Strategic Pillars LLR Strategic Plan 2022-2027 Our strategic pillars represent the priorities that support and embolden the strategic intent. These are areas that will drive successful growth and entry into the African market. They serve as enablers of our strategy where positive results are expected. Strategic pillars that will support our strategy comprise a streamlined and expanded Botswana portfolio; Optimised Balance Sheet; quality African assets; strong partnerships and networks, operational excellence and a talented and competent team. Pillars of our strategy are presented and articulated below. Our Strategic Intent We will leverage strong partnerships and networks, optimise our assets, expand the Botswana portfolio and grow into Africa to create a diversified portfolio of BWP3.0 billion and exceed the market weighted average total return year on year until F/Y 2027: Streamlined & Expanded Bots. Portfolio Optimised Balance Sheet Quality African Assets Strong Partnerships and Networks Operational excellence Talented and Competent 1. Streamlined & Expanded Botswana Portfolio The Botswana property portfolio has grown through acquisitions that added individual or a portfolio of assets based on the investment policy of the company. Some assets are old and could be candidates for disposal or are inappropriately located to facilitate efficiency and management excellence. Upon renewal of some of the leases and with a deep understanding of the clients business and operations developed over time, LLR enter into discussion to retain each tenant by right sizing the property at a competitive and affordable rental amount. Value accretive projects such as developing solar solutions and selling back to tenants can further enhance their incentive to stay at higher rentals. Subject to the longevity of the asset, LLR will explore the option to exit the property at a premium by selling on sectional title to sitting tenants. LLR will leverage strategic partnerships, trusted relationships with clients and understanding of their business models to discuss becoming the preferred property partner in their value chain for market growth and/ or logistics, among others 2. Optimised Balance Sheet LLR aims to ensure that the Balance sheet is optimized in order to unlock value and deliver on the strategic intent. The Company seeks to sweat the assets to derive the maximum value from them, and form multi-bank relationship. A Security Special Purpose Vehicle (SPV) to be formed to house all LLR properties in order to allow financiers to have a proportionate share of LLRs prime properties as collateral. 3. Quality African Assets LLR seeks to expand its investment footprint into the rest of Africa through the acquisition of value accretive assets. A bottom-up investment approach will be followed to identify investment opportunities. The below highlight the margins of safety that the Company will adopt when exploring opportunities within the Region. Hard currency Repatriation of funds Political risk and microeconomics Margins of safety Land tenure Ability to raise debts Contemporary Currency risk Tenancy risk Repatriation risk Country risk Operational risk Overexposure risk Political risk Prioritisation of assets with USD/Euro denomination leases Prioritisation of long term lease with blue chip multinational tenants Robust relationship with central bank, hedging and monitoring policies Target stable jurisdictions that satisfy our key investment criteria Reputable experienced partners and in-country property managers Defined diversification strategy in place Comprehensive political risk insurance cover in place Notes: i.e stable governance/political maturity, strong USD based economy, high growth rates, acceptable sovereign rating and outlook by rating agencies, solid economic fundamentals clear tax regime target not more than 45% of the GAV ex-Botswana 4. Strong Partnerships and Networks A critical aspect of the LLRs competitive advantage is the strong and influential shareholders and investors that could be leveraged for the envisaged growth of the business. The company will develop and leverage relationships with BDC and major institutional investors (e.g. pension funds) to access local opportunities and innovative ventures in the market. On the African continent an opportunity exists to leverage the deep experience of Grit to access trusted regional networks and conduct arms length transactions. These partnerships and collaborations will follow the proper channels as per good corporate governance and will be subject to Board approval. 5. Operational Excellence In ensuring the delivery of the strategic intent, LLR commits to driving operational excellence. This will be evidenced through good corporate governance as well as optimized and documented business processes. Additionally, LLR seeks to improve customer experience and strategically position technology for effective and efficient delivery. 6. Talented and Competent People LLR places people at the core of effective execution of strategy. Therefore, investments will be channelled towards developing a strong team that will drive the growth strategy of LLR and build a performance driven culture. This will include the institution of a robust performance management system, needs based training and development of staff as well as standardizing the implementation of approved remuneration and incentive structures. An HR specialist will be engaged to continuously review and align key polices in line with driving the desired culture anchored on the corporate values. Questions a. Analyse the company strategic plan and tell whether it can aid the growth of the company. (20 marks) b. Assuming that the company hires you as a consultant what improvements will you make to the strategy