying interest on a floating rate basis is that the loans attract interest at the marginal cost only. Previously the swap contracts in place imposed negative interest rates on borrowers. The weighted all-in interest rate on the Swiss loans has therefore decreased to 1.41% from approximately 2.80% a year earlier. As discussed above, Swiss debt totalling CHF88.5 million was refinanced on 31 March 2017. Loans of CHF49 million and CHF23.8 million were refinanced on a rolling basis with UBS as a current account credit facility with interest charged at an all-in interest rate (in effect margin only due to negative interest rates) of 1.05% and 1.15% respectively. At the same time, three loans totalling CHF15.7 million were refinanced on a rolling basis with Credit Suisse and mature on 31 March 2018. The all-in interest rate is between 1.35% and 1.50% on these loans. If one excludes the Swiss portfolio and Nova Eventis, the all-in contracted weighted average cost of debt remains at 2.53%. Bermuda Stock Exchange listing and cessation of quarterly reporting Shareholders were advised on 30 September 2016 that the Bermuda Stock Exchange ('BSX') approved Stenprop's request to move the Company's listing on the BSX from a primary listing to a secondary listing, with effect from 3 October 2016. This transfer does not affect the Company's current listing on the Main Board of the JSE and does not affect the trading of shares on either the JSE or the BSX. One of the consequences of moving from a primary to a secondary listing on the BSX is that Stenprop will no longer have to publish quarterly results. This change is in line with the financial reporting protocol adopted by most of our peers who are listed on the Johannesburg and/or the London Stock Exchanges, neither of which requires quarterly reporting. A second consequence is that Stenprop is no longer required to have two board members who are resident in Bermuda. Board appointments and resignations On 4 April 2016 David Brown resigned from the Board as an independent non-executive director. On the same date Peter Hughes was appointed as an independent non-executive director. On 14 September 2016 Michael Fienberg resigned as independent non-executive director following a change of residency. On the same date Paul Miller was appointed as independent non-executive director. On 23 November 2016, the Board accepted the resignation of Peter Hughes and James Keyes. Both were independent non-executive directors and resident in Bermuda. On 19 December 2016 it was with great sadness that Stenprop announced the passing of its founder and chairman, Gerald Leissner, who died on 16 December. Paul Arenson, Stenprop CEO, said 'We were privileged to have Gerald as a Chairman and colleague, not only for his vast experience and knowledge of property where he was a legend in his lifetime, but also for his personal contribution to Stenprop.' On 1 February 2017 it was announced that Stephen Ball, who was an independent non-executive director of Stenprop, had been appointed as the Chairman of the Company. Subsequent to the year end on 5 April 2017, Warren Lawlor was appointed as a non-executive director. Industrial Portfolio acquisition On 7 June 2017 Stenprop announced the acquisition of a portfolio of multi-let industrial properties (the 'MLI Portfolio') as well as the management business that has built up and managed the portfolio, C2 Capital Limited (the 'C2 Management Platform') for a combined consideration that values the two businesses at GBP130.5 million. The MLI Portfolio is made up of 25 separate multi-let industrial estates situated in or near densely populated nodes across the United Kingdom. The portfolio has a gross lettable area of approximately 2 million square feet (200,000 sqm), a diversified base of over 400 tenants and contractual rent (including contractual fixed uplifts) of approximately GBP9.1 million per annum. The C2 Management Platform specialises in the acquisition and active management of multi-let industrial estates across the UK. Founded and run by Julian Carey, with the support of five property professionals, the business has been investing on behalf of private and institutional clients since its inception in 2009. The MLI portfolio is being acquired with effect from the date of completion of the transaction, which is due to take place on 30 June 2017. The purchase price is payable in cash, with a GBP6.35 million deposit having been paid on exchange of contracts and the balance of the purchase price payable on completion, with a further adjustment to take account of any working capital in the structure. The purchase consideration will be ultimately funded out of the proceeds from the sale of the Nova Eventis shopping centre, which is scheduled to complete on 22 June 2017, and certain of the properties in Stenprop's Swiss portfolio that are in the process of being sold. To ensure that it has the cash available to settle the purchase price on completion, Stenprop has secured a 12-month bridging finance facility of EUR31 million, which attracts an arrangement fee of 1% and interest at 7% per annum. The loan is subject to a group loan to value covenant of 65%. A further 12-month facility of EUR8 million has been secured at an interest rate of 7% per annum. Stenprop will acquire the shares in C2 Capital Limited from Julian Carey for GBP3.5 million, to be settled by the issue of 3,270,500 Stenprop shares, valued at EUR1.22 per share, adjusted upward or downward in cash for working capital. Stenprop is confident that the combination of these acquisitions will provide a strategic foothold and capability in the multi let industrial estates sector; and that this positioning will enable it to deliver sustainable higher average annual rental growth over the next few years. The acquisition of the MLI portfolio, together with the acquisition of the C2 Management Platform, represents a rare opportunity to make a substantial strategic investment into an asset class which Stenprop believes is likely to show superior returns over the next few years. Subsequent events As detailed above, on 6 June 2017, Stenprop exchanged contracts on the acquisition of the Industrial Portfolio. Completion is expected to take place on 30 June 2017. As mentioned earlier in this report, the Nova Eventis shopping centre near Leipzig, in which the Group has a 28.42% interest, is currently in the final stages of a sales process. At the date of signing these financial statements all closing conditions have been met and the completion date is set for 22 June 2017. Subsequent to the year end on 5 April 2017, Warren Lawlor was appointed as a non-executive director. On 7 June 2016, the directors declared a final cash dividend of 4.50 cents per share. An announcement containing details of the dividend and the timetable will be made separately. Prospects The acquisition of the portfolio of 25 multi-let properties (the MLI portfolio) and the C2 Management Platform management business which has built up and managed the MLI portfolio provides Stenprop with a strategic platform in the multi-let industrial estates (MLI) sector that it believes will, on a sustainable basis, deliver increased earnings growth in the future. Stenprop is confident that, in addition to delivering organic growth through ongoing asset management of the MLI portfolio, it will be able to add further MLI properties onto the platform through earnings enhancing acquisitions. Individual MLI properties tend to trade at higher yields than large portfolios as, on their own, they lack the diversification and necessary economies of scale to be efficiently operated. The opportunity to acquire individual MLI properties at higher yields and operate them efficiently through the C2 Management Platform should also contribute to overall growth. To achieve this, Stenprop intends to pursue further acquisition opportunities within the MLI sector with the objective of integrating additional properties and portfolios into its newly acquired MLI platform, with the intention of establishing itself as a leading player in the UK MLI space. Results for the year ending 31 March 2018, whilst including nine months of earnings from the MLI portfolio, will also be impacted by acquisition and sales costs, as well as interim bridge funding costs, which will be influenced by the timing of the receipt of exit proceeds from the Swiss sales. On this basis, assuming average exchange rates of EUR1.18:GBP1:00 and EUR0.94:CHF1.00 and ignoring the potential positive impact of any further acquisitions in the MLI sector, Stenprop expects that diluted adjusted EPRA earnings per share for the year ending 31 March 2018 will remain at a similar level to the current year earnings of 10.28 cents. Stenprop expects to maintain the current pay-out ratio and therefore expects to deliver a full year dividend for the year ending 31 March 2018 of not less than 9.00 cents per share. Stenprop's objective is to continue to declare and pay a dividend every six months. Following completion of the acquisitions referred to above, Stenprop intends to actively investigate the merits of a conversion to REIT status as well as a listing on the London Stock Exchange, and a possible change in its reporting currency from Euro to Sterling to reflect the relatively larger weighting of its UK portfolio following implementation of the acquisition and sales strategy. This general forecast has been based on the Group's forecast and has not been reported on by the external auditors. Given the nature of its business, Stenprop has adopted distribution per share as its key performance measure, as this is considered more relevant than earnings, headline earnings or net asset value per share. Statement of directors' responsibilities The directors are responsible for preparing the financial statements in accordance with applicable law and regulations. Bermudian company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ('IASB'). The financial statements are required to give a true and fair view of the state of affairs of the Group and of the profit or loss of the Group for that period. In preparing these financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgements and estimates that are reasonable and prudent; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business for the foreseeable future, and - follow applicable accounting standards. The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Group and to enable them to ensure that the financial statements comply with the Companies Act 1981 of Bermuda. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Statement as to disclosure of information to auditors So far as the directors are aware, there is no relevant audit information of which the Group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the Group's auditors are aware of that information. Approval of annual financial statements The consolidated annual financial statements of Stenprop Limited were approved by the Board of Directors on 7 June 2017 and are signed on their behalf by: Stephen Ball Paul Arenson Patsy Watson Chairman of Audit Committee Chief Executive Officer Chief Financial Officer Consolidated statement of comprehensive income Audited Year ended year ended 31 March 31 March 2017 2016 Note EUR'000 EUR'000 Net rental income 6 30,316 31,596 Management fee income 3,701 2,927 Operating costs 7 (5,975) (8,682) Net operating income 28,042 25,841 Fair value movement of investment properties 16 2,894 28,471 (Loss)/gain from associates 18 (11,710) 1,075 Income from joint ventures 19 4,083 7,820 Profit from operations 23,309 63,207 Net gain/(loss) from fair value of derivative financial instruments 25 582 (2,495) Net finance costs 9 (7,137) (8,576) Net foreign exchange gains/(losses) 319 (134) Profit for the year before taxation 17,073 52,002 Taxation 10 (2,680) (2,933) Profit for the year from continuing operations 14,393 49,069 Discontinued operations Profit for the year from discontinued operations 20 3,350 514 Profit for the year 17,743 49,583 Profit attributable to: Equity holders 17,477 49,266 Non-controlling interest derived from continuing operations 266 317 Other comprehensive income Items that may be reclassified subsequently to profit or loss: Fair value movement on derivative financial instruments - 519 Foreign currency loss (15,026) (20,480) Total comprehensive profit for the year 2,717 29,622 Total comprehensive profit attributable to: Equity holders 2,451 29,305 Non-controlling interest 266 317 Earnings per share From continuing operations IFRS EPS (cents) 14 5.00 17.51 Diluted IFRS EPS (cents) 14 4.98 17.47 From continuing and discontinued operations IFRS EPS (cents) 14 6.18 17.70 Diluted IFRS EPS (cents) 14 6.16 17.66 Consolidated statement of financial position Audited 31 March 31 March 2017 2016 Note EUR'000 EUR'000 ASSETS Investment properties 16 550,145 729,782 Investment in associates 18 20,883 39,298 Investment in joint ventures 19 36,748 37,620 Other receivables 21 13,600 7,406 Total non-current assets 621,376 814,106 Cash and cash equivalents 22 29,461 36,811 Trade and other receivables 21 4,757 6,367 Assets classified as held for sale 20 158,248 - Total current assets 192,466 43,178 Total assets 813,842 857,284 Equity and liabilities Capital and reserves Share capital and share premium 12 395,141 389,927 Equity reserve (10,612) 480 Retained earnings 54,997 63,426 Foreign currency translation reserve (13,362) 1,664 Total equity attributable to equity shareholders 426,164 455,497 Non-controlling interest 2,398 2,132 Total equity 428,562 457,629 Non-current liabilities Bank loans 24 252,563 178,708 Derivative financial instruments 25 3,335 4,173 Other loan and interest - 12 Deferred tax 26 6,774 9,705 Total non-current liabilities 262,672 192,598 Current liabilities Bank loans 24 15,203 188,785 Derivative financial instruments 25 139 1,769 Accounts payable and accruals 23 18,189 16,503 Liabilities directly associated with assets classified as held for sale 20 89,077 - Total current liabilities 122,608 207,057 Total liabilities 385,280 399,655 Total equity and liabilities 813,842 857,284 IFRS net asset value per share 15 1.53 1.61 Consolidated statement of changes in equity Share Foreign Cash capital currency flow Attributable Non- and share Equity Retained translation hedge to equity controlling Total premium reserve earnings reserve reserve shareholders interest equity Note EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 Balance at 1 April 2016 389,927 480 63,426 1,664 - 455,497 2,132 457,629 Issue of share capital 12 5,214 (14) - - - 5,200 - 5,200 Credit to equity for equity-settled share-based payments (note 13) - 316 - - - 316 - 316 Repurchase of own shares 12 - (11,394) - - - (11,394) - (11,394) Total comprehensive profit/(loss) for the period - - 17,477 (15,026) - 2,451 266 2,717 Ordinary dividends 11 - - (25,906) - - (25,906) - (25,906) Balance at 31 March 2017 395,141 (10,612) 54,997 (13,362) - 426,164 2,398 428,562 Balance at 1 April 2015 374,127 - 37,562 22,144 (519) 433,314 1,815 435,129 Issue of share capital 15,800 (41) - - - 15,759 - 15,759 Credit to equity for equity-settled share-based payments - 521 - - - 521 - 521 Total comprehensive profit for the period - - 49,266 (20,480) 519 29,305 317 29,622 Ordinary dividends - - (23,402) - - (23,402) - (23,402) Balance at 31 March 2016 389,927 480 63,426 1,664 - 455,497 2,132 457,629 Consolidated statement of cash flows Audited Year ended year ended 31 March 31 March 2017 2016 Note EUR'000 EUR'000 Operating activities Profit from operations from continuing operations 23,309 63,207 Profit from operations from discontinuing operations 20 5,064 1,884 28,373 65,091 Share of loss/(profit) in associates 18 11,710 (1,075) Increase in fair value of investment property 16 (1,872) (22,939) Share of profit in joint ventures 19 (4,083) (7,820) Exchange rate losses/(gains) 319 (134) Decrease/(increase) in trade and other receivables 388 (119) Increase/(decrease) in trade and other payables 2,808 (510) Interest paid (9,330) (10,770) Interest received 1,281 1,942 Net tax paid (1,106) (1,006) Net cash from operating activities 28,488 22,660 Contributed by: Continuing operations 25,802 18,523 Discontinued operations 2,686 4,137 Investing activities Dividends received from associates - 2,268 Dividends received from joint ventures 1,778 420 Purchases of investment property - (47,561) Capital expenditure (1,921) (3,576) Proceeds on disposal of investment property - discontinued operations 20 6,270 6,701 Proceeds on disposal of investment in associate 18 6,716 - Acquisition of investment in joint venture 19 - (26,782) Net cash from/(used in) investing activities 12,843 (68,530) Financing activities New bank loans raised - 60,368 Dividends paid (25,906) (15,070) Repayment of borrowings (8,978) (41,477) Repurchase of shares (11,394) - Financing fees paid (203) (1,246) Payments made on swap break (101) (571) New loan advances (1,222) - Repayment of loan advances 246 95 Net cash (used in)/from financing activities (47,558) 2,099 Net decrease in cash and cash equivalents (6,227) (43,771) Effect of foreign exchange rate changes (392) 152 Cash and cash equivalents at beginning of the period 36,811 80,430 Cash and cash equivalents at end of the period 30,192 36,811 Contributed by: Continuing operations 22 29,461 33,416 Discontinued operations 22 731 3,395 Notes to the consolidated financial statements 1. Basis of preparation The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as issued by the IASB, the requirements of IAS 34: Interim Financial Reporting, the JSE Listings Requirements and the BSX Listing Regulations and applicable Bermuda law. The consolidated financial statements have been prepared on the historical cost basis,except for the revaluation of investment properties and financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. The principal accounting policies which are consistent with those applied in the previous annual financial statements are set out below. This summarised report is extracted from audited information, but is itself not audited. The directors take full responsibility for the preparation of the provisional report and that the financial information has been correctly extracted from the underlying annual financial statements. The auditors, Deloitte, have reported on the audited financial statements and their report was unqualified. A copy is available on the Company's website: www.stenprop.com, or upon written request from the Company's registered office. Going concern At the date of signing these financial statements, the Group has positive operating cash flow forecasts and positive net assets. The directors have reviewed the Group's budgets for the year to 31 March 2018, forecasts for the period to September 2018 and the current financial position and, in light of this review, they are satisfied that the Company and the Group have access to adequate resources to meet the obligations and continue in operational existence for the foreseeable future, and specifically the 12 months subsequent to the signing of these financial statements. The cash flow forecasts take into account projected income and expenses; possible changes in the investment property portfolio, including exposure to tenant credit risk; lease expiries; the raising of additional capital; external debt; refinancings which have occurred and are expected to occur subsequent to the reporting date, and forecast financial loan covenants. As mentioned earlier in this report, the Nova Eventis shopping centre near Leipzig, in which the Group has a 28.42% interest is currently in the final stages of a sales process. A sale and purchase agreement was signed on 6 February 2017 by the shareholders of the underlying property company, owned by Stenham European Shopping Centre ('SESCF'), an associate of Stenprop, and at which time the buyers paid a deposit of EUR11 million into an escrow account. At the date of signing these financial statements all closing conditions have been met and the completion date is set for 22 June 2017. The likely wind up process of SESCF is expected to take longer than 12 months and the consolidated financial statements of SESCF show the investment property as Held for Sale and its accounts have been prepared on a going concern basis. The Swiss portfolio, valued at CHF163.9 million after taking into account estimated selling costs, is currently being marketed for sale. The properties are at various stages in the sale process and are expected to be sold within the next six to 12 months. As such, loans have been refinanced on a short-term basis as a rolling credit facility or mature on 31 March 2018. Should a decision be taken not to sell the properties for any reason, the directors anticipate that, given the quality of the property and the strong relationships with Swiss lenders, a refinancing can be secured on favourable terms. On 7 June 2017, Stenprop announced the acquisition of a portfolio of multi-let industrial properties (the "MLI Portfolio") as well as the management business that has built up and managed the portfolio, C2 Capital Limited (the "C2 Management Platform") for a combined consideration that values the two businesses at GBP130.5 million. The acquired portfolio assets are financed with a loan facility provided by RBS which matures in June 2022. The purchase consideration will be ultimately funded out of the proceeds from the sale of the Nova Eventis shopping centre, which is scheduled to complete on 22 June 2017, and certain of the properties in Stenprop's Swiss portfolio that are in the process of being sold. To ensure that it has the cash available to settle the purchase price on completion, Stenprop has secured a twelve month bridging finance facility of EUR31 million, which attracts an arrangement fee of 1% and interest at 7% per annum. The loan is subject to a group loan to value covenant of 65%. A further twelve month facility of EUR8 million has been secured at an interest rate of 7% per annum. The directors believe that it is therefore appropriate to prepare the financial statements on a going concern basis. Note 27 to the financial statements includes the Group's objectives, policies and procedures for managing its market, interest and liquidity risk. 2. Adoption of new and revised standards In the current period the following new and revised Standards and Interpretations have been adopted. Their adoption has not had any material impact on the disclosures or the amounts reported in these financial statements: IFRS 14 Regulatory deferral accounts (1 January 2016) IFRS 11 (amendments) Accounting for acquisitions of interests in joint operations (1 January 2016) IAS 16 and IAS 38 (amendments) Clarification of acceptable methods of depreciation and amortisation (1 January 2016) IAS 27 (amendments) Equity method in separate financial statements (1 January 2016) IAS 1 (amendments) Disclosure Initiative (1 January 2016) IFRS 10, IFRS 12 & IAS 28 (amendments) Investment entities: applying the consolidation exception (1 January 2016) IFRS 5 (amendments) Annual improvements to IFRS 5 (1 January 2016) IFRS 7 (amendments) Annual improvements to IFRS 7 (1 January 2016) Annual improvements 2012 - 2014 cycle (1 January 2016) At the date of authorisation of these financial statements, the following applicable standards which have not been applied to these financial statements, were in issue but not yet effective. They are effective for periods commencing on or after the disclosed date and will be adopted as they become effective. IFRS 9 Financial instruments (1 January 2018) IFRS 15 Revenue from contracts with customers (1 January 2018) IFRS 16 Leases (1 January 2019) IFRIC 22 Foreign currency transactions and advance consideration (1 January 2018) IAS 12 (amendments) Recognition of deferred tax assets for unrealised losses (1 January 2017) IAS 7 (amendments) Disclosure Initiative (1 January 2017) IFRS 2 (amendments) Classification and measurement of share-based payment transactions (1 January 2018) IFRS 10 & IAS 28 (amendments) Sale or contribution of assets between an investor and its associate or joint venture (effective date deferred indefinitely) IAS 40 (amendments) Transfers of investment property (1 January 2018) Annual improvements 2014 - 2016 cycle (1 January 2017) Management are in the process of assessing these standards and do not expect that the adoption of the standards listed above will have a material impact on the financial statements of the Group in the future period. 3. Significant accounting policies Basis of consolidation Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Specifically, the results of the subsidiaries acquired or disposed of during the period are included in the consolidated statement of comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary. Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of the subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with the Group's accounting policies. All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members of the Group are eliminated on consolidation. When the Group loses control of a subsidiary, the gain or loss on disposal recognised in profit or loss is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), less liabilities of the subsidiary and any non-controlling interests. All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as specified/permitted by applicable IFRS). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IAS 39 Financial instruments: recognition and measurement or, when applicable, the costs on initial recognition of an investment in an associate or jointly controlled entity. Investments in associates An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant interest is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. The results, assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5 Non-current Assets Held for Sale and discontinued operations. Under the equity method, an investment in associate is initially recognised in the consolidated statement of financial position at cost and adjusted thereafter to recognise the Group's share of the profit or loss and other comprehensive income of the associate. Joint ventures The Group's investment properties are typically held in property-specific special purpose vehicles ('SPVs'), which may be legally structured as joint ventures. In assessing whether a particular SPV is accounted for as a subsidiary or joint venture, the Group considers all of the contractual terms of the arrangement, including the extent to which the responsibilities and parameters of the venture are determined in advance of the joint venture agreement being agreed between the two parties. The Group will then consider whether it has the power to govern the financial and operating policies of the SPV, so as to obtain benefits from its activities, and the existence of any legal disputes or challenges to this control in order to conclude on the classification of the SPV as a joint venture or subsidiary undertaking. The Group considers this position with the evidence available at the time. The consolidated financial statements account for interests in joint ventures using the equity method of accounting per IFRS 11. Revenue recognition The Group earns returns from investments in direct property assets and management fees. Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the Group and the amount of revenue can be measured reliably. Revenue includes amounts receivable in respect of property rental income and service charges earned in the normal course of business, net of sales-related taxes. Rental income from operating leases is recognised on an accruals basis. A rent adjustment based on open market estimated rental value is recognised from the rent review date in relation to unsettled rent reviews. Where a significant rent free period is included in a lease, the rental income foregone is allocated evenly over the period from the date of lease commencement to the expiry date of the lease. Rental income from fixed and minimum guaranteed rent reviews is recognised on a straight-line basis over the entire lease term. Where such rental income is recognised ahead of the related cash flow, an adjustment is made to ensure the carrying value of the investment property, including the accrued rent, does not exceed the external valuation. Initial significant direct costs incurred in negotiating and arranging a new lease are amortised on a straight-line basis over the period from the date of lease commencement to the expiry date of the lease. Where a lease incentive payment, or surrender premium is paid to enhance the value of a property, it is amortised on a straight-line basis over the period from the date of lease commencement to the expiry date of the lease. Upon receipt of a surrender premium for the early determination of a lease, the profit, net of dilapidations and non-recoverable outgoings relating to the lease concerned, is immediately reflected in income. Contingent rents, such as turnover rents, rent reviews and indexation, are recorded as income in the periods in which they are earned. Management fees are recognised in the income statement on an accruals basis. Service charge income is recognised in the accounting period in which the services are rendered and the related property expenses are recognised in the period in which they are incurred. Dividend income from listed securities is recognised at the date the dividend is declared. Interest income is recognised in the consolidated statement of comprehensive income under the effective interest method as it accrues. Foreign currencies The individual financial statements of each Group company are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position are expressed in Euros, which is the functional currency of the Group and the presentation currency for the consolidated financial statements. In preparing the financial statements of the individual companies, transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange difference are recognised in profit or loss for the period in which they arise. For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising are recognised in other comprehensive income and accumulated in equity (attributed to non-controlling interests as appropriate). Borrowing costs Interest costs are recognised in the consolidated statement of comprehensive income using the effective interest rate method. Borrowing costs directly attributable to arranging finance are amortised over the facility term in the consolidated statement of comprehensive income. Taxation The tax expense represents the sum of the tax currently payable and deferred tax, in those jurisdictions where the property companies are registered, namely Germany, Switzerland and the United Kingdom. In addition, Stenprop Management Limited incurs tax in the United Kingdom. Current tax Tax currently payable is based on taxable profit for the year. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis. Non-controlling interest Non-controlling interests in the net assets (excluding goodwill) of consolidated subsidiaries are identified separately from the Group's equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling interests' share of the changes in equity since the date of the combination. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance. Investment properties Properties held to earn rentals and/or for capital appreciation are classified as investment properties. Investment properties comprise both freehold and leasehold land and buildings. Investment properties are recognised as assets when: - it is probable that the future economic benefits that are associated with the investment property will flow to the Group; - there are no material conditions precedent which could prevent completion; and - the cost of the investment property can be measured reliably. Investment properties are measured initially at cost, including related transaction costs. After initial recognition, investment properties are carried at fair value, determined by the directors and/or based on independent external appraisals. The Group uses the valuations prepared by its independent valuers as the fair value of its investment properties. These valuations are undertaken in accordance with the appropriate sections of the current Practice Statements contained in the Royal Institution of Chartered Surveyors Valuation - Professional Standards (Red Book). This is an internationally accepted basis of valuation. The valuations are based upon assumptions including contractual and estimated rental values, future rental income, anticipated maintenance costs, future development costs and appropriate discount rates. The valuers also make reference to market evidence of transaction prices for similar properties. The difference between the fair value of a property at the reporting date and its carrying amount prior to re-measurement is included in the consolidated statement of comprehensive income as a valuation surplus or deficit. Cash and cash equivalents Cash and cash equivalents in the balance sheet comprise cash at banks and short-term deposits with an original maturity of three months or less. Expenditure Expenses are accounted for on an accrual basis. Financial instruments Classification A financial instrument is a contract that gives rise to a financial asset to one entity and a financial liability or equity instrument to another. The classification of financial assets and financial liabilities depends on the nature and purpose of the instrument and is determined at the time of initial recognition. Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual agreement. Measurement Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets at fair value through profit or loss ('FVTPL')) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transactions costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognised immediately in the statement of comprehensive income. In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows: Level 1 - Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. Level 2 - Inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly. Level 3 - Inputs are unobservable inputs for the asset or liability. The financial statements are presented in Euros. Financial assets The Group classifies its financial assets as either at fair value through profit and loss or as loans and receivables. Recognition and derecognition Loan and receivables, including those relating to the purchase of Stenprop shares (note 21), are measured at amortised cost using the effective interest method, less impairment losses which are recognised in the statement of comprehensive income. Financial liabilities are measured at amortised cost using the effective interest method. In the case of short-term trade receivables and payables, the impact of discounting is not material and cost approximates amortised costs. The Group derecognises a financial asset when the contractual rights to the cash flows from the asset have expired or have been transferred and the Group has transferred substantially all risk and rewards of ownership of the asset to another entity. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They include current assets with maturities or terms greater than 12 months after the reporting dates which are classified as non-current assets. Impairment of financial assets Financial assets, specifically accounts receivable and other debtors, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investments have been affected. Objective evidence of impairment could include: - significant financial difficulty of the issuer or counterparty; or - breach of contract, such as a default or delinquency in interest or principal payments; or - it becoming probable that the borrower will enter bankruptcy or financial reorganisation. For financial assets carried at amortised cost, the amount of the impairment loss is measured as the difference between the asset's carrying amount and present value of the estimated future cash flows, discounted at the financial assets original effective interest rate. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets, with the exception of trade receivables, where the carrying amount is reduced through the use of a provision account. When a trade receivable is considered uncollectable, it is written off against the provision account. Changes in the carrying amount of the provision account are recognised in the statement of comprehensive income in the period. For financial assets measured at amortised cost if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through the statement of comprehensive income to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. Financial liabilities and equity Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual agreement. Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all its liabilities. Ordinary shares are classed as equity. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs. Financial liabilities The Group's financial liabilities comprise interest-bearing borrowings, loans and payables and trade payables. Recognition and derecognition Financial liabilities are recognised when the Group becomes party to the contractual provisions of the instrument. The Group derecognises financial liabilities when the Group's obligations are discharged, cancelled or they expire. Derivatives Interest rate swaps have been initially recognised at fair value, and subsequently re-measured at fair value in accordance with IAS 39, Financial Instruments: Recognition and Measurement. They have been entered into in order to hedge against the exposure to variable interest rate loans as described in note 25. They have been valued by an independent valuer in line with internationally accepted practice. A derivative with a positive fair value is recognised as a financial asset whereas a derivative with a negative fair value is recognised as a financial liability. A derivative is presented as a non-current asset or non-current liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realised or settled within 12 months. It is Group policy not to hedge account. Other derivatives are presented as current assets or current liabilities. Trade and other receivables These are valued at their nominal value (less accumulated impairment losses) as the time value of money is immaterial for these current assets. Impairment losses are estimated at the year-end by reviewing amounts outstanding and assessing the likelihood of recoverability. Trade and other payables Trade and other payables are valued at their nominal value as the time value of money is immaterial for these current liabilities. Dividends Dividends to the Group's ordinary shareholders are recognised when they are declared. This is when they are approved by the board. Earnings/(loss) per share Earnings per share is calculated on the weighted average number of shares in issue in respect of the current period and is based on the profit attributable to the ordinary shareholders. Share-based payments Deferred Share Bonus Plan Share options are granted to key management, subject to achieving annual targets, under the Deferred Share Bonus Plan. The cost of equity settled transactions is measured with reference to the fair value at the date at which they were granted. The Group accounts for the fair value of these options at grant date over the vesting period in the income statement, with a corresponding increase to the share-based payment reserve included as part of equity reserve in the Statement of Financial Position. The fair value of the options granted is determined using the Black-Scholes Option Pricing Model, which takes into account the exercise price of the option, the current share price, the risk-free interest rate, the expected volatility of the Group's share price over the life of the option and other relevant factors. Readers are referred to note 13: share-based payments, where key assumptions are further disclosed. The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest. Share Purchase Plan As part of the Group's remuneration policy, the Company can award shares to qualifying participants, funded through the advance of loans to the participants. Loans advanced under the share purchase plan are interest-bearing at a rate equal to the average interest rate incurred by the Group from time to time. Interest is payable six-monthly in arrears. Loans are repayable within 30 days of cessation of employment (unless the participant ceases employment in circumstances beyond his or her control, in which case the loan is repayable within 12 months), and must in all circumstances be repaid in 10 years. All dividends received by such employees (or his or her nominee) by virtue of their shareholding, must first be utilised to discharge any interest outstanding in terms of the loan advanced in terms of the Share Purchase Plan. The loans have full recourse to the participants and as such fall outside of the scope of IFRS 2 and are accounted for as financial instruments under IAS. The participants must charge their shares by way of security for the loan. The loans have full recourse to the participants who waive all rights to compensation for any loss in relation to the Plan. Repurchase of share capital (Own Shares) Where share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs, is recognised as a deduction from equity. Such shares may either be held as Own Shares (treasury shares) or cancelled. Where Own Shares are subsequently re-sold from treasury, the amount received is recognised as an increase in equity. 4. Critical accounting judgements and key sources of estimation uncertainty Judgements and estimates The preparation of the consolidated financial statements in accordance with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgement in the process of applying the Group's accounting policies. Although the estimates are based on management's best knowledge of the amount, events or actions, actual results may ultimately differ from those estimates. The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting year, that have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below. Investment properties The Group's investment properties are stated at estimated fair value, determined by directors, based on an independent external appraisal. The valuation of certain of the Swiss properties disclosed as Assets Held for Sale has been determined by the directors and is based on offers made to acquire the properties. The directors valuation amounts to CHF77.6 million (2016 independent valuation: CHF77.3 million). The valuation of the Group's property portfolio is inherently subjective due to a number of factors including the individual nature of each property, its location and the expectation of future rentals. As a result, the valuations placed on the property portfolio are subject to a degree of uncertainty and are made on the basis of assumptions that may not prove to be accurate particularly in years of volatility or low transaction flow in the market. The estimated market value may differ from the price at which the Group's assets could be sold at a particular time, since actual selling prices are negotiated between willing buyers and sellers. As a result, if the assumptions prove to be false, actual results of operations and realisation of net assets could differ from the estimates set forth in these financial statements, and the difference could be significant. Associates The Group holds an investment in Stenham European Shopping Centre Fund Limited ('SESCF'). A sale and purchase agreement was signed on 6 February 2017. At the date of signing these financial statements all closing conditions have been met and the completion date is set for 22 June 2017. The likely wind up process of SESCF is expected to take longer than 12 months and the consolidated accounts of SESCF show the investment property as Held for Sale and its accounts have been prepared on a going concern basis. Stenprop has therefore deemed it appropriate to continue to disclose the investment in associate relating to SESCF as a non-current asset. Readers are referred to the commentary (page 4) and the going concern paragraph in note 1 where this is discussed in further detail. The Group holds an investment in Stenham Berlin Residential Fund Limited ('SBRF') with a shareholding of 5.24%. Although this shareholding represents less than 20% of the voting power, Stenprop has representation on the board of SBRF and is the manager of the fund and as such has significant influence including participation in policy making processes. In addition, Stenprop is the largest single shareholder in SBRF. These factors have been taken into account when assessing the classification of SBRF as an associate. Deferred tax assets and liabilities Tax liabilities are recognised when it is considered probable that there will be a future outflow of funds to a taxing authority. In such cases, provision is made for the amount that is expected to be settled, where this can be reasonably estimated. This requires the application of judgement as to the ultimate outcome, which can change over time depending on facts and circumstances. A change in estimate of the likelihood of a future outflow and/or in the expected amount to be settled would be recognised in income in the period in which the change occurs. Deferred tax assets are recognised only to the extent it is considered probable that those assets will be recoverable. This involves an assessment of when those assets are likely to reverse, and a judgement as to whether or not there will be sufficient taxable profits available to offset the assets when they do reverse. This requires assumptions regarding future profitability and is therefore inherently uncertain. To the extent assumptions regarding future profitability change, there can be an increase or decrease in the amounts recognised in respect of deferred tax assets as well as in the amounts recognised in income in the period in which the change occurs. Deferred tax assets and liabilities are presented in note 26. 5. Operating segments The Group is focused on real estate investment in well-developed, large economies with established real estate markets. The investment portfolio is geographically diversified across Germany, the United Kingdom and Switzerland, and these geographical locations provide the basis of the business segments identified by the Group. Each segment derives its revenue from the rental of investment properties in the respective geographical regions. Relevant financial information is set out below: Discontinued Continuing operations operation United Germany Kingdom Switzerland Total EUR'000 EUR'000 EUR'000 EUR'000 (i) Information about reportable segments For the year ended 31 March 2017 Net rental income 12,462 17,854 - 30,316 Fair value movement of investment properties 5,866 (2,972) - 2,894 Net gain/(loss) from fair value of financial liabilities 431 151 - 582 Loss from associates (11,710) - - (11,710) Income from joint ventures 2,702 1,017 - 3,719 Net finance costs (2,796) (4,351) - (7,147) Operating costs (780) (166) - (946) Net foreign exchange gain 64 - - 64 Profit for the year from discontinued operations (see note 20) - - 3,350 3,350 Taxation (1,570) (967) - (2,537) Total profit/(loss) per reportable segments 4,669 10,566 3,350 18,585 As at 31 March 2017 Investment properties 256,088 294,057 - 550,145 Investment in associates 20,883 - - 20,883 Investment in joint ventures 12,022 24,684 - 36,706 Cash 13,670 14,355 - 28,025 Other 15,196 2,743 - 17,939 Assets classified as held for sale 2,970 - 155,278 158,248 Total assets 320,829 335,839 155,278 811,946 Borrowings - bank loans 143,673 124,093 - 267,766 Other 13,286 13,146 - 26,432 Liabilities directly associated with assets classified as held for sale (see note 20) - - 89,077 89,077 Total liabilities 156,959 137,239 89,077 383,275 For the year ended 31 March 2016 Net rental income 11,713 19,883 - 31,596 Fair value movement of investment properties 12,228 16,242 - 28,470 Net (loss)/gain from fair value of financial liabilities (175) (2,319) - (2,494) Income from associates 1,075 - - 1,075 Income from joint ventures 2,569 4,826 - 7,395 Net finance costs (2,950) (5,626) - (8,576) Operating costs (794) (288) - (1,082) Net foreign exchange gain 23 - - 23 Profit for the year from discontinued operations (see note 20) - - 514 514 Taxation (2,337) (502) - (2,839) Total profit per reportable segments 21,352 32,216 514 54,082 As at 31 March 2016 Investment properties 252,510 321,532 155,740 729,782 Investment in associates 39,298 - - 39,298 Investment in joint venture 10,329 27,250 - 37,579 Cash 10,435 15,053 3,395 28,883 Other 9,687 2,277 1,178 13,142 Total assets 322,259 366,112 160,313 848,684 Borrowings - bank loans (145,913) (134,512) (87,068) (367,493) Other (9,154) (12,231) (7,826) (29,211) Total liabilities (155,067) (146,743) (94,894) (396,704) Audited Year ended year ended 31 March 31 March 2017 2016 EUR'000 EUR'000 (ii) Reconciliation of reportable segment profit or loss Rental income Net rental income for reported segments 30,316 31,596 Profit or loss Fair value movement of investment properties 2,894 28,470 Net gain/(loss) from fair value of financial liabilities 582 (2,494) (Loss)/gain from associates (11,710) 1,075 Income from joint ventures 3,719 7,395 Net finance costs (7,147) (8,576) Operating costs (946) (1,082) Net foreign exchange gains 64 23 Profit for the year from discontinued operations (see note 20) 3,350 514 Taxation (2,537) (2,839) Total profit per reportable segments 18,585 54,082 Other profit or loss - unallocated amounts Management fee income 3,701 2,927 Income from joint ventures 364 425 Net finance income 10 - Tax, legal and professional fees (239) (446) Audit fees (265) (250) Administration fees (257) (356) Non-executive directors (159) (214) Staff remuneration costs (2,719) (4,289) Other operating costs (1,390) (2,045) Net foreign exchange gain 255 (157) Taxation (143) (94) Consolidated profit for the year 17,743 49,583 Audited 31 March 31 March 2017 2016 EUR'000 EUR'000 (iii) Reconciliation of reportable segment financial position ASSETS Investment properties 550,145 729,782 Investment in associates 20,883 39,298 Investment in joint venture 36,706 37,579 Cash 28,025 28,883 Other 17,939 13,142 Assets classified as held for sale (see note 20) 158,248 - Total assets per reportable segments 811,946 848,684 Other assets - unallocated amounts Investment in joint ventures 42 41 Cash 1,436 7,928 Other 418 631 Total assets per consolidated statement of financial position 813,842 857,284 LIABILITIES Borrowings - bank loans 267,766 (367,493) Other 26,432 (29,211) Liabilities directly associated with assets classified as held for sale (see note 20) 89,077 - Total liabilities per reportable segments 383,275 (396,704) Other liabilities - unallocated amounts Other 2,005 (2,951) Total liabilities per consolidated statement of financial position 385,280 (399,655) Audited Year ended year ended 31 March 31 March 2017 2016 EUR'000 EUR'000 6. Net rental income Rental income 41,500 43,458 Other income - tenant recharges 7,807 7,632 Other income 117 201 Rental income 49,424 51,291 Direct property costs (12,499) (11,674) Discontinued operations adjustment (see note 20) (6,609) (8,021) Total net rental income 30,316 31,596 7. Operating costs Tax, legal and professional fees 780 1,200 Audit fees 296 297 Interim review fees 37 43 Administration fee 402 466 Investment advisory fees 510 519 Non-executive directors 159 214 Staff remuneration costs 2,719 4,289 Other operating costs 1,595 2,259 Discontinued operations adjustment (note 20) (523) 605 5,975 8,682 8. Employees' and directors' emoluments The Group had 11 employees (2016: 15) at year end and incurred EUR2,391,000 (2016: EUR3,942,000) in wages and salaries and EUR328,000 (2016: EUR347,000) in related social security costs and pension charges during the year. Their aggregate remuneration for the period including that of executive directors is: Audited Year ended year ended 31 March 31 March 2017 2016 EUR'000 EUR'000 Wages and salaries (excluding key management) 1,008 2,396 Key management remuneration 1,383 1,546 Social security costs 219 246 Other pension costs 109 101 2,719 4,289 As at 31 March 2017 the Group had six directors (2016: 9). The directors of the Company during the financial year and at the date of this report were as follows: Change in Appointed appointment Non-executive directors S Ball (Chairman) 2/10/2014 appointed chairman 1/2/2017 M Yachad 10/12/2014 P Miller 14/9/2016 G Leissner (Chairman) 3/12/2012 passed away 16/12/2016 M Fienberg 2/10/2014 resigned 14/9/2016 D Brown 25/9/2013 resigned 4/4/2016 J Keyes 26/10/2012 resigned 23/11/2016 P Hughes 4/4/2016 resigned 23/11/2016 Executive directors P Arenson (CEO) 2/10/2014 P Watson (CFO) 2/10/2014 N Marais 2/10/2014 The Group pays remuneration to executive directors which amounted to EUR1,383,000 (2016: EUR1,546,000 ) and non-executive directors which amounted to EUR159,000 (2016: EUR214,000) in the year. A breakdown of directors' remuneration is provided below: Total Vested remuneration Basic Other Cash share 31 March salary Pension benefits(1) bonus options 2017 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 Executive directors P Arenson 301 30 2 141 171 645 P Watson 240 24 - 113 137 514 N Marais 150 15 2 38 19 224 691 69 4 292 327 1,383 Total Vested remuneration Basic Other Cash share 31 March salary Pension benefits(1) bonus options 2016 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 Executive directors P Arenson 341 34 1 171 171 717 P Watson 273 27 - 137 137 574 N Marais 171 17 7 43 17 255 785 78 7 350 325 1,546 (1) Other benefits relates to the provision of private medical insurance. Based on the average GBP:EUR foreign exchange rate over the year of GBP1:EUR1.1904 (2016: GBP1:EUR1.3658) Audited Year ended year ended 31 March 31 March 2017 2016 EUR'000 EUR'000 Non-executive directors S Ball^ 45 44 M Yachad* 19 11 P Miller (appointed 14 September 2016) 27 - G Leissner (passed away 16 December 2016) 25 50 M Fienberg (resigned 14 September 2016) 21 75 D Brown (resigned 4 April 2016) - 14 J Keyes (resigned 23 November 2016) 13 20 P Hughes (appointed 4 April 2016, resigned 23 November 2016) 9 - 159 214 * these fees were paid to Peregrine SA Holdings Proprietary Limited ^ these fees were paid to Sphere Management Limited The above non-executive fees include all management, consulting, technical or other fees paid for such services rendered, including payments to management companies. On 7 June 2017, the board of directors, on the recommendation of the remuneration committee, approved the following: Bonuses in respect of the year ended 31 March 2017 Share Purchase Plan^ Deferred Share Cash bonus Bonus Plan* Number Loans Number EUR'000 EUR'000 of shares EUR'000 of shares Executive directors Paul Arenson 141 - - 1,108 907,842 Patsy Watson 113 - - 886 726,274 Neil Marais 38 14 11,348 102 83,234 292 14 11,348 2,095 1,717,350 Based on the average exchange rate of GBP1:EUR1.1904. On 8 June 2016, the board of directors, on the recommendation of the remuneration committee, approved the following: Bonuses in respect of the year ended 31 March 2016 Share Purchase Plan^ Deferred Share Cash bonus Bonus Plan* Number Loans Number EUR'000 EUR'000 of shares EUR'000 of shares Executive directors Paul Arenson 171 171 115,248 2,600 1,843,972 Patsy Watson 137 137 92,199 2,080 1,475,177 Neil Marais 43 23 15,847 126 89,317 350 331 223,294 4,806 3,408,466 Based on the average exchange rate of GBP1:EUR1.3658. * Share options vest in three equal tranches and are accounted for as share-based payments (see note 3). The first tranche vests on grant. Subsequent tranches will vest in accordance with the rules of the Deferred Share Bonus Plan at the end of the relevant year. ^ Loans advanced under the share purchase plan are interest-bearing at a rate equal to the average interest rate incurred by the Group from time to time. Interest is payable six-monthly in arrears. Loans are repayable within 30 days of cessation of employment (unless the participant ceases employment in circumstances beyond his or her control, in which case the loan is repayable within 12 months), and must in all circumstances be repaid in 10 years. All dividends paid to such employees (or his or her nominee) by virtue of their shareholding, must first be utilised to discharge any interest outstanding in terms of the loan advanced in terms of the Share Purchase Plan. Directors' interests - beneficial direct and indirect holdings in the Company Direct Indirect Number number % number % of share % of shares of shares of shares of shares options held of shares 31 March 2017 S Ball (Chairman) - 250,000 0.09 - - M Yachad - 150,000 0.06 - - P Miller - 21,898 0.01 - - P Arenson (CEO) - 9,955,994 3.47 474,908 0.17 P Watson (CFO) - 3,658,510 1.28 412,918 0.14 N Marais - 219,663 0.08 15,345 0.01 31 March 2016 G Leissner (Chairman) - 422,034 0.15 - D Brown - - - J Keyes - - - M Yachad - - - M Fienberg - 114,994 0.04 - S Ball - 250,000 0.09 - P Arenson (CEO) 97,783 0.03 8,854,419 3.13 236,894 0.05 P Watson (CFO) - 2,183,333 0.77 189,515 0.05 N Marais - 120,283 0.04 19,646 0.01 The directors' interests have not changed from 31 March 2017 to the date of the signing of these financial statements. Audited Year ended year ended 31 March 31 March 2017 2016 EUR'000 EUR'000 9. Net finance costs Interest receivable: Cash and cash equivalents 292 174 292 174 Finance costs: Bank interest payable (9,331) (10,787) Amortisation of facility costs (474) (478) (9,805) (11,265) Discontinued operations adjustment (note 20) 2,376 2,515 Net finance costs (7,137) (8,576) 10. Taxation (i) Tax recognised in statement of comprehensive income Income tax in respect of current year 1,461 618 Deferred tax (see note 26) 2,040 2,666 Discontinued Operations Adjustment (see note 20) (821) (351) Total tax expense 2,680 2,933 No tax was recognised on other comprehensive income during the period (2016: Nil). - Germany 15.825% - United Kingdom 20% - Switzerland (depending on the district in which the property is situated). Average rate of 19.6%. (ii) Reconciliation of tax charge for the year Continuing operations Profit for the year before taxation 17,073 52,002 Tax provided at applicable rate in Bermuda - - Tax charge in respect of different jurisdictions (2,680) (2,933) Profit for the year after taxation 14,393 49,069 Discontinuing operations Profit for the year before taxation 4,170 865 Tax provided at applicable rate in Bermuda - - Tax charge in respect of different jurisdictions (820) (351) Profit for the year after taxation 3,350 514 Audited Year ended year ended 31 March 31 March 2017 2016 EUR'000 EUR'000 11. Dividends Amounts recognised as distributions to equity holders in the period: Final dividend for the prior year 13,411 11,654 Interim dividend for the current year 12,495 11,748 25,906 23,402 On 18 July 2016, the directors of the Company declared a final dividend of 4.7 cents per share in respect of the year ended 31 March 2016 equating to EUR13,411,000 (2016: EUR11,654,000). This was paid in cash on 29 July 2016. An interim dividend of 4.5 cents per share equating to EUR12,495,000 (2016: EUR11,748,000) was declared on 23 November 2016 and paid in cash on 17 January 2017. The directors declared a final dividend on 7 June 2017 for the year ended 31 March 2017, of 4.50 cents per share. The payment of this dividend, which will not have any tax consequences for the Group, is detailed in note 31. Audited Year ended year ended 31 March 31 March 2017 2016 EUR'000 EUR'000 12. Share capital Authorised 1,000,000,000 ordinary shares with a par value of EUR0.000001258 each 1 1 Issued share capital Opening balance (shares) 282,984,626 272,236,146 Issue of new shares (shares) 3,697,254 10,748,480 Closing number of shares issued (shares) 286,681,880 282,984,626 Share capital - - Share premium 397,999 392,785 Less: Acquisition/transaction costs (2,858) (2,858) Total share premium 395,141 389,927 There were no changes made to the number of authorised shares of the Company during the year. Stenprop Limited has one class of share; all shares rank equally and are fully paid. The Company has 286,681,880 (March 2016: 282,984,626) ordinary shares in issue at the reporting date. On 9 June 2016, 3,687,191 and 10,063 new ordinary shares were issued on the JSE and the BSX at an issue price of EUR1.41 per share in respect of the Share Purchase Plan and Deferred Share Bonus Plan respectively (refer note 13). As at 31 March 2017, the Company held 9,026,189 treasury shares (March 2016: Nil). In June and July 2016 the Company repurchased 1,356,567 shares for an aggregate purchase price of EUR1.8 million. The programme continued in November and December 2016 with the repurchase of a further 7,669,622 shares for an aggregate repurchase price of EUR9.6 million. The combined average price per share of the repurchased shares was EUR1.262. The shares were purchased with the benefit of the dividend thereby effectively reducing the average price per share to EUR1.217. The impact to the equity reserve of EUR11.4 million can be seen in the Consolidated Statement of Changes in Equity. Major shareholders As at the financial year end there were 2,847 shareholders in the Company. In terms of the Companies Act 1981 of Bermuda, there is no requirement for registered shareholders to disclose their beneficial shareholdings and accordingly, the Company provides disclosure on the shareholdings where this information is provided to the Company. There is no ultimate controlling party. Known shareholders holding in excess of 5% of the Company's share capital are detailed below: Beneficial shareholder greater than 5% Percentage of issued share capital Peregrine Holdings Limited (direct and indirect interest) 6.51 13. Share-based payments The Group operates two share incentive plans which are used to attract and retain high-calibre employees to help grow the business. All awards are considered by the Remuneration Committee and are subject to board approval. The incentive plans are discussed in more detail below: Deferred Share Bonus Plan The board may grant an award to an eligible employee following a recommendation from the Remuneration Committee over such number of shares that have an aggregate value equal to the deferred bonus. Such share options vest in three equal tranches; The first tranche vests on the date of grant with subsequent tranches vesting at the first and second anniversaries of the relevant year end. Share options may be exercised until the tenth anniversary of the grant date, after which time, they will lapse. The below table summarises the position at year end in terms of the number of share options granted and exercised in the period. All share options were granted at nil-cost. Further details relating to share options issued to executive directors are disclosed in more detail in note 8. 31 March 31 March 2017 2016 Number of share options Outstanding at beginning of year 356,242 - Granted during year 282,544 376,059 Exercised during year (10,063) (27,620) Other (includes dividend equivalents and forfeited shares) 35,898 7,803 Outstanding at end of year 664,621 356,242 Exercisable at the end of the year 575,281 225,966 The fair value of the options was calculated using the Black-Scholes pricing model. The aggregate of the fair value credit of options granted at 31 March 2017 was EUR100,424 (2016: EUR42,110 expense). The table below sets out the assumptions made for the purposes of this valuation. 31 March 31 March 2017 2016 Stock price at date of grant (EUR) 1.41 1.43 Stock price at year end (EUR) 1.25 1.54 Weighted average exercise price 1.43 1.30 Compounded risk-free interest rate (%) 1.50 1.50 Volatility (%) 28 22 Expected life (years) 10 10 The Group recognised a total share-based payment expense of EUR316,000 (2016: EUR521,000) during the year relating to share-based payment transactions and holds an Equity Reserve at 31 March 2017 of EUR782,000 (2016: EUR480,000). Share Purchase Plan Loans advanced under the share purchase plan are interest-bearing at a rate equal to the average interest rate incurred by the Group from time to time. Interest is payable six monthly in arrears. Loans are repayable within 30 days of cessation of employment (unless the participant ceases employment in circumstances beyond his or her control, in which case the loan is repayable within 12 months), and must in all circumstances be repaid in 10 years. All dividends received by such employees (or his or her nominee) by virtue of their shareholding, must first be utilised to discharge any interest outstanding in terms of the loan advanced in terms of the Share Purchase Plan. The loans have full recourse to the participants who must charge their shares by way of security for the loans. The below table summarises the position at year end in terms of loans advanced and the number of shares to which they relate. Loans relating to the Share Purchase Plan issued to executive directors are disclosed in more detail in note 8. 31 March 31 March 2017 2016 Brought forward at start of year (number of shares) 5,209,109 - Share Purchase Plan shares issued in year (number of shares) 3,687,191 5,209,109 Share Purchase Plan shares redeemed (number of shares) (240,081) - Carried forward at end of year (number of shares) 8,656,219 5,209,109 Stock price at date of grant (EUR) 1.41 1.43 Share Purchase Plan loans advanced (including accrued interest) (EUR'000) 12,380 7,406 Other share options On 30 March 2017 the Company agreed to grant an option to subscribe for two million Stenprop shares to an individual appointed a non-executive director after the year end on 5 April 2017. The exercise price was EUR1.53 and the option lapses should the individual cease to be a director, or after five years, whichever is sooner. The options only have a dilutive effect when the average market price of ordinary shares exceeds the exercise price of the options. The share price at year end was EUR1.25, which was below the exercise price. Year ended year ended 31 March 31 March 2017 2016 EUR'000 EUR'000 14. Earnings per ordinary share Reconciliation of profit for the period to adjusted EPRA(1) earnings Earnings per IFRS income statement attributable to shareholders 17,477 49,266 Adjustment to exclude profit from discontinued operations (3,350) (514) Earnings per IFRS income statement from continuing operations attributable to shareholders 14,127 48,752 Earnings per IFRS income statement attributable to shareholders 17,477 49,266 Adjustments to calculate EPRA earnings, exclude: Changes in fair value of investment properties (1,872) (22,939) Changes in fair value of financial instruments (2,064) 999 Deferred tax in respect of EPRA adjustments (investment properties and financial instruments) 2,525 2,666 Adjustments above in respect of joint ventures and associates Changes in fair value of investment properties and financial instruments 12,985 (2,959) Deferred tax in respect of EPRA adjustments (investment properties and financial instruments) (864) 39 EPRA earnings attributable to shareholders 28,187 27,072 Further adjustments to arrive at adjusted EPRA earnings Straight-line unwind of purchased swaps 954 1,976 Adjusted EPRA earnings attributable to shareholders 29,140 29,048 Weighted average number of shares in issue (excluding treasury shares)(2) 282,644,639 278,350,720 Share-based payment award 956,185 647,806 Diluted weighted average number of shares in issue 283,600,824 278,998,526 Earnings per share from continuing operations IFRS EPS (cents) 5.00 17.51 Diluted IFRS EPS (cents) 4.98 17.47 Earnings per share from continuing and discontinued operations IFRS EPS (cents) 6.18 17.70 Diluted IFRS EPS (cents) 6.16 17.66 EPRA EPS (cents) 9.97 9.73 Diluted EPRA EPS (cents) 9.94 9.70 Adjusted EPRA EPS (cents) 10.31 10.44 Diluted adjusted EPRA EPS (cents) 10.28 10.41 (1) The European Public Real Estate Association (EPRA) issued Best Practices Policy Recommendations in November 2016, which provide guidelines for performance measures relevant to real estate companies. Their recommended reporting standards are widely applied across this market, aiming to bring consistency and transparency to the sector. The EPRA earnings measure is intended to show the level of recurring earnings from core operational activities with the purpose of highlighting the Group's underlying operating results from its property rental business and an indication of the extent to which current dividend payments are supported by earnings. The measure excludes unrealised changes in the value of investment properties, gains or losses on the disposal of properties and other items that do not provide an accurate picture of the Group's underlying operational performance. The measure is considered to accurately capture the long-term strategy of the Group, and is an indication of the sustainability of dividend payments. (2) As at 31 March 2017, the Company held 9,026,189 treasury shares (March 2016: Nil). Straight-line unwind of purchased swaps A further adjustment was made to the EPRA earnings attributable to shareholders relating to the straight-line unwind of the value as at 1 April 2014 of the swap contracts in the property companies acquired. When the property companies were acquired by Stenprop with effect from 1 April 2014, it also acquired the bank loans and swap contracts which were in place within these property companies. As a result, Stenprop took over loans with higher swap interest rates than would have been the case had new loans and swaps been put in place at 1 April 2014. To compensate for this, the value of the swap break costs was calculated at 1 April 2014 and the purchase consideration for the property companies was reduced accordingly to reflect this liability. Audited Revised* Year ended year ended year ended 31 March 31 March 31 March 2017 2016 2015 EUR'000 EUR'000 EUR'000 Earnings per IFRS income statement attributable to shareholders 17,477 49,266 37,600 Adjustments to calculate headline earnings, exclude: Changes in fair value of investment properties (1,872) (22,939) (17,956) Reversal of gain on acquisition - - (9,657) Changes in fair value of financial instruments - 519 (431) Deferred tax in respect of headline earnings adjustments (investment properties) 2,202 2,666 1,538 Adjustments above in respect of joint ventures and associates Changes in fair value of investment properties 16,254 (2,529) 1,360 Deferred tax in respect of headline earnings adjustments (944) (307) (204) Headline earnings attributable to shareholders 33,116 26,676 12,250 Weighted average number of shares in issue (excluding treasury shares) 282,644,639 278,350,720 132,254,338 Share-based payment award 956,185 647,806 291,563 Diluted weighted average number of shares in issue 283,600,824 278,998,526 132,545,901 Earnings per share Headline EPS (cents) 11.72 9.58 9.26 Diluted headline EPS (cents) 11.68 9.56 9.24 * Readers are referred to the 2015 headline EPS which has been revised since the publication of the 2015 Annual Financial Statements. The revised 2015 Headline EPS is 9.26 cents per share, which differs from that of 8.20 cents published in the 2015 Annual Financial statements, due to the adjustment for deferred tax in respect of headline earnings adjustments. The deferred tax adjustment had originally included all deferred tax but should have adjusted for deferred tax relating only to changes in fair value of investment properties. Audited Year ended year ended 31 March 31 March 2017 2016 EUR'000 EUR'000 15. Net asset value per ordinary share Net assets attributable to equity shareholders 426,164 455,497 Adjustments to arrive at EPRA net asset value: Derivative financial instruments 3,474 5,942 Deferred tax 11,853 9,705 Adjustments above in respect of non-controlling interests 1,839 2,838 EPRA net assets attributable to shareholders 443,330 473,982 Number of shares in issue (excluding treasury shares)(1) 277,655,691 282,984,626 Share-based payment award 956,185 647,806 Diluted number of shares in issue 278,611,876 283,632,432 Net asset value per share (basic and diluted) IFRS net asset value per share (Euros) 1.53 1.61 Diluted IFRS net asset value per share (Euros) 1.53 1.61 EPRA net asset value per share (Euros) 1.60 1.67 Diluted EPRA net asset value per share (Euros) 1.59 1.67 (1) As at 31 March 2017, the Company held 9,026,189 treasury shares (March 2016: Nil). 16. Investment property The fair value of the consolidated investment properties at 31 March 2017 was EUR550,145,000 (31 March 2016: EUR729,782,000). This excludes an amount of EUR155,900,000 (31 March 2016: EURNil) for properties which have been classified as held for sale, including the entire Swiss portfolio. The carrying amount of investment property is the fair value of the property as determined by registered independent appraisers having an appropriate recognised professional qualification and recent experience in the location and category of the property being valued ('valuers'). The fair value of each of the properties for the year ended 31 March 2017 was assessed by the valuers in accordance with the Royal Institute of Chartered Surveyors ('RICS') standards and IFRS 13. Valuers are qualified for purposes of providing valuations in accordance with the 'Appraisal and Valuation Manual' published by RICS. The valuations performed by the independent valuers are reviewed internally by senior management. This includes discussions of the assumptions used by the external valuers, as well as a review of the resulting valuations. Discussions of the valuations process and results are held between the senior management and the external valuers on a bi-annual basis. The Audit Committee reviews the valuation results and, provided the committee is satisfied with the results, recommends them to the board for approval. The valuation techniques used are consistent with IFRS 13 and use significant 'unobservable' inputs. Investment properties are all at level 3 in the fair value hierarchy and valuations represent the highest and best use of the properties. There have been no changes in valuation techniques since the prior year. There are interrelationships between all these unobservable inputs as they are determined by market conditions. An increase in more than one unobservable input would magnify the impact on the valuation. The impact on the valuation would be mitigated by the interrelationship of two unobservable inputs moving in the opposite directions e.g. an increase in rent may be offset by an increase in yield, resulting in no net impact on the valuation. Expected vacancy rates may impact the yield with higher vacancy rates resulting in higher yield. All revenue is derived from the underlying tenancies given on the investment properties. All investment properties are mortgaged. Details of which can be seen in note 24. As at the date of signing this report, there are no restrictions on the realisability of any of the underlying investment properties, nor on the remittance of income and disposal proceeds. The key unobservable inputs used in the valuation of the Group's investment properties at 31 March 2017 are detailed in the table below: % of Market Net initial Combined portfolio portfolio value Annualised yield (including share by market 31 March gross rental (weighted Voids by of jointly value 2017 Area income average) area controlled entities) (%) (EUR million) Properties (m2) (EUR million) (%) (%) UK 34.7 294.1 13 63,555 18.5 5.57 0.05 Germany 30.2 256.3 23 92,264 14.5 4.95 5.37 Assets held for sale 18.4 155.9 12* 47,111 9.6 4.33 4.65 Sub-total 83.3 706.3 48 202,930 42.6 5.07 3.54 Share of joint ventures and associates 16.7 141.8 6 49,730 9.9 5.69 5.78 Total 100.0 848.1 54 252,660 52.5 5.18 3.98 * The Burger King space, which is an annexe to the property known as Hermann is not included in the property count, but its inputs have been considered in other measures. Audited 31 March 31 March 2017 2016 EUR'000 EUR'000 Opening balance 729,782 695,196 Properties acquired - 48,206 Capitalised expenditure 1,924 3,604 Disposals through the sale of property - (6,701) Foreign exchange movement in foreign operations (20,934) (33,462) Net fair value gain on investment property - continuing operations 2,894 28,471 Net fair value loss on investment property - discontinued operations (note 20) (1,022) (5,532) Transfer to Assets Held for Sale (see note 20) (162,499) - Closing balance 550,145 729,782 Acquisitions Germany Stenprop Hermann Limited - 24,458 Stenprop Victoria Limited - 23,748 - 48,206 Disposals United Kingdom GGP1 Limited - (6,701) - (6,701) 17. Subsidiaries, associates and joint ventures The Group consists of a parent company, Stenprop Limited, incorporated in Bermuda and a number of subsidiaries, associates and joint ventures held directly and indirectly by Stenprop Limited which operate and are incorporated around the world. Details of the Group's subsidiaries as at 31 March 2017 are as follows: Place of % equity owned by Name incorporation Principal activity Company Subsidiary BVI Davemount Properties Limited BVI Property Investment 100.00 Laxton Properties Limited BVI Property Investment 100.00 Loveridge Properties Limited BVI Dormant 100.00 Normanton Properties Limited BVI Property Investment 100.00 Ruby Red Holdings Limited BVI Management 100.00 SP Corporate Services Limited BVI Management 100.00 SP Nominees Limited BVI Management 100.00 SP Secretaries Limited BVI Management 100.00 Stenprop Management Holdings Limited BVI Holding Company 100.00 Stenprop (Germany) Limited BVI Holding Company 100.00 Stenprop (Swiss) Limited BVI Holding Company 100.00 Stenprop (UK) Limited BVI Holding Company 100.00 Stenprop Trafalgar Limited BVI Holding Company 100.00 Leatherback Property Holdings Limited BVI Holding Company 100.00 Stenprop Hermann Ltd BVI Property Investment 100.00 Stenprop Victoria Ltd BVI Property Investment 100.00 Curacao Anarosa Holdings N.V. Curacao Holding Company 94.90 C.S. Property Holding N.V. Curacao Holding Company 94.90 Lakewood International N.V. Curacao Holding Company 89.00 T.B Property Holdings N.V. Curacao Holding Company 100.00 Guernsey APF1 Limited (in liquidation) Guernsey Dormant 100.00 Bernina Property Holdings Limited Guernsey Holding Company 100.00 GGP1 Limited Guernsey Property Investment 100.00 Kantone Holdings Limited Guernsey Property Investment 100.00 KG Bleichenhof Grundtuscksverwaaltung GmbH & Co. KG Germany Property Investment 94.90 LPE Limited Guernsey Property Investment 100.00 Stenham Paramount Hotel GP Limited Guernsey Management 100.00 Stenprop Advisers Limited Guernsey Management 100.00 Luxembourg Algy Properties Sarl Luxembourg Property Investment 100.00 Bruce Properties Sarl Luxembourg Property Investment 100.00 Clint Properties Sarl Luxembourg Property Investment 100.00 David Properties Sarl Luxembourg Property Investment 100.00 Jimmy Investments Sarl Luxembourg Holding Company 100.00 Spike Investments S.A. Luxembourg Holding Company 100.00 Netherlands Century 2 BV Netherlands Property Investment 94.90 Century BV Netherlands Property Investment 94.90 Isabel Properties BV Netherlands Property Investment 94.90 Mindel Properties BV Netherlands Holding Company 94.50 Isle of Man (I oM) Stenham Beryl Limited IoM Property Investment 100.00 Stenham Crystal Limited IoM Property Investment 100.00 Stenham Jasper Limited IoM Property Investment 100.00 Gemstone Properties Limited (formerly Stenham Properties (Germany) Limited) IoM Holding Company 100.00 Switzerland Polo Property GmbH Switzerland Property Investment 100.00 United Kingdom Stenprop Management Limited England Management 100.00 Details of the Group's investments in associates and joint ventures are disclosed in note 18 and note 19 respectively. 18. Investment in associates Details of the Group's associates at the end of the reporting period are as follows: % equity Place of Principal owned by Name incorporation activity subsidiary Stenham European Shopping Centre Fund Limited ('SESCF') Guernsey Fund 28.42* Stenham Berlin Residential Fund Limited Guernsey Fund 5.24 * 28.16% of the investment in the underlying property is held through SESCF, and 0.26% of the property investment is held via a wholly-owned subsidiary, Leatherback Property Holdings Limited, a company incorporated in the British Virgin Islands. The above associates are accounted for using the equity method in these consolidated financial statements as set out in the Group's accounting policies in note 3. The judgements exercised are disclosed in note 4. Summarised financial information in respect of each of the Group's associates is set out below: Stenham Stenham European Berlin Shopping Residential Centre Fund Fund Limited Limited Total EUR'000 EUR'000 EUR'000 31 March 2017 Non-current assets 165 - 165 Assets Held for Sale 207,666 19,716 227,382 Current assets 7,861 22,583 30,444 Non-current liabilities - - - Current liabilities (150,021) (582) (150,603) Equity attributable to owners of the Company 65,671 41,717 107,388 Revenue 19,027 59,794 78,821 Profit/(loss) from continuing operations and total comprehensive income (50,599) 23,330 (27,269) 31 March 2016 Non-current assets - 55,672 55,672 Current assets 265,286 - 265,286 Non-current liabilities 15,408 4,600 20,008 Current liabilities (164,318) (150) (164,468) Equity attributable to owners of the Company 116,376 60,122 176,498 Revenue 20,638 4,621 25,259 Profit from continuing operations and total comprehensive income 1,343 6,876 8,219 Reconciliation of the above summarised financial information to the carrying amount of the interest in the associates recognised in the financial statements: Stenham Stenham European Berlin Shopping Residential Stenpark Centre Fund Fund Management Limited Limited Limited Total EUR'000 EUR'000 EUR'000 EUR'000 31 March 2017 Opening balance 33,019 6,279 - 39,298 Share of associates' (loss)/profit* (14,333) 2,623 - (11,710) Associate balance sheet adjustment 18 - - 18 Share in associates disposed during the period - (6,716) - (6,716) Distribution received from associates (7) - - (7) Closing balance 18,697 2,186 - 20,883 31 March 2016 Opening balance 34,041 5,570 41 39,611 Share in associates acquired during the period 367 - - 367 Reclassification of associate to joint venture - - (41) - Share of associates' profit* 366 709 - 1,075 Distribution received from associates (1,755) - - (1,755) Closing balance 33,019 6,279 - 39,298 * The share of associates' profit includes the fair value movement in the underlying investments for the period. The investment property owned by Stenham European Shopping Centre, Nova Eventis was valued by the directors of the associate at EUR208 million less selling costs at 31 March 2017, a 21.5% reduction of the fair value at 31 March 2016 of EUR265 million. The Stenham Berlin Residential Fund share price increased by 49.2% from EUR1.24 to EUR1.85 per share during the year under review. Stenham European Shopping Centre Fund Limted ('SESCF') As mentioned earlier in this report, SESCF, in which the Group has a 28.42% interest is currently in the final stages of a sales process in respect of the Nova Eventis shopping centre. A sale and purchase agreement was signed on 6 February 2017 at which time the buyers paid a deposit of EUR11 million into an escrow account. At the date of signing these financial statements all closing conditions have been met and the completion date is set for 22 June 2017. There are no significant restrictions on the remittance of the disposal proceeds. Stenham Berlin Residential Fund Limited ('SBRF') At 31 March 2017 Stenprop had a 5.24% shareholding in SBRF. At 31 March 2016 SBRF'S investments comprised a holding of 3,154,618 shares in ADO Group Limited (a company listed on the Tel Aviv Stock Exchange) and 1,283,283 shares in ADO Properties Sarl (listed on the Frankfurt Stock Exchange). During the year to 31 March 2017 SBRF disposed of its entire holding in ADO Group Limited and 659,415 shares in ADO Properties Limited. These disposals enabled SBRF to buy back 19.5 million of its shares for EUR1.73 per share at a total cost of EUR33.7 million in December 2016. This enabled Stenprop to realise EUR6.7 million from the sale of 3,882,317 shares in SBRF. At 31 March 2017 SBRF's sole investment was its remaining holding of 623,868 shares in ADO Properties Limited. SBRF embarked on a disposal programme to sell these remaining shares and Stenprop's investment in SBRF has been categorised at 31 March 2017 as Assets Held for Sale. At the date of signing these financial statements all remaining shares in ADO Properties Limited held by SBRF had been sold. There are no significant restrictions on the remittance of the disposal proceeds. 19. Investment in joint ventures Details of the Group's joint ventures at the end of the reporting period are as follows: % equity Place of owned by Name incorporation Principal activity subsidiary Luxembourg Elysion S.A. Luxembourg Holding company 50.00 Elysion Braunschweig Sarl Luxembourg Property company 50.00 Elysion Dessau Sarl Luxembourg Property company 50.00 Elysion Kappeln Sarl Luxembourg Property company 50.00 Elysion Winzlar Sarl Luxembourg Property company 50.00 Guernsey Stenpark Management Limited Guernsey Management company 50.00 BVI Stenprop Argyll Limited BVI Holding company 50.00 Regent Arcade House Holdings Limited BVI Property company 50.00 Summarised consolidated financial information in respect of the Group's joint ventures is set out below. Where applicable these represent the consolidated results of the respective holding companies. Stenpark Stenprop Elysion Management Argyll S.A. Limited Limited Total EUR'000 EUR'000 EUR'000 EUR'000 31 March 2017 Investment property 35,521 - 94,689 130,210 Current assets 526 302 4,472 5,300 Assets 36,047 302 99,161 135,510 Bank loans (22,672) - (43,620) (66,292) Shareholder loan (14,537) - - (14,537) Deferred tax (529) - - (529) Financial liability (588) - (1,445) (2,033) Current liabilities (237) (217) (4,729) (5,183) Liabilities (38,563) (217) (49,794) (88,574) Net assets/(liabilities) of joint ventures (2,516) 85 49,367 46,936 Net assets of joint ventures excluding shareholder loans 12,021 85 49,367 61,473 Group share of net assets 12,021 43 24,684 36,748 Revenue 2,753 978 5,367 9,098 Interest payable (1,995) - (1,326) (3,321) Tax expense (389) - - (389) Profit from continuing operations and total comprehensive income excluding interest due to Group 2,703 727 2,034 5,464 Share of joint ventures profit due to the Group 2,703 363 1,017 4,083 Stenpark Stenprop Elysion Management Argyll S.A. Limited Limited Total EUR'000 EUR'000 EUR'000 EUR'000 31 March 2016 Investment property 34,349 - 103,375 137,724 Current assets 613 405 4,130 5,148 Assets 34,962 405 107,505 142,872 Bank loans (23,222) - (47,131) (70,353) Shareholder loan third party - - (23,851) (23,851) Shareholder loan Group (14,140) - (23,850) (37,990) Deferred tax (223) - - (223) Financial liability (1,068) - (1,585) (2,653) Current liabilities (120) (324) (4,290) (4,734) Liabilities (38,773) (324) (100,707) (139,804) Net (liabilities)/assets of joint ventures (3,811) 81 6,798 3,068 Net assets of joint ventures excluding shareholder loans 10,329 81 54,499 64,909 Group share of net assets 10,329 41 27,250 37,620 Revenue 2,797 1,115 4,990 8,902 Interest payable (2,456) - - (2,456) Tax expense (91) - - (91) Profit from continuing operations and total comprehensive income excluding interest due to Group 2,569 848 9,654 13,071 Share of joint ventures profit due to the Group 2,569 424 4,827 7,820 Elysion S.A Stenprop owns 100% of the shares and shareholder loans in Bernina Property Holdings Limited (Bernina). Bernina in turn owns 50% of the issued share capital and 100% of the shareholder loans of Elysion S.A., a company incorporated in Luxembourg which is the beneficial owner of the Care Home portfolio. The remaining 50% of Elysion S.A. is owned by a joint venture partner who manages the portfolio. The acquired shareholder loans have attracted, and continue to attract, a 10% compounded interest rate since inception in 2007. The outstanding shareholder loan, which is wholly owned by Stenprop, has been valued at the recoverable balance which is deemed equal to the net assets of the joint venture excluding the shareholder loan. Reconciliation of the above summarised financial information to the carrying amount of the interest recognised in the consolidated financial statements: Stenpark Stenprop Elysion Management Argyll S.A. Limited Limited Total EUR'000 EUR'000 EUR'000 EUR'000 31 March 2017 Opening balance 10,329 41 27,250 37,620 Share of joint venture profit 2,703 363 1,017 4,083 Distribution received from joint venture (1,010) (355) (1,489) (2,854) Foreign exchange movement in foreign operations - (7) (2,094) (2,101) Closing balance 12,022 42 24,684 36,748 31 March 2016 Opening balance 8,506 - - 8,506 Reclassification of associate to joint venture - 41 - 41 Share in joint ventures acquired during the period - - 26,782 26,782 Share of joint venture profit 2,569 424 4,827 7,820 Distribution received from joint ventures (746) (420) (1,072) (2,238) Foreign exchange movement in foreign operations - (4) (3,287) (3,291) Closing balance 10,329 41 27,250 37,620 20. Discontinued operations Management consider 11 properties (the entire Swiss portfolio) and an annexe of a 12th property ('Burger King' element of the Hermann Quartier property) to meet the conditions relating to Assets Held for Sale, as per IFRS 5: Non-current Assets Held for Sale and discontinued operations. The properties are expected to be disposed of during the next financial year. The values have been determined by the directors based on the sale price per a letter of intent, a draft sales and purchase agreement, or in the case where this is not yet finalised, the fair value as determined by a third party valuer. The results of the discontinued operations were as follows: 31 March 31 March 2017 2016 EUR'000 EUR'000 Net rental income 6,609 8,021 Operating costs (523) (605) Net operating income 6,086 7,416 Fair value movement of investment properties (1,022) (5,531) Profit from operations 5,064 1,884 Other gains and losses - - Net gain from fair value of derivative financial instruments 1,482 1,495 Net finance costs (2,376) (2,515) Profit for the year before taxation 4,170 865 Taxation (820) (351) Profit for the year from discontinued operations 3,350 514 The fair value of these properties are shown in the table below: 31 March 2017 EUR'000 The fair value of these properties are shown in the table below: Investment properties 155,949 Cash and cash equivalents 731 Trade and other receivables 1,568 Total assets classified as held for sale 158,248 Bank loans 82,744 Deferred tax 5,079 Accounts payable and accruals 1,255 Liabilities directly associated with assets classified as held for sale 89,077 Disposals On 29 November 2016, the Group disposed of the Clint Properties Sarl property known as Interlaken, Switzerland, for CHF6.8 million (equating to EUR6.3 million after disposal costs). There was no gain to the Group as the disposal was made at fair value. Audited 31 March 31 March 2017 2016 EUR'000 EUR'000 21. Trade and other receivables Non-current receivables Other debtors 13,600 7,403 13,600 7,403 Non-current other debtors includes EUR12.38 million of loans advanced under the Share Purchase Plan (see note 13; share- based payments) and a EUR1.22 million loan advanced on 30 March 2017 used to purchase one million Stenprop shares in the market by a non-executive director, appointed to the board of Stenprop on 5 April 2017. Audited 31 March 31 March 2017 2016 EUR'000 EUR'000 Current receivables Accounts receivable(1) 4,851 3,509 Other debtors 593 1,935 Prepayments 601 923 Transfer to Assets Held for Sale (see note 20)(2) (1,288) - 4,757 6,367 (1) Included in this balance are provisions for doubtful debts of EUR272,000 (2016: EUR101,000) (2) Included in this balance are provisions for doubtful debts of EUR163,000 22. Cash and cash equivalents Cash at bank 30,192 36,811 Transfer to Assets Held for Sale (see note 20) (731) - 29,461 36,811 Restricted cash At year end funds totalling EUR14.5 million (2016: EUR11.9 million) were restricted. Tenant deposits of EUR2.8million (2016: EUR2.7 million) are included in this amount as are net rents held in bank accounts which are secured by the lenders for the purposes of debt repayments and redevelopment, including EUR11 million (2016: EUR8.5 million) for the redevelopment of Bleichenhof. As the Group is in compliance with all the terms and conditions of its loans as at the date of signing these financial statements, there are no further restrictions, and any surplus will flow to the Group. Audited 31 March 31 March 2017 2016 EUR'000 EUR'000 23. Accounts payable and accruals Accruals 3,373 3,868 Deferred income 5,763 5,183 Taxes payable 2,682 1,776 Other payables 7,626 5,676 Liabilities directly associated with assets classified as held for sale adjustment (see note 20) (1,255) - 18,189 16,503 Audited 31 March 31 March 2017 2016 EUR'000 EUR'000 24. Borrowings Opening balance 367,493 364,931 Loan repayments (4,844) (30,608) New loans - 56,196 Amortisation of loans (4,134) (7,514) Capitalised borrowing costs (188) (1,049) Amortisation of transaction fees 459 378 Foreign exchange movement in foreign operations (8,276) (14,841) Adjustment for liabilities directly associated with assets classified as held for sale adjustment (see note 20) (82,744) - Total borrowings 267,766 367,493 Amount due for settlement within 12 months 97,947 188,785 Amount due for settlement between one to three years 92,662 29,892 Amount due for settlement between three to five years 159,901 139,816 Amount due for settlement after five years - 9,000 Liabilities directly associated with assets classified as held for sale adjustment (see note 20) (82,744) - 267,766 367,493 Non-current liabilities Bank loans 252,563 178,708 Total non-current loans and borrowings 252,563 178,708 The maturity of non-current borrowings is as follows: One year to five years 252,563 169,708 More than five years - 9,000 252,563 178,708 Current liabilities Bank loans 97,947 188,785 Liabilities directly associated with assets classified as held for sale adjustment (see note 20) (82,744) - Total current loans and borrowings 15,203 188,785 Total loans and borrowings 267,766 367,493 The facilities are secured by debentures and legal charges over the properties to which they correspond. There is no cross-collateralisation of the facilities. The terms and conditions of outstanding loans are as follows: Nominal value Carrying value* Loan 31 March 31 March 31 March 31 March interest Maturity 2017 2016 2017 2016 Facility Note Amortising rate Currency date EUR'000 EUR'000 EUR'000 EUR'000 United Kingdom Laxton Properties Limited No LIBOR 1.4% GBP 08/05/2020 32,194 34,846 31,969 34,497 Normanton Properties Limited No LIBOR 1.4% GBP 25/03/2019 43,312 46,879 43,205 46,690 Davemount Properties Limited 1 Yes LIBOR 2.25% GBP 26/05/2021 4,676 5,445 4,637 5,445 LPE Limited No LIBOR 2% GBP 23/03/2020 35,070 37,959 34,626 37,317 GGP1 Limited 1 No LIBOR 2.25% GBP 26/05/2021 9,773 10,578 9,656 10,563 Switzerland Algy Properties Sarl 2 Yes LIBOR 1.5% CHF 31/03/2018 3,028 3,099 3,028 3,099 Bruce Properties Sarl 2 Yes LIBOR 1.35% CHF 31/03/2018 4,447 4,384 4,447 4,384 Clint Properties Sarl 3 CHF - 2,820 - 2,820 David Properties Sarl 2 Yes LIBOR 1.4% CHF 31/03/2018 7,225 7,340 7,225 7,340 Kantone Holdings Limited 2 Yes LIBOR 1.05% CHF Note 2 45,830 46,787 45,830 46,787 Polo Property GmbH 2 Yes LIBOR 1.15% CHF Note 2 22,213 22,639 22,213 22,639 Germany Century BV Yes Euribor 1.65% EUR 31/12/2017 9,649 9,911 9,631 9,870 Century 2 BV Yes Euribor 1.65% EUR 31/12/2017 4,177 4,291 4,169 4,273 Century 2 BV Yes Euribor 1.65% EUR 31/12/2017 874 898 873 894 Stenham Beryl Limited Yes Euribor 1.85% EUR 30/04/2018 5,377 5,488 5,377 5,488 Stenham Crystal Limited Yes Euribor 1.85% EUR 30/04/2018 4,490 4,583 4,490 4,583 Stenham Jasper Limited Yes Euribor 1.85% EUR 30/04/2018 5,494 5,608 5,494 5,608 Isabel Properties BV No Euribor 2.50% EUR 31/12/2021 9,000 9,000 9,000 9,000 Bleichenhof GmbH & Co.KG 4 No 1,58% EUR 28/02/2022 84,937 84,937 84,937 84,884 Stenprop Hermann Ltd No Euribor 1.13% EUR 30/06/2020 9,430 11,050 9,399 11,012 Stenprop Victoria Ltd No Euribor 1.28% EUR 31/08/2020 10,300 10,300 10,300 10,300 351,496 368,842 350,506 367,493 * The difference between the nominal and the carrying value represents unamortised facility costs. (1) On 26 May 2016, Davemount Properties Limited ('Davemount') and GGP1 Limited ('GGP1') refinanced their loan facilities with Santander. Santander have provided a single facility with a five-year term of GBP12,360,000 split GBP4,000,000 to Davemount and GBP8,360,000 to GGP1. The all-in rate on this facility is 3.46% (including a swap of 1.21%) which compares to 2.7% on the current Davemount facility and 3.72% on the GGP1 facility. (2) All of the bank loans in respect of the Swiss properties were due for expiry on 31 March 2017. Given that all of the properties in the Swiss portfolio were held for sale at this date, the loans were re-financed on a short-term basis as follows: - Algy Properties Sarl extended its loan with Credit Suisse in the sum of CHF3,237,500, for a period of one year from 1 April 2017 at a loan interest rate of LIBOR 1.5 % and no swap (previous facility: LIBOR 1.3% 0.91% swap). - Bruce Properties Sarl extended its loan with Credit Suisse in the sum of CHF4,755,000, for a period of one year from 1 April 2017 at a loan interest rate of LIBOR 1.35 % and no swap (previous facility: LIBOR 1.25% 1.90% swap). - David Properties Sarl extended its loan with Credit Suisse in the sum of CHF7,725,000, for a period of one year from 1 April 2017 at a loan interest rate of LIBOR 1.4 % and no swap (previous facility: LIBOR 1.3% 1.73% swap). - Kantone Holdings Limited entered into a rolling credit facility with its existing lender, Union Bank of Switzerland ('UBS'). The credit facility was for CHF 49,000,000 at a loan interest rate of LIBOR 1.05 % and no swap (previous facility: LIBOR 1.05% 0.7% swap). As each property within the Kantone portfolio is sold, partial repayments of the loan are to be made. - Polo Properties GmbH entered into a rolling credit facility with its existing lender, Union Bank of Switzerland ('UBS'). The credit facility was for CHF 23,750,000 at a loan interest rate of LIBOR 1.15 % and no swap (previous facility: LIBOR 1.15% 0.73% swap). As each property within the Polo portfolio is sold, partial repayments of the loan are to be made. (3) 0n 29 November 2016, Clint Properties Sarl ('Clint') sold its sole investment, a property in Interlaken Switzerland. As a condition of the sale Clint repaid, in full, its outstanding loan of CHF3,067,500 with Credit Suisse. (4) On 28 February 2017 Kommandtigesellschaft Bleichenhof Grundstucksverwaltung GmbH & Co. ('Bleichenhof') refinanced its EUR84,937,000 interest only loan facility with Berlin Hyp AG for a five-year term, until 28 February 2022, at an all-in fixed rate of 1.58 % per annum compared to the previous all-in fixed rate of 1.90 % per annum. 25. Derivative financial instruments In accordance with the terms of the borrowing arrangements and group policy, the Group has entered into interest rate swap agreements. The interest rate swap agreements are entered into by the borrowing entities to convert the borrowings from floating to fixed interest rates and are used to manage the interest rate profile of financial liabilities and eliminate future cash exposure to interest rate fluctuations. It is the Group's policy that no economic trading in derivatives is undertaken. In the current year the Group recognised a total net gain in fair value of financial instruments from continuing and discontinuing operations of EUR582,000 (2016: EUR2,495,000 loss) and EUR1.482,000 (2016: EUR1,495,000) respectively. The following table sets out the interest rate swap agreements at 31 March 2016 and 31 March 2017. Notional Fair Notional Fair value value value value Swap 31 March 31 March 31 March 31 March Effective Maturity rate 2017 2017 2016 2016 Facility date date % EUR'000 EUR'000 EUR'000 EUR'000 United Kingdom Laxton Properties Limited 14/04/2014 8/05/2020 1,62 32,194 (1,105) 34,846 (1,232) Normanton Properties Limited 1/04/2014 25/03/2019 1,50 43,312 (964) 46,879 (1,285) LPE Limited 26/03/2015 31/03/2020 1,35 35,070 (872) 37,959 (891) GGP1 Limited (novated from APF1 Limited) - - 6,630 (55) GGP1 Limited (novated from APF1 Limited) - - 1,265 (10) Switzerland Algy Properties Sarl - - 3,522 (62) Bruce Properties Sarl - - 4,384 (122) Clint Properties Sarl - - 2,820 (74) David Properties Sarl - - 7,409 (171) Kantone Holdings Limited - - 46,787 (721) Polo Property GmbH - - 22,639 (355) Germany Century BV 1/04/2014 29/12/2017 1,00 9,649 (95) 9,911 (220) Century 2 BV 1/04/2014 29/12/2017 1,08 4,177 (44) 4,291 (102) Century 2 BV 1/04/2014 29/12/2017 1,85 874 - 898 - Stenham Beryl Limited 1/04/2014 30/04/2018 0,83 5,340 (65) 5,488 (125) Stenham Crystal Limited 1/04/2014 30/04/2018 0,83 4,459 (54) 4,583 (105) Stenham Jasper Limited 1/04/2014 30/04/2018 0,83 5,456 (67) 5,608 (128) Isabel Properties BV 30/01/2015 30/12/2021 0,48 9,000 (208) 9,000 (284) Total swaps 149,531 (3,475) 254,919 (5,942) Maturing within 12 months (139) (1,769) Maturing after 12 months (3,335) (4,173) Derivative financial instruments - on balance sheet (3,475) (5,942) Swaps included in investments in associates and joint ventures Regent Arcade House Holdings Ltd 20/05/2015 20/05/2020 1,57 43,838 (1,445) 47,449 (1,585) Elysion Braunschweig Sarl 1/04/2014 29/03/2018 2,43 5,963 (115) 6,125 (240) Elysion Dessau Sarl 1/04/2014 29/03/2018 2,43 5,762 (110) 5,918 (230) Elysion Kappeln Sarl 1/04/2014 31/12/2018 2,80 6,252 (217) 6,420 (359) Elysion Winzlar Sarl 1/04/2014 31/12/2018 2,80 4,168 (145) 4,280 (239) Prejan Enterprises Limited - - 44,380 (231) Derivative financial instruments - associates and joint ventures 65,983 (2,032) 114,572 (2,884) 26. Deferred tax The following are the major deferred tax liabilities and assets recognised by the Group and movements thereon during the current and prior reporting period. Audited 31 March 31 March 2017 2016 EUR'000 EUR'000 Opening balance (9,705) (7,230) Deferred tax recognised on investment properties (2,202) (2,667) Deferred tax recognised on revaluation of financial liabilities (323) (220) Deferred tax on tax losses 377 412 Adjustment for liabilites directly associated with assets classified as held for sale adjustment (see note 20) 5,079 - Closing balance (6,774) (9,705) Deferred tax assets and liabilities are offset where the Group has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes: Deferred tax liabilities (16,790) (14,821) Deferred tax assets 4,937 5,116 Adjustment for liabilities directly associated with assets classified as held for sale adjustment (see note 20) 5,079 - Closing balance (6,774) (9,705) Deferred tax opening balance 9,705 7,230 Exchange movements 107 (191) Deferred tax liability closing balance (11,852) (9,705) Movement in deferred tax (2,040) (2,666) 27. Financial risk management The Group is exposed to a variety of financial risks including market risk, credit risk and liquidity risk. The overall risk management strategy seeks to minimise the potential adverse effects on the Group's financial performance. Certain risk exposures are hedged via the use of financial derivatives. This note presents information about the Group's exposure to each of the above risks, the Group's objectives, policies and processes for measuring and managing these risks, and the Group's management of capital. Further quantitative disclosures are included throughout these audited financial statements where relevant. The Group's board of directors has overall responsibility for the establishment and oversight of the Group's risk management framework. The board has established the Risk Committee which has assumed responsibility for developing and monitoring the Group's risk management policies. The Risk Committee participates in management's process of formulating and implementing the risk management plan and reports on the plan adopted by management to the Board. The objective of risk management is to identify, assess, manage and monitor the risks to which the business is exposed, including, but not limited to, information technology risk. The board will be responsible for ensuring the adoption of appropriate risk management policies by management. 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 are reviewed regularly to reflect changes in market conditions and the Group's activities. The board will also ensure that there are processes in place between itself and management enabling complete, timely, relevant, accurate and accessible risk disclosure to shareholders. To enable the Risk Committee to meet its responsibilities, the Risk Committee has adopted a charter which includes appropriate standards and the implementation of systems of internal control and an effective risk-based internal audit, comprising policies, procedures, systems and information to assist in: - safeguarding assets and reducing the risk of loss, error, fraud and other irregularities; - ensuring the accuracy and completeness of accounting records and reporting; - preparing timely, reliable financial statements and information in compliance with relevant legislation and generally accepted accounting policies and practices; and - increasing the probability of anticipating unpredictable risk. The 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 risks faced by the Group. Credit risk The Group's principal financial assets are cash and cash equivalents and trade and other receivables. The credit risk arising from deposits with banks is managed through a policy of utilising only independently-rated banks with acceptable credit ratings. The credit quality of cash and cash equivalents can be assessed by reference to external credit ratings of the counterparty where the account or deposit is placed. A summary of the European financial institutions credit ratings for the six banks in which 81% of the Group's cash is held, are as follows: 31 March 31 March 2017 2016 ABN AMRO Bank NV A A Barclays Private Clients International Limited A- A- Berliner Sparkasse AA- AA- HSBC Bank plc. AA- AA- Santander UK plc. A A UBS AG A A The directors are satisfied as to the credit worthiness of the banks where the remaining cash is held. At the time of acquisition of a property, and from time to time thereafter, the Company reviews the quality of the contracted tenants to ensure that the tenants meet acceptable covenants. Trade receivables are presented in the statement of financial position net of allowances for doubtful receivables. An allowance for impairment is made where there is an indefinable loss event, which based on previous experience, may give risk to a non-recovery of a receivable. The carrying amount of financial assets represents the maximum credit exposure at the reporting date. At 31 March 2017, trade and other receivables and cash and cash equivalents amounts to EUR34,218,000 (March 2016: EUR43,178,000) as shown in the statement of financial position. Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash resources, the availability of funding through appropriate and adequate credit lines and managing the ability of tenants to settle within lease obligations. The Group ensures, through the forecasting and budgeting of cash requirements that adequate committed resources are available. By its nature, the market for investment property is not immediately liquid. As a result of this illiquidity, the Group's ability to vary its portfolio in a timely fashion and to receive a fair price in response to changes in economic and other conditions may be limited. Furthermore, where the Group acquires investment properties for which there is not a readily available market, the Group's ability to deal in any such investment or obtain reliable information about the value of such investment or risks to which such property investment is exposed may be limited. The Group's short-term liquidity risk is secured by the existence of cash balances, through the fact that rental income exceeds the Group's cost structures and through ensuring that facilities are managed within debt covenants. The following table details the contractual maturity date of the Group's financial liabilities. The table has been drawn up based on the undiscounted contractual maturities of the financial liabilities, including interest that will accrue to those liabilities, except where there Group is entitled and intends to repay the liability before its maturity. The discount column represents the possible future cash flows included in the maturity analysis, such as future interest or potential payments that have not been included in the carrying amount of the financial liability. The table also includes a reconciliation to the carrying value in the statement of financial position. Less One Three One Over than one to three to twelve to five five month months months years years Discount Total EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 Interest-bearing loans - - 97,946 252,564 - - 350,510 Loan interest 575 1,950 5,609 14,120 - (21,634) 620 Financial liabilities - - 139 3,335 - - 3,474 Deferred tax - - 5,079 6,774 - - 11,853 Other payables (including tax) - 4,225 6,083 - - - 10,308 Accruals - - 2,753 - - - 2,753 Deferred income - 5,763 - - - - 5,763 Liabilities directly associated with assets classified as held for sale - (770) (89,250) - - 943 (89,077) As at 31 March 2017 575 11,168 28,359 276,793 - (20,691) 296,204 Interest-bearing loans 5,445 - 183,340 169,708 9,000 - 367,493 Loan interest 531 2,388 6,636 14,056 203 (23,278) 536 Financial liabilities 199 - 1,570 3,889 284 - 5,942 Deferred tax - - - 9,705 - - 9,705 Other loans and interest - - - 12 - - 12 Other payables (including tax) - 2,811 4,641 - - - 7,452 Accruals - - 3,332 - - 3,332 Deferred income - 5,156 27 - - - 5,183 As at 31 March 2016 6,175 10,355 199,546 197,370 9,487 (23,278) 399,655 Fair value of financial instruments The following table summarises the Group's financial assets and liabilities into categories required by IFRS 7 Financial instruments disclosures. The directors consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the financial statements approximate their fair values. Held at Total fair value carrying through Held at amount profit amortised 31 March and loss cost 2017 EUR'000 EUR'000 EUR'000 Financial assets Cash and cash equivalents - 29,461 29,461 Trade and other receivables - 18,357 18,357 - 47,818 47,818 Financial liabilities Bank loans - 267,766 267,766 Derivative financial instruments 3,474 - 3,474 Accounts payable and accruals - 18,189 18,189 As at 31 March 2017 3,474 285,955 289,429 Held at Total fair value carrying through Held at amount profit amortised 31 March and loss cost 2016 EUR'000 EUR'000 EUR'000 Financial assets Cash and cash equivalents - 36,811 36,811 Accounts receivable - 3,509 3,509 Other debtors - 9,338 9,338 - 49,658 49,658 Financial liabilities Bank loans - 367,493 367,493 Other loan and interest - 12 12 Derivative financial instruments 5,942 - 5,942 Accounts payable and accruals - 16,503 16,503 As at 31 March 2016 5,942 384,008 389,950 Market risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: foreign currency risk, interest rate risk and price risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising returns to shareholders. Investment in property is subject to varying degrees of risk. The main factors which affect the value of the investment in property include: - changes in the general economic climate; - local conditions in respective markets, such as oversupply, or a reduction in demand, for commercial space in a specific area; - competition from other available properties; and - government regulations, including planning, environmental and tax laws. Whilst a large number of these factors are outside the control of the management, market and property specific factors relevant to maintain a sustainable income stream within the Group's yield parameters are considered as part of the initial due diligence. Properties and tenant leases are actively managed. Foreign currency risk The Group's functional currency is Euros. Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign currency or exchange rates. At the reporting date, the below table summarises the Group's exposure to foreign currency risk in respect of assets and liabilities held in GBP (United Kingdom) and CHF (Switzerland). 31 March 31 March 2017 2016 EUR'000 EUR'000 Assets GBP 337,187 371,938 CHF 155,278 160,313 Liabilities GBP 138,557 149,120 CHF 89,077 94,894 Foreign currency sensitivity analysis The sensitivity analysis measures the impact on the Group's exposure in Euros (based on a change in the reporting date spot rate) and the impact on the Group's Euro profitability, given a simultaneous change in the foreign currencies to which the Group is exposed at the reporting date. A 10% strengthening in the Euro exchange rate against the following currencies at year end would have decreased equity and profits by the amounts shown below. The 10% threshold was selected as a reasonable, worse-case scenario and is considered a prudent threshold. This analysis assumes that all other variables remain constant. For a 10% weakening of the Euro, there would be an equal but opposite impact on the profit and equity and the balance would be positive. Equity Profit or loss EUR'000 EUR'000 GBP impact (19,863) (1,079) CHF impact (6,620) (335) (26,483) (1,414) The following exchange rates were applied during the year: Average rate for 12 months Period end to 31 March 31 March 2017 2017 CHF 0.9229 0.9353 GBP 1.1904 1.1690 Interest rate risk The Group's interest rate risk is associated with cash and cash equivalents, on the one hand, and interest-bearing borrowings, on the other. If the interest is variable, it presents the Group with a cash flow interest rate risk. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. As stated in note 24, borrowings from credit institutions are protected against movements in interest rates. The Company uses interest rate swaps to manage its interest rate exposure. Fair value hierarchy The table below analyses the Group's financial instruments carried at fair value, by valuation method. The different levels have been defined as follows: 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). Total financial instruments Designated at fair value recognised at fair value Level 1 Level 2 Level 3 EUR'000 EUR'000 EUR'000 EUR'000 31 March 2017 Liabilities Derivative financial liabilities 3,474 - 3,474 - Total liabilities 3,474 - 3,474 - 31 March 2016 Liabilities Derivative financial liabilities 5,942 - 5,942 - Total liabilities 5,942 - 5,942 - Details of changes in valuation techniques There have been no significant changes in valuation techniques during the period under review. Significant transfers between Level 1, Level 2 and Level 3 There have been no significant transfers during the period under review. Unobservable inputs Investment properties are considered Level 3 and associated unobservable inputs are disclosed in note 16. Capital risk management The capital structure of the Group consists of debt, which includes the borrowings disclosed in note 25, cash and cash equivalents and equity attributable to ordinary shareholders of the Company, comprising issued capital, reserves and retained earnings as disclosed in the statement of changes in equity. Stenprop's average loan-to-value ratio ('LTV') ratio at 31 March 2017 was 51.6% (March 2016: 51.6%), including joint ventures and associates and the Group is not subject to any external capital requirements. The Group strategy is to maintain a debt-to-equity ratio and LTV to ensure that property performance is translated into an enhanced return for shareholders whilst at the same time ensuring that it will be able to continue as a going concern through changing market conditions. The directors are of the opinion that a 50% LTV in respect of secured external borrowings is an appropriate target for the Group, given the current market conditions. 28. Related party transactions Parties are considered related if one party has control, joint control or significant influence over the other party in making financial and operating decisions. Transactions with related parties are made on terms equivalent to those that prevail in an arm's-length transaction. Other than those further referred to below, there were no other related party transactions during the period ended 31 March 2017. P Arenson and M Fienberg, both directors of the Company until 14 September 2016 when M Fienberg resigned, are also directors of Stenham Limited which at 31 March 2017 had an indirect beneficial interest of 4.85% in Stenprop Limited through its wholly-owned subsidiary, Stenham Group Limited (March 2016: 4.91%). At 31 March 2017, P Arenson held an indirect 1.13% interest in the share capital of Stenham Limited (March 2016: 2.58%). His interest in Stenprop Limited is seperately disclosed in note 8. M Yachad is a non-executive director of the Company and an executive director of Peregrine Holdings Limited, which has a beneficial interest (direct and indirect) of 6.51% in the shares of the Company at 31 March 2017 (March 2016: 6.41%). 29. Operating lease commitments The Group earns rental income by leasing its investment properties to tenants under non-cancellable operating leases. At the balance sheet date the Group had contracted with tenants for the following future minimum lease payments on its investment properties: Audited 31 March 31 March 2017 2016 EUR'000 EUR'000 Continuing operations Within one year 32,536 32,662 Between one and two years 30,531 31,777 Between two and five years 76,284 81,790 After five years 63,304 72,157 202,656 218,386 Discontinuing operations Within one year 9,210 8,011 Between one and two years 8,282 7,145 Between two and five years 20,792 16,203 After five years 30,030 14,532 68,314 45,891 30. Contingent liabilities and commitments As at 31 March 2017, the Group was contractually committed to CHF2.5 million (EUR2.3 million). This reflects a contribution towards capital expenditure in respect of an investment property in Switzerland. 31. Subsequent events (i) Declaration of dividend after reporting date On 7 June 2017, the directors declared a final dividend of 4.5 cents per share, payable in cash on 4 August 2017. An announcement containing details of the dividend and the timetable will be made separately. (ii) Sale of Assets Held for Sale Burger King On 25 April 2017, the sale completed on the annexe of the Hermann Quartier property known as Burger King. The annexe was recognised at its sale price per the signed sales and purchase agreement at reporting date. Readers are referred to note 20 where details of this annexe are disclosed as per IFRS 5 Non-current Assets Held for Sale and discontinued operatio (iii) Signing of sale and puchase agreement of shares in subsidiary of associate On 6 February 2017, a sale and purchase agreement was signed to sell the shares in the company which owns the underlying property known as Nova Eventis shopping centre. Stenprop owns 28.16% of the underlying investment through Stenham European Shopping Centre Fund Limited ('SESCF'), and 0.26% via a wholly-owned subsidiary, Leatherback Property Holdings Limited. The directors have estimated the fair value of the Nova Eventis shopping centre to be EUR207.7 million as at 31 March 2017 being the agreed property valuation of EUR208.5 million per the agreement, less sale costs. The buyers have paid a deposit of EUR11 million into an escrow account. At the date of signing all closing conditions are met, and completion date is set for 22 June 2017. (iv) Sale of shares held by associate Following year end, an associate of the Group, Stenham Berlin Residential Fund Limited ('SBRF') sold all of its shares in its sole investment, ADO Properties SA. Subsequent to this, a voluntary buy back offer was made to all investors in SBRF. Stenprop has participated in this buyback which will result in net sales proceeds of EUR2.3 million being received by 20 June 2017. (v) Change to the board of directors On 6 April 2017, an announcement was made containing details of the appointment of Warren Lawlor as a non-executive director of the board of Stenprop with effect from 5 April 2017. (vi) Share incentive awards On 7 June 2017, the directors, on the recommendation of the remuneration committee, approved the following share-based awards: Bonus awards under Deferred Share Bonus Plan in respect of the year ended 31 March 2017* Share Purchase Plan^ Number of Loan Number of EUR'000 shares EUR'000 shares Executive directors 14 11,348 2,095 1,717,350 Other staff 39 31,856 285 233,654 53 43,204 2,380 1,951,004 * Share options vest in three equal tranches. The first tranche vests on grant. Subsequent tranches will vest at the relevant year-end in accordance with the rules of the Deferred Share Bonus Plan. ^ Shares will be issued on 8 June 2017. Loans advanced under the share purchase plan are interest-bearing at a rate equal to the average interest rate incurred by the Group from time to time. Interest is payable six monthly in arrear. Loans are repayable within 30 days of cessation of employment (unless the participant ceases employment in circumstances beyond his or her control, in which case the loan is repayable within 12 months), and must in all circumstances be repaid in 10 years. All dividends received by such employees (or his or her nominee) by virtue of their shareholding, must first be utilised to discharge any interest outstanding in terms of the loan advanced in terms of the Share Purchase Plan. (vii) Industrial portfolio acquisition On 7 June 2017 Stenprop announced the acquisition of 100% of the interests in Industrials UK LP which owns a portfolio of multi-let industrial properties (the 'MLI Portfolio') as well 100% as the management business that has built up and managed the portfolio, C2 Capital Limited (the 'C2 Management Platform') for a combined consideration that values the two businesses at GBP130.5 million. The MLI Portfolio is made up of 25 separate multi-let industrial estates situated in or near densely populated nodes across the United Kingdom. The portfolio has a gross lettable area of approximately 2 million square feet (200,000 sqm), a diversified base of over 400 tenants and contractual rent (including contractual fixed uplifts) of approximately GBP9.1 million per annum. The C2 Management Platform specialises in the acquisition and active management of multi-let industrial estates across the UK. Founded and run by Julian Carey, with the support of five property professionals, the business has been investing on behalf of private and institutional clients since its inception in 2009. The MLI Portfolio is being acquired with effect from the date of completion of the transaction, which is expected to be 30 June 2017. The purchase price is payable in cash, with a GBP6.35 million deposit having been paid on exchange of contracts on 6 June 2017 with the balance of the purchase price payable on completion, subject to a further adjustment to take account of any working capital in the structure. The purchase consideration will ultimately be funded out of the proceeds from the sale of the Nova Eventis shopping centre, which is scheduled to complete on 22 June 2017, and certain of the properties in Stenprop's Swiss portfolio that are in the process of being sold. To ensure that it has the cash available to settle the purchase price on completion, Stenprop has secured a twelve month bridging finance facility of EUR31 million, which attracts an arrangement fee of 1% and interest at 7% per annum. The loan is subject to a group loan to value covenant of 65%. A further twelve month facility of EUR8 million has been secured at an interest rate of 7% per annum. Stenprop will acquire the shares in C2 Capital Limited from Julian Carey for GBP3.5 million, to be settled by the issue of 3,270,500 Stenprop shares valued at EUR1.22 per share, adjusted upward or downward in cash for working capital. The accounting for these transactions will be finalised on completion and more information will be given when Stenprop reports its interim results. Stenprop is confident that the combination of these acquisitions will provide a strategic foothold and capability in the multi-let industrial estates sector; and that this positioning will enable it to deliver sustainable higher average annual rental growth over the next few years. The acquisition of the MLI Portfolio, together with the acquisition of the C2 Management Platform, represents a rare opportunity to make a substantial strategic investment into an asset class which Stenprop believes is likely to show superior returns over the next few years. Property summary Weighted Asset average value as Gross Annual WAULT rental Asset percentage lettable Occupancy gross rental (by WAULT per square value of portfolio area (by area) income revenue) (by area) metre (EUR million) (%) (m2) (%) (EUR million) years years EUR/m2 United Kingdom Office 324.7 38.3 44,566 99.9 19.0 5.5 5.6 426 Retail 8.7 1.0 7,678 100.0 1.1 4.0 4.3 143 Industrial 8.0 0.9 14,313 100.0 0.7 3.4 3.4 49 Total 341.4 40.2 66,557 100.0 20.8 5.4 5.0 313 Germany Retail 206.2 24.3 103,396 95.6 14.5 6.7 7.0 140 Office 53.5 6.3 15,015 80.1 2.4 4.5 4.8 160 Nursing Homes 35.4 4.2 19,330 100.0 2.7 12.4 12.1 140 Other 55.7 6.6 1,251 80.1 2.5 4.5 4.8 1,998 Total 350.8 41.4 138,990 94.4 22.1 6.9 7.4 159 Assets Held for Sale* Retail 84.6 10.0 24,511 94.7 5.3 9.2 10.5 216 Office 70.7 8.3 21,487 96.5 4.3 4.7 4.7 200 Other 0.6 0.1 1,113 87.8 0.0 4.6 4.3 - Total 155.9 18.4 47,111 95.4 9.6 7.2 7.7 204 Total Office 448.9 52.9 81,068 95.4 25.7 5.3 5.2 317 Retail 299.5 35.3 135,585 95.6 20.9 7.2 7.5 154 Industrial 8.0 0.9 14,313 100.0 0.7 3.4 3.4 49 Nursing Homes 35.4 4.2 19,330 100.0 2.7 12.4 12.1 140 Other 56.3 6.7 2,364 83.7 2.5 4.5 4.6 1,058 Total 848.1 100.0 252,660 96.0 52.5 6.3 6.8 208 * Readers are referred to note 20. Assets Held for Sale includes the remaining Swiss portfolio. Rental Escalation profile Stenprop operates in countries with low inflation rates. The annual inflation rate during the 2016 calendar year was 1.6% for the UK, 1.7% for Germany and nil for Switzerland. Rental escalation clauses vary across the portfolio. In the UK, a majority of leases are subject to periodic upwards-only rent reviews, at different stages of the tenancy. Leases in the German and Swiss properties are generally adjusted for CPI with a hurdle rate before an increase can be applied, with the exception of the Aldi portfolio, which sees increases of 1.66% annually. During the past year, the UK increased by 0.38% entirely due to one rent review at the Argyll Street property. Rents from German properties saw an average increase of 0.63%, while Swiss properties saw no indexation. Portfolio analysis Net initial yield Portfolio Market Annualised 31 March by value gross 2017 market 31 March rental (weighted WAULT Voids Rental Combined value 2017 Area income average) (by rental) (by area) per m2 portfolio (%) (EUR million) Properties (m2) (EUR million) (%) (years) (%) (EUR/m2) United Kingdom 34.7 294.1 13 63,555 18.5 5.57 5.7 0.0 291 Germany 30.2 256.3 23 92,264 14.5 4.95 6.6 5.4 157 Assets Held for Sale 18.4 155.9 12 47,111 9.6 4.33 7.2 4.6 204 Germany 0.3 2.7 - 250 0.2 6.40 1.2 0.0 800 Switzerland 18.1 153.2 12 46,861 9.4 4.29 7.3 4.7 201 Total 83.3 706.3 48 202,930 42.6 5.07 6.3 3.5 210 Share of joint ventures and associates 16.7 141.8 6 49,730 9.9 5.69 6.4 5.8 199 Total 100.0 848.1 54 252,660 52.5 5.18 6.3 4.0 208 Tenant profile Stenprop's tenants are classified into three groups, as follows: Tenant profile by annual rent Type A 64% Type B 21% Type C 15% Tenant profile by let area Type A 57% Type B 26% Type C 17% Type A: Large tenants with a national presence or multi-national tenants, government and major franchisees. Type B: Nationally recognised tenants, listed tenants, franchisees, and medium to large professional firms. Type C: All other tenants. Includes Stenprop's share of joint ventures and associates. Consolidated portfolio Net initial yield Market Annualised 31 March value gross 2017 Ownership 31 March rental (weighted WAULT Voids Rental Property/ interest 2017 Pro- Area income average) (by rental) (by area) per m2 Company portfolio (%) (EUR million) perties (m2) (EUR million) (%) (years) (%) (EUR/m2) United Kingdom Davemount Davemount 100.00 8.7 3 7,678 1.1 11.42 4.0 0.0 143 Properties (BVI) Laxton Properties Ltd Euston 100.00 90.8 1 10,204 4.8 4.07 4.2 0.0 470 (BVI) GGP1 Limited GGP1 100.00 30.3 7 25,454 2.6 8.23 3.8 0.0 102 (Guernsey) Normanton Properties Pilgrim 100.00 91.2 1 9,655 5.1 4.98 4.2 0.0 528 (BVI) LPE Ltd Trafalgar 100.00 73.1 1 10,564 4.9 6.38 10.1 0.3 464 (Guernsey) United Total Kingdom 294.1 13 63,555 18.5 5.57 5.7 0.0 291 Germany Gemstone Aldi 100.00 33.0 14 18,843 2.2 5.78 9.9 0.0 117 Properties Ltd Anarosa Holdings N.V BikeMax 100.00 25.2 5 18,007 2.0 7.0 9 4.5 0.0 111 (Curacao) KG Bleichenhof Bleichenhof 94.90 127.5 1 20,067 5.8 3.98 4.5 19.9 289 GmbH Isabel Isabel 100.00 18.7 1 13,365 1.3 6.08 6.4 3.0 97 Properties B.V Stenprop Hermann Ltd Hermann 100.00 20.7 1 8,272 1.4 6.40 5.1 5.3 169 Stenprop Victoria Ltd Victoria 100.00 31.2 1 13,710 1.8 4.65 13.5 0.9 131 Total Germany 256.3 23 92,264 14.5 4.95 6.6 5.4 157 Wholly- Total owned 550.4 36 155,819 33.0 5.28 6.1 3.2 212 portfolio Assets Held for sale properties Net initial yield Market Annualised 31 March value gross 2017 WAULT Ownership 31 March rental (weighted (by Voids Rental Property/ interest 2017 Pro- Area income average) rental) (by area) per m2 Company portfolio (%) (EUR million) perties (m2) (EUR million) (%) (years) (%) (EUR/m2) Germany Germany Burger King space 100 2.7 - 250 0.2 6.40 1.2 0.0 800 (Hermann) Switzerland Switzerland Credit Suisse Credit Suisse David Properties Cham 100.00 13.2 1 5,335 0.8 4.46 4.5 14.2 150 Sarl (Lux) Bruce Properties Chiasso 100.00 8.9 1 4,183 0.6 4.28 2.4 9.7 143 Sarl (Lux) Algy Properties Sarl (Lux) Sissach 100.00 3.9 1 1,988 0.2 4.91 4.2 45.4 101 Total Credit Suisse 26.0 3 11,506 1.6 4.47 3.7 18.0 139 Polo Polo Polo Property Altendorf 100.00 27.1 1 8,199 1.5 4.09 10.4 0.0 183 GmbH (Swiss) Polo Property GmbH (Swiss) Arlesheim 100.00 13.1 1 4,834 1.0 4.95 6.5 0.0 207 Total Polo 40.2 2 13,033 2.5 4.37 8.9 0.0 192 Kantone Kantone Kantone Holdings Baar 100.00 22.3 1 4,114 1.4 4.00 2.8 1.8 340 Ltd (Guernsey) Kantone Holdings Granges 100.00 18.6 3 5,261 1.1 4.46 4.8 0.0 209 Ltd (Guernsey) Kantone Holdings Lugano 100.00 18.3 1 7,036 1.3 4.46 19.5 0.0 185 Ltd (Guernsey) Kantone Holdings Montreux 100.00 22.3 1 4,362 1.1 4.09 4.6 0.5 252 Ltd (Guernsey) Kantone Holdings Ltd (Guernsey) Vevey 100.00 5.5 1 1,549 0.4 3.82 3.6 1.8 258 Total Kantone 87.0 7 22,322 5.3 4.21 7.7 0.6 237 Total Switzerland 153.2 12 46,861 9.4 4.29 7.3 4.7 201 Total Held for sale 155.9 12 47,111 9.6 4.33 7.2 4.6 204 Current Total subsidiaries 706.3 48 202,930 42.6 5.07 6.3 3.5 210 Jointly controlled entities Net initial yield Market Annualised 31 March value gross 2017 WAULT Ownership 31 March rental (weighted (by Voids Rental Property/ interest 2017 Pro- Area income average) rental) (by area) per m2 Company portfolio (%) (EUR million) perties (m2) (EUR million) (%) (years) (%) (EUR/m2) United Kingdom Argyll 50.0 94.7 1 6,007 4.6 4.54 2.7 0.0 766 Germany Elysion Sarl Carehomes 100.00 35.4 4 19,330 2.7 6.28 12.4 0.0 140 SESCF Ltd (Guernsey) Nova 28.42 207.7 1 96,397 17.2 6.27 4.8 10.5 178 Total Germany 243.1 5 115,727 19.9 6.27 5.8 6.2 172 Jointly-owned Total interests 337.8 6 121,734 24.5 5.79 5.2 5.9 201 (100%) Jointly-owned interests (Stenprop Total share) 141.8 6 49,730 9.9 5.69 6.4 5.8 199 Analysis of shareholders Number of Number shareholdings % of shares % SHAREHOLDER SPREAD 1 - 1 000 shares 369 12.96 131,613 0.05 1 001 - 10 000 shares 1,108 38.92 4,628,198 1.61 10 001 - 100 000 shares 899 31.58 34,429,088 12.01 100 001 - 1 000 000 shares 422 14.82 113,479,116 39.58 1 000 001 shares and over 49 1.72 134,013,865 46.75 Total 2,847 100.00 286,681,880 100.00 DISTRIBUTION OF SHAREHOLDERS Banks/brokers 55 1.93 32,528,773 11.35 Close corporations 23 0.81 518,811 0.18 Control account 2 0.07 254,592 0.09 Endowment funds 14 0.49 1,162,857 0.41 Individuals 1,837 64.52 55,146,817 19.24 Insurance companies 16 0.56 5,982,922 2.09 Investment company 2 0.07 71,801 0.03 Mutual funds 97 3.41 28,724,174 10.02 Other corporations 11 0.39 346,298 0.12 Private companies 195 6.85 51,437,951 17.94 Public companies 32 1.12 41,124,912 14.35 Retirement funds 43 1.51 6,331,530 2.21 Treasury stock 1 0.04 9,026,189 3.15 Trusts 519 18.23 54,024,253 18.84 Total 2,847 100.00 286,681,880 100.00 PUBLIC/NON-PUBLIC SHAREHOLDERS Non-public shareholders 13 0.46 23,107,874 8.06 Directors and associates of the Company holdings 12 0.42 14,081,685 4.91 Treasury stock 1 0.04 9,026,189 3.15 Public shareholders 2,835 99.58 272,600,195 95.09 Total 2,847 100.00 286,681,880 100.00 Major shareholders As at the financial year end there were 2,847 shareholders in the Company. In terms of the Companies Act 1981 of Bermuda, there is no requirement for registered shareholders to disclose their beneficial shareholdings and accordingly, the Company provides disclosure on the shareholdings where this information is provided to the Company. As at 31 March 2017 Peregrine Holdings Limited held a direct and indirect interest of 6.51% in the issued share capital of the Company. The Company does not know of any other shareholder which has beneficial interest of greater than 5% of the Company's issued share capital as at 31 March 2017. Shareholder diary Financial year-end 31 March Integrated Annual Report posted August Annual general meeting September Announcement of results Interim December Annual June Dividends Declared Paid Interim December January Final June July/August Corporate information Registered office of the Company Stenprop Limited (Registration number 47031) 20 Reid Street 3rd Floor, Williams House Hamilton, HM11 Bermuda Company secretary Apex Corporate Services Ltd. (Registration number 33832) 3rd Floor, Williams House 20 Reid Street Hamilton HM11, Bermuda (PO Box 2460 HM JX, Bermuda) JSE sponsor Java Capital Trustees and Sponsors Proprietary Limited (Registration number 2006/005780/07) 6A Sandown Valley Crescent Sandown Sandton, 2196 South Africa (PO Box 2087, Parklands, 2121) SA transfer secretaries Computershare Investor Services Proprietary Limited (Registration number 2004/003647/07) Rosebank Towers, 15 Biermann Avenue, Rosebank, Johannesburg, 2196, South Africa Correspondence address PO Box 61051 Marshalltown, 2107 South Africa Legal advisors Berwin Leighton Paisner LLP Adelaide House London Bridge London, EC4R 9HA United Kingdom Postal address of the Company Kingsway House Havilland Street St Peter Port, GY1 2QE Guernsey South African corporate advisor Java Capital Proprietary Limited (Registration number 2012/089864/07) 6A Sandown Valley Crescent Sandown Sandton, 2196 South Africa (PO Box 2087, Parklands, 2121) BSX sponsor Estera Securities (Bermuda) Limited (Registration number 25105) Canon's Court 22 Victoria Street Hamilton, HM12, Bermuda (Postal address the same as the physical address above) Bermudian registrars Computershare Investor Services (Bermuda) Limited (Company number 41776) Corner House 20 Parliament Street Hamilton, HM12 Bermuda Correspondence address 2nd Floor, Queensway House Hilgrove Street St. Helier Jersey JE1 1ES Channel Islands Auditors Deloitte LLP Regency Court Glategny Esplanade St Peter Port GY1 3HW Guernsey Channel Islands www.stenprop.com