Aat 3 A 45 K 5 X

Background and executive summary
This report summarises the results of our investigations into a group of property
companies (Resilient, Fortress, NepiRockcastle and Greenbay) listed on the JSE. It
has been well-documented in research reports by independent research houses that
the shares trade at higher price-to-book ratios and lower dividend yields than most
property companies operating in the same geographies as these companies. As a
result, investors have sometimes described these companies as “overvalued” in the
past. In our opinion, the findings in this report shows that simply considering the
companies as being overvalued is a euphemistic view of the situation.
We believe that our findings show that the premium valuation of each of the
group companies did not arise from normal market activity, but from deliberate
(and frequently concealed) actions by some of the influential owners and key
management of the group.
The first part of our analysis shows how a complex and convoluted group-structure
with cross-shareholdings make it difficult for investors to determine the true size of the
premium valuation (price-to-book ratio) of the group companies. We provide our
calculation of the true premium valuation and show that it requires a large number of
assumptions and that it is much higher than that calculated from using the net asset
values provided by the group companies in their financial results.
We then show that a significant portion of distributable income for the various group
companies consist of antecedent dividends, accrued dividends and interest received
on loans to employees and BEE trusts. This report also presents arguments on why
we believe the BEE trusts should have been consolidated into the group in accordance
with the principles and application guidance contained in IFRS 10 and not reflected
merely as a financial asset (a loan to the BEE trust) and interest thereon. This is a
significant finding, as consolidating the BEE trusts would lead to a significant loss of
distributable income and net asset value, specifically for Resilient and Fortress. In
addition, this implies that the financial statements do not comply with International
Financial Reporting Standards (IFRS) which constitutes a transgression of both the
Companies Act, 2008, and the JSE listing requirements.
The final part of our report shows that an unusually high proportion of monthly trading
volumes in group companies can be ascribed to transactions by the group companies
and their BEE trusts. In addition, our investigations show that transactions by parties
related to group companies and directors were unusually prescient as to the timing
thereof. We believe that the degree of success is far too unusual to be ascribed to
mere luck, but that only knowledge of inside information could generate these returns.
Finally, we also find a number of transactions between group entities which serve no
clear economic purpose (considering their nature and frequency) and conclude that
these transactions in our opinion had only one purpose: to artificially inflate the share
prices of the group companies and increase volumes traded.
This research raises the questions: what was the purpose of these transactions
and activities? What benefit accrued to the instigators of these transactions?
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We believe the answer lies in a number of factors characterising property investment
companies, which we discuss below:
• As described by George Soros:

“The true attraction of mortgage trusts [property investment companies] lies in their
ability to generate capital gains for their shareholders by selling additional shares
at a premium over book value. If a trust with a book value of $10 and a 12% return
on equity doubles its equity by selling additional shares at $20, the book value
jumps to $13.33 and per share earnings go from $1.20 to $1.60.
Investors are willing to pay a premium because of the high yield and the
expectation of per-share earnings growth. The higher the premium, the easier it is
for the trust to fulfill this expectation. The process is a self-reinforcing one. Once it
gets under way, the trust can show a steady growth in per-share earnings despite
the fact that it distributes practically all its earnings as dividends. Investors who
participate in the process early enough can enjoy the compound benefits of a high
return on equity, a rising book value, and a rising premium over book value.”
(Source: https://thelongshorttrader.com/2012/09/25/the-alchemy-of-reits/, accessed on 26 January 2018)
• We believe the influential owners and key management of the group realised this
fact early on and instituted several deliberate actions to drive the share price of
group companies above their net asset values. This includes the transactions by
related parties which appear to be based on inside information and the “book-over”
trades between group entities which serve no clear economic purpose.
• The underlying growth rates were boosted / maintained by the group structure. As
smaller companies can grow faster using these techniques, it suited management
to create smaller associate companies (first Fortress, then Nepi and Rockcastle
prior to their merger and finally Greenbay). As the smaller associate companies
generate higher growth rates, this boosts the growth rates in the holding companies
higher in the group.
• In addition, inclusion in security indices can boost share prices further for several
reasons. Firstly, with the emergence of index-tracking funds, inclusion in security
indices create forced buyers of the stock. Secondly, some institutional investors
will only invest in companies above a certain market capitalisation or with
significant average volume traded per day. Finally, some institutional investors
benchmark their performance against indices and cannot afford to ignore securities
with large weightings in these indices. By artificially increasing the share price and
volume traded in these securities, the group of companies effectively created a
new group of buyers to whom they could sell their own shares at a profit.
• Turning to the BEE transactions, we believe the lack of consolidation of these

structures is due to two reasons. Firstly, it created another set of related parties
through which group share prices and volumes could be manipulated. Secondly,
the group needed to avoid consolidation of these trusts at all costs. The reason is
that consolidation would represent a drag on growth rates within the group,
representing a headwind for the cycle to continue. By charging interest rates higher
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than the group’s funding cost on every higher loan balances, the group could find
another source of income growth (provided that the trusts were not consolidated).
• Finally, we note that the interests of employees and executives are highly tied to
an ever-increasing share price. Unusually, employees do not receive share
options, but loans carrying interest at the cost of borrowings for the group to invest
in shares. Given the low dividend yield on the shares, the only way in which
employees can ever repay these loans would be by selling shares at prices higher
than those at which they bought them. This creates an incentive for employees to
support key individuals in perpetuating the actions detailed above to continue to
support the cycle.
In summary, we therefore believe that the exceptionally high valuation of the

companies in the group arose from insider-directed and insider-related
transactions in group companies’ shares to deliberately inflate share prices and
volumes traded. Once this was achieved, third party investors quickly became
enticed by the attractive dividend growth rates on offer and became vested in
the continuation of the cycle themselves.
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Group structure
Using information disclosed in the financial statements and publicly available results
presentations of the group companies (Resilient, Fortress, NepiRockcastle and
Greenbay) together with shareholding information obtained from Bloomberg we
compiled the following approximate group structure:
9% Fortress
Resilient
16% A-shares Preferred right to dividends
B-shares Equity
16% 16%
12%
NepiRockcastle Greenbay
23%
The above group structure highlights the cross-holdings between Resilient and
Fortress. In addition, from information disclosed in the financial statements of Resilient
and Fortress, we determined that the Siyakha Education Trust is a significant BEE
shareholder in both Resilient and Fortress.
Group net asset value
In brief, using information disclosed in the financial statements and publicly available
results presentations of the group companies, the assets of each of the companies
broadly consist of the following:
Resilient Fortress NepiRockcastle Greenbay

(RES) (FFB) (NRP) (GRP)
Direct property Direct property Direct property Direct property
Shares in other Shares in other
group companies group companies
Interests in other Interests in other Interests in other
listed securities listed securities listed securities
outside of the outside of the outside of the
group group group
Other financial Other financial Other financial Other financial
assets assets assets assets
In addition to compiling financial statements which comply with the requirements of

International Financial Reporting Standards (IFRS), as required by the JSE listing
requirements, some of the group companies also disclose adjusted financial
information in their results announcement and presentations.
A significant difference between the IFRS financial statements and the adjusted
financial information is the treatment of investments in associates (i.e. other group
companies). While IFRS requires these investments to be stated at the purchase price
adjusted for the group’s interest in changes in net asset value after acquisition date,
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the adjusted financial information includes the listed associates at their fair value in
the determination of net asset value.
Irrespective of whether the net asset value of the group is calculated using the IFRS
net asset value or the net asset value on an adjusted basis, a significant issue is that
the market capitalisation of every group company exceeds its published net asset
value at the time of writing the report. In the case of Greenbay, this is particularly
unusual as 81,8% of its gross asset value (per its September 2017 results) consists of
listed securities, while entities of this nature typically trade at a discount to net asset
value.
The fact that group companies trade at a premium to net asset value affects the IFRS
net asset value, as some of the investments in group companies are classified as
financial assets for IFRS-purposes (e.g. Fortress’ holding in Resilient). Financial
assets are carried at fair value (i.e. at the group or company’s share of the market
capitalisation) in IFRS financial statements. In addition, the adjusted financial
information is also affected as the group adjusts the equity accounted values of
investments in associates to their IFRS fair values (the group or company’s share of
the market capitalisation).
The reason that this is a concern, is that the net asset values of the companies higher
in the group structure (Resilient and Fortress) therefore incorporate a premium to the
underlying net asset values of the group companies in which they hold shares. For the
companies higher in the group structure, it becomes important to determine whether
investors are paying a premium for investments in group companies which are already
trading at premiums to their underlying net asset values.
Eliminating the premiums for investments in group companies results in the following
price to book (P/B) ratios for the group companies:
FFB NRP RES GRP

Published
NAV in R 26.75 95.23 89.44 1.45
Total premium / (discount) 26.8% 76.7% 44.2% 34.5%
P/B ratio 1.27 1.77 1.44 1.34
Updated for changes in listed prices

NAV in R 22.27 110.16 75.68 n/a
Total premium / (discount) 52.4% 52.7% 70.4% n/a
P/B ratio 1.52 1.53 1.70 n/a
Stripping out prem ium to NAV in group com panies

NAV in R 12.30 110.16 53.96 n/a
Total premium / (discount) 176.0% 52.7% 139.0% n/a
P/B ratio 2.76 1.53 2.39 n/a
While the above reflects estimations, as several assumptions were made, it reveals
that removing the premiums to net asset value for group companies drastically
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increases the price-to-book ratios for the various group companies compared to the
same calculation using the published net asset values at reporting date.
By comparison, it is worth noting that for the 87 local and international property
companies that we follow, the average and median price-to-book ratios are 0,98 at the
time of writing this report (as of 25 January 2018). With reference to only the JSE-
listed property companies that we follow, the average price-to-book ratio is 0,97 (the
median price-to-book ratio is 0,95). Therefore, in our view, all the price-to-book ratios
that we have calculated appear higher than the norm and there is a substantial risk of
overvaluation in these stocks.
The details of our calculation with explanatory notes are contained in Appendix A.
However, in brief, to eliminate the premium to group investments from the published
net asset values, we followed the following process:
1. We update the gross asset values of Resilient, Fortress and NepiRockcastle for
changes in the prices of listed investments since the last published financial results,
using prices obtained from Bloomberg.
The last published results available at the time of writing this report is the annual
results to June 2017 for Resilient and Fortress, the annual results to September
2017 for Greenbay and the interim results to June 2017 for Nepi and Rockcastle,
prior to their merger.
2. We were unable to update the gross asset value of Greenbay, as it holds most of
its interests in listed securities as derivative positions. It discloses its top ten
investments as at 30 September 2017 totalling EUR446m in its results then dated
together with an equity derivative margin of EUR234m. The geared position means
that changes in listed prices would have an unpredictable impact on its listed
security portfolio. With no historical information, we do not have insight into the
gearing policy of the company and are therefore unable to estimate the potential
impact of changes in listed prices on the geared position.
In addition, the company has raised ZAR8,8bn in new capital during 2017, of which
ZAR5,6bn was raised in August 2017 (refer to SENS announcements). A
significant portion of the new capital would therefore still have been undeployed as
at 30 September 2017.
We have accordingly assumed that Greenbay’s net asset value per share has
remained unchanged from the disclosed net asset value per share as at
30 September 2017. The fact that Greenbay does not hold shares in other group
companies, provides some justification for leaving the net asset value unadjusted,
as we are primarily concerned with removing premiums to net asset values of
group companies in this calculation.
3. We calculate a gross asset value for the unlisted assets of each company based
on the latest reported results, including investment properties and current assets,
but excluding goodwill.
4. We obtain the total liabilities of each company from the latest published results to
deduct this from the updated gross asset value in our calculations. Note that we
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have assumed that the A-shares in Fortress should be treated as debt for the
purposes of calculating a net asset value for the B-shares.
5. We adjust all values to ZAR using exchange rates obtained from Bloomberg, as
the share prices on the JSE are quoted in ZAR (refer to the Appendix for details of
the time of conversion).
6. We calculate a value per share, based on the number of shares in issue per the
latest published results.
7. Using the above information, we start with NepiRockcastle (as it is at the bottom of
the group structure) and calculate an updated net asset value for this company.
8. We can then replace the market value of NepiRockcastle with the result of our
calculation in the net asset value calculations of Fortress and Resilient.
9. Similarly, we replace the market value of Greenbay with its published net asset
value in the net asset value calculations of Fortress and Resilient.
10. We cannot deal with the cross-holdings between Fortress and Resilient
simultaneously and chosen to adjust the Fortress calculation first, by using the
Resilient net asset value updated only for changes in the listed prices of its
investments since last reporting date. While not fully accurate, we argue that this
is the smaller cross-holding in value and therefore justified.
11. We then replace the market value of Fortress with the result of our calculation in
the net asset value calculation of Resilient.
Group distributable income
We also analyse the composition of the group distributable income, using the latest
distributable income reconciliations in the published financial results of each of the
group companies.
The following assumptions were necessary in this calculation (a detailed reconciliation

with references and explanatory notes is contained in Appendix B):
1. As NepiRockcastle formed from the merger of Nepi and Rockcastle subsequent to

publication of their latest financial results (interim results to June 2017), we add
their financial results together in this calculation. We use the EUR/USD exchange
rate per the combined results announcement of 1,1213 for this purpose.
2. The interim results of NepiRockcastle does not separate the interest income from
employees from total interest income. We use the information from the annual
reports for the years ended 31 December 2016 and assume that the proportion of
interest income received from employees to total interest come has remained
unchanged in the latest reported results for these companies.
3. Fortress and Resilient do not disclose the interest income earned on their loans to
BEE trusts and employees separately from other interest income. We use the
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disclosures in the annual reports to June 2017 to extract the opening and closing
loan balances to these parties. The interest income earned is calculated by
applying the interest rates disclosed in these annual reports to the average of the
opening and closing loan balances. The combined amount is shown as related
party interest income in our calculations, while the separated amounts are shown
later in this report.
The resultant calculations reveal that the distributable income of the group companies
comprise the following:
Greenbay NepiRockcastle Fortress Resilient

EUR EUR ZAR ZAR
2017FY 2017H1 2017FY 2017FY
Operational distributable income 4% 82% 56% 56%
Third party investment income 61% 0% 0% 0%
Related party investment income 0% 0% 16% 17%
Third party interest income 11% 0% 12% 8%
Related party interest income 0% 1% 9% 14%
Accrued dividends on investments 6% 15% 4% 5%
Antecedent dividends 18% 1% 3% 0%
Total distributable incom e pre-finance cost 100% 100% 100% 100%
Operational - property 4% 82% 56% 56%

Third party investment 78% 15% 12% 8%
Related party investment 0% 1% 29% 35%
Capital return (antecent dividend) 18% 1% 3% 0%
Total distributable incom e pre-finance cost 100% 100% 100% 100%
Alternatively, with the assumption that finance cost relates only to the property portfolio
(i.e. only the direct properties have been geared):

EUR EUR ZAR ZAR
2017FY 2017H1 2017FY 2017FY
Operational distributable income -15% 80% 42% 39%
- gross operational 4% 91% 76% 78%
- finance cost -20% -10% -34% -39%
Third party investment income 73% 0% 0% 0%
Related party investment income 0% 0% 22% 24%
Third party interest income 14% 0% 17% 12%
Related party interest income 0% 1% 12% 19%
Accrued dividends on investments 7% 16% 5% 6%
Antecedent dividends 22% 1% 3% 1%
Total distributable incom e 100% 100% 100% 100%
Operational (property, finance costs) -15% 80% 42% 39%

Third party investment 93% 17% 17% 12%
Related party investment 0% 1% 38% 49%
Capital return (antecent dividend) 22% 1% 3% 1%
Total distributable incom e 100% 100% 100% 100%
From the above it is noticeable income from direct property holdings make up less
than half of the distributable income in Fortress and Resilient. Furthermore, it is
noticeable that almost half of Resilient’s distributable income depends income
received from related parties, i.e. either dividends from group companies or interest
income from employees and BEE trusts. Lastly, related party interest income from
employees and BEE trusts make up 12% and 19% of the companies’ distributable
income respectively.
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These findings are unusual for the following reasons:
• Real Estate Investment Trusts (REITs) are traditionally expected to earn most of
their income from investments in direct property.
• Fortress and Resilient are highly dependent on related party investments

continuing to perform to support their own distributable income. This is a
particularly significant finding in respect of the interest income from loans to
employees and BEE trusts.
• Fortress and Resilient earn a substantial amount of interest on loans to employees

and BEE trusts where their own shares serve as security for these loans. This
source of distributable income is highly geared to the companies’ own market
value. In other words, if the share price should decline, the loans and interest
income may need to be impaired.
Given the high price to book valuations of these companies that we have calculated
earlier, a decline in the share price of these companies appear to be more than a
inconsequential risk.
Investigating this further, we find that loans to related parties (employees and BEE
trusts) make up more than 5% of the total assets of both Fortress and Resilient in the
companies’ latest published financial results:

EUR EUR ZAR ZAR
Thousands Thousands Thousands Thousands
2017FY 2017H1 2017FY 2017FY
Interest income on loans to related parties
- loans to employees 65 748.00 1 872.89 83 314.85 49 281.93
- loans to BEE vehicles - - 320 694.28 387 606.78
Total interest incom e from related parties 65 748.00 1 872.89 404 009.13 436 888.71
Interest income as % of distributable income
(before finance costs) 0.2% 1.5% 11.8% 19.2%
- loans to employees 0.2% 1.5% 2.4% 2.2%
- loans to BEE vehicles 0.0% 0.0% 9.3% 17.0%
Loans to employees (closing balance) 505 679.00 33 905.62 786 598.00 627 849.00
Loans to BEE vehicles (closing balance) - - 3 432 645.00 3 577 288.00
Total loans to related parties 505 679.00 33 905.62 4 219 243.00 4 205 137.00
Total assets 935 628 834.00 4 990 114.36 62 065 981.00 46 540 814.00
Employee loans as % of total assets 0.1% 0.7% 1.3% 1.3%
BEE loans as % of total assets 0.0% 0.0% 5.5% 7.7%
Related party loans as % of total assets 0.1% 0.7% 6.8% 9.0%
These findings are significant as we believe the BEE trusts should have been
consolidated in the financial statements of Resilient. Consolidating the BEE trusts
would mean that the interest income as well as the loans should have been eliminated
in the group financial statements of Resilient. Consequently, a large part of the
distributable income of these companies should not have been available for
distribution to shareholders. Likewise, a material portion of the total assets should not
appear on the statements of financial position of these companies.
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Our reasoning on the consolidation of the BEE trusts are discussed further in the
section which follows.
BEE trusts
As discussed earlier in this report, from information disclosed in the financial

statements of Resilient and Fortress, we determined that the Siyakha Trust is a
significant BEE shareholder in both Resilient and Fortress. While we discuss this as a
single entity, shareholder registers reveal that there are several entities (“trust 1” “trust
2” etc.) involved.
In considering whether these trusts should have consolidated in the group financial
statements of Resilient, we note that IFRS 10 requires an entity to consolidate another
entity if it controls it.
Under IFRS 10, par 7, an investor controls an investee if and only if the investor has
all the following:
• power over 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 affect the amount of the investor’s
returns
We obtained the details of the Siyakha Trusts from the annual report of Resilient and
these are contained in Appendix C. We note that the company provides several
reasons for not consolidating these trusts in the annual report, notably the following:
• The trusts have separate boards with unilateral discretion on decisions on their key
activities.
• The substantive decisions taken by the board of trustees are not limited by
contractual arrangements.
• The group received only interest income from these trusts and receives no other
income from them.
• The group is not the sole financier of the trusts and the loans are not subordinated.
We consider the requirements of IFRS 10 and the arguments of management with

reference to the relationship of Resilient and the BEE trusts:
• Power over the investee
IFRS 10, par 10, determines that an investor has power over an investee when the
investor has existing rights that give it the current ability to direct the relevant
activities, i.e. the activities that significantly affect the investee’s returns.
We note that management argue that the fact that the boards are governed by
separate boards of trustees with the ability to make unilateral decisions and that
the trustee’s decisions are not limited by contractual arrangements.
To assess this argument, we refer to IFRS 10, par B15 and B18, which note that
factors that could indicate that the investor has power over an investee include:
➢ The investor has the right to appoint, reassign or remove members of an
investee’s management personnel.
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➢ The investee’s key management personnel are related parties of the
investor.
➢ The majority of the members of the investee’s governing body are related
parties of the investor.
In other words, we conclude that a separate board and the lack of contractual
arrangements, is not sufficient to determine that the group does not control the
board of trustees if the trustees are related parties of Resilient.
In this respect we obtained the trust deeds of the Siyakha Education Trusts
(relevant extracts are attached in Appendix H) and note the following:
➢ Clause 4.5 of both trust deeds determine that:
We note that “The Founder” for both trusts is Resilient Properties (Pty) Ltd,
which is a wholly owned subsidiary of Resilient per its latest annual report to
the year ended 30 June 2017.
Therefore, if Resilient is at any time dissatisfied with the “unilateral”

decisions of the “separate board”, it can simply exercise its power under
clause 4.5 and replace the trustees with a board more amenable to its
point of view.
➢ The majority of the trustees of both trusts are in some way related to group
companies:
Siyakha Education Trust 1
• Tembakazi (Tembi) Iris Chagonda, is the chairperson of the Resilient board

per the latest annual report
The fact that she is the chairperson of the Resilient board draws into
question her independence. Given the senior role that she occupies within
Resilient, she would be a related party of Resilient under IAS 24.
• Dazray Tarr is the group office manager of Resilient Properties (Pty) Ltd
We obtained this information from her Linked-In profile on 25 January 2018

and this therefore appears to reflect current information:
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The fact that she is an employee of Resilient draws into question her
independence. In addition, we would note that she does not appear to have
significant financial or managerial experience, given that her role at JHI Real
Estate was as a personal assistant.
• Jacques Johannes van Wyk is a former director of Lodestone per Windeed

until 24 January 2017. Lodestone is a subsidiary of Fortress since 2017.
Having so recently been a senior executive at one of the subsidiaries of

Fortress, he is clearly related to the group companies.
Siyakha Education Trust 2
• Tshiamo Daphne Vilakazi is a director on the board of Fortress per the latest
annual report.
The fact that she severs on the Fortress board draws into question her
independence. Given the senior role that she occupies within Fortress, she
would be a related party of Fortress (and by extension Resilient) under
IAS 24.
• Ndhlabole Shongwe is a former director of Lodestone per Windeed until

24 January 2017. Lodestone is a subsidiary of Fortress since 2017.
Having so recently been a senior executive at one of the subsidiaries of

Fortress, he is clearly related to the group companies.
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• Leeone Phoebe Gindan is a former company secretary of Lodestone per
Windeed until 24 January 2017. Lodestone is a subsidiary of Fortress since
2017.
Having so recently been a senior company officer at one of the subsidiaries

of Fortress, she is clearly related to the group companies.
These trustees are clearly related (and not independent) of Resilient.
Interestingly, we also find that the corresponding addresses on the share registers
for a number of the BEE trusts reflect group company directors as the appropriate
addressees. These include Resilient directors (Andries de Lange, Des de Beer)
and a Greenbay director (Stephen Delport). An extract of the share register
obtained from TimBukOne showing these details is attached in Appendix G.
Finally, since the compilation of this report, Resilient released interim financial
results for the six months to December 2017 on an accelerated schedule. Within
this set of results, we note the following comment by management:
This provides an interesting contrast with note 8 in the annual report of Resilient
for the year ended 31 December 2017, where it is noted that the loans to the BEE
trusts are repayable on 14 December 2026.
Based on the above, we therefore believe that the “request” by Resilient for early
repayment of the loans goes beyond the normal contractual rights of a lender over
a borrower. In the parlance of IFRS 10, the request does not suggest the normal
“protective rights” that a lender holds, but rather “substantive rights” over the
borrower (the BEE trusts). In other words, we do not believe that a normal arms-
length lending agreement would allow the lender to demand accelerated
repayment or, at least, not without additional rights (“power”) over the board of the
borrower.
We therefore believe that Resilient has power over the BEE trusts.
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• Exposure to variable returns
IFRS 10, par 15, determines that an investor is exposed, or has rights, to variable
returns from its involvement with the investee when the investor’s returns from its
involvement have the potential to vary as a result of the investee’s performance.
The investor’s returns can be only positive, only negative or both positive and
negative.
In this respect, we note the following in IFRS 10, par B56:
“Variable returns are returns that are not fixed and have the potential to vary as a
result of the performance of an investee. Variable returns can be only positive, only
negative or both positive and negative (see paragraph 15). An investor assesses
whether returns from an investee are variable and how variable those returns are
on the basis of the substance of the arrangement and regardless of the legal form
of the returns. For example, an investor can hold a bond with fixed interest
payments. The fixed interest payments are variable returns for the purpose of this
IFRS because they are subject to default risk and they expose the investor to the
credit risk of the issuer of the bond. The amount of variability (i.e. how variable
those returns are) depends on the credit risk of the bond.”
Consequently, we dismiss the argument of management that they do not

consolidate the trusts as the group receives “interest income…at interest rates
linked to prime” as irrelevant. Similarly, the fact that the loans are not subordinated
(i.e. do not carry equity risk) is also irrelevant.
We conclude that Resilient and Fortress have exposure to variable returns from
the BEE trusts as the interest on the loans have a variable interest rate and are
subject to default risk. The fact that the ability of the BEE trusts to repay the loans
depend on the share price and dividend performance of Resilient and Fortress only
exacerbates the degree to which they are exposed to variable returns.
This requirement in respect of control is therefore met.
Link between power and returns
IFRS 10, par 17, determines that an investor controls an investee if the investor
not only has power over the investee and exposure or rights to variable returns
from its involvement with the investee, but also has the ability to use its power to
affect the investor’s returns from its involvement with the investee.
The activities of the BEE trusts, including the purchase and sale of shares as well
as the distribution of its income to beneficiaries, affect its ability to repay the loans
to Resilient and Fortress and consequently the income and credit risk attached to
the loans. There is consequently a clear link between the variable returns that
Resilient and Fortress are exposed to in the BEE trusts and the power that they
exercise over these trusts.
Based on the above assessment of the underlying facts, we conclude that ALL of the
three requirements for control under IFRS 10 are met. We therefore conclude that
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Resilient controls the BEE trusts under IFRS 10 and that these should have been
consolidated in its group financial statements.
As noted earlier in this report, this has significant negative consequences for the
distributable income and net asset value of both companies.
In addition, this implies that the financial statements do not comply with International
Financial Reporting Standards (IFRS) which constitutes a transgression of both the
Companies Act, 2008, and the JSE listing requirements.
Trading in group shares
Our investigation into the trading in group company shares consists of two parts:
1. We drew the shareholder registers of two group companies to identify trading in

the shares by group companies and potential related parties. The purpose of this
investigation was to determine what proportion of volume traded in group company
shares was driven by parties with potential inside information.
2. We investigated the potential related parties we identified further to determine (i)

the exact relationships between each other and (ii) whether the trading activity
appears unusual (i.e. that the investors appear to have benefitted from an
abnormal degree of luck in executing their trades). This sheds light on potential
insider trading and/or market manipulation by way of unusual prices or high volume
trades.
Identifying trading in the shares by group companies and potential related parties
Sources of the shareholder registers
Using information available from Bloomberg and TimBukOne, we ran numerous

reports, focussing on the shareholder registers of two specific companies, namely
Greenbay and Fortress (the B-Shares).
These reports provided us the following information

1. Volumes traded per month1 .
2. Who the biggest buyers and sellers were in the month.
3. Who the biggest holders of these shares were at month end.
4. Which other JSE-listed shares were held at month end by these buyers and sellers.
Methodology - identification
We systematically ran these reports, using the below parameters, to ensure all
material transactions on the shareholder register for the dates discussed were
extracted for inspection:
1 TimBukOne’s cut-off dates for the month does not fall on the last trading date of the month. To
address this issue, we have made sure that the dates on the information we pulled from Bloomberg
ties up with that of TimBukOne. Refer to Appendix D for more detail on the dates.
15
• Materiality threshold:
• Monthly share registers from 1 October 2016 up until 29 December 2017 were
used
• Buyers and/or sellers of more than 500 000 GRP shares in any of the above
months
• Buyers and/or sellers of more than 250 000 FFB shares in any of the above months
• Entities or individuals that held more than 10 000 000 shares in GRP in one or
more of the above months
• Entities or individuals that held more than 5 000 000 shares in FFB in one or more
of the above months
Methodology - classification
Once all the material transactions or holdings were identified, using the parameters
described above, we classified each month’s transaction or shares held into one of the
following three categories:
1. Group companies and BEE trusts (i.e. Resilient, Fortress A and B-shares,
NepiRockcastle, Greenbay and the Siyakha Trust)
We consider transactions / holdings in this category to be clearly related party

transactions / holdings.
2. Portfolios with more than 90% of their value in the group companies (i.e. Resilient,
Fortress A and B-shares, NepiRockcastle and Greenbay)
This category reflects transactions / holdings of entities or individuals that held or

traded almost exclusively in the above shares. In most instances, the portfolios in
this category only contained shares in the group companies, although a few held
some other shares as well.
3. Independent shareholders
This category reflects transactions / holdings of entities or individuals that were

some of the largest buyers and sellers of shares in group companies in the month
16
(per our parameters as set out above), but holdings in shares of group companies
made up a very small fraction of their overall holdings in JSE listed shares. These
are usually investors (unit trusts, individuals or other entities) with well-diversified
portfolios.
Appendix E have all the names of the relevant individuals or entities that were
classified in Category 1 and Category 2 for Greenbay and Fortress B-shares.
Results
After the identification and classification as discussed above, the volume traded was
calculated for each category for each month. We used Bloomberg reported volume
together with TimBukOne (only the buying side of the transaction was used to account
for bookbuilds) in compiling the volumes.
There is a significant difference in these two volume numbers, which could partly be
explained by book-overs between group entities. In almost all cases, the TimBukOne
volume number was higher that the Bloomberg reported number.
The findings reflect that several months exist where volumes traded were dominated
by category one transactions (i.e. group company and BEE trust transactions). We
highlight a few of these months in yellow in the tables below. However, the full and
detailed findings are collated in tables contained in Appendix F.
Greenbay
GRP - absolute volum e Dec-17 Nov-17 Oct-17 Aug-17 Apr-17 Mar-17 Jan-17 Oct-16
Selling Category 1 & 2 -2,921,183,234 -427,537,186 -33,440,671 -20,567,027 -488,224,191 -37,735,446 -641,370,499 -9,697,573
Selling Category 1 -2,871,677,488 -404,792,017 -968,542,868 - -533,335,334 -77,417,219 -599,999,138 -
Buying Category 1 & 2 3,050,598,384 411,481,845 987,003,613 1,086,570,916 545,033,809 256,845,859 645,137,833 589,178,014
Buying Category 1 2,453,979,157 404,792,017 - 800,000,000 545,587,296 331,125,828 600,000,000 575,813,236
GRP - TBO and BBG volum es Dec-17 Nov-17 Oct-17 Aug-17 Apr-17 Mar-17 Jan-17 Oct-16
TimBukOne Volume 3,740,893,573 639,147,586 1,266,819,166 2,351,766,945 680,632,551 1,493,719,335 688,576,012 703,645,741
Bloomberg Volume 2,147,719,183 192,859,361 1,235,669,246 284,526,355 57,853,398 61,969,709 150,751,551 89,681,188
Bloomberg Volume as % of TBO Volume 57.41% 30.17% 97.54% 12.10% 8.50% 4.15% 21.89% 12.75%
GRP Dec-17 Nov-17 Oct-17 Aug-17 Apr-17 Mar-17 Jan-17 Oct-16

Buying as % of TBO Category 1 65.60% 63.33% 0.00% 34.02% 80.16% 22.17% 87.14% 81.83%
Buying as % of BBG Category 1 114.26% 209.89% 0.00% 281.17% 943.05% 534.33% 398.01% 642.07%

Buying as % of TBO Category 1&2 81.55% 64.38% 77.91% 46.20% 80.08% 17.20% 93.69% 83.73%
Buying as % of BBG Category 1&2 142.04% 213.36% 79.88% 381.89% 942.09% 414.47% 427.95% 656.97%

Selling as % of TBO Category 1 -76.76% -63.33% -76.45% 0.00% -78.36% -5.18% -87.14% 0.00%
Selling as % of BBG Category 1 -133.71% -209.89% -78.38% 0.00% -921.87% -124.93% -398.01% 0.00%

Selling as % of TBO Category 1 & 2 -78.09% -66.89% -2.64% -0.87% -71.73% -2.53% -93.14% -1.38%
Selling as % of BBG Category 1 & 2 -136.01% -221.68% -2.71% -7.23% -843.90% -60.89% -425.45% -10.81%
17
Fortress B-shares
FFB - absolute volum e DEC 2017 May 2017 April 2017 Feb 2017 Dec 2016 Nov 2016
Selling Category 1 & 2 -23,409,394 -20,062,344 -49,999,928 -6,812,826 -3,658,122 -2,181,535
Selling Category 1 -16,929,244 -8,993,608 -42,740,793 -53,000 - -
Buying Category 1 & 2 24,328,030 16,240,885 43,200,750 26,376,554 18,656,400 32,436,701
Buying Category 1 23,500,000 10,924,710 41,350,000 21,570,814 11,620,497 9,504,909
FFB - TBO and BBG volum es DEC 2017 May 2017 April 2017 Feb 2017 Dec 2016 Nov 2016
TimBukOne Volume 62,293,139 40,479,441 63,107,655 42,527,372 48,415,980 61,863,581
Bloomberg Volume 50,985,969 27,093,383 27,485,326 24,674,999 46,682,748 32,821,618
Bloomberg Volume as % of TBO Volume 81.85% 66.93% 43.55% 58.02% 96.42% 53.05%
FFB DEC 2017 May 2017 April 2017 Feb 2017 Dec 2016 Nov 2016
Buying as % of TBO Category 1 37.72% 26.99% 65.52% 50.72% 24.00% 15.36%
Buying as % of BBG Category 1 46.09% 40.32% 150.44% 87.42% 35.68% 28.96%
Buying as % of TBO Category 1&2 39.05% 40.12% 68.46% 62.02% 38.53% 52.43%
Buying as % of BBG Category 1&2 47.72% 59.94% 157.18% 106.90% 57.28% 98.83%
Selling as % of TBO Category 1 -27.18% -22.22% -67.73% -0.12% 0.00% 0.00%
Selling as % of BBG Category 1 -33.20% -33.19% -155.50% -0.21% 0.00% 0.00%
Selling as % of TBO Category 1 & 2 -37.58% -49.56% -79.23% -16.02% -7.56% -3.53%
Selling as % of BBG Category 1 & 2 -45.91% -74.05% -181.91% -27.61% -11.23% -6.65%
The unusually high proportion of volumes ascribed to group companies in these

months led us to believe that further investigation into the nature of these transactions
is warranted.
Investigating potential related party trades
Greenbay
Greenbay Properties (“GRP”) is a company that was incorporated in the Republic of

Mauritius on 14 August 2014 under the name Green Flash Properties Ltd.
Towards the end of 2015, GRP applied to the JSE for a secondary listing and made
an offer to invited investors to subscribe for approximately 9,765,210 ordinary shares.
Most of the shares were subscribed for by the companies in the table seen below (note
that these directors also played a significant role in other transactions within the group
as highlighted later in this report):
Company Director Number of shares

DACOS HOLDINGS (PTY) LTD JOSE JORGE GONCALVES DA COSTA 2 337 000
SERISA HOLDINGS (PTY) LTD ANTONIO CONCALVES LOURENCO 2 336 000
CEVA INVESTMENTS (PTY) LTD JOAO EVANGELISTA GONCALVES DA COSTA 2 334 000
JOSE DA COSTA INVESTMENT HOLDINGS JOSÉ MANUEL GONCALVES DA COSTA 2 331 465
9 338 465
Source: Windeed and TimBukOne
Subsequently, Jorge da Costa was appointed as an independent non-executive

director of Greenbay Properties on 9 February 2016.
18
On 31 May 2016, GRP announced a R4bn book build at R1.20 a share. Over 55% of
the shares issued in the book build were allocated to Resilient, Fortress, directors of
those two companies and their associates as detailed in the table below. This table
shows that substantially the same shareholders own Greenbay, Resilient and Fortress
and illustrated the degree of influence that these shareholders have over Greenbay.
Note that the degree of influence as illustrated in the table below, reflects that if these
shareholders were to decide to act in concert, they would control Greenbay.
Company Number of shares

RESILIENT PROP (PTY) LTD 667 049 077
FORTRESS INCOME 2(PTY)LTD (PLEDGE) 419 143 077
SENTOLA LIMITED 131 566 667
LODESTONE INVESTMENTS (PTY) LTD 127 476 410
HOLLYROOD INVESTMENTS (PTY) LTD ACC 125 833 332
K2014070733 (PTY) LTD 79 166 667
NAD PROPERTY INCOME FUND (PTY)LTD(P 41 666 667
SILVER BLADE INVESTMENTS 40 (PTY) L 41 666 667
DUSTY GOLD INVESTMENTS 4(PTY) LTD 40 862 505
THE NANO TRUST (NO2) 33 333 333
K2012040929 25 750 000
OPTIMPROP 3 (PTY) LTD 25 000 000
CO-PROPS 139 (PTY) LTD 25 000 000
K2012040925 22 750 000
K2012040668 19 750 000
K2012040151 17 950 000
EAGLELET INVESTMENTS (PTY) LTD - NO 16 666 667
KIBERA INVESTMENTS(PTY)LTD(A/C NO.2 16 666 667
WILD BREAK 250 (PTY) LTD ACC 2 16 666 667
MAXTRADE SEVEN (PTY) LTD ACC 2 16 666 667
JEAN AVENUE PROPERTY INVESTMENTS 16 666 666
TAMBURA PROPERTY INVESTMENTS PTY LT 12 500 000
RUMAE HOLDINGS(NO.4A/C) 12 000 000
Total 1 951 797 736
Total shares issued in book build 3 333 333 333

Percentage of total shares issued in book build 58.6%
Source: TimBukOne and SENS
Jose, Antonio, Joao and Jose purchase R200m of GRP shares in the book build:
Company Director Number of shares

SERMAR INVESTMENTS (PTY) LTD ANTONIO CONCALVES LOURENCO 41 666 665
JOMAN HOLDINGS (PTY) LTD JOAO EVANGELISTA GONCALVES DA COSTA 41 666 665
MANJO HOLDINGS (PTY) LTD JOSÉ MANUEL GONCALVES DA COSTA 41 666 665
JORJO INVESTMENTS (PTY) LTD JOSE JORGE GONCALVES DA COSTA 41 666 665
166 666 660
Source: Windeed and TimBukOne
19
The next month these shares were transferred to the Peregrine CFD account at which
point it becomes unable to track whether these shares were sold. It is interesting to
note that no SENS regarding Jorge da Costa selling shares was released but he
subsequently resigned from the board of directors on 27 September 2017.
However, this is not the only transaction that these individuals had with the group
companies. From the N1 Business Park website, one can ascertain that Improvon,
Acucap and Capital Property Fund purchased the land for the N1 Business Park in
2006:
Source: N1businesspark.co.za, accessed 25 January 2018
Capital Property Fund was acquired by Resilient in 2015. The directors of Improvon
are:
• Antonio Concalves Lourenco
• Joao Evangelista Goncalves da Costa
• José Manuel Goncalves da Costa
• Jose Jorge Goncalves da Costa
These are the same directors who bought a substantial holding in GRP. Additionally,
Jorge da Costa was a director of GRP. It therefore seems plausible that they were
acting in connection with or based on instructions received from Resilient and/or
Fortress or the directors of those companies.
Possible Insider Trading
Greenbay Properties had a book build announced on 30 May 2017 at a 5.6% discount
and raised R1.15bn.
20
Two companies, K2012040668 and K2014252338, held 29.7m shares and 9.2m
shares respectively at the end of April 2017. An account with the name of Allistar
Fredericks Development HOC, which cannot be traced to company records and
therefore might be held via an individual and not a company, held 7.7m shares.
K2012040668 sold 26m out of the 29.7m shares it held during the month of May 2017,
while K2014252338 and Allistar Fredericks Development sold their entire
shareholding in May 2017.
What we found unusual about these transactions is that all three accounts can be
traced back to someone who is related to Resilient, Fortress or Desmond de Beer (the
CEO of Resilient). It appears these shareholders disposed of their shares to reacquire
them in the book build at a lower price. The timing of these sales was either highly
fortuitous or based on insider information.
We therefore investigated the parties behind these companies further:
K2012040668
The sole director of this company is Hendrik Johannes Oberholzer. He is a director of

a company Comess, with the registered address highlighted below:
Source: Windeed
This is important for several reasons:
1. Norma Jean Square Property Investments is a 100% subsidiary of Resilient.
2. Du Plessis and Du Plessis is an audit firm. They are the auditors of Hollyrood
Investments – a vehicle through which Desmond de Beer holds his investments in
Resilient, Fortress, Greenbay and NEPI Rockcastle.
21
3. One of the directors of Du Plessis and Du Plessis is Jacobus Albertus Du Plessis.
Jacobus Du Plessis has been a director of Resilient 1, Pangbourne Investments
and Diversified Properties as per Windeed. These are all companies which have
been acquired by companies in the Resilient group.
K2014252338
According to Windeed, the sole director of this company is Justin James Muller, who
is also the director of Resilient Africa.
Allistar Fredericks Development HOC
Allistar Fredericks is the head of hockey at Beaulieu College:
Source:http://www.kyalamischools.org/beaulieu-college/affiliate-organisations/hockey_academy, accessed on 26 January 2018
22
Beaulieu College together with Kyalami Preparatory School are two of the three
members of the Kyalami Schools group:
Source: http://www.kyalamischools.org/beaulieu-college/about-the-college/our-family-of-schools, accessed 26 January 2018
Desmond de Beer (the CEO of Resilient) is a director of Beaulieu College Properties,

Kyalami Preparatory Holdings and Kyalami Preparatory School.
These findings therefore lead to the following questions:
1. What is the source of the funds used to acquire the shares in Greenbay Properties
by Allistar Fredericks Development HOC? We find it difficult to believe that a school
hockey coach had access to sufficient funds to acquire 7,7m shares in this
company when GRP represented substantially his entire portfolio as at 28 April
2017 according to TimBukOne (the other shares in his portfolio were all in other
group companies).
2. Is Allistar Fredericks the beneficial owner of this account?
3. Why did Allistar Fredericks decide to sell his shares shortly before the bookbuild
only to replace them with new share if not to benefit from the discount at which the
bookbuild was done?
Share book-overs and trades between related parties
If one investigates the monthly share registers from TimBukOne, it becomes apparent
that there is an unusually high number of book-overs or trades between related parties.
It is not clear what the economic rationale is for these trades. Note, however, that this
report does not contain a comprehensive list of all these transactions.
Greenbay Properties
During the month of February 2017, the following trades/book overs took place:
1. Sakhisizwe Investment Holdings moved 8 434 608 shares between accounts. The
sole director of this company is Mark Walter Stevens according to Windeed. Mark
Walter Stevens is also the managing director and chief executive officer of
Fortress.
23
2. Redspiced Investments transferred 5 904 225 shares between accounts. The sole
director of of Redspiced Investments is Gidon Trope according to Windeed. Gidon
Trope is an ex-director of Lodestone REIT which was acquired by Fortress.
Additionally, Windeed also shows that the auditors of Redspiced Investments are
Du Plessis and Du Plessis.
3. Twenty Eight Twelve Investment Properties had 2 247 027 shares transferred
between accounts. Windeed shows the sole director of the company as Jason
Scott Cooper. Jason Scott Cooper was also a director of Lodestone REIT.
During the month of April 2017, the following trades/book overs took place:
4. Resilient Property transferred 500 000 000 shares from one account to another.
5. Fortress Income 2 moved 33 335 334 shares between accounts.

During the month of May 2017, the following trades/book overs took place:
6. Hollyrood Investments transferred 42 023 814 shares between accounts.
During the month of June 2017, the following trades/book overs took place:
7. Boabab Consulting CC transferred 17 292 725 shares between accounts. Stephen
Delport is the sole member of the close corporation according to Windeed. He is
also the CEO of Greenbay Properties.
8. The Nano Trust moved 40 767 273 shares from its account no. 2 to account no. 4.
According to SENS announcements, Andries de Lange is a trustee and beneficiary
of the Nano Trust. He is also an executive director and chief operating officer of
Resilient.
During the month of September 2017, the following trades/book overs took place:
9. The Nano Trust Acc. No. 4 disposed of 47 204 588 shares. These shares were
acquired by the Dyer Trust. The only information publicly available on the Dyer
Trust is its address, which is 16 Heddon Road, London, UK and linked to Ronnie
Porter. On 18 September 2017, Ronnie Porter was appointed as a director of
Hollyrood Investments and Eaglelet Investments (the companies through which
Desmond de Beer and Nicolaas Willem Hanekom – the Financial Director of
Resilient – hold shares in Resilient and the other group companies).
10. Browndesk Property Investments transferred 8 593 752 shares between accounts.
The sole director of the company is Andrew Edward Texeira per Windeed. Andrew
was a director of Fortress Reit, Lodestone Reit and Capital Property Fund.
During the month of October 2017, the following trades/book overs took place:
11. Resilient Property sold 968 542 868 shares. 508 027 868 shares were purchased
by K2017408359 South Africa and 460 545 000 shares were purchased by Norma
Jean Square Property Investments. Both companies are subsidiaries of Resilient.
Details of the block trade can be seen in the Bloomberg screenshot below.
24
During the month of November 2017, the following trades/book overs took place:
12. Fortress Income 2 transferred 404 792 017 shares into another account belonging
to them.
During the month of December 2017, the following trades/book overs took place:
13. This month had by far the largest number of trades between accounts. This is best
summarised in the table below.
Shareholder Number of shares bought/(sold)
RESILIENT PROP (PTY) LTD NO.2 ACC -509 434 000
FORTRESS INCOME 2 (PTY) LTD ACC NO -404 792 017
K2017408359 SOUTH AFRICA (PTY) LTD -296 767 975
LODESTONE INVESTMENTS (PTY) LTD -291 100 392
FORTRESS INCOME 3(PTY)LTD -244 528 320
CAPITAL PROPFUND (PTY) LTD -244 528 320
FORTRESS INCOME 3 (PTY) LTD -178 032 158
CAPITAL PROPFUND (PTY) LTD -178 032 158
HOLLYROOD INVESTMENTS (PTY) LTD ACC -172 582 381
FORTRESS INCOME 2 (PTY) LTD -143 972 243
LODESTONE INVESTMENTS (PTY) LTD -131 460 087
FORTRESS INCOME 2 PTY LTD -33 964 305
FORTRESS INCOME 2(PTY)LTD (PLEDGE) -30 000 000
EAGLELET INVESTMENTS (PTY) LTD - NO -17 187 505
RESILIENT PROPERTIES (PTY) LTD -12 483 132
NORMA JEAN SQUARE PROPERTY INVESTME 7 154 791
DIVERSIFIED PROPERTIES 2 (PTY) LTD 7 154 791
FORTRESS INCOME 10 (PTY) LTD NO 3 P 30 000 000
SENTOLA LIMITED 31 648 519
RESILIENT 4 (PTY) LTD 62 369 784
FORTRESS INCOME 10 (PTY) LTD 131 983 495
DELSA INVESTMENTS (PTY)LTD 175 263 707
FORTRESS INCOME 11 (PTY) LTD ACC NO 248 327 434
K2017408359 SA (PTY) LTD (2)(PLEDGE 304 660 950
RESILIENT 3 (PTY) LTD 467 669 791
Net purchases 76 687 340
Source: TimBukOne
25
Given the large number of transactions and book-overs between related parties /
insiders, we ask the following questions:
1. If not to manipulate the share price / volumes traded, what was the economic
rationale behind these transactions?
2. Why would these shareholders find it necessary to have this number of

transactions if the intention is to hold the shares for the long-term?
Closing auction activity
We also note unusual activity in the closing auctions of the group companies during
January 2018 as shown in the market screenshots below:
1. We noted usually large volume bids in the closing auctions of two group companies
(Resilient and Greenbay) on 25 January 2018:
2. During the course of the auction these bids were removed, significantly after an
offer to sell at the bid price was placed into the auction:
26
27
3. We noted similar activity in the closing auction in Greenbay shares on 29 January
2018:
28
We believe this amounts to false advertising of a bid for these companies and an
attempt to falsely increase demand (and the share price of these companies). Once
the bidder established that there were in fact sufficient sellers at these prices and
realised that the attempt to drive up the share price had failed, the bids were
immediately withdrawn.
Remuneration policies
In the final part of our analysis, we consider the remuneration policies of the group
companies. The reasons for this are twofold:
• Firstly, an analysis of the remuneration policies sheds further light on the incentives
for management to have engaged in the practices that we have identified.
29
• Secondly, our analysis show that the remuneration policies of the various group
companies are virtually identical (to the point of being virtual copies of each other
with the name of the company changed).
This is important as that these companies are represented to the market (and
accounted for) as either independent companies (simple investments in financial
assets) or investments over which the group merely has significant influence (i.e.
associates).
We find it difficult to believe that truly independent board and remuneration

committees could have arrived at such similar remuneration policies without
significant interaction between them. We would argue that this should suggest that
these companies are in fact controlled by the same individuals.
Remuneration committees
At face value, there is very little overlap between the remuneration committee
members of the group companies (only Jeff Zidel is present on Fortress and
NepiRockcastle’s remuneration committees).
Remuneration committee members RES FFA&FFB NRP GRP

Chairman Brian Hopkins Jeff Zidel Robert Emslie Barry Stuhler
Member 1 Protas Phili Tshiamo Matlapeng-Vilakazi Jeffery Zidel Market Olivier
Member 2 Umsha Reddy Djurk Venter Desmond De Beer Teddy Lo Seen Chong
Despite this seeming independence, Resilient, Fortress and Greenbay have virtually
identical long-term share incentive schemes
Resilient remuneration policy2
The Resilient remuneration committee is said to be guided by companies of a

comparable size. Fortress Income fund is one of the four companies mentioned, which
is difficult to swallow, considering that it is a related party.
There are no retirement benefits for employees (page 15, second last paragraph). This
increases the propensity for the employees of the company to invest into the
company’s shares as a way of saving (which is heavily encouraged by the below long-
term incentive scheme):
Old Scheme
Employees take full market risk on shares from date of issue.
• Limited to 20 times an employee’s gross remuneration (page 16)

• Loan granted to take part in share scheme, issued at market price
• Shares vest immediately
• Loans repayable in 10 yrs
• Loans at WACC of group, Bi-annually service (five-year interest subsidy)
2
Page 15 to 21 of the Resilient REIT Limited 2017 Integrated Report;
http://www.cmsignition.co.za/download/files_1208/ResilientIntegratedReport2017.pdf
30
New Scheme
Employees take full market risk on shares from date of issue.
• Two options
o All shares upfront, can be up to 3x the annual package; or
o Gear up shares 4 x of the above (which means 12 times) and the shares
vest over 5 years. Maximum loan to a participant is 20x that individual’s
annual remuneration.
• Loan granted to take part in share scheme, issued at market price
In the event of a member of management choosing option 2 and obtaining the

maximum 20x exposure of his or her annual remuneration in a form of a loan to
purchase shares of the company, the incentive to increase the share price
becomes excessive in our opinion.
Fortress remuneration policy3
The Fortress remuneration committee is said to be guided by companies of a

comparable size. Resilient is one of the four companies mentioned, which is difficult
to swallow, considering that it is a related party.
Looking at the remuneration policy of Fortress Income Fund, it is obvious that the
Resilient remuneration policy was copied (in most cases, entire paragraphs are the
same word for word).
This is not a concern per se, but it does raise the question of independence of the non-
executive directors on the Remuneration committee (Resilient and Fortress does not
have any overlap on the members of the remuneration committee).
The same share scheme as Resilient is present in Fortress.
There are no retirement benefits for employees, which again increases the propensity
for the employees of the company to invest into the company’s shares as a way of
saving.
Greenbay Properties LTD remuneration policy4
Looking at the remuneration policy of Greenbay Properties, again, the wording is very
similar (and in some cases identical) to the Resilient remuneration policy.
3
Page 17 to 23 of Fortress Income Fund Limited 2017 Integrated report
http://www.cmsignition.co.za/download/files_1184/IntegratedReport30June2017.pdf
4
Page 34 to 41 of Greenbay Properties LTD Integrated report 2017
http://www.greenbayprop.mu/Investor-Relations/Financials/
31
There are no retirement benefits for employees of Greenbay, which again increases
the propensity for the employees of the company to invest into the company’s shares
as a way of saving.
The same share scheme as Resilient is present in Greenbay.
NepiRockcastle remuneration policy5
The annual report for the newly merged entity was not yet available at the time of
writing this report.
For comparative purposes , the remuneration committee composition in this report

was based on Nepi’s annual report for the year ended 31 December 2016.
5
http://www.nepinvest.com/pdf/nepi-annual-report-2016.pdf
32
Appendix A
Direct / indirect Code No of shares Fortress No of shares Nepi Rockcastle No of shares Resilient
2017FY 2017H1 2017FY
ZAR c / share ZAR c / share ZAR c / share
Listed portfolio 2 855.54 2 908.01 5 229.47

Fair value of GBP investments
- Hammerson HMSO LN Equity - - 5.75 24 723 159.00 386.46 N1 9 381 225.00 6.78 N2
- Greenbay GRP SJ Equity 1 480 410 000.00 266.71 N1 - 1 550 975 000.00 749.86 N1
- NEPI Rockcastle NRP SJ Equity 135 289 000.00 2 116.21 N1 - 71 687 000.00 3 009.26 N1
- Unibail-Rodamco UL NA Equity - - 220.65 559 269.00 317.08 N1 - -
Fair value of USD investments
- Simon Property SPG US Equity - - 161.76 772 750.00 282.58 N1 - -
- Prologis PLD US Equity - - 58.64 1 040 246.00 147.67 N1 - -
- Ventas VTR US Equity - - 69.48 892 343.00 109.80 N1 - -
Fair value of ZAR investments
- Fortress B FFB SJ Equity - - - 172 930 000.00 1 463.56 N1
- Resilient RES SJ Equity 39 455 000.00 472.62 N1 - - -
Other listed investments n/a n/a - n/a 1 664.41 N3 n/a -
Unlisted property under development 304.79 N3 596.63 N3 199.07 N3

Unlisted property leased out
- South Africa 2 307.60 N3 - N3 4 788.54 N3
- Nigeria - - 327.17
- Other - 9 898.01 216.27
Joint ventures - 189.53 -
Current assets 178.45 N3 1 339.32 N3 378.34 N3
Total gross assets AAA 5 646.38 14 931.50 11 138.85
Number of shares 1 076 832 691.00 N3 539 000 000.00 N3 401 260 209.00 N3
Prem ium analysis
Current share price 3 394.00 N4 16 826.00 N4 12 900.00 N4

Net asset value as reported (adjusted fair value) 2 675.00 N3 9 528.69 N3 8 944.00 N3
Gross asset value as reported (IFRS) 5 763.75 N4 13 122.55 N4 11 598.66 N4
Net debt as reported (IFRS) BBB 3 417.64 N5 3 895.45 N3 3 565.93 N3
Approximate total net assets (adjusted fair values) CCC 2 227.69 N6 11 023.33 N6 7 568.43 N6
33
Fortress Nepi Rockcastle Resilient
2017FY 2017H1 2017FY
ZAR c / share ZAR c / share ZAR c / share
Stripping out prem ium to NAV analysis
Gross asset value of unlisted properties 2 790.84 N7 12 018.79 N7 5 909.38 N7

Gross market value non-group listed securities - N8 2 904.22 N8 6.83 N8
Net asset value of Greenbay (as reported) 195.16 N3 - 548.69 N5
Net asset value of NepiRockcastle 1 385.28 N9 n/a N9 1 969.87 N9
Net asset value of Resilient 277.31 N10 - n/a
Net asset value of Fortress n/a - 530.50 N9
Net debt as reported (includes deduction for debt and A-shares) - 3 417.64 N5 - 3 896.85 N5 - 3 565.93 N5
Estim ated net asset value, prem ium in listed holdings stripped out 1 230.94 11 026.16 5 399.34
Current share price 3 393.00 N4 16 826.00 N4 12 900.00 N4
Explanatory notes
N1 - calculated using the number of shares disclosed in the latest published results, updated using the latest share price and exchange rate (w here applicable) from Bloomberg as at 25 January 2017, 15:53.
N2 - estimated derivative value, using the information disclosed in the latest published results. Immaterial to the calculation as a w hole.
N3 - from the latest published results, adjusted for the exchange rate (w here applicable) from Bloomberg as at 25 January 2017, 15:53
N4 - from Bloomberg as at 25 January 2017, 15:53
N5 - from the latest published results, counting the FFA shares as debt, using the net asset value per share as disclosed in the financial statements.
N6 - Reference AAA - reference BBB
N7 - sum of total gross assets per share, excluding listed portfolio
N8 - sum of listed securities calculated above, excluding shares in Greenbay, NepiRockcastle, Fortress and Resilient
N9 - using the net asset value as calculated by 36ONE for this company, multiplying by the number of shares held and divided by the number of shares in issue (as above)
N10 - due to circular reference, w e use the updated NAV for Resilient as denoted by reference CCC
34
Appendix B
Greenbay NepiRockcastle NEPI Rockcastle Fortress Resilient
EUR EUR EUR USD ZAR ZAR
Thousands Thousands Thousands Thousands Thousands
2017FY 2017H1 2017H1 2017H1 N1 2017FY 2017FY
Rental income
- Net rental income 3 930 167.00 N2 125 589.04 90 981.00 38 806.00 N2 1 997 232.00 N2 1 556 435.00 N2
- Property joint venture income 1 579 188.00 N2 3 518.49 2 187.00 1 493.00 N2 634 467.00 N2 366 768.00 N2
- Impact of straight-lining - 1 162.00 N2 - 478.02 - 536.00 N2 92 245.00 N2 - 23 618.00 N2
Operating expenses - 2 432 819.00 N2 - 10 261.51 - 8 823.00 - 1 613.00 N2 - 122 694.00 N2 - 116 161.00 N2
Third party investments

- dividend income 255 367.00 N2 363.00 363.00 - N3 - -
- income from equity derivatives 27 803 793.00 N2
Group investments dividend income - N2 - - - 740 734.00 N4 540 653.00 N4
Interest income from third parties 5 237 920.00 N2 538.73 178.44 404.00 N5 568 583.87 N6 267 350.29 N6
Interest income on loans to related parties **** 65 748.00 N2 1 872.89 1 232.56 718.00 N5 404 009.13 N6 436 888.71 N6
Finance cost paid to third parties - 7 556 810.00 N2 - 13 154.61 - 9 590.00 - 3 997.00 N2 - 1 176 126.00 N2 - 890 668.00 N2
Income tax expense - 1 414 429.00 N2 - 3 545.24 - 1 107.00 - 2 734.00 N2 - - N2
27 466 963.00 104 442.78 75 422.00 32 541.00 3 138 451.00 2 137 648.00
Accrued dividends on investments 2 794 275.00 N7 20 435.17 181.00 22 711.00 N7 173 274.00 N7 144 000.00 N7
Antecedent dividends 8 418 663.00 N7 1 692.59 1 277.00 466.00 N7 116 652.00 N7 13 836.00 N7
Non-controlling interest - - - 99.00 N2 3 348.00 N2 - 19 175.00 N2
38 679 901.00 126 570.54 76 880.00 55 619.00 3 431 725.00 2 276 309.00
Distributable earnings per company financials 38 679 901.00 N7 76 892.00 55 619.00 3 431 725.00 2 276 309.00
Difference - - 12.00 - - -
35
Notes
**** Loans to employees and BEE trusts
N1 - converted to EUR at an exchange rate of USD/EUR of 1,1213 (as per the latest published results of NepiRockcastle) in determining the combined NepiRockcastle amounts.
N2 - from the statement of profit or loss and other comprehensive income in the latest published results.
N3 - from the statement of profit or loss and other comprehensive income in the latest published results. Assumed all from third parties as these companies do not hold shares in the other group companies.
N4 - from the statement of profit or loss and other comprehensive income in the latest published results. Assumed all from group companies as immaterial holdings in other listed securities.
N5 - from the statement of profit or loss and other comprehensive income in the latest published results. Assumed proportion of interest income from loans to employees unchanges from year ended 31/12/2016.
N6 - from the statement of profit or loss and other comprehensive income in the latest published results. Calculated BEE and employee portion by averaging the opening and closing loan balances in the annual report for
the year ended 31 December 2016 and applying the disclosed interest rate to it.
N7 - from the distributable income statement in the latest published results.
36
Appendix C
Extract from Resilient annual report for the year ended 30 June 2017
37
Appendix D
Report dates Dec-17 Nov-17 Oct-17 Sep-17 Aug-17 Jul-17 Jun-17 May-17 Apr-17 Mar-17 Feb-17 Jan-17 Dec-16 Nov-16 Oct-16
Start Date 2017/12/29 2017/11/24 2017/10/27 2017/09/29 2017/08/25 2017/07/28 2017/06/30 2017/05/26 2017/04/28 2017/03/31 2017/02/24 2017/01/27 2016/12/30 2016/11/25 2016/10/28
End date 2017/11/25 2017/10/28 2017/09/30 2017/08/26 2017/07/29 2017/07/01 2017/05/27 2017/04/29 2017/04/01 2017/02/25 2017/01/28 2016/12/31 2016/11/26 2016/10/29 2016/10/01
38
Appendix E
GRP - Category 1 Entities / Individuals

CAPITAL PROPFUND (PTY) LTD
DIVERSIFIED PROPERTIES 2 (PTY) LTD
FORTRESS INCOME 10 (PTY) LTD
FORTRESS INCOME 10 (PTY) LTD NO 3 P
FORTRESS INCOME 11 (PTY) LTD ACC NO
FORTRESS INCOME 2 (PTY) LTD ACC NO
FORTRESS INCOME 2 PTY LTD
FORTRESS INCOME 2(PTY)LTD (PLEDGE)
FORTRESS INCOME 3(PTY)LTD
HOLLYROOD INVESTMENTS (PTY) LTD
HOLLYROOD INVESTMENTS (PTY) LTD ACC
K2017408359 SOUTH AFRICA (PTY) LTD
LODESTONE INVESTMENTS (PTY) LTD
NORMA JEAN SQUARE PROPERTY INVESTME
RESILIENT 3 (PTY) LTD
RESILIENT 4 (PTY) LTD
RESILIENT PROP (PTY) LTD
RESILIENT PROP (PTY) LTD NO.2 ACC
RESILIENT PROPERTIES (PTY) LTD
FFB - Category 1 Entities / Individuals
BLUE DOT PROPERTIES 456 (PTY) LTD
BN1 - (CSDP) SIYAKHA EDUCATION TRUS
BN1 - (CSDP)SIYAKHA EDUCATION TRUST
DUSTY GOLD INVE 4(PTY) LTD (ACC NO.
HOLLYROOD INV (PTY) LTD #2 (BEAR SA
HOLLYROOD INVESTMENTS (PTY) LTD
HOLLYROOD INVESTMENTS (PTY) LTD (CE
HOLLYROOD INVESTMENTS (PTY) LTD (NO
HOLLYROOD INVESTMENTS (PTY) LTD ACC
RESILIENT PROP (PTY) LTD NO.2 ACC
RESILIENT PROPERTIES (PTY) LIMITED
RESILIENT PROPERTIES (PTY) LTD
RESILIENT PROPERTIES (PTY) LTD PLED
RESILIENT PROPERTIES PTY LTD
SIYAKHA EDUCATION TRUST
SIYAKHA EDUCATION TRUST (CARRY)
SIYAKHA EDUCATION TRUST(NO 3 ACC)
THE SIYAKHA 2 EDUCATION TRUST
39
GRP - Category 2 Entities/Individuals
3PM INVESTMENTS (PTY) LTD LUVON INVESTMENTS (PTY)
ALLISTAR FREDERICKS DEVELOPMENT HOC MACDONALD BRUCE HECTOR LEWIS
ANTEDILUVIAN INVESTMENTS #2 MAJIJA ACC 3 SIPHO VUSO
ANTEDILUVIAN INVESTMENTS #4 MARXEN INVESTMENTS CC
ASPIRE WEALTH INVESTMENTS (PTY) LTD MAXTRADE SEVEN (PTY) LTD ACC 2
BBHTSIA SNLM UNI FD/SANLAM AFRICAN FRONTIER MARKET MAY PAUL SIMON
BIZ AFRIKA (PTY) LTD #6 MC NAMARA LEON JAMES
BLACK GINGER 209 (PTY) LTD MMI>FEO: PP024027110
BOABAB CONSULTING CC MMI>FEO: PP024027127
BOABAB CONSULTING CC (CARRY) MMI>FEO: PP024027133
BORNMAN BAREND HENDRIK MMI>FEO: PP024027216
BORNMAN CAROLINA ELIZABETH GERTRUIDA MMI>FEO: VAN WYK SA
BRANCO E SILVA LUIS MANUEL GOMES MOBE INVESTMENTS (PTY) LTD
BROWNDESK PROPERTY INVESTMENTS PTY MOLYNEUX MICHAEL
CHADIK INVESTMENTS (PTY) LTD MOTRADE 145 (PTY) LTD
CHAMBERS MARGOT DOREEN MP9 ASSET MANAGEMENT CC
COPPER LAKE INVESTMENTS 26 CC MULLER GLENTON JAMES
CO-PROPS 139 (PTY) LTD NAD PROPERTY INCOME FUND (PTY)LTD N
DANCOR CAPITAL (PTY) LTD NAD PROPERTY INCOME FUND (PTY)LTD(P
DANCOR PROPERTIES (PTY) LTD NETH350
DE BEER ACC 3 ROSS PETER NEU-NER (A/S) RAN
DE BEER CRAIG MATTHEW NUBIE INVESTMENT PTY LTD
DE BEER ROSS PETER OPTIMPROP 3 (PTY) LTD
DELSA INVESTMENTS (PTY)LTD PANOPTICON INVESTMENTS (PTY) LTD AC
DIVERSIFIED PROPERTIES 2 (PTY) LTD PRANEEL INVESTMENTS (PTY) LIMITED
DUSTY GOLD INVESTMENTS 4(PTY) LTD RED SPICED INVESTMENTS PTY LTD
DYER INVESTMENTS REDSPICED INVESTMENTS (PTY) LTD
DYER TRUST REYA GOLA INVESTMENT (PTY) LTD
EAGLELET INVESTMENTS (PTY) LTD - NO RUMAE HOLDINGS(NO.4A/C)
ELDERBERRY INVEST 115(PTY)LTD(PLEDG SAFE SAIL INVESTMENTS (PTY) LTD
EMERGING AFRICAN PROPERTY HOLDINGS SAKHISIZWE INVESTMENT HOLDING (PTY)
GALGARY PROPERTY INVESTMENTS CC SAKHISIZWE INVESTMENTS HLDGS (PTY)
GILMOUR CD & L (CARRY) SBSA ITF SESFIKILE BCI GLOBAL PROPERTY FUND
GRAKEN SALES & HIRE PTY LTD SCB MU A/C HERISSON FUND SPC FOR & OBO HERISSON AFRICA EQ SEGREGA
GRATZ MICHELE RENEE SENTOLA LIMITED
HAFNER DANIEL ERWIN SILVER BLADE INVESTMENTS 40 (PTY) L
HATTINGH ANNE LOUISE SISHUBA THANDUXOLO SELBY
HIGHLANDS TRUST SKYWALKER TRUST
HULK INVESTMENTS SMITH DAVID MICHAEL
JEAN AVENUE PROPERTY INVESTMENTS STARSHIP PROPS TWO
JEAN AVENUE PROPERTY INVESTMENTS (P SULEMAN IMRAAN EBRAHIM
K2011110358 (PTY) LTD TAMBURA PROPERTY INVESTMENTS (PTY)
K2012040151 TAMBURA PROPERTY INVESTMENTS PTY LT
K2012040668 THE NANO TRUST (NO2)
K2012040925 THE NANO TRUST(A/C NO.4)
K2012040929 THE NATVARLAL BHAILAL PATEL FAMILY
K2014070733 (PTY) LTD THOMAS STREET INVESTMENTS CC
K2014163511 (PTY) LTD ACC NO2 TWENTY EIGHT TWELVE INVEST PROPERTI
K2014252338 (PTY) LTD ACC NO 2 TWENTY EIGHT TWELVE INVESTMENT PROP
K2017408359 SA (PTY) LTD (2)(PLEDGE VAN AARDT CHANE
KAPLAN BELINDA LEE VAN NIEKERK EUNICE
KAPLAN MARK JONATHAN VENBRIDGE INVESTMENTS (PTY) LTD
KAPLAN-A/C 3PM INVESTMENTS PTY LTD RAOUL MAURICE VENBRIDGE INVESTMENTS PTY LTD
KIBERA INVESTMENTS(PTY)LTD(A/C NO.2 WILD BREAK 250 (PTY) LTD ACC 2
KOHLER(A/C NO.2) KONRAD BRIAN ZOSO INVESTMENTS (PTY) LTD
LIMIT 26 INVESTMENTS ONE PTY LTD NO
40
FFB - Category 2 Entities/Individuals
ANTEDILUVIAN INVESTMENTS MWS INVESTMENT TRUST 2(PLEDGE)
ANTEDILUVIAN INVESTMENTS #2 MWS INVESTMENT TRUST NO 1
BLUE DOT PROP 456(PTY)LTD NORTON KATHLEEN
BN1 - (WIP)HART RICHARD STEWART HAMILTON NOUSSIS INVESTMENTS PTY LTD
BN1 - *DYER INVESTMENTS (PTY) LTD NUMIGRAPH (PTY) LTD
BOABAB CONSULTING CC OPTIMPROP 3 (PTY) LTD
BOABAB CONSULTING CC (CARRY) OPTIMPROP 3 (PTY) LTD ACC NO.4
BOABAB CONSULTING CC(A/C NO.3) (PLE OPTIMPROPS 3(PTY) LTD NO2
BOSHARD CRAIG PETER PICK (NO.4) INGE FRANCES
BOTHA (A/C NO.2) MARIA TEREZA PEREIRA PICK ACC NO INGE FRANCES
BROWN (PLEDGE) STEVEN RABBOLINI (PLEDGE)(NO.4) JOHN ALEXANDER
BROWNDESK PROPERTY INVESTMENTS PTY RABBOLINI (WIP) JOHN ALEXANDER
CHATAPROP HOLDINGS 50 (CEDED) RCG TRADE & FINANCE (PTY) LTD
CHATAPROP HOLDINGS 50 (PTY) LTD RED SPICED INVESTMENTS PTY LTD
DUSTY GOLD INVE 4(PTY) LTD NO3 PLED REDSPICED INVESTMENTS (PTY) LTD
DUSTY GOLD INVESTMENTS 4(PTY) LTD REDSPICED INVESTMENTS (PTY) LTD ACC
DUSTY GOLD NO.4 RUMAE HOLDINGS (NO.2)
DYER INVESTMENTS RUMAE HOLDINGS (NO.3) (PLEDGE)
DYJAJU TRUST RUMAE HOLDINGS (PTY) LTD (PLEDGE)
DYJAJU TRUST(A/C NO.4)(PLEDGE) RUMAE HOLDINGS (PTY) LTD ACC NO 7
EAGLELET INVESTMENTS (PTY) LTD - NO SAKHISIZWE INVESTMENTS HLDGS (PTY)
EAGLELET INVESTMENTS (PTY) LTD (PLE SENTOLA LIMITED
EAGLELET INVESTMENTS (PTY) LTD NO 2 SHY WAY TRADING (PTY) LTD
EAGLELET INVESTMENTS (PTY)LTD NO.3P SL COLLA - NEDCOR SECURITIES
EAGLELET TRUST (A/C NO.2) SPEAR EDGE INVESTMENT PTY LTD
EAGLELET TRUST (PLEDGE) SPEAR EDGE INVESTMENTS (PTY) LTD AC
EAGLELET TRUST(PLEDGE)(NO.3) STAR TRUST (A/C NO.2)(PLEDGE)
ELDERBERRY INVESTMENTS 115(PTY)LTD STARLING TRUST NO 3(PLEDGE)
GENIA CAPITAL (PTY) LTD THE GILLESPIE FAMILY TRUST ACC 2
HART (PLEDGE)(NO.4) RICHARD STEWART HAMILTON THE NANO TRUST (NO 2 ACC)
JEAN AVENUE PROPERTY INVESTMENTS THE NANO TRUST (NO2)
JEAN AVENUE PROPERTY INVESTMENTS (P THE NANO TRUST (PLEDGE)
JOANNIDES (A/C NO.3) ANTONIS THE NANO TRUST(A/C NO.4)
K2012040151 THE NANO TRUST(A/C NO.5)(PLEDGE)
K2012040668 THE RUMAE TRUST (PLEDGE)
K2012040925 THE RUMAE TRUST(A/C NO.5)
K2012040929 THE STAR TRUST
K2014070733 (PTY) LTD TWENTY EIGHT TWELVE INV PROPERTIES
KIBERA INVESTMENTS (PTY) LTD (PLEDG TWENTY EIGHT TWELVE INVEST PROPERTI
KIBERA INVESTMENTS (PTY) LTD NO 2 TWENTY EIGHT TWELVE INVESTMENT PROP
KIBERA INVESTMENTS(PTY)LTD(A/C NO.2 VAN BILJON (PLEDGE) JACOBUS FREDERICK
KIBERA INVESTMENTS(PTY)LTD(ACC.4)(P VISSER FAMILY INVE(PTY)LTD-ACC.3 PL
KOHLER(A/C NO.2) KONRAD BRIAN WALMER ESTATE TRUST NO 2 A/C
KOHLER(A/C NO.3)(PLEDGE) KONRAD BRIAN WANIA ACC NO 3 PLEDGE FAREED ISMAIL
LIMIT 26 INVESTMENTS ONE (PTY)LTD P WILD BREAK 250 (PTY) LTD ACC 2
LIMIT 26 INVESTMENTS ONE PTY LTD WILD BREAK 250 (PTY) LTD(NO.4)(PLED
LIMIT 26 INVESTMENTS ONE PTY LTD NO WILDBREAK 250 PTY LTD
MAXTRADE SEVEN (PTY) LTD ACC 1 WILLIAMS BEVAN EDWARD
MOTRADE 145 (PTY) LTD ZIDEL (A/C NO.4) JEFFREY NATHAN
41
Appendix F – results for Greenbay
GRP - absolute volum e Dec-17 Nov-17 Oct-17 Sep-17 Aug-17 Jul-17 Jun-17 May-17 Apr-17 Mar-17 Feb-17 Jan-17 Dec-16 Nov-16 Oct-16
Selling Category 1 & 2 -2,921,183,234 -427,537,186 -33,440,671 -89,036,724 -20,567,027 -34,477,020 -65,957,289 -88,953,209 -488,224,191 -37,735,446 -29,421,980 -641,370,499 -77,997,943 -34,203,216 -9,697,573
Selling Category 1 -2,871,677,488 -404,792,017 -968,542,868 - - - - -42,023,814 -533,335,334 -77,417,219 - -599,999,138 -22,047,465 - -
Buying Category 1 & 2 3,050,598,384 411,481,845 987,003,613 76,000,247 1,086,570,916 17,408,004 380,155,497 44,582,245 545,033,809 256,845,859 16,589,099 645,137,833 133,991,396 23,141,853 589,178,014
Buying Category 1 2,453,979,157 404,792,017 - - 800,000,000 - 128,020,332 42,023,814 545,587,296 331,125,828 - 600,000,000 53,063,697 - 575,813,236
GRP - TBO and BBG volum es Dec-17 Nov-17 Oct-17 Sep-17 Aug-17 Jul-17 Jun-17 May-17 Apr-17 Mar-17 Feb-17 Jan-17 Dec-16 Nov-16 Oct-16
TimBukOne Volume 3,740,893,573 639,147,586 1,266,819,166 382,738,086 2,351,766,945 217,309,416 1,109,589,364 264,603,455 680,632,551 1,493,719,335 71,279,125 688,576,012 243,561,544 78,638,615 703,645,741
Bloomberg Volume 2,147,719,183 192,859,361 1,235,669,246 355,442,657 284,526,355 196,707,749 334,665,403 229,941,739 57,853,398 61,969,709 190,426,506 150,751,551 148,085,921 69,701,913 89,681,188
Bloomberg Volume as % of TBO Volume 57.41% 30.17% 97.54% 92.87% 12.10% 90.52% 30.16% 86.90% 8.50% 4.15% 267.16% 21.89% 60.80% 88.64% 12.75%
GRP Dec-17 Nov-17 Oct-17 Sep-17 Aug-17 Jul-17 Jun-17 May-17 Apr-17 Mar-17 Feb-17 Jan-17 Dec-16 Nov-16 Oct-16
Buying as % of TBO Category 1 65.60% 63.33% 0.00% 0.00% 34.02% 0.00% 11.54% 15.88% 80.16% 22.17% 0.00% 87.14% 21.79% 0.00% 81.83%
Buying as % of BBG Category 1 114.26% 209.89% 0.00% 0.00% 281.17% 0.00% 38.25% 18.28% 943.05% 534.33% 0.00% 398.01% 35.83% 0.00% 642.07%
Buying as % of TBO Category 1&2 81.55% 64.38% 77.91% 19.86% 46.20% 8.01% 34.26% 16.85% 80.08% 17.20% 23.27% 93.69% 55.01% 29.43% 83.73%
Buying as % of BBG Category 1&2 142.04% 213.36% 79.88% 21.38% 381.89% 8.85% 113.59% 19.39% 942.09% 414.47% 8.71% 427.95% 90.48% 33.20% 656.97%
Selling as % of TBO Category 1 -76.76% -63.33% -76.45% 0.00% 0.00% 0.00% 0.00% -15.88% -78.36% -5.18% 0.00% -87.14% -9.05% 0.00% 0.00%
Selling as % of BBG Category 1 -133.71% -209.89% -78.38% 0.00% 0.00% 0.00% 0.00% -18.28% -921.87% -124.93% 0.00% -398.01% -14.89% 0.00% 0.00%
Selling as % of TBO Category 1 & 2 -78.09% -66.89% -2.64% -23.26% -0.87% -15.87% -5.94% -33.62% -71.73% -2.53% -41.28% -93.14% -32.02% -43.49% -1.38%
Selling as % of BBG Category 1 & 2 -136.01% -221.68% -2.71% -25.05% -7.23% -17.53% -19.71% -38.69% -843.90% -60.89% -15.45% -425.45% -52.67% -49.07% -10.81%
42
Appendix F – results for Fortress B-shares
FFB - absolute volum e DEC 2017 NOV 2017 OCT 2017 SEPT 2017 AUG 2017 Jul 2017 Jun 2017 May 2017 April 2017 March 2017 Feb 2017 Jan 2017 Dec 2016 Nov 2016 Oct 2016
Selling Category 1 & 2 -23,409,394 -2,500,710 -6,343,118 -25,463,124 -7,693,293 -8,454,064 -21,842,919 -20,062,344 -49,999,928 -7,735,920 -6,812,826 -20,718,926 -3,658,122 -2,181,535 -6,736,018
Selling Category 1 -16,929,244 - - -11,413,175 - - -7,310,928 -8,993,608 -42,740,793 -2,864,208 -53,000 -13,470,931 - - -5,075,000
Buying Category 1 & 2 24,328,030 - 1,000,000 22,439,562 706,468 1,945,009 2,550,191 16,240,885 43,200,750 5,124,112 26,376,554 5,049,324 18,656,400 32,436,701 1,497,888
Buying Category 1 23,500,000 - - - - - - 10,924,710 41,350,000 - 21,570,814 2,993,088 11,620,497 9,504,909 207,188
FFB - TBO and BBG volum es DEC 2017 NOV 2017 OCT 2017 SEPT 2017 AUG 2017 Jul 2017 Jun 2017 May 2017 April 2017 March 2017 Feb 2017 Jan 2017 Dec 2016 Nov 2016 Oct 2016
TimBukOne Volume 62,293,139 37,901,636 33,926,397 63,479,252 29,465,569 24,484,564 57,476,556 40,479,441 63,107,655 33,456,013 42,527,372 40,756,380 48,415,980 61,863,581 39,836,572
Bloomberg Volume 50,985,969 31,118,363 30,885,642 49,880,482 34,848,106 43,446,958 63,364,124 27,093,383 27,485,326 34,798,653 24,674,999 31,239,307 46,682,748 32,821,618 32,571,174
Bloomberg Volume as % of TBO Volume 81.85% 82.10% 91.04% 78.58% 118.27% 177.45% 110.24% 66.93% 43.55% 104.01% 58.02% 76.65% 96.42% 53.05% 81.76%
FFB DEC 2017 NOV 2017 OCT 2017 SEPT 2017 AUG 2017 Jul 2017 Jun 2017 May 2017 April 2017 March 2017 Feb 2017 Jan 2017 Dec 2016 Nov 2016 Oct 2016
Buying as % of TBO Category 1 37.72% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 26.99% 65.52% 0.00% 50.72% 7.34% 24.00% 15.36% 0.52%
Buying as % of BBG Category 1 46.09% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 40.32% 150.44% 0.00% 87.42% 9.58% 35.68% 28.96% 0.64%
Buying as % of TBO Category 1&2 39.05% 0.00% 2.95% 35.35% 2.40% 7.94% 4.44% 40.12% 68.46% 15.32% 62.02% 12.39% 38.53% 52.43% 3.76%
Buying as % of BBG Category 1&2 47.72% 0.00% 3.24% 44.99% 2.03% 4.48% 4.02% 59.94% 157.18% 14.73% 106.90% 16.16% 57.28% 98.83% 4.60%
Selling as % of TBO Category 1 -27.18% 0.00% 0.00% -17.98% 0.00% 0.00% -12.72% -22.22% -67.73% -8.56% -0.12% -33.05% 0.00% 0.00% -12.74%
Selling as % of BBG Category 1 -33.20% 0.00% 0.00% -22.88% 0.00% 0.00% -11.54% -33.19% -155.50% -8.23% -0.21% -43.12% 0.00% 0.00% -15.58%
Selling as % of TBO Category 1 & 2 -37.58% -6.60% -18.70% -40.11% -26.11% -34.53% -38.00% -49.56% -79.23% -23.12% -16.02% -50.84% -7.56% -3.53% -16.91%
Selling as % of BBG Category 1 & 2 -45.91% -8.04% -20.54% -51.05% -22.08% -19.46% -34.47% -74.05% -181.91% -22.23% -27.61% -66.32% -11.23% -6.65% -20.68%
43
Appendix G
Extract from share register for the Siyakha Trusts from TimBukOne:
44
Appendix H
45
46
47
48
49
50

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What complex group structure makes it difficult to determine the true premium valuation?

What complex group structure makes it difficult to determine the true premium valuation?

What portion of distributable income consists of unusual dividends and interest payments?

What portion of distributable income consists of unusual dividends and interest payments?

Background and executive summary

• As described by George Soros:

• Turning to the BEE transactions, we believe the lack of consolidation of these

In summary, we therefore believe that the exceptionally high valuation of the

Group net asset value

Resilient Fortress NepiRockcastle Greenbay

In addition to compiling financial statements which comply with the requirements of

FFB NRP RES GRP

Updated for changes in listed prices

Stripping out prem ium to NAV in group com panies

Group distributable income

The following assumptions were necessary in this calculation (a detailed reconciliation

1. As NepiRockcastle formed from the merger of Nepi and Rockcastle subsequent to

Greenbay NepiRockcastle Fortress Resilient

Operational - property 4% 82% 56% 56%

Greenbay NepiRockcastle Fortress Resilient

Operational (property, finance costs) -15% 80% 42% 39%

• Fortress and Resilient are highly dependent on related party investments

• Fortress and Resilient earn a substantial amount of interest on loans to employees

Greenbay NepiRockcastle Fortress Resilient

As discussed earlier in this report, from information disclosed in the financial

We consider the requirements of IFRS 10 and the arguments of management with

• Power over the investee

➢ Clause 4.5 of both trust deeds determine that:

Therefore, if Resilient is at any time dissatisfied with the “unilateral”

Siyakha Education Trust 1

• Tembakazi (Tembi) Iris Chagonda, is the chairperson of the Resilient board

We obtained this information from her Linked-In profile on 25 January 2018

• Jacques Johannes van Wyk is a former director of Lodestone per Windeed

Having so recently been a senior executive at one of the subsidiaries of

Siyakha Education Trust 2

• Ndhlabole Shongwe is a former director of Lodestone per Windeed until

Having so recently been a senior executive at one of the subsidiaries of

Having so recently been a senior company officer at one of the subsidiaries

These trustees are clearly related (and not independent) of Resilient.

In this respect, we note the following in IFRS 10, par B56:

Consequently, we dismiss the argument of management that they do not

This requirement in respect of control is therefore met.

Link between power and returns

Trading in group shares

1. We drew the shareholder registers of two group companies to identify trading in

2. We investigated the potential related parties we identified further to determine (i)

Sources of the shareholder registers

Using information available from Bloomberg and TimBukOne, we ran numerous

These reports provided us the following information

We consider transactions / holdings in this category to be clearly related party

This category reflects transactions / holdings of entities or individuals that held or

This category reflects transactions / holdings of entities or individuals that were

GRP Dec-17 Nov-17 Oct-17 Aug-17 Apr-17 Mar-17 Jan-17 Oct-16

GRP Dec-17 Nov-17 Oct-17 Aug-17 Apr-17 Mar-17 Jan-17 Oct-16

GRP Dec-17 Nov-17 Oct-17 Aug-17 Apr-17 Mar-17 Jan-17 Oct-16

GRP Dec-17 Nov-17 Oct-17 Aug-17 Apr-17 Mar-17 Jan-17 Oct-16

The unusually high proportion of volumes ascribed to group companies in these

Investigating potential related party trades