TURNSTAR : ANNUAL REPORT 2024

ANNUAL REPORT

2024

Full year distribution

20t

Net asset value

P3.36

Revenue increase by

13%

Profit before tax increase by

58%

Property assets value

P 2.8 billion

Gearing ratio

21%

Earnings per share increased to

26 thebe

Fair value gain

P50 million

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I N T H I S R E P O R T

E X E C U T I V E B O A R D	2
M A N A G I N G D I R E C T O R ' S R E P O R T	4
F I N A N C I A L O P E R AT I N G R E V I E W	6
P R O P E R T Y M A R K E T	1 2
C O R P O R AT E G O V E R N A N C E	1 8
C O R P O R AT E S O C I A L R E S P O N S I B I L I T Y	3 0
M I L E S T O N E S	3 2

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B O A R D O F D I R E C T O R S

MR BUTLER PHIRIE - CHAIRMAN OF THE BOARD

Appointed 1 July 2021

Mr. Phirie is a Fellow member of the Botswana Institute of Chartered Accountants (FCA) and the Association of Chartered Certified Accountants (UK) (FCCA). He also holds a BComm degree for the University of Botswana obtained in 1984. He brings with him a wealth of experience, having served at PricewaterhouseCoopers (Botswana) for 27 years, 13 years of which he was the Managing Partner. He has also served the Botswana Development Corporation as General Manager Finance and Administration for 4 years.

Mr Phirie has over the years distinguished himself by holding some prestigious positions in both the public and private sector of Botswana as well as professional and sporting bodies. He is former Director at Air Botswana, Sechaba Breweries Holdings, Fairgrounds Holdings (Chairman) and several other companies. Mr Phirie has held positions of President of Botswana Institute of Accountants and President East Central and Southern Federation of Accountants (ECSAFA). He was also involved with Botswana Golf Union as President.

MR SHIRAN PUVIMANASINGHE - EXECUTIVE DIRECTOR

Appointed 11 December 2014

Shiran Puvimanasinghe is a Chartered Accountant. He commenced his career in Botswana in 1987 as a Senior Manager at Coopers and Lybrand (now PwC). He served the Botswana Housing Corporation, as a Chief Accountant during the period 1990-1993. He was the Financial Director of Zurich Insurance Company Botswana for 15 years and was subsequently appointed as Chief Executive Officer in 2009. Shiran joined Turnstar Holdings as the Chief Financial Officer, in June 2013 and was appointed as the Chief Operating Officer on the 1st of April 2023.

MR GULAAM ABDOOLA - MANAGING DIRECTOR

Appointed 12 February 2001

Gulaam Husain Abdoola has been the Executive Chairman of the GH Group since the group's inception. The family owned group of companies has a large employment force, in various sectors including property development, wholesale and retail, hospitality and automotive parts.

He is also the founding member and managing director of Turnstar Holdings Limited, a listed property company on the Botswana Stock Exchange.

He continues to play an active role in many other social and charitable activities.

MS VICTORIA TEBELE - DIRECTOR

Appointed 1 February 2021

Ms Victoria Tebele graduated from the University of Botswana with a First Class Bachelor of Commerce (Accounting) in 1992 and attained ACCA in 1998. Ms Tebele is a Fellow Member of both ACCA and the Botswana Institute of Chartered Accountants.

Ms Tebele has extensive experience in financial and management accounting, risk management, internal auditing, contracts management, corporate governance and people management in a number of industries including mining, financial services, beef production and general maintenance in both the private sector and parastatals.

She has served as a Director under Botswana National Productivity Centre

(BNPC), Private Enterprises Evaluation and Privatization Agency (PEEPA), and Bank of Botswana where she was the Chairman of the Audit and Risk Committee. She served as a BICA Tax Committee member from 2004 to 2011.

She is currently serving as the Treasurer at the Botswana Chamber of Mines and is currently the Country Manager and Director at Epiroc Botswana, a supplier of innovative mining solutions."

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MR AMARESH CHETTY - DIRECTOR

(B COM, PG DIP BUS MANAGEMENT, MBA) Appointed 1 July 2022

Mr Chetty is the Chief Investment Officer at Ngwenya Capital and has in excess of 20 years' investment and commercial experience across various sectors including but not limited to real estate, healthcare, mining and financial services.

He has served as a director at several companies in South Africa that include:

• Ascendis Health Limited (JSE main board) -member of audit and risk committee, Chair of Human Capital Committee and member of Social and Ethics committee
• Sunstone Capital Limited - Chairman and Chair of the investment committee
• Pepper Club Hotel Investments Ltd - Director and Chair of the Investment Committee
• Rencell Ltd - Director

MR SOLOMON SEOKETSI MANTSWE - DIRECTOR

Appointed 1 July 2022

Mr Mantswe has a career spanning over 35 years' in the public service sector with experience in areas of Policing, Public Relations and Corporate Governance.

He joined the Botswana Police Service (BPS) in October 1983, and over the years held various key positions providing strategic leadership and management. In April 2002 he was appointed Head of Botswana Police Public Relations Unit and would later be appointed Director-Department of Managerial Services in April 2012.

Mr Mantswe was appointed the Deputy Commissioner of Botswana Police Services in July 2021.Some of his key responsibilities include the development and implementation of the organisational strategies, directing the Human Resource and Administration of the BPS, Policy direction and stakeholder relations.

He has extensive experience in corporate governance through his service as the Chairman of the Botswana Public Officers Pension Fund (BPOPF) a position he has held since 2017, and also from the various sub-committees of the same board.

He has over the years served on numerous Boards, some of which included;

1. Chairman, Police XI Football Club, b)Chairperson, Botswana Police Relief Fund He brings a wealth of applied knowledge and experience.

MRS SETHEBE MANAKE - DIRECTOR

Appointed 1 September 2022

Sethebe Manake is an influential figure in Botswana's real estate industry, known for her thought leadership and proptech advocacy. With over 14 years experience, she founded Gosmartvalue, a research and consulting firm focused on transforming the sector.

Sethebe, a chartered surveyor in Real Estate Investment and Finance, introduced an automated valuation platform that provides objective property valuations, democratizes real estate information, and optimizes business efficiency. She serves on the board of the Africa Proptech Forum, leads the Botswana Proptech Chapter, and is the President of the Real Estate Institute of Botswana.

Sethebe's accomplishments include receiving awards such as the Most Innovative Real Estate Data Analytics Firm and the Business Excellence Award for Women in a Male Dominated Industry. Her leadership and dedication have established her as a trusted influencer in Botswana's Real Estate industry.

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M A N A G I N G D I R E C T O R ' S R E P O R T

Valued Shareholders and Stakeholders,

On behalf of Turnstar Holdings, it is both a privilege and a pleasure to present to you a report of our performance and strategic initiatives as Turnstar for the financial year ended 31 January 2024.

Turnstar is a proudly Botswana business that continues to create value for Batswana even beyond our borders, and you will see more of this throughout this Annual Report, closely aligned to the strategy of a homegrown business that today proudly makes its mark across multiple markets. The very values this business was founded upon in 2002 continue to guide us, supported now by the opportunities that time, innovation and digitization offer.

NOTABLE MILESTONES IN THIS PERIOD

• Botswana properties continued to enjoy high occupancy rates during the year
• Economic conditions in Tanzania continued to improve. The retail shopping centre operated at optimum capacity, the conference centre showed strong income growth and the Commercial Office space secured several new tenants
• The Dubai property saw full occupancy during the year
• All properties recorded substantial fair value gains
• Overall, the Group has a 2.7% vacancy
• Notable financial highlights of the year under review
• 13% increase in Revenue due to strong rental income growth in all jurisdictions
• 15% increase in Operating Profit and 58% increase in Profit Before Tax
• P49.8 million fair value gain on the investment property portfolio
• Re-statementof financials for the prior 2 years resulted in substantial growth in the Group's profit after taxation (increase of 23% for the year under review) and retained earnings
• Investment property value growth of over PI 20 million, bringing our asset value to P 2.8 billion.

SOCIO-ECONOMIC CLIMATE

Throughout the year, we witnessed several challenges that significantly impacted the broader business environment and economic climate. Navigating these changes - both global and local required resilience, adaptability, and strategic foresight.

The global landscape had a bearing on Botswana's economy and the industries and businesses within it, especially those with international investments like that of Turnstar. This included the impacts of global conflicts such as in the Middle East and between Russia/Ukraine,

which persist to date. On the back of the long-term consequences of the COVID-19 pandemic, we saw greater disruptions to trade, supply chain, costs of living, global financing conditions, and the cost of raw materials in the property space. This raised development costs tremendously, and yet, paradoxically, rentals in Botswana remain relatively low. The challenge for us is how to navigate the broader concerns whilst also matching property costs and maintaining a satisfactory return on investment for shareholders, a challenge we rose to meet. We also remain acutely aware of global influences such as sustainability, ESG focuses, and of climate change, mindful that we are not immune to the effects of these.

Locally, we felt the impact of the US Dollar appreciation against the Botswana Pula in the form of increased finance costs and foreign exchange losses. National GDP growth was only 2.9%, being significantly lower than the projected 7.6%; rising unemployment rates only affected this further. Botswana's economic resilience bore the brunt of volatility in the global diamond market, prompting changes in policy we see policymakers working to navigate to date. In the property space, we observed increased market competition.

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However, occupancy rates for Turnstar properties were maintained. Last but not least, we are mindful of the concerning economic conditions in Botswana, with the lack of new investors and businesses entering the market having posed (and continuing to pose) challenges to employment creation.

Despite these conditions, Turnstar maintained its status as the largest property company in Botswana, living true to the strategic focus on growth and expansion that we carry into how we shape our future.

STRATEGIC GROWTH AND EXPANSION

Testament to our growth and expansion theme is the significant addition to our portfolio of Lotsane Junction in Botswana during the period under review. We successfully concluded the acquisition of this exceptional quality asset, the kind of which that rarely comes to market, and which brings our portfolio value to over BWP 2.850b and total portfolio size to approx. 105, 000 m2 of Gross Lettable Area (G.L.A). We now await the necessary compliance approvals from shareholders and statutory bodies to progress further.

In addition to Lotsane Junction, we began conducting due diligence on three other potential acquisitions, each of which are poised to further strengthen Turnstar's market position and enhance our asset base further, creating value for the company and shareholders. These deal negotiations carried into the subsequent (current) reporting period, and thus more detail on these acquisitions will be shared once the necessary protocols and requirements have been met, and subsequent agreements finalized.

Also in our pipeline is the expansion of Turnstar's footprint in East Africa, with additional space at Mlimani City in Dar es Salaam. Work began on exploring the new opportunity around this prime location, one which also offers substantial growth opportunities.

While our growth strategy continues to drive our success, the aforementioned lack of new investors and businesses entering the Botswana market remains a significant concern. We are cautiously optimistic of how we navigate this, mindful of the incredible role we believe property can play in shaping the growth narrative of Botswana, and the part we wish to play in this as Turnstar.

Conversely, the East African market, particularly Tanzania, presents a more optimistic outlook. East Africa is experiencing a veritable boom, and Turnstar's established presence in Tanzania positions us advantageously to capitalize on regional growth. Our growing investments in this region are expected to yield substantial returns and support our long-term growth objectives further.

Turnstar's ability to navigate such global and local economic challenges is demonstrative of our strong market presence and effective operational strategies, ensuring continued growth, expansion and profitability. This strong and stable brand is one we are proud to see continue to create value and deliver both returns and impact. We move, as the saying goes "with the times," always learning and always evolving with the necessary agility, perseverance, determination and strategic foresight that remain essential to our industry. This is how we live our purpose to invest, manage and grow properties that bring about real returns for communities and investors with sustainable results.

LOOKING AHEAD

As we navigate these varied market dynamics, Turnstar remains committed to prudent investment, strategic expansion, and maintaining our leadership in the property sector. We will continue to leverage our strengths and explore new opportunities to drive value for our shareholders and contribute positively to the markets in which we operate. While efforts and exploration of even more strategic investments cannot be disclosed as yet, we are confident they will only bring more value and impact, allowing this home-grown Botswana business to extend its proverbial roots deeper and its reach broader, bringing us closer to our bold target of P3 billion in asset value.

On the base of a solid 22-year foundation, robust assets, sound risk management strategy, a low debt gearing ratio and consistent returns, ours is a future that we at Turnstar are all excited to build together.

APPRECIATION

The calibre of Board, Management and Staff we have are what make this possible, and to them I offer tremendous appreciation for working so tirelessly to invest in our growth, expansion and profitability, as well as to being the living embodiments of our values. We also extend our gratitude to our shareholders, partners, financiers, suppliers and wider stakeholders for their continued support and the role they play in our journey, a role we hope they continue to play well into the future.

Gulaam Husain Abdoola

Managing Director

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F I N A N C I A L

O P E R A T I N G

R E V I E W

THE RENTAL REVENUES OF THE GROUP FOR THE YEAR ENDED 31	THE GROUP'S OPERATIONAL PROFIT INCREASE BY
JANUARY 2024 INCREASED BY APPROXIMATELY 13% COMPARED	P22.8 million
TO THE CORRESPONDING YEAR ENDED 31 JANUARY 2023	JANUARY 2023
P328.5 million
	COMPARED TO THE CORRESPONDING YEAR ENDED 31
FOR THE YEAR ENDED 31 JANUARY 2024 COMPARED TO	P176.1 million
P291.3 million	FOR THE YEAR ENDED 31 JANUARY 2024 COMPARED TO
WHICH THE GROUP OPERATES.	P153.3 million
FOR THE YEAR ENDED 31 JANUARY 2023). THIS WAS DUE TO
STRONG RENTAL INCOME GROWTH IN ALL JURISDICTIONS IN
	FOR THE YEAR ENDED 31 JANUARY 2023.

THE GROUP'S PROPERTY ASSETS WERE VALUED AT	THE GROUP EARNINGS PER LINKED
P2.8 billion,	UNIT WAS
AS AT BAL ANCE SHEET DATE. THE INCREASE IS	26 thebe.
MAINLY DUE TO FAIR GAINS IN MLIMANI.
ALL PROPERTIES RECORDED SUBSTANTIAL FAIR VALUE GAINS

FINANCE COSTS

The Group restructured one of its loan facilities from the prior year. This together with the US Dollar appreciation against the Botswana Pula resulted in an increase in the Group's finance costs by 26% compared to the prior year (from BWP 30.9 for the year ended 31 January 2023 to P38.8 for the year ended 31 January 2024). The ABS loan is due in September 2024, however the company has signed a new facility converting ABSA USD loan into Pula loan.

FAIR VALUE

The Group realized a fair value gain on its investment property portfolio of P49.8 million for the year ended 31 January 2024. The is due to substantial increase in Mlimani caused improved occupancy in the office blocks.

CURRENCY FLUCTUATIONS

The US Dollar appreciated against Botswana Pula, during the year under review approximately 49% of Group rental is in US Dollar, resulting in an exchange gain for Turnstar.

TRANSLATION GAINS

The translation gain reported for the year, occurred when translating the US $ denominated investments and assets of the group subsidiaries in Tanzania and Dubai

LOAN TO VALUE RATIO (LTV)

The loan to value ratio (borrowing as a percentage of investment property) is a very conservative 21% compared to 23% of prior year. Company has set internal gearing ratio of 30%.

DISTRIBUTION TO SHAREHOLDERS

The company continues to pay good distribution despite tough economic challenges, total distribution of 20 thebe per linked unit.

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TURNSTAR GROUP GEOGRAPHICAL ANALYSIS

PROPERTY VALUE	GL A (SQUARE METER)	SECTOR FOCUS
P2.72	150 497	85%
billion		Retail

BOTSWANA	TANZANIA	DUBAI
54%	45%	1%
ROPERTY VALUE	ROPERTY VALUE	ROPERTY VALUE
P1.5 billion	P1.2 billion	P25 million
NO. OF PROPERTIES	NO. OF PROPERTIES	NO OF PROPERTIES
7	4	1
GL A (M2)	GL A (M2)	GL A (M2)
94 419	54 836	1 242

CONTRIBUTION TO REVENUE

LE ASE EXPIRY

350

300

250

200

150

100

50

0

				328.5	35%
			291.4	30%
269.2		266.6	160.2
245.2	131.2			23	25	24	25
108.8	111.7		25%
105.6					19	19		20
			20%
				2.1						16
9.1		0.8	1.8	15%
5.0					10
					10%
151.3		154.1	158.4	166.2	5	7		6
134.6	5%	3
					0%

JAN 20	JAN 21	JAN 22	JAN 23	JAN 24	VACANT MONTHLY FEB 25	FEB 26	FEB 27	FEB 28	BEYOND
	Botswana Dubai Tanzania		by Rental Income by GLA		FEB 28

SECTORIAL SPRE AD BY GL A			SECTORIAL SPRE AD BY VALUE
1%	1%	4%				3%
	3%			2%
					10%
				1%
		8%
2%
			Retail			10%	 Retail
			Office - Botswana	2%			 Office - Botswana
			Office - Tanzania			 Office - Tanzania
		81%	Office - Dubai			72%	 Office - Dubai
			Industrial				 Industrial
			Residential				 Residential
			Conference Centre				 Conference Centre

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