integrated - annual report - The Vault

2020/INTEGRATED

FOR THE YEAR ENDED 31 MARCHANNUAL REPORT

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About this reportThis integrated annual report presents

the fi nancial, operational, social and

environmental performance of Safari

Investments RSA Limited and its subsidiary

(hereinafter referred to as “Safari” or “the

group” or “the company”) to stakeholders for

the period 1 April 2019 to 31 March 2020.

In order to provide a concise overview of

the business, business model and strategy,

it includes a range of fi nancial and non-

fi nancial disclosures, performance measures

and reviews over the year. This will enable

stakeholders to objectively assess the

group’s ability to create and sustain value

in the future.

The integrated annual report provides

information on the group and highlights the

group’s corporate governance principles,

growth strategy and fi nancial performance,

and the social, environmental and economic

sphere in which the group operates.

The group has continued to build on its

commitment to provide stakeholders with

information to maintain their trust and

confi dence in Safari.

The content is intended to enhance your

understanding and appraisal of the

company and its prospects and we

remain committed to improving our

reporting to our stakeholders. Any feedback

to improve reporting in future will be

welcomed. Comments can be sent to

[email protected].

Framework appliedThe framework is in accordance with best

practice and applies the principles of the

following:

◗ King IV Report on Corporate

GovernanceTM* for South Africa 2016

(“King IV”);

◗ JSE Limited (“JSE”) Listings

Requirements;

◗ Companies Act 71 of 2008, as amended

(“Companies Act”); and

◗ International Integrated Reporting

Council <IR> framework.

The fi nancial information provided in the

consolidated annual fi nancial statements

commencing on page 53 has been

prepared in accordance with International

Financial Reporting Standards (“IFRS”),

SAICA’s Financial Reporting Guides as

issued by the Accounting Practices

Committee, the JSE Listings Requirements,

Financial Pronouncements as issued by

the Financial Reporting Council and the

Companies Act. Detailed statements on how

Safari has applied the principles contained

in King IV can be viewed on our website:

www.safari-investments.com.

Report published: 13 July 2020.

* Copyright and trademarks are owned by the Institute of

Directors in Southern Africa NPC and all of its rights are

reserved.

ABOUT THIS REPORT

Assurance and board responsibility statementSafari continues to develop and

apply a combined assurance model,

providing management and the

board with confi dence regarding the

information disclosed. The group

strives to achieve high standards in all

disclosures and management reviews.

The consolidated annual fi nancial

statements were independently

audited by BDO South Africa

Incorporated and the board of the

company, supported by the audit and

risk committee, has approved this

integrated annual report.

The board of directors acknowledges

its responsibility to ensure the integrity

of this integrated annual report for

the 2020 fi nancial year. The board has

accordingly applied its judgement and

in its opinion, this integrated annual

report addresses all material matters

and off ers a holistic view of the

performance of Safari and its impacts.

The board authorised the publication

of the integrated annual report on

13 July 2020.

AE Wentzel

Chairman

DC Engelbrecht

Chief executive officer

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SAFARI INVESTMENTS RSA LIMITED

2020 INTEGRATED ANNUAL REPORT 1

About this report IFC

STRATEGIC OVERVIEW

Who we are 2

Our business model 4

Our strategy at a glance 6

Monitoring our performance/KPIs 8

ANNUAL PERFORMANCE REVIEW

Property portfolio 10

2020 performance overview 12

Five-year financial review 14

Outgoing chairman’s report 15

CEO’s review 16

Risk management 19

Stakeholder engagement 24

Sustainability report 29

GOVERNANCE REVIEW

Board of directors 32

Board charter 36

Board committees 40

Application of the King IV Report

on Corporate Governance for

South Africa 47

REIT and REIT taxation legislation 52

CONTENTSCONSOLIDATED ANNUAL FINANCIAL STATEMENTS

Directors’ responsibility

and approval 54

Certificate by group company

secretary 55

Directors’ report 56

Audit and risk committee report 60

Independent auditor’s report 63

Consolidated statement

of financial position 66


of profit or loss and

other comprehensive income 67


of changes in equity 68


of cash flows 69

Notes to the consolidated annual

financial statements 70

Analysis of ordinary shareholders 108

Property portfolio 110

SHAREHOLDERS’ INFORMATION

Notice of annual general meeting 114

Annexure A: Remuneration policy 122

Annexure B: Implementation report 124

Form of proxy 125

Notes to the form of proxy 127

Corporate information 128

Income-producing

properties9(2019: 9)

Vacancy

rate3,3%

(2019: 2,6%)

Weighted average

annual rental

escalation

achieved

4,84% (South Africa)

and 2,93%(total portfolio)(2019: 5,2%)

National tenants

(rentable area)87%

(2019: 86%)

Average

annualised

property

yield

8,15%(2019: 7,6%)

Weighted average

trading

density for the

portfolio

R33 669/m2

(2019: R32 396/m2)

Total rental

area m2 of

property portfolio

175 136m2

(2019: 174 583m2)

Monthly weighted

average gross

rental/m2

R149/m2

(2019: R144/m2)

Valuation of

property portfolioR3,27 billion(2019: R3,21 billion)

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At Safari we work to unlock value through prudent asset

management, yield-enhancing acquisitions and sensible

development or redevelopment opportunities while maintaining

a clear and focused investment strategy in line with our risk

appetite and company culture.

Safari Investments RSA Limited (“Safari”) is a property investment

company listed on the JSE as a Real Estate Investment Trust (“REIT”).

Through selective investments in property we create value for our

stakeholders as we strive for sustainable growth and earnings.

WHO WE ARE

Dividend per share

46 cents(2019: 50 cents)

Operatingprofit

R225 million(2019: R181 million)

Market capitalisation

as at 31 March

R1,03billion(2019: R1,45 billion)

Growth in property revenue

16%(2019: 15%)

Value ofshares traded

R201,1million(2019: R140,8 million)

Net asset value per share

R7,69(2019: R7,23)


2020 INTEGRATED ANNUAL REPORT STRATEGIC OVERVIEW2

Our values

◗ Quality: Unlocking and delivering high-quality assets

◗ Innovation: Finding opportunities in the market through

creative thinking

◗ Improvement: Making a diff erence for the better of our

stakeholders

◗ Integrity: Acting honestly and ethically in all we do

Our mission

Building a property portfolio which offers:

◗ To our investors: Investments that deliver long-term income

and capital growth

◗ To our communities: Social and environmental sustainability

◗ To our tenants and their clients: Highly sought-after spaces

◗ To our employees: A secure and sustainable future


ATLYNAtteridgeville (cnr Phudufufu

and Khoza Streets)

DENLYNMamelodi (cnr Stormvoël

and Maphalla Roads)

MNANDIAtteridgeville (Maunde Street)

THABONGSebokeng (Moshoeshoe Street)

THE VICTORIANHeidelberg (cnr Voortrekker

and Jordaan Streets)

PLATZ AM MEERSwakopmund, Namibia (cnr

Albatros and Tsavorite Streets)

SOWETO DAY HOSPITALSoweto (R558, Protea Glen)

NKOMO VILLAGEAtteridgeville (49 Tlou Street)

THORNHILLPolokwane (cnr Veldspaat

Street and Munnik Avenue)

6Vacant

stands

34Residential

units

9Income-

generating

assets

Rentalreversion +3,04%

Retail 99%

Living <1%

Medical 1%Office <1%

Group total assets

R3,37 billion(2019: R3,32 billion)

Loan to value 33%(2019: 24%)

SOUTH AFRICA

NAMIBIA

Gauteng

7 Limpopo

1

Swakopmund

1



Investment proposition

◗ Listed on the JSE April 2014

◗ Portfolio of nine premium properties

◗ A balanced and carefully selected tenant mix

◗ Sustainable quality of earnings

◗ Focused on retail property investments in

under-developed areas

◗ Highly qualified and experienced internal

management team




Capital inputs

Intellectual resources◗ MDA Property Systems software is used for

financial reporting. This is a single integrated

property and financial software management

system simplifying the flow of information for

management reporting, data collection, analysis,

invoicing and decision-making. MDA is the leading

provider of software for property and facilities

managers in the market

◗ Internet fibre infrastructure is in place at most

centres running on a three-tier system that

simplifies internet connection and availability of

service for tenants and shoppers

◗ Free Wi-Fi is available at centres for shopper

convenience and collection of valuable customer

behaviour data gaining insight into preferences,

demographics, dwell time and more

◗ Intelligent video analytics through on-site cameras

assists with foot count and shopper behaviour data

◗ Market research is conducted through specialist

studies including spatial planning and property

market analysis to best understand local and

surrounding market dynamics

Manufactured resources◗ Nine income-producing investment properties

◗ Primary focus is on the retail sector

◗ Development of bulk reserve at appropriate time

intervals

◗ Consideration of property acquisitions that fit our

portfolio and investment criteria

Human resources◗ An internalised asset and property management

team and portfolio leasing staff as well as on-site

centre managers overseeing daily operations at all

retail properties

◗ Board of nine members comprising a healthy

spread of professionals in the property and

business industry

◗ Five board subcommittees

◗ Internal company secretary function

◗ Continuous investment in training and employee

development

Natural resources◗ Environmental impact carefully considered with new

acquisitions, expansions and refurbishments

◗ Green building initiatives considered and

incorporated where feasible

◗ Solar power systems at retail centres and adding

or expanding solar systems to full capacity where

feasible

◗ Natural light and natural ventilation maximised

inside buildings

◗ Recycling of waste material and professional

waste sorting

Social and relationship resources◗ Strong geographic concentration of assets in

emerging sector

◗ Relationship and engagement with our communities

are prioritised

◗ Safari is in an ideal position to enhance consumer

experience through the development of holistic

business nodes

◗ Safari’s balanced and combined service offerings

serve communities well

◗ Retail centres are linked to public transport networks

◗ Health, safety and security measures are in place at

all sites

◗ Involved in and initiating many of the social and

philanthropic projects within the communities

residing around our centres

Financial resources ◗ Capital growth and dividend income to shareholders

◗ Disciplined cost management

◗ Tax contributions to authorities

◗ Credit rating strength and access to funding

◗ Centres have economic impact off ering business

and employment opportunities

OUR BUSINESS MODEL

Our value proposition for stakeholdersAs an income-focused REIT, Safari

creates value for its stakeholders by

investing in quality assets, benefitting

from active asset management based on

ethical leadership and sound corporate

governance principles. Safari’s pursuit of

sustainable value creation incorporates

economic prosperity, social responsibility

and environmental protection.

Shopper

Shoppers can expect a pleasant and safe retail and business environment linked to public transport networks and an optimum mix of national and local retailers to cover a balanced spectrum of needs, all at one destination. The safety and well-being of shoppers are prioritised during the COVID-19 global pandemic and the company has implemented the World Health Organisation’s suggested sanitisation measures and recommendations across all retail assets.

Tenant

Tenants can expect their space and business requirements met and catered for, as best as possible, as their business evolves or expands. Strong lines of communication and relations exist with our internal leasing and tenant coordinating staff.

Local communityLocal communities can expect stimulation of job opportunities, one-stop shopping destinations close to home reducing transport costs and consideration of community needs and preferences at revamp and expansion phases.

ShareholderInvestors can expect growth through yield-accretive acquisitions and developments or redevelopment of strategically well-positioned properties.

EmployeeEmployees can expect fair remuneration, incentives, career development and training and a work environment that is designed to encourage teamwork, collaboration, connectedness and innovation.




Risks

◗ COVID-19 impact on business and industry

◗ Slowing consumer spend affects trading

densities and rent ratios

◗ Competitors infiltrating the market affects

trading densities and rental escalations

◗ Listed property continues to face pressure

on key performance measures

Opportunities

◗ Use tenant lease expiries as opportunities

to improve tenant mix

◗ Unlock value-added services crucial to

emerging markets

◗ Unlock non-GLA sources of income

◗ Pursue appropriate yield-enhancing

acquisitions in emerging markets

Capital outcomes

More effective and innovative operation of Safari

business functions that improve the performance and

ultimately the quality of our properties

Enhancing shopper experience through providing free

Wi-Fi services

Realising selective property development,

redevelopment and acquisition opportunities that

extract maximum value

Better alignment and integration of company strategic

goals through engaged and competent employees and

leadership resulting in an empowered organisation

with competitive strength in the market. Objectives

at managerial level are known and integrated at

operational level

Responsible delivery of buildings, products and

activities for a reduced impact on the environment

and on natural resources

Strong community cohesion and support in fostering

relationships, loyalty and trust

Economic prosperity of organisations and communities

and increased investor interest

Our corporate strategy

Grow aspecialised portfolio ...

Increase sustainable income ...

Strengthen the Safari brand ...

of premium commercial

property investments

through quality management

of properties

through investor relations

and brand marketing

Activities

The aim is to create value for all our stakeholders through selective income-

generating assets and by optimising these assets to full potential. Our activities

include a combination of:

Development Invest in vacant land or property

with development potential

Acquisition Acquire new

investment

property

Optimisation Grow and

unlock value

from existing

assets




OUR STRATEGYAT A GLANCE

Our mission

Building a property portfolio which offers:

◗ To our investors: Investments that

deliver long-term income and capital

growth

◗ To our communities: Social and

environmental sustainability

◗ To our tenants and their clients:

Highly sought-after spaces

◗ To our employees: A secure and

sustainable future

Our vision

To be a leading REIT driving

sustainable growth and returns above

market average through selective

property investments, thereby creating

value for all our stakeholders.

Our values

◗ Quality: Unlocking and delivering high-

quality assets

◗ Innovation: Finding opportunities in the

market through creative thinking

◗ Improvement: Making a difference for

the better of our stakeholders

◗ Integrity: Acting honestly and ethically

in all we do

To achieve our vision and mission, we leverage our business model and focus on

three strategic goals:

Why? How?

Grow aspecialisedportfolio ...

Growing the company’s asset

value will unlock funding

opportunities for further

property acquisitions and

developments that will, in turn,

increase income distribution

and stimulate share trading for

faster growth.

By working intentionally

on unlocking value

through yield-enhancing

acquisitions, prudent asset

management and pursuing

development opportunities

while maintaining a clear

and focused investment

strategy in line with our

risk appetite and company

culture.

Increasesustainable income ...

Maintaining and increasing

healthy growth on distributable

income streams through our

core business will positively

impact our share liquidity and

market cap and will unlock

faster growth.

Through a dedicated

internal management

team that diligently and

responsibly manages

company revenue streams,

expenditure and cash flow.

Strengthenthe Safaribrand ...

To promote the Safari brand as

an attractive investment in a

highly competitive environment.

A positive brand reputation

well known in the market will

support our strategic goals.

Through a focus on good

stakeholder and investor

relations and an emphasis

on good communication.




Progress Future outlook KPIs

◗ Resolved to stay focused on quality assets in the

South African retail sector

◗ Defined and formulated the risk appetite for new

business development

◗ Implemented an improved funding structure

through a security SPV in the previous financial year

◗ Introduced interest rate hedging policy in the

previous financial year

◗ The acquisition of a new retail asset in the prior

financial year, Thornhill Shopping Centre in

Polokwane, proved successful

◗ Opened the new Nkomo Village Shopping Centre

in Atteridgeville in the prior financial year and the

addition of the Engen filling station in the current year

◗ Remain focused on commercial property

in under-developed markets, specifically in

the retail sector

◗ During the COVID-19 crisis, embrace

challenges as opportunities to strengthen

our portfolio’s position and brand in the

market, and be innovative with solutions

for the benefit of all stakeholders

◗ Look for opportunities to expand existing

assets where we have available bulk

reserve for optimisation of assets

◗ Stay competitive in terms of Safari’s

offering

Property portfolio

increased by

2% to R3,27 billion

NAV per share

increased by

6%

◗ Maintained healthy tenant occupancy rates

◗ Maintained net operating expenses at an acceptable

level

◗ Optimised operational structure through successful

internalisation of management and leasing

functions

◗ 652KW peak solar installation at Thornhill

completed which resulted in significant electricity

cost savings

◗ Continue to consider yield-accretive

acquisitions and redevelopments

◗ Explore and extract sources of non-GLA

revenue

96,7% occupancy

Property expenses as a

% of property revenue

24%(decreased from 26%

in prior year)

R321 million property revenue

◗ Increased shareholder engagements including one-

on-one visits, site visits and roadshows

◗ Improved reporting (roadshow presentations and

financial analyses)

◗ Initiated and supported various social projects in

our communities that have a far-reaching impact on

loyalty to the Safari brand

◗ During the COVID-19 crisis, embrace

challenges as opportunities to strengthen

our portfolio’s position and brand in the

market, and be innovative with solutions

for the benefit of all stakeholders

◗ Refine marketing campaigns for the

Safari brand to reach a wider network of

businesses, professionals and potential

future investors

◗ Continue to pursue sustainable and worthy

CSI projects

9active Safari CSI initiatives




MONITORING OUR PERFORMANCE/KPIsOur progress is measured against our strategic objectives using financial and non-financial indicators.

Occupancy % Gross rent per m²Headline earnings per share

Why is this important?It provides an indication of the level of

attraction and retention of tenants. A high

occupancy rate enhances appeal and

trading and supports the sustainability of

rental income.

Why is this important?It represents the average gross rental rate

that the company could secure across its

properties. This rate should be competitive

but also leave room for escalations and

increases at renewal dates.

Why is this important?Headline earnings indicate the extent to

which shareholder distributions are

supported by the core business

operations.

How is this measured?Occupancy rate is the ratio of rented

space to the total amount of available

space and indicates the portion of GLA

occupied by tenants.

How is this measured?A measurement across the portfolio of the

average monthly rental rate charged per

square metre for occupancy.

How is this measured?Headline earnings is a measurement of

earnings per share based solely on core

operational activities. It excludes

exceptional items like property valuation

movements.

How did we perform?Occupancy remained stable during the

year at 96,7% reflecting Safari’s low

vacancy rate of 3,3% which outperformed

the retail sector average vacancy rate of

4,6% as measured by SAPOA.

How did we perform?The company continued to offer a

competitive rental of R149m2 metre

reflecting good rental values from

retailers as they continue to demand

space in our centres. This is in spite of

the impact of a tough economic and retail

environment that continues to put rental

renewals and escalations under pressure

in general.

How did we perform?A strong performance in the prior year

with the new acquisition of Thornhill was

offset in the current year by the impact of

a tough retail and economic environment.

The links to our strategic objectives The links to our strategic objectives The links to our strategic objectives

20202019201820172016

96% 96%

98% 98%97,4%

96,7%

20202019201820172016

47 47

43

51

35

202020192018

R144

R149

R142


02ANNUAL PERFORMANCE

REVIEW



2020 INTEGRATED ANNUAL REPORT ANNUAL PERFORMANCE REVIEW10

PROPERTY PORTFOLIOSafari has acquired a portfolio of dominant retail centres, focused on high-growth areas. Moreover, rental income is largely

underpinned by long-term leases from national retailers.

Atlyn Denlyn Mnandi Thabong The Victorian

Atteridgeville

(cnr Phudufufu and

Khoza Streets)

Mamelodi

(cnr Stormvoël and

Maphalla Roads)

Atteridgeville

(Maunde Street)

Sebokeng

(Moshoeshoe Street)

Heidelberg

(cnr Voortrekker and

Jordaan Streets)

Trading since 2006

Number of shops 96

Total rentable area 31 257m2

Investment value R577 600 000

Trading density R31 650/m2

per annum

National tenants 89,00%

Major tenant Shoprite

Occupancy levels 96,08%

Trading since 2003

Number of shops 122




per annum


Major tenant Shoprite


Trading since 2015

Number of shops 30




per annum


Major tenant Pick n Pay


Trading since 2007

Number of shops 99




per annum


Major tenants Boxer, Pick n Pay,

Superspar


Trading since 1997

Number of shops 38




per annum


Major tenant Pick n Pay





The superior performance of these centres is evidenced by a low vacancy factor and higher than average trading densities

across the portfolio, as well as strong rental escalations achieved.

Platz am MeerSoweto Day Hospital Nkomo Village Thornhill

Swakopmund, Namibia

(cnr Albatros and Tsavorite Streets)

Soweto

(R558, Protea Glen)

Atteridgeville

(49 Tlou Street)

Polokwane

(cnr Veldspaat Street and

Munnik Avenue)

Trading since 2016

Number of shops 72




per annum


Major tenant Checkers


Trading since 2016

Number of beds 20



National tenant 100%

Major tenant Advanced

Health

Occupancy level 100%

Trading since 2018

Number of shops 60




per annum


Major tenants Boxer and

Pick n Pay


Trading since 2009

Number of shops 36




per annum


Major tenant Superspar


Fair value of investment

property value year-on-

year (%) increased by

2%

Total asset value

year-on-year

(%) increased by

1,5%

Property expenses as a

percentage of property

revenue

24%

Tenant retention

95,8%

Retail

Medical

SECTOR

Living

Offi ce




2020 PERFORMANCE OVERVIEWRevenue GLA

Geographical spread

Revenue GLA

Sectoral spread

14%2020/21

2021/22

2022/23

2024+

0% 5% 10% 15% 20% 30%

18%20%

24%23%23%

13%2023/24 14%

20%26%

Lease expiry profile of the portfolio

25%

83% 81%

9% 7%

8% 12%

99% 99%

1% 1%

Gauteng – South Africa Limpopo – South Africa Swakopmund – Namibia Retail Healthcare

Revenue GLA

Total tenant mix

Revenue GLA

Contracted versus uncontracted

73% 78%

12% 9%

15% 13%

Rentable area

Revenue

100% 100%

0% 0%

Tenants of national listed companies and other nationals

Tenants of national franchises and medium to large professional firms

Local traders

Contracted Uncontracted




Portfolio (value) Property income Property expenses

Office

Medical

Retail

0% 1% 3% 4%

Living

3,3%

Vacancy profile by sector by rentable area

2%

0%

0%

0%

Living

Retail

Medical

0 R/m2 50 R/m2 150 R/m2100 R/m2 125 R/m2 200 R/m2

Office

72 R/m2

188 R/m2

Weighted average

rental

181 R/m2

75 R/m225 R/m2 175 R/m2

149 R/m2

149 R/m2

Average rental for the portfolio by rental area

2,84%

Living

Retail

Medical

0% 6% 12% 15%

Office

2,8%

0%

8,0%

Weighted average

escalation

8,0%

9%3%

Weighted average rental escalation for the portfolio by rental area

The Victorian 5%

Thabong 20%

Atlyn 17%

Denlyn 25%

Mnandi 5%

The Victorian 8%

Thabong 28%

Atlyn 11%

Denlyn 16%

Mnandi 2%

Nkomo 10%

Lynnwood 0%

Platz am Meer 8%

Thornhill 9%

Soweto 1%

Nkomo 9%

Lynnwood 0%

Platz am Meer 12%

Thornhill 14%

Soweto 0%

Retail 94%

Living 5%

Medical 1%

Office 0%



2020 INTEGRATED ANNUAL REPORT14 ANNUAL PERFORMANCE REVIEW

FIVE-YEAR FINANCIAL REVIEW

2020

R

2019

R

2018

R

2017

R

2016

R

Property revenue 320 786 920 275 978 654 240 998 870 203 426 979 169 055 147

Property revenue year-on-year (%) 16 15 18 20 20

Operating expenses 114 830 672 104 321 828 70 890 780 61 471 158 48 587 394

Operating expenses year-on-year (%) 10 47 15 27 27

Property expenses as % of property revenue 24 26 25 30 29

Investment property 3 058 198 009 3 009 003 845 2 638 537 718 2 421 549 684 2 054 690 350

Investment property year-on-year (%) 2 14 9 18 18

Total asset value 3 372 719 000 3 320 511 000 2 939 779 000 2 650 701 000 2 219 368 430

Total asset value year-on-year (%) 2 13 11 19 23

Inventory 122 684 000 153 438 300 169 648 600 175 003 438 96 905 412

Inventory year-on-year (%) (20) (10) (3) 81 165

Vacancy (%) 3,3 2,6 2 2 4

Total rentable area (m2) 175 135 174 583 134 823

Rentable area year-on-year (%) – 29

0

500

1 000

1 500

2 000

2 500

3 000

3 500

Property 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Denlyn 289 823 223 375 500 000 431 500 000 511 700 000 530 400 000 581 700 000 693 800 000 788 800 000 792 800 000 798 900 000

Thabong 164 100 000 176 000 000 237 900 000 265 700 000 368 000 000 382 100 000 488 900 000 497 600 000 534 500 000 559 400 000

Atlyn 260 000 000 274 900 000 307 400 000 373 100 000 395 100 000 428 500 000 484 400 000 527 200 000 538 300 000 577 600 000

Nkomo 32 400 000 28 330 000 44 500 000 75 921 982 86 248 436 188 479 821 331 600 000 333 600 000

Mnandi 13 100 000 9 150 000 117 400 000 92 000 000 103 500 000 107 300 000 136 600 000 136 900 000

Platz am Meer 16 166 139 43 000 000 67 121 634 92 804 651 156 900 000 412 571 973 547 816 479 500 790 100 436 979 800 400 276 000

Victorian 135 000 000 142 500 000 143 500 000 154 600 000 166 200 000 172 000 000 161 900 000

Soweto 28 400 000 33 900 000 35 506 190 39 400 000 41 000 000

Lynnwood 40 795 247 39 200 000 39 400 000 41 700 000 36 500 000

Thornhill 205 100 000 226 000 000

Property portfolio R3,272 billion




OUTGOING CHAIRMAN’SREPORT

Dear shareholders I am proud to present the integrated annual report of

Safari for the 2020 fi nancial year.

As I write, we are all adapting to the changes in our

business environment and in our daily lives as the

unprecedented situation around the COVID-19 health

crisis continues to unfold.

I want to assure you that Safari’s commitment and

determination to unlock value for its investors remain

steadfast. I have confi dence that the Safari portfolio has

unique strengths and that the group will continue to

deliver value over the long term.

A number of internal changes to the Safari board took

place during the year to reinforce an independent and

experienced structure. With my resignation being

eff ective 21 June 2020, Allan Wentzel has assumed the

chairmanship pending new appointments to the board.

On behalf of the board, I would like to thank all

stakeholders for your continued confidence in Safari.

AM Slabber

Outgoing chairman

Pretoria

10 July 2020


ANNUAL PERFORMANCE REVIEW


2020 INTEGRATED ANNUAL REPORT16

CEO’S REVIEW

“The 2020 financial year will no doubt

be known for its unusual challenges.

We experienced harsh economic

and trading conditions together

with the global COVID-19 pandemic

while unsolicited corporate activity

demanded much of the board’s and

management’s attention. The economic

climate required firm decisions on

the strategic front of business while

adapting to a changing environment.

I am confident though that this is

a defining time that still presents

opportunities and that with willpower

and commitment, we will continue to

play our role with excellence.”

Operational reviewOperations continued to perform well in

the 2020 fi nancial period and properties

delivered satisfactorily despite an economy

that continues to be aff ected by business

and fi scal uncertainty. Management

continued with a disciplined approach to

optimise operational performance of assets

by fi lling vacancies, being proactive in terms

of renewing lease agreements and fl agging

tenants to be replaced or concluding

settlement agreements with distressed

tenants.

Considering that Safari’s assets are mainly

dominant neighbourhood and small

regional peri-urban centres with a loyal

community base, we continued to be well

positioned against and less susceptible to

an increasing e-commerce market. At least

38% of the group’s GLA is occupied by

grocers, pharmacies and tenants

functioning as essential services to its




surrounding communities. The board

reaffi rmed its preference for investment

in such dominant retail assets in South

Africa’s local peri-urban market and that

optimisation of assets should continue to

be our focus.

Denlyn Shopping Centre in Mamelodi

continued to deliver pleasing results and

trading fi gures despite new competition in

the immediate node. The new Engen fi lling

station at Nkomo Village opened in

November and is performing well while new

redevelopment possibilities and related

pockets of opportunity are considered with

caution. A priority though is the

refurbishment of the 21-year-old Victorian

Shopping Centre in Heidelberg, a necessary

redevelopment that will enhance the

dominance of this convenience centre in the

area. The addition of a new day hospital

facility at our Nkomo Village node is also

under review and with our Soweto Day

Hospital delivering so well, we know this is

an opportunity to extract additional value.

Cost-saving initiatives over the year include

the successful expansion of a number of

solar photovoltaic installations.

Safari’s various corporate social initiatives

continued to have a positive impact on our

communities in terms of education and

skills development with the introduction of

our new Jewels of Atteridgeville and other

campaigns. You will fi nd some of our

highlight events of 2020 mentioned in

this report.

Financial performanceWe have seen the group property portfolio

grow to R3,27 billion but remain mindful

that valuations should remain under review

considering the still unknown future

impacts that COVID-19 may have and that

property valuations will continue to be

under pressure.

We maintained a low vacancy factor of

3,3% compared to the market average of

4,6% (SAPOA). The slight increase in

vacancies is due mainly to the planned

redevelopment of The Victorian Shopping

Centre with some spaces already being

prepared for the refurbishment and only to

be occupied once the redevelopment is

complete.

Trading density across the portfolio on

trading square metres improved by 4% and,

except for Platz am Meer, all the shopping

centres in our South African portfolio are

signifi cantly outperforming market

benchmark trading densities for similar

size centres (benchmark: Clur Research

International). Leases that expired during

the fi nancial year were renewed at a

positive reversion rate of 3,04% across the

portfolio. The group successfully retained

95,8% of its 2019/2020 expiring leases

based on GLA. Despite the diffi cult trading

conditions of the past year, weighted

average rental escalation is still at a healthy

2,93%, and 4,84% if considering only the

South African portfolio, while 87% national

tenancy was maintained indicating the

strength of the tenant base.

Operating profi t increased by 24%, and

property revenue by 16%, mainly as a result

of the Nkomo Village and Thornhill

Shopping Centres now included for a full

12-month period compared to last year, but

the 6,92% increase in NOI on a weighted

like-for-like basis is due to hands-on

management and cost-saving initiatives to

reduce property expenses from 26% to 24%

as a percentage of property revenue. It

includes the successful replacement of

Edcon brands with other retailers paying

higher rentals, and negotiating better

rentals on vacant spaces and renewals.

The group’s NAV per share increased by 6%

to 769 cents (March 2019: 723 cents) mostly

as a result of the 53 million shares held by

Southern Palace being seen as treasury

shares and thus excluded in the calculation

of NAV per share. The group’s LTV at

year-end increased to 33% from last year’s

24% as a result of the Southern Palace loan

repaid to Sanlam during June 2019 while

the further payment to Sanlam after

year-end as full and fi nal settlement of the

Southern Palace loan resulted in a further

increase in LTV to approximately 40%.

We continue to maintain a conservative

approach to gearing and net debt levels and

are in the fi nal stages of negotiating

refi nancing of R900 million of debt facilities

that will mature in August 2020. Proceeds

from the sale of the remaining residential

apartments at Platz am Meer will be used

to settle debt as the share title register for

the residential phase has now been opened

and the fi rst units sold and transferred

successfully.

Southern Palace/Sanlam The group provided for a share-based

payment liability of approximately

R220 million under the Safari guarantee

for the Southern Palace/Sanlam facility.

Settlement of this amount occurred on

6 May 2020. With the structure having

been due to mature in August 2020, the

settlement under the guarantee has been

anticipated and this was provided for in

Safari’s debt provisioning and budget

forecasts. The drawdown of these funds

“A final dividend of

22 cents per share

has been declared for

the year and brings

the total dividend

for the 2020 year to

46 cents per share.”

Maintained a low vacancy factor 3,3%

compared to the market average

of 4,6% (SAPOA)

Group successfully

retained

95,8%of its 2019/2020 expiring leases

based on GLA




CEO’S REVIEW continued

is thus not expected to adversely impact

Safari’s eff ective net cash fl ows or its

general operational fi nancial provisioning.

The minimum recovery for Safari in respect

of the debt owed by Southern Palace is the

value of the shares, either on cancellation

or on realisation. Cancellation of all or some

of the shares may have benefi cial

consequences for shareholders in terms of

dividends and the board will be considering

all factors in its resolutions on this. The

53 million Southern Palace shares are

treated as treasury shares for accounting

purposes in the group 2020 annual fi nancial

statements.

COVID-19 While there is indeed pressure on rental

revenue, the portfolio remains defensive

and resilient due to its locations and target

markets. The ongoing eff ect of businesses

still restricted to trade under COVID-19

Levels 1 to 3 forced us to provide some

rental relief depending on the various

businesses and when they will be allowed

to commence trading while the economy is

gradually being opened in phases. Our

insurance policy does cover for business

disruption due to infectious diseases and

the group has submitted the necessary

claim for losses and will remain fi rm in

expecting cover from our insurer.

From a very early stage in this crisis,

proactive measures were put in place by

Safari and continue to be monitored closely.

Importantly, the safety of our tenants and

shoppers has been prioritised and the

company has implemented the World

Health Organisation’s recommended

hygiene measures across its retail assets.

Management also established eff ective

communication channels with the relevant

local authorities and city offi cials to ensure

that retail sites are compliant with

regulations. During this time, we want

to be mindful of how we can continue to

contribute positively and support our

society while our centres remain open.

Safari’s head offi ce employees have been

able to work remotely and internal

communication continued smoothly.

Employees are returning in phases and only

under strict new health and safety

measures in line with published regulations.

The board and management have taken

steps to ensure that the company preserves

its cash reserves and liquidity, especially

during this time. Measures have been put in

place to reduce operating costs and capital

expenditure and to optimise cash fl ow.

Looking aheadWe expect that we will continue to operate

in fragile South African and Namibian

economies but will remain focused on

refi ning our portfolio to ensure that

sustainable income is being generated from

our assets and will continue to manage

assets to remain defensive to weather the

tough trading conditions. We will achieve

this through continued hands-on

management, repositioning assets where

we can and disposing of assets not within

our strategic focus. I am confi dent that we

have the appropriate strategy and an asset

portfolio with unique strengths together

with core competencies in our team to

navigate the challenges and to execute on

the opportunities ahead.

AppreciationI am proud and highly appreciative of the

continued commitment and determination

of the Safari team as well as our business

partners and tenants during this demanding

time. I would also like to express my

appreciation for the guidance extended to

my team and me by the board, and my

gratitude to our shareholders for your

support to see us succeed and grow.

DC Engelbrecht

Chief executive offi cer

Pretoria

10 July 2020




RISK MANAGEMENT

Safari’s overarching risk appetite is defi ned

in the context of focusing on what we know

– quality retail property investments. Safari

has a disciplined approach to managing

our operational risk, in particular our

development exposure. We take cognisance

of market conditions while always

maintaining low fi nancial risk with

conservative fi nancial leverage.

The board has delegated to the audit and risk

committee the responsibility to design,

implement and monitor a risk management

programme and to identify, assess and

manage risks appropriately (refer to the

audit and risk committee report on

page 60). In order to measure, review and

assess the company’s risk profi le, the audit

and risk committee sets out parameters,

which consider, among others, operational

functions, fi nancial gearing, interest cover,

level of speculative and total development

exposure and external or internal macro-

and micro-economical climates. These

parameters are assessed quarterly by the

committee and any risks identifi ed are

reported at quarterly board meetings.

Our approach to risk management involves:

◗ aligning risk appetite and the company’s

strategy to improve active monitoring of

risks;

◗ enhancing risk response decisions

through proactive management of

identifi ed risks;

◗ reducing operational losses by gaining

enhanced capabilities to identify potential

events and establish responses;

◗ identifying and managing multiple

cross-enterprise risks; and

◗ seizing opportunities by identifying a full

range of potential events.

During the year ended 31 March 2020, the

board, together with the applicable board

committees, carried out continual

assessments of the risks facing the group,

including those that present potential

threats to our business model, future

performance and solvency and liquidity

requirements. Safari is a member of The

Global Platform and utilises its REIT Risk

Instrument to manage the risk process on a

continual basis. The necessary controls are

therefore in place to mitigate risks.

A strong vision, mission and strategy and a

high level of awareness at the operational

level supports the risk management

policies. Risk management cannot eliminate

risk completely, but rather provides a

process and structure to continuously

identify, assess, evaluate and manage risk.

Risk management forms part of Safari’s

policy framework and is embedded in our

overall governance.

COVID-19 At the time of compiling this report, the

COVID-19 pandemic was having a severe

impact on the world and on businesses

around the globe. Safari is, however, in full

support of the decisive action taken by the

South African government to reduce the

local spread of the virus, and the initial

steps taken to mitigate its impact.

Safari operations during the national lockdown and subsequent imposed levels As part of our commitment to create safe

and sustainable spaces, Safari prioritised

the safety and well-being of its stakeholders

during these times and has implemented

the World Health Organisation’s

recommended sanitisation measures

across all retail assets.

All shopping centres, in both South Africa

and Namibia, operated in compliance with

the lockdown and the subsequent imposed

level regulations. These included, but were

not limited to: social distancing measures;

rigorous hygienic cleaning eff orts;

sanitisers and disinfectants readily

available throughout centres; and

information on COVID-19 distributed to

communities through awareness

campaigns.

The objective of risk management is to identify, assess, manage and monitor the risks to which Safari is exposed. The board,

together with senior management, have set risk strategy policies. A comprehensive risk register is in place, which is supported

by policies reviewed by the board.

“Our risk philosophy

recognises the

importance of risk

management and the

appropriate balance

as an integral

part of generating

sustainable value

and enhancing

stakeholder

interests.”




RISK MANAGEMENT continued

A work-from-home policy was implemented

for head offi ce staff during the national

lockdown. Business was managed well

while communication and interaction with

asset and property management teams

continued daily via various online platforms

and other electronic means. After the

lockdown, and during the subsequent

imposed levels, working from home was

still encouraged where feasible, while strict

measures were put in place before anyone

could return to the workplace.

Safari’s tenantsSafari realised that the lockdown would

have a serious and immediate impact on

the business and cash fl ows of a majority of

our tenants. Contractually, the company’s

leases prohibit withholding rental under any

circumstances and tenants undertake and

guarantee to make payment without any

set-off .

The company dealt with tenant concerns

and requests on a case-by-case basis with

a continued focus on supporting tenants

through these challenging times. The lease

expiry profi le continues to be monitored

closely and with 14% of leases in terms of

GLA expiring within 12 months, many

renewal negotiations are already underway.

ConclusionAs governments, national authorities and

companies continue to implement rigorous

measures, there remains uncertainty about

the exact level of impact COVID-19 will have

on future operations and on business in the

long term. Management is, however,

confi dent that Safari will be able to navigate

through the changes and challenges and

that our portfolio has specifi c strengths

which will support it in doing so. It is also

positive and commendable that there is

cooperation between REITs and property

industry bodies such as the SA REIT

Association, the South African Property

Owners Association and the South African

Council of Shopping Centres, to collectively

work together for guidance to understand

the impact of COVID-19 on the property

industry’s operations, and to formulate

appropriate responses to risks and

business infl uences.

The identifi cation of key risks entails a

systematic, documented assessment of the

processes and outcomes surrounding these

risks and addresses our exposure to macro-

economic risks, property industry risks,

fi nancial risks, business process risks,

reputational risks and people risks.

The board has established Safari’s risk

appetite and risk tolerance levels and is

committed to reporting on instances where

risks fall outside these limits.

The table commencing on page 21 sets

out these limits and tolerance levels as

determined by the board. The board is

satisfi ed with the eff ectiveness of the risk

management policies and procedures that

are in place.

No material deviations from the risk

tolerance limits have occurred during the

reporting period. Furthermore, the board is

not aware of any other current, imminent or

envisaged risk that may threaten Safari’s

long-term sustainability.




Health and safety

Environment

Legal and compliance

RISK CONSEQUENCE

Community and reputation

Operational impact

Financial

Risk register

Risk Description Stakeholders aff ectedConsequence should the risk materialise

Mitigating controls – identify and monitor

Macro-economic risks

Threatening disease

– including COVID-19

◗ Employees

◗ Shoppers

◗ Investors and

fi nanciers

◗ Local community

◗ Tenants

Situational awareness. Refer to

separate sections on

pages 18 and 19.

Fiscal crises risk – The

risk of sovereign debt

crises and/or liquidity

crisis

◗ Investors and

fi nanciers

◗ Employees

◗ Tenants

Necessary hedging policy in

place. Safari’s debt maturity is

spread out and we aim to keep

our gearing levels low. ±60% of

our interest-bearing debt is

hedged by way of interest rate

swaps as at year-end. Audit

and risk committee provides

oversight.

Macro-economic risk

– Slower consumer

spending that may result

in arrears and vacancies

◗ Investors and

fi nanciers

◗ Local community

◗ Tenants

Monthly leasing meetings

where performance and

arrears are considered and

discussed. Strong focus on

tenant retention in the midst of

the current challenging

economic climate.

Property return risk

Property return risk

– The risk that

investments will

perform below market

expectations

◗ Investors and

fi nanciers Eff ective property management

not outsourced but done

through an internal staff team.

Appointment and retention of

competent experienced

personnel. Extensive due

diligence procedures.

Energy price and

availability risk – The

risk of sharp and/or

sustained energy price

increases, the risk that

provision of energy is

unreliable as well as

failure in the supply of

utility services and its

administrative

management

◗ Investors and

fi nanciers

◗ Local community

◗ Tenants

◗ Shoppers

Necessary back-up power is

provided at all centres and

solar panels are installed at

most centres. The risk for

Safari is the increased cost of

occupancy for tenants to

operate sustainable businesses

which may aff ect rental

escalations going forward.

Utility management is

outsourced to a third party who

invoices and recovers usage

from tenants directly.




RISK MANAGEMENT continued



Property return riskcontinued

Rates and taxes and

water risk – The risk of

sharp and/or sustained

rates and taxes and

water price increases

◗ Investors and

fi nanciers

◗ Local community

◗ Tenants

◗ Shoppers

Rates Watch is involved and

notifi ed when objections

should be lodged against

municipalities. Energy saving

initiatives through solar

projects. Monitoring of utilities

per building in place, including

common areas. Tenants are

educated on methods to

calculate their usage, therefore

improving usage patterns.

Financialrisk

Ability to maintain

distribution growth

◗ Investors and

fi nanciers

Every operational and fi nancial

action should aim to create and

preserve a high-quality income

stream that is sustainable in

the long term. Specifi c

measures continuously

identifi ed and monitored by

strategy committee and

management committee.

Capital availability risk

– The risk of inability to

raise funding for capital

and operational

requirements

◗ Investors and

fi nanciers Manage cash fl ow forecast in

order to identify the right time

to raise funds from the market,

strategy committee should

monitor capital requirements.

Safari has an open

communication line with

existing and prospective

lenders in this regard. Safari

must also make sure that the

company stays well within the

limits set by the covenants in

relevant Common Terms

Agreements.

Interest rate risk – The

risk of a rise in interest

rates

◗ Investors and

fi nanciers Necessary hedging policy in

place, with ±60% of our

interest-bearing debt hedged

by way of interest rate swaps

as at year-end. Loan to value

ratio is monitored and

restricted to an acceptable

level. Audit and risk committee

provides oversight.




Health and safety

Environment

Legal and compliance

RISK CONSEQUENCE

Community and reputation

Operational impact

Financial



Business processesrisk

IT risk – The probability

of a cyberattack or data

breach on Safari data

◗ Employees

◗ Board Internal audit review was

completed that considered data

migration, back-up procedures,

IT security and hardware

equipment. Regular on-site and

off -site back-ups in place. IT

disaster recovery plan in place.

Audit and risk committee

provides oversight on IT

governance.

Financial accounting

– Incorrect recording of

fi nancial transactions

and misstatement of

fi nancial records

◗ Investors and

fi nanciers

◗ Board

Systems of internal control are

reviewed by the internal

auditor annually. Monthly

review of fi nancial and

operational data and

projections by the fi nancial

director and the management

committee. Annual external

audit engagement and audit

and risk committee quarterly

meetings. Audit and risk

committee chairman engages

with external auditor as

recommended by King IV.

Breakdown in corporate

governance

◗ Investors and

fi nanciers

◗ Board

Board made up of majority

non-executive independent

directors and required board

subcommittees in place.

Internal and external audit

function.

Reputational risk

Media/public perception

risk – The risk of

unfavourable social

media and/or print

media exposure

◗ Investors and

fi nanciers

◗ Employees

◗ Board

The board has implemented a

communication policy and

dedicated spokesperson (CEO),

to ensure that one message is

communicated. Community

engagement and CSI strategies

in place to foster and

maintain relationships with

communities. Social and ethics

committee oversight.

People risk

Loss of key personnel

– The risk of sudden loss

of key personnel

A succession plan is in place

for executive board members

and key members of senior

management. Competitive

remuneration for staff

members is in place and a

partial contribution to pension

benefi ts has been incorporated

– refer to page 44 in the

nomination and remuneration

committee report.




STAKEHOLDER ENGAGEMENTSafari believes that strong relationships with our stakeholders are imperative to securing our place in the market as well as in

the community. This is especially the case with the COVID-19 social crisis impacting businesses and the entire economy on so

many levels. Safari wants to answer the expectations of its stakeholders through thoughtful stakeholder engagement and good

working relationships with all individuals.

Employees

Their expectations ◗ An adjusted work environment that

encompasses safety measures during

the COVID-19 crisis

◗ Fair and market-related remuneration

and incentives

◗ To be part of a high-performing

organisation where individual and team

contribution is recognised and

appreciated

◗ Developmental conversations and

refl ection sessions to ensure potential is

unlocked and energy ignited to

continuously improve skills and

capabilities

◗ To be employed by a company where the

strategic priorities provide hope for the

future and employees are treated with

respect and dignity

Our strategic response ◗ Strict new health and safety measures introduced at the workplace during the COVID-19

pandemic

◗ Streamlined cross-functional alignment and communication

◗ Agile, fl exible interactive systems and processes are in place that allow for eff ective

decision-making

How we engage ◗ A culture of collaboration and an engaged leadership style

◗ Shared leadership is applied in diff erent areas of expertise to ensure dynamic

growth and development of all leaders, building synergy and ensuring optimum

solutions when solving problems

◗ Lean eff ective structures that require high levels of collaboration and foster

teamwork

◗ A culture of trust, openness and integrity – we do what we say we will do

◗ A pleasant and welcoming work environment

◗ Remuneration strategy designed to assist the organisation in achieving its strategic

goals and objectives

◗ Formal performance evaluations with feedback and development conversations

◗ Regular staff alignment meetings

Value is created through: ◗ Competent, skilled employees

◗ A high level of personal engagement and

commitment

◗ Loyalty toward the business, what we stand

for and how we do things

◗ Consistent refl ection and evaluation of how

things can be improved through better

innovation, technology, systems or ways

of work

Supported by strategic goals




Investors and funders

Their expectations ◗ Delivery on strategy

◗ Strong investor relations and

transparent communication

Our strategic response ◗ A focus on investor relations with an emphasis on good communication and

transparency

How we engage ◗ Good relationships maintained with funding institutions

◗ Interim and annual results announcements

◗ Provision of information to fi nancial markets

◗ Regular communication with institutional shareholders and equity analysts

◗ Press announcements and JSE SENS announcements

◗ Executive directors and the group company secretary are available to answer

queries from shareholders

◗ Investor presentations

◗ Roadshows

◗ One-on-one meetings

◗ Website

◗ Surveys

◗ Site visits

◗ Marketing material

Value is created through: ◗ Capital appreciation

◗ Solvency and liquidity

◗ Timely servicing of debt

◗ Credit quality of tenants

◗ Portfolio value and growth

◗ Credit rating

◗ Low property vacancy levels

◗ Transparency of fi nancial results and position

◗ Calibre of management

◗ Strategy execution

◗ Accessibility of management

◗ Timely information on key developments

◗ Succession planning

◗ Corporate governance


Grow a specialised portfolio

Increase sustainable income

Strengthen the Safari brand

STRATEGIC GOAL




STAKEHOLDER ENGAGEMENT continued

Local communities

Their expectations ◗ Business and employment opportunities

for locals

◗ Quality buildings that bring a safe and

pleasant environment focused on the

entire shopper experience

◗ Community involvement and enrichment

◗ Aff ordability of services and access to

public transport

◗ A retail environment that encompasses

the necessary safety measures during

the COVID-19 crisis and conveys support

to its community

Our strategic response ◗ Engagement through social media and regular feedback from our building managers

and tenants on community and local market requirements

◗ Increased promotional activities and marketing initiatives aimed at local community

members and schools

◗ Partnership with government departments for synergy in approach and outcomes to

make a lasting diff erence in communities

◗ Strict new health and safety measures introduced at all shopping centres during the

COVID-19 pandemic for the safety and well-being of the community as a whole. The

minimum number of centre gate entrances opened to assist with crowd control. Posters

displayed at every entrance to reinforce the message “no mask – no entry” as well as

promoting 1,5m distancing. Posters displayed in centre walkways and on social media to

promote “steps to wash your hands” and “how to prevent getting infected”. Branded

masks ordered for larger centres and distributed to shoppers who do not have a mask.

Demarcated walkways with tape and stickers to promote social distancing

◗ SASSA grant payout points: Social distances promoted with demarcated areas and

sanitised chairs every 1,5m. Community police forum members assist with safety and

control measures during payout days. Regulations regarding the SASSA grant payouts

posted on social media to inform our communities

◗ Prioritised support during the pandemic to our immediate communities through food

supplies and donations. A number of charities, orphanages and vulnerable shelters that

are directly located in the suburbs and communities where our shopping centres are

located are receiving support

How we engage ◗ Initiation of various successful corporate social investment projects in our

communities

◗ Partnerships with local schools

◗ Launching of competitions and campaigns to involve and promote local community

members such as our Denlyn Stars and Atlyn Arts campaigns focusing on the youth

and education

◗ Sponsorship and promotion of community events and organisations including

support of local charity projects

◗ Contributions to city rates and taxes

◗ Regular meetings with and cooperation from government departments

◗ Sharing of social media posts from the government COVID-19 page regarding

support for small businesses and government support for the underprivileged with

contact details

◗ Messages of encouragement posted on a regular basis during the pandemic

Value is created through: ◗ Economic stimulus created for local

businesses and suppliers

◗ Positive impact on community development

and upliftment

◗ Responsible corporate citizenship

◗ Security and safety being a priority





Shoppers and tenants

Their expectations ◗ Clean and secure spaces

◗ Value for money

◗ Positive branding and promotion of

centres

◗ A shopping environment that

encompasses the necessary safety

measures during the COVID-19 crisis

Our strategic response ◗ Maintaining strong relationships with the retailer brands

◗ Providing superior spaces and fi nishes

◗ Active marketing, branding and promotion of centres

◗ Strict new health and safety measures introduced at centres during the

COVID-19 pandemic

How we engage ◗ Careful consideration of tenant space requirements

◗ Regular shopper surveys

◗ Marketing, promotions and social events

◗ Shopping centre websites and social media platforms

◗ Dedicated on-site centre managers

◗ Micro-management of security and cleaning service providers

◗ Property maintenance and refurbishments on an ongoing basis and prioritised by

portfolio manager

◗ Mall branding and awareness

◗ Free Wi-Fi at centres

◗ Regular centre visits by property portfolio manager

◗ Review and discuss tenant performance and trading densities

◗ Customer satisfaction and shopper surveys

◗ Regular communication through print, web, social media and events

Value is created through: ◗ Good tenant-landlord communication

◗ Regular building maintenance and care

◗ Initiatives to enhance the shopping

experience and attract shoppers

◗ Tenant mix improvement to enhance

shopping experience

◗ Consider the impact of competing centres

◗ Safe, secure and clean shopping environment

◗ Easy access to centres with links to public

transport networks

◗ Competitive rental rates

◗ Cost-saving initiatives in respect of waste,

solar power, fi bre networks

◗ Environmentally sensitive and eco-effi cient

building designs and fi nishes





STAKEHOLDER ENGAGEMENT continued

Suppliers

Their expectations ◗ Business opportunities and local

representation

Our strategic response ◗ Fair procurement process

◗ Business opportunities unlocked and provided for suppliers

◗ Service agreements are mutually benefi cial, transparent and equitable

How we engage ◗ Fair procurement and tender processes followed

◗ Involvement of local contractors from the surrounding community encouraged

by the board

◗ Tenants encouraged to appoint staff from local communities

◗ Several maintenance and service contracts entered into with local suppliers

and small service providers

◗ Skills development opportunities exist in construction and renovation phases

of developments

◗ Communication via on-site centre managers

Value is created through: ◗ Services are delivered that present and

enhance the performance of the portfolio

◗ Quality of services carefully monitored

◗ Supplier relationship management

Supported by strategic goal

JEWELS OF ATTERIDGEVILLECase study

Jewels of Atteridgeville is an initiative that aspires to empower young

artists and to discover creative talent in Atteridgeville and the surrounding

areas. This initiative started with an art competition that involved

11 participating High Schools in Atteridgeville. This evolved into key

partnerships with like-minded organisations who agree that where

there is talent the possibilities are endless.

Associates who partnered with Safari include the HM Pitje Foundation

and the AttSaul Arts and Culture Forum and Undiscovered Canvas.

Undiscovered Canvas supports African creative industries in Europe

and Africa by fi nding opportunities and producing events that showcase

the best of African creativity. Together with our partners, various art

workshops and competitions are launched to expand the horizons of

young artists in our community.

Nomaza Nongqunga Coupez from Undiscovered Canvas, Giggs Kgole,

famous South African artist who resides in France, and Alice Tindall

from Tindall Textiles were guest speakers at our seminar hosted for

70 Atteridgeville artists. They encouraged and motivated these artists

to believe that creative industries have the potential to empower the

economies of countries by creating wealth, creativity and competitiveness.

In partnership with The Idea Collective, Safari initiated a special

performance by Creative Arts for the Youth in Atteridgeville (CAYA) at the

very fi rst Afrika Design Day hosted by the Pan African Design Institute.

CAYA is an Atteridgeville string orchestra funded by two retired teachers.

Here they had the opportunity to meet people from the USA, Canada,

Jordan, Lithuania, Lebanon, Zimbabwe, Nigeria and other countries. of Atteridgeville




SUSTAINABILITY REPORTGenerating positive returns for the Safari

shareholders should be balanced with our

wider obligations to the environment and

society as a whole. Economic prosperity,

social responsibility and environmental

protection go together. Integrating these

three values is fundamental for the healthy

growth of a business and for broad-based

stakeholder value creation over the long

term. While Safari is a relatively small REIT

in the market, we want to be more aware of

these broader impacts and opportunities in

relation to our business activities.

Health, safety and the COVID-19 impactIt has always been a company commitment

that our properties will be safe and

sustainable spaces. With the COVID-19

pandemic having a severe impact on the

world and on businesses around the globe,

Safari continued to prioritise the safety and

well-being of its stakeholders by

introducing strict safety measures and the

World Health Organisation’s recommended

sanitisation measures across all retail

assets and at workplaces. Management is

confi dent that Safari is able to navigate

through the changes and challenges that

this social crisis brings and that the Safari

portfolio has specifi c strengths that support

the company in doing so. In the interest of

all stakeholders that are aff ected by the

crisis, Safari has become part of the

cooperation that now exists between REITs

and property industry bodies such as the

SA REIT Association, the South African

Property Owners Association and the

South African Council of Shopping Centres,

to collectively work together for guidance

and an understanding of the impact of

COVID-19 on our industry’s operations

and to ultimately formulate appropriate

responses and sustainable solutions for all.

Social impactCommunity

Safari’s retail centres stimulate and create

employment in its direct communities but

also provide one-stop destinations of

services and shopping for the community at

large. Community members no longer have

to travel long distances to town for

shopping, banking and entertainment

facilities. Centres off er an extensive range

of national and local brands of fashion, food,

entertainment and banking. This means

more money in the pockets of community

residents, which would otherwise be spent

on transport to alternative nodes. Revamp

phases and expansions are done in

accordance with market demand and what

the community needs. Safari launches its

own innovative CSI projects and campaigns

in cooperation with local schools focused on

the youth and skills development in our

surrounding communities.

EmploymentEach Safari asset grants a large number

of ongoing employment and business

opportunities. Retailers are encouraged to

fi rst consider appointing local residents

when fi lling job vacancies. We also instruct

our service providers, such as cleaning and

security contractors, to employ suitable

candidates from local communities. During

construction or revamp periods, the building

contractor is encouraged to employ local

sub-contractors in order that jobs and skills

are developed through the construction

phases. This has created good relationships

with the community and a positive attitude

and sense of ownership and loyalty towards

the centres from the people of the

community.

Environmental impact Green design During the design and construction phases

of buildings, environmentally sensitive and

eco-effi cient options are considered. Safari

takes great care in selecting materials and

building techniques suitable for the

environment, for example, sulphur-rich mist

in Swakopmund causes aggressive and

corrosive conditions. Innovative installations

were therefore crucial here. Self-adhesive

roof tiles that contain no metal were

imported for the project. Such fi nishes

“With the COVID-19 social crisis having a severe impact on the world and on businesses around the globe, Safari continued to prioritise the safety and well-being of its stakeholders by introducing strict safety measures and the World Health Organisation’s recommended sanitisation measures across all retail assets and at our workplaces.”




enhance the lifespan of the building,

reducing the need for costly maintenance

work and frequent improvements to

fi nishes. The Platz am Meer building was

awarded by the SACSC (International

Shopping Centre Awards) for excellent

design resolution and achieving innovative

construction solutions.

Solar power

Large roofed buildings such as our retail

centres are ideal for photovoltaic electricity

generation. Solar power systems already

operate at most centres and the company

will continue to expand existing systems to

full capacity where feasible.

Natural light and ventilation

Safari properties are designed to make

optimal use of natural light and ventilation

in public areas. Unlike traditional closed

malls which are sealed off from the

environment by air-conditioned corridors,

Safari’s centres breathe through their

naturally ventilated open walkways.

Furthermore, roofs allow natural light to

fi lter through, illuminating walkways during

daytime and saving precious energy by

reducing the centre’s dependence on the

electricity grid.

Broad-based black economic empowerment (“BBBEE”)Considering the peri-urban areas where

Safari assets are located, and being a role

player in the property industry in particular,

opportunities are manifold for the company

to make a diff erence, to empower previously

disadvantaged communities and individuals

and to show our commitment to the

transformation process in South Africa.

The well-being and economic welfare of our

communities are of utmost importance as

their growth and stability underpins our

business’ own stability and sustainability.

The company recognises that integrating

transformation into our business practices

and organisation is crucial for the

sustainability of our entity. We believe that

BBBEE is a component of the broader

transformation necessary for South Africa,

and that the Property Transformation

Charter supports this aim. The social and

ethics committee is responsible for

monitoring progress in complying with the

BBBEE scorecard. Progress is monitored

through a base-line summary of the

application of BBBEE principles and a BBBEE

audit annually. Empowerlogic has been

appointed as the accreditation agent.

SUSTAINABILITY REPORT continued

DENLYN STARS AND ENTREPRENEURIAL NETWORKINGCase study

Denlyn Stars was launched by Safari in 2018

to acknowledge and award persons in the

Mamelodi community who make a diff erence.

Every three to six months, Denlyn starts a new

search for its next Denlyn Star. Members of

the community nominate inspirational fi gures

of any age in the category in which they excel.

Once fi nalists are announced, the community

can vote for their favourite star. The winning

Denlyn Star is awarded with measures of

assistance, guidance and upskilling from

Denlyn Shopping Centre and other partnering

associations in selected areas such as fi nance,

employment, education, training and

networking. Through this initiative, they are

exposed to business advice, to experiences in

the business world, to give motivational talks

in the community, and to attend events where

they can inspire the youth. These experiences

and memories are being created while also

encouraging loyalty and fellowship among

the Denlyn shoppers and businesses.

One such Denlyn Stars initiative was a vibrant

entrepreneurial networking session hosted by

Safari at Denlyn. A number of entrepreneurs

from Mamelodi, together with the latest

Denlyn Star fi nalists, joined the session.

Speakers included the 22-year-old Howard

Zondo, young author, public speaker and

talent-preneur who is an advocate of black

consciousness. He grew up in Mamelodi and is

evidence that struggles, instead of pulling you

down, can be turned into symbols of hope. His

message echoes that hardship can connect

people in their communal goal to seek better

lives. Professionals from Safari Investments

shared business advice with topics on

motivation, branding, social media and

legal aspects in the business world. From

this networking session also came the

establishment of a new entrepreneurial forum

and WhatsApp support group for entrepreneurs

in Mamelodi.

Since its establishment, the forum organised a

wedding expo giving local entrepreneurs the

opportunity to showcase their products at

Denlyn. An Authors Club is now being

established for young upcoming authors

wanting to publish their own books. These

writers will use Denlyn as a platform to

showcase their talent, but will also be giving

back to the community by reading to young

ones on a Saturday morning to encourage love

for books and education.

Safari CEO, Dirk Engelbrecht, with Denlyn Star, Sibongile Rakgatjane, from Mo’s Bakery & Coff ee Bar

Networking between Safari Investments employees and Mamelodi entrepreneurs

Entrepreneurs workshop at Denlyn Shopping Centre




03GOVERNANCE

REVIEW



2020 INTEGRATED ANNUAL REPORT GOVERNANCE REVIEW32

BOARD OF DIRECTORS

(“Dirk”) (34)


(“Willem”) (36)

Executive fi nancial director

(“Kiki”) (65)

Executive operations director

(“Tinus”) (63)

Independent non-executive

chairman – resigned

(“Allan”) (81)

Independent

non-executive chairman

ADRIAAN MARTINUS

SLABBER DIRK CORNELIUS

ENGELBRECHT

WILLEM LINSTROM

VENTER

KYRIACOS

PASHIOU

ALLAN EDWARD

WENTZEL

Tinus, BCom LLB (Stellenbosch), has been a practising attorney for 37 years, but became an occasional practitioner in 2001 due to his own business interests overtaking his ability to commit to full-time law practice. He ended his full-time legal practice at Webber Wentzel’s Cape Town offi ce as a commercial and litigation partner.

Tinus has extensive and ongoing commercial experience as an attorney and as an investor in, inter alia, property development (both in South Africa and overseas), the retirement industry, manufacturing, retail and mining. He has served and still serves as a director of various companies, local and overseas.

He advises an extensive client base with substantial interests in South Africa and overseas on an ongoing basis. As an attorney and adviser, he specialises in matters of confl ict or fi nancial distress. Tinus was appointed independent non-executive director during November 2019, and as chairman of the board in January 2020.

On 21 June 2020, Tinus resigned and Allan was appointed as interim independent non-executive chairman of the board. Shareholders are referred to the SENS announcement dated 22 June 2020.

Dirk obtained his BCom Law and LLB degrees from the University of Pretoria and subsequently completed his articles at Weavind & Weavind Incorporated where he remained as practising attorney focusing on general litigation until 2011. During 2011, he was appointed by G4S Secure Solutions as the national legal adviser tasked with the general legal and statutory duties and governance of one of the largest security fi rms in South Africa. Dirk joined Safari in January 2014 as the group company secretary and legal adviser and was appointed as an executive director in February 2018. On 7 November 2018, Dirk was appointed as chief executive offi cer (“CEO”).

Willem obtained a BCom Accounting and Honours degree at the University of Pretoria in 2006 and completed his articles at Deloitte Pretoria. He qualifi ed as a CA(SA) in 2009. In 2010, Willem joined Safari to oversee the bookkeeping and operational functions of the company and was appointed as the fi nancial director for the Safari group with eff ect from 1 April 2017.

Kiki is the CEO of Pace Construction Proprietary Limited. He has a wealth of experience and knowledge of all facets of the construction industry and has been involved in the construction of shopping centres, high-rise residential apartments, higher educational facilities, light and heavy industrial buildings, commercial buildings, food processing plants, recreational facilities, fi lling stations, hospitals and laboratories.

Large portions of Pace’s developments consisted of apartment blocks for the sectional title market and offi ce blocks for investment purposes. In 1995, he became an integral part of the Safari group and co-developed shopping centres in Gauteng and North West province.

Kiki has served on the Safari board since incorporation and is one of the founding members of Safari Investments.

Allan is a qualifi ed chartered accountant and has acted in various positions in the fi eld of commerce since 1975, at which time he was the chief executive of African Bank Limited, the only black-owned bank in South Africa. He has since practised as a consulting chartered accountant, acting mainly in the non-profi t and BBBEE sectors. Allan is a director of KP Fiduciary Solutions, which specialises in estate planning, administers trusts and executes deceased estates. He is also the chairman of the Uniting Presbyterian Church in Southern Africa pension fund. His achievements include the formation of African Bank Limited, the formation of CDT Foundation NPC and the listing of the fi rst black-owned group on the JSE, formerly known as Kilimanjaro Investments Limited. He was the fi rst lay person to head the United Congregational Church of Southern Africa and was vice chairman of the investment committee of the Council for World Mission in London, with over £100 million under management. Allan was appointed as the lead independent non-executive director of Safari during September 2009 and also chairs various board subcommittees, including the audit and risk committee.

On 21 June 2020, Tinus resigned and Allan was appointed as interim independent non-executive chairman of the board. Shareholders are referred to the SENS announcement dated 22 June 2020.

CommitteeNomination and remuneration

CommitteesStrategy (chairman); management (chairman)

CommitteesStrategy; management

CommitteeStrategy

CommitteesAudit and risk (chairman); nomination and remuneration (chairman); social and ethics (chairman)




(“Mark”) (53)

Independent non-executive director

(“Etienne”) (59)

Independent non-executive director – resigned

(“Faith”) (53)


(“Chris”) (65)


DR MARK

MINNAAR

ETIENNE RHODERIC

SWANEPOEL

FAITH NONDUMISO

KHANYILE

CHRISTOPHER

RUSSELL ROBERTS

Mark qualifi ed as a medical doctor in 1991 and furthered his studies with a postgraduate diploma in anaesthetics in 1994. He obtained his degree as a specialist ophthalmologist in 2001 from the South African Fellowship of Surgeons. Mark joined the Pretoria Eye Institute in 2001 and was elected to the board of the Pretoria Eye Institute in 2005. In 2006, he was part of a team from the CSIR, the Pretoria Eye Institute and the Wits Health Consortium that developed, patented and marketed he EyebornHydroxyapatite orbital implant. In 2007, he was elected as managing director of the Pretoria Eye Institute, a role that he fulfi lled until December 2010. He was the fi nancial director of the Pretoria Eye Institute from 2010 to 2012. Mark was appointed as an independent non-executive director in March 2008.

Etienne holds a BA LLB LLM (Tax) (UCT) and is a practising attorney under the name and style of ER Swanepoel and Associates, with specialities in M&A and corporate law. He was formerly a M&A and corporate law partner at Webber Wentzel. Etienne is an Adjunct Associate Professor, Law Faculty, at the University of Cape Town. Etienne was appointed as independent non-executive director in November 2019.

On 21 June 2020, Etienne resigned as independent non-executive director. Shareholders are referred to the SENS announcement dated 22 June 2020.

Faith is currently the CEO of WDB Investment Holdings. Before assuming this role in late 2013, she worked for Standard Bank in its Corporate and Investment Bank (“CIB”) division for 12 years, the last six years of which she was head of corporate banking. Faith held other senior positions in Standard Bank, including head of trade fi nance and services and was a director in the Structured Debt Finance division. Faith was a member of the CIB executive committee and credit committee. Faith has extensive experience in fi nancial services, private equity, strategy development and leadership. She is also a non-executive director of Discovery Limited, the JSE Limited and Transcend Residential Property Fund. Her academic qualifi cations include a BA (Hons) in Economics (cum laude) from Wheaton College, USA, and a Master’s in Business Administration (MBA)-Finance, from Bentley Graduate School of Business, USA. She also has an HDip Tax from Rand Afrikaans University and completed an Executive Leadership programme at Columbia University (New York) in 2007.

Faith was appointed as an independent non-executive director during August 2015 after WDB Investment Holdings became an institutional shareholder of Safari.

Chris initially served as executive and development director of EG Chapman Group. Under his leadership, the group developed, inter alia, two golf estates and a number of retail and offi ce developments in South Africa. During this time, he was also involved in the creation of Unibank where he served on the board for a number of years. Subsequent to his involvement at the Chapman Group, he became managing director of 5th Avenue Properties in Johannesburg, developing various corporate head offi ces, shopping centres and offi ce parks in Gauteng. He continues to be a shareholder and director of the privately held Cornerstone Property Fund. In his personal capacity, and as part of his family venture, he developed a number of smaller offi ce developments in Pretoria under the name of RPG (Roberts Property Group). Chris is a commercial property developer with extensive experience in identifying development opportunities, property fi nance, leasing and management of property. He was appointed to the Safari board in February 2018 as an independent non-executive director.

CommitteesStrategy; nomination and remuneration; audit and risk

Committees Social and ethics; nomination and remuneration

CommitteesAudit and risk; social and ethics

CommitteeStrategy




BOARD OF DIRECTORS continued

The board and management team

provide eff ective leadership and

supervision based on ethical

imperatives.

This approach is evidenced in the

quality of the properties, the tenants

and the continued demand for excellent

operational management of the Safari

portfolio. The team is represented by a

healthy spread of professionals from

disciplines such as construction,

property development, medical, legal

and fi nancial industries.

The board consists of seven directors,

four of whom are independent non-

executives, and three executives. On

21 November 2019, Mr AM Slabber

and Mr ER Swanepoel were appointed as

independent non-executive directors.

On 31 December 2019, Dr JP Snyman

retired as director and chairman of the

board and Mr AM Slabber was appointed

as the new independent non-executive

chairman.

Mr Slabber and Mr Swanepoel resigned

with eff ect from 21 June 2020. The board

expressed its sincere regret at their

resignations. Both expressed their

willingness to again serve on the board

should they be elected. Mr AE Wentzel has

assumed the chairmanship of the board on

an interim basis, pending appointment of

further directors to the board.

Name, age and

nationality& Qualifi cations Capacity

Directors’

aggregate

indirect and

direct interest

in Safari

31 March 2020

Directors’

aggregate

indirect and

direct interest

in Safari

31 March 2019

Adriaan Martinus

Slabber (63)@

BCom LLB Independent non-executive

chairman

– –

Dirk Cornelius

Engelbrecht (34)

BCom Law (2006), LLB (2009) Chief executive offi cer – –

Willem Linstrom

Venter (36)

CA(SA) (2008) Executive fi nancial director – –

Kyriacos

Pashiou (65)

National Diploma in

Construction Management (1977)

Executive operations director 2,99%* 2,95%*

Faith Nondumiso

Khanyile (53)

BA (Hons) (1991), MBA (1994),

MCom (2000), HDip Tax (2004)


director

4,58%# 4,58%#

Etienne Rhoderic

Swanepoel (59)@

BA LLB LLM (Tax) (UCT) Independent non-executive

director

– –

Dr Mark

Minnaar (53)^

MBChB, DA (SA), FCS (SA) Ophth Independent non-executive

director

0,40%* 0,38%*

Christopher Russell

Roberts (64)

Diploma in Business

Management


director

0,02%* 0,02%*

Allan Edward

Wentzel (81)

CA(SA) (1961) Lead independent

non-executive director

– –

Marthinus Cornelius

Basson (33)

Prescribed offi cer

(non-director)

– –

& All of the directors are South African.

* May include indirect benefi cial interest held through a related party.# Shares held by WDB Investment Holdings, Ms FN Khanyile is the CEO and the shareholding is shown as a non-benefi cial holding.@ Resigned on 21 June 2020.

^ Refer to page 39 dealing in securities.

Save for Dr M Minnaar’s interests (refer to page 39 “dealing in securities”), the interest of the directors and prescribed off ers, as stated

in the table above,have remained unchanged from 31 March 2020 up to the date of publication of this report. All the interests held by

the directors are indirect, save for Dr M Minnaar’s holding, Mr WL Venter and Mr DC Engelbrecht’s holding of the interests in their

personal capacity.

Safari is driven by a board of business professionals with a passion for excellence and a preference for a hands-on

management approach.




Directors’ transparency and remuneration reportThe remuneration of the board for the fi nancial periods ended 31 March 2019 and 2020 is set

out in the table below:

Directors’ fees* Committee fees Consulting Total

Name

2020

R

2019

R

2020

R

2019

R

2020

R

2019

R

2020

R

2019

R

Exec

utiv

e di

rect

ors WL Venter# 2 259 390 1 850 000 – – – – 2 259 390 1 850 000

K Pashiou 350 000 187 000 40 500 121 500 85 000 142 000 475 500 450 500

DC Engelbrecht# 2 379 390 1 850 000 – – – – 2 379 390 1 850 000

Non-

exec

utiv

e di

rect

ors

AM Slabber^ 83 402 – – – 670 000 – 753 402 –

FJJ Marais^ – 274 500 – 147 000 – 210 000 – 631 500

Dr JP Snyman^ 450 000 237 000 40 500 207 000 – 27 000 490 500 471 000

CR Roberts 325 000 187 000 202 500 81 000 337 500 63500 865 000 331 500

LL Letlape^ 202 664 181 000 27 000 67 500 – 27 000 229 664 275 500

FN Khanyile@ 300 000 187 000 128 250 148 500 5 000 13 500 433 250 349 000

Dr M Minnaar 350 000 187 000 243 000 256 500 – 27 000 593 000 470 500

ER Swanepoel^ 58 402 – 13 500 – 903 098 – 975 000 –

AE Wentzel 350 000 187 000 285 000 240 000 21 527 30 000 656 527 457 000

Total 7 108 248 5 327 500 980 250 1 269 000 2 022 125 540 000 10 110 623 7 136 500

* There are no benefi ts such as medical or pension benefi ts.# Remuneration is a fi xed annual salary plus performance bonus in terms of employment agreements. @ Invoiced by WDB Investment Holdings.

^ Resigned.

No payments are proposed to be made, either directly or indirectly, in cash or securities or

otherwise, to the directors in respect of expense allowances, benefi ts, pension contributions,

management, consulting or technical fees.

No monies have been paid or have been agreed to be paid, within the three years preceding

the last practicable date, to any director or to any group in which he/she is benefi cially

interested, directly or indirectly, or of which he/she is a director, or to any partnership,

syndicate or other association of which he/she is a member, in cash or securities or

otherwise, by any person either to induce him/her to become or to qualify him/her as

a director.

Gender14% female

86% male

Board

size

4 non-executives

3 executive directors

Race14% African

86% white

Average

tenure 5,2 years

Average

age

28,6% 30 to 40 years

0% 41 to 50 years

28,6% 51 to 60 years

28,6% 61 to 70 years

0% 71 to 80 years

14,2% 81 to 90 years

Directors’ tenure as at 31 March 2020

Exec

utiv

e di

rect

ors DC Engelbrecht

K Pashiou

WL Venter

Non-

exec

utiv

e di

rect

ors

Dr M Minnaar

AE Wentzel

FN Khanyile

CR Roberts

AM Slabber

ER Swanepoel

0 1 2 3 4 5 6 7 8 9 10 11 12




BOARDCHARTER

Corporate governance statementSafari is fully committed to applying each and every recommendation contained in the

King IV Report on Corporate Governance for South Africa 2016 (“King IV”), the Companies

Act, the Financial Markets Act and the JSE Listings Requirements. Full details of the

company’s application of the principles of corporate governance can be found at

www.safari-investments.com/the-company/corporate-governance.

Safari has operated as a public company since 2010 and listed on the Johannesburg Stock

Exchange in April 2014 under the REIT section. The board endeavours to maintain the highest

level of corporate governance and, as such, the principles set out in King IV are applied. The full

details on the application of the King IV principles are set out on pages 47 to 51.

The board is collectively responsible to the stakeholders for the long-term success of the

group and for the overall strategic direction and control of the company. This responsibility is

explicitly assigned to the board in its charter and, to some extent, in the company’s

memorandum of incorporation.

The directors have, accordingly, established mechanisms and policies appropriate to the

company’s business, according to its commitment to best practices in corporate governance,

in order to ensure the application of King IV principles. The board reviews these mechanisms

and policies from time to time.

Summary of the board charter

The main functions of the board, as set out in the board charter, are:

◗ determining the group’s purpose and values, identifying its stakeholders and developing

strategies in relation thereto;

◗ being the focal point for and custodian of

good corporate governance by managing

the board’s relationship with management,

the shareholders and other stakeholders

of Safari;

◗ providing strategic direction and

leadership that is aligned with the

group’s value system by reviewing and

approving budgets, plans and strategies

for Safari and monitoring the

implementation of such strategic plans

and approving the funding for such plans;

◗ ensuring that Safari’s business is

conducted ethically and monitoring the

ethical performance of Safari;

◗ approving business plans, budgets and

strategies that are aimed at achieving

Safari’s long-term strategy and vision;

◗ annually reviewing the board’s work plan;

◗ ensuring the sustainability of Safari’s

business;

◗ reporting in Safari’s integrated annual

report on the going concern status of Safari

and whether Safari will continue to be a

going concern in the next fi nancial year;

Executive directors Non-executive directors

SAFARI BOARD

AE WENTZEL

Independent non-

executive chairman

WL VENTER

Financial director

K PASHIOU

Operations director

DC ENGELBRECHT


DR M MINNAAR

Independent

CR ROBERTS

Independent

FN KHANYILE

Independent




◗ determining, implementing and

monitoring policies, procedures, practices

and systems to ensure the integrity of

risk management and internal controls in

order to protect Safari’s assets and

reputation;

◗ identifying and monitoring key

performance indicators of Safari’s

business and evaluating the integrity of

the systems used to determine and

monitor such performance;

◗ monitoring and ensuring application of

the group’s policies, codes of best

business practice, the recommendations

of King IV and all applicable laws and

regulations;

◗ adopting and annually reviewing the

information technology governance

framework and receiving independent

assurance on such framework;

◗ considering, through the audit and risk

committee, specifi c limits for the levels of

risk tolerance;

◗ defi ning levels of materiality, thereby

reserving certain powers for itself and

delegating other matters to management

of the group;

◗ ensuring that the consolidated annual

fi nancial statements are prepared and

are laid before a duly convened annual

general meeting of the group;

◗ ensuring that a communications policy is

established, implemented and reviewed

annually and, in addition to its statutory

and regulatory reporting requirements,

that such policy contains accepted

principles of accurate and reliable

reporting, including being open,

transparent, honest, understandable,

clear and consistent in Safari’s

communications with stakeholders;

◗ considering recommendations made to

the board by the nomination and

remuneration committee with regard to

the nomination of new directors and the

re-appointment of retiring directors, both

as executive directors and non-executive

directors;

◗ ensuring that the competency and other

attributes of the directors are suitable for

their appointment as directors and the

roles that they are intended to perform

on the board, and that they are not

disqualifi ed in any way from being

appointed as directors;

◗ ensuring that appointments to the board

are formal and transparent and comply

with all prescribed procedures;

◗ ensuring that a succession plan for the

executive directors and senior

management is implemented;

◗ ensuring the appointment and removal of

the group company secretary;

◗ reviewing the competence, qualifi cations

and experience of the group company

secretary annually; and

◗ selecting and appointing suitable

candidates as members of committees of

the board and the chairman of such

committees.

Composition of the board

The board comprises seven directors, of

which three are executive directors, and

four are independent non-executives.

Chairman

The roles of the chairman and CEO

are separate. On 31 December 2019,

Dr JP Snyman resigned as director of Safari,

and Mr AM Slabber was appointed as

independent non-executive chairman.

Mr Slabber resigned with eff ect from

21 June 2020 and Mr AE Wentzel was

appointed as independent non-executive

chairman of the board on an interim basis,

pending appointment of further directors to

the board.

Chief executive officer

The board has established a framework for

delegation of authority and ensured that the

role and function of the CEO have been

formalised and that the CEO’s performance

is evaluated against specifi ed criteria on

an annual basis. On 7 November 2018,

Mr DC Engelbrecht was appointed as the

CEO of Safari.

Balance of power

The group’s executive directors are involved

in the day-to-day business activities of the

group and are responsible for ensuring that

the decisions of the board of directors are

implemented in accordance with the

mandates given by the board.

The board has ensured that there is an

appropriate balance of power and authority

at board level, such that no one individual or

block of individuals dominates the board’s

decision-making. The non-executive

directors are individuals of calibre and

credibility and have the necessary skills and

experience to bring independent judgement

on issues of strategy, performance,

resources, and standards of conduct and

evaluation of performance.

Code of ethics

The board is responsible for the strategic

direction of the group. It sets the values that

the group adheres to and has adopted a

code of ethics which is applied throughout

the group.

The current board’s diversity of professional

expertise and demographics makes it highly

eff ective with regard to Safari’s current

strategies. The board shall ensure that, in

appointing successive board members, the

board as a whole will continue to refl ect,

whenever possible, a diverse set of

professional and personal backgrounds.

Information and other

professional advice

The board has performed an annual

review of its members’ information needs

and directors have unrestricted access to

all group information, records, documents

and property to enable them to discharge

their responsibilities effi ciently. Eff ective

and timely methods of informing and

briefi ng board members prior to board

meetings were established. In this regard,

steps have been taken to identify and

monitor key risk areas, key performance

areas and non-fi nancial aspects relevant to

Safari. In this context, the directors are

continually provided with information in

respect of key performance indicators,

variance reports and industry trends.

The board established, through the group

company secretary, a formal induction

programme to familiarise incoming

directors with the group’s operations,

senior management and its business

environment, and to induct them in their

fi duciary duties and responsibilities. The

directors receive further briefi ngs from time

to time on relevant new laws and

regulations, as well as on changing

economic risks.




BOARD CHARTER continued

The directors ensure that they have a

working understanding of applicable laws.

The board has ensured that the group

complies with applicable laws and considers

adherence to non-binding industry rules and

codes and standards. In deciding whether or

not non-binding rules should be complied

with, the board factors in the appropriate

and ethical considerations that must be

taken into account. New directors with

limited or no board experience will receive

appropriate training to inform them of their

duties, responsibilities, powers and potential

liabilities.

The board has established a procedure for

directors, in furtherance of their duties, to

take independent professional advice, if

necessary, at the group’s expense. All

directors have access to the advice and

services of the group company secretary.

Board evaluationThe board will disclose details in its

directors’ report on how it has discharged

its responsibilities to establish an eff ective

compliance framework and process.

The board, as a whole, was assessed on its

overall performance in order to identify

areas for improvement in the discharge of

functions of individual directors and the

board. This review was undertaken by the

nomination and remuneration committee

and group company secretary.

Board meetingsDuring the fi nancial year, the board held

four formal board meetings, at which an

attendance record of 100% was achieved

(refer to table above) as well as six special

board meetings (refer to table below). The

board set the strategic objectives of the

group and determined investment and

performance criteria. Furthermore, the

board eff ectively managed the

sustainability, property management,

Attendance of special board meetings

Director

Special board

21 May

2019

Special board

31 May

2019

Special board

7 August

2019

Special board

20 September

2019

Special board

14 October

2019

Special board

19 February

2020

Annual strategy

session 6 March

2020

AM Slabber ~ ~ ~ ~ ~ √ √

Dr JP Snyman √ √ √ √ √ + –

FJJ Marais √ + + + + + +

WL Venter √ √ √ √ √ √ √

K Pashiou √ √ √ √ √ √ √

DC Engelbrecht √ √ √ √ √ √ √

FN Khanyile √ √ √ + √ √ √

LL Letlape √ √ √ √ + + +

Dr M Minnaar √ √ √ √ √ √ √

CR Roberts √ √ √ √ x √ √

AE Wentzel √ √ √ √ √ √ √

ER Swanepoel ~ ~ ~ ~ ~ √ √

Attendance 100% 100% 100% 89% 78% 100% 100%

√ = Attended ~ = Not a member yet + = Resigned x = Absent

Attendance of board meetings

Director

3 April

2019

19 June

2019

4 September

2019

13 November

2019

AM Slabber √ √ √ √

Dr JP Snyman √ √ √ √

FJJ Marais √ + + +

WL Venter √ √ √ √

K Pashiou √ √ √ √

DC Engelbrecht √ √ √ √

FN Khanyile √ √ √ √

LL Letlape √ √ √ √

Dr M Minnaar √ √ √ √

CR Roberts √ √ √ √

AE Wentzel √ √ √ √

ER Swanepoel ~ ~ ~ ~

Attendance 100% 100% 100% 100%

√ = Attended ~ = Not a member yet + = Resigned

control, compliance and ethical behaviour

of the businesses under its direction.

The board has established a number of

committees in order to give detailed

attention to certain of its responsibilities.

These committees operate within defi ned,

written terms of reference. During March

2020, the board also held its annual

strategic planning session at which the

medium- and long-term strategy of Safari

was reviewed and confi rmed.




The board has developed a charter setting

out its responsibilities for the adoption of

strategic plans, monitoring of operational

performance and management,

determination of policy and processes to

ensure the integrity of the group’s risk

management and internal controls,

communication policy and director

selection, orientation and evaluation.

Directors’ declarations and

conflicts of interestThe board determined a policy for detailing

the manner in which a director’s interest in

a transaction must be determined and the

interested director’s involvement in the

decision-making process. Real or perceived

confl icts in the board are managed in

accordance with the predetermined policy

used to assess a director’s interest in

transactions.

Dealing in securities

Directors, executives and senior employees

are prohibited from dealing in Safari

securities during certain prescribed

restricted periods. A formal securities-

dealings policy has been developed to

ensure directors’ and employees’

compliance with the JSE Listings

Requirements and the insider trading

legislation in terms of the Financial

Markets Act.

Relating to Dr Mark Minnaar’s aggregate

indirect and direct interest in Safari as at

31 March 2019 and 31 Mach 2020: During

February 2020, the entities in which

Dr Minnaar held an indirect benefi cial

interest in Safari commenced an unbundling

process, whereby Dr Minnaar’s indirect

shareholding was transferred into his

personal name (direct holding). None of

these entities as per the JSE Listing

Requirements are associates of Dr Minnaar.

Although Dr Minnaar’s allocated shares

within these structures have not changed

since March 2016, his eff ective shareholding

in Safari has increased slightly as a result of

changes in the capital structures of the

entities. The change in shareholding held by

Dr Minnaar was as a result of the unbundling

of these entities and not due to dealing in

Safari shares by Dr Minnaar.

Procedures for board

appointmentsThe board has detailed the procedures for

new appointments to the board. Such

appointments are to be formal and

transparent and a matter for the board as a

whole, assisted, where appropriate, by the

nomination and remuneration committee.

The development and implementation of

nomination policies will be undertaken by

the nomination and remuneration

committee and the board as a whole,

respectively.

Rotation of directorsNo director shall be appointed for life or for

an indefi nite period. The directors shall

rotate in accordance with the following

provisions:

◗ At each annual general meeting,

one-third of the non-executive directors

for the time being shall retire from offi ce,

by rotation, provided only that if a director

is an executive or the CEO, or an

employee of the group in any other

capacity, he/she shall not, while he/she

continues to hold that position or offi ce,

be subject to retirement by rotation, and

he/she shall not, in such case, be taken

into account in determining the rotation

or retirement of directors; and

◗ The appointment of executive directors

shall be terminable in terms of board

resolutions.

Group company secretaryA suitably, qualifi ed and competent group

company secretary is appointed and was

appropriately empowered to fulfi l his duties

with regard to assistance to the board. His

name, business address and qualifi cations

are set out in the “corporate information”

section.

The group company secretary assists the

nomination and remuneration committee in

the appointment, induction and training of

directors. He provides guidance to the board

of directors with reference to their duties

and good governance and ensures that the

board and board committee charters are

kept up to date. The group company

secretary prepares and circulates board

papers and assists with obtaining

responses, input and feedback for board

and board committee meetings.

Assistance is also provided with regard to

the preparation and fi nalisation of board

and board committee agendas based on

annual work plan requirements.

The group company secretary ensures that

the minutes of board meetings and board

committee meetings are prepared and

circulated and also assists with the annual

evaluations of the board, board committees

and individual directors. The group

company secretary reports directly to the

chairman.

The board of directors considered and

satisfi ed itself on the competence,

qualifi cations and experience of the group

company secretary. The group company

secretary eff ectively enhances his abilities

as gatekeeper of good corporate

governance through regularly attending

skills development programmes.

Pieter Wynand Le Roux van

Niekerk, LLB (UP) (“Pieter”)Pieter obtained his LLB degree from the

University of Pretoria and subsequently

completed his articles at Le Roux van

Niekerk Attorneys where he remained as

practising attorney focusing on general

litigation, property law and conveyancing.

He is admitted as a conveyancer and notary

of the High Court. Pieter joined Safari during

May 2017 as legal adviser and property

development manager assisting with the

legal aspects and requirements of

greenfi eld projects, from implementation

through to fruition. On 14 November 2018,

Pieter was appointed as the group company

secretary and legal counsel of Safari

dealing with all statutory compliance and

corporate governance aspects for the

group.

+27 (0) 12 365 1889

[email protected]




BOARD COMMITTEES

Members

31 May

2019

16 August

2019

4 October

2019

14 November

2019

7 February

2020

WL Venter √ √ √ √ √

K Pashiou √ √ √ x x

DC Engelbrecht √ √ √ √ √

CR Roberts √ √ √ √ √

Dr M Minnaar √ √ √ √ √

Attendance 100% 100% 100% 80% 80%

√ = Attended x = Absent

STRATEGY COMMITTEE

The strategy committee is chaired by

Safari’s CEO, Mr DC Engelbrecht, and

comprises all the executive directors and

two non-executive directors. Members of

senior management may attend meetings

on invitation.

The committee deliberated, decided and

made recommendations on all matters of

strategy and operations within its mandate

as set by the board, and from time to time,

the decisions or recommendations were

referred to the board for fi nal approval. The

committee is currently working on plans to

redevelop The Victorian Shopping Centre in

Heidelberg which will be subject to board

approval.

The committee has overseen the group’s

strategy of investment which is focused on:

◗ areas of high growth selected for all

investment properties; and

◗ properties with redevelopment and

turnaround potential.

The duties of the strategy committee may

include, but are not limited to:

◗ the prioritisation and allocation of

investment and resources in terms of the

company strategy;

◗ managing mitigating controls and

overseeing the risk profi le of Safari

together with the audit and risk

committee;

◗ monitoring of operational and fi nancial

performance as reported by the

management committee;

◗ considering recommendations from

management for acquisitions, capital

expenditure or disposals;

◗ authorising and approving such

transactions and capital expenditure

within its approval mandate;

◗ making recommendations to the board

for approval regarding transactions and

capital expenditure outside its approval

mandate;

◗ ensuring and overseeing the

development and implementation of

business plans, policies, procedures and

strategy for growth by the management

committee;


investment and resources within its

mandate; and

◗ the development and implementation of

Safari’s investment policy and, more

specifi cally:

– presenting Safari’s investment policy

and corporate strategy to the board

annually for approval;

– considering economic and business

conditions aff ecting Safari, and

reviewing and adapting the policy

accordingly;

– ensuring that Safari’s investment

activities comply with policy and

applicable legislation; and

– approving internal processes relating

to investment transactions, including

all documentation required to be

completed and maintenance of

records.




New investmentsThe following new investments were approved by Safari’s board during the 2020 fi nancial year on recommendation by the strategy

committee:

Project Project status

Budget

approved

R Information

Engen fi lling station,

Nkomo Village

Shopping Centre

Completed 13 793 000 The Engen fi lling station at Nkomo Village Shopping Centre started streaming

in November 2019 and had a signifi cant positive impact on trading at the

centre.

Atlyn

Shopping Centre

Completed 1 028 347 Edgars vacated and the space was reconfi gured into four value fashion

tenants including Power fashion, Studio 88, Jam Clothing and Outlook. All four

new tenants are trading well.

Denlyn

Shopping Centre

Completed 10 982 400 Jet at Denlyn was downsized to incorporate Woolworths, which opened for

trade in July 2019.

Thornhill

Shopping Centre

Completed 5 653 534 The 652kWh peak solar installation at Thornhill Shopping Centre was

completed in December 2019. This resulted in signifi cant cost savings in

terms of electricity.

The Victorian redevelopment

The Victorian Shopping Centre has been

trading with great success for more than

20 years and is being prepared for a

refurbishment and redevelopment. The

centre is at the heart of the Heidelberg town

and anchored by a well performing Pick n

Pay, Clicks and Dis-Chem. The project is

currently in the leasing phase with

Dis-Chem to be expanded from 400m2 to

approximately 800m2 while West Pack and

Petzone also show good interest. The

reconfi guration and tenanting of the ground

fl oor would be phase one with a possible

phase two being the addition of a family-

oriented food court including restaurants

like Panarottis, Ocean Basket and

Cappuccinos. The relaunch is currently

planned for September 2021 although some

new key tenants might trade earlier. The

project value for the two phases is

estimated at approximately R60 million.

Proposed new Nkomo Day Hospital

Safari was presented with the opportunity

of adding a day hospital to its recently

completed Nkomo Village Shopping Centre

located in Atteridgeville. This is in line with

Safari’s view to strengthen our nodes with

combined service off erings in instances

where demand from communities is clear.

The operator of the new facility would be

Epione who will be leasing the purpose-

built premises from Safari. The indicative

project value is around R27 million and its

feasibility is currently being considered.

Tenant upgrades

Safari completed some signifi cant tenant

upgrades during the past 12 months. The

Edgars space at Atlyn Shopping Centre was

converted to four smaller tenants including

Studio 88, Jam Clothing, Power Fashion and

Outlook. The Food Lover’s Market at

Thornhill was revamped and expanded to

1 500m2. These projects had the desired

positive impact with an increase in trading

conditions at the centres. The next possible

upgrade would include the replacement of

Edgars at Denlyn as the centre needs a

second anchor due to sometimes

overtraded conditions evident during peak

times and the recently added competition in

the node. Furthermore the addition of a

second anchor will add a convenience

factor by better utilising the parking on the

western side. Depending on the required

board approval, and the practicalities

surrounding construction during COVID-19,

it is possible to have the new tenants

trading before year-end 2021.




BOARD COMMITTEES continued

For future investments

Name Location

Cost at

acquisition

R

Market

value

R

Size

m2 Ownership

Sebokeng Erf 77666 Moshoeshoe Street, Sebokeng 4 050 000 1 916 000 5 502 Freehold

Lynnwood Erf 582, 1064, 585 and

remaining extent of Erf 586

Corner of Lynnwood and Roderick

Streets, Lynnwood, Pretoria

40 795 000 36 500 000 13 133 Freehold

Nkomo Village remaining bulk 49 Tlou Street, Atteridgeville 17 487 000 23 102 –

Swakopmund Corner of Albatros and Tsavorite

Streets, Swakopmund, Namibia

31 762 000 8 500 Freehold

The strategy committee conducted fi ve meetings, with 92% attendance by the committee members.

The committee satisfi ed itself that Safari delivered on the group’s strategy in recent years of upgrading and redeveloping its existing

properties. The committee is also satisfi ed that the quality of the investment portfolio was improved, with most centres currently having

above-market average trading densities.

On behalf of the strategy committee

DC Engelbrecht

Chairman: strategy committee

Pretoria

10 July 2020

STRATEGY COMMITTEE continued




MANAGEMENT COMMITTEE

The management committee is chaired by Safari’s CEO, Mr DC Engelbrecht, and comprises

two executive directors together with members of senior management. The management

committee convenes on a regular basis and reports to the various board subcommittees on

the day-to-day operations of Safari.

The committee satisfi ed itself that it has maintained the high integrity standards of Safari’s

operations and optimised all business resources. Safari has delivered on the group’s

strategy in recent years and is satisfi ed that the quality of the investment portfolio was

improved, with most centres currently having above-market average trading densities.

The committee conducted fi ve meetings and maintained 100% attendance by the committee

members.

On behalf of the management committee

DC Engelbrecht

Chairman: management committee

Pretoria

10 July 2020

Members

29 May

2019

31 July

2019

30 October

2019

29 January

2020

26 February

2020

DC Engelbrecht √ √ √ √ √

WL Venter √ √ √ √ √

PWL van Niekerk √ √ √ √ √

M Basson √ √ √ √ √

F Joubert √ √ √ √ √

Attendance 100% 100% 100% 100% 100%

√ = Attended

◗ implementation and execution of

Safari’s strategy, business plans,

policies and procedures as approved

by the board;

◗ sourcing and presentation of new

business opportunities and attending

to the due diligence processes of new

investment opportunities as approved

by the strategy committee;

◗ managing the approved day-to-day

operational budget in terms of the

delegation of authority;

◗ the development and implementation

of business plans, policies,

procedures, strategy for growth and

budgets as delegated and approved

by the board of directors;

◗ the monitoring of operational and

fi nancial performance; and


investment and resources within its

mandate.

The duties of the committee include:





NOMINATION AND REMUNERATION COMMITTEE

Members

31 May

2019

25 October

2019

6 March

2020

AE Wentzel √ √ √

Dr JP Snyman √ √ +

Dr M Minnaar √ √ √

LL Letlape √ x +

CR Roberts - - ^

Attendance 100% 75% 100%

√ = Attended X = Absent + = Resigned ^ = Co-opted/by invitation

The duties of the committee include:

◗ reviewing the group’s board structure, including the size and composition of the board;

◗ succession planning for board members and key management personnel; and

◗ making recommendations in respect of these matters as well as an appropriate split

between executive and non-executive directors and independent directors.

The nomination and remuneration committee duties in 2019/20

The nomination and remuneration

committee currently comprises

Mr AE Wentzel as chairman of the

committee together with two additional

board members, all of whom are


The CEO and other executive directors

may attend meetings of the committee

by invitation, but do not participate in

discussions regarding their own

remuneration and benefi ts.

Report by the nomination and remuneration committeeThe committee assists in identifying

and nominating new directors for approval

by the board. It considers and approves

the classifi cation of directors as

independent non-executives, oversees

induction and training of directors and

conducts annual performance reviews of

the board and various board committees in

conjunction with the group company

secretary.

The committee, with the assistance of the

group company secretary and under the

direction of the chairman of the committee,

conducted the annual board assessment.

This assessment was reviewed and

processed, and formal feedback was

conveyed to the board.

The committee has the responsibility to

consider and make recommendations to the

board on, inter alia, remuneration policy of

the group, payment of performance

bonuses, executive remuneration, and

short-, medium- and long-term incentive

schemes and employee retention schemes.

External market surveys and benchmarks

were used to determine executive directors’

remuneration and benefi ts, to the extent

paid by Safari, as well as non-executive

directors’ base fees and attendance fees.

Safari’s remuneration philosophy is to

structure packages in such a way that

long- and short-term incentives are aimed

at achieving business objectives and the

delivery of shareholder value.

During this fi nancial year, the committee

was instructed to recommend to the

board shortlisted candidates for two

vacancies. As a result, Mr AM Slabber and

Mr ER Swanepoel, were appointed by the

board subject to shareholder ratifi cation at

the next annual general meeting of the

company. Mr Slabber and Mr Swanepoel

resigned with eff ect from 21 June 2020.

Both Safari’s remuneration policy and its

implementation report will be presented to

shareholders for separate non-binding

advisory votes thereon at the next annual

general meeting. In the event that 25% or

more of shareholders vote against either

the remuneration policy or the

implementation report at the meeting,

Safari will engage with shareholders

through dialogue, requesting written

submissions or otherwise, in order to

address shareholder concerns. Safari’s

stated business objectives are fair and

responsible toward both employees and

shareholders. During this fi nancial year,

the board approved an employee pension

benefi t scheme, whereby the company

partially contributes to the pensions of the

employees of Safari. This will further

incentivise employees.


conducted three meetings with 90%

attendance by the members.

On behalf of the nomination and

remuneration committee

AE Wentzel

Chairman: nomination and remuneration

committee

Pretoria

10 July 2020




SOCIAL AND ETHICS COMMITTEE

Members

31 May

2019

25 October

2019

6 March

2020

AE Wentzel √ √ √

LL Letlape √ + +

FN Khanyile √ √ √

ER Swanepoel – – ^

Dr JP Snyman – ^ +

Attendance 100% 100% 100%

√ = Attended + = Resigned ^ = Co-opted/by invitation

The social and ethics committee currently

comprises Mr AE Wentzel as chairman of the

committee, together with two additional

board members, all of whom are


Report of the social and ethics committeeThe social and ethics committee monitors

the group’s activities with regard to any

relevant legislation, other legal

requirements and prevailing codes of best

practice, in respect of social and economic

development, good corporate citizenship

(including the promotion of equality,

prevention of unfair discrimination, care for

the environment, health and public safety,

including the impact of the group’s activities

and of its products or services), consumer

relations and labour and employment

issues. The committee ensures that the

group carries out its business in an ethical

and socially responsible manner to the

benefi t of the community and the

environment in which Safari operates.

The board of Safari emphasised its focus on

the social upliftment of its communities,

more specifi cally sustainable programmes

to enhance education for the youth. Over

the years, we have built long-standing

relationships with the communities who

have adopted the centres as a critical part

of their society.

The committee is dedicated to ensuring that

the business operations of Safari not only

improve the quality of life of the people in

the vicinity of its shopping centres by

creating employment opportunities and

easy access to a fi rst-class shopping

experience, but also consider areas of need

where Safari is in a position to assist and

upskill the local community.

Safari’s board approves an annual budget

for donations and the committee ensures

that it is spent on worthy causes where it

will be applied to the benefi t of the

community in which Safari owns

shopping centres.

Examples of assistance or contributions in

the 2020 fi nancial year:

◗ Education is our Future – This is an

intervention company that assists

teachers and learners at Umthombo

Primary in our Mamelodi community

with Literacy, Maths and other valuable

learning programmes. Safari also

contributes to upgrading the school’s

library and training the librarian.

◗ Denlyn Star initiative – An ongoing

Safari initiative that focuses on

entrepreneurial development and young

achievers in the Mamelodi community in

support of skills development for the youth.

◗ Denlyn Little Star initiative – An ongoing

Safari initiative that creates and

encourages a love for the written word

and supports future authors within the

Mamelodi community.

◗ Jewels of Atteridgeville – An ongoing

Safari initiative that aspires to empower

young artists and to seek fresh creative

talent in our Atteridgeville community

and surrounding areas. Projects include

art competitions and workshops,

roadtrips and sponsoring various arts

and cultural projects in Atteridgeville.

◗ Tshepong Care Centre – In support of

this orphanage in our Sebokeng

community, we collaborated with our

Thabong tenants and residents in the

area to assist with basic food necessities

and help with structural and electrical

construction work needed at the centre.

◗ Mpho’s Dream Centre – A child

healthcare centre in our Mamelodi

community where Safari provides regular

assistance, support and donations.

During the COVID-19 lockdown, Safari inter

alia contributed in the fi ght to contain the

spread of the virus in the following ways:

◗ Distributed 257,5l of sanitiser;

◗ Distributed 14 000 gloves and 3 469

masks; and

◗ Used 2 200 metres of tape and 160 vinyl

stickers to promote social distancing.

The committee monitors the company’s

business practices and ensures that




operations are carried out in an ethical and

environmentally friendly and socially

responsible manner.

There is zero tolerance for corruption and a

whistle-blowing policy is in place. During

this fi nancial year, a survey was conducted

to assess the ethical leadership in Safari,

and said results were presented to the

board.

The policy on race, gender, culture,

age, fi eld of knowledge, skills and

diversifi cation is reviewed annually and

formal recommendations or amendments

are made if necessary. The company

is therefore always mindful of

transformation targets and the social and

ethics committee is responsible for

monitoring progress in complying with the

BBBEE scorecard. Furthermore, the

necessary employment equity committee is

established which reports to the social and

ethics committee.


conducted three meetings with 100%

attendance by the members.

The committee confi rms that it has

fulfi lled its mandate as prescribed by

the regulations of the Companies Act and

there are no instances of material

non-compliance to disclose.

The committee will continue to report to the

board on its activities and fi ndings.

AE Wentzel

Chairman: social and ethics committee

Pretoria

10 July 2020


SOCIAL AND ETHICS COMMITTEE continued

POSITIVE CHANGE IN OUR LOCAL COMMUNITIESCase study

At Safari, we are passionate about positive

change in our local communities. From

experience, we know that the local property

industry carries with it a wealth of platforms

and opportunities where landlords can get

involved, open doors, take hands, shift

boundaries and stimulate change for the

better of communities and society as a whole.

“Improvement” is a core value of Safari and

we are proud to give a voice to this value

through our corporate social actions as we

strive to make a diff erence for the better. Our

initiatives at Safari are particularly centred

around education and the social upliftment of

our local communities as we draw young

entrepreneurs and small businesses to

benefi t from skills development and

networking opportunities.

Safari Investments at Mpho’s Dream Centre on Mandela Day

AttSaul arts and culture forum’s Pheli festival for the Atteridgeville community

A community cemetery clean-up day




APPLICATION OF THE KING IV REPORT ON CORPORATE GOVERNANCE FOR SOUTH AFRICASafari Investments RSA Limited (“Safari” or

“the company”) is committed to the highest

standards of ethics and corporate

governance. Being listed on the

Johannesburg Stock Exchange operated by

the JSE Limited (“JSE”), the company

complies with the principles of King IV and

the mandatory corporate governance

requirements of the JSE Listings

Requirements.

The Companies Act places certain duties on

directors and determines that they should

apply the necessary care, skill and diligence

in fulfi lling their duties. To ensure that this

is achieved, the board applies best practice

principles as contained in King IV.

Paragraph 8.63 (a)(i) of the JSE Listings

Requirements stipulates that issuers are

required to disclose the implementation of

King IV through the application of the King

IV disclosure and application regime. For

the period ended 31 March 2020, Safari

applied all the principles of King IV as

disclosed below.

King IV advocates an outcome-based

approach and defi nes corporate governance

as the exercise of ethical and eff ective

leadership towards the achievement of four

governance outcomes. The desired

outcomes are listed below, together with

the practice implemented and progress

made towards achieving the 17 principles

in meeting the outcomes.

Governance outcome one: Ethical culturePrinciple 1

Leadership: The board should lead

ethically and effectively

The Safari board of directors (“the board”) is

the governing body and is committed to the

good corporate governance principles as

set out in King IV. Safari’s values of quality,

integrity, improvement and innovation guide

the behaviour on how the board must

discharge its duties and responsibilities.

The directors hold one another accountable

for decision-making. Board members are

under a legal duty to prevent confl icts of

interest with the company and are obliged

to make full disclosure of any areas of

confl ict prior to any consideration or

discussion by the board of such matters,

and may not take part in any discussion and

must recuse themselves from voting on

such matters.

The chairman is tasked to monitor this as

part of his duties and the annual board

assessment is managed by the nomination

and remuneration committee for and on

behalf of the chairman. The board will make

ongoing assessments to ensure that the

ethical characteristics demonstrated by the

individual directors are continued.

In order to ensure eff ective appointments of

board members, committee members and

executives are proposed by the nomination

and remuneration committee to enhance

the appropriate mix of skills and

independence of thought. New board

members appointed from time to time are

given a detailed and appropriate induction

into the business and aff airs of the group.

The board has adopted a stakeholder-

inclusive approach in the execution of their

governance role and responsibilities.

Principle 2

Organisational ethics: The board

should govern the ethics of the

organisation in a way that supports

the establishment of an ethical culture

The board determines and sets the tone for

Safari’s values and the requirements of

being a responsible corporate citizen. The

board has a fi duciary duty to act in good

faith, with due care and diligence and in the

best interest of all stakeholders. While

control of the day-to-day management is

delegated to management, the board

retains full and eff ective control over the

group. The responsibility for monitoring the

overall responsible corporate citizenship

performance of the organisation was

delegated to the social and ethics

committee by the board.

A whistle-blowing policy has been

implemented where employees can report

any unethical practice or fraud

anonymously and free from victimisation.

The whistle-blowing policy and reviewed

code of ethics are part of a variety of

initiatives that are in place to create

awareness of ethical conduct requirements.

Safari’s code of ethics (“the code”), as

adopted by the board, guides the ethical

behaviour of all Safari employees and

directors to ensure that Safari maintains

the highest level of integrity and ethical

conduct and, among others, regulates

aspects of confi dentiality, non-

discrimination, bribes and political

contributions. The code deals with duties of

care and skill as well as those of good faith,

including honesty, integrity and the need to

always act in the best interest of the

company. The code is published on the

company’s website and incorporated as an

addendum in employee contracts, as well

as in employee induction and training

programmes.

All board members adhere to strict policies

and procedures in terms of confl icts of

interest. Planned areas for future focus will

include the continued training of employees

and board members to ensure that the

group embeds a culture of ethical behaviour

in all aspects of its operations.

Principle 3

Responsible corporate citizenship:

The board should ensure that the

organisation is, and is seen to be, a

responsible citizen

As guardian over the values and ethics

of the company, the board annually

emphasises its responsibility at its strategy

session in March. Here the business




APPLICATION OF THE KING IV REPORT ON CORPORATE GOVERNANCE FORSOUTH AFRICA continued

strategy and priorities are assessed,

reviewed, formalised and approved in

accordance with the board’s role of

overseeing the company’s conduct as a

good corporate citizen. It is imperative for

the board of Safari to ensure that the

consequences of the group’s activities do

not adversely aff ect its status of a

responsible corporate citizen in the areas of

the workplace and the economies of the

geographical areas within which it operates,

with due regard to social and environmental

issues.

The board, with the support of the executive

team, oversees and monitors how the

operations and activities of the company

aff ect its status as a responsible corporate

citizen. This is measured against agreed

performance targets that are in support of

Safari’s strategic imperatives.

The performance targets contain fi nancial

and non-fi nancial measures. Non-fi nancial

measures encompass the areas of

workplace, economy, society and

environment so that the company’s core

purpose and values, strategy and conduct

are congruent with it being a responsible

corporate citizen.

Going forward, the company will holistically

consider its responsibilities in the areas of

workplace, society in general and the

environment, all being key inter-related

factors in ensuring the sustainability of the

group’s business.

Governance outcome two: Performance and value creationPrinciple 4

Strategy and performance: The

board should appreciate that the

organisation’s core purpose, its risks

and opportunities, strategy, business

model, performance and sustainable

development are all inseparable

elements of the value-creation

process

The board’s paramount responsibility is to

ensure that it creates value for its

shareholders while taking into account the

interest and expectations of its stakeholders.

The directors individually and collectively

assist the group to realise its strategic

objectives; to manage risk and opportunities

that could threaten or enhance the group’s

ability to provide sustainable long-term

growth; to maintain and enhance effi ciencies

within the group’s businesses and to support

the people who rely on the businesses.

Safari’s ability to create value in a

sustainable manner is illustrated

throughout its business model. Refer to

pages 4 and 5 – business model, and

pages 29 and 30 – sustainability report,

that present material information in an

integrated manner to provide users with a

clear, concise and understandable

presentation of Safari’s performance in

terms of sustainable value creation in the

economic, social and environmental context

within which it operates.

Safari aligns its strategic objectives with

reference to its risks and opportunities. The

board continuously assesses both the

positive and negative outcomes resulting

from its business model and responds to it.

Safari’s strategic objectives are set out on

pages 6 and 7.

Principle 5

Reporting: The board should ensure

that reports issued by the organisation

enable stakeholders to make informed

assessments of the organisation’s

performance, and its short-, medium-

and long-term prospects

The board ensures that communication is

done eff ectively in a transparent, clear,

balanced and truthful manner with the

highest regard to integrity and ethical

standards.

Safari circulates and publishes its interim

and integrated annual reports both online

and in printed form. The reports connect the

more detailed information at a high level

and in a complete, concise way, with respect

to matters that could signifi cantly aff ect or

improve the company’s ability to create

sustainable value. The report also includes

the consolidated annual fi nancial

statements and complies with legal

requirements and all required disclosures.

Information is also made available to

stakeholders via investor presentations,

roadshows and on the company’s website

at www.safari-investments.com.

Refer to page 14 for historical

information and its detailed overview of the

fi nancial year.

Governance outcome three: Adequate and effective controlPrinciple 6

Primary role and responsibilities of

the board: The board should serve

as the focal point and custodian

of corporate governance in the

organisation

The board’s role, responsibilities and

procedural conduct are documented in the

board charter to guide eff ective functioning.

The board serves as the focal point and

custodian of corporate governance of Safari.

The board meets quarterly to attend to

general matters and once annually to assess,

review and approve its ongoing short- and

medium-term strategies. Additional

meetings may be convened should important

matters arise between meetings.

Information on the performance of the group

for the year to date, and any other matters

for discussion at the board meetings, are

circulated well in advance of every meeting.

At board meetings, both fi nancial as well as

non-fi nancial and qualitative information that

might have an impact on stakeholders are

considered. Refer to pages 34 and 36

to 42 for details on board and board

subcommittee meetings.

An appropriate governance framework and

the necessary policies and processes are in




place to ensure that the company and its

subsidiaries adhere to governance

standards.

Principle 7

Composition of the board: The

board should comprise the

appropriate balance of knowledge,

skills, experience, diversity and

independence for it to discharge its

governance role and responsibilities

objectively and effectively

On 21 November 2019, Mr AM Slabber and

Mr ER Swanepoel were appointed as

independent non-executive directors. On

31 December 2019, Dr JP Snyman retired

as director and chairman of the board and

Mr AM Slabber was appointed as the new

independent non-executive chairman.

Mr Slabber resigned with eff ect from

21 June 2020 and Mr AE Wentzel was

appointed as independent non-executive

chairman of the board on an interim basis,

pending appointment of further directors to

the board.

The board, with the assistance of the

nomination and remuneration committee,

considers, on an annual basis, its

composition in terms of balance of skills,

experience, diversity, independence and

knowledge, and whether this enables it to

eff ectively discharge its role and

responsibilities. The board is satisfi ed that

there is a balance of skills, experience,

diversity, independence and knowledge

needed to perform its role and

responsibilities. The board has

strengthened its succession plan to also

include an emergency succession plan in

the event of an unforeseen event.

Safari has a board of seven members and,

in accordance with King IV, the majority of

the directors are non-executive directors of

which the majority of the non-executive

directors are independent. The board is

comprised of three executive members and

four independent non-executive members.

The chairman is an independent non-

executive director. The roles of chairman

and CEO are separate. All board members

are suitably qualifi ed to act in the best

interest of stakeholders.

The independence of directors is reviewed

on an annual basis against criteria

stipulated in King IV, and arrangements for

the periodic, staggered rotation of board

members are contained within the

company’s memorandum of incorporation

and are duly applied.

Refer to pages 32 and 33 refl ecting the

skills and experience of the board.

Principle 8

Committees of the board: The board

should ensure that its arrangements

for delegation within its own structures

promote independent judgement and

assist with balance of power and the

effective discharge of duties

The board has established fi ve board

subcommittees to assist the directors in

fulfi lling its duties and responsibilities. Each

committee has formal terms of reference

and reports to the board at regular

intervals. The terms of reference set out the

objectives, authority, composition and

responsibilities of each committee and have

been approved by the board. All the

committees are free to take independent

external professional advice as and when

required at the company’s expense.

Membership of the committees is as

recommended by King IV.

The composition of the committees of the

board is balanced as well as the distribution

of authority between the chairman and the

rest of the directors. It should not lead to

instances where individual(s) dominate

decision-making within governance

structures or where undue dependency is

caused.

The audit and risk committee is satisfi ed

that the auditor is independent as

non-audit services are not performed and

the auditing fi rm was appointed with the

designated partner having oversight of the

audit. The fi nancial director is the head

of the fi nance function and he has one

senior fi nancial manager reporting to

him. Internal audit is fully outsourced

and the fi nancial director is responsible

for overseeing and coordinating the

eff ective functioning of the outsourcing

arrangement. An assessment of the

eff ectiveness of the fi nancial director

function is performed annually by the audit

and risk committee.

The board has also constituted a social and

ethics committee which operates in line

with King IV and the Companies Act as well

as a management committee which reports

directly to the board and other board

subcommittees on the day-to-day

management of the company.

In addition to the above, ad hoc committees

are formed from time to time to assist the

board in discharging its duties.

Refer to pages 40 to 46 of the

integrated annual report for reports by

each committee.

Principle 9

Evaluations of the performance of the

board: The board should ensure that

evaluation of its own performance

and that of its committees, its chair

and its individual members, do

support continued improvement in

performance and effectiveness

A performance evaluation of the board, its

committees, the chairman, individual

members and the group company secretary

was conducted formally and, although not

externally facilitated, it was done in

accordance with the methodology

approved by the board. The overview of the

evaluation results is that there were no

issues raised and contribution, value and

participation has considered satisfactory and

positive. Items identifi ed for improvement

are discussed and followed up to ensure

recommended actions. The skills

represented on the board were also

assessed as well balanced.




APPLICATION OF THE KING IV REPORT ON CORPORATE GOVERNANCE FORSOUTH AFRICA continued

Each committee undertakes an annual

committee self-evaluation in order to assess

whether the committee has the required

skills within its membership and is eff ective

in performing in line with its objectives and

is discharging its responsibilities as

delegated by the board.

The group company secretary’s

performance is also evaluated to ensure

that there is an arm’s-length relationship

between the board and the group company

secretary in that the objectivity and

independence of the group company

secretary is not unduly infl uenced. Safari’s

group company secretary was appointed in

November 2018, and the board is confi dent

that his objectivity and independence is in

no way compromised. The group company

secretary’s performance is assessed

annually and no major issues or concerns

have been identifi ed. The board is satisfi ed

that the group company secretary is

performing well in executing the functions

that he oversees.

Principle 10

Appointment and delegation to

management: The board should

ensure that the appointment of, and

delegation to, management contribute

to role clarity and the effective

exercise of authority and

responsibilities

In this regard, the board has established a

management committee which is chaired

by the CEO and includes various members

of senior management and the fi nancial

director. The management committee

convenes on a regular basis and reports to

the strategy and various other committees

regarding the day-to-day management of

Safari.

In terms of the board charter, the board’s

responsibilities include the appointment of

a CEO, approval of a corporate strategy, risk

management and corporate governance.

The board must review and approve its

business plan and must monitor the

fi nancial performance of the group and

implementation of strategies.

Board members have full and unrestricted

access to management and all group

information and property. Directors may

meet separately with members of the

management team without executives

present.

A detailed delegation of authority policy and

framework indicates matters reserved for

the board and those delegated to

management. The board is satisfi ed that

Safari is appropriately resourced and that

its delegation to management contributes

to an eff ective arrangement by which

authority and responsibilities are exercised.

In instances where delegation has taken

place to management or committees,

preapproved materiality levels and terms of

reference apply respectively.

The CEO does not have any work

commitments outside the Safari group and/

or associated business partners. To provide

continuity of executive leadership,

succession planning is in place and is

regularly reviewed to provide succession in

both emergency situations and over the

longer term.

Principle 11

Risk governance: The board should

govern risk in a way that supports the

organisation in setting and achieving

its strategic objectives

The audit and risk committee assists the

board with the responsibility for governing

risk by setting the direction for how risk is

to be approached and addressed across the

group in order to achieve its strategic

objectives. The board is aware of the

importance of the governance of risk

management as it is critical to the strategy,

performance and sustainability of Safari.

The audit and risk committee implements

a process whereby risks to the

sustainability of the company’s business

are identifi ed, monitored and managed

within acceptable parameters. The audit

and risk committee delegates to

management the task to continuously

identify, assess, mitigate and manage risks

within the existing but stable risk profi le

of Safari’s operating environment.

Mitigating controls are formulated to

address the risks and the board is kept up

to date on the status of the risk

management plan.

Further oversight of risk exercises includes

the receipt and review of internal audit

reports, due diligence processes to evaluate

and understand risks and opportunities that

acquisitions may contain and annual review

and assessment of the group’s insurance

portfolio.

Responsibility for eff ective risk

management is spread across the group’s

workforce and management.

Refer to pages 19 to 23 for an overview

on Safari’s risk management.

Principle 12

Technology and information

governance: The board should govern

technology and information in a way

that supports the organisation in

setting and achieving its strategic

objectives

The board is aware of the importance of

technology and information as it is

inter-related to the strategy, performance

and sustainability of Safari. The group

company secretary and information

technology service providers are consulted

on a regular basis with reference to

applicable legislation and the protection and

management of technology and information

principles respectively.




Principle 13

Compliance governance: The board

should govern compliance with

applicable laws and adopted, non-

binding rules, codes and standards in

a way that supports the organisation

being ethical and a good corporate

citizen

Responsibility for the implementation and

execution of eff ective compliance

management is delegated by the board to

management. The group company secretary

ensures compliance with all applicable

laws, rules, codes and standards at the

highest ethical standards. The board,

however, retains ultimate responsibility for

compliance in this regard. Relevant new

legislation or regulations introduced from

time to time are brought to the attention of

the respective board and committee

members to ensure that compliance

requirements are kept up to date.

During the review period, there were no

material or repeated regulatory penalties,

sanctions or fi nes for contraventions of, or

non-compliance with, statutory obligations

imposed on the company, members of the

board or offi cers. There were no fi ndings of

non-compliance with environmental laws or

criminal sanctions and prosecutions for

non-compliance.

Principle 14

Remuneration governance: The board

should ensure that the organisation

remunerates fairly, responsibly and

transparently so as to promote the

achievement of strategic objectives

and positive outcomes in the short,

medium and long term

The board assumes responsibility for the

governance of remuneration and sets the

direction across the group. Annual

assessments are done by the nomination

and remuneration committee and this

committee is free to obtain independent

external professional advice on fair and

market-related remuneration. The

committee undertakes frequent

benchmarking exercises in order to ensure

fair and responsible remuneration of

employees and executives. Refer to

page 58 of the integrated annual report

where directors’ remuneration is disclosed

comprehensively. Safari’s board

remunerates fairly, responsibly and

transparently so as to promote the

creation of value in a sustainable manner.

A remuneration policy was approved at the

2018 annual general meeting of

shareholders for a period of two years.

Principle 15

Assurance: The board should

ensure that assurance services and

functions enable an effective control

environment, and that these support

the integrity of information for

internal decision-making and of the

organisation’s external reports

The board sets the direction for assurance

services and functions, but the responsibility

for overseeing such arrangements is

delegated to the audit and risk committee

which is charged with supporting the integrity

of information for internal decision-making

purposes and external reports.

A combined assurance model has been

developed and formally implemented across

the company to eff ectively cover the group’s

signifi cant risks and material matters. The

model includes, but is not limited to, the

group’s established outsourced internal audit

functions, the external auditor, the risk

management and compliance functions, and

regulatory inspectors, together with such

other external assurance providers as may

be appropriate or deemed necessary from

time to time. The group company secretary

provides assurance on aspects of corporate

governance and the JSE sponsor advises on

the JSE Listings Requirements.

Safari is satisfi ed that assurance results in an

adequate and eff ective control environment

and integrity of reports for better decision-

making.

Governance outcome four: Trust, good reputation and legitimacyPrinciple 16

Stakeholders: In the execution of its

governance role and responsibilities,

the governing body should adopt a

stakeholder-inclusive approach that

balances the needs, interests and

expectations of material stakeholders

in the best interest of the organisation

over time

The board assumes responsibility for the

direction on stakeholder relationships and

delegates to manage the responsibility for

the implementation and execution thereof.

Stakeholders are kept apprised of the

company’s performance by publication of

the interim results and integrated annual

reports. Safari has identifi ed its stakeholder

groups and is active in balancing their

legitimate and reasonable needs, interests

and expectations. Refer to pages 24 to 28

for Safari’s stakeholder engagement.

Principle 17

Responsible investment: The board

ensures that responsible investment is

practised to promote good governance

and the creation of value by the

companies in which it invests

Safari is not an institutional investor and

this principle is therefore not applicable.




REIT AND REIT TAXATION LEGISLATIONREIT legislation in South Africa came into

eff ect on 1 April 2013. Safari confi rms that

it continues to hold REIT status recognised

by the JSE and meets the qualifi cation

requirements as stipulated by the JSE and

applicable legislation.

SA REIT Association – Best Practice Recommendations (“BPR”)The SA REIT Association issued a second

edition BPR, which deals with best practice

reporting for South African REITs. The

second edition BPR is eff ective for

fi nancial years commencing on or after

1 January 2020. Safari is currently assessing

this edition of the BPR and intends to adopt

the recommendations contained in the BPR

in the next fi nancial year.

REIT legislationThe following achievements from a REIT

point of view are noteworthy:

◗ The group currently has gross assets

worth approximately R3,37 billion,

as refl ected in the annual fi nancial

statements for the period ended

31 March 2020;

◗ The group is a property investment fund

focusing mainly on retail centres and

currently has four regional shopping

centres, of which three are located in

under-developed urban areas in Gauteng,

South Africa and one in Swakopmund,

Namibia. Furthermore, Safari has four

community shopping centres in

Heidelberg, Polokwane and Atteridgeville

and a 20-bed private day hospital in

Soweto. The total property portfolio

comprises a total of 175 136m² rentable

area;

◗ The group is currently deriving 92% of

its revenue from rental income;

◗ The group complies with the minimum

income and shareholder spread

requirements of the Main Board of

the JSE and currently has over

768 shareholders as at the fi nancial

year ended 31 March 2020;

◗ The group will, to the best of the

directors’ knowledge, qualify for a tax

deduction of distributions under section

25BB(2) of the Income Tax Act for the

current fi nancial year;

◗ The group’s borrowing (loan to value)

remained below the 60% requirement in

terms of REIT legislation;

◗ The audit and risk committee has

confi rmed to the JSE that, as part of its

terms of reference, it has adopted the

policy referred to in paragraph 13.46(h)(i)

of the JSE Listings Requirements and

that the group complies with the

following provisions set out in the

JSE Listings Requirements:

– Adopting and implementing an

appropriate risk management policy,

which policy as a minimum is in

accordance with industry practice and

specifi cally prohibits Safari from

entering into any derivative

transactions that are not in the normal

course of Safari’s business;

– Reporting in the integrated annual

report each year that the audit and risk

committee has monitored compliance

with the policy and that Safari has, in

all material respects, complied with the

policy during the year concerned; and

– Reporting to the JSE, in the annual

compliance declaration referred to in

paragraph 13.49(d) of the JSE Listings

Requirements, that the audit and risk

committee has monitored compliance

with the policy and that Safari has, in

all material respects, complied with the

policy during the year concerned;

◗ The group will comply with the general

continuing obligations as determined by

the JSE and, more specifi cally, those set

out in section 13.49 of the JSE Listings

Requirements, as amended from time to

time; and

◗ The board confi rms that Safari has,

during the past fi nancial year, complied

with, and will continue to comply with,

the following provisions, as set out in

section 13.49 of the JSE Listings

Requirements:

– Safari will distribute at least 75% of its

total distributable profi ts as a

distribution to the holders of its listed

securities by no later than six months

after its fi nancial year-end, subject to

the relevant solvency and liquidity test

as defi ned in sections 4 and 46 of the

Companies Act. The next distribution

of 22 cents per share was approved

and will accordingly be paid out on

3 August 2020;

– If relevant, Safari will ensure that,

subject to the solvency and liquidity test

and the provisions of section 46 of the

Companies Act, the subsidiaries of

Safari that are property entities

incorporated in South Africa will

distribute at least 75% of their total

distributable profi ts as a distribution by

no later than six months after their

fi nancial year-end; and

– Interim distributions may occur before

the end of a fi nancial year. The total

distribution declared for the 2020

fi nancial year was R149 196 488

(2019: R183 586 617). The distribution

consisted of an interim cash dividend of

24 cents per share in December 2019

and the aforementioned fi nal cash

dividend of 22 cents per share

declared at the board meeting held

on 3 July 2020 which will be paid out

on 3 August 2020.

REIT taxation statusThe group’s status as a REIT entails, among

others, the following tax consequences:

◗ The group will not pay capital gains tax

on the disposal of immovable property,

the disposal of shares in other REITs or

the disposal of shares in property

companies;

◗ The group may claim a tax deduction for

qualifying dividends to its shareholders;

◗ Dividends distributed by the group to its

resident shareholders are subject to

normal tax (and exempt from dividends

tax); and

◗ Dividends distributed to foreign

shareholders are subject to

dividends tax.


04ANNUAL FINANCIAL

STATEMENTS

CONSOLIDATED

The consolidated annual fi nancial statements have been audited by

BDO South Africa Incorporated. The fi nancial director, Mr WL Venter CA(SA),

was responsible for the preparation of these audited annual fi nancial

statements, executed by the fi nancial manager, T Pothraju. Safari Investments

RSA Limited and Subsidiary (Registration number: 2000/015002/06)

Published: 13 July 2020



2020 INTEGRATED ANNUAL REPORT CONSOLIDATED ANNUAL FINANCIAL STATEMENTS54

DIRECTORS’ RESPONSIBILITY AND APPROVAL

The directors are required in terms of the

Companies Act to maintain adequate

accounting records and are responsible for

the content and integrity of the consolidated

annual fi nancial statements and related

fi nancial information included in this report.

It is their responsibility to ensure that the

consolidated annual fi nancial statements

fairly present the state of aff airs of the

group as at the end of the fi nancial year and

the results of its operations and cash fl ows

for the period then ended, in conformity

with International Financial Reporting

Standards, SAICA’s Financial Reporting

Guides as issued by the Accounting

Practices Committee, the JSE Listings

Requirements, Financial Pronouncements

as issued by the Financial Reporting

Standards Council and the Companies Act.

The external auditor is are engaged to

express an independent opinion on the

annual fi nancial statements.


statements are prepared in accordance with

International Financial Reporting Standards,



Committee, the JSE Listings Requirements,

Financial Pronouncements as issued by the

Financial Reporting Standards Council and

the Companies Act and are based upon

appropriate accounting policies consistently

applied and supported by reasonable and

prudent judgements and estimates.

The directors acknowledge that they are

ultimately responsible for the system of

internal fi nancial control established by the

group and place considerable importance

on maintaining a strong control

environment. To enable the directors to

meet these responsibilities, the board sets

standards for internal control aimed at

reducing the risk of error or loss in a

cost-eff ective manner. The standards

include the proper delegation of

responsibilities within a clearly-defi ned

framework, eff ective accounting procedures

and adequate segregation of duties to

ensure an acceptable level of risk. These

controls are monitored throughout the

group and management is required to

maintain the highest ethical standards in

ensuring the group’s business is conducted

in a manner that, in all reasonable

circumstances, is above reproach. The focus

of risk management in the group is on

identifying, assessing, managing and

monitoring all known forms of risk across

the group. While operating risk cannot be

fully eliminated, the company endeavours to

minimise it by ensuring that appropriate

infrastructure, controls, systems and

ethical behaviour are applied and managed

within predetermined procedures and

constraints.

The directors are of the opinion, based on

the information and explanations given by

management, that the system of internal

control provides reasonable assurance that

the fi nancial records may be relied on for

the preparation of the consolidated annual

fi nancial statements. However, any system

of internal fi nancial control can provide only

reasonable, and not absolute, assurance

against material misstatement or loss.

The directors have reviewed the group’s

cash fl ow forecast for the year to

31 March 2021 and, in light of this review

and the current fi nancial position, they are

satisfi ed that the group has access

to adequate resources to continue in

operational existence for the foreseeable

future.

The external auditor is responsible for

independently auditing and reporting on the

group’s consolidated annual fi nancial

statements. The consolidated annual

fi nancial statements have been examined by

the group’s external auditor and their report

is presented on pages 63 to 65.


statements which have been prepared on

the going concern basis, were approved by

the board on 3 July 2020.

Signed on behalf of the board of directors

by:

DC Engelbrecht


WL Venter

Executive fi nancial director

Pretoria

Safari Investments_IAR_Fins_FA.indd 54Safari Investments_IAR_Fins_FA.indd 54 2020/07/10 11:04 AM2020/07/10 11:04 AM



CERTIFICATE BY GROUP COMPANY SECRETARY

The group company secretary hereby certifies, in accordance with section 82(2)(e) of the

South African Companies Act 71 of 2008, that the group has lodged with the Commissioner

of the Companies and Intellectual Property Commission all such returns as are required for a

listed company and that all such returns are true, correct and up to date in respect of the

financial year reported.

PWL van Niekerk

Group company secretary

Pretoria

10 July 2020




DIRECTORS’ REPORT

The directors have pleasure in submitting

their report on the consolidated annual

fi nancial statements of Safari Investments

RSA Limited and subsidiary for the year

ended 31 March 2020.

Nature of the businessSafari invests in quality income-generating

property mainly focused on the retail

sector. There was no material change in

the nature of the business during the

fi nancial year.

Events during and subsequent to the reporting periodEvents during the financial periodSafari entered into a non-cancellable lease

agreement with Wealthgate Investments 45

Proprietary Limited for the corporate head

offi ce of Safari. The lease agreement

commenced on 1 May 2019 and is for a

duration of fi ve years with an option to

renew for a further three years. This results

in a present value of lease payments as at

1 May 2019 of R7 831 145. Based on our

assessment, this will not materially impact

the annual fi nancial statements. This

amount is also management’s best

estimate of the impact in adopting IFRS 16

in the 2020 fi nancial year.

On 24 June 2019, a fi nal cash distribution

for the previous fi nancial year of 24 cents

per share was declared and paid to

shareholders on 15 July 2019.

At the annual general meeting held on

7 August 2019 all resolutions were passed

except for ordinary resolution number 10

being the general authority to issue shares

for cash. Dr JP Snyman and Ms FN Khanyile

were re-elected as non-executives and

Ms FN Khanyile, Dr M Minnaar and

Mr AE Wentzel were re-appointed as

members of the audit and risk committee

who retired by rotation in terms of the

memorandum of incorporation and, being

eligible, off ered themselves for re-election.

It was further resolved that the directors of

the company be authorised, by way of a

general authority, to repurchase shares.

The shareholders also passed a non-

binding advisory vote on the company’s

remuneration policy as well as the 2019

implementation report on the company’s

remuneration policy which is available for

inspection on the company’s website.

On 28 May 2019, the board accepted the

resignation tendered by Mr FJJ Marais.

Dr JP Snyman, at that time a current

independent non-executive director and

former chairman of Safari, was re-

appointed as chairman of the company with

immediate eff ect. Subsequent to the

resignation of Ms LL Letlape on

16 October 2019, two new independent

non-executive board members were

appointed on 14 November 2019:

Mr ER Swanepoel and Mr AM Slabber.

When Dr JP Snyman resigned on

31 December 2019, Mr AM Slabber was

appointed as the new independent

non-executive chairman.

Shareholders are referred to note 14 of the

31 March 2019 consolidated annual

fi nancial statements with regards to the

Southern Palace transaction and are

advised that the board entered into further

agreements during the current period

whereby:

◗ A portion of the senior facility amounting

to R252 032 465 was settled by Safari

which resulted in a further claim by

Safari against Southern Palace; and

◗ Amended the reversionary pledge and

cession in security agreement given by

Southern Palace in favour of Safari to

include the additional amounts owing to

Safari and, in addition, entered into a

guarantee and pledge and cession in

security agreement by Southern Palace

Holdco in favour of Safari in order to

secure Safari’s position with regards

to, among other things, the

aforementioned claim.

Shareholders are referred to the SENS

announcements published on 2 July 2019

and 14 August 2019 relating to the proposed

friendly Fairvest merger which was offi cially

terminated on 14 August 2019.

Shareholders are also referred to the SENS

announcements published on 22 July 2019,

26 August 2019, 12 September 2019,

27 September 2019 and 15 October 2019

relating to receipt of an unsolicited fi rm

intention proposal from Community

Property Company Proprietary Limited

(“Comprop”) and subsequent updates.

During December 2019, an interim cash

distribution of 24 cents per ordinary share

was declared and paid to shareholders.

On 11 March 2020, Safari appointed

BDO South Africa Incorporated as its

external auditor with Paul Badrick being

the designated audit partner.

Events subsequent to the financial

period

The group is continuously monitoring the

impact of COVID-19 and is negotiating with

all stakeholders to mitigate the risks that

have become apparent. While rental

collection for the period post fi nancial

year-end has remained robust, it is still too

early to quantify the full impact of COVID-19

on the portfolio.

Recovery of rentals from a component of

retail tenants which are still restricted to

trade remains doubtful and we continue

engaging on an individual basis and on a

case-by-case basis to help ensure

sustainability of businesses during these

uncertain times. While there is indeed this

pressure on rental revenue in the short term,

the portfolio remains defensive and resilient.

The company is also engaging with its

bankers on a proactive basis regarding the

possible impact of COVID-19 on its

covenant levels. Furthermore, Safari has

notifi ed its insurance brokers of a claim for

loss of income as a result of business

interruption arising from infectious

diseases. Shareholders are also referred

to the SENS announcement published on

10 June 2020.




Shareholders are referred to the SENS

announcement published on 4 May 2020

relating to the Southern Palace transaction.

Also refer to note 14 regarding a share-

based payment liability raised on

31 March 2020.

Mr Slabber and Mr Swanepoel

resigned with eff ect from 21 June 2020.

Mr AE Wentzel has assumed the

chairmanship of the board on an interim

basis, pending appointment of further

directors to the board.

Matters approved by the board at the board

meeting held on 3 July 2020:

A fi nal cash distribution of 22 cents

per Safari share will be paid to

shareholders during August 2020.

The directors are not aware of any other

material reportable events that occurred

during and subsequent to the reporting

period.

Accounting policiesThe consolidated annual fi nancial

statements have been prepared in

accordance with IFRS and the requirements

of the Companies Act, SAICA’s Financial

Reporting Guides as issued by the

Accounting Practices Committee, Financial

Pronouncements as issued by the Financial

Reporting Standards Council and the JSE

Listings Requirements.

The accounting policies have been applied

consistently compared to those of the prior

year and, save for new and revised

accounting standards per note 2 to the

annual fi nancial statements, had no

material impact on the results.

Financial results and activitiesThe operating results and state of aff airs of

the group are fully set out in the attached

consolidated annual fi nancial statements.

The group recorded an operating profi t,

before investment revenue, fair value

adjustments and fi nance costs for the year

ended 31 March 2020, of R225 390 000

(2019: R181 061 000).

The group’s revenue increased by 15% to

R345 443 456 compared with the previous

year’s R299 426 469. A weighted average

escalation on lease agreements of 4,84%

for South Africa and 2,93% for the group

was achieved during the 2020 fi nancial

year. Property expenses as a percentage of

property revenue was 24% (2019: 26%).

The Safari group’s gearing (loan to value)

ratio increased from 24% to 33%.

The fair value of the group’s investment

property increased by 2,4% to

R3 149 392 200. Refer to note 4 of the

consolidated annual fi nancial statements for

detailed disclosure. The income-generating

properties were valued on the discounted

cash fl ow method and are supported by

Safari’s 3,31% vacancy profi le, the 87%

national tenants’ occupation level, a positive

lease expiry profi le and rental escalation

achieved through the 2020 fi nancial year.

The group has recorded a net asset value per

share of 769 cents (2019: 723 cents).

Stated capitalDetails of the stated capital are disclosed in

note 11 to the consolidated annual fi nancial

statements.

Capital commitmentsRefer to note 36 to the group consolidated

annual fi nancial statements, where details

of the capital commitments can be found.

DividendsIn terms of REIT legislation, at least 75%

of the distributable earnings must be

distributed in every fi nancial year. During

2020, Safari declared a total distribution of

R149 196 488 (2019: R183 586 617).

Going concernThe directors are of the opinion that the

group has adequate fi nancial resources to

continue its operations for the foreseeable

future and, accordingly, the consolidated

annual fi nancial statements have been

prepared on a going concern basis.

The group is in a sound fi nancial position

and has access to suffi cient borrowing

facilities to meet its foreseeable cash

requirements for operational activities and

capital commitments as disclosed in note

36 to the consolidated annual fi nancial

statements. The directors are not aware of

any material changes that may have an

adverse impact on the group, nor of any

material non-compliance with statutory or

regulatory requirements nor of any pending

changes to legislation which may aff ect the

group.

Litigation statementIn terms of section 11.26 of the JSE Listings

Requirements, the directors are not aware

of any legal or arbitration procedures that

are pending or threatening, that might have

had, in the previous 12 months, a material

eff ect on the group’s fi nancial position.

AuditorBDO South Africa Incorporated was

appointed on 11 March 2020 as external

auditor for the group for 2020.

For the 2020 fi nancial year, Mr Paul Badrick

was the designated audit partner for the

Safari group.

Performance measuresIn compliance with sections 3.4(b)(vi) and

3.4(b)(vii) of the JSE Listings Requirements,

and owing to the nature of the business

conducted by Safari, being that of a Real

Estate Investment Trust, the board of Safari

has decided to adopt the distribution per

share and net asset value per share

measures for future trading statement

purposes, as this is considered to be a more

appropriate yardstick to measure Safari’s

performance than headline earnings per

share and earnings per share.




DIRECTORS’ REPORT continued

DirectorsThe directors in offi ce at the date of this report are as follows:

Name Offi ce Designation Changes

AE Wentzel Chairman Independent non-executive Appointed 21 June 2020

AM Slabber – – Appointed 14 November 2019 as independent

non-executive director and appointed as

chairman of the board on 1 January 2020.

Resigned 21 June 2020

CR Roberts Independent non-executive

DC Engelbrecht Chief executive offi cer Executive

ER Swanepoel – Appointed 14 November 2019.

Resigned 21 June 2020

FN Khanyile Independent non-executive Re-elected 7 August 2019

K Pashiou Operations director Executive

Dr M Minnaar Independent non-executive

WL Venter Financial director Executive

Directors’ remunerationThe directors refer you to note 32 of the consolidated annual fi nancial statements, where

details of the directors’ remuneration can be found.

The group company secretary is Mr PWL van Niekerk who was appointed with eff ect from

14 November 2018.

Business address

The Corner Offi ce

410 Lynnwood Road

Lynnwood

Pretoria 0081

Resolutions The following special resolution was passed at the annual general meeting held on

20 July 2018:

◗ Approval of directors’ remuneration: A non-binding advisory vote was passed with regard

to remuneration to be paid by the company to the directors as follows:

Directors’ remuneration R

Board retainer fee (quarterly)

Chairman 37 500

Member 25 000

Board meetings attendance

Chairman 37 500

Member 25 000

Committee meetings attendance

Chairman 15 000

Member 13 500

Ad hoc/hour

Non-salaried members 2 500

Ad hoc/full working day

Non-salaried members 12 000

Travel allowance/full day

All members 6 000

At least one-third of the non-executive

directors stand for re-election at the annual

general meeting on a rotation basis as

stipulated in the company’s memorandum

of incorporation. No person holds any

preferential rights other than normal

shareholder rights relating to the

appointment of any particular director

or number of directors.

Directors’ interest in contractsMr K Pashiou is a director and shareholder

of Safari Developments Pretoria Proprietary

Limited and Safari Developments

Swakopmund Proprietary Limited, the

portfolio development and procurement

agent. Mr FJJ Marais was a director up

until 1 March 2015, when he resigned

as a director from Safari Developments

Pretoria Proprietary Limited and Safari

Developments Swakopmund Proprietary

Limited. Mr FJJ Marais is a shareholder of

Safari Developments Pretoria Proprietary

Limited and Safari Developments

Swakopmund Proprietary Limited.

Mr K Pashiou is an experienced director

who has a clear understanding of his

fi duciary duty as a director of Safari. His

interests in Safari Developments and other

entities are disclosed annually to the board

of Safari. For details of the contracts, the

director refers you to note 31, reported

under related parties.




The aforementioned directors’ remuneration

was approved for the period 1 April 2018 to

31 March 2020.

The company is compliant with the

provisions of the Companies Act or relevant

laws of establishment. Furthermore, the

company is operating in conformity with its

memorandum of incorporation and/or

relevant constitutional documents.

The following special resolutions were

passed at the annual general meeting held

on 7 August 2019:

◗ Special resolution number 1: General

authority to repurchase shares.

◗ Special resolution number 2: Approval of

fi nancial assistance in terms of section

45 of the Companies Act 71 of 2008:

Inter-company fi nancial assistance.

◗ Special resolution number 3: Approval of

fi nancial assistance in terms of section

44 of the Companies Act 71 of 2008:

Financial assistance for the subscription

and/or purchase of shares in the

company or a related company.

Distribution statement

2020

R’000

2019

R’000

Revenue (including recoveries) 350 888 301 594

Less: Lease smoothing eff ect (24 656) (23 448)

Less: Expenses (114 831) (104 323)

Less: Net interest (85 390) (31 293)

Interest income 5 605 5 907

Interest expense (90 995) (37 200)

Plus: Transaction costs expensed* 13 924 13 246

Distributable earnings 139 935 155 776

Less: Interim distribution paid (74 598) (80 815)

Interim distribution per share (cents) 24 26

Available for distribution at year-end 65 337 74 961

Actual number of shares excluding 53 million Safari

shares held by Southern Palace in 2020 257 826 016 N/A

Final distributable income per share (cents) available 25 24

Percentage of distributable income distributed for the

fi nancial year (%) 94 100

Final distribution per share (cents) declared 22 24

* Transaction cost added back to get to the 2020 distributable income mostly relates to corporate action expenses incurred during

the fi nancial year with relation to the proposed Fairvest merger, the subsequent Comprop unsolicited cash off er and the

subsequent proposed off er by Heriot as disclosed in the various SENS announcements.

The decrease in distribution per share is attributed to:

◗ the continued challenging retail environment in South Africa and Namibia putting rental

renewals under pressure; and

◗ the increased interest expense resulting from the guarantee payments on the Southern

Palace transaction.

Due to uncertainty at this point in time regarding the impact of COVID-19 in the longer term,

the board decided not to distribute 100% of distributable income, which would translate to

25 cents per share on the fi nal distribution. Until there is more clarity on the impact of

COVID-19, the board can also not give guidance on expected future distributions. The board

continues to monitor the situation and will keep shareholders updated.

Note that the 53 million shares are currently pledged to Safari as security for the claim

Safari has against Southern Palace. The shares are treated as “treasury shares” in

calculation of distribution per share because the full distribution paid on these shares will

be paid over to Safari against the claim Safari has against Southern Palace.

.




AUDIT AND RISK COMMITTEE REPORT

All the members of the committee are

fi nancially literate and the board will ensure

that any future appointees are fi nancially

literate. The members of the audit and risk

committee are Mr AE Wentzel CA(SA), the

lead independent non-executive director,

who chairs this committee, Ms FN Khanyile,

and Dr M Minnaar all of whom are


The committee’s report on audit-related mattersThe committee is satisfi ed that the

members thereof have the required

knowledge and experience as set out

in section 94(5) of the Companies Act

and regulation 42 of the Companies

Regulations, 2011.

The committee is responsible for

performing the functions required by it in

terms of section 94(7) of the Companies Act.

These functions include nominating and

appointing the group’s auditor and ensuring

that such auditor is independent of the

group, determining the fees to be paid to the

auditor and the auditor’s terms of

engagement, ensuring that the appointment

of the auditor complies with the provisions

of the Companies Act and any other relevant

legislation, dealing with any complaints

(whether from within or outside the group)

relating to accounting practices or the

content of the group’s consolidated annual

fi nancial statements and related matters.

The non-statutory functions of this

committee are to assist the board in

fulfi lling its responsibilities by reviewing the

eff ectiveness of internal control systems in

the group with reference to the fi ndings of

the external and internal auditors, and

reviewing and recommending, for approval

by the board, the annual fi nancial

statements and interim reports of the

group, as well as other public

communications of a fi nancial nature. Other

functions include considering accounting

issues, reviewing audit recommendations

and ensuring that the group complies with

relevant legislation and sound corporate

governance principles.

In addition, and if required, the committee

will review any signifi cant cases of fraud,

misconduct or confl icts of interest. This

committee will, from time to time,

determine policies with regard to non-audit

services provided by the external auditor.

The group’s external auditor has

unrestricted access to this committee and

its meetings. The members of this

committee are appointed every year at the

annual general meeting.

Responsibilities of the committee include:

◗ adopting and implementing an

appropriate fi nancial risk management

policy in accordance with industry

practice;

◗ reporting in the integrated annual report

each year that it has monitored

compliance with the risk management

policy and that the group has, in all

material respects, complied with the

policy during the year concerned;

◗ reporting to the JSE in the annual

compliance declaration (as referred to in

paragraph 13.49(d) of the JSE Listings

Requirements) that it has monitored

compliance with the policy and that the

group has, in all material respects,

complied with the policy during the year

concerned; and

◗ at the time of listing, confi rming to the

JSE and disclosing in the prelisting

statement that it has adopted the policy

referred to in paragraph 13.46(h)(i) of the

JSE Listings Requirements above.

Internal auditorSafari appointed an internal auditor as per

the recommendation by the audit and risk

committee and in line with King IV. The

committee satisfi ed itself through enquiry

that the internal auditor is independent as

defi ned by the Companies Act and as per

the standards stipulated by the auditing

profession.

The committee, in consultation with

executive management, agreed to the terms

of the engagement. The fee for the internal

audit has been considered and was

approved by the board. The committee

satisfi ed itself of the scope and quality of

work performed by the internal auditor.

External auditorThe committee satisfi ed itself through

enquiry that the external auditor is

independent as defi ned by the Companies

Act and as per the standards stipulated by

the auditing profession. Requisite assurance

was sought and provided by the Companies

Act that internal governance processes

within the fi rm support and demonstrate

the claim to independence. The committee

also reviewed the performance of the

external auditor and confi rmed that the

external auditor, the partner and the fi rm,

have complied with the suitability

requirements of the JSE as detailed in

paragraph 22.15(h) of the JSE Listings

Requirements.

During this fi nancial year, the committee conducted four meetings with a 100% attendance

by the members (refer to table below):

Members

14 June

2019

6 November

2019

19 February

2020

9 March

2020

AE Wentzel √ √ √ √

FN Khanyile √ √ √ √

Dr M Minnaar √ √ √ √

WL Venter ~ ~ ~ ~

DC Engelbrecht ~ ~ ~ ~

Attendance 100% 100% 100% 100%

√ = Attended ~ = Not a member




The committee, in consultation with

executive management, agreed to the terms

of the engagement. The audit fee for the

external audit has been considered and

approved, taking into consideration such

factors as the timing of the audit, the extent

of the work required and the scope. For

non-audit services, the committee satisfi es

itself that the service provider is

independent in relation to the external audit

function. The service provider submits an

engagement letter pertaining to the scope

of work and fee which is considered by the

committee and recommended to the board

for approval. Based on written reports

submitted and key audit matters addressed

as per the auditor’s report, the committee

reviewed, with the external auditor, the

fi ndings of their work and confi rmed that all

signifi cant matters had been satisfactorily

resolved. The committee is satisfi ed that the

2020 audit was completed without any

restrictions on its scope.

The committee satisfi ed itself with the

appointment of the external auditor as per

the JSE Limited and the Companies Act.

Subsequently, the committee recommended

the appointment of BDO South Africa

Incorporated as external auditor for the

2021 fi nancial year and Mr Paul Badrick as

the designated lead auditor. The 2021

fi nancial year will be the second year of the

fi rm as auditor of the company and group.

The following factors were considered when

the appointment was made: the annual fee

charged; independence; the promotion of

transformation regarding race and gender;

experience; and track record of auditing

REITs and the availability of a Pretoria-

based audit team.

Annual fi nancial statements and reportsFollowing the review of:

◗ the unaudited interim fi nancial

statements as at 30 September 2019;

and

◗ the consolidated annual fi nancial

statements as at 31 March 2020

the audit and risk committee recommended

board approval of the annual fi nancial

statements listed above.

Accounting practices and internal

control The audit and risk committee closely

monitors the internal control systems. In

addition, the committee monitors the

corporate governance of the company to

ensure it complies with the Companies Act,

the JSE Listings Requirements and King IV.

No signifi cant accounting practices or

internal control measurement changes

occurred during the year that required the

attention of the audit and risk committee.

Financial director assessmentThis committee has reviewed the expertise,

experience and performance of Safari’s

fi nancial director, Mr WL Venter, and was

satisfi ed with his appointment as fi nancial

director. In addition, the committee

reviewed and reported on the expertise,

resources and experience of the group’s

fi nance functions.


assessmentThe committee also reviewed and assessed

the group company secretary’s competence,

qualifi cations and experience. The

committee interviews and assesses

Mr PWL van Niekerk on a continual basis

and is satisfi ed that he is qualifi ed and

competent to act as the group company

secretary. A written assessment has been

done in this regard and was submitted to

the board in order to discharge its duties in

terms of the JSE Listings Requirement

3.84(i).

The committee’s report on risk-related mattersSafari is of the view that eff ective risk

governance is essential to its sustainable

business performance and the realisation of

strategic management and operational

objectives. Safari’s approach ensures that

any changes in risks and the impact thereof

are identifi ed and managed appropriately.

The board has the overall responsibility of

risk governance within the company and

oversees that risks are being managed and

reported appropriately. This includes the

determination of risk appetite and tolerance

levels and the approval of the risk strategy

– in this regard, refer to the risk management

section on page 19.

The global COVID-19 pandemic started to

become apparent shortly before the 2020

fi nancial year-end. Its direct impact on Safari’s

business operations is closely monitored by

this committee. Engagement with

stakeholders is ongoing and assessments are

done on a case-by-case level in order to best

mitigate the associated risks.

The audit and risk committee is further

charged with the duty to identify, review and

eff ectively monitor any fi nancial risks and for

overseeing that the strategy committee and

senior management have identifi ed and

assessed all the signifi cant risks the

organisation faces, and monitoring, in

conjunction with other board committees or

the full board, if applicable, risks such as

strategic, fi nancial, credit, market, liquidity,

security, property, IT, legal, regulatory,

reputational and other risks.

BOARD

COMMITTEEAUDIT AND RISK

COMMITTEE

STRATEGY

COMMITTEE

The risk management and governance of Safari is illustrated in the graphic below:

Ultimately responsible for the governance of risk in Safari

Management by response and action as well as report to the board on risks mitigated

or managed

Mandated to identify, assess, measure and monitor the

management of risk by the executive committee and

management




The audit and risk committee has

considered all the correspondence received

from the JSE relating to proactive

monitoring and has taken the necessary

action.

The audit and risk and strategy committees

report quarterly to the board to attest that

all potential and emerging risks have been

identifi ed and recorded and that appropriate

actions have been taken to mitigate the

risks to acceptable levels.

Safari’s board appreciates the fact that risk

management is an integral part of the

group’s strategy to ensure that the value of

the business is protected and to enable

business and growth. Safari is committed to

continuously improving its risk strategy and

management processes to ensure that the

business remains risk resistant. Risk

management does not necessarily eliminate

risks completely, but rather provides a

process and structure to manage and

mitigate the possible consequences of the

risks identifi ed.

The audit and risk committee duties in 2019/20The duties of the committee include, but are

not limited to:

◗ monitoring the integrity of the annual

financial statements of Safari including

the integrated annual and interim reports

and formal announcements relating to its

financial performance;

◗ overseeing integrated reporting and

signing off the integrated annual report;

◗ reviewing the expertise, resources and

experience of Safari’s financial function;

◗ reviewing and reporting risk-related

matters and overseeing the development

and review of a policy and plan for risk

management;

◗ keeping under review the eff ectiveness of

Safari’s internal controls and risk

management systems;

◗ reviewing Safari’s procedures for

detailing fraud;

◗ reviewing Safari’s arrangements for its

employees to raise concerns about

possible wrongdoing in financial

reporting or other matters and ensuring

that these arrangements allow

independent investigation and

appropriate follow-up action;

◗ considering the appointment, re-

appointment and removal of Safari’s

auditor and overseeing the relationship

with the auditor;

◗ assessing annually if the group requires

an internal audit function; and

◗ ensuring that a combined assurance

model is applied to provide a coordinated

approach to all assurance activities.

Accounting treatment of Southern Palace transactionDuring June 2019, Safari paid a portion of

the outstanding Southern Palace facility

over to Sanlam after Sanlam called on the

guarantee provided by Safari. A share-

based payment liability of R250 million was

raised on 31 March 2019 as disclosed in

our 2019 integrated annual report. The

liability was posted against stated capital

(equity). The liability was settled during

June 2019 and resulted in increased

interest-bearing debt.

As at 31 March 2020, Safari had provided

for a share-based payment liability of

R220 416 716 due to a higher probability of

settlement under the Safari guarantee

which was evidently settled on 6 May 2020.

Safari holds a pledge over the 53 million

Safari shares as security for the claim

against Southern Palace and would recover,

as a minimum for the debt owed by

Southern Palace, the value of the shares

upon realisation or cancellation. As part

of the board’s considerations, cancellation

of all or some of these shares may

present additional consequences to

shareholders which may be benefi cial e.g.

dividend per share. The 53 million shares

are treated as treasury shares for

accounting purposes.

AUDIT AND RISK COMMITTEE REPORT continued

Even though the claim against Southern

Palace is for the full amount including

costs, the asset raised is limited to the

value of the 53 million deal shares under

the recoverability considerations as per

relevant accounting standards. The

minimum recovery for Safari in respect of

the debt owed by Southern Palace will

therefore be the value of the shares, either

on cancellation or on realisation.

Cancellation of all or some of the shares

may have additional consequences for

shareholders e.g. dividend per share, which

may be benefi cial, and which will be

evaluated as part of the board’s

considerations.

On behalf of the audit and risk committee:

AE Wentzel

Chairman: audit and risk committee

Pretoria

10 July 2020




INDEPENDENT AUDITOR’S REPORT

To the shareholders of Safari Investments

RSA Limited

Report on the Audit of the Consolidated Financial Statements

OpinionWe have audited the consolidated fi nancial

statements of Safari Investments RSA

Limited and its subsidiary (“the group”) set

out on pages 66 to 107, which comprise

the consolidated statement of fi nancial

position as at 31 March 2020, and the

consolidated statement of profi t or loss and

other comprehensive income, the

consolidated statement of changes in equity

and the consolidated statement of cash

fl ows for the year then ended, and notes to

the consolidated fi nancial statements,

including a summary of signifi cant

accounting policies.

In our opinion, the consolidated fi nancial

statements present fairly, in all material

respects, the consolidated fi nancial position

of Safari Investments RSA Limited and its

subsidiary as at 31 March 2020, and its

consolidated fi nancial performance and

consolidated cash fl ows for the year then

ended in accordance with International

Financial Reporting Standards and the

requirements of the Companies Act of

South Africa.

Basis for opinionWe conducted our audit in accordance with

International Standards on Auditing (ISAs).

Our responsibilities under those standards

are further described in the Auditor’s

Responsibilities for the Audit of the

Consolidated Financial Statements section of

our report. We are independent of the group

in accordance with the sections 290 and 291

of the Independent Regulatory Board for

Auditors’ Code of Professional Conduct for

Registered Auditors (Revised January 2018),

parts 1 and 3 of the of the Independent

Regulatory Board for Auditors’ Code of

Professional Conduct for Registered Auditors

(Revised November 2018) (together the IRBA

Codes) and other independence requirements

applicable to performing audits of fi nancial

statements in South Africa. We have fulfi lled

our other ethical responsibilities, as

applicable, in accordance with the IRBA

Codes and in accordance with other ethical

requirements applicable to performing audits

in South Africa. The IRBA Codes are

consistent with the corresponding sections of

the International Ethics Standards Board for

Accountants’ Code of Ethics for Professional

Accountants and the International Ethics

Standards Board for Accountants’ International

Code of Ethics for Professional Accountants

(including International Independence

Standards) respectively. We believe that the

audit evidence we have obtained is suffi cient

and appropriate to provide a basis for

our opinion.

Key Audit MattersKey audit matters are those matters that, in our professional judgement, were of most signifi cance in our audit of the consolidated fi nancial

statements of the current period. These matters were addressed in the context of our audit of the consolidated fi nancial statements as a whole,

and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter How our audit addressed the key audit matter

Investment property

The valuation of investment property is

considered a key audit matter due to the

signifi cance of the balance, the signifi cant

judgements and estimates associated

with determining their fair values and the

sensitivity of the valuations to changes in

assumptions.

The valuations are based on discounted

cash fl ow models which are valued

annually by an external independent

valuator. Judgement is required in

determining the future cashfl ow forecasts,

vacancy levels, discount and

capitalisation rates.

Note 4 (Investment property) sets out the

most signifi cant inputs and assumptions

into the valuations.

We performed the following procedures amongst others:

◗ evaluated the capabilities, competency and objectivity of the external valuator. This

included verifying professional qualifi cations and registrations and making an assessment

of the independence and appropriateness of the valuator used;

◗ through discussions with the external valuator, obtained an understanding of the work

performed, which included, the valuation process adopted, the signifi cant assumptions

used and critical judgement areas applied, such as vacancy levels, discount rates and

capitalisation rates;

◗ with the assistance of our internal corporate fi nance specialist, compared for reasonability,

the signifi cant assumptions and judgements used by the valuator against historical inputs

and market data where available and investigated unexpected movements;

◗ for all properties, we verifi ed the mathematical accuracy of the models applied, evaluated

the reasonability of the inputs and assessed the reasonability of management’s forecast by

comparing the forecast to the actual historical results for accuracy; and

◗ we reviewed the adequacy of the disclosure in the fi nancial statements for compliance

with International Financial Reporting Standards, including disclosure on signifi cant inputs

and sensitivity analysis.




INDEPENDENT AUDITOR’S REPORT continued

Other informationThe directors are responsible for the other

information. The other information

comprises the information included in the

document titled “Safari Investments

RSA Limited Annual Integrated Report

31 March 2020” for the year ended

31 March 2020, which includes the

Directors’ Report, the Audit and Risk

Committee’s Report, the Company

Secretary’s Certifi cate as required by the

Companies Act of South Africa and the

annual integrated report. The other

information does not include the

consolidated fi nancial statements and

our auditor’s reports thereon.

Our opinion on the consolidated fi nancial

statements does not cover the other

information and we do not express an

audit opinion or any form of assurance

conclusion thereon.

In connection with our audit of the

consolidated fi nancial statements, our

responsibility is to read the other

information and, in doing so, consider

whether the other information is materially

inconsistent with the consolidated fi nancial

statements or our knowledge obtained in

the audit, or otherwise appears to be

materially misstated. If, based on the work

we have performed, we conclude that there

is a material misstatement of this other

information, we are required to report that

fact. We have nothing to report in

this regard.

Responsibilities of the Directors for the Consolidated Financial StatementsThe directors are responsible for the

preparation and fair presentation of the

consolidated fi nancial statements in

accordance with International Financial

Reporting Standards and the requirements

of the Companies Act of South Africa, and

for such internal control as the directors

determine is necessary to enable the

preparation of consolidated fi nancial

statements that are free from material

misstatement, whether due to fraud

or error.

In preparing the consolidated fi nancial

statements, the directors are responsible

for assessing the group’s ability to continue

as a going concern, disclosing, as

applicable, matters related to going concern

and using the going concern basis of

accounting unless the directors either

intend to liquidate the group or to cease

operations, or have no realistic alternative

but to do so.

Auditor’s Responsibilities for the Audit of the Consolidated Financial StatementsOur objectives are to obtain reasonable

assurance about whether the consolidated

Key audit matter How our audit addressed the key audit matter

Share-based payment liability

The Share-based payment liability is

considered a key audit matter due to the

signifi cance of the balance to the fi nancial

statements as a whole and the judgement

involved as to the recognition and

measurement of the obligation at

31 March 2020.

We performed the following procedures amongst others:

◗ we obtained managements’ calculation of the share-based payment liability, scrutinising

it for relevant inputs and assessing the validity thereof;

◗ we discussed the triggering events and the impact on the consolidated fi nancial

statements with management;

◗ we obtained and reviewed the Southern Palace agreements for the arrangement;

◗ we substantiated the high probability of default by Southern Palace at year end;

◗ we considered the ability of Southern Palace to settle its debt and meet its performance

obligations by reviewing its historic commitments to the arrangement; and

◗ we consulted with our internal fi nancial reporting experts to ensure the accounting

treatment of the transaction is appropriately accounted for and disclosed in terms of

International Financial Reporting Standards.

fi nancial statements as a whole are free

from material misstatement, whether due

to fraud or error, and to issue an auditor’s

report that includes our opinion. Reasonable

assurance is a high level of assurance, but

is not a guarantee that an audit conducted

in accordance with ISAs will always detect a

material misstatement when it exists.

Misstatements can arise from fraud or error

and are considered material if, individually

or in the aggregate, they could reasonably

be expected to infl uence the economic

decisions of users taken on the basis of

these consolidated fi nancial statements.

As part of an audit in accordance with ISAs,

we exercise professional judgement and

maintain professional scepticism

throughout the audit. We also:

◗ Identify and assess the risks of material

misstatement of the consolidated

fi nancial statements, whether due to

fraud or error, design and perform audit

procedures responsive to those risks, and

obtain audit evidence that is suffi cient

and appropriate to provide a basis for our

opinion. The risk of not detecting a

material misstatement resulting from

fraud is higher than for one resulting

from error, as fraud may involve

collusion, forgery, intentional omissions,

misrepresentations, or the override of

internal control.

◗ Obtain an understanding of internal

control relevant to the audit in order to

design audit procedures that are




appropriate in the circumstances, but not

for the purpose of expressing an opinion

on the eff ectiveness of the group’s

internal control.

◗ Evaluate the appropriateness of

accounting policies used and the

reasonableness of accounting estimates

and related disclosures made by the

directors.

◗ Conclude on the appropriateness of the

directors’ use of the going concern basis

of accounting and based on the audit

evidence obtained, whether a material

uncertainty exists related to events or

conditions that may cast signifi cant doubt

on the group’s ability to continue as a

going concern. If we conclude that a

material uncertainty exists, we are

required to draw attention in our

auditor’s report to the related disclosures

in the consolidated fi nancial statements

or, if such disclosures are inadequate, to

modify our opinion. Our conclusions are

based on the audit evidence obtained up

to the date of our auditor’s report.

However, future events or conditions may

cause the group to cease to continue as a

going concern.

◗ Evaluate the overall presentation,

structure and content of the consolidated

fi nancial statements, including the

disclosures, and whether the

consolidated fi nancial statements

represent the underlying transactions

and events in a manner that achieves fair

presentation.

◗ Obtain suffi cient appropriate audit

evidence regarding the fi nancial

information of the entities or business

activities within the group to express an

opinion on the consolidated fi nancial

statements. We are responsible for the

direction, supervision and performance

of the group audit. We remain solely

responsible for our audit opinion.

We communicate with the directors

regarding, among other matters, the

planned scope and timing of the audit and

signifi cant audit fi ndings, including any

signifi cant defi ciencies in internal control

that we identify during our audit.

We also provide the directors with a

statement that we have complied with

relevant ethical requirements regarding

independence, and to communicate with

them all relationships and other matters

that may reasonably be thought to bear on

our independence, and where applicable,

related safeguards.

From the matters communicated with the

directors, we determine those matters that

were of most signifi cance in the audit of the

consolidated fi nancial statements of the

current period and are therefore the key

audit matters. We describe these matters in

our auditor’s report unless law or regulation

precludes public disclosure about the

matter or when, in extremely rare

circumstances, we determine that a matter

should not be communicated in our report

because the adverse consequences of doing

so would reasonably be expected to

outweigh the public interest benefi ts of

such communication.

Report on Other Legal and Regulatory RequirementsIn terms of the IRBA Rule published in

Government Gazette Number 39475 dated

4 December 2015, we report that BDO

South Africa Incorporated has been the

auditor of Safari Investments RSA Limited

for 1 year.

BDO South Africa Incorporated

Registered Auditors

PR Badrick

Director

Registered Auditor

Wanderers Offi ce Park

52 Corlett Drive

Illovo, 2196

10 July 2020

BDO South Africa Incorporated

Registration number: 1995/002310/21

Practice number: 905526

VAT number: 4910148685

National Executive: PR Badrick • HN Bhaga-Muljee

• DF Botha • E Singh • BJ de Wet •

HCS Lopes (Johannesburg Offi ce Managing

Partner) SM Somaroo • ME Stewart

(Chief Executive) • IM Scott • MS Willimott

The company’s principal place of business is at

52 Corlett Drive, Illovo, Johannesburg, where a list

of directors’ names is available for inspection.

BDO South Africa Incorporated, a South African

personal liability company, is a member of BDO

International Limited, a UK company limited by

guarantee, and forms part of the international

BDO network of independent member fi rms.




Note

2020

R’000

2019

R’000

AssetsNon-current assets

Property, plant and equipment 3 912 23

Right-of-use assets 16 6 934 –

Investment property 4 3 058 199 3 009 004

Fair value of investment property 3 149 392 3 075 542

Straight-line lease adjustment (91 193) (66 538)

Loans to shareholders 5 44 399 45 883

Operating lease asset 6 87 637 64 322

Deferred tax 7 24 234 23 743

3 222 315 3 142 975

Current assets

Inventories 8 122 684 153 438

Loans to shareholders 5 5 465 5 465

Trade and other receivables 9 12 593 9 185

Operating lease asset 6 3 557 2 215

Cash and cash equivalents 10 6 105 7 233

150 404 177 536

Total assets 3 372 719 3 320 511

Equity and liabilitiesEquity

Stated capital 11 1 606 452 1 828 902

Retained income 375 711 417 245

1 982 163 2 246 147

Liabilities

Non-current liabilities

Interest-bearing borrowings 13 500 000 781 656

Derivatives 12 23 875 2 005

Lease liabilities 16 6 975 –

Deferred tax 7 19 206 16 921

550 056 800 582

Current liabilities

Trade and other payables 17 32 089 23 215

Interest-bearing borrowings 13 587 240 467

Derivatives 12 252 100

Lease liabilities 16 502 –

Share-based payment liability 14 220 417 250 000

840 500 273 782

Total liabilities 1 390 556 1 074 364

Total equity and liabilities 3 372 719 3 320 511

CONSOLIDATED STATEMENT OFFINANCIAL POSITIONas at 31 March 2020




Note

2020

R’000

Restated

2019

R’000

Revenue 18 345 444 299 427

Property revenue 320 788 275 979

Straight-line lease adjustment 24 656 23 448

Other income 20 5 444 2 167

Gain on sale of inventory 19 566 –

Sales 21 340 –

Cost of sales (20 774) –

Impairment of inventory 19 (11 233) (16 210)

Operating expenses (114 831) (104 323)

Operating profit 37 225 390 181 061

Investment income 23 5 605 5 907

Fair value adjustments 21 (8 179) (32 077)

Gross fair value adjustments 16 477 (8 629)

Straight-line lease adjustment (24 656) (23 448)

Finance costs 24 (90 995) (37 200)

Fair value loss on hedging instruments 25 (21 870) (2 005)

Profit before taxation 109 951 115 686

Taxation 26 (2 289) 8 293

Profit for the year 107 662 123 979

Other comprehensive income – –

Total comprehensive income for the year 107 662 123 979

Basic earnings per share (cents) 30 42 48

Diluted earnings per share (cents) 30 42 40

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEfor the year ended 31 March 2020




CONSOLIDATED STATEMENT OF CHANGES IN EQUITYfor the year ended 31 March 2020

Stated

capital

R’000

Share-based

payment

reserve

R’000

Retained

income

R’000

Total

equity

R’000

Balance as at 1 April 2018 2 087 928 49 800 427 053 2 564 781

Profi t for the year – – 123 980 123 980

Other comprehensive income – – – –

Total comprehensive income for the year – – 123 980 123 980

Share-based payment (7 356) (49 800) 49 800 (7 356)

Share buy-back (1 670) – – (1 670)

Share-based payment liability (250 000) – – (250 000)

REIT distribution paid – – (183 587) (183 587)

Total contributions by and distributions to owners of the company

recognised directly in equity (259 026) (49 800) (133 787) (442 613)

Balance as at 1 April 2019 1 828 902 – 417 245 2 246 147

Profi t for the year – – 107 662 107 662

Other comprehensive income – – – –

Total comprehensive income for the year – – 107 662 107 662

Share-based payment (2 033) – – (2 033)

Share-based payment liability (note 14) (220 417) – – (220 417)

REIT distribution paid – – (149 196) (149 196)

Total contributions by and distributions to owners of the company

recognised directly in equity (222 450) – (149 196) (371 646)

Balance as at 31 March 2020 1 606 452 – 375 711 1 982 163

Note 11




CONSOLIDATED STATEMENT OF CASH FLOWSfor the year ended 31 March 2020

Note

2020

R’000

Restated

2019

R’000

Net cash generated from/(used in) operating activities

Cash generated from operations 27 237 633 182 531

Investment income 5 759 5 907

Finance costs (89 859) (42 924)

REIT distribution paid 29 (149 197) (183 587)

Tax paid 28 (495) (156)

Net cash generated from/(used in) operating activities 37 3 841 (38 229)

Cash used in investing activities

Purchase of property, plant and equipment 3 (1 060) (24)

Purchase and development of investment property 4 (57 374) (391 001)

Net cash used in investing activities (58 434) (391 025)

Cash flows from financing activities

Reduction of share capital or buy-back of shares 11 (252 033) (9 026)

Proceeds from interest-bearing borrowings 13 564 983 1 001 172

Repayment of interest-bearing borrowings 13 (259 782) (560 575)

Repayment on shareholders’ loan 1 289 1 968

Payment lease liabilities (lessee) 16 (993) –

Net cash from financing activities 37 53 465 433 539

Total cash movement for the year (1 128) 4 285

Cash and cash equivalents at the beginning of the year 7 233 2 948

Total cash and cash equivalents at the end of the year 10 6 105 7 233




NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

Accounting policiesPresentation of the annual

financial statementsThese consolidated annual fi nancial

statements of Safari Investments RSA

Limited and its subsidiary (“the group”)

have been prepared in accordance with

International Financial Reporting Standards,



Committee and Financial Pronouncements

as issued by the Financial Reporting

Standards Council, the JSE Listings

Requirements and the Companies Act 71

of 2008. The consolidated annual fi nancial

statements have been prepared on the

historical cost basis, except for the

measurement of investment properties at

fair value, and incorporate the principle

accounting policies set out below. They are

presented in South African Rand.

These accounting policies are consistent

with the previous period save for new and

revised accounting standards per note 2 to

the annual fi nancial statements, which had

no material impact on the results.

1. Signifi cant accounting policies1.1 ConsolidationBasis of consolidation

The consolidated annual fi nancial statements

comprise the fi nancial statements of the

group as at 31 March 2020. Control is

achieved when the group is exposed, or has

rights, to variable returns from its

involvement with the investee and has the

ability to aff ect those returns through its

power over the investee. Specifi cally, the

group controls an investee if, and only if, the

group has:

◗ power over the investee (i.e. existing

rights that give it the current ability to

direct the relevant activities of the

investee);

◗ exposure, or rights, to variable returns

from its involvement with the investee;

and

◗ the ability to use its power over the

investee to aff ect its returns.

The results of the subsidiary are included in

the consolidated annual fi nancial

statements from the eff ective date that

control was acquired to the eff ective date

that control is disposed of or lost.

All intra-group transactions, assets and

liabilities, income and expenses and cash

fl ows relating to transactions between

members of the group are eliminated in full

on consolidation.

1.2 Significant judgements and

sources of estimation uncertaintyIn preparing the consolidated annual

fi nancial statements, the group is required to

make estimates and assumptions that aff ect

the amounts represented in the consolidated

annual fi nancial statements and related

disclosures. Use of available information and

the application of judgement is inherent in

the formation of estimates. Actual results in

the future could diff er from these estimates

which may have an impact on the


Signifi cant judgements included:

Key sources of estimation uncertainty

Trade receivables

Trade receivables are amounts due from

customers mainly relating to rental income

and tenant recoveries. They are generally

due for settlement within 30 days and

therefore are all classifi ed as current.

The group applies the IFRS 9 general

approach to measuring expected credit

losses which uses a 12-month expected

loss allowance for all trade receivables.

Individual receivables which were known

to be uncollectable were written off by

reducing the carrying amount directly.

Fair value of investment property

Refer to note 1.3.

Operating lease straight-lining

Included in the lease smoothing

calculations are lease agreements with

escalation terms linked to the Consumer

Price Index (“CPI”). The escalation terms

state that the annual escalation will be

equal to the CPI percentage, but limited to

7% per annum.

Inventory

A percentage of Erf 71 Swakopmund and

the development thereon is recognised as

inventory. The reason for the classifi cation

as inventory is that the development on this

part of the property will be sold as

residential units.

The net realisable value of inventory has

been valued by an independent external

valuer, who has considered all aspects of

the inventory, including:

◗ the current economy;

◗ nature of the property;

◗ location;

◗ risk profi le; and

◗ cost to sell inventory.

The inventory has been valued using the

“direct comparable method” and recognised

at the lower of cost and net realisable value

in terms of IAS 2 Inventories.

Expected manner of realisation for

deferred tax

Deferred tax is provided for on the fair value

adjustments of investment properties based

on the expected manner of recovery i.e. sale

or use. This manner of recovery aff ects the

rate used to determine the deferred tax

liability. Refer to note 26.

The group was listed as a Real Estate

Investment Trust (“REIT”) on the JSE

Limited on 7 April 2014 and the manner of

the realisation of deferred tax has been

taken into account accordingly.

Safari Investments RSA Limited as a REIT

does not have a formal distribution policy

for the foreseeable future. As such,

assumptions cannot be made that the

distributions made to the shareholders of

the company will exceed the taxable income

of the company. Therefore, the deferred tax

has been provided on the following in

accordance with IAS 12 Income Taxes:

◗ Straight-lining of operating leases;

◗ Income received in advance; and

◗ Capital allowances previously deducted

before listing as a REIT on the JSE and

therefore a future recoupment for tax

purposes on sale of investment

properties.




After converting to a REIT, capital gains

taxation is no longer applicable on the sale

of investment property in terms of section

25BB of the Income Tax Act. The deferred

tax rate applied to investment property at

the sale rate will therefore be 0%.

Consequently, no deferred tax was raised on

the fair value adjustments on investment

property.

The deferred tax asset for Namibia is a

result of the downward fair valuation of the

Platz am Meer property. Management’s

judgement is that the current economic

climate together with certain property-

specifi c matters, which are being

addressed, resulted in the downward

valuation and should be reversed once

there is a turnaround. The valuation of the

asset will be assessed at each reporting

period.

1.3 Fair value investment

propertyThe valuation of the property has been

carried out by an external valuer who has

considered all aspects of all the properties,

including:

◗ the current economy;

◗ nature of the property;

◗ location;

◗ tenancy;

◗ risk profi le;

◗ forward rent and earning capability;

◗ exposure to future expenses and

property risk;

◗ tenancy income capability; and

◗ property expenditure.

The value thus indicates the fair market

values for the properties. The company

accordingly applied the fair value model.

The calculation of the market values of

the improved properties for the proposed

development has been based on income

capitalisation, making use of market rental

rates and capitalisation rates.

The vacant land has been valued on the

“direct comparable basis”.

The discounted cash fl ow has, however,

been calculated for developed property as

the only method of valuation in order for the

capitalised value to be calculated and is

consistent with market norms and

expectations.

The “highest and best use” has been

considered when determining the market

value of the existing buildings, those in the

“process of development” as well as the

“vacant land”.

The considerations for the capitalised

valuations are as follows:

◗ Calculating the forward cash fl ow of all

contractual and other income from the

property;

◗ Calculating the forward contractual and

other expenditure as well as provisions

for various expenses in order to provide

for future capital expenditure to which

the property may be exposed; and

◗ The current area vacancy as a

percentage of the leasable area.

The valuer has also deducted percentages

of the net annual income as a provision for

rental that may not be collected as a

consequence of vacancy, tenant failure or

tenant refi tting.

The valuation reports were based on

“material valuation uncertainty” due to the

timing of the valuation and the uncertain

extent of the future eff ect of the COVID-19

pandemic on property values. It has been

recommended that the property valuations

remain under frequent review.

1.4 Property, plant and

equipment Property, plant and equipment are tangible

assets which the company holds for its own

use and which are expected to be used for

more than one year.

An item of property, plant and equipment is

recognised as an asset when it is probable

that future economic benefi ts associated

with the item will fl ow to the company, and

the cost of the item can be measured

reliably.

Property, plant and equipment is initially

measured at cost.

Depreciation of an asset commences when

the asset is available for use as intended by

management. Depreciation is charged to

write off the asset’s carrying amount over

its estimated useful life to its estimated

residual value, using a method that best

refl ects the pattern in which the asset’s

economic benefi ts are consumed by the

company.

The useful lives of items of property, plant

and equipment have been assessed as

follows:

Item

Depreciation

method

Average

useful life

Furniture and

fi xtures Straight-line 6 years

IT equipment Straight-line 3 years

Each part of an item of property, plant and

equipment with a cost that is signifi cant in

relation to the total cost of the item is

depreciated separately.

The depreciation charge for each year is

recognised in profi t or loss unless it is

included in the carrying amount of another

asset.

Impairment tests are performed on

property, plant and equipment when there is

an indicator that they may be impaired.

When the carrying amount of an item of

property, plant and equipment is assessed

to be higher than the estimated recoverable

amount, an impairment loss is recognised

immediately in profi t or loss to bring the

carrying amount in line with the recoverable

amount.

An item of property, plant and equipment is

derecognised upon disposal or when no

future economic benefi ts are expected from

its continued use or disposal. Any gain or

loss arising from the derecognition of an

item of property, plant and equipment,

determined as the diff erence between the

net disposal proceeds, if any, and the

carrying amount of the item, is included in

profi t or loss when the item is derecognised.




1. Significant accounting policies continued

1.5 Financial instrumentsClassification

Financial assets and fi nancial liabilities are

recognised in the group’s consolidated

statement of fi nancial position when the

group becomes a party to the contractual

provisions of the instrument.

Initial recognition and measurement

Financial assets and fi nancial liabilities are

initially measured at fair value through profi t

or loss or, at amortised cost depending on

the groups business model for managing the

assets or liabilities, and the contractual

terms of the cash fl ows.

Transaction costs that are directly

attributable to the acquisition or issue of

fi nancial assets and fi nancial liabilities (other

than fi nancial assets and fi nancial liabilities

at fair value through profi t or loss) are added

to or deducted from the fair value of the

fi nancial assets or fi nancial liabilities, as

appropriate, on initial recognition.

Transaction costs directly attributable to the

acquisition of fi nancial assets or fi nancial

liabilities at fair value through profi t or loss

are recognised immediately in profi t or loss.

Subsequent measurement

Financial assets and fi nancial liabilities at

amortised cost are subsequently carried at

amortised cost using the eff ective interest

rate method. This method exactly discounts

estimated future cash receipts or payments

to the gross carrying amount of a fi nancial

asset or to the amortised cost of a fi nancial

liability.

Gains or losses arising from derecognition,

reclassifi cation, impairment or in the case

of a fi nancial asset, the amortisation

process, will be recognised in profi t or loss.

When the contractual cash fl ows of a

fi nancial asset are renegotiated or modifi ed,

the entity will recalculate the present value

using the fi nancial asset’s original eff ective

interest rate. The modifi cation gain or loss

is recognised in profi t or loss.

All fi nancial assets and fi nancial liabilities

at fair value through profi t or loss are

carried at fair value subsequent to initial

recognition. Fair value gains or losses

(realised and unrealised) calculated on the

subsequent measurement are recognised in

profi t or loss.

Financial assets and liabilities are not

reclassifi ed unless the group amends its

business model for managing these

fi nancial assets and liabilities.

Derecognition

The group shall derecognise a fi nancial

asset only when the contractual rights to

the cash fl ows expire or it transfers the

fi nancial asset and that transfer qualifi es

for derecognition.

The group shall derecognise a fi nancial

liability only when it is extinguished i.e.

when the obligation specifi ed in the contract

is discharged or cancels or expires.

An exchange of debt instruments with

substantially diff erent terms between an

existing borrower and lender of debt, or a

substantial modifi cation to the terms of an

existing fi nancial liability shall be accounted

for as an extinguishment of the original

fi nancial liability and the recognition of a

new fi nancial liability. The diff erence

between the carrying amount of a fi nancial

liability extinguished or transferred and the

amount paid will be recognised in profi t or

loss.

Impairment of financial assets

The group recognises a loss allowance for

expected credit losses (“ECL”) on lease

receivables, trade receivables, and fi nancial

guarantee contracts.

Safari has adopted the general approach

which measures the loss allowance at an

amount equal to a 12-month expected

credit loss on a probability weighted

estimate. Under this approach an expected

loss allowance based on the 12-month ECL

is recognised for a fi nancial instrument. If

there has been a signifi cant increase in

credit risk since initial recognition of the

fi nancial instrument, the group recognises a

lifetime expected credit loss. Expected

credit losses under the “general approach”

for each forward-looking scenario of the

group can be developed using the equation:

Probability of default multiplied by the loss

of the given default multiplied by the

exposure at the date of default.

Lease receivables are written off when

there is no reasonable expectation of

recovery. Indicators that there is no

reasonable expectation of recovery

include, among others, the failure of a

tenant to engage in a repayment plan,

vacated tenants not honouring payment

plans, the inability to locate tenants and

the recovery cost and eff orts are not

justifi ed relative to the amount receivable.

Write-off s are recognised under “operating

expenses” in profi t or loss.

Subsequent recoveries of amounts

previously written off are credited against

operating expenses.

Loans to shareholders

These fi nancial assets are measured at

amortised cost.

Trade and other receivables

Safari makes use of the general approach

in accounting for trade and other

receivables and records the loss

allowance as part of a 12-month expected

credit loss. These are the expected

shortfalls between the contractual cash

fl ows and the cash fl ows that it actually

expects to receive (“cash shortfalls”).

The group assesses impairment of trade

receivables on a collective and individual

basis, tenants that possess shared credit

risk characteristics and have been

grouped based on the days past due.

Trade and other payables

Trade payables are initially measured at

fair value, and are subsequently measured

at amortised cost, using the eff ective

interest rate method.

Cash and cash equivalents

Cash and cash equivalents comprise cash

on hand and demand deposits.

Borrowings

Borrowings are classifi ed as fi nancial

liabilities at amortised cost. Any diff erence

between the proceeds (net of transaction

costs) and the settlement or redemption of

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS continued




borrowings is recognised over the term of

the borrowings in accordance with the

company’s accounting policy for borrowing

costs.

Effective interest rate

The eff ective interest rate method is a

method of calculating the amortised cost of

a fi nancial instrument and of allocating the

interest on the instrument over the relevant

period. The eff ective interest rate is the rate

that exactly discounts estimated future cash

payments or receipts through the expected

life of the fi nancial instrument or, when

appropriate, a shorter period to the net

carrying amount of the instrument.

Derivative financial instruments

As part of the company’s risk management

strategies, derivatives have been utilised to

hedge against interest rate risks arising

from its fi nancing arrangements. Even

though the derivatives meet the hedge

accounting criteria, we have selected not to

apply hedge accounting and therefore these

are classifi ed as held for trading for

accounting purposes which are accounted

for at fair value through profi t or loss. They

are presented as non-current assets or

liabilities to the extent they are expected to

be settled 12 months after the end of the

reporting period.

The derivative fi nancial instruments held

relate to interest rate swaps measured at

fair value at the reporting date. This is

calculated using the net present value the

group would pay or receive from the swap

counterparty based on current interest

rates.

1.6 Tax

Current tax assets and liabilities

Current tax for current and prior periods is,

to the extent unpaid, recognised as a

liability. If the amount already paid in

respect of current and prior periods

exceeds the amount due for those periods,

the excess is recognised as an asset.

Current tax liabilities (assets) for the current

and prior periods are measured at the

amount expected to be paid to (recovered

from) the tax authorities, using the tax rates

(and tax laws) that have been enacted or

substantively enacted by the end of the

reporting period.

Deferred tax assets and liabilities

A deferred tax liability is recognised for all

taxable temporary diff erences, except to the

extent that the deferred tax liability arises

from the initial recognition of an asset or

liability in a transaction which at the time of

the transaction, aff ects neither accounting

profi t nor taxable profi t (tax loss).

A deferred tax asset is recognised for all

deductible temporary diff erences to the

extent that it is probable that taxable profi t

will be available against which the

deductible temporary diff erence can be

utilised. A deferred tax asset is not

recognised when it arises from the initial

recognition of an asset or liability in a

transaction at the time of the transaction,

aff ects neither accounting profi t nor taxable

profi t (tax loss).

IFRIC 23 Uncertainty over Income Tax

Treatments

When there is uncertainty concerning the

group’s fi ling position regarding the tax

bases of assets or liabilities, the taxability of

certain transactions or other tax-related

assumptions, the group then:

◗ Considers whether uncertain tax

treatments should be considered

separately, or together as a group, based

on which approach provides better

predictions of the resolution;

◗ Determines if it is probable that the tax

authorities will accept the uncertain tax

treatment; and

◗ If it is not probable that the uncertain tax

treatment will be accepted, measure the

tax uncertainty based on the most likely

amount or expected value, depending on

whichever method better predicts the

resolution of the uncertainty. The

required measurement is based on the

assumption that each of the tax

authorities will examine amounts they

have a right to examine and have full

knowledge of all related information

when making those examinations.

Judgement is required in determining the

provision for income taxes due to the

complexity of legislation. There are many

transactions and calculations for which the

ultimate tax determination is uncertain

during the ordinary course of business.

Where the fi nal tax outcome of these

matters is diff erent from the amounts that

were initially recorded, such diff erences will

impact the income tax and deferred tax

provisions in the period in which such

determination is made.

Tax expenses

Current and deferred taxes are recognised

as income or an expense and included in

profi t or loss for the period, except to the

extent that the tax arises from:

◗ a transaction or event which is recognised,

in the same or a diff erent period, to other

comprehensive income; or

◗ a business combination.

Current tax and deferred taxes are charged

or credited to other comprehensive income

if the tax relates to items that are credited

or charged, in the same or a diff erent

period, to other comprehensive income.

Current tax and deferred taxes are charged

or credited directly to equity if the tax

relates to items that are credited or

charged, in the same or a diff erent period,

directly in equity.

1.7 Leases

All leases with tenants are classifi ed as

operating leases.

Operating leases – lessor

Operating lease income is recognised as

an income on a straight-line basis over the

lease term.

The accrued operating lease income

straight-lining adjustment is recognised

as an asset in the statement of fi nancial

position. The current portion of the

operating lease asset is the portion of the

accrued operating lease income straight-

lining adjustment that will reverse in the

next fi nancial year.

Income for leases is disclosed within

revenue in profi t or loss.





1.7 Leases continued

Contingent rentals

Where applicable, turnover rent is

negotiated with tenants on an individual

basis. Turnover rent is recognised when it

is due in terms of the lease agreement.

Leases – lessee

Lease liability

The lease liability is initially measured at

the present value of the lease payments

that are not paid at the commencement

date, discounted by using the rate implicit

in the lease. If this rate cannot be readily

determined, the company uses its

incremental borrowing rate.

Lease payments included in the

measurement of the lease liability

comprise the following:

◗ Fixed lease payments, including

in-substance fi xed payments, less any

lease incentives;

◗ Variable lease payments that depend on

an index or rate, initially measured using

the index or rate at the commencement

date;

◗ The amount expected to be payable by

the company under residual value

guarantees;

◗ The exercise price of purchase options, if

the company is reasonably certain to

exercise the option;

◗ Lease payments in an optional renewal

period if the company is reasonably

certain to exercise an extension option;

and

◗ Penalties for early termination of a

lease, if the lease term refl ects the

exercise of an option to terminate the

lease.

Variable rents that do not depend on an

index or rate are not included in the

measurement of the lease liability (or

right-of-use asset). The related payments

are recognised as an expense in the period

incurred and are included in operating

expenses (refer to note 16).

The lease liability is presented as a

separate line item on the statement of

fi nancial position.

The company remeasures the lease liability

(and makes a corresponding adjustment to

the related right-of-use asset) when:

◗ there has been a change to the lease

term, in which case the lease liability is

remeasured by discounting the revised

lease payments using a revised discount

rate;

◗ there has been a change in the

assessment of whether the company will

exercise a purchase, termination or

extension option, in which case the lease

liability is remeasured by discounting the

revised lease payments using a revised

discount rate;

◗ there has been a change to the lease

payments due to a change in an index or

a rate, in which case the lease liability is

remeasured by discounting the revised

lease payments using the initial discount

rate (unless the lease payments change

is due to a change in a fl oating interest

rate, in which case a revised discount

rate is used);

◗ there has been a change in expected

payment under a residual value

guarantee, in which case the lease

liability is remeasured by discounting the

revised lease payments using the initial

discount rate; and

◗ a lease contract has been modifi ed and

the lease modifi cation is not accounted

for as a separate lease, in which case the

lease liability is remeasured by

discounting the revised payments using a

revised discount rate.

When the lease liability is remeasured in

this way, a corresponding adjustment is

made to the carrying amount of the

right-of-use asset, or is recognised in profi t

or loss if the carrying amount of the

right-of-use asset has been reduced

to zero.

Right-of-use assets

Right-of-use assets are presented as a

separate line item on the statement of

fi nancial position.

Right-of-use assets are usually measured

at cost at the commencement date which

comprises the following:

◗ The initial amount of the corresponding

lease liability;

◗ Any lease payments made at or before

the commencement date;

◗ Any initial direct costs incurred;

◗ Any estimated costs to dismantle and

remove the underlying asset or to restore

the underlying asset or the site on which

it is located, when the company incurs an

obligation to do so, unless these costs are

incurred to produce inventories; and

◗ Less any lease incentives received.

Right-of-use assets are subsequently

measured at cost less accumulated

depreciation and impairment losses.

Right-of-use assets are depreciated over

the shorter period of lease term and useful

life of the underlying asset. However, if a

lease transfers ownership of the underlying

asset or the cost of the right-of-use asset

refl ects that the company expects to

exercise a purchase option, the related

right-of-use asset is depreciated over the

useful life of the underlying asset.

Depreciation starts at the commencement

date of a lease.

For right-of-use assets which are

depreciated over their useful lives, the

useful lives are determined consistently

with items of the same class of property,

plant and equipment. Refer to the

accounting policy for property, plant and

equipment for details of useful lives.

The residual value, useful life and

depreciation method of each asset are

reviewed at the end of each reporting year.

If the expectations diff er from previous

estimates, the change is accounted for

prospectively as a change in accounting

estimate. Each part of a right-of-use asset

with a cost that is signifi cant in relation to

the total cost of the asset is depreciated

separately.

The depreciation charge for each year is

recognised in profi t or loss unless it is

included in the carrying amount of another

asset.

1.8 Inventories

Inventories are measured at the lower of

cost and net realisable value. Cost includes

all expenses directly attributable to the

construction process.





Net realisable value is the estimated selling

price in the ordinary course of business

less the estimated costs of completion

and the estimated costs necessary to make

the sale.

When inventories are sold, the carrying

amount of those inventories is recognised

as an expense in the period in which the

related revenue is recognised. The amount

of any write-down of inventories to net

realisable value and all losses of inventories


the write-down or loss occurs.

The amount of any reversal of any

write-down of inventories, arising from

an increase in net realisable value, is

recognised as a reduction in the amount

of inventories recognised as an expense in

the period in which the reversal occurs.

1.9 Impairment of assetsThe company assesses at each end of the

reporting period whether there is any

indication that an asset may be impaired.

If any such indication exists, the company

estimates the recoverable amount of the

asset.

An impairment loss of assets carried

at cost less any accumulated depreciation

or amortisation is recognised immediately

in profi t or loss. Any impairment loss of a

revalued asset is treated as a revaluation

decrease.

A reversal of an impairment loss of assets

carried at cost less accumulated

depreciation or amortisation other than

goodwill is recognised immediately in profi t

or loss. Any reversal of an impairment loss

of a revalued asset is treated as a

revaluation increase.

1.10 Stated capital and equityAn equity instrument is any contract that

evidences a residual interest in the assets

of an entity after deducting all of its

liabilities.

Ordinary shares are classifi ed as equity.

Ordinary shares paid for and issued are

recognised as stated capital.

Ordinary shares fully paid for but not yet

issued are classifi ed as equity within the

statement of changes in equity.

1.11 Earnings per shareThe group presents basic and diluted

earnings per share (“EPS”) for its ordinary

shares. Basic EPS is calculated by dividing

the profi t or loss attributable to the ordinary

shareholders by the weighted average

number of ordinary shares in issue during

the period.

The calculation of headline earnings per

share is based on the net profi t attributable

to equity holders of the parent, after

excluding all items of a non-trading

nature, divided by the weighted average

number of ordinary shares in issue during

the year.

The presentation of headline earnings is not

an IFRS requirement, but is required by the

JSE Limited and Circular 1 of 2019.

1.12 RevenueThe group earns revenue from the leasing

of investment property and recoveries of

property expenses. Revenue from rental

agreements is recognised in accordance

with the accounting policy for operating

leases.

The group furthermore earns revenue from

the sale of apartments classifi ed as

inventory on the face of the consolidated

statement of fi nancial position.

Revenue is measured at the fair value of the

consideration received or receivable and

represents the amounts receivable for

apartment sales and leasing services

provided in the normal course of business,

net of value added tax.

Interest is recognised, in profi t or loss, using

the eff ective interest rate method.

The core principle of IFRS 15 is that an

entity recognised revenue to depict the

transfer of promised goods or services to

customers in an amount that refl ects the

consideration to which the entity expects to

be entitled in exchange for those goods or

services. An entity recognises revenue in

accordance with that core principle by

applying the following steps:

◗ Identify the contract(s) with a customer;

◗ Identify the performance obligations in

the contract;

◗ Determine the transaction price;

◗ Allocate the transaction price to the

performance obligations in the contract;

and

◗ Recognise revenue when (or as) the

entity satisfi es a performance obligation.

The contracts impacted by this standard do

not form a signifi cant part of Safari’s

contracts being lease agreements which

are covered under IAS 17.

1.13 Borrowing costsBorrowing costs that are directly

attributable to the acquisition, construction

or production of a qualifying asset are

capitalised as part of the cost of that asset

until such time as the asset is ready for its

intended use. The amount of borrowing

costs eligible for capitalisation is

determined as follows:

◗ Actual borrowing costs on funds

specifi cally borrowed for the purpose of

obtaining a qualifying asset less any

temporary investment of those

borrowings.

Capitalisation ceases when substantially all

the activities necessary to prepare the

qualifying asset for its intended use or sale

are complete.

1.14 Segment reportingAn operating segment is a component

of an entity that engages in business

activities from which it may earn

revenues or incur expenses for which

discrete fi nancial information is available

and whose operating results are regularly

reviewed by the entity’s chief operating

decision maker. The segment’s assets

and liabilities comprise those operating

assets and liabilities that are directly

attributable to the segment or can be

allocated to the segment on a reasonable

basis.

The group’s operating segments are

reported based on the location of every

property within the company.

The measurement policies the company

uses for segment reporting under IFRS 8

Operating Segments are the same as those

used in the annual fi nancial statements.





1.14 Segment reporting continued

The group classifi es the following main

segments (shopping centres), which is

consistent with the way in which the

company reports internally:

◗ Atlyn, Mnandi and Nkomo

(Atteridgeville);

◗ Denlyn (Mamelodi);

◗ Thabong (Sebokeng);

◗ The Victorian (Heidelberg);

◗ Thornhill (Polokwane); and

◗ Platz am Meer (Namibia).

1.15 Related partiesThe related parties of the group consist of

companies with common directorship,

trusts with directors acting as trustees,

close corporations with directors acting as

members and a wholly-owned subsidiary of

such entities.

The majority of capitalised development

costs are transacted with related parties.

Refer to note 31.

1.16 Cost of salesWhen inventories are sold, the carrying

amount of those inventories is recognised

as an expense in the period in which the

related revenue is recognised. The amount

of any write-down of inventories to net

realisable value and all losses of inventories


the write-down or loss occurs.

The amount of any reversal of any

write-down of inventories, arising from an

increase in net realisable value, is

recognised as a reduction in the amount of

inventories recognised as an expense in the

period in which the reversal occurs.

2. New standards and interpretationsIFRS 16 LeasesIFRS 16 establishes principles for the

recognition, measurement, presentation and

disclosure of leases, with the objective of

ensuring that lessors provide relevant

information that faithfully represents those

transactions.


Accounting by a lessor

Upon lease commencement, a lessor shall

recognise assets held under a fi nance lease

as a receivable at an amount equal to the

net investment in the lease. A lessor

recognises fi nance income over the lease

term of a fi nance lease, based on a pattern

refl ecting a constant periodic rate of return

on the net investment.

A lessor recognises operating lease

payments as income on a straight-line basis

or, if more representative of the pattern in

which the benefi t from use of the underlying

asset is diminished, another systematic

basis.

Accounting by a lessee

Upon lease commencement, a lessee

recognises a right-of-use asset and a lease

liability.

The right-of-use asset is initially measured

at the amount of the lease liability plus any

initial direct costs incurred by the lessee.

Adjustments may also be required for lease

incentives, payments at or prior to

commencement and restoration obligations

or similar.

After lease commencement, a lessee shall

measure the right-of-use asset using a cost

model, unless: [IFRS 16:29, 34, 35]

◗ the right-of-use asset is an investment

property and the lessee fair values

its investment property under

IAS 40; or

◗ the right-of-use asset relates to a class

of PPE to which the lessee applies

IAS 16’s revaluation model, in which case

all right-of-use assets relating to that

class of PPE can be revalued.

Disclosure

The objective of IFRS 16’s disclosures is for

information to be provided in the notes that,

together with information provided in the

statement of fi nancial position, statement

of profi t or loss and statement of cash

fl ows, gives a basis for users to assess the

eff ect of leases. The eff ective date of the

standard is for years beginning on or after

1 January 2019. The group adopted the

standard for the fi rst time in the 2020


The group assessed the impact of the new

standard and concluded that there will not

be a signifi cant quantitative impact on

recognition of amounts as a result of the

new standard due to the fact that, in terms

of lease agreements, Safari is mainly in the

position of lessor. There may, however, be a

qualitative impact on Safari as a result of

the new standard as it can be expected that

lessees, being the retail tenants in Safari’s

case, will take the impact of the new

standard on their fi nancial results into

consideration when negotiating terms and

conditions for new contracts and renewals

with Safari. The only instance where Safari

is a lessee is where monthly rental is paid

for partial offi ce space.

On 1 May 2019, Safari entered into a

non-cancellable lease agreement, for its

corporate head offi ce with Wealthgate

Investments 45 Proprietary Limited for a

period of fi ve years including the option to

renew for a further three years. This

subsequently resulted in the recognition of

a lease liability and a right-of use asset of

R7 477 204 and R6 934 133, respectively.

Based on our assessment, we have realised

a current year depreciation of R897 011,

interest expense of R639 450 and a present

value of lease payments at commencement

date of R7 831 145, which will not

materially impact the consolidated annual

fi nancial statements.




3. Property, plant and equipment2020 2019

Cost or

revaluation

R’000

Accumulated

depreciation

R’000

Carrying

value

R’000

Cost or

revaluation

R’000

Accumulated

depreciation

R’000

Carrying

value

R’000

Furniture and fi xtures 766 (119) 647 – – –

IT equipment 342 (77) 265 24 (1) 23

Total 1 108 (196) 912 24 (1) 23

Reconciliation of property, plant and equipment

Opening

balance

R’000

Additions

R’000

Depreciation

R’000

Total

R’000

2020

Furniture and fi xtures – 766 (119) 647

IT equipment 23 319 (77) 265

23 1 085 (196) 912

2019

IT equipment – 24 (1) 23

4. Fair value investment property

Carrying value

2020

R’000

2019

R’000

Investment property 3 058 199 3 009 004

Reconciliation of fair value investment property

Opening

balance

R’000

Additions

R’000

Operating

lease

straight-

lining

asset

R’000

Fair value

adjustments

R’000

Total

R’000

2020

Investment property 3 009 004 57 374 (24 656) 16 477 3 058 199

2019

Investment property 2 638 538 402 543 (23 448) (8 629) 3 009 004




4. Fair value investment property continued

Details of property The fair values as disclosed per property are inclusive of the operating lease asset. The operating lease asset is presented separately

as required by IAS 40 and the value of investment property is reduced to avoid double counting.

2020

R’000

2019

R’000

Sebokeng – Thabong Shopping Centre

Erf 103 measuring 9 643m²





Erf 77666 (consolidated 86, 87, 94 and 95) measuring 5 502m²

Sebokeng Unit 10 Ext 1: Retail shopping centre

– Purchase price: Land 7 739 7 739

– Purchase price: Buildings 1 637 1 637

– Capital movement since purchase or valuation 417 741 419 252

– Fair value adjustments 132 283 105 872

559 400 534 500

Mamelodi – Denlyn Shopping Centre

Erf 19265 Mamelodi measuring 4 849m²

Erf 40827 Mamelodi Ext 13 measuring 75 539m²

Erf 40827 is a consolidated property made up of previous erven measuring 35 380m², 40 327m2

and 40 326m² (Portion 1) Mamelodi

Ext 1: Retail shopping centre





798 900 792 800

Atteridgeville – Atlyn Shopping Centre

Erf 16248 Atteridgeville Ext 25 measuring 64 926m²

Erf 16248 is a consolidated property made up of erven 15232, 15233 and 15234,

Atteridgeville Ext 25: Retail shopping centre





577 600 538 300






Details of property continued

2020

R’000

2019

R’000

Atteridgeville – Nkomo Village Shopping Centre




Atteridgeville Ext 5: Retail shopping centre



– Fair value adjustments (43 342) (4 627)

333 600 331 600

Atteridgeville – Mnandi Shopping Centre

Remainder of Portion 294, Farm Pretoria Town and Townlands 351, Maunde Street

Atteridgeville Ext 45, stand 16249 and 16250, measuring 26 141m²: Retail shopping centre




136 900 136 600

Heidelberg – The Victorian Shopping Centre

Portion 1 and Portion 3 of Erf 3523 measuring 34 000m²

Ext 19 Heidelberg Township: Retail shopping centre

– Acquisition through business combination 132 414 132 414

– Additions to business combination 2 388 2 388



161 900 172 000

Soweto Day Hospital

Stand 14475 Protea Glen Ext 6, Johannesburg, Gauteng: Day hospital

– Purchase price: Development 1 300 1 300

– Capital movement of project under development 26 291 26 291


41 000 39 400

Lynnwood

Stands 582-585 (inclusive), Portion 1 of Stand 586

(Sections 1 and 2 of Lynnwood 586 Een) and remaining extent of Stand 586

Lynnwood, Tshwane, Gauteng: Residential property

– Purchase price: Land and buildings 40 795 40 795

– Capital movement since purchase or valuation 595 492

– Fair value adjustments (4 890) 413

36 500 41 700





Details of property continued

2020

R’000

2019

R’000

Polokwane – Thornhill Shopping Centre

Portion 1 of Erf 5665 Bendor Extension 87, Polokwane, Limpopo and remainder of

Erf 5665 Bendor Extension 87, Polokwane, Limpopo

– Acquisition of land and buildings 172 660 174 455

– Capital movement since purchase or valuation 8 513 326


226 000 205 100

Subsidiary Property

Swakopmund, Namibia

Platz am Meer Waterfront






Erf 69 measuring 522m²

Erf 71 measuring 20 239m² (Being 70% of total square metres of 29 041)

Swakopmund, Erongo Region, Registration division G: Retail shopping centre

– Purchase price: Land and buildings 16 000 16 000


– Transferred to inventory (174 684) (174 684)


277 592 283 542






Details of property continued Direct operating costs (including repairs and maintenance), relating to the investment property that generated rental income during the

period, of R72 375 776 (2019: R71 969 428) are included in profi t or loss.

Certain investment property is held as security for mortgage bonds and the bank facilities. The value of encumbered property is as

follows:

Thabong – Sebokeng Shopping Centre

◗ Erf 103 Sebokeng Unit 10 Extension 1 Township Registration Division I.Q., Gauteng, Measuring: 9 643 (nine thousand six hundred and

forty-three) square metres;



◗ Erf 105 Sebokeng Unit 10 Extension 1 Township Registration Division I.Q., Gauteng, Measuring: 10 000 (ten thousand) square metres;



◗ Erf 74995 Sebokeng Unit 10 Extension 1 Township, Registration Division I.Q., Gauteng, Measuring: 5,1061 (fi ve comma one zero six

one) hectares; and

◗ Erf 77666 (consolidated 86, 87, 94 and 95) Sebokeng Unit 10 Extension 1 Township, Registration Division I.Q., Gauteng, Measuring

5 502 (fi ve thousand fi ve hundred and two) square metres.

Initial valuation amount: R497 600 000 (four hundred and ninety-seven million six hundred thousand Rand)

Mortgage bond amount: R1 000 000 000 (one billion Rand)

Atteridgeville – Nkomo Village Shopping Centre

◗ Erf 9043 Atteridgeville Extension 5 Township Registration Division J.R., Gauteng, Measuring: 6,9068 (six comma nine zero six eight)

hectares; and

◗ Erf 9044 Atteridgeville Extension 5 Township, Registration Division J.R., Gauteng, Measuring: 8 401 (eight thousand four hundred and

one) square metres.

Initial valuation amount: R304 000 000 (three hundred and four million Rand)

Mortgage bond amount: R610 000 000 (six hundred and ten million Rand)

Polokwane – Thornhill Shopping Centre

◗ Portion 1 of Erf 5665 Bendor Extension 87 Township, Registration Division L.S., Limpopo, Measuring: 2,5474 (two comma fi ve four

seven four) hectares; and

◗ Remaining Extent of Erf 5665 Bendor Extension 87 Township, Registration Division L.S., Limpopo, Measuring: 8 272 (eight thousand

two hundred and seventy-two) square metres.

Initial valuation amount: RI74 000 000 (one hundred and seventy-four million Rand)

Mortgage bond amount: R348 000 000 (three hundred and forty-eight million Rand)






Details of property continued Atteridgeville – Atlyn Shopping Centre

◗ Erf 16248 Atteridgeville Extension 25 Township Registration Division J.R., Gauteng, Measuring: 6,4926 (six comma four nine two six)

hectares.

Initial valuation amount: R527 200 000 (fi ve hundred and twenty-seven million two hundred thousand Rand)

Mortgage bond amount: R1 055 000 000 (one billion fi fty-fi ve million Rand)

Atteridgeville – Mnandi Shopping Centre

◗ Erf 16251 Atteridgeville Extension 45 Township Registration Division J.R., Gauteng, Measuring: 2,6141 (two comma six one four one)

hectares.

Initial valuation amount: R107 300 000 (one hundred and seven million three hundred thousand Rand)

Mortgage bond amount: R215 000 000 (two hundred and fi fteen million Rand)

Heidelberg – The Victorian Shopping Centre

◗ Portion 3 of Erf 3523 Heidelberg Extension 19 Township, Registration Division J.R., Province of Gauteng, Measuring: 3,4000 (three

comma four zero zero zero) hectares.

Initial valuation amount: R166 200 000 (one hundred and sixty-six million two hundred thousand Rand)

Mortgage bond amount: R333 000 000 (three hundred and thirty-three million Rand)

Mamelodi – Denlyn Shopping Centre

◗ Erf 40827 Mamelodi Extension 13 Township, Registration Division J.R., Gauteng, Measuring: 7,5539 (seven comma fi ve fi ve three

nine) hectares; and

◗ Erf 19265 Mamelodi Township, Registration, Division, J.R., Gauteng, Measuring: 4 849 (four thousand eight hundred and forty-nine)

square metres.

Initial valuation amount: R788 000 000 (seven hundred and eighty-eight million Rand)

Mortgage bond amount: R1 576 000 000 (one billion fi ve hundred and seventy-six million Rand)

Soweto Day Hospital

◗ Erf 14475 Protea Glen Extension 6 Township, Registration Division I.Q., Gauteng, Measuring: 1 912 (one thousand nine hundred and

twelve) square metres.

Initial valuation amount: R35 506 000 (thirty-fi ve million fi ve hundred and six thousand Rand)

Mortgage bond amount: R71 000 000 (seventy-one million Rand)


SAFARI INVESTMENTS RSA LIMITED 2020 INTEGRATED ANNUAL REPORT 83


Details of valuation The effective date of the revaluations was 31 March 2020. Revaluations were performed by independent valuers, Mr WJ Hewitt

(Professional Valuer NDPV, CIEA, FIVSA, MRICS, Appraiser), Mr P Niesing (Professional Valuer MSc Real Estate, B Art et Scientia (Planning) SAIV SACPVP) and Mr C Viljoen (Candidate Valuer BSc Hon Real Estate) of Messrs Mills Fitchet. Mills Fitchet is not connected to the group and has recent experience in the location and categories of the investment property being valued.

The valuation of investment property (except for the property valuations based on the direct comparable method as detailed below) totalling R3 061 727 000 (2019: R2 999 119 000) was based on the discounted cash flow method.

The valuation of investment property (Lynnwood and other vacant stands/remaining bulk), totalling R87 665 000 (2019: R76 423 000) was based on the direct comparable method, plus development cost. This method was used as the aforementioned portions are not yet income earning (not yet generating cash flow).

These assumptions are based on current market conditions. In estimating the fair value of the properties, the highest and best use of the properties is their current use.

See note 1.2 – Significant judgements and sources of estimation uncertainty and note 1.3 – Fair value of investment property for inputs and basis of valuations used.

IFRS 13 seeks to increase consistency and comparability in fair value measurements and related disclosures through a “fair value hierarchy”. The hierarchy categorises the inputs used in valuation techniques into three levels. The hierarchy gives the highest priority to (unadjusted) quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

◗◗ Level 1 inputs are quoted prices 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 market 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.

These valuations are considered to be Level 3 on the fair value hierarchy as per IFRS 13. There have been no movements of inputs between fair value hierarchy levels nor have there been any changes in the methods of valuation as mentioned above.

Information about fair value measurements using significant unobservable inputs If the valuer were to increase both the capitalisation and discount rates by 0,50%, the total valuation would decrease by R157 192 200.

If the valuer were to decrease both the capitalisation and discount rates by 0,50%, the total valuation would increase by R175 907 800.

If the valuer were to increase the long-term vacancy provision by 1,00%, the total valuation would decrease by R16 392 200. If the valuer were to decrease the long-term vacancy provision by 1,00% the total valuation would increase by R16 107 800.

Due to COVID-19, these valuations are reported based on “material valuation uncertainty” as per VPS 3 and VPGA 10 of the RICS Red Book Global. Consequently, less certainty – and a higher degree of caution – should be attached to our valuation than would normally be the case.

Given the unknown future impact that COVID-19 might have on the real estate market, it has been recommended that property valuations remain under frequent review.




Details of valuation continued

Fair value as at 31 March

Description

2020

R'000

2019

R'000 Valuation techniques

Erf 16248, Atteridgeville Ext 25 577 600 538 300 Discounted cash fl ow

Erf 19265 and Erf 40827, Mamelodi Ext 13 798 900 792 800 Discounted cash fl ow

Erf 103, Erf 104, Erf 105, Erf 106 and Erf 74995, Sebokeng 557 484 530 219 Discounted cash fl ow

Additional bulk – Erf 77666, Sebokeng Unit 10 Ext 1 1 916 4 281 Direct comparable method

Portion 1 and Portion 3 of Erf 3523, Heidelberg Ext 19 161 900 172 000 Discounted cash fl ow

Erf 9043, Erf 9044 and Erf 9045, Atteridgeville Ext 5 316 113 313 300 Discounted cash fl ow

Additional bulk – Nkomo, Atteridgeville Ext 5 17 487 18 300 Direct comparable method

Remainder of Portion 294, Farm Pretoria Town and Townlands,

Maunde Street, Atteridgeville Ext 45

136 900 136 600 Discounted cash fl ow

Portion 1 of Erf 5665 Bendor Extension 87, Polokwane, Limpopo and

remainder of Erf 5665 Bendor Extension 87, Polokwane, Limpopo

226 000 205 100 Discounted cash fl ow

Erf 69, Erf 70 and Erf 71, Swakopmund 245 830 271 400 Discounted cash fl ow

Erf 14, Erf 15, Erf 16, Erf 68, Swakopmund* 31 762 12 142 Direct comparable method

Lynnwood 36 500 41 700 Direct comparable method

Soweto 41 000 39 400 Discounted cash fl ow

3 149 392 3 075 542

* During 2019, Erven 14, 15 and 16 were not valued separately using the direct comparable method.

Erf 16248,

Atteridgeville

Ext 25

R’000

Erf 19265

and Erf 40827,

Mamelodi

Ext 13

R’000

Erf 103,

Erf 104,

Erf 105,

Erf 106

and Erf 74995,

Sebokeng

Unit 10 Ext 1

R’000

Portion 1

and Portion 3

of Erf 3523,

Heidelberg

Ext 19

R’000

Fair value adjustment opening balance 201 813 345 460 105 872 15 868

Fair value adjustment in 2020 35 079 2 391 26 411 (9 962)

Fair value adjustment closing balance 236 892 347 851 132 283 5 906





Discount rate/price per m² Capitalisation rate

Unobservable inputs

2020

%

2019

%

2020

%

2019

%

Relationship of unobservable

inputs to fair value

Capitalisation rate 14,25 14,25 8,25 8,25 The lower the capitalisation rate, the higher the value



Price per m² R348,30 R778,12 N/A N/A



Price per m² R756,94 R778,12 N/A N/A




Price per m² R3 900 R3 500 N/A N/A The higher the rate/m², the higher the value

Price per m² R3 479 R3 968 N/A N/A The higher the rate/m², the higher the value


Erf 14, Erf 15,

Erf 16, Erf 69,

Erf 70 and Erf 71,

Swakopmund

R’000

Erf 9043,

Erf 9044 and

Erf 9045,

Atteridgeville

Ext 5

R’000

Remainder of

Portion 294,

Farm Pretoria

Town and

Townlands,

Maunde Street,

Atteridgeville

Ext 45

R’000

Portion 1 of

Erf 5665 Bendor

Extension 87,

Polokwane,

Limpopo and

remainder of

Erf 5665 Bendor

Extension 87,

Polokwane,

Limpopo

R’000

Stand 14475

Protea Glen

Extension 6,

Johannesburg,

Gauteng

R’000

Lynnwood

R’000

Total

R’000

(233 264) (4 627) (7 681) 30 319 11 809 413 465 982

(9 728) (38 715) 197 14 507 1 600 (5 303) 16 477

(242 992) (43 342) (7 484) 44 826 13 409 (4 890) 482 459




5. Loans to shareholders

2020

R’000

2019

R’000

WDB Investment Holdings Limited 49 864 51 348

In terms of the Women’s Development Business Investment Holdings Limited Subscription, Women’s Development Business

Investment Holdings subscribed, during August 2017, for 6 578 948 Safari Investments RSA Limited shares at a price of R7,60 for

a total subscription price of R50 000 005.

Financial assistance was provided to Women’s Development Business Investment Holdings by way of a vendor loan by Safari

Investments RSA Limited to Women’s Development Business Investment Holdings. The salient terms of the vendor loan are:

◗ Seven-year loan, which outstanding amount thereafter to be settled by way of a cash payment or refi nancing of the loan;

◗ The loan will be repaid by instalments equal to a minimum of 80% of the full dividend declared on Women’s Development Business

Investment Holdings’s total shareholding in Safari Investments RSA Limited;

◗ Interest rate of prime plus 0,5%;

◗ Women’s Development Business Investment Holdings to provide Safari Investments RSA Limited with 13 923 314 Safari

Investments RSA Limited shares as security against the vendor loan;

◗ Women’s Development Business Investment Holdings shall not be entitled to sell any shares in Safari Investments RSA Limited until

such time as the vendor loan is repaid in full; and

◗ Women’s Development Business Investment Holdings may fi nd alternative fi nance for the vendor loan after 36 months and settle the

full outstanding amount to Safari Investments RSA Limited. Safari Investments RSA Limited will have the option to meet any

refi nancing terms.

Loans to shareholders relate to the vendor fi nancing provided to WDB Investment Holdings Limited (“WDBIH”). 13 923 314 of the Safari

shares held by WDBIH are pledged to Safari as security for the vendor fi nancing and interest, which is charged at the prime lending

rate +0,5% and will be covered by future distributions on the Safari shares. There is thus suffi cient security in place to conclude that

impairment of this asset is not likely.

Split between non-current and current portions

2020

R’000

2019

R’000

Non-current assets 44 399 45 883

Current assets 5 465 5 465

49 864 51 348





6. Operating lease asset

2020

R’000

2019

R’000

Non-current assets 87 637 64 322


91 194 66 537

Movement can be reconciled as follows:

Balance at the beginning of the year 66 537 43 090

Movement during the year 24 657 23 447

91 194 66 537

The future minimum lease payments receivable under non-cancellable leases are as follows:

Future minimum lease payments receivable:

– no later than one year 266 404 291 213

– later than one year but not later than fi ve years 593 226 709 423

– later than fi ve years 699 449 558 162

1 559 079 1 558 798

The average lease terms are for three to 10 years and the average eff ective escalation rate is from 6% to 8% per annum.

7. Deferred tax

2020

R’000

2019

R’000

Deferred tax liability (19 206) (16 921)

Deferred tax asset 24 234 23 743

The balances comprise:

Income received in advance (151) 103

Operating lease asset (2 541) (2 120)

Investment property 7 720 8 839

5 028 6 822

Deferred tax is no longer calculated on the straight-line rental income accrual or on the operating

lease asset, as the rental accrual will form part of the group's distribution in the future. Given the

conversion to a REIT, such distributions are fully deductible for tax purposes and hence no tax

liability will arise on straight-line rental income accruals or operating lease assets. Safari

Investments Namibia Proprietary Limited will, however, still incur deferred tax on the above as

this subsidiary company is not a REIT.

Movement summary

At the beginning of the year 6 822 (1 627)

Per statement of comprehensive income (1 794) 8 449

At the end of the year 5 028 6 822




8. Inventory

2020

R’000

2019

R’000

Inventory at the beginning of the year 153 438 169 648

Impairment (11 233) (16 210)

Cost of inventory sold (19 521) –

122 684 153 438

As part of the Platz am Meer mixed-used development, Safari Investments Namibia Proprietary Limited developed 36 luxury seafront

apartments and offi ces together with a shopping centre. The entire development has been incorporated into a sectional title scheme with

39 units consisting of 36 apartments, one offi ce unit and two commercial units which are trading as the Platz am Meer Shopping Centre.

In this regard, 36 close corporations and one additional private company were incorporated in which these units vest. A proportionate

allocation of the development cost of the land was transferred to these close corporations and private company. The person/s acquiring

the apartments or offi ce units will then acquire the membership or shares in the close corporation or private company respectively.

Currently, Safari Investments Namibia Proprietary Limited holds 100% of the shares in the private company known as Platz am Meer

Property One Proprietary Limited and through its nominee, Mr DC Engelbrecht, the group CEO, the membership in the remaining unsold

close corporations.

Inventories are measured at the lower of cost and net realisable value. Cost includes all expenses directly attributable to the construction

process.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the

estimated costs necessary to make the sale.

The 29 unsold units with a net realisable value of N$122 684 000 were valued by independent valuers, Mr WJ Hewitt (Professional Valuer

NDPV, CIEA, FIVSA, MRICS, Appraiser), Mr P Niesing (Professional Valuer MSc Real Estate, B Art et Scientia (Planning) SAIV SACPVP) and

Mr C Viljoen (Candidate Valuer BSc Hon Real Estate) of Messrs Mills Fitchet on the eff ective date being 31 March 2020. An impairment of

N$11 233 000 had been realised as a result of the net realisable value noted previously.

9. Trade and other receivables

2020

R’000

2019

R’000

Financial instruments

Trade receivables 11 369 7 923

Deposits paid 891 340

Other receivables 5 24

Expected loss allowance and bad debt written off (1 611) (1 141)

Non-fi nancial instruments

VAT – 408

Prepayments 1 939 1 631

Total trade and other receivables 12 593 9 185







9. Trade and other receivables continued

Trade and other receivables pledged as securityNo trade and other receivables balances were pledged as security for any of the group’s liabilities.

Credit quality of trade and other receivablesThe credit quality of trade and other receivables that are neither past due nor impaired is determined to be fully recoverable.

Credit checks are performed on tenants prior to the group entering into lease agreements.

The credit quality of trade and other receivables that are neither past nor due nor impaired can be assessed by reference to historical

information about counterparty default rates.

Trade receivables – General approach Under this approach, a loss allowance for lifetime expected credit losses is recognised for a fi nancial instrument if there has been a

signifi cant increase in credit risk since initial recognition of the fi nancial instrument. If, at reporting date the credit risk has not

increased signifi cantly, a loss allowance for the 12-month expected credit loss is recognised

Trade receivables are assessed for estimated credit losses using the general approach. A three-stage approach based on the

deterioration in the credit risk of a fi nancial asset is applied. Trade receivables are categorised by tenant type to determine the risk

factor of a receivable, and therefore the probability of default. Tenant collateral i.e. tenant deposits or bank guarantees, have also been

taken into account in the ECL assessment, with the expected proceeds reducing the arrears balance.

The table below presents the provision matrix which is used to calculate the 12-month expected credit losses of trade receivables. The

following table assumes that the loss allowance is calculated on the total trade receivables balance because there is no diff erentiation

of risk profi les. The group’s objective is to present the matrix in the manner that illustrates that the loss allowance is actually

determined internally by management. The “expected gross carrying amount at default” is the balance of the debtors before deducting

the loss allowance.

2020 2019

Estimated

gross

carrying

amount at

default

R’000

Loss

allowance

(12-month

expected)

credit loss)

R’000

Estimated

gross

carrying

amount at

default

R’000

Loss

allowance

(12-month

expected)

credit loss)

R’000

Expected credit loss rate:

30 days past due: 10% (2019: 10%) 567 18 1 579 30

60 days past due: 20% (2019: 20%) 366 25 791 50

90 days past due: 40% (2019: 40%) 205 31 – –

120 days past due: 60% (2019: 60%) 315 104 446 122

150 days past due: 80% (2019: 80%) 223 81 156 47

180 days past due: 100% (2019: 100%) 950 423 1 631 793

Total 2 626 682 4 603 1 042

Other receivablesOther receivables are subsequently measured at amortised cost and mainly comprise deposits paid and prepayments.




10. Cash and cash equivalents

2020

R’000

2019

R’000

Bank balances 5 408 6 640

Listing funds’ bank account* 697 593

6 105 7 233

* The listing funds’ bank account is exclusively for shareholders’ deposits for the funds raised during the listing process or subsequent share issues. The balance in the account is due to

unpaid cheques on the REIT distribution for certifi cated shareholders and the account requires a minimum account balance of R25 000.

Due to the short-term nature of cash and cash equivalents, the carrying amount is deemed to approximate the fair value.

11. Stated capital

2020

R’000

2019

R’000

Authorised

2 000 000 000 no par value ordinary shares – –

Reconciliation of number of shares issued

Reported at the beginning of the year 310 826 311 185

Share buy-back – (359)

310 826 310 826

During the prior fi nancial period, Safari repurchased 359 597 shares in terms of its general authority

at an average price per share of R4,44. The shares were subsequently cancelled.

Issued

At the beginning of the year 1 828 902 2 087 928

Movements during the year (222 450) (259 026)

At the end of the year – 310 826 016 (2019: 310 826 016) no par value ordinary shares 1 606 452 1 828 902

12. Derivatives

2020

R’000

2019

R’000

Hedging derivatives

Interest rate swaps (24 127) (2 105)

In line with an internal hedging policy adopted by the board, as well as requirements of the Absa

facility agreements, a portion of the debt has been fi xed by way of interest rate swaps. To date,

Safari has hedged its exposure to interest rates for approximately 60% of its interest-bearing debt.


Non-current liabilities (23 875) (2 005)

Current liabilities (252) (100)

(24 127) (2 105)





13. Interest-bearing borrowings

2020

R’000

2019

R’000

Held at amortised cost

Facilities – Absa Bank Limited 1 087 240 782 123

During the 2019 fi nancial year, Safari successfully implemented a security SPV whereby bonds have

been registered over most of Safari’s investment properties in the security SPV structure to provide

pooled security to lenders. The structure is regulated by a Common Terms Agreement, cession of

security, counter indemnity agreements as well as debt guarantees. Absa is currently Safari’s sole

fi nancier.

Secured by certain investment property as per note 4.

Facility A: R300 000 000 – quarterly repayments of interest only at the three-month JIBAR rate plus

1,75% with the capital due upon maturity in January 2022.

Facility B: R200 000 000 – quarterly repayments of interest only at the three-month JIBAR rate plus

1,95% with the capital due upon maturity in January 2024.

Facilities C and D: R900 000 000 – monthly repayment of interest only at the prime bank overdraft

rate less 1,05% (prime: 8,75% (2019: 10,25%) at year-end with the capital due on both facilities upon

maturity in August 2020, of which R100 000 000 is an Absa guarantee relating to the Southern

Palace Proprietary Limited transaction. Negotiations with the lender for new facilities to replace the

maturing facilities are at an advanced stage with lender credit approval already in place by date of

publication of this report. The implementation of the new facilities remains subject to conditions

precedent usual and customary for facilities of this nature.

Total facility: R1 400 000 000 (2019: R1 400 000 000) of which R100 000 000 is an Absa guarantee

relating to the Southern Palace Capital Proprietary Limited.

Proceeds from interest-bearing borrowings: R564 983 000 (2019: R1 001 172 000).

Repayment of interest-bearing borrowings: R259 782 000 (2019: R560 575 000).

The group is engaging with its bankers on a proactive basis regarding the possible impact of

COVID-19 on its covenant levels. If necessary, covenant waivers will be negotiated in the short term.


Non-current liabilities 500 000 781 656

Current liabilities 587 240 467

1 087 240 782 123

The directors consider the carrying amount of bank loans to approximate their fair values as the

interest rates associated with these bank loans are considered to be market-related.

Reconciliation of movement

Carrying amount at the beginning of the period 782 123 335 808

Proceeds during the period 564 983 1 001 172

Repayments during the period (259 782) (560 575)

Transaction and fi nance costs accrued (84) 5 718

1 087 240 782 123

The directors consider the carrying amount of bank loans to approximate their fair values as the interest rates associated with these

bank loans are considered to be market-related.




14. Share-based payment liability

2020

R’000

2019

R’000

Share-based payment liability 220 417 250 000

During June 2019, Safari paid a portion of the outstanding Southern Palace facility over to Sanlam after Sanlam called on the

guarantee provided by Safari. A share-based payment liability of R250 million was raised on 31 March 2019 as disclosed in our

2019 integrated annual report. The liability was posted against stated capital (equity). The liability was settled during June 2019 and

resulted in increased interest-bearing debt.

As per the SENS announcement published on 4 May 2020, the repayment of the outstanding balance under the Sanlam Southern

Palace facility had been called upon by Sanlam from Southern Palace. Consequently, Southern Palace did not make the required

payment. On 6 May 2020, Safari, in terms of the Safari guarantee, paid over to Sanlam the outstanding debt of R220 416 716 from

existing debt facilities.

As at 31 March 2020, Safari had provided for a share-based payment liability of R220 416 716 due to a higher probability of settlement

under the Safari guarantee which was evidently settled on 6 May 2020. Safari holds a pledge over the 53 million Safari shares as

security for the claim against Southern Palace and would recover, as a minimum for the debt owed by Southern Palace, the value of the

shares upon realisation or cancellation. As part of the board’s considerations, cancellation of all or some of these shares may present

additional consequences to shareholders which may be benefi cial e.g. dividend per share. The 53 million shares are treated as treasury

shares for accounting purposes.

15. Financial liabilities by category

2020

R’000

2019

R’000

Financial liabilities at amortised cost

Interest-bearing borrowings 1 087 240 782 123

Trade and other payables 32 089 23 215

Deferred tax 19 206 16 921

Lease liabilities 7 477 –

Share-based payment liability 220 417 250 000

1 366 429 1 072 259

Financial liabilities at fair value

Derivatives 24 127 2 105

24 127 2 105

Total liabilities 1 390 556 1 074 364





16. Leases (group as lessee) In the current year, Safari has adopted IFRS 16 and has elected to apply the modifi ed retrospective approach for this standard.

Accordingly the group has not restated comparatives for the previous periods and, as a result, presentation of a third statement of

fi nancial position is not required.

The adoption of this new standard has resulted in the group recognising a right-of-use asset and a related lease liability in connection

with its head offi ce lease except for those identifi ed as low-value or having a remaining lease term of less than 12 months from the

date of initial application.

The group has elected not to include initial direct costs in the measurement of the right-of-use asset for operating leases in existence

at the date of initial application of IFRS 16, being 1 May 2019. At this date, the group has also elected to measure the right-of-use

assets at an amount equal to the lease liability adjusted for any prepaid or accrued lease payments that existed at the date of

transition.

The group is a lessee in respect of its corporate head offi ce premises in Pretoria. This fi ve-year non-cancellable lease with Wealthgate

Investments 45 Proprietary Limited has a renewable option period of three years and is refl ected on the statement of fi nancial

position as a right-of-use asset, R6 934 000 and lease liability, R7 477 000. The present value of all lease payments at the

commencement date of the lease, 1 May 2019, is R7 831 145 with variable lease payments which do not depend on an index or rate

being excluded from the initial measurement of the lease liability and asset.

Net carrying amounts of right-of-use assets

2020

R’000

2019

R’000

The carrying amounts of right-of-use assets are as follows:

Right-of-use asset (lessee) 7 831 –

Depreciation (897) –

6 934 –

Lease liabilities

2020

R’000

2019

R’000

On transition to IFRS 16, the incremental borrowing rate applied to lease liabilities recognised under

IFRS 16 was 9,2%. The maturity analysis of lease liabilities is as follows:

Current year 354 –

Within one year 502 –

Two to fi ve years 3 651 –

More than fi ve years 3 324 –

7 831 –

Lease payments (993) –

Add back: Interest expense 639 –

7 477 –




17. Trade and other payables2020

R’000

2019

R’000

Financial instruments

Trade payables 10 212 3 740

Tenants’ deposits received 12 525 11 248

Non-fi nancial instruments

Income received in advance 5 277 7 045

VAT 4 075 1 187

32 089 23 215

18. Revenue

2020

R’000

2019

R’000

Rental Income 294 990 259 412

Straight-line lease income adjustment 24 657 23 448

Tenant recoveries 25 797 16 567

345 444 299 427

Certain tenants are also invoiced for turnover rental which is based on a percentage of their audited annual turnover. Total turnover

rental recognised as income in the period is R5 825 866 (2019: R7 345 544).

19. Impairment and gain on sale of inventory2020

R’000

2019

R’000

Impairment of inventory

Write-down of apartments to net realisable value 11 233 16 210

Gain on sale of inventory

Sales 21 340 –

Cost of sales (20 774) –

566 –

As part of the Platz am Meer mixed-use development, 36 residential apartments were developed. Units are being held as inventory for

sale in the market, with seven units sold in the current fi nancial year.





20. Other operating income2020

R’000

2019

R’000

Recovery bank charges, contract fees and signage 1 372 873

Other income 4 072 1 294

5 444 2 167

21. Fair value adjustmentThe movement in the operating lease straight-lining asset is added back from the gross fair value movement on investment properties

as it is included under revenue (refer to note 18).

Note

2020

R’000

2019

R’000

Fair value gains/(losses)

Investment property 4 16 477 (8 629)

Operating lease straight-lining asset 4 (24 656) (23 448)

(8 179) (32 077)

22. Employee costsStaff internalisation took eff ect 1 March 2019, and refer to Note 32 for directors’ emoluments.

2020

R’000

2019

R’000

Employee costs (including directors fees) 21 275 9 274

23. Investment income2020

R’000

2019

R’000

Interest income

Interest charged 5 605 5 907




24. Finance costs2020

R’000

2019

R’000

Interest-bearing borrowings 90 355 37 200

Interest – lease payments 640 –

Total fi nance costs 90 995 37 200

The prime lending rate decreased by 1,5% year-on-year (2020: 8,75%/2019: 10,25%). Finance costs relate to the utilisation of the Absa

facilities and the interest expense implicit in lease payments.

25. Other non-operating gains/(losses)2020

R’000

2019

R’000

Fair value gains/(losses)

Net loss on interest rate swaps (refer to note 12) (21 870) (2 005)

26. Taxation2020

R’000

2019

R’000

Major components of the tax expense

Current

Foreign income tax or withholding tax – current period 495 156

Deferred

Originating and reversing temporary diff erences on income received in advance 254 269

Originating and reversing temporary diff erences on capital allowances on investment property 1 118 (9 408)

Originating and reversing temporary diff erences on operating lease asset 422 690

1 794 (8 449)

2 289 (8 293)

Reconciliation of the tax expense

Reconciliation between applicable tax rate and average eff ective tax rate

Applicable tax rate (%) 28,00 28,00

Non-taxable fair value adjustment (%) 2,09 2,09

Permanent diff erences – section 25BB (%) (29,70) (35,21)

Non-deductable IFRS 2 charge (%) – –

Deferred tax – change in judgement (%) 1,70 (2,04)

2,09 (7,16)





27. Cash generated from operations2020

R’000

2019

R’000

Profi t before taxation 109 951 115 686

Adjustments for:

Depreciation 1 093 1

Gains on sale of inventory (566) –

Interest income (5 605) (5 907)

Finance costs 90 995 37 200

Fair value adjustments 30 049 34 082

Movements in operating lease assets (24 657) (23 447)

Changes in working capital

Inventory 19 521 –

Trade and other receivables (3 408) 6 146

Derivatives 152 –

Trade and other payables 8 875 2 560

Impairment of inventory 11 233 16 210

237 633 182 531

28. Tax paid

2020

R’000

2019

R’000

Current tax for the year recognised in profi t or loss (495) (156)

29. REIT distribution paid

2020

R’000

2019

R’000

Prior year fi nal distribution (24 cents per share) (2019: 33 cents per share) (74 598) (102 692)

Interim distribution (24 cents per share) (2019: 26 cents per share) (74 598) (80 895)

(149 196) (183 587)

Refer to distribution statement within directors’ report.




30. Earnings per share2020

R’000

2019

R’000

Earnings used in the calculation of basic earnings per share (profi t after tax) 107 662 123 979

Ordinary shares in issue at year-end 257 826 257 826

Weighted average number of ordinary shares 257 826 258 128

Diluted weighted average number of ordinary shares 257 826 311 128

Headline earnings 91 185 132 608

Basic earnings per share (cents) 41,76 48,03

Diluted earnings per share (cents) 41,76 39,85

Basic headline earnings per share (cents) 35,37 51,37

Diluted headline earnings per share (cents) 35,37 42,62

Headline earnings reconciliation

Basic earnings (profi t after tax) 107 662 123 979

Gains and losses from the adjustment to the fair value of non-current assets (16 477) 8 629

Headline earnings 91 185 132 608

31. Related parties Relationships

Subsidiaries Safari Investments Namibia Proprietary Limited

(100% owned)

Common directorship/trusteeship/

membership

Safari Retail Proprietary Limited

Safari Developments Pretoria Proprietary Limited

Safari Developments Swakopmund Proprietary Limited

Wealthgate Investments 45 Proprietary Limited

Pace Construction Proprietary Limited

WDB Investment Holdings

Close corporations controlled by

common director

MDM Architects CC

Cosmos Management CC





31. Related parties continued

Related party transactions

2020

R’000

2019

R’000

Services rendered by/purchases from related parties

Safari Developments Pretoria Proprietary Limited 43 549 192 627

Safari Developments Swakopmund Proprietary Limited 2 748 7 303

Safari Retail Proprietary Limited – 2 658

Safari Hold Proprietary Limited 494 1 722

Pace Construction Proprietary Limited – 18

Wealthgate Investments 45 Proprietary Limited 1 548 –

Close corporations controlled by common director

Cosmos Management CC – 18 772

MDM Architects CC 458 952

Compensation to directors and other key management

Short-term employee benefi ts 17 929 9 274

Common directorship, membership and shareholding related to material-related parties balances and transactions:

Common directorship and shareholding:

Safari Developments Pretoria Proprietary Limited

◗ FJJ Marais (25%) resigned as director from 1 March 2015

◗ K Pashiou (25%)

Common membership and shareholding:

Cosmos Management CC

◗ FJJ Marais (55%)

◗ WL Venter (20%)

Services provided by material-related parties:

Safari Hold Proprietary Limited

The previous offi ce premises was leased from Safari Hold Proprietary Limited with no fi xed-term contract.

Safari Developments Pretoria Proprietary Limited and Safari Developments Swakopmund Proprietary Limited

Various development agreements were entered into between Safari Investments RSA Limited (“investor”) and Safari Developments

Pretoria Proprietary Limited (“developer”) and in Namibia, Safari Developments Swakopmund Proprietary Limited. The investor

provides the necessary funds to cover the development cost. The agreed-upon development cost will be paid over to the developer by

way of progress payments as agreed by the investor and developer. Once the project is complete, the developer will hand the project

over to the investor.




32. Directors’ emoluments

Directors’

fees

R’000

Committee

fees

R’000

Consulting

fees

R’000

Total

R’000

2020

AE Wentzel# 350 285 22 657

AM Slabber# 83 – 670 753

CR Roberts# 325 203 337 865

DC Engelbrecht*^ 2 379 – – 2 379

ER Swanepoel# 58 14 903 975

FN Khanyile# 300 128 5 433

Dr JP Snyman# 450 40 – 490

LL Letlape# 202 27 – 229

K Pashiou* 350 41 85 476

Dr M Minnaar# 350 243 – 593

WL Venter*^ 2 259 – – 2 259

7 106 981 2 022 10 109

2019

AE Wentzel# 187 240 30 457

CR Roberts# 187 81 64 332

DC Engelbrecht*^ 1 850 – – 1 850

FJJ Marais* 275 147 210 632

FN Khanyile# 187 148 13 348

Dr JP Snyman# 237 207 27 471

LL Letlape# 181 68 27 276

K Pashiou* 187 122 142 451

Dr M Minnaar# 187 257 27 471

WL Venter*^ 1 850 – – 1 850

5 328 1 270 540 7 138

* Executive # Non-executive ^ Remuneration is a fi xed annual salary plus performance bonus in terms of employment agreements.





33. Subsequent eventsThe group is monitoring the economic impact of the global COVID-19 pandemic and is negotiating with all stakeholders to mitigate the

risks that have become apparent. While rental collection for the period post fi nancial year-end has remained robust, it is still too early

to quantify the full impact of COVID-19 on the portfolio. Recovery of rental from a component of retail tenants which are still restricted

to trade remain doubtful and the group continues to engage on an individual basis and on a case-by-case level to help ensure

sustainability of tenant businesses during these uncertain times. While there is indeed this pressure on rental revenue in the short

term, the portfolio remains defensive and resilient. The group is also engaging with its bankers regarding the possible impact on

covenant levels and the negotiation of waivers if necessary. Furthermore, Safari has instituted an insurance claim for business

interruption arising from infectious diseases.

Mr Slabber and Mr Swanepoel resigned with eff ect from 21 June 2020. Mr AE Wentzel has assumed the chairmanship of the board on

an interim basis, pending appointment of further directors to the board.

Matters approved by the board at the board meeting held on 3 July 2020 include a fi nal cash distribution of 22 cents per Safari share

and will be paid to shareholders during August 2020.

The current portion of long-term liabilities and the share-based payment liability included in current liabilities will be settled from

existing debt facilities. With regard to the renewal/refi nance of the R900 million facilities which are maturing in August 2020, the high

level terms have been agreed between the lender (Absa) and the borrower (Safari). No formal term sheet was supplied as these

facilities will fall under the Common Terms Agreement that was executed in January 2019. Legal representatives have already been

instructed to begin drafting the facility agreements and other related documentation. With these new facilities in place, Safari will have

suffi cient resources to pay its debt when it falls due.

34. Net asset value per share

2020

R’000

2019

R’000

Total assets 3 372 719 3 320 511

Total liabilities (1 390 556) (1 074 364)

1 982 163 2 246 147

Ordinary shares in issue (excluding 53 million Safari shares held by Southern Palace in 2020) 257 827 310 826

Net asset value per share (cents) 769 723

Tangible net asset value (cents) 769 723

After year-end, Safari had settled Sanlam’s claim and now holds the 53 million Southern Palace shares as security.

One of various options Safari’s board is considering is to, subject to shareholder approval, buy back by way of settlement against the

claim Safari has against Southern Palace and cancel the 53 million shares held by Southern Palace. Also refer to the audit and risk

committee report and note 14 for further disclosure on the Southern Palace transaction. Shareholders will be advised of decisions

taken by the board regarding the unwinding of the Southern Palace transaction via SENS.




35. Segment report The group classifi es the following main segments, which is consistent with the way the group reports internally: Atteridgeville,

Mamelodi, Sebokeng, Limpopo; Heidelberg and Namibia. Head offi ce, Lynnwood and Soweto forms part of reconciliation.

Segment results and net assets, include items that can be directly attributable to a segment as well as those that can be allocated on

a reasonable basis.

Atteridge-

ville

R’000

Mamelodi

R’000

Sebokeng

R’000

Heidelberg

R’000

Limpopo

R’000

Namibia

R’000

Recon-

ciliation

R’000

Total

R’000

As at 31 March 2020

Turnover (external) 113 042 80 681 71 354 18 081 30 510 27 443 4 333 345 444

Reportable segment profi t

before investment revenue,

fair value adjustments and

fi nance costs 97 721 70 469 50 811 12 739 20 342 8 723 – 260 806

Unallocated reportable

segment profi t before

investment revenue, fair

value adjustments and

fi nance costs – – – – – – (35 416) (35 416)

Profit before investment

revenue, fair value

adjustments and finance

costs 97 721 70 469 50 811 12 739 20 342 8 723 (35 416) 225 390

Segment assets and

liabilities

Segment assets 1 051 238 799 254 559 712 162 919 227 204 404 367 – 3 204 694

Unallocated assets – – – – – – 168 024 168 024

Total assets 1 051 238 799 254 559 712 162 919 227 204 404 367 168 024 3 372 719

Segment liabilities 6 629 3 234 4 234 753 1 683 3 687 – 20 220

Unallocated liabilities – – – – – – 283 097 283 097

Interest-bearing

borrowings – – – – – – 1 087 240 1 087 240

Total liabilities 6 629 3 234 4 234 753 1 683 3 687 1 370 337 1 390 556

Other segment items

Interest revenue (external) – – – – – 216 – 216

Unallocated interest

revenue – – – – – – 5 389 5 389

Investment revenue – – – – – 216 5 389 5 605

Fair value adjustments (3 439) 2 391 26 411 (9 962) 14 507 (9 728) (3 704) 16 477

Interest expense – – – – – – – –


expense – – – – 79 – 90 916 90 995

Finance costs – – – – 79 – 90 916 90 995





35. Segment report continued

Atteridge-

ville

R’000

Mamelodi

R’000

Sebokeng

R’000

Heidelberg

R’000

Limpopo

R’000

Namibia

R’000

Recon-

ciliation

R’000

Total

R’000

As at 31 March 2019

Turnover (external) 86 892 79 787 65 665 21 557 10 751 30 458 4 316 299 427

Reportable segment profi t

before investment revenue,

fair value adjustments and

fi nance costs 70 727 67 134 44 366 14 650 9 172 3 162 – 209 211

Unallocated reportable

segment profi t before

investment revenue, fair

value adjustments and

fi nance costs – – – – – – (28 150) (28 150)

Profit before investment

revenue, fair value

adjustments and finance

costs 70 727 67 134 44 366 14 650 9 172 3 162 (28 150) 181 061

Segment assets and

liabilities

Segment assets 1 007 076 793 136 534 791 171 966 205 568 442 697 – 3 155 235

Unallocated assets – – – – – – 165 276 165 276

Total assets 1 007 076 793 136 534 791 171 966 205 568 442 697 165 276 3 320 511

Segment liabilities 6 135 3 109 4 097 566 2 212 4 022 – 20 141

Unallocated liabilities – – – – – – 269 996 269 996

Interest-bearing

borrowings – – – – – – 784 228 784 228

Total liabilities 6 135 3 109 4 097 566 2 212 4 022 1 054 224 1 074 364

Other segment items

Interest revenue (external) – – – (4) 12 324 – 333


revenue – – – – – – 5 574 5 574

Investment revenue – – – (4) 12 324 5 574 5 907

Fair value adjustments (15 418) (3 916) 25 604 5 438 30 319 (56 512) 5 856 (8 629)

Interest expense – – – – – – – –


expense – – – – – – 37 200 37 200

Finance costs – – – – – – 37 200 37 200




36. Risk management Capital risk management

The group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order to provide

returns for shareholders and benefi ts for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital

by maintaining a good balance between debt and equity fi nance.

The capital structure of the group consists of debt, which includes the borrowings disclosed in note 13, cash and cash

equivalents disclosed in note 10, and equity as disclosed in the statement of fi nancial position amounting to R3 075 508 000

(2019: R3 035 503 000).

REIT distribution of a minimum of 75% of taxable income will be distributed every year as per the REIT requirements and legislation.

The company’s strategy is to maintain a loan to value ratio of below 40%, except in high-growth periods or other unforeseen

circumstances.

The loan to value ratios at 2020 and 2019 respectively were as follows:

Note

2020

R’000

2019

R’000

Interest-bearing borrowings 13 1 087 240 782 123

Cash and cash equivalents 10 (6 105) (7 233)

Net debt 1 081 135 774 890

Fair value of investment property and net realisable value of inventory 3 272 076 3 228 980

Loan to value ratio (%) 33 24

Financial risk managementOverview

The group’s activities expose it to a variety of fi nancial risks: market risk (including fair value interest rate risk and cash fl ow interest

rate risk), credit risk and liquidity risk.

The group is not exposed to foreign exchange risk. The only cross-border transactions which occur within the group are with the

group’s subsidiary located in Namibia.

The exchange rate is: 1 South African Rand = 1 Namibian Dollar.

Credit risk

Credit risk consists mainly of cash deposits, cash equivalents and trade debtors. The group only deposits cash with major banks with

high-quality credit standing and limits exposure to any one counterparty.

The credit quality of tenants is assessed by taking into account their fi nancial position, past experience and performing a credit

verifi cation before a property is let. The group only lets property to tenants who are considered to be creditworthy. In addition, the trade

receivables age analysis is reviewed on a weekly basis with the intention of minimising the group’s exposure to bad debts. Deposits or

bank guarantees are also held in most instances to further minimise the group’s exposure to bad debts.

Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable

expectation of recovery include, among others, the failure of a debtor to engage in a repayment plan with the group, and a failure to

make contractual payments for a period of greater than 30 days past due. Trade receivables that are neither past due nor impaired are

considered to be of high credit quality accompanied by an insignifi cant default rate.





36. Risk management continued

Financial risk management continued

Credit risk continued

The carrying amount of fi nancial assets represents the maximum credit exposure. The maximum exposure to credit risk at the

reporting date was:

2020 2019

Note

Gross

carrying

amount

R’000

Credit

loss

allowance

and bad debt

written off

R’000

Amortised

cost/fair

value

R’000

Gross

carrying

amount

R’000

Credit

loss

allowance

and bad debt

written off

R’000

Amortised

cost/fair

value

R’000

Trade and other

receivables 9 14 204 (1 611) 12 593 10 326 (1 141) 9 185

Cash and cash

equivalents 10 6 105 – 6 105 7 233 – 7 233

20 309 (1 611) 18 698 17 559 (1 141) 16 418

The group has been monitoring the economic impact of COVID-19 and is negotiating with all stakeholders to mitigate the current risks

that have become apparent. Furthermore, Safari has instituted an insurance claim for business interruption arising from infectious

diseases.

Liquidity riskPrudent liquidity risk management implies maintaining suffi cient cash and the availability of funding through an adequate amount of

committed credit facilities.

The group’s risk to liquidity is a result of the funds available to cover future commitments. The group manages liquidity risk through an

ongoing review of future commitments and credit facilities.

Cash fl ow forecasts are prepared and adequate utilised borrowing facilities are monitored.

The table below analyses the group’s fi nancial liabilities into relevant maturity groupings based on the remaining period at the

consolidated statement of fi nancial position to the contractual maturity date. The amounts disclosed in the table are the contractual

undiscounted cash fl ows.

Note

Less than

one year

R’000

Two to

fi ve years

R’000

Total

R’000

2020


Interest-bearing borrowings 13 – 500 000 500 000

Lease liabilities 16 – 6 975 6 975

Derivatives 12 – 23 875 23 875

Current liabilities

Trade and other payables 17 22 737 – 22 737

Interest-bearing borrowings 13 587 240 – 587 240

Lease liabilities 502 – 502

Derivatives 12 252 – 252

610 731 530 850 1 141 581




36. Risk management continued

Liquidity risk continued

Note

Less than

one year

R’000

Two to

fi ve years

R’000

Total

R’000

2019


Interest-bearing borrowings 13 – 783 661 783 661

Current liabilities

Trade and other payables 17 14 989 – 14 989

Interest-bearing borrowings 13 467 – 467

Derivatives 100 – 100

15 556 783 661 799 217

The maturity profi le of contractual cash fl ows of derivative fi nancial liabilities is as follows:

◗ The group’s interest rate risk arises from long-term bank borrowings at variable interest rates (therefore cash fl ow risk). Borrowings

issued at fi xed rates expose the group to fair value interest rate risk and borrowings issued at variable rates expose the group to

cash fl ow rate risk.

◗ As at 31 March 2020, if interest rates on Rand-denominated borrowings had been 1% higher with all other variables held constant,

post-tax profi t and equity for the year would have been R5 867 599 (2019: R4 003 962) lower, mainly as a result of higher interest

expense on fl oating rate borrowings.

◗ As part of the group’s risk management strategies, derivatives have been utilised to hedge against interest rate risks arising from its

fi nancing engagements. The derivative fi nancial instruments held relate to interest rate swaps measured at fair value at the

reporting date. This is calculated using the net present value the group would pay or receive from the swap counterparty based on

current interest rates. The group’s derivative fi nancial instruments are only used for economic hedging purposes and not as

speculative investments.

Fair value informationFinancial assets and liabilities included in the group’s annual fi nancial statements require measurement at, and/or disclosure of, fair

value. The fair value measurement of the group’s fi nancial liabilities utilises market observable inputs and data as far as possible.

Inputs used in determining fair value measurements are categorised into diff erent levels based on how observable the inputs used in

the valuation technique utilised are (the “fair value hierarchy”):

◗ Level 1: Quoted prices in active markets for identical items (unadjusted);

◗ Level 2: Observable direct or indirect inputs other than Level 1 inputs; and

◗ Level 3: Unobservable inputs (i.e. not derived from market data).

The group measures its derivative fi nancial instruments which relate to interest rate swaps at fair value on 31 March 2020. The fair

value is based on a level 2 fair value measurement hierarchy and is calculated using the net present value, the group would pay or

receive from the swap counterparty based on current interest rates.

Fair value of contract

Note

2020

R’000

2019

R’000

Interest rate swaps 12 (23 875) (2 005)





37. Restatement and reclassifi cation of comparativesThe sale of inventory in the current year has highlighted the issue in respect to the placement of the inventory line items, namely the

gain on sale of inventory and the impairment of inventory in the consolidated statement of profi t or loss and other comprehensive

income. The prior year impairment of inventory line item has been restated, to be presented consistently with the current year,

eff ectively reducing operating profi t for the prior year. The total comprehensive income for the prior year remained unchanged.

The comparative amounts relating to the proceeds and repayments of interest-bearing borrowings on the consolidated statement of

cash fl ows for the prior year has been reclassifi ed to present consistently with the current year, eff ectively removing interest paid from

the repayment of interest-bearing borrowings.

38. Company annual fi nancial statementsThe separate annual fi nancial statements of Safari Investments RSA Limited have not been presented with the consolidated annual

fi nancial statements in terms of Par 8.62(d) of the JSE Listings Requirements as they do not contain any signifi cant additional

information to what is disclosed in the consolidated annual fi nancial statements. This is consistent with the prior year.




Number of

shareholdings

% of total

shareholdings

Number of

shares

% of issued

capital

Shareholder spread

1 – 1 000 180 23,44 40 266 0,01

1 001 – 10 000 252 32,81 970 986 0,31

10 001 – 100 000 163 21,22 5 574 690 1,79

100 001 – 1 000 000 131 17,06 47 151 262 15,17

Over 1 000 000 42 5,47 257 088 812 82,72

Total 768 100,00 310 826 016 100,00

Distribution of shareholders

Assurance companies 2 0,26 30 000 0,01

Close corporations 21 2,73 3 542 580 1,14

Collective investment schemes 10 1,30 56 247 565 18,10

Control accounts 2 0,26 55 0,00

Custodians 1 0,13 1 800 000 0,58

Foundations and charitable funds 1 0,13 3 830 0,00

Hedge funds 3 0,39 819 316 0,26

Investment partnerships 3 0,39 205 000 0,07

Organs of state 1 0,13 4 147 857 1,33

Private companies 47 6,12 144 599 438 46,52

Public companies 1 0,13 20 000 000 6,43

Retail shareholders 531 69,14 13 513 351 4,35

Retirement benefi t funds 2 0,26 1 094 997 0,35

Scrip lending 1 0,13 85 400 0,03

Stockbrokers and nominees 5 0,65 283 418 0,09

Trusts 137 17,85 64 453 209 20,74

Total 768 100,00 310 826 016 100,00

Shareholder type

Non-public shareholders 16 2,08 77 850 772 25,05

Directors, associates and prescribed offi cers 15 1,95 24 850 772 8,00

Holders >10% (Southern Palace Capital Proprietary Limited) 1 0,13% 53 000 000 17,05

Public shareholders 752 97,92 232 975 244 74,95

Total 768 100,00 310 826 016 100,00

ANALYSIS OF ORDINARY SHAREHOLDERS




Number of

shares

% of issued

capital

Fund managers with a holding greater than 3%

of the issued shares

Bridge Fund Managers 55 480 997 17,85

Total 55 480 997 17,85

Number of

shares

% of issued

capital

Beneficial shareholders with a holding greater

than 3% of the issued shares

Southern Palace Capital Proprietary Limited 53 000 000 17,05

Nedbank Group 31 082 288 10,00

Heriot Investments Proprietary Limited 29 305 374 9,43

Bridge Fund Managers 25 589 997 8,23

SA Corporate Real Estate Fund 20 000 000 6,43

WDB Investment Holdings 14 232 550 4,58

Tensai Property Services Proprietary Limited 13 646 806 4,39

Total 186 857 015 60,11

Closing price as

at 31 March 2020 R3,30

Share price performance

Total number of

shareholders 768

Opening price as

at 1 April 2019 R4,68

Total number of

shares in issue

310 826 016(including 53 million

Safari shares held by

Southern Palace)

Price/earnings

ratio as at

31 March 20207,42

Dividend yield as

at 31 March 2020

(based on

12 months VWAP)

10,9%

Market

capitalisation as

at 31 March 2020R1 025 725 853




PROPERTY PORTFOLIO

Name Location Property type Region

Shopping centres

Atteridgeville (Atlyn) Cnr Phudufu and Khoza Streets, Atteridgeville Retail Gauteng

Atteridgeville (Mnandi) Maunde Street, Atteridgeville Retail Gauteng

Mamelodi Cnr Stormvoël and Maphalla Roads, Mamelodi Retail Gauteng

Sebokeng Moshoeshoe Street, Sebokeng Unit 10, Ext 1, Sebokeng Retail Gauteng

Heidelberg Cnr Voortrekker and Jordaan Streets, Heidelberg Retail Gauteng

Swakopmund Swakopmund, Namibia (cnr Albatros and Tsavorite Streets) Retail Erongo

Polokwane Cnr Veldspaat Street and Munnik Avenue Retail Polokwane

Atteridgeville (Nkomo) Cnr Lengau, Thlou, Lepogo and Church Streets Retail Gauteng

Private day hospital

Soweto Healthcare Gauteng

Stands for development

Sebokeng Erf 77666 Moshoeshoe Street, Sebokeng Gauteng

Lynnwood Cnr Lynnwood Road and Rodericks – Sussex and Rodericks,

Lynnwood

Gauteng

Swakopmund Swakopmund, Namibia (cnr Albatros and Tsavorite Street) Erongo

Nkomo Village remaining bulk 49 Thlou Street, Atteridgeville Gauteng

Residential units held for sale

Swakopmund Albatros Street, Swakopmund, Namibia Apartments Namibia

Total

The average annualised property yield for the income-generating property portfolio based on market values as at 1 April 2019 is 8,15% for the

2020 fi nancial year. Included in revenue is gross rent, solar income, sundry income and turnover rent for all income-generating properties and

all property expenses have been deducted.




Market

value as

attributed

by

independent

valuer

R’000

Rentable

area/m2

Vacancy

%

Weighted

average

rental/m2 Zoning

Freehold/

leasehold

Approximate

age of

building

years

577 600 31 257 4,00 145 Special – various Freehold 12



557 484 34 539 – 156 Special – various Freehold 11



226 000 12 390 – 190 Special – various Freehold 11

316 113 19 275 4,00 124 Special – various Freehold 1,5

41 000 1 379 – 188 Special – various Freehold 3,5

1 916 5 502 N/A N/A Special – various Freehold




122 684 N/A N/A N/A Special – various

3 272 076


05SHAREHOLDERS’

INFORMATION



2020 INTEGRATED ANNUAL REPORT SHAREHOLDERS’ INFORMATION114

NOTICE OF ANNUAL GENERAL MEETING

The Safari Investments Board, after considering the spread of the Coronavirus in South

Africa, and in the interest of maintaining social distancing to adhere to the current

restrictions on public gatherings, has decided that this year’s AGM will be held virtually.

Notice is hereby given that the annual general meeting of shareholders of Safari (“AGM”) will

be on 14 September 2020 at 14:00 for the purpose of:

◗ dealing with such business as may lawfully be dealt with at the annual general meeting;

and

◗ considering and, if deemed fi t, adopting, with or without modifi cation, the ordinary and

special resolutions set out hereunder.

Notes on participating in the 2020 annual general meeting

Virtual meetingIn terms of section 63(2)(a) of the Companies Act, as amended (“the companies act”)

Shareholders may join the virtual AGM by accessing the platform link

https://sar.votingplatform.corporateactions.co.za/login which will direct the member

to the online voting and webcast platform on the day of the AGM. The shareholder login

credentials consist of both a unique Shareholder reference number and unique password,

which will be communicated by email and/or SMS. A help service will be made available for

further assistance prior to/and on the day.

The virtual platform will enable the shareholders to cast an electronic vote in respect of each

of the resolutions listed in the agenda. To listen in on the broadcast of the meeting and to be

able to ask verbal questions through the online teleconference facility will be made available

on the day. Shareholders will be notifi ed regarding this facility and for pre-registration

requirements purposes by email and/or SMS. Shareholders will receive a confi rmation email

or SMS with their unique login credentials, which will consist of both a unique SRN and

unique password. A help service will be made available for further assistance.

Electronic voting will open at 14:00 on 14 September 2020 and will be closed by the

Chairman during the course of the AGM. The results of the voting will be announced at the

AGM, or as soon as they have been verifi ed by the appointed scrutineers and will be

published on the Safari Investments company’s website as soon as possible after

the meeting.

We highly recommend that members log in on the virtual platform at least 15 minutes before

the meeting starts to ensure that our service provider can assist with any technical issues

A shareholders’ guide to assist and provide meeting participation guidelines is available on

the company’s website https:www.safari-investments.com/Investor-relations

Kindly note that, in terms of section 63(1) of the Companies Act, as amended, meeting

participants (including proxies) will be required to provide reasonably satisfactory

identifi cation before being entitled to participate in or vote at the annual general meeting.

Forms of identifi cation that will be accepted include original and valid identity documents,

driver’s licences and passports.

Kindly note further that in terms of section

62(3)(e) of the Companies Act:

◗ A shareholder who is entitled to attend

and vote at the annual general meeting is

entitled to appoint a proxy or two or more

proxies to attend, participate in and vote

at the meeting in the place of the

shareholder; and

◗ A proxy need not be a shareholder of

the company.

Shareholders are advised that the

company’s integrated annual report for the

year ended 31 March 2020 was dispatched

to shareholders on Monday, 13 July 2020.

Record dates, proxies and votingIn terms of sections 59(1)(a) and (b) of the

Companies Act, the board of the company

has set the following record dates for the

purpose of determining which shareholders

are entitled to:

◗ receive notice of the annual general

meeting (being the date on which a

shareholder must be registered in the

company’s securities register in order to

receive notice of the annual general

meeting) as Friday, 3 July 2020; and

◗ participate in and vote at the annual

general meeting (being the date on which

a shareholder must be registered in the

company’s securities register in order

to participate in and vote at the

annual general meeting) as Friday,

4 September 2020, with the last day to

trade being Tuesday, 1 September 2020.

Presentation of the audited consolidated annual fi nancial statementsThe annual fi nancial statements of the

company and the group, including the

Safari Investments RSA Limited

(Registration number: 2000/015002/06)

(Share code: SAR | ISIN: ZAE000188280)

(“the company” or “Safari”)




reports of the directors, group audit and risk committee and the independent external

auditor, for the year ended 31 March 2020, are presented to shareholders as required in

terms of section 30(3)(d) of the Companies Act.

The complete set of the audited annual fi nancial statements, together with the

abovementioned reports, are set out on pages 53 to 107 of the company’s 2020 integrated

annual report. The company’s 2020 integrated annual report, together with the complete set

of the audited consolidated annual fi nancial statements, is available on the company’s

website at https://www.safari-investments.com/investor-relations, alternatively, it may be

requested and obtained in person, at no charge, from the registered offi ce of the company

during offi ce hours.

The audit and risk committee report is set out on page 60 of the company’s 2020

integrated annual report.

Presentation of group social and ethics committee reportThe report by the social and ethics committee for the year ended 31 March 2020, is included

in the 2020 integrated annual report on page 45 and is presented to the shareholders in

terms of regulation 43 of the Companies Regulations 2011.

Ordinary businessTo consider and, if deemed fi t, to pass, with or without modifi cation, the following ordinary

resolutions of the company:

Note: For any of the ordinary resolutions numbered 1 to 11 (inclusive) to be adopted, more

than 50% (fi fty percent) of the voting rights exercised on each such ordinary resolution must

be exercised in favour thereof. For ordinary resolution number 12 to be adopted, at least 75%

(seventy-fi ve percent) of the voting rights exercised on such ordinary resolution must be

exercised in favour thereof.

1. Retirement and re-election of directors

Ordinary resolution number 1

“Resolved that Dr M Minnaar, who retires by rotation in terms of the memorandum of

incorporation and, being eligible, off ers himself for re-election, be and is hereby re-elected

as director.”


“Resolved that Mr AE Wentzel, who retires by rotation in terms of the memorandum of

incorporation and, being eligible, off ers himself for re-election, be and is hereby re-elected

as director.”

The reason for ordinary resolutions numbers 1 to 2 (inclusive) is that the memorandum of

incorporation of the company, the JSE Listings Requirements and, to the extent applicable,

the Companies Act, as amended, require that a component of the non-executive directors

rotate at every annual general meeting of the company and, being eligible, may off er

themselves for re-election as directors. Brief résumés of these directors appear on

pages 32 and 33 of the 2020 integrated annual report.

2. Recommendation to appoint directors


“Resolved that Mr G Heron be and is hereby appointed as director in terms of the

memorandum of incorporation of the company.”

A brief résumé vitae of Mr G Heron:

Greg Heron is a qualifi ed chartered

accountant with more than 25 years’

experience in corporate, structured and

property fi nance as well as signifi cant

operational exposure to a variety of

businesses.

Greg is currently CEO of Infi nitus Holdings

(Pty) Limited, an investment company with a

portfolio primarily invested in the FMCG and

retail sectors. Prior to that he was head of

Leaf Property Fund, a signifi cant unlisted

property fund focused on the offi ce and

commercial sector of the property market.

During his time at Leaf Property Fund he

led the repositioning of the fund which

included the disposal of a large portfolio

of assets as part of this process.


“Resolved that Dr P Pienaar be and is

hereby appointed as director in terms of

the memorandum of incorporation of the

company.”

A brief résumé vitae of Dr P Pienaar:

Pine has a doctorate in engineering, is a

registered professional engineer and has

over 30 years of experience in the

consulting engineering fi eld. Pine’s initial

exposure was in construction. This was

followed by a period of specialisation in the

roads and transportation fi eld, including

road network planning, economic project

evaluation, traffi c and transportation

engineering, road design, public transport

planning, Bus Rapid Transit (BRT) and urban

renewal. In recent years Pine leaded a

multidisciplinary team responsible for the

planning, design and construction

supervision of various industrial buildings.

He also had exposure to a few PPP projects.

Pine is a founding member and current CEO

of Nyeleti Consulting, a multidisciplinary

fi rm of consulting engineers.

Pine was a director of Safari Investments

from November 2013 to August 2015. Pine

has a keen interest in the property market

and has over the years invested in property

itself, as well as the REIT sector on the

stock exchange.




3. Appointment of independent

external auditor


“Resolved that BDO South Africa

Incorporated be and is hereby appointed as

the auditor of the company for the ensuing

year, on the recommendation of the

company’s audit and risk committee.”

Shareholders are hereby advised that the

board of Safari or its audit and risk

committee will undertake a full review of

the cost, performance and scope of the

audit function performed by the

independent auditor of the company.

In order to ensure good corporate

governance, the board may independently

engage with a number of other service

providers to assess the best value

proposition that meets Safari’s

requirements in terms of good corporate

governance, sustainability and the

empowerment codes.

The reason for ordinary resolution

number 5 is that the company, being a

public listed company, must have its

fi nancial results audited and such auditor

must be appointed or re-appointed each

year at the annual general meeting of the

company as required by the Companies Act.

4. Re-appointment of audit and

risk committee membersTo elect, by separate resolutions, an audit

and risk committee comprising independent

non-executive directors, as provided in

section 94(4) of the Companies Act, and

appointed in terms of section 94(2) of that

Act to hold offi ce until the next annual

general meeting to perform the duties and

responsibilities stipulated in section 94(7)

of the Companies Act and the King IV Report

on Corporate Governance for South Africa

2016, and to perform such other duties and

responsibilities as may from time to time

be delegated by the board of directors for

the company, all subsidiary companies and

controlled trusts.

The board of directors has assessed

the performance of the audit and risk

committee members standing for

re-election and has found them suitable

for appointment. Brief résumés of these

directors appear on pages 32 and 33 of

the 2020 Integrated annual report.


“Resolved that Ms FN Khanyile, being

eligible, be and is hereby re-appointed as a

member of the audit and risk committee of

the company, as recommended by the board

of directors of the company, until the next

annual general meeting of the company.”


“Resolved that, subject to re-election under

ordinary resolution 1, Dr M Minnaar, being

eligible, be and is hereby re-appointed as a

member of the audit and risk committee of

the company, as recommended by the board

of directors of the company, until the next

annual general meeting of the company.”


“Resolved that, subject to re-election under

ordinary resolution 2, Mr AE Wentzel, being

eligible, be and is hereby re-appointed as

a member and chairman of the audit

and risk committee of the company, as

recommended by the board of directors of

the company, until the next annual general

meeting of the company.”

The reason for ordinary resolutions numbers

6 to 8 (inclusive) is that the company, being a

public listed company, must appoint an audit

and risk committee and the Companies Act

requires that the members of such audit and

risk committee be appointed, or re-

appointed, as the case may be, at each

annual general meeting of the company.

5. Place the unissued ordinary

shares under the control of the

directors


“It is resolved that, in accordance with the

memorandum of incorporation, the

authorised but unissued ordinary shares in

the share capital of the company be and are

hereby placed under the control and

authority of the directors and that the

directors be and are hereby generally

authorised and empowered to allot, issue

and otherwise dispose of such shares to

such person or persons on such terms and

conditions and at such times as the

directors may from time to time and in their

discretion deem fi t, subject to the provisions

of the Companies Act, the memorandum of

incorporation and the JSE Listing

Requirements, where applicable.”

Shareholders are urged to note the

unissued ordinary stated capital of the

company represents approximately 84% of

the entire authorised stated capital of the

company as at the date of the notice of

this annual general meeting.

The reason for ordinary resolution number

9 is that in terms of the company’s

memorandum of incorporation, the

shareholders must authorise that the

unissued ordinary shares are placed under

the control of the directors.

6. Non-binding advisory vote

on the company’s remuneration

policy and implementation report


“Resolved that the shareholders endorse, by

way of a non-binding advisory vote, the

company’s remuneration policy as set out in

Annexure A to this notice of annual general

meeting.”


number 10 is that King IV recommends and

the JSE Listings Requirements require that

the remuneration policy of the company be

endorsed through a non-binding advisory

vote by shareholders. This enables

shareholders to express their views on the

remuneration policy adopted. The eff ect of

ordinary resolution number 10, if passed,

will be to endorse the company’s

remuneration policy.

Ordinary resolution number 10 is of an

advisory nature only and failure to pass this

resolution will therefore not have any legal

consequences relating to existing

remuneration agreements. However, the

board will take the outcome of the vote into

consideration when considering

amendments to the company’s

remuneration policy.

NOTICE OF ANNUAL GENERAL MEETING continued





“Resolved that the company’s

implementation report with regards to its

remuneration policy, as set out in

Annexure B of this notice of annual general

meeting, be and is hereby endorsed by way

of a non-binding vote.”


number 11 is that King IV recommends that

the implementation report on a company’s

remuneration policy be tabled for a

non-binding advisory vote by shareholders

at each annual general meeting of the

company. This enables shareholders to

express their views on the implementation

of a company’s remuneration policy. The

eff ect of ordinary resolution 11, if passed,

will be to endorse the company’s

implementation report in relation to its

remuneration policy. Ordinary resolution 11

is of an advisory nature only and failure to

pass this resolution will therefore not have

any legal consequences relating to existing

remuneration agreements. However, the

board will take the outcome of the vote into

consideration when considering

amendments to the company’s

remuneration policy and its implementation.

In the event that 25% or more of

shareholders vote against either the

remuneration policy or the implementation

report at the meeting, Safari will engage

with shareholders through dialogue,

requesting written submissions or

otherwise, in order to address shareholder

concerns.

7. General authority to issue

authorised but unissued ordinary

shares for cash


“Resolved that the directors of the company

be and are hereby authorised, by way of a

general authority, to allot and issue and

grant options to acquire or subscribe for all

or any of the authorised but unissued equity

securities in the capital of the company for

cash on such terms and conditions as the

directors in their discretion deem fi t, subject

annual general meeting, 15% of the

company’s issued ordinary share capital

(net of treasury shares) amounts to

46 623 902 ordinary shares.”

For listed entities wishing to issue or grant

options over shares for cash other than

issues by way of rights off ers or dividends

reinvested for shares, in consideration of

acquisitions and/or share incentive

schemes (which schemes have been duly

approved by the JSE and by the

shareholders of the company), it is

necessary for the board of the company to

obtain the prior authority of the

shareholders in accordance with the JSE

Listings Requirements and the

memorandum of incorporation of the

company. Accordingly, the reason for

ordinary resolution number 12 is to obtain a

general authority from shareholders to

issue shares for cash in compliance with

the JSE Listings Requirements and the

memorandum of incorporation.

In order for ordinary resolution number 12

to be adopted, the support of at least 75%

(seventy-fi ve percent) of the votes cast by

shareholders present or represented by

proxy at the annual general meeting is

required

Special business

In order for these special resolutions to be

adopted, the support of at least 75%

(seventy- fi ve percent) of votes cast by

shareholders present or represented by

proxy at this meeting, is required.

To consider and, if deemed fi t, to pass, with

or without modifi cation, the following

special resolutions of the company:

to the Companies Act, the memorandum of

incorporation and the JSE Listings

Requirements, where applicable, on the

basis that:

◗ this authority shall be valid until the

company’s next annual general meeting

or for 15 months from the date that this

resolution is passed, whichever period is

shorter;

◗ the ordinary shares must be issued to

public shareholders as defi ned in the JSE

Listings Requirements and not to related

parties;

◗ the equity securities which are the

subject of the issue for cash must be of a

class already in issue or must be limited

to such securities or rights that are

convertible into a class already in issue;

◗ the maximum discount at which the

ordinary shares may be issued is 10% of

the weighted average traded price of the

company’s ordinary shares measured

over 30 business days prior to the date

that the price of the issue is determined

or agreed by the directors and the party

subscribing for the securities (the JSE

will be consulted for a ruling if the

company’s securities have not traded in

such 30-business-day period);

◗ an announcement, giving full details of

such issue, will be published on SENS at

the time of any issue representing, on a

cumulative basis, 5% or more of the

number of ordinary shares in issue prior

to that issue in terms of the JSE Listings

Requirements; and

◗ the general issues of shares for cash

under this authority may not exceed, in

the aggregate, 15% of the company’s

issued share capital (number of

securities) of that class as at the date of

this notice of annual general meeting, it

being recorded that ordinary shares

issued pursuant to a rights off er to

shareholders or options granted by the

trust in accordance with the JSE Listings

Requirements shall not diminish the

number of ordinary shares that comprise

the 15% of the ordinary shares that can

be issued in terms of this ordinary

resolution. As at the date of this notice of




8. Approval of non-executive directors’ remuneration

Special resolution number 1

“Resolved that in terms of section 66(9) of the Act, as amended, payment of the remuneration

of the directors of Safari for their services as directors is hereby approved as follows:

Board retainer fee (quarterly)

1 April 2020

to

31 March 2022

R

Board chairman 45 000

Member 26 250

Board meeting (per attendance)

Board chairman 45 000

Member 26 250

Audit and risk committee meeting (per attendance)

Committee chairman 25 000

Member 20 000

Nomination and remuneration committee meeting (per attendance)


Member 14 175

Social and ethics committee meeting (per attendance)


Member 10 000

Strategy committee meeting (per attendance)


Member 15 000

Ad hoc/hour 2 500

Thereafter, but only until the expiry of a

period of 24 (twenty four) months from the

date of the passing of this special resolution

number 1 (or until amended by a special

resolution of shareholders prior to the

expiry of such period), on the same basis as

above, escalated as determined by the

board of Safari, up to a maximum of 5% per

annum per amount set out as aforesaid.

The reason and eff ect of special resolution

number 1 is to enable the company to

comply with the provisions of sections

65(11)(h), 66(8) and 66(9) of the Companies

Act, which stipulate that remuneration to

directors for their services as directors may

be paid only in accordance with a special

resolution approved by shareholders.

The role of non-executive directors is under

increasing focus of late, with greater

accountability and risk attached to

the position.

◗ this general authority shall only be valid

until the next annual general meeting of

the company, provided that it shall not

extend beyond 15 months from the date

of this resolution;

◗ an announcement must be published as

soon as the company has acquired

shares constituting, on a cumulative

basis, 3% of the number of shares in

issue on the date that this authority is

granted, containing full details thereof,

as well as for each 3% in aggregate of

the initial number of shares acquired

thereafter;

◗ the general authority to repurchase is

limited to a maximum of 20% in the

aggregate in any one fi nancial year of the

company’s issued share capital at the

time the authority is granted;

◗ a resolution has been passed by the

board of directors approving the

repurchase, that the company has

satisfi ed the solvency and liquidity test as

defi ned in the Companies Act and that,

since the solvency and liquidity test was

applied, there have been no material

changes to the fi nancial position of the

company and its subsidiaries;

◗ the general repurchase is authorised by

the company’s memorandum of

incorporation;

◗ repurchases must not be made at a price

more than 10% above the weighted

average of the market value of the shares

for the fi ve business days immediately

preceding the date that the transaction is

eff ected. The JSE will be consulted for a

ruling if the company’s securities have not

traded in such fi ve business-day period;

◗ the company may at any point in time

only appoint one agent to eff ect any

repurchase(s) on the company’s behalf;

and

◗ the company may not eff ect a repurchase

during any prohibited period as defi ned in

terms of the JSE Listings Requirements

unless there is a repurchase programme

in place, which programme has been

submitted to the JSE in writing prior to

the commencement of the prohibited

period and executed by an independent

third party, as contemplated in terms of

paragraph 5.72(h) of the JSE Listings

Requirements.”


9. General authority to

re-purchase shares


“Resolved, as a special resolution, that the

company and the subsidiaries of the

company be and are hereby authorised, as a

general approval, to repurchase any of the

shares issued by the company, upon such

terms and conditions and in such amounts

as the directors may from time to time

determine, but subject to the provisions of

sections 46 and 48 of the Companies Act,

the memorandum of incorporation of the

company and the JSE Listings

Requirements, including, inter alia, that:

◗ the general repurchase of the shares

may only be implemented through the

order book operated by the JSE trading

system and done without any prior

understanding or arrangement between

the company and the counterparty;




Reason and effect

The reason for and eff ect of special

resolution number 2 is to grant the

directors a general authority in terms of its

memorandum of incorporation and the JSE

Listings Requirements for the acquisition by

the company or by a subsidiary of the

company of shares issued by the company.

The company has no immediate plans to

use this authority and is simply obtaining

same in the interests of prudence and good

corporate governance should the

unforeseen need arise to use the authority.

In terms of section 48(2)(b)(i) of the

Companies Act, subsidiaries may not hold

more than 10%, in aggregate, of the number

of the issued shares of a company. For the

avoidance of doubt, a pro rata repurchase

by the company from all its shareholders

will not require shareholder approval, save

to the extent as may be required by the

Companies Act.

Information relating to the special

resolution

The directors of the company or its

subsidiaries will only utilise the general

authority to repurchase shares of the

company to the extent that the directors,

after considering the maximum number of

shares to be purchased, are of the opinion

that the position of the group would not be

compromised as to the following:

◗ The group’s ability in the ordinary course

of business to pay its debts for a period

of 12 months after the date of the general

meeting and for a period of 12 months

after the repurchase;

◗ The consolidated assets of the group will

at the time of the general meeting and at

the time of making such determination

be in excess of the consolidated liabilities

of the group. The assets and liabilities

should be recognised and measured in

accordance with the accounting policies

used in the latest audited annual fi nancial

statements of the group;

◗ The ordinary capital and reserves of the

group after the repurchase will remain

adequate for the purpose of the business

of the group for a period of 12 months

after the general meeting and after the

date of the share repurchase; and

◗ The working capital available to the

group after the repurchase will be

suffi cient for the group’s requirements

for a period of 12 months after the date

of the notice of the general meeting.

10. Inter-company financial

assistance

Inter-company financial assistance


“Resolved, in terms of section 45(3)(a)(ii) of

the Companies Act, as a general approval,

that the board of the company be and is

hereby authorised to approve that the

company provides any direct or indirect

fi nancial assistance (“fi nancial assistance”)

will herein have the meaning attributed to it

in section 45(1) of the Companies Act) that

the board of the company may deem fi t to

any company or corporation that is related

or inter-related (“related” or “inter-related”


in section 2 of the Companies Act) to the

company, on the terms and conditions and

for amounts that the board of the company

may determine, provided that the

aforementioned approval shall be valid until

the date of the next annual general meeting

of the company.”



directors of the company the authority, until

the next annual general meeting of the

company, to provide direct or indirect

fi nancial assistance to any company or

corporation which is related or inter-related

to the company. This means that the

company is, inter alia, authorised to grant

loans to its subsidiaries and to guarantee

the debt of its subsidiaries.

Financial assistance for the

subscription and/or purchase of

shares in the company or a related

or inter-related company Special

resolution number 4

“Resolved, in terms of section 44(3)(a)(ii) of

the Companies Act, as a general approval,

that the board of the company be and is

hereby authorised to approve that the

company provides any direct or indirect

fi nancial assistance (“fi nancial assistance”


in sections 44(1) and 44(2) of the companies

Act) that the board of the company may deem

fi t to any company or corporation that is

related or inter-related to the company

(“related” or “inter-related” will herein have

the meaning attributed to it in section 2 of the

Companies Act) and/or to any fi nancier who

provides funding by subscribing for

preference shares or other securities in the

company or any company or corporation that

is related or inter-related to the company, on

the terms and conditions and for amounts

that the board of the company may

determine for the purpose of, or in connection

with the subscription of any option, or any

shares or other securities, issued or to be

issued by the company or a related or

inter-related company or corporation, or for

the purchase of any shares or securities of

the company or a related or inter-related

company or corporation, provided that the

aforementioned approval shall be valid until

the date of the next annual general meeting

of the company.”



directors the authority, until the next annual

general meeting of the company, to provide

fi nancial assistance to any company or

corporation which is related or inter-related

to the company and/or to any fi nancier for

the purpose of or in connection with the

subscription or purchase of options, shares

or other securities in the company or any

related or inter-related company or

corporation. This means that the company

is authorised, inter alia, to grant loans to its

subsidiaries and to guarantee and furnish

security for the debt of its subsidiaries

where any such fi nancial assistance is

directly or indirectly related to a party

subscribing for options, shares or securities

in the company or its subsidiaries.

A typical example of where the company

may rely on this authority is where a

subsidiary raised funds by way of issuing

preference shares and the third-party

funder requires the company to furnish

security, by way of a guarantee or

otherwise, for the obligations of its

subsidiary to the third-party funder arising

from the issue of the preference shares.




The company has no immediate plans to

use this authority and is simply obtaining

same in the interests of prudence and

good corporate governance should the

unforeseen need arise to use the

authority.

In terms of and pursuant to the provisions

of sections 44 and 45 of the Companies

Act, the directors of the company

confi rm that the board will satisfy itself,

after considering all reasonably

foreseeable fi nancial circumstances

of the company, that immediately after

providing any fi nancial assistance as

contemplated in special resolution

numbers 3 an 4 above:

◗ the assets of the company (fairly valued)

will equal or exceed the liabilities of the

company (fairly valued) (taking into

consideration the reasonably foreseeable

contingent assets and liabilities of the

company);

◗ the company will be able to pay its debts

as they become due in the ordinary

course of business for a period of

12 months;

◗ the terms under which any fi nancial

assistance is proposed to be provided,

will be fair and reasonable to the

company; and

◗ all relevant conditions and restrictions

(if any) relating to the granting of fi nancial

assistance by the company as contained

in the company’s memorandum of

incorporation have been met.

11. To transact such other

business as may be transacted at

an annual general meeting

Important notes regarding attendance at the annual general meetingGeneralShareholders wishing to attend the

meeting have to ensure beforehand with

the transfer secretaries of the company

that their shares are in fact registered

in their name.

Certificated shareholders and own-name dematerialised shareholdersShareholders who have not dematerialised their shares or who have dematerialised their

shares with own-name registration are entitled to attend and vote at the annual general

meeting and are entitled to appoint a proxy or proxies to attend, speak and vote in their

stead. The person appointed need not be a shareholder of the company.

Proxy forms should be lodged with the transfer secretaries of the company, being

Computershare Investor Services at Rosebank Towers, 15 Biermann Avenue, Rosebank 2169,

South Africa, or posted to the transfer secretaries at Private Bag X9000, Saxonwold 2132,

South Africa, or by email to [email protected] to be received by them not later

than Thursday, 10 September 2020, provided that any form of proxy not delivered to the

transfer secretary by this time may be handed to the chairman of the annual general

meeting prior to the commencement of the annual general meeting, at any time before the

appointed proxy exercises any shareholder rights at the annual general meeting.

Dematerialised shareholders other than with own-name registrationDematerialised shareholders, other than own- name dematerialised shareholders, should

contact their Central Securities Depository Participant (“CSDP”) or broker in the manner and

time stipulated in the custody agreement entered into between such shareholders and the

CSDP or broker:

◗ to furnish them with their voting instructions; and

◗ in the event that they wish to attend the meeting, to obtain the necessary authority to

do so.

Voting will be by way of a poll and every shareholder of the company present in person or

represented by proxy shall have one vote for every share held in the company by such

shareholder.

Electronic participation1. Shareholders participating in the meeting using the online platform

https://sar.votingplatform.corporateactions.co.za/login will be able to vote during the

commencement of the meeting (2pm on 14 September 2020) and the closure of voting

as announced by the Chair during the meeting. More information regarding online

participation at the meeting (including how to vote and ask questions online during the

meeting) is available in the Online Shareholders’ Meeting Guide which can be accessed on

our Investor Relations website. It is also recommended that shareholders who elect to

participate in the meeting through the online platform log into the online platform at least

15 minutes prior to the scheduled start time of the meeting.

2. The company cannot guarantee there will not be a break in communication which is

beyond the control of the company.

3. The participant acknowledges that the telecommunication lines are provided by a third

party and indemnifi es the company against any loss, injury, damage, penalty or claim

arising in any way from the use or possession of the telecommunication lines, whether or

not the problem is caused by any act or omission on the part of the participant or anyone

else. In particular, but not exclusively, the participant acknowledges that he/she will have no

claim against the company, whether for consequential damages or otherwise, arising from

the use of the telecommunication lines or any defect in it or from total or partial failure of

the telecommunication lines and connections linking the telecommunication lines to

the AGM.





Summary of shareholder rightsIn compliance with the provisions of section

58(8)(b)(i) of the Companies Act, a summary

of the rights of a shareholder to be

represented by proxy, as set out in section

58 of the Companies Act, is as follows:

◗ A shareholder entitled to attend and vote

at the annual general meeting may, at

any time, appoint any individual (or two

or more individuals) as a proxy or proxies

to attend, participate in and vote at the

meeting in the place of the shareholder.

A proxy need not be a shareholder of

the company.

◗ A proxy appointment must be in writing,

dated and signed by the shareholder

appointing the proxy, and subject to the

rights of a shareholder to revoke such

appointment (as set out below). It remains

valid only until the end of the meeting.

◗ A proxy may delegate the proxy’s

authority to act on behalf of the

shareholder to another person, subject to

any restrictions set out in the instrument

appointing the proxy.

◗ The appointment of a proxy is suspended

at any time and to the extent that the

shareholder who appointed such proxy

chooses to act directly and in person in

the exercise of any of his/her rights as

shareholder.

The appointment of a proxy is revocable by

the shareholder in question cancelling it in

writing or making a later inconsistent

appointment of a proxy and delivering a

copy of the revocation instrument to the

proxy and to the company. The revocation of

a proxy appointment constitutes a complete

and fi nal cancellation of the proxy’s

authority to act on behalf of the shareholder

as of (a) the date stated in the revocation

instrument, if any; or (b) the date on which

the revocation instrument is delivered to the

company as required in the fi rst sentence of

this paragraph, whichever is the later.

If the instrument appointing the proxy or

proxies has been delivered to the company,

as long as that appointment remains in

eff ect, any notice that is required by the

Companies Act or the memorandum of

incorporation to be delivered by the

company to the shareholder, must be

delivered by the company to: (a) the

shareholder; or (b) the proxy or proxies, if

the shareholder has: (i) directed the

company to do so in writing; and (ii) paid

any reasonable fee charged by the company

for doing so.

Attention is also drawn to the notes on the

proxy form.

By order of the board

PWL van Niekerk


Pretoria

13 July 2020

Registered offi ce

410 Lynnwood Road

Lynnwood

Pretoria 0081




ANNEXURE A: REMUNERATION POLICY

Background statement Safari Investments RSA Limited’s (“Safari”)

remuneration and benefi ts policy is in

support of the company’s strategic

objectives. Remuneration is a formidable

communicator of what behaviours and

outcomes the organisation wishes to

reward. The policy remains a primary

motivator to employees to actively and

diligently work towards achieving the

business targets.

The company engaged with its stakeholders

subsequent to the 2019 annual general

meeting regarding particular issues of the

remuneration policy that were voted against

by 9,55% of the voting rights exercised. The

implementation report was voted against by

9,55% of the voting rights exercised.

However, the company endeavoured to

engage with stakeholders and discussed

the legitimate and reasonable objections

raised. As much as the policy has been

improved, the company believes that the

policy should continuously evolve to ensure

that it best meets the needs of staff , the

company and that of its stakeholders.

The key principles behind the remuneration

policy designed to ensure attraction and

retention of high-quality employees are

as follows:

◗ Competitive remuneration packages that

are realistic within similar industries and

markets within which the company

operates;

◗ Remuneration and reward supports high

performance, continuous improvement

and a general value-adding culture;

◗ Each employee conducts themselves in

line with the company values and code of

conduct of the company;

◗ Key performance indicators are based

on economic, social and environmental

targets;

◗ Manage the total cost to company for

every employee (guaranteed salary);

◗ Incentive packages to reward both

company performance and individual/

team/project performance;

◗ Reference to external sources on

comparative remuneration levels within

the industry;

◗ The remuneration policy is reviewed

regularly to ensure that Safari keeps

pace with the continually changing

market;

◗ Attention to and consideration for all

employees’ requirements; and

◗ Ensure that all stakeholders understand

the remuneration policy.

During the reporting period, the board

approved a partial contribution to staff

members’ pension benefi ts and by doing

so guaranteed that the employees are

incentivised. Furthermore, long-term

incentives (equity-based) involving a

conditional share plan off ered to senior

executives and future leaders identifi ed by

the executive team of the company, are

currently under review and will be

recommended to shareholders once the

conditional share plan is approved by the

board of directors. The long-term incentive

share plan will serve as a method of

ensuring retention of key talent.

Overview of remuneration policy A competitive remuneration strategy allows

Safari to attract and retain quality talent

with high levels of competence. This

remuneration approach coupled with

fostering a culture of collaboration and

recognition for superior contribution allows

the diff erent functions in the business to

function in unison. Our company values are

foundational and our recruitment process

focuses on recruiting both competent

employees who believe in, and live by our

values and principles. This results in

consistency and predictability in highly

changing ambiguous economic conditions.

Remuneration and reward-related matters

are reviewed and assessed by the

nomination and remuneration committee

and revert to the board for fi nal approval.

Implementation is subject to shareholder

approval at the annual general meeting.

All board members except for the CEO,

fi nancial director and the group company

secretary receive board fees as per

aforementioned approval. The CEO, fi nancial

director and group company secretary

receive a basic salary and may be awarded

a performance bonus dependent on

company and individual performance for

the previous fi nancial year and accounted

for on a cash-paid basis in the following

fi nancial year.

Board responsibilityThe board carries ultimate responsibility for

the remuneration policy. The nomination

and remuneration committee operates in

accordance with a board-approved

mandate. The board may, when required,

refer matters for shareholder approval for

example, new and amended non-executive

board and committee fees. During the year,

the board accepted the recommendations

made by the committee. In terms of the

recommendations set out in King IV, the

remuneration policy will be submitted to

shareholders for a non-binding vote.


committeeAn independent non-executive director

chairs the meeting. Full details of

attendance are set out in our integrated

annual report (refer to page 44).

The committee:

◗ Reviews the remuneration philosophy

and policy.

◗ Reviews the recommendations of

management on fee proposals for the

chairman and non-executive directors

and determines, in conjunction with the

board, the fi nal proposals to be submitted

to shareholders for approval.

◗ Determines all the remuneration

parameters for the chief executive and

executive directors, and agrees the

principles for senior management

increases and cash incentives.

◗ The CEO and fi nancial director attend

meetings by invitation. Other members of

the board or senior management can be

invited when appropriate.

◗ No individual, irrespective of position, is

present when their performance is

evaluated and their remuneration is

discussed.




◗ Safari conducted a survey in 2019 to

compare the remuneration strategy

against similar size companies in the

industry. These survey results serves as

guidelines to determine the remuneration

of executive and non-executive directors

and certain senior management roles.

◗ Peer performance reviews and biannual

performance evaluation are considered

when reviewing salaries. To retain

fl exibility and ensure fairness when

directing human capital to those areas of

the company requiring focused attention,

subjective performance assessments

may sometimes be required when

evaluating employee contributions.

◗ The CEO has full control in terms of the

parameters, as mandated by the board,

over employee remuneration in line with

the company’s remuneration philosophy

and policies.

Remuneration structureThe integrated remuneration structure

is made up of the following components

to ensure competitive base pay and a

motivational performance-driven variable

pay portion:

◗ Total cost to company incorporating

basic pay; and

◗ Short-term incentive bonuses

(performance-based) dependent on

company and individual performances

for the previous fi nancial year and

accounted for on a cash-paid basis in the

following fi nancial year. This aligns

individual and group performance with

the short-term objectives of the company

primarily through targeted annual growth

dividends. This will keep employees

focused on achieving their targets in their

critical performance areas.

Executive directors’ contractsNotice periods for directors range from

60 to 180 days, dependent on strategic

considerations. Certain executives who have

shares in Safari or subsidiaries have

restraint of trade (non-compete)

agreements for varying periods, depending

on the individual circumstances.

Non-executive remunerationThe remuneration of non-executive directors is based on proposals from the nomination and

remuneration committee, which are submitted to the board for approval. Non-executive

directors sign service contracts with the company upon appointment.

The term of offi ce of non-executive directors is governed by the memorandum of corporation,

which provides that directors who have served for three years will retire by rotation, but may,

if eligible, off er themselves for re-election for a further three-year term.

Fee structureThe remuneration of non-executive directors who serve on the board and its committees is

reviewed by the committee annually. Remuneration is compared with that of selected peer

companies on an annual basis and recommendations are then submitted to the board for

approval.

Non-executive remuneration is determined and paid quarterly based on an annual fee. Any

additional time spent on company business specifi cally mandated by the board is paid at a

fi xed hourly rate. Fees are approved annually on this basis at the annual general meeting

and apply with eff ect from 1 April of that fi nancial year for a period of two years.

Mandate and authorityThe CEO of the company as well as the nomination and remuneration committee take into

account the remuneration policy, and any other relevant documents such as the nomination

and remuneration committee’s terms of reference, when considering matters before it.

The nomination and remuneration committee have full discretion in determining appropriate

remuneration policies and practices for the company, including but not limited to, annual

remuneration increases, performance bonuses and share incentives for the company.

The CEO has full discretion to implement and manage the remuneration principles and

policies of the company with regards to any full-time employee.

The nomination and remuneration committee shall, as deemed necessary, report signifi cant

deviations from the principles set forth in the remuneration policy, to the board.

The remuneration policy can be viewed on the company’s website under the following

address https://www.safari-investments.com/investor-relations.




Safari complied with its remuneration

policy in all respects for the year ended

31 March 2020.

All components of remuneration paid to

Safari’s executive, non-executive directors

and Safari employees in accordance with

Safari’s remuneration policy are

comprehensively disclosed and reported

on herein.


committee reviews and assesses salary

adjustments and makes a formal

recommendation to the board for

implementation. All board members except

for the CEO, fi nancial director and the group

company secretary receive board fees as

per aforementioned approval. The CEO,

fi nancial director and group company

secretary receive a basic salary and may be

awarded a performance bonus dependent

on company and individual performance for

the previous fi nancial year and accounted

for on a cash-paid basis in the following

fi nancial year.

Directors’ remunerationThe directors’ remuneration paid during

the 2020 fi nancial year was approved by

way of a special resolution passed by

shareholders at the 2018 annual general

meeting. For a detailed breakdown of fees

paid, please refer to note 32 on page 100

of the 2020 integrated annual report. The

remuneration policy was also approved by

way of a non-binding advisory resolution

passed at the 2018 annual general meeting

of shareholders.

The reason for the non-binding advisory

vote by shareholders is that the King IV

Report on Corporate Governance for South

Africa, 2016 recommends, and the JSE

Listings Requirements require, that the

remuneration policy of a company be tabled

for a non-binding advisory vote by

shareholders at each annual general

meeting of the company. This enables

shareholders to express their views on the

remuneration policy adopted.

The eff ect of the special resolution is to

endorse the company’s remuneration policy

and failure to pass this resolution will

ANNEXURE B: IMPLEMENTATION REPORT

therefore not have any legal consequences

relating to existing remuneration

agreements. However, the board will take

the outcome of the vote into consideration

when considering amendments to the

company’s remuneration policy.

The board of Safari has implemented the

aforementioned directors’ remuneration

and remuneration policy as approved by

shareholders.

Other remunerationThe CEO, fi nancial director, group company

secretary and other full-time employees

earn a base salary which is guaranteed

annual pay on a cost-to-company basis. It

is subject to annual review and adjustments

are eff ective on 1 April of each year,

coinciding with the commencement of

Safari’s fi nancial year.

Base salary increases are determined

with reference to the South African infl ation

rate and other generally accepted

benchmarks, always with due regard for

market-comparable remuneration. Role,

responsibilities, qualifi cations, tenure,

complexity, ambiguity and number of

variety stakeholders are considered in the

grading of roles. Salary ranges are also

compared to industry norms and

considered when any adjustments are

proposed.

The full-time employed salaried directors

will be eligible for a performance bonus

dependent on company and individual

performance. Please refer to note 32 on

page 100 of the 2020 integrated annual

report for a detailed breakdown on

directors’ remuneration paid during the

prior fi nancial year.

KPIs and relevant measures considered The weighting split between company and

personal performance conditions, is

dependent on the seniority of the employee

with more weighting towards company

performance and conditions at more senior

levels.

Executive directors’ KPI measures

considered ◗ Strategic measures

– Responsible growth in the business:

To inter alia achieve growth in dividend

in line with board set targets and to

execute the strategy to increase net

asset value.

– Building development pipeline: New

pipeline secured with development

risks and balance sheet exposure

limited through structures and

partnerships.

– Board/corporate governance:

Strategic input to board decision-

making and input.

◗ Financial measures

– Budget management: Control of the

corporate administrative expenditure.

– Balance sheet management: Ensuring

that the company maintains a prudent

funding strategy in line with the

approved policies and maintaining the

GCR rating.

– Financial reporting: Timeous delivery

of internal and external fi nancial

reporting.

◗ Operational measures

– Arrears: Against arrears as a

percentage of the 12 months income.

– Vacancies: By GLA against prior year

and against peers for portfolio.

– Increase retail trading densities:

Benchmarking against market norm,

including but not limited to SAPOA.

BenchmarkingBenchmarking is performed with reference

to companies comparable in size, industry,

business complexity and the level of

responsibility that the individual assumes to

ensure that remuneration is market-related.

The 2019 extensive benchmark survey was

conducted by Acronim and compared Safari

to eight competitive companies.

The survey provided insight committee

structure, size, diversity and remuneration.




Each share comprises one ordinary share. Certifi cated and own-name dematerialised shareholders are therefore advised that they must

complete a form of proxy in order for their vote/s to be valid.

This form of proxy is for use by the holders of the company’s certifi cated shares (“certifi cated shareholders”) and/or dematerialised shares

held through a Central Securities Depository Participant (“CSDP”) or broker who have selected own-name registration and who cannot attend

but wish to be represented at the annual general meeting to be conducted entirely by electronic communication on 14 September 2020 at

14:00 or any adjournment, if required. Additional forms of proxy are available at the company’s registered offi ce.

This form of proxy is not for the use by holders of the company’s dematerialised shares who have not selected own-name registration. Such

shareholders must contact their CSDP or broker timeously if they wish to attend and vote at the annual general meeting and request that they

be issued with the necessary authorisation to do so or provide the CSDP or broker timeously with their voting instructions should they not

wish to attend the annual general meeting but wish to be represented thereat, in order for the CSDP or broker to vote in accordance with their

instructions.

I/We

(Name in BLOCK LETTERS)

of

(Address)

Being the registered holder/s of

(number) ordinary shares in Safari Investments RSA Limited

Hereby appoint of or failing him/her,

the chairman of the annual general meeting, as my/our proxy(ies) to vote for me/us on my/our behalf at the annual general meeting of the

company and at any adjournment thereof.

Please indicate with an “X” in the appropriate spaces how you wish your votes to be cast. Unless this is done, the proxy will vote as he/she

thinks fi t.

Resolutions In favour of Against Abstain

Ordinary resolutions

Retirement and re-election of directors

1. Dr M Minnaar

2. Mr AE Wentzel

Recommendation to appoint directors

3. Mr G Heron

4. Dr P Pienaar

Appointment of independent external auditor

5. Appointment of independent external auditor: BDO Incorporated South Africa

Re-appointment of audit and risk committee members

6. Ms FN Khanyile

7. Dr M Minnaar

8. Mr AE Wentzel

FORM OF PROXY


(Registration number: 2000/015002/06)

(Share code: SAR | ISIN: ZAE000188280)

(“the company” or “Safari”)




Resolutions In favour of Against Abstain

Place unissued ordinary shares under board control

9. Place unissued ordinary shares under board control

Remuneration policy

10. Non-binding advisory vote on the company’s remuneration policy

11. Non-binding advisory vote on the company’s implementation report with regards

to its remuneration policy

General authority to issue shares for cash

12. General authority to issue authorised but unissued shares for cash

Special resolutions

1. Remuneration of non-executive directors

2. General authority to re-purchase shares

Financial assistance to section 45

3. Approval to provide fi nancial assistance in terms of section 45 of the Companies

Act 71 of 2008

Financial assistance to section 44

4. Financial assistance for the subscription and/or purchase of shares in the company

or a related or inter-related company

Signed at on 2020

Signature

Assisted by (if applicable)

FORM OF PROXY continued




1. Each of the shares comprises one

ordinary share. Certifi cated and

own-name dematerialised shareholders

are therefore advised that they must

complete a form of proxy for their

vote/s to be valid.

2. This form of proxy is to be completed

only by those shareholders who hold

shares in certifi cated form or recorded

in the sub-register in electronic form in

their “own name”.

3. Each shareholder is entitled to appoint

one or more proxies (none of whom

need to be a shareholder of the

company) to attend, speak and vote in

place of that shareholder at the annual

general meeting.

4. Shareholders who are certifi cated or

own-name dematerialised shareholders

may insert the name of a proxy or the

names of two alternate proxies of the

shareholder’s choice in the space/s

provided, with or without deleting “the

chairman of the annual general

meeting”, but any such deletion must be

initialled by the shareholders. The

person whose name stands fi rst on this

form of proxy and who is present at the

annual general meeting will be entitled

to act as proxy to the exclusion of those

whose names follow. If no proxy is

named on a lodged form of proxy, the

chairman shall be deemed to be

appointed as the proxy.

5. A shareholder’s instructions to the

proxy must be indicated by the insertion

of an “X” in the appropriate box

provided. Failure to comply with the

above will be deemed to authorise the

proxy, in the case of any proxy other

than the chairman, to vote or abstain

from voting as deemed fi t and in the

case of the chairman to vote in favour

of any resolution.

6. A shareholder or his proxy is not

obliged to use all the votes exercisable

by the shareholder, but the total of the

votes cast or abstained from may not

exceed the total of the votes exercisable

in respect of the shares held by the

shareholder.

NOTES TO THE FORM OF PROXY

7. Forms of proxy must be lodged at,

posted or e-mailed to the transfer

secretaries, Computershare Investor

Services Proprietary Limited (Private

Bag X9000, Saxonwold 2132,

Fax number: 011 688 5238, E-mail

[email protected] or

to the group company secretary

[email protected] to

be received at least 48 hours prior to

the annual general meeting.

8. The completion and lodging of this form

of proxy will not preclude the relevant

shareholder from attending the annual

general meeting and speaking and

voting in person thereat to the exclusion

of any proxy appointed in terms hereof,

should such shareholder wish to do so.

Where there are joint holders of shares,

the vote of the fi rst joint holder who

tenders a vote as determined by the

order in which the names stand in the

register of shareholders, will be

accepted. In addition to the aforegoing,

a shareholder may revoke the proxy

appointment by:

(i) cancelling it in writing or making a

later inconsistent appointment of a

proxy; and

(ii) delivering a copy of the revocation

instrument to the proxy and to the

company. The revocation of a proxy

appointment constitutes a complete

and fi nal cancellation of the proxy’s

authority to act on behalf of the

shareholder as at the later of the

date stated in the revocation

instrument, if any, or the date on

which the revocation instrument

was delivered in the required

manner.

9. Where there are joint holders of any

shares, only that holder whose name

appears fi rst in the register in respect

of such shares needs to sign this form

of proxy.

10. The chairman of the annual general

meeting may reject or accept any form

of proxy which is completed and/or

received, otherwise than in accordance

with these notes, provided that, in

respect of acceptances, the chairman is

satisfi ed as to the manner in which the

shareholder concerned wishes to vote.

11. Documentary evidence establishing the

authority of a person signing this form

of proxy in a representative capacity

must be attached to this form of proxy

unless previously recorded by the

company or waived by the chairman of

the annual general meeting.

12. Any alteration or correction made to

this form of proxy must be initialled by

the signatory/ies.

13. A minor must be assisted by his/her

parent/guardian unless the relevant

documents establishing his/her legal

capacity are produced or have been

registered by the transfer secretaries.

14. The aforegoing notes contain a

summary of the relevant provisions

of section 58 of the Companies Act 71

of 2008, as amended.




Safari Investments RSA Limited(Registration number: 2000/015002/06)

JSE code: SAR

ISIN: ZAE000188280

Country of incorporation: Republic of South Africa (7 July 2000)

Registered address and place of business410 Lynnwood Road, Lynnwood, Pretoria 0081

+27 (0) 12 365 1889

[email protected]

www.safari-investments.com

AuditorBDO South Africa Incorporated.Wanderers Offi ce Park. 52 Corlett Drive

Illovo, Johannesburg 2196

Commercial bankerAbsa Bank Limited(Registration number: 1986/004794/06)

Absa Towers East

170 Main Street, Johannesburg 2001

PO Box 7735, Johannesburg 2000

Group company secretaryPieter van Niekerk LLB410 Lynnwood Road, Lynnwood, Pretoria 0081

Postal: As above

Directors of Safari Investments RSA LimitedAE Wentzel (Independent non-executive chairman)

DC Engelbrecht (Chief executive offi cer)

FN Khanyile (Independent non-executive)

Dr M Minnaar (Independent non-executive)

K Pashiou (Executive operations director)

CR Roberts (Independent non-executive)

WL Venter (Executive fi nancial director)

CORPORATE INFORMATION

Independent valuerMills Fitchet (Tvl) CC(Registration number: CK 89/40464/23)

No 17 Tudor Park, 61 Hillcrest Avenue

Oerder Park, Randburg 2115

PO Box 35345, Northcliff 2115

Legal advisersWebber Wentzel90 Rivonia Road

Sandton

Johannesburg 2196

(PO Box 1144, Johannesburg 2000)

SponsorPSG Capital Proprietary Limited (Registration number: 1951/002280/06)

1st Floor, Ou Kollege Building, 35 Kerk Street

Stellenbosch 7599

PO Box 7403, Stellenbosch 7599

Transfer secretariesComputershare Investor Services

Proprietary Limited(Registration number: 2004/003647)

Rosebank Towers

15 Biermann Avenue, Rosebank 2196

Private Bag X9000, Saxonwold 2132


Visit our investor relations link on our website for more information and fi nancial updates, profi les and news.

www.safari-investments.com/investor-relations/

Key contacts

If interested in investing with us, or for more information

on our investment opportunities, contact:

TALANA SMITH

Investor relations manager

+27 (0) 12 365 1889

[email protected]

Or alternatively

DIRK ENGELBRECHT



+27 (0) 12 365 1889

[email protected]


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