Ethics and integrity are at the foundation of Growthpoint’s operations, deeply rooted in its organisational DNA and ethical culture and practices are continually enhanced throughout the organisation. Growthpoint’s approach to ethics is intentional and strategic, supported by structures and tools that consistently uphold its ethical standards.

The Board provides strategic direction and leadership to benefit the company and all its stakeholders. Directors are required to adhere to Growthpoint’s Code of Ethics and policies that promote ethical behaviour to ensure that in addition to fulfilling their statutory and fiduciary duties, all members of the Board display the characteristics of integrity, competence, responsibility, accountability, fairness and transparency.

Through the Group’s Social, Ethics and Transformation Committee, (SET) the Board ensures Growthpoint is a responsible corporate citizen and measures the key performance indicators for effective corporate social responsibility, green initiatives and environmental sustainability.

Regular reports to SET Committee enable the Organisation to maintain its high ethical standards across all aspects of its business.

Growthpoint implemented a comprehensive Board-approved ethics strategy in FY23, based on the results of our participation in the GIBS Ethics Barometer in 2019 and 2021. An Ethics Barometer update was conducted in FY24. The strategy promotes a strong ethical culture within the company and in the company’s interactions with stakeholders. This strategy is supported by various policies and practices and focuses on measurable objectives and ongoing evaluation and improvement.

Our Ethics Strategy aims to:

• Create an ethical culture in the organisation
• Improve performance and increase the value created
• Ensure there are adequate and effective controls in place
• Build trust between all stakeholders
• Ensure the organisation has a good reputation
• Ensure legitimacy
• Evolve based on the changing business landscape
• Respond to issues highlighted in recent ethics surveys

The Board Charter commits the Board of Directors (Board) to effective and ethical leadership. The Board is committed to the highest standards of good corporate governance and sets the tone from the top for effective leadership based on ethical imperatives.

The Board Charter, sets out the Board’s responsibilities, which includes:

• Governing, directing and monitoring the performance of the business as a going concern and presiding over material business decisions
• Approving the company’s strategic plans and objectives
• Managing risks through the Risk Management and Audit Committees
• Providing direction to and evaluating the performance of management.

An annual assessment of the Board and Committee performance is conducted based on several factors i.e., expertise, attitude, objectivity, independence, judgement understanding and commitment to the Board’s duties and responsibilities. The overall outcome from the annual assessments was positive, and feedback was provided to the Board and respective Committees at their meetings held in August / September 2024.

Growthpoint is committed to ethical behaviour and an ethical culture. Our ethical culture is embedded through effective control, transparency, compliance and accountability.

Growthpoint’s Code of Ethics is applicable to all employees, officers, directors, contractors and suppliers of Growthpoint. The core values articulated in this code provides a firm and unshakeable foundation on which our organisational culture is built. The code is a dynamic document that is constantly evolving and ensures that Growthpoint conducts its business with the highest ethical standards. Growthpoint is committed to upholding and enforcing the standards articulated in this code and will reconsider its dealings with individuals or entities not demonstrating the same level of commitment to organisational integrity.

The Code of Ethics considers relevant topics, including training and awareness of ethical matters, confidential reporting and ethical advice, managing conflicts of interest, ensuring governance oversight and managing disciplinary and grievance processes.

To enhance the effectiveness of our ethics function, Growthpoint participates in the GIBS-facilitated Ethics Barometer. The SET Committee is responsible for ensuring that the Group’s ethics are managed effectively, and for reporting on policy implementation to the Board. In addition to monitoring adherence to the Code of Ethics, the SET Committee is responsible for oversight of organisational ethics.

Internal audit provides assurance to the Audit Committee on the effectiveness of the ethics function, which has been further enhanced with the appointment of an Ethics Officer.

The Tip-offs Anonymous Helpline operated by Deloitte, provides a platform to report corruption, unethical behaviour and irregularities. The whistle-blowing mechanism and protected disclosures assist with the identification of possible unethical behaviour. Furthermore, substance abuse and harassment policies are in place prohibiting these practices within the organisation.

During FY24 to date, Growthpoint had no incidents of major non-compliance, fines or prosecutions linked, for example, to anti-competitive practices or other governance and economic issues, or non-compliance with its Code of Ethics.

FY24 Key focus areas:

A key development has been the increased weight of ESG KPIs in our executive remuneration strategy. For FY25, the importance of ESG metrics in our short-term and long-term incentive schemes was highlighted, reflecting our commitment to holding leadership accountable for ESG performance. Please refer to our remuneration report for further information.

The Human Resources and Remuneration Committee has embarked on a journey to enhance the company’s high performance and ethical culture. Growthpoint recognizes that challenging KPIs and their strong linkage to reward underpin high performance. It regularly assesses the culture and analyses leading indicators to determine how it can improve its employee value proposition.

Growthpoint introduced a new company value “play fair” in FY23, specifically focusing on ethics and ethical conduct.

As part of Growthpoint’s commitment to improving the ethical culture within the organisation, Growthpoint engaged the Gordon Institute of Business Science (GIBS) to conduct an ethics risk assessment and after conducting a comprehensive and detailed analysis of the results, an ethics strategy was formulated and recommended to the Board for adoption.

Although Growthpoint’s results were in line with the Corporate SA benchmark at 73%, Growthpoint’s score declined slightly compared to the previous year. This feedback offers valuable insights into how our ethical practices are perceived and highlights areas for improvement, which inform our ongoing efforts. The feedback received from the Ethics Barometer was key in the development of the ethics strategy. Management has formulated a plan to address areas that require improvement.

An Ethics Committee made up of representatives of various business units was established, and its priorities determined. This Committee reports to the SET Committee, enabling the Board to monitor the overall ethics programme of the organisation and ensure compliance with ethical standards.

Policies have been implemented to promote and safeguard the ethical behaviour of management and employees and where necessary, policies were updated to ensure alignment with the Company’s Ethics strategy. In addition, an ethics portal has been created for communication and awareness regarding the company’s ethical matters.

Compliance with the laws of the country throughout the Group, including the Constitution of South Africa and the Bill of Rights is non-negotiable. The core purpose and values of Growthpoint, as well as its strategy and conduct, are congruent with it being a responsible corporate citizen. The Board oversees sustainability matters, risks and opportunities, which are part of its governance process and are highlighted within the SET Committee’s terms of reference. The Board has delegated responsibility for monitoring the Group’s overall responsible corporate citizenship performance to the SET Committee.

The scope of the Committee’s mandate in this regard includes the relevant activities of the Group in the workplace, in the economy, society and the environment including promotion of equality, prevention of unfair discrimination, reduction of corruption, contribution to the community in which the Company operates and recording of any sponsorship, donations and charitable giving which the Company may participate in. Where relevant, specific targets have been set against which the performance of the Group is monitored on an ongoing basis. 

Growthpoint made significant strides in its ESG journey by incorporating an ESG Impact Council in FY24. This Council comprises of senior members of key functions and ESG leads from business units which contribute to driving and shaping the ESG strategy in the organisation. The Council’s goal is to ensure good stewardship and to support the Executive Committee and Board subcommittees, specifically the SET Committee and Human Resource and Remuneration Committee, in ensuring that Growthpoint conducts its business in an environmentally sustainable, ethical and socially responsible manner, and takes responsibility for the governance of sustainable practices.

Environmental stewardship, social responsibility and good governance exemplify Growthpoint’s approach to conscientious and responsible corporate citizenship.

Growthpoint invests in society and its employees, aligning its initiatives with the UN SDGs and the Company’s ESG strategy. Our transformation strategy is regularly reviewed, while our transformation targets track our progress and showcase our commitment to workforce diversity, equity and inclusion. (Please read ESG report for more information).

Growthpoint adheres to all labour laws applicable but not limited to the Basic Conditions of Employment Act, Labour Relations Act, Employment Equity Act, Skills Development Act and the Occupational Health and Safety (OHSA). Growthpoint’s policies and processes go beyond compliance to ensure fair and favourable employment conditions.

ESG remains an integral component of our business, as we focus on practical initiatives which make both meaningful impact and business sense.

Key achievements for FY24 included our groundbreaking power purchase agreement (PPA) with Etana Energy (Pty) Limited (Etana Energy) and ongoing advancements in solar installations. Which are supportive of the Company’s commitment to reach carbon neutrality by 2050 and safeguard Growthpoint’s portfolio from energy insecurity, by managing utilities effectively, enhancing consumption efficiency and expanding renewable energy use.

In addition to signing our PPA to commence with the rollout of clean, wheeled power to select buildings in FY25, Growthpoint installed an additional 13.4MWp of solar capacity, bringing total solar power generation to 40.7MWp. Growthpoint intends to expand its solar capacity to 50MWp in FY25.

We are also concentrating on our strategy for green-certified buildings. The redevelopment of our property at 36 Hans Strijdom Avenue in Cape Town for Ninety One will become one of the first carbon-neutral buildings in our portfolio.

Growthpoint is committed to increasing the number of green-certified buildings within its portfolio, with 123 certifications being achieved across its portfolio at the end of FY24. The Company aims to achieve 20 net zero certificates by FY28 and ultimately reach 100% certification on all long-term hold office buildings.

The Company is conducting extensive audits of its key long-term hold assets to assess and improve their environmental performance, with comprehensive water and waste reduction strategies, which will be implemented in FY26. These initiatives will optimise water usage, reduce waste generation and enhance recycling efforts, ensuring that the Company meets the highest standards of environmental performance across its entire portfolio.

The Company remains dedicated to being carbon neutral by 2050 and has made significant progress in improving its performance, with an average 3% reduction in carbon emissions year-on-year since 2021.

The 20:20:20:2 targets are strategic goals set by Growthpoint to enhance our sustainability efforts and achieve specific milestones within a defined timeframe. These targets are integral to our broader environmental strategy and focus on four key areas which include, 20 net-zero buildings, 20MW of renewable energy, R20 million worth of green lease recoveries, and two commercially implemented Greenovate Award innovations. The Company has tracked well against its targets and has concluded the 20:20:20:2 initiative. The Company’s revised environmental strategy maintains net zero buildings and solar energy production targets.

Climate change is complex and can amplify environmental, economic or other risks across a company’s risk profile. Market trends show that companies that anticipate regulatory or market pressure to mitigate emissions, and those with a clearer understanding of their assets’ exposure to extreme weather events, along with the capital planning needed to climate-proof those assets, will be better positioned to increase asset value and avoid asset stranding.
 

Growthpoint recognises the importance of climate change, and has historically sought to understand the potential impacts across key aspects of its business performance.

In 2021, an external environmental firm conducted an in-depth assessment of the Company’s climate-related risks and opportunities, based on the Task Force on Climate-Related Financial Disclosure (TCFD) recommendations and drew on climate science and scenario data. The objectives of this climate-related impact assessment were to:

• Identify direct and indirect physical and transition climate-related risks to selected Growthpoint facilities
• Develop a risk register outlining the climate-related risks and risk drivers
• Qualitatively assess Growthpoint’s climate-related financial impacts on projected climate change risks

The Company’s Local Economic Development Policy seeks to accelerate the empowerment of businesses owned by previously disadvantaged individuals operating in communities within the vicinity of Growthpoint’s assets and developments to foster community partnerships and to maintain Growthpoint’s reputation in local communities.

Growthpoint received Board approval for a proposed R250 million B-BBEE Trust scheme, which will fund the Company’s CSI initiatives, in education, skills development and local economic growth. The Trust scheme is structured to allocate Growthpoint shares to the special-purpose CSI Trust for perpetual funding of social impact projects which will support Growthpoint’s equity ownership targets under the Property Sector Code and aligns with the Company’s vision of empowering South African society, benefiting our employees, their families, and the communities we serve.

For more information on how the Group addressed its responsibilities as a responsible corporate citizen, refer to the Integrated Annual Report (IAR) available at www.growthpoint.co.za.

Growthpoint’s approach to corporate governance is an essential part of its value creation process, which benefits all its stakeholders by ensuring the sustainability of the business and enhancing long-term performance.

Growthpoints strategic approach is centered on integrating sustainability into every aspect of its operations. By embedding sustainability into its business model, it enhances the resilience and performance of its properties, driving long-term value creation and positioning itself at the forefront of the real estate industry. This strategic focus ensures that Growthpoint remains adaptable and responsive to the evolving environmental landscape, securing a sustainable future for its business and the communities it serves.

The HR and Remuneration Committee has reviewed the remuneration policy and its implementation extensively with appropriate input from Growthpoint’s advisers. Environmental factors are included in the KPIs of Executive Directors and relevant employees, embedding sustainability into Growthpoint’s performance metrics and corporate culture. This approach leads to sustained value creation for shareholders and other stakeholders.

Growthpoint believes that the company’s remuneration policy is fair, responsible and aligned with best practice and that its consistent application will ensure the attraction and retention of requisite talent and skills, sustain the performance culture of the company and lead to sustained value creation for all stakeholders.

The Company acknowledges the need to carefully maintain a balance between delivering on the expectations of shareholders, regulators and other stakeholders and ensuring a sustainable business.

Growthpoint has been included in the FTSE/JSE Responsible Investment Index for fourteen consecutive years. Qualification for the index is based on environmental, economic and social standing.

More information on the vision and future direction of the Group as well as the value created for the Group and its material stakeholders is available in the IAR at www.growthpoint.co.za.

The Board sets key performance measures and targets in order to continuously monitor and assess the achievement of strategic objectives and agreed plans for value creation over the short, medium and long term. Management is expected to implement and execute on the approved strategy and business plans. Management is furthermore expected to continually assess and respond, in a responsible manner, to any negative consequences that may arise, as a result of the Group’s activities and outputs in all areas of the business. 

In addition, the Board has a focus on the general viability of the business and its status as a going concern. For this reason, the solvency and liquidity of Growthpoint is monitored on a continuous basis.

The Board is responsible for the governance of risk, which it manages through an independent Risk Management Committee. This Committee also monitors the Company’s compliance with the qualifying REIT criteria laid down by the JSE Listings Requirements (section 13). The governance of risk is covered later in this report.

The IAR, is available at www.growthpoint.co.za and presents material information in an integrated manner providing stakeholders and users with a holistic presentation of the Group’s performance. The IAR is part of a suite of reports issued for the financial year end and should be read in conjunction with the AFS, AGM notice and the ESG report. The Group’s external auditor, Ernst & Young Inc, provided assurance on the annual financial statements (AFS) for the year ended 30 June 2024.

Through our robust governance structures, we ensure that our stakeholders’ interests are protected, providing accurate and transparent information for investors through our reporting mechanisms.

The Board, with the assistance of the Audit and Risk Management Committees, ensures that reports are issued as is necessary to comply with legal requirements and/or to meet the legitimate and reasonable information needs of material stakeholders. The integrity of all reporting is ensured with the assistance of relevant internal and external role players forming part of the integrated assurance process, to ensure that the information is a true reflection of Growthpoint’s activities.

Growthpoint has undertaken moderate independent assurance engagement in respect of selected environmental, social and governance information. IBIS Environmental Social Governance Consulting Africa (Pty) Ltd (IBIS) was commissioned by Growthpoint Properties Limited (Growthpoint) to conduct an independent third-party assurance engagement in relation to the sustainability information in Growthpoint’s Environmental, Social, and Governance (ESG) Report (the ESG Report) for the financial year ended 30 June 2024.

As part of the assurance engagement, the assurers determined whether Growthpoint adheres, in all material respects, to the AA1000 Accountability Principles of Inclusivity, Materiality, Responsiveness and Impact. Additionally, the annual carbon footprint review was externally verified by a third party under International Organization for Standardization (ISO) 14064-3 (2019), which provides guidance for validating and verifying greenhouse gas (GHG) assertions.

Annual Sustainability reporting and disclosure is overseen by the Audit and SET Committees, including Compliance with the Global Reporting Initiative.

The Board is the custodian of Growthpoint's governance framework. Board-approved strategies, policies, standards, practices and procedures deliver the highest standard of corporate governance. The Company embodies its values through a transparent and ethical culture, sound risk management and enhanced accountability. Growthpoint’s internal controls promote risk awareness, compliance and good governance.

Protecting and creating value are at the core of Growthpoint’s governance and integrated thinking. Its ability to create value is underpinned by its stakeholders, whose trust is integral to ensure Growthpoint’s sustainability and performance. Through the company’s structured operational frameworks and governance processes, the Board makes well-informed decisions in the best interests of the company and all stakeholders.

The role and functions of the Board are set out in the Board charter and incorporated into the Board’s annual workplan. The Board Charter is reviewed annually and includes the Board’s responsibility to ensure that governance is effectively administered. Furthermore, the Board Charter makes provision for directors to take independent professional advice at the Company’s expense. The Board meets a minimum of four times annually. An additional meeting is scheduled for the review of strategic issues and approval of the IAR. Formal minutes of all meetings are kept as a permanent record.

Growthpoint’s Board Charter stipulates that the Board shall have unrestricted access to all Company information, records, documents and property. The Board Committees are all entitled to obtain external legal / professional advice, and to secure the attendance at meetings of outside parties with the relevant experience and expertise. The Board confirms that it is satisfied that it has fulfilled its responsibilities in accordance with its charter for the period under review.

The Company optimizes the use of available funds and addresses its key risks while taking advantage of existing opportunities. Sound corporate governance practices are implicit in the Company’s values, culture and processes, and internal controls promote an awareness of risk, compliance, and good governance in every area of the business. By ensuring that our structured operational frameworks are firmly in place, and that the various governance processes are incorporated in all the Company’s activities, the Board can focus on the business and make well-informed decisions in the Company’s best interests.

Refer to the IAR available on the website (www.growthpoint.co.za) for information and disclosure regarding the number of Board meetings and attendance during the reporting period.

Composition:

As at the date of issue of this report, Growthpoint had a unitary Board comprising 11 Directors in total, three Executive Directors and eight Non-executive Directors, all of whom are regarded by the Board as independent.

The Board has carried out a formal skills profiling and assessment of the Non-executive and Executive Directors on the Board and considers its current composition to be suited to the business. The Board has an appropriate mix of knowledge, skills and experience.

These skills complement the extensive skills and experience of the Chairman and executive directors. The composition of the Board also introduces the required element of diversity and independence. The Board is therefore comfortable with its composition under current circumstances and considering the challenges faced by the business.

Refer to the Growthpoint website (www.growthpoint.co.za) for information and disclosure regarding the composition of the Board, tenure, independence and demographics of each of the directors.

Nomination, election, and appointment of members to the governing body:

The Governance and Nominations Committee is responsible for assessing the Board composition and identifying appropriate candidates for appointment to the Board and making recommendations to shareholders regarding the re-election of retiring non-executive directors at the AGM.  This has assisted Growthpoint to ensure that the skillsets of newly appointed directors are complementary to those of the current directors. Skills gaps identified during the assessment have been addressed.

Succession planning to ensure complimentary skill sets and experience is an ongoing exercise. The Board considers candidates who represent a diverse spectrum of age, race, gender and cultural communities and is committed to women holding Board positions. There are Board statements on gender and racial diversification.

Independence and conflicts:

In FY24, the Board conducted its annual independence assessment of the Non-executive Directors and is satisfied that all Non-Executive Directors are deemed independent as per King IV definition.

The Board has resolved that to ensure independence, the maximum tenure of a director on the Board would be 9 years, effective at the financial year end of the 9^th year. However, if requested by shareholders, a director’s tenure could be extended, but such a director would be required to resign at each subsequent annual general meeting (AGM) and be reappointed. There is no mandatory retirement age for non-executive directors.

It was further resolved that non-executive directors on the Board should not hold more than four directorships, including Growthpoint, or one chairman position outside Growthpoint and two non-executive director positions including Growthpoint. The Chairman would also be limited to two other, or one other Chairman position. The reason for this is that the individual directors need to ensure that they have necessary capacity in order to prepare adequately for meetings and attend all Board and Committee meetings.

Members of the Board are required to declare their interests as provided for in the Companies Act, both on an annual basis, by means of a Disclosure of Interests and prior to the commencement of each meeting in regard to the business of the meeting. Board members are also encouraged to declare interests as and when changes occur.

The Board has a Board-level gender diversification target for female representation. Currently, the two female Directors represent 18% of the total number of Directors as at FY24.

Ms Olive Chauke tendered her resignation effective 9 October 2023 and remained with the company until 31 March 2024.

More female representation is required at Board level, and this is currently an area that is work in progress. There is sufficient racial representation at an NED level.

Furthermore, the Board Charter includes a policy statement on racial diversification, in terms of which the Board strives to meet legislated and / or regulated employment equity targets applicable from time to time at Board level.

Messrs Norbert Sasse (Group: CEO), Estienne de Klerk (CEO:SA) and Gerald Völkel (Group Financial Director) serve on the Growthpoint Board in the capacity of Executive Directors, to ensure that the Board has more than one point of direct interaction with Management.

Chair of the governing body:

The role of the Chairman and CEO are distinct. The Chairman, Mr Rhidwaan Gasant, is an independent non-executive director. His responsibilities are outlined in, but not limited to what is contained in the Chairman’s charter. Growthpoint’s Group CEO is Mr Norbert Sasse. Mr Andile Sangqu is the Lead Independent Director to strengthen independence on the Board.

The Chairman’s charter is explicit in that it only makes provision for the appointment of an independent non-executive director in the role of Chairman, as defined by the King IV Code and the JSE Listings Requirements.

The following Board committees are in place:

• Audit Committee
• Risk Management Committee
• Human Resources and Remuneration Committee
• Governance and Nomination Committee
• Social, Ethics and Transformation Committee
• Property and Investment Committee

The committees established by the Board assist it in the discharge of its duties and the organisation’s overall governance.

Each Committee has a minimum of three independent non-executive members as recommended by the King IV Code. The composition of each Committee is aligned with the King IV recommendations.

The Board is also comfortable that the current composition of the Board Committees contributes to effective collaboration as well as a balanced distribution of power so that no individual has the ability to dominate decision-making and no undue reliance is placed on any individual.  During FY24 all the Committees have satisfied themselves that they have fulfilled their responsibilities according with their TOR.

Formal TOR are in place for all the Board Committees, which are reviewed and recommended by the various Committees for Board approval on an annual basis. Refer to the website (www.growthpoint.co.za) for access to the IAR which provides the following information:

• Composition of each Committee, qualifications and experience of members
• Information on external advisors or invitees who regularly attend committee meetings
• Key areas of focus of each Committee during the reporting period
• Number of Committee meetings and attendance
• Confirmation by each Committee that it is satisfied that it has fulfilled its responsibilities for the reporting period.

The Audit Committee has satisfied itself with:

• The independence of EY as the external auditor, including reference to the nature of non-audit services rendered, the audit firm and designated audit partner tenure and any significant management changes at EY. Ms Jane Fitton was up for audit rotation as she has served as partner on the Growthpoint group audit for five years. Ms R Kalain has been appointed as the engagement partner for FY25.
• The quality of the external audit
• Significant matters relating to the FY24 AFS
• The effectiveness of the internal audit function
• The expertise, resources and experience of the Company’s finance function and of the Group Financial Director’s suitability.

The Audit Committee also ensured that:

• Adequate processes are in place to safeguard the company’s assets
• Appropriate accounting records are maintained
• The design effectiveness of internal controls is reviewed, and effective systems of internal control are maintained
• An open channel of communication is maintained between the Board, management and accounting staff, as well as both internal and external auditors
• The financial position and performance of the business are reviewed quarterly
• The company complies with accepted corporate governance practices and codes as well as with international reporting standards.

• The AFS are reviewed prior to them being recommended to the Board for approval
• The external auditor is nominated for appointment by the Board and subsequent approval at the next AGM
• Approval of the external auditor’s fees as well as the scope of the external audit
• The Audit Committee is satisfied that the external auditor is independent and that the FY24 audit has been carried out without restricting the audit’s scope
• Internal audit is independent and managed effectively
• The controls in relation to the valuation of investment property are adequate

Key Focus Areas for FY24:

• The treatment of maintenance expenditure and review of the capital expenditure accounting policy
• Review of tax risk and compliance reports for local and foreign companies in which Growthpoint has invested
• The consideration of the committee’s composition and skills set, the independence of its members and their ability to act independently
• This committee report includes the committee’s assessment of the financial knowledge, expertise and experience of the Group FD as well as the  appropriateness, expertise and adequacy of the resources of the finance function
• The committee reports to shareholders on how it carried out its obligations in the AFS

The Board Charter incorporates an annual self-assessment or self-evaluation based on several factors i.e., expertise, attitude, objectivity, independence, judgement understanding and commitment to the Board’s duties and responsibilities.

A self-evaluation of the Board and Committees’ performance during the financial year is performed annually and an overview of the results and remedial actions to be taken is shared with the Board and the respective Committees at the meetings held in August / September 2024.

The Board is satisfied that the assessment contributes towards the Board’s improvement in performance and effectiveness. The Board’s overall performance assessment was noted as being positive with the exception of the following areas which warranted intervention:

• Succession planning for executive and senior management, particularly with respect to the Group CEO’s role and appointment of successor to Group FD which remain key focus areas for the Board. Significant progress has been made in this regard. Furthermore, the SET Committee actively monitors succession from a transformation perspective.
• Gender diversification on the Board. This remains an ongoing target, current female representation is 18%.
• Renegotiating employment contract for extension of  Group CEO

Outcomes of the annual assessment of the Board and respective Committees, including remedial actions taken was highlighted as follows:

Audit Committee:

The results of the Committee self-evaluation were noted as being satisfactory with no specific areas warranting the Committee’s attention.

Risk Management Committee:

The results of the Committee self-evaluation were noted as being satisfactory with no specific areas warranting the Committee’s attention.

IT experience on the Committee has been strengthened through the appointment of additional Committee members. Risks surrounding the international investments, including Growthpoint’s investment in funds management businesses requires ongoing focus.

Human Resources and Remuneration Committee:

The results of the Committee self-evaluation were noted as being satisfactory, except for succession planning for executive and senior management.

The Committee has extensively considered succession planning in the Company. All positions have been realigned and roles specified to ensure the execution of the Company’s strategyThe final phase of this project was completed in FY2024 and involved placing existing employees and/or new recruits in the relevant positions in the new structure and ensuring succession for each position.

The strength of Growthpoint’s business lies in its human capital, and Growthpoint is dedicated to fostering its employees’ growth and supporting their wellbeing. Growthpoint has enhanced its human resources (HR) function with the appointment of a new Head of HR, who is spearheading initiatives to strengthen the company’s corporate culture and develop the skills needed for future growth. Succession planning remains a priority to ensure that Growthpoint has a robust talent pipeline that supports its strategic objectives.

Social, Ethics and Transformation Committee:

The results of the Committee self-evaluation were noted as being satisfactory with no specific areas warranting the Committee’s attention, though it was noted that greater focus is required on emerging issues namely impact of climate change on the business going forward.

A process is currently underway to review and refresh contents of the Committee documentation to facilitate more strategic discussions by the Committee. This will include restructuring/ refreshing of the Committees Annual Work Plan to align it with the revised ESG strategy.

Property and Investment Committee:

The results of the Committee self-evaluation for FY24 were noted as being positive overall, and it was evident that Committee members are well-versed in the South African property market though still scope for more exposure of Eastern European, Australian and UK market.

The Board has the authority to exercise all the powers and perform any of the functions, except as otherwise provided in the Act or the Memorandum of Incorporation (MOI) of Growthpoint. Specific authority and powers of the Board have been delegated to management and such delegation is captured in a formal delegation of authority framework that is reviewed by the Audit Committee and thereafter recommended to the Board for approval. The Board is comfortable and satisfied that this framework contributes to role clarity and the effective exercise of authority and responsibilities. 

The Board is assisted by a competent, suitably qualified and experienced Company Secretary who is not a director and who maintains an arm’s length relationship with the Board.

Growthpoint Executive Directors may only hold other directorships in Growthpoint subsidiaries and associated companies, or in companies set up for personal and/or family purposes that are not in competition with Growthpoint. Any exceptions are subject to the discretion of the Board.

The performance of the Group CEO and SA CEO is evaluated by the HR & Remuneration Committee and ultimately the Board against agreed performance measures and targets. The Governance and Nomination Committee is responsible for ensuring that succession plans are in place for the position of the Group CEO SA CEO and Group FD.

Risk management is imperative to Growthpoint to help safeguard our assets, enhance our performance and ensure long-term success. Effective risk management (ERM) identifies risks and enables us to make informed decisions and allocate resources effectively. Growthpoint has a well-defined risk governance structure that outlines how key ERM functions are organised. This ensures that risk management is institutionalised, and it promotes a risk management culture. Our risk reporting mechanism ensures that risk information flow is comprehensive and reported to the appropriate authorities.

The governance and oversight of risk management has always been an integral part of the strategic objectives setting process.  This function is fulfilled with the assistance of the Risk Management Committee. The Committee’s responsibilities in respect of risk include, amongst others:

• Assist the Board in matters of corporate accountability and associated risks
• Ensure that risk policies and strategies are managed effectively
• Monitor external variables that could affect corporate accountability
• Review and assess the integrity of risk control systems
• Define risk management policies and the risk management function, as well as the scope of ERM
• Ensure the independent and objective oversight and review of information provided by management on corporate accountability and associated risks
• To review the adequacy of the risk management framework relative to identified risks and opportunities

A comprehensive risk management process is in place for identifying, evaluating and monitoring the nature and extent of risks affecting the business. The Risk Management and Compliance function assists management in evaluating the process for managing key operational, financial and compliance risks.  Key risks and opportunities and responses thereto are identified by the Group CEO and presented to the Risk Management Committee annually. The detailed report, setting out the key risks and opportunities presented to the Risk Management Committee and monitored on a quarterly basis.

The top ten risks and responses thereto are identified based on their probability, as well as their potential impact on Growthpoint as a whole. Each risk has been mapped to the related strategic objective on which it could impact.

The Risk Management Committee meets at least four times a year and is chaired by an independent non-executive director.

Key focus areas for this Committee during FY24:

• Monitoring operating performance of IT systems including business continuity in the face of disruptions to electricity supply as well as an enhanced focus on cybersecurity.

• Monitoring and reporting on the implementation of the Protection of Personal Information Act (POPIA) requirements.
• Ongoing monitoring of liquidity and funding as well as the impact   of increasing interest rates on borrowings
• Monitoring actions taken and management’s processes designed to ensure compliance with environmental legislation.
• Monitoring obligations associated with GIP business (Growthpoint Investment Partners).

• Formalising the risk function through finalisation of the risk compliance policy and risk management strategy.

Technology and information governance are ultimately the responsibility of the Board, via the Risk Management Committee, and in respect of financial reporting risk, under the auspices of the Group Financial Director, via the Audit Committee. The Chief Information Officer (CIO), who attends the Risk Management Committee meetings, is responsible for the IT governance framework and the external auditor will periodically assess IT governance against King IV.

A formal IT governance framework is in place, and is overseen by an IT Steering Committee, which is chaired by an independent IT expert who reports to the Risk Management Committee on the activities, findings and recommendations of the IT Steering Committee in respect to potential material IT investments and expenditure to ensure that IT infrastructure is managed efficiently.

Furthermore, the framework is customised to the Growthpoint environment, integrated into our key business objectives and monitored for compliance and performance. The key aims of the framework are to standardise business processes across the Group, reduce internal costs and ensure sound governance.

IT forms an integral part of the Company’s risk management and IT internal audits are performed periodically by experienced outside parties. An IT governance charter formalises lines of delegation from the Board and Risk Management Committee through to the CIO, as well as sets out policies, procedures and performance metrics which work together in the IT governance framework. The IT governance policy has considered the material issues affecting all relevant stakeholders including the Board, employees and specific departments, for instance finance.

The Board receives a quarterly update on IT risks from the CIO. All risks presented in the year were deemed to be within defined tolerance levels and not considered material. In addition, the IT team continues to introduce innovation to the business that enhances Growthpoint’s service delivery capacity.

Key focus areas during FY24:

• Growthpoint continued to upgrade and integrate its enterprise resource planning system (ie, MRI) with other systems, and it is pleased with the execution.
• In addition to ongoing maintenance and updates, Growthpoint focuses on accessing data for analytics and business intelligence. All Growthpoint’s data is located in hosting facilities with cloud backup.

• Given the increase in cybercrime, Growthpoint implemented automated playbooks to respond to identified threats. These playbooks trigger a series of processes to safeguard our systems and information.

The Board is ultimately responsible for the governance of compliance with applicable laws and adopted, codes and standards in setting the direction for how compliance should be approached and addressed. Compliance is considered by the Board not only for the obligations it creates but also the rights and protection it affords. 

Legal and regulatory compliance is essential for safeguarding Growthpoint’s reputation, ensuring operational integrity and maintaining trust with stakeholders. It assists the Company to navigate complex legal environments while mitigating risks associated with non-compliance.

The compliance function at Growthpoint plays a vital role in assisting with, facilitating and monitoring compliance related matters across the organisation. New legislation that impacts the Group is discussed at the relevant Board Committee meetings as well as at the Board meetings. Growthpoint has adopted a risk-based compliance management programme, based on the best practice standards and principles outlined in the King IV Report.

Growthpoint Properties annually submits a REIT compliance declaration and an annual compliance certificate to the JSE, confirming its compliance with the JSE Listings Requirements.

Additionally, the Compliance function is responsible for reporting to executive management, the Risk Management Committee and regulators as required. The Board and executive management are responsible for ensuring a culture of compliance across the organisation. This is underpinned by the compliance policy and compliance framework, which guide the development of consistent and effective compliance management across all levels.

Growthpoint’s risk management and compliance programme, established under the terms of the Financial Intelligence Centre Act (FICA) (as amended), provides strategic direction and detailed processes to manage and mitigate financial crime risks. The programme includes Growthpoint’s customer due diligence and reporting processes and is supported by the anti-money laundering policy, which aligns with local regulatory requirements and international best practice. Our training and awareness initiatives ensure that employees understand the impact of financial crime and their responsibilities towards combatting it.

Achievements in FY24:

• The Board approved the risk management policy, strategy and risk appetite statements, which were communicated throughout the business
• The Board also approved the compliance policy and strategy, ensuring communication across the organisation The risk management process was further embedded by applying the adopted risk management framework to report top strategic risks to executive management and the Risk Management Committee on a quarterly basis
• Growthpoint developed and adopted its anti-money laundering policy, ensuring compliance with FICA in response to the potential threat of South Africa’s grey listing status

Focus areas for FY25:

• The Company will seek to further embed the risk management programme across the organisation through training and awareness, promoting proactive risk management and leveraging opportunities
• Growthpoint will continue to integrate compliance management in line with best practice, enabling value-added contributions to the business
• Leverage technology to enhance the risk management process and improve data monitoring for more effective risk management

The Group has a formal mandatory authorisation process for dealings in the Company’s shares, formal policies and procedures for accepting and granting gifts, disclosure of conflicts of interest and anti-corruption as well as formal levels of authority and delegated signing authorities for business transactions.

There were no material or repeated regulatory penalties, sanctions or fines for contraventions of, or non-compliance with, statutory obligations. No compliance inspections by environmental regulators had taken place during the period under review and no incidences of non-compliance with environmental laws were identified.

The Human Resources and Remuneration Committee and the Governance and Nomination Committee support the Board with the governance of remuneration throughout the Group, ensuring fair and responsible remuneration practices.

The Human Resources and Remuneration Committee, in consultation with executive management and an external advisor to the Committee, ensures that the Group’s directors and executives are fairly rewarded for their contribution, in line with the Group remuneration policy. The Committee has reviewed the remuneration policy and its implementation extensively with appropriate input from its advisers. The company’s remuneration policy is fair, responsible, and aligned with best practice, and to all South African legislation, and that there is pay parity both in terms of race and gender.

Furthermore, its consistent application will ensure the attraction and retention of requisite talent and skills, sustain the performance culture of the company and lead to sustained value creation for all stakeholders. Central to this philosophy is the principle that overall compensation at Growthpoint is linked to performance at employee, business unit and company levels.

Our focus for FY25 is to undertake a comprehensive organisation-wide job grading and position benchmarking exercise to confirm each role is paid at market-related salaries, so we remain an employer of choice.

The remuneration of each individual director is contained in the remuneration report.

The shareholders vote on the remuneration policy and remuneration implementation report at the annual general meeting. Arrangements to meet with shareholders are made, should the remuneration policy and remuneration implementation report not be accepted at the annual general meeting. The committee has considered shareholder concerns and suggestions in relation to Growthpoint’s remuneration policy and the implementation thereof, as reflected in the voting outcome for the implementation of the remuneration policy vote at Growthpoint’s November 2023 AGM. As a result, further changes have been made to the FY25 STI and LTI scorecards of the executives.

Detailed disclosure regarding remuneration, including key themes of the roadshow are contained in the remuneration report and remuneration Implementation report in the IAR that is available at www.growthpoint.co.za. 

Refer to the IAR available at www.growthpoint.co.za for information on assurance provided by both the Internal Audit and Risk Management & Compliance functions.  Assurance provided regarding the Company’s external audit reports are disclosed in the respective reports as follows:

• Annual Financial Statements.
• CEO and FD Responsibility Statement and Independent Auditor’s Report.
• IAR – Assurance and Responsibility Statement.
• ESG Report – about this report.

The Board ensures that there is an effective risk-based internal audit function in place.

Internal Audit follows a risk-based approach and provides written assessments quarterly to the Audit Committee as to the adequacy of the internal control environment and any significant breakdown in internal controls.

The Audit committee is responsible for overseeing internal audit.

The Head of Internal Audit is a senior manager and reports to the Chairman of the Audit Committee and has unrestricted access to the Chairman and Members of the Audit Committee.

The application of the combined assurance model (CAM) is reflected in the AFS in the report of the Audit Committee. The Growthpoint CAM is designed to optimise the assurance provided over the Group’s top 10 risks, risk management and internal financial controls. The Audit and Risk Management committees monitor and review the Group’s risk profile and the efficacy of management activities, and monitors adherence to Board-approved risk appetite and tolerance. Other board committees perform additional risk oversight through rigorous analysis of management’s assertions for their assigned Group risks as disclosed in the IAR.

The Board has identified material stakeholders of the Group and considers the legitimate and reasonable needs, interests and expectations of such stakeholders on an ongoing basis as part of the decision-making process and in acting in the best interest of Growthpoint.

Growthpoint’s stakeholder engagement approach is driven by the identification of key groups that it impacts and that have an impact on its business. It is a multi-faceted approach, in that the nature and degree of engagement varies to meet each specific stakeholder group’s needs. This approach is further supported by a stakeholder governance structure which comprises of the Board, who is the ultimate owner of stakeholder management matters and is responsible for managing response strategies.

Growthpoint’s business activities are enhanced with collaborative processes. By engaging with stakeholders proactively, Growthpoint can mitigate potential risks to its reputation and operations. Strategically, engaging with stakeholders provides Growthpoint with valuable insights into their needs and preferences, enabling the company to make more informed decisions that enhance market competitiveness.

Focus areas for FY24:

Growthpoint developed and finalised its stakeholder engagement policy. This initiative was driven by the need to standardise and formalise stakeholder engagement processes across the business.

Growthpoint places considerable emphasis on the role of stakeholders in its operations and across its value chain. Although the company’s LED and transformation strategy includes a strong stakeholder engagement focus, it lacked a formal policy and documented approach for mapping and prioritising stakeholders that could be consistently applied across relevant organisational units.

Recognising the evolving landscape of corporate sustainability and ESG practices, Growthpoint conducted an externally facilitated gap assessment to enhance its approach to managing stakeholder engagement. This first phase of work was conducted by Vukani Impact Collective in 2021, and involved a broader staff consultative approach to gather inputs and insights for policy development and implementation.

Additionally, Growthpoint aligned its stakeholder engagement approach with best practice and global sustainability principles, including the King IV, AA 1000 Stakeholder Engagement Standard, JSE Guidance on Sustainability Disclosure and IFC Performance Standards.

The outcome of these efforts led to the development and approval of our stakeholder engagement policy, which includes NGOs and civil society organisations, in addition to stakeholder groups identified in previous reporting cycles.

Growthpoint stakeholder engagement policy outlines the:

• Purpose of stakeholder engagement (managing risk, enhancing reputation, creating business value, achieving social and environmental impacts)
• Identification of key stakeholders, including NGOs and civil society, in addition to the stakeholder groups identified in previous reporting cycles
• Channels and methods for stakeholder engagement
• Roles and responsibilities related to stakeholder engagement across the different organizational levels
• Approach to stakeholder engagement in various contexts
• Policy implementation plan

The policy emphasises constructive engagements to build trust and enhance long-term relationships with stakeholders.

For FY25, Growthpoint aims to continually document and benchmark its stakeholder engagement efforts to further improve its holistic approach, ensuring meaningful interactions that benefit the company and its stakeholders.

The Board is assisted by the SET Committee in fulfilling its responsibilities and ensuring that key stakeholder relationships are effectively managed. The Group Chief Executive Officer through the support of Group Executive Committee and management ensures that the overall stakeholder engagement process is implemented, and that stakeholder management is effective.

• Growthpoint collects qualitative and quantitative data regarding stakeholder sentiment through employee, tenant and supplier surveys, project-specific public participation processes, interviews and direct interactions.
• Growthpoint remains committed to transparency with all its stakeholders and strives to engage with and respond to stakeholder concerns appropriately and in a timely manner.
• Periodic reviews and assessments are conducted to evaluate the effectiveness of stakeholder engagement initiatives and identify areas for improvement.
• The interests and expectations of the various stakeholder groups are clearly articulated in the IAR, to ensure that there is a healthy balance of these needs, and that value is created for the various stakeholder groups.

• The Board recognises that stakeholder perceptions can affect the Company’s reputation and seeks to ensure the equitable treatment of all stakeholders.
• Management proactively deals with stakeholder relationships by balancing various stakeholder interests appropriately and in the Company’s best interests.
• The Board also engages with shareholders at the results presentations, the AGM and on an ad hoc basis as and when required.

Refer to the website and IAR available at www.growthpoint.co.za for additional information on the management of stakeholder relationships.

A formal governance framework is in in place between Growthpoint as holding Company and its operating subsidiaries. The Board recognises the separate legal existence of each subsidiary as well as the statutory and fiduciary duties of the directors of such subsidiaries.  The Audit Committee as well as the SET Committee fulfils oversight functions in respect of South African based subsidiaries. Group policies are applied in all subsidiaries unless regarded as not being in the interest of a subsidiary in which event the directors of the subsidiary may recommend appropriate amendments to such policy.