Annual financial statement
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Courtyard Hotel Gqeberha Annual Financial Statements for the year ended 30 June 2026
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Revenue R2.2bn up 10% 2025: R2.0bn Adjusted headline earnings per share (diluted) 41.6c up 20% 2025: 34.6c Group occupancy 58% up 2% points 2025: 56% Earnings per share (diluted) 38.7c up 1% 2025: 38.3c Average Room Rate increase 7% no change 2025: 7% Headline earnings per share (diluted) 34.4c up 4% 2025: 33.1c Adjusted EBITDAR R675m up 15% 2025: R589m Cash generated by operations R657m up 20% 2025: R549m Profit for the year R203m down 5% 2025: R213m Share Buy-Back R153m 6.4% of total shares in issue Dividends declared per share Final: 11c 2025: 9c up 22% Interim: 8c 2025: 6c up 33% Highlights
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City Lodge Hotels has delivered strong revenue growth of 10% from improved occupancies and achieved room rates, and returned value to shareholders by acquiring and cancelling 6.4% of shares in issue. The group capitalised on the strong economic trends in South Africa in the first half of the financial year and achieved the highest occupancy for nearly a decade. In response to a tougher economic operating environment in the second half of the financial year, the group has responded pro-actively through enhanced dynamic rate management and cost control initiatives. City Lodge Hotels has delivered a good performance. The first half of the year (“H1FY26”) achieved robust occupancy from domestic leisure and business travel, which resulted from improved consumer and investor confidence in South Africa. A stable Government of National Unity marked its first anniversary in June 2025 and reassured the country of political stability and prospects of economic growth. Performance was further aided by additional business activity in and around the B20 and G20 events. The impact of the geopolitical conflict in the Middle East was particularly evident in the last quarter of the financial year as higher fuel costs, inflation and interest rates, curbed discretionary spending, making domestic travel more expensive. This led to a softening in occupancy in the last quarter, albeit slightly ahead of the prior year. Weekend stays and leisure breaks were particularly subdued over this period. Whilst navigating these headwinds, the group managed to preserve average room rate (ARR) gains and dynamic pricing helped deliver a 7% increase in room rates for the year compared to the prior year. International travel has been insulated from the domestic pressures as South Africa continues to be an affordable, sought-after holiday destination. The Western Cape, with five of our hotels having been recently refurbished, benefitted from international travel and achieved a 21% increase in revenue. KwaZulu Natal, Gauteng and Eastern Cape also delivered good growth. Within SADC, Namibia had stable revenue growth with good occupancy in H1FY26, but softened in the second half. Mozambique’s performance beat expectations and delivered revenue growth in excess of 20%. Botswana’s performance continues to be a challenge as the economy battles to recover from the diamond-market downturn. FINANCIAL REVIEW After a strong start to the year in which we achieved 62% occupancy in H1FY26, the geopolitical tensions and fuel price increases in the second half resulted in an overall 58% (2025: 56%) occupancy for the year. The group effectively managed the impact of the weaker second-half occupancy through disciplined room rate management. Average room rates increased by 4% in H1FY26, and accelerated to near double digit growth in H2FY26, resulting in a full-year increase of 7%, in line with the prior year (2025: 7%). Total revenue for the year ended 30 June 2026 increased by 10% to R2.2 billion (2025: R2.0 billion) with rooms revenue increasing by 9% to R1.74 billion (2025: R1.59 billion). The food and beverage (F&B) offer continues to broaden, as we have added bespoke identity restaurants to three of our hotels. F&B revenue grew by 14% to R449.9 million (2025: R393.2 million), and now accounts for 20.4% (2025: 19.7%) of total revenue. Cost containment remains a key area of focus, as we try to mitigate the above inflation increases in utility costs, and the failing municipal services, which often result in additional contingent supply costs. Inflation spiked in the second half of the year following the fuel price increases caused by the Middle East conflict. Total operating costs increased by 9%, but operating costs per room sold only increased by 6%. The combination of strong revenue growth and well controlled costs, delivered an Adjusted EBITDAR (which excludes unrealised foreign exchange (losses)/gains and exceptional items) growth of 15%, and an Adjusted EBITDAR margin increase of 1.1% points to 30.6% (2025: 29.5%). A 7% increase in salaries and wages to R631.9 million (2025: R588.5 million) was largely aligned to the annual inflationary increase of 5.5%, but included additional staff required to support the increased occupancy and F&B volumes. Property costs have increased by only 5.3% to R 197.0 million (2025: R187.0 million). The group continues to prioritise renewable energy from solar generated power at 40 hotels and borehole and filtration water supply at 14 hotels to mitigate the average 13% municipal utility price increases over the last year. Rooms related costs and F&B costs are mainly variable in nature. The increased occupancies grew room related costs by 11% to R226.1 million (2025: R204.3 million). This was partly due to the increase in commissions payable for additional corporate and government segment sales. F&B costs increased by only 13% to R170.2 million (2025: R150.7 million), compared to F&B revenue growth of 14%. These efficiencies improved F&B gross profit margins to 62.2% from 61.7% in the prior year. The strengthening of the South African Rand, resulted in an unrealised loss on foreign exchange of R28.7 million (2025: R7.9 million) mainly in Mozambique on the intercompany Rand denominated loan. Depreciation for the year of R201.2 million (2025: R180.3 million) includes depreciation of capitalised leases. The 12% increase relates to additional depreciation on newly refurbished hotels. Lease related expenses (i.e. depreciation on right-of-use assets of R95.3 million and interest expense on leases of R126.6 million) exceeds cash lease payments of R184.6 million by R37.3 million. Taxation amounting to R106.9 million (2025: R98.4 million) increased by 9%. Taxation includes a R7.7 million impairment of the deferred tax asset in Botswana due to its subdued performance and R1.8 million in Namibia due to changes in tax legislation. Profit after tax of R203.0 million (2025: R213.0 million) decreased by 5%, and diluted earnings per share increased by 1% to 38.7 cents (2025: 38.3 cents). City Lodge Hotels Annual Financial Statements 2026 1 Commentary
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City Lodge Hotels Limited Incorporated in the Republic of South Africa Registration number: 1986/002864/06 Share code: CLH ISIN: ZAE000117792 Diluted headline earnings per share increased by 3.9% to 34.4 cents (2025: 33.1 cents), whilst adjusted diluted headline earnings per share, which excludes unrealised losses on foreign exchange and exceptional items (the impairment of the deferred tax assets) has increased by 20% to 41.6 cents (2025: 34.6 cents). STRATEGIC UPDATE The group continues to optimise its strong balance sheet position, and robust cash generated by operations, of R656.9 million (2025: R548.6 million), by reinvesting in its hotels. In addition, we acquired and cancelled 38 million shares in issue (6.4% of total shares in issue at the beginning of the financial year) at an average price of R4.02 per share, for a total consideration of R152.8 million. Capital has been allocated to strengthen the hotel portfolio and align the product with our new generation brand standards delivering more value to our guests. These include the modernisation of three hotels (City Lodge Hotel (CL) Johannesburg International Airport, Courtyard Hotel (CY) Gqeberha and CY Sandton) and three bespoke restaurant refurbishments (CL V&A Waterfront, CL Umhlanga Ridge and CY Gqeberha). Two further hotel refurbishments are in-progress at CL Morningside, Sandton and Road Lodge (RL) Gqeberha. The group spent R234.0 million (2025: R260.5 million) on capital expenditure during the year. The group also optimised the performance of the portfolio through the sale of CY Arcadia (closed in December 2025), and by not renewing the lease for CL Newtown (closed in March 2026). Both hotels were loss making and had been impaired in previous years. OUTLOOK Disciplined refurbishment plans continue to be prioritised at targeted hotels to deliver optimal and sustained returns. The group intends to complete the current refurbishments at CL Morningside Sandton and RL Gqeberha in H1FY27, with a further four hotel refurbishments planned to commence during the year. These include CL Fourways, Town Lodge (TL) Roodepoort, TL Gqeberha and RL Johannesburg International Airport. The group is actively pursuing expansion opportunities, specifically in areas such as, Western Cape and KwaZulu- Natal. In addition, the construction of the 53 room expansion at CL Waterfall City is scheduled to commence in September 2026 and to be completed in June 2027. We are investing in innovative technologies which aim to improve the guest experience, create operational efficiencies and deliver improved productivity. Environmental sustainability and resilience solutions continues to be a priority to mitigate the water and electricity supply challenges and high annual cost increases. Phase 3 of our solar installation roll-out and the addition of more water resilience and sustainability solutions have been earmarked for financial year 2027. The South African economic outlook is marred by the global uncertainty caused by the Middle East conflict, the resulting oil shortages and its impact on the price of fuel. There is continued risk of higher inflation and interest rates, putting upward pressure on food prices, consumables and transport costs, leading to constraints on disposable income. However, when stability returns, domestic policies have displayed good prospects for economic growth aided by improved investor and consumer confidence. In response to these headwinds, the group is well-positioned to manage longer term disruptions. We are vigilant and responsive to the changes in demand and price pressures. Pressure from low weekend demand is balanced by good midweek demand and promotions, where appropriate. Group occupancies for July and August 2026 were 59% and 62%, respectively (July and August 2025: 60% and 59%, respectively). Month to date occupancy, up to 9 September 2026, is up by four percentage points to 65% (2025: 61%). The ARR improvements remain consistent with the second half of the financial year, with year to date up to 9 September 2026 achieving an increase of 10% and total revenue growth of 10.4% compared to the same period in the prior year. DECLARATION OF DIVIDEND The board has approved and declared a final dividend (number 70) of 11.00 cents per ordinary share (gross) (2025: 9.00 cents) in respect of the year ended 30 June 2026. The dividend will be subject to Dividend Tax. In accordance with paragraph 7.23 of the JSE Listings Requirements the following additional information is disclosed: • the dividend has been declared out of distributable reserves; • the local Dividend Tax rate is 20% (twenty per centum); • the gross local dividend amount is 11.00 cents per ordinary share for shareholders exempt from the Dividend Tax; • the net local dividend amount is 8.80 cents per ordinary share for shareholders liable to pay the Dividend Tax; • the company currently has 549 039 187 ordinary shares in issue; and • the company’s income tax reference number is 9041001711. Shareholders are advised of the following dates: • Last date to trade cum dividend Tuesday, 29 September 2026 • Shares commence trading ex dividend Wednesday, 30 September 2026 • Record date Friday, 2 October 2026 • Payment of dividend Monday, 5 October 2026 Share certificates may not be dematerialised or rematerialised between Wednesday, 30 September 2026 and Friday, 2 October 2026, both days inclusive. For and on behalf of the board Bulelani Ngcuka Andrew Widegger Chairman Chief executive officer 10 September 2026 2 Commentary continued Directors: B T Ngcuka (Chairman), A C Widegger (Chief executive officer)*, K Classen, S J Enderle#, G G Huysamer, F W J Kilbourn (Deputy chairman), M S P Marutlulle, , M G Manthata, D Nathoo*, L G Siddo* ( *Executive # South African and Swiss) Transfer secretaries: Computershare Investor Services Proprietary Limited, Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196 Company secretary: M C van Heerden Sponsor: Nedbank Corporate and Investment Banking, a division of Nedbank Limited.
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CONTENTS 4 Directors’ responsibility statement 4 Certificate by the company secretary 5 Chief executive officer and chief financial officer’s responsibility statement 6 Report of the audit committee 7 Directors’ report 9 Independent auditor’s report 14 Statements of financial position 15 Statements of profit or loss and other comprehensive income 16 Statements of cash flows 17 Statements of changes in equity 19 Summary of material accounting policies 26 Notes to the financial statements 61 Shareholders' analysis City Lodge Hotels Annual Financial Statements 2026 3 These annual financial statements were published on 10 September 2026, were audited in compliance with the requirements of the Companies Act, 71 of 2008, and prepared under the supervision of the Chief financial officer, Dhanisha Nathoo CA(SA).
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The company’s directors are required by the Companies Act of South Africa, Act 71 of 2008, as amended (Companies Act) to maintain adequate accounting records and to prepare financial statements for each financial year that fairly present the state of affairs of the group and company at the end of the financial year and of the results of operations and cash flows for the year. In preparing the accompanying consolidated and separate annual financial statements, IFRS® Accounting Standards and its interpretations adopted by the International Accounting Standards Board, the Listings Requirements of JSE Limited, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council and the requirements of the Companies Act, have been followed, suitable accounting policies have been used and applied consistently, and reasonable and prudent judgements and estimates have been made. The consolidated and separate annual financial statements incorporate responsible disclosure. The directors accept responsibility for the preparation, integrity and fair presentation of the consolidated and separate annual financial statements. The directors are responsible for the establishment and adequate functioning of a system of governance, risk management and internal controls in the company. The directors are also responsible for the controls over, and the security of the company's website and where applicable, for the establishing and controlling the process for electronically distributing annual reports and other financial information to the company's shareholders and the Companies and Intellectual Property Commission. Consequently, the directors have implemented a broad range of processes and procedures designed to provide control by the directors over the company’s operations. The directors have reviewed the group and company budgets and cash flow forecasts for the year to 30 June 2027. On the basis of this review, and in light of the current financial position, improved operational performance, liquidity and existing borrowing facilities, the directors are satisfied that the group and company are going concerns and they have accordingly adopted the going-concern basis in preparing the consolidated and separate financial statements. The group’s independent auditor, PricewaterhouseCoopers Inc., have audited the consolidated and separate financial statements and their unqualified report appears on pages 9 to 13. PricewaterhouseCoopers Inc. was given unrestricted access to all financial records and related data, including minutes of all meetings of shareholders, the board of directors of City Lodge Hotels Limited (the board) and committees of the board. The directors believe that all representations made to the independent auditor during their audit are valid and appropriate. The board recognises and acknowledges its responsibility for the group’s systems of internal financial control. The group adheres to a code of conduct, which covers ethical behaviour and compliance with legislation. The control systems include written accounting and control policies and procedures, clearly defined lines of accountability and delegation of authority, and comprehensive financial reporting and analysis against approved budgets. The responsibility for operating these systems is delegated by the directors who confirm that they have reviewed the effectiveness thereof. The directors consider that the systems are appropriately designed to provide reasonable, but not absolute, assurance that assets are safeguarded against material loss or unauthorised use and that transactions are properly authorised and recorded. The effectiveness of the internal financial control systems is monitored through management reviews, comprehensive reviews and testing by the internal auditor and the independent auditor’s testing of appropriate aspects of the internal financial control systems during the course of their statutory examinations of the company and the underlying subsidiaries. APPROVAL OF CONSOLIDATED AND SEPARATE ANNUAL FINANCIAL STATEMENTS The consolidated and separate annual financial statements of City Lodge Hotels Limited, as set out on pages 3 to 64 were approved by the board of directors on 10 September 2026 and signed on its behalf by: Andrew Widegger Dhanisha Nathoo Chief executive officer Chief financial officer Certificate by the company secretary In terms of section 88(2)(e) of the Companies Act of 2008, as amended, I certify that, to the best of my knowledge and belief, the company has lodged with the Companies and Intellectual Property Commission, all such returns and notices required of a public company in terms of the Companies Act, No. 71 of 2008, as amended, in respect of the financial year ended 30 June 2026 and that all such returns are true, correct and up to date. Melanie van Heerden Company secretary 10 September 2026 4 Directors’ responsibility statement for the year ended 30 June 2026
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Each of the directors whose names are stated below hereby confirm that: (i) the annual financial statements set out on page s 3 to 64, fairly present in all material respects the financial position, financial performance and cash flows of City Lodge Hotels Limited in terms of IFRS® Accounting Standards; (ii) to the best of our knowledge and belief, no facts have been omitted or untrue statements made that would make the annual financial statements false or misleading; (iii) internal financial controls have been put in place to ensure that material information relating to City Lodge Hotels Limited and its consolidated subsidiaries have been provided to effectively prepare the financial statements of City Lodge Hotels Limited; (iv) the internal financial controls are adequate and effective and can be relied upon in compiling the annual financial statements, and we have fulfilled our role and function as executive directors with primary responsibility for implementation and execution of controls; (v) where we are not satisfied, we have disclosed to the audit committee and the auditors any deficiencies in design and operational effectiveness of the internal financial controls, and have taken steps to remedy the deficiencies; and (vi) we are not aware of any fraud involving directors. Andrew Widegger Dhanisha Nathoo Chief executive officer Chief financial officer City Lodge Hotels Annual Financial Statements 2026 5 Chief executive officer and chief financial officer’s responsibility statement for the year ended 30 June 2026
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Dear Stakeholders The audit committee plays a vital role ensuring the integrity of the group's financial controls and integrated reporting in identifying and managing financial risk. This report is provided by the audit committee in compliance with the Companies Act, and as recommended by King IVTM. COMPOSITION AND MEETINGS The committee comprises three independent non-executive directors. All appointed directors satisfied the requirements of section 94(4) of the Companies Act and King IVTM recommendations. As a collective and considering the size and circumstances of the group, the committee is adequately skilled, and all members possess the appropriate financial and related qualifications, skills and financial expertise and experience required to discharge their responsibilities. The committee met three times during the year, as per the committee's mandate and terms of reference. The group chief executive officer, chief financial officer and representatives from external audit and internal audit attend each meeting by invitation. The committee chairperson engages regularly with management on material matters and the external auditor and internal auditor have direct access to the committee. Meeting attendance Members Sept 2025 Feb 2026 May 2026 Mathukana Manthata (chairperson) 1 1 1 Karen Classen (appointed 20 November 2025) – 1 1 Deon Huysamer 1 1 1 Andrew Lapping (retired 20 November 2025) 1 – – By invitation Andrew Widegger (CEO)1 1 1 1 Dhanisha Nathoo (CFO)1 1 1 1 1 Executive director Gender and race diversity INTERNAL CONTROL The audit committee has considered and approved the group’s system of internal financial controls, based on the reports received from the external auditor, reports on hotel visits, risk reviews and internal financial control testing by the internal auditor, and confirms that no material breakdown of internal controls has taken place during the year. STATUTORY DUTIES The audit committee is satisfied that it considered, executed and discharged its responsibilities during the year in accordance with its mandate. The committee has considered the independence of the company’s external auditor, PricewaterhouseCoopers Inc., and is satisfied that, for the year under review, the external auditor is independent. The committee adopts a work plan annually, in advance, in order to manage the discharge of its responsibilities under the Companies Act, King IVTM, its own charter and the JSE Listings Requirements. The committee agreed to the engagement letter, terms, external audit plan and fees for the 2026 financial year. In accordance with the company’s non-audit services policy, the committee considered and pre-approved all non-audit services provided by the external auditor, ensuring that the independence of the external auditor was not compromised. A breakdown of the fees for the year are included in note 17 of the consolidated and separate financial statements. It has also considered that appropriate financial reporting procedures exist and are working, which includes consideration of all entities included in the consolidated financial statements. The committee reviewed and approved the group accounting policies; considered all significant transactions and accounting matters that occurred during the year and evaluated whether the accounting treatment was appropriate in terms of IFRS Accounting Standards. The committee considered and approved the Internal audit charter which is aligned to King V™, the Companies Act, the JSE Listings Requirements and the Standards issued by the Institute of Internal Auditors. The committee also considered the JSE’s most recent report and annexure on proactive monitoring of financial statements, and taken appropriate action where necessary to respond to the findings as highlighted in the report when preparing the annual financial statements for the year ended 30 June 2026. The committee, excluding management invitees, met with both the external and internal auditor in order to discuss any issues relevant to the audit as well as to consider the resources and adequacy of the finance function, in particular the expertise and experience of the chief financial officer. The committee is satisfied with the appropriateness of the expertise and experience of the chief financial officer. The committee, excluding both the external and internal auditor, met with management invitees in order to discuss any issues relevant to the audit as well as to consider the quality and effectiveness of the external and internal audit process and concluded that both were adequate. The committee also considered and approved the designated external audit partner rotation. The audit committee has requested all findings by the Independent Regulatory Board for Auditors or any other regulatory bodies, and the associated responses and reviews undertaken by the auditor. There are no significant matters to report on in this regard. In carrying out its responsibility for risk oversight in respect of the management of financial and other risks (internal financial controls; fraud and IT risks as they relate to financial reporting) the committee collaborates with and received feedback from the risk committee on risks having a financial and reporting impact on the company. SOLVENCY AND LIQUIDITY The committee is satisfied that the board has performed a solvency and liquidity test on the group and company and has concluded that the group and company satisfy the test, on the basis of the continued availability of borrowing facilities, the operational performance during the last financial year, and on the ongoing performance forecast for the next 12 months. Following our review, and having regard to all material factors and risks that may impact the financial statements, we accordingly recommended the consolidated and separate financial statements of City Lodge Hotels Limited for the year ended 30 June 2026 to the board of directors for approval on 10 September 2026. Mathukana Manthata Chairperson of the audit committee 10 September 2026 6 Report of the audit committee for the year ended 30 June 2026
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NATURE OF BUSINESS The company is a South African incorporated public company domiciled in the Republic of South Africa. The group owns and operates high-quality, affordable hotels targeted at the business community and leisure traveller. There have been no material changes in the nature of the group's and company's business from the prior year. FINANCIAL RESULTS The financial results of the group for the year are set out in the consolidated financial statements and accompanying notes thereto. Group profit after taxation for the year amounted to R203.0 million (2025: R213.0 million), resulting in basic diluted earnings per share of 38.7 cents, compared to 38.3 cents in the prior year. Headline earnings amounted to R180.4 million (34.4 cents per share, diluted) compared to R184.1 million (33.1 cents per share, diluted) in the previous year. Adjusted diluted headline earnings per share, which excludes unrealised losses on foreign exchange and exceptional items (the impairment of the deferred tax assets) has increased by 20% to 41.6 cents (2025: 34.6 cents). Net asset value per share improved to 239 cents from 230 cents in the prior year. The group generated positive cash flows from operating activities of R326.1 million (2025: R247.1 million). The company’s interest in its subsidiaries’ loss after taxation amounted to R13.9 million (2025: profit after taxation of R25.8 million). DIVIDENDS Interim The board approved an interim dividend of 8.0 cents per share (6.4 cents net after deducting withholding tax) on 19 February 2026 (2025: 6.0 cents). Final Subsequent to year end, the board has approved a final ordinary dividend of 11.0 cents per ordinary share (8.8 cents net after deducting withholding tax) in respect of the year ended 30 June 2026 (2025: 9.0 cents). The source of the dividend will be from distributable reserves. The dividend will be payable on 5 October 2026 to shareholders registered in the company's securities register on 2 October 2026. STATED CAPITAL There was no change in the authorised share capital of the company during the year under review. City Lodge Hotels has authorised share capital of 10 000 000 000 ordinary no par value shares. In line with the group’s strategy to return capital and value to shareholders, the group acquired 38 041 071 (2025: 7 672 300) shares at an average price of R4.02 per share during the year. The cost of the share repurchases totalled R152.8 million. Following the cancellation of 37 890 667 shares, the total number of ordinary no par value shares in issue as at 30 June 2026 is 552 626 865 (2025: 590 517 532). The remaining shares were cancelled after year end. SUBSIDIARIES Details relating to interest in subsidiaries are included in note 4. INTEREST-BEARING BORROWINGS The group has total loan facilities of R600.0 million, and overdraft facilities of R115.0 million. The loan facilities mature between June 2028 and June 2030. The total interest- bearing borrowings balance is R100 million as at 30 June 2026 (2025: Nil). The group retains access to the total loan facilities of R600.0 million, and an accordion facility of R300 million, subject to the funder’s credit approval. GOING CONCERN The consolidated and separate financial statements are prepared on the going-concern basis. Based on the cash flow forecasts, available liquidity from cash resources and access to available debt facilities, the directors believe that the group and company have sufficient resources to continue operations as a going concern in a responsible and sustainable manner. Refer to note 32 for further details. SUBSEQUENT EVENTS Further details are included in note 30. Between 1 July 2026 to 9 September 2026, the group bought back 3 603 994 shares at an average price of R4.29 per share and cancelled 3 587 678 shares, which included 150 404 treasury shares held at year end (refer note 10). Following the cancellation of the shares, the total number of ordinary no par value shares in issue as at 10 September 2026 is 549 039 187. The board has approved a final ordinary dividend of 11.0 cents per ordinary share (8.8 cents net after deducting withholding tax) in respect of the year ended 30 June 2026 (2025: 9.0 cents ). Other than the above, the directors are not aware of any material matter or circumstance arising since the reporting date and the date of this report. City Lodge Hotels Annual Financial Statements 2026 7 Directors’ report for the year ended 30 June 2026
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DIRECTORATE Directors of the company are set out below: Appointed Independent non-executive Bulelani Ngcuka (Chairman) 2008 Frank Kilbourn (Deputy Chairman) 1996 Karen Classen (appointed 20 November 2025) 2025 Deon Huysamer 2015 Andrew Lapping (retired 20 November 2025) 2021 Dr. Sizakele Marutlulle 2016 Mathukana Manthata 2022 Non-executive Stephen Enderle 2021 Executive Andrew Widegger (CEO) 1994 Dhanisha Nathoo (CFO) 2020 Lindiwe Siddo (COO) 2018 In terms of the memorandum of incorporation, Deon Huysamer, Dr. Sizakele Marutulle and Stephen Enderle will retire by rotation at the forthcoming annual general meeting. The directors are eligible and have offered themselves for re- election. DIRECTORS’ EMOLUMENTS No material contracts in which the directors have an interest were entered into during the year under review. Refer to note 19 of the consolidated and separate financial statements for details of the group’s executive management compensation. COMPANY SECRETARY Mrs M C van Heerden City Lodge Hotels Limited The Lodge, Bryanston Gate Office Park Corner Homestead Avenue and Main Road Bryanston Johannesburg, 2191 (PO Box 97, Cramerview, 2060) EXTERNAL AUDITOR PricewaterhouseCoopers Inc. were re-appointed into office at the company's 2025 annual general meeting in accordance with section 90 of the Companies Act of South Africa, to report on the financial year ending 30 June 2026. They will continue in office in accordance with section 90 of the Companies Act of South Africa. MATERIAL SHAREHOLDERS Beneficial shareholders holding 5% or more of the company's listed ordinary shares as at 30 June 2026 were as follows: % Number of shares owned Enderle SA (Pty) Ltd 9.8% 54 358 553 Allan Gray Clients 8.9% 48 977 224 Peregrine Group 6.7% 37 177 030 Peresec 5.8% 31 794 757 8 Directors’ report continued for the year ended 30 June 2026
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REPORT ON THE AUDIT OF THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS OUR OPINION In our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate financial position of City Lodge Hotels Limited (the Company) and its subsidiaries (together the Group) as at 30 June 2026, and its consolidated and separate financial performance and its consolidated and separate cash flows for the year then ended in accordance with IFRS Accounting Standards and the requirements of the Companies Act of South Africa. What we have audited City Lodge Hotels Limited's consolidated and separate financial statements set out on pages 14 to 60 comprise: • the consolidated and separate statements of financial position as at 30 June 2026; • the consolidated and separate statements of profit or loss and other comprehensive income for the year then ended; • the consolidated and separate statements of changes in equity for the year then ended; • the consolidated and separate statements of cash flows for the year then ended; and • the notes to the financial statements, including material accounting policy information. BASIS FOR OPINION We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated and separate financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Group in accordance with the Independent Regulatory Board for Auditors’ Code of Professional Conduct for Registered Auditors (IRBA Code), as applicable to audits of financial statements of public interest entities, and other independence requirements applicable to performing audits of financial statements in South Africa. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code and in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBA Code is consistent with the corresponding sections of the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards). OUR AUDIT APPROACH Overview Final materiality • Consolidated financial statements: R22.029 million which represents 1% of consolidated revenue for the year ended 30 June 2026. • Separate financial statements: R21.050 million which represents 1% of revenue for the year ended 30 June 2026. Group audit scope • A full scope audit was performed on 1 component that was significant due to risk and/or size. • Specified procedures were also performed on 1 non-significant component. Key audit matter • Impairment assessment of Property, plant and equipment and Right-of-use assets As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the consolidated and separate financial statements. In particular, we considered where the directors made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud. In terms of the IRBA Rule on Enhanced Auditor Reporting for the Audit of Financial Statements of Public Interest Entities, published in Government Gazette Number 49309 dated 15 September 2023 (EAR Rule), we report final materiality and group audit scope below. City Lodge Hotels Annual Financial Statements 2026 9 Independent auditor’s report To the shareholders of City Lodge Hotels Limited
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Final materiality The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the consolidated and separate financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated and separate financial statements. Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the final materiality for the consolidated and separate financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on the consolidated and separate financial statements as a whole. Consolidated financial statements Separate financial statements Final materiality R22.029 million R21.050 million How we determined it 1% of consolidated revenue 1% of revenue Rationale for the materiality benchmark applied We chose consolidated revenue, because, in our view, it is the benchmark against which the performance of the Group can be consistently measured. Consolidated revenue is considered to be a key objective and focus of the Group’s businesses and a key performance indicator for management and investors. We chose 1% as the benchmark threshold which is consistent with quantitative materiality thresholds used for Groups operating within this industry. In determining the benchmark threshold, we took into account various factors, including the intended users and distribution of the financial statements as well as the level of the Group’s debt. We chose revenue, because, in our view, it is the benchmark against which the performance of the Company can be consistently measured. Revenue is considered to be a key objective and focus of the Company’s business and a key performance indicator for management and investors. We chose 1% as the benchmark threshold which is consistent with quantitative materiality thresholds used for Companies operating within this industry. In determining the benchmark threshold, we took into account various factors, including the intended users and distribution of the financial statements as well as the level of the Company’s debt. Group audit scope We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the Group operates. The Group has hotel operations in South Africa, Botswana, Namibia and Mozambique. In addition, the Group has centralised functions, property holding companies and investment holding companies domiciled in South Africa. The consolidated financial statements are a consolidation of the Group’s hotel operations, investment and property holding companies and centralised functions (each considered to be a ‘component’ for purposes of our group scoping). We performed a full scope audit on 1 component that was considered to be significant due to risk and/or size. Furthermore, we performed specified procedures on 1 component to ensure that sufficient coverage was obtained over the consolidated financial statements. No further audit procedures were performed on the remaining 11 components for the purposes of the Group audit as they were either non-significant or inconsequential to the Group. In establishing the overall approach to the Group audit, we determined the work to be performed by us, as the group engagement team. Further substantive audit procedures were also performed by the group engagement team over the consolidation process. The extent of work performed on the components within the Group provided us with sufficient and appropriate audit evidence to express an opinion on the consolidated financial statements as a whole. 10 Independent auditor’s report continued
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KEY AUDIT MATTERS Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated and separate financial statements of the current period. These matters were addressed in the context of our audit of the consolidated and separate financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In terms of ISA 701 Communicating key audit matters in the independent auditor’s report / the EAR Rule (as applicable), we are required to report key audit matters and the outcome of audit procedures or key observations with respect to the key audit matters, and these are included below. Key audit matter How our audit addressed the key audit matter Impairment assessment of Property, plant and equipment and Right-of-use assets This key audit matter relates to the consolidated and separate financial statements. A significant portion of the Group and Company’s total assets comprise property, plant and equipment (PPE) and right-of use (ROU) assets. PPE constitutes those assets owned by the Group and Company while ROU assets relate to land and/or buildings leased by the Group and Company. As at 30 June 2026, the carrying value of the Group and Company’s PPE amounted to R2.02 billion and R1.57 billion respectively. As it relates to ROU assets, the Group and Company has recognised ROU assets amounting to R855.87 million and R805.99 million respectively. At the end of each reporting period, the Group and Company reviewed the carrying amounts of each hotel (which is considered to be an individual cash-generating unit (CGU)) to determine whether there are any indications of impairment. If any such indication exists, then the CGU’s recoverable amount is determined. Management has assessed the carrying amount of the individual CGUs for an impairment loss or impairment reversal during the financial year by reviewing cash flow forecasts for the period 2027 to 2031, which they believe adequately reflects the cash flows generated by the underlying hotels. Based on the assessment performed, no impairment loss or impairment reversals have been recognised on PPE and ROU assets during the period. The recoverable amount of each individual CGU has been based on value-in-use (VIU) using the discounted cash flow model (DCF) by applying projected cash flows over a five-year period. In determining the forecast cash flow assumptions, significant judgement and estimation was applied in determining the occupancy, room rates and operating expenses. Furthermore, significant judgement and estimation is applied in determining the terminal growth rate and discount rate assumptions to be used in the DCF model. The impairment assessment of PPE and ROU assets was considered to be a matter of most significance to our current year audit of the consolidated and separate financial statements due to: • the significant judgements and estimation applied in determining the forecast cash flow assumptions, terminal growth rates and discount rates; and • the magnitude of the carrying amounts of the Group and Company’s PPE and ROU assets. Our audit addressed this key audit matter as follows: We assessed whether there were any impairment indicators for each CGU in terms of International Accounting Standard 36, Impairment of Assets (IAS 36). No other impairment indicators were identified that were not already identified by management. We assessed management’s definition and composition of a CGU by comparing it to the principles contained in IAS 36 to confirm that each individual hotel meets the definition of a CGU. No material exceptions were noted. We assessed the reasonability of the budgets, which formed the basis of the forecast cash flows used in the DCF model, as follows: • Obtained an understanding of the setting, reviewing and approval of the budgets and the assumptions applied. • Assessed the reliability of the budgeting process, by comparing the prior period budgeted results for the Group to the current financial year’s actual results of the Group. We further compared post year-end budgeted information to post year-end actual results to understand management's ability to follow a robust budgeting process that results in credible budgets. Where the budgeted numbers significantly differed from actual results, we obtained corroboration from management which we considered to be reasonable and consistent with other evidence obtained during the audit. We tested the mathematical accuracy of the DCF model and assessed whether the DCF model is consistent with market practice and the applicable requirements of IAS 36. We did not note any aspect which required further consideration. For the base year (financial year 2027) used in the DCF model, we agreed the cash flow forecasts to the budget approved by the board of directors. No material exceptions were noted. We tested the reasonableness of the assumptions applied by management in their forecast cash flows as follows: • Discussions with management to understand the basis for the assumptions used in respect of the cash flows and corroborated their explanations by evaluating: – the past performance of the CGU and the post-year end performance of the CGU against forecasts for the same periods; – the consistency with external market and industry data; and – the corroboration of strategic initiatives with evidence obtained from independent sources and in other areas of the audit. • We assessed the reasonableness of the occupancy and room rates applied in management’s revenue forecasts by comparing these to historical actual trends. • We assessed the reasonableness of capital expenditure and working capital movements applied by management in the DCF model by agreeing these to historical actual trends. Based on our procedures performed above, we found the assumptions applied by management to be reasonable. City Lodge Hotels Annual Financial Statements 2026 11
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Key audit matter How our audit addressed the key audit matter Refer to the following material accounting policies and notes to the financial statements for the details as it relates to this key audit matter: • Summary of material accounting policies: Significant judgements and areas of estimation uncertainty: Impairment of property, plant and equipment and right-of use assets; • Summary of material accounting policies: Impairments: Non- financial assets; • Note 1: Property, plant and equipment; and • Note 2: Right-of-use assets. The reasonableness of the terminal growth rates was assessed by comparing the terminal growth rates to long term growth rates obtained from independent sources. We applied these terminal growth rates to our independent valuation scenarios, and it was determined that management’s overall impairment assessment was within an acceptable range, with no material differences noted. With the assistance of our valuation expertise, we independently sourced data such as the long-term growth rates, cost of debt, cost of leases, risk-free rates in the applicable market, market risk premiums adjusted for specific risks relating to the relevant CGUs, small stock premiums , debt/ equity ratios, and the betas of comparable companies. We then independently calculated a discount rate for a sample of individual CGUs. The calculation of the discount rate performed by our valuation experts was performed on a sample of individual CGUs within South Africa and Rest of Africa respectively, and the valuation principles were replicated across the CGUs assessed. We applied this independently calculated discount rate to our independent valuation scenarios, and it was determined that management’s overall impairment assessment was within an acceptable range and therefore we accepted management’s impairment assessment amount as being reasonable. We assessed the reasonableness of the discount rates, terminal growth rates and net cash flows by performing a sensitivity analysis to determine the impact that a change in discount rates, terminal growth rates and net cash flows would have on the DCF analysis and the resultant recoverable amount. We did not note any aspects requiring further consideration. OTHER INFORMATION The directors are responsible for the other information. The other information comprises the information included in the document titled "City Lodge Hotels Annual Financial Statements for the year ended 30 June 2026", which includes the Directors’ report, the Report of the audit committee and the Certificate by the company secretary as required by the Companies Act of South Africa, which we obtained prior to the date of this auditor’s report, and the document titled "City Lodge Hotels Integrated Annual Report 2026", which is expected to be made available to us after that date. The other information does not include the consolidated or the separate financial statements and our auditor’s report thereon. Our opinion on the consolidated and separate financial statements does not cover the other information and we do not and will not express an audit opinion or any form of assurance conclusion thereon. In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. RESPONSIBILITIES OF THE DIRECTORS FOR THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS The directors are responsible for the preparation and fair presentation of the consolidated and separate financial statements in accordance with IFRS Accounting Standards and the requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated and separate financial statements, the directors are responsible for assessing the Group's and the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group and/or the Company or to cease operations, or have no realistic alternative but to do so. 12 Independent auditor’s report continued
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AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS Our objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and separate financial statements. As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's and the Company's internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. • Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's and the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated and separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group and/or Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures, and whether the consolidated and separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the consolidated financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the consolidated and separate financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS Audit tenure In terms of the IRBA Rule published in Government Gazette Number 39475 dated 4 December 2015, we report that PricewaterhouseCoopers Inc. has been the auditor of City Lodge Hotels Limited for 5 years. PricewaterhouseCoopers Inc. Director: AM Motaung Registered Auditor Johannesburg, South Africa 10 September 2026 City Lodge Hotels Annual Financial Statements 2026 13
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GROUP COMPANY R000 Notes 2026 2025 2026 2025 ASSETS Non-current assets 2 896 881 2 880 933 2 743 601 2 679 256 Property, plant and equipment 1 2 020 961 1 936 177 1 574 590 1 461 821 Right-of-use assets 2 855 869 909 350 805 993 847 795 Intangible assets and goodwill 3 16 073 22 694 16 073 22 694 Interest in subsidiaries 4 – – 346 145 346 146 Investments 800 800 800 800 Deferred taxation 5 3 178 11 912 – – Current assets 246 377 195 165 191 278 148 713 Inventories 6 8 404 8 148 8 088 7 691 Trade receivables 27.5 83 837 70 372 80 893 68 227 Other receivables 8 106 635 88 817 74 903 64 472 Taxation receivable 2 876 456 2 423 – Cash and cash equivalents1 44 625 27 372 24 971 8 323 Total assets 3 143 258 3 076 098 2 934 879 2 827 969 EQUITY Capital and reserves 1 227 971 1 263 772 1 036 873 1 066 605 Stated capital 9 1 090 329 1 243 133 1 090 329 1 243 133 Treasury shares 10 (511 843) (520 779) (511 843) (520 779) Other reserves 11 73 316 76 958 63 347 70 544 Retained earnings 576 169 464 460 395 040 273 707 LIABILITIES Non-current liabilities 1 545 306 1 449 493 1 467 066 1 354 050 Interest-bearing borrowings 12 100 000 – 100 000 – Lease liabilities 13 1 367 322 1 379 217 1 289 741 1 284 433 Provisions 13 296 10 696 13 296 10 696 Deferred taxation 5 64 688 59 580 64 029 58 921 Current liabilities 369 981 362 833 430 940 407 314 Lease liabilities 13 51 762 56 746 36 332 43 273 Taxation payable 1 431 8 660 – 4 228 Trade and other payables 14 316 788 297 427 394 608 359 813 Total liabilities 1 915 287 1 812 326 1 898 006 1 761 364 Total equity and liabilities 3 143 258 3 076 098 2 934 879 2 827 969 1 Cash and cash equivalents are measured at amortised cost, and are held in current accounts with the Group’s bankers. 14 Statements of financial position as at 30 June 2026
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GROUP COMPANY R000 Notes 2026 2025 2026 2025 Revenue 15 2 202 914 1 997 450 2 105 002 1 903 512 Other income 16 29 543 68 665 32 987 105 174 Expected credit loss reversal/(charge) on trade receivables 27.5 1 916 (571) 1 937 (859) Salaries and wages (631 876) (588 547) (605 312) (563 230) Property costs (197 026) (187 025) (191 229) (181 643) Food and beverage costs (170 169) (150 726) (162 718) (143 042) Rooms related costs (226 098) (204 270) (218 525) (196 458) Unrealised losses on foreign exchange (28 736) (7 912) (393) (180) Other operating costs 17 (330 412) (300 903) (344 158) (313 732) Depreciation and amortisation (105 954) (87 934) (96 342) (78 485) Depreciation on right-of-use assets (95 258) (92 399) (84 568) (81 448) Impairment loss on loan to subsidiary 7 – – (2 577) – Impairment loss on other receivables 8 – – (7 912) – Operating profit 448 844 445 828 426 192 449 609 Interest income 20.1 1 620 1 807 1 669 1 774 Interest expense 20.2 (140 577) (136 227) (131 355) (125 772) Profit before taxation 309 887 311 408 296 506 325 611 Taxation 21 (106 910) (98 429) (83 905) (57 969) Profit for the year 202 977 212 979 212 601 267 642 Other comprehensive income Items that are or may be reclassified to profit or loss Foreign currency translation differences (non-taxable) 3 555 490 – – Total comprehensive income for the year 206 532 213 469 212 601 267 642 Basic earnings per share (cents) 26 38.8 38.3 Basic diluted earnings per share (cents) 26 38.7 38.3 City Lodge Hotels Annual Financial Statements 2026 15 Statements of profit or loss and other comprehensive income for the year ended 30 June 2026
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GROUP COMPANY R000 Notes 2026 2025 2026 2025 Cash inflow from operating activities 326 099 247 120 308 299 304 021 Cash generated by operations 25.1 656 911 548 585 611 981 572 960 Interest received 1 620 1 807 1 592 1 774 Interest paid (11 186) (6 645) (11 186) (6 645) Interest paid – leases 13 (126 594) (128 809) (117 372) (118 354) Taxation paid 25.2 (103 384) (83 555) (85 448) (61 451) Dividends paid 22 (91 268) (84 263) (91 268) (84 263) Cash outflow from investing activities (195 174) (202 164) (192 658) (250 057) Investment to maintain operations 25.3 (229 675) (251 559) (228 960) (251 103) Investment to expand operations 25.4 (4 301) (8 962) – – Advances to subsidiary 7 – – (2 500) – Proceeds on disposal of property, plant and equipment 38 802 58 357 38 802 1 046 Cash outflow from financing activities (112 553) (84 777) (98 993) (73 750) Capital repayment of lease liabilities 13 (57 959) (46 805) (44 399) (35 778) Purchase of incentive scheme shares 10 (1 131) (7 972) (1 131) (7 972) Repurchase of ordinary shares 9 (152 804) (30 000) (152 804) (30 000) Purchase of treasury shares 10 (659) – (659) – Proceeds from interest-bearing borrowings 12 230 000 80 000 230 000 80 000 Repayments of interest-bearing borrowings 12 (130 000) (80 000) (130 000) (80 000) Net increase/(decrease) in cash and cash equivalents 18 372 (39 821) 16 648 (19 786) Cash and cash equivalents at the beginning of year 27 372 67 316 8 323 28 109 Effect of movements in exchange rates on cash held (1 119) (123) – – Cash and cash equivalents at the end of year 44 625 27 372 24 971 8 323 16 Statements of cash flows for the year ended 30 June 2026
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R000 Notes Stated capital Treasury shares Other reserves Retained earnings Total GROUP Balance as at 30 June 2024 1 273 133 (512 807) 77 524 335 744 1 173 594 Total comprehensive income for the year – – 490 212 979 213 469 Profit for the year – – – 212 979 212 979 Foreign currency translation differences – – 490 – 490 Transactions with owners, recorded directly in equity (30 000) (7 972) (1 056) (84 263) (123 291) Repurchase of ordinary shares 9 (30 000) – – – (30 000) Incentive scheme shares 10 – (7 972) – – (7 972) Share compensation reserve 11 – – (1 056) – (1 056) Dividends paid 22 – – – (84 263) (84 263) Balance as at 30 June 2025 1 243 133 (520 779) 76 958 464 460 1 263 772 Total comprehensive income for the year – – 3 555 202 977 206 532 Profit for the year – – – 202 977 202 977 Foreign currency translation differences – – 3 555 – 3 555 Transactions with owners, recorded directly in equity (152 804) 8 936 (7 197) (91 268) (242 333) Repurchase of ordinary shares 9, 10 (152 804) (659) (153 463) Incentive scheme shares 10 – (1 131) – – (1 131) Reserve transferred on exercise of vesting rights 10, 11 – 10 726 (10 726) – – Share compensation reserve 11 – – 3 529 – 3 529 Dividends paid 22 – – – (91 268) (91 268) Balance as at 30 June 2026 1 090 329 (511 843) 73 316 576 169 1 227 971 City Lodge Hotels Annual Financial Statements 2026 17 Statements of changes in equity for the year ended 30 June 2026
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R000 Notes Stated capital Treasury shares Other reserves Retained earnings Total COMPANY Balance as at 30 June 2024 1 273 133 (512 807) 71 600 90 328 922 254 Total comprehensive income for the year Profit for the year – – – 267 642 267 642 Transactions with owners, recorded directly in equity (30 000) (7 972) (1 056) (84 263) (123 291) Repurchase of ordinary shares 9 (30 000) – – – (30 000) Incentive scheme shares 10 – (7 972) – – (7 972) Share compensation reserve 11 – – (1 056) – (1 056) Dividends paid 22 – – – (84 263) (84 263) Balance as at 30 June 2025 1 243 133 (520 779) 70 544 273 707 1 066 605 Total comprehensive income for the year Profit for the year – – – 212 601 212 601 Transactions with owners, recorded directly in equity (152 804) 8 936 (7 197) (91 268) (242 333) Repurchase of ordinary shares 9, 10 (152 804) (659) – – (153 463) Incentive scheme shares 10 – (1 131) – – (1 131) Reserve transferred on exercise of vesting rights 10, 11 – 10 726 (10 726) – – Share compensation reserve 11 – – 3 529 – 3 529 Dividends paid 22 – – – (91 268) (91 268) Balance as at 30 June 2026 1 090 329 (511 843) 63 347 395 040 1 036 873 18 Statements of changes in equity for the year ended 30 June 2026
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REPORTING ENTITIES City Lodge Hotels Limited (the company) is a company domiciled in South Africa. The group financial statements for the year ended 30 June 2026 comprise the company and its subsidiaries (together referred to as the group). The group owns and operates high-quality, affordable hotels targeted at the business community and leisure traveller. Where reference is made to ‘group’, it should be interpreted as company where the context requires and unless otherwise stated. BASIS OF PREPARATION Functional and presentation currency These financial statements are presented in South African Rand (‘R’), which is the company’s functional and group’s presentation currency, rounded to the nearest thousand unless indicated otherwise. Basis of measurement These financial statements are prepared on the historical cost basis. Statement of compliance The group and company financial statements have been prepared in accordance with IFRS Accounting Standards and its interpretations adopted by the International Accounting Standards Board, the Listings Requirements of JSE Limited, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council and the requirements of the Companies Act, 71 of 2008 of South Africa. These group and company financial statements were authorised for issue by the board of directors on 10 September 2026. The assessment of shock events Conflict in the Middle East The group does not have direct exposure, largely because of not having significant suppliers, vendors or customers in the affected countries. Indirectly, the most likely impact will be on the overall economic uncertainty and negative impacts on the global economy. MATERIAL ACCOUNTING POLICIES The accounting policies set out on the following pages have been applied consistently by all group entities to all periods presented in these financial statements, except as indicated otherwise in the case of new and amended standards adopted by the group. New and amended standards adopted by the group The group adopted all the new revised or amended accounting pronouncements as issued by the IASB which were effective from 1 July 2025. Significant judgements and estimates The preparation of the consolidated and separate financial statements requires management to make judgements, estimates and assumptions that may affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience, consideration of market predictions at these unprecedented times and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision only affects that period, or in the period of the revision and future periods if the revision affects both current and future periods. Information about significant areas of estimation, uncertainty and critical judgements, in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is in relation to the following: Significant judgements: Determining the lease term In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. These extension and termination options are included in a number of the lease agreements across the group and are used to maximise operational flexibility in terms of managing the assets used in the group’s operations. The group’s leasing portfolio comprises leases in relation to leases of land and/or buildings for its hotel operations. These lease agreements have varying tenures from 2 years to 30 years. The agreements also contain options to extend for up to 5 renewal periods. The extension options (or periods after termination options) have been considered and where certain, one lease renewal period has been included in the lease term, due to the long tenure for the majority of the leases and to ensure that management maintains operational flexibility within the group as the location and business environment to which the hotel operates does change over time. All extension and termination options held are exercisable by the group and not by the respective lessor. The group assesses the certainty of renewal extensions annually, and evaluates all leases renewals with a renewal date within two years of the reporting date. All future cash outflows have been included in the lease liability. Refer to note 2 Right-of-use assets and note 13 Lease liabilities for details of specific leases that have been remeasured during the current year due to changes in the lease term. City Lodge Hotels Annual Financial Statements 2026 19 Summary of material accounting policies for the year ended 30 June 2026
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Significant judgements and areas of estimation uncertainty: Impairment of property, plant and equipment and right-of-use assets The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Impairments as set out in note 1, explains the significant areas of estimation, uncertainty and critical judgements, in applying accounting policies which have the most significant effect on the amounts recognised in the financial statements. Basis of consolidation and business combinations The group accounts for business combinations using the acquisition method when control is transferred to the group. The consideration transferred in the acquisition is measured at fair value, as are the identifiable net assets acquired and liabilities assumed. For a business combination achieved in stages, the pre-existing equity interest in the acquiree is measured at fair value at the acquisition date. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred. Consolidation Subsidiaries are entities (including structured entities) over which the group has control. The group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. The company carries its investments in subsidiaries at cost, including transaction costs and initial fair value measurements of contingent consideration arising on acquisition date, less accumulated impairment losses. Subsequent fair value remeasurements of the contingent consideration are recognised in profit or loss. Intragroup balances, and any unrealised gains and losses or income and expenses arising from intragroup transactions, are eliminated in preparing the consolidated financial statements. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Goodwill Goodwill represents the excess of the costs of acquisition over the group’s interest in the fair value of the identifiable assets (including intangibles), liabilities and contingent liabilities of the acquired entity at the date of acquisition and if a business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree. Goodwill is stated at cost less accumulated impairment losses and is reviewed for impairment on an annual basis. Any impairment identified is recognised immediately in profit or loss and is not reversed. Goodwill is allocated to cash-generating units (CGUs) for the purpose of impairment testing. Each of those CGUs is identified in accordance with the basis on which the businesses are managed and according to the differing risk and reward profiles. The group tests annually whether goodwill has suffered any impairment in accordance with the accounting policy. The recoverable amounts of the CGUs have been determined based on the higher of fair value less costs to sell and value-in-use calculations. Foreign transactions and balances The financial statements for each group company have been prepared on the basis that transactions in foreign currencies are recorded in their functional currency at the rate of exchange ruling at the date of the transaction. Monetary items denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date with the resultant translation differences being credited or charged to profit or loss. Foreign subsidiaries – translation Once-off items in the statement of profit or loss and other comprehensive income and statement of cash flows of foreign subsidiaries expressed in currencies other than the South African Rand are translated to South African Rand at the rates of exchange prevailing on the day of the transaction. All other items are translated at average rates of exchange for the relevant reporting period. Assets and liabilities of these undertakings are translated at closing rates of exchange at each reporting date. All translation exchange differences arising on the retranslation of opening net assets together with differences between statement of comprehensive income translated at average and closing rates are recognised as a separate component of other comprehensive income. For these purposes net assets include loans between group companies that form part of the net investment, for which settlement is neither planned nor likely to occur in the foreseeable future and is either denominated in the functional currency of the parent or the foreign entity. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Structured entities The group established a number of structured entities for the purposes of the B-BBEE transaction in 2008, and a share trust for the benefit of the employees. The group did not have any direct or indirect shareholdings in these entities. The group guaranteed the funding of the structured entities and as such it was deemed to control these structured entities resulting in the incorporation of the structured entities into the company and group financial statements. The company is considered to be the sponsor entity of the structured entities as the structured entities are acting as an agent of the company and are therefore aggregated into the separate financial statements. 20 Summary of material accounting policies continued for the year ended 30 June 2026
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Property, plant and equipment Owned assets Items of property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Costs include expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials, direct labour and any other costs directly attributable to bringing the asset to a working condition for its intended use. Where significant components of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment. Freehold land is stated at cost and is not depreciated. Freehold and leasehold buildings are stated at cost and depreciated over periods of up to 50 years as deemed appropriate to reduce carrying values to estimated residual values over their useful lives. Buildings under construction are not depreciated. The group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when the cost is incurred if it is probable that the future economic benefits embodied with the item will flow to the group and the cost of the item can be measured reliably. The carrying amount of the replaced item is derecognised. All other costs are recognised in profit or loss as an expense as incurred. Borrowing costs incurred on funds raised to erect hotel buildings (qualifying assets) are capitalised up to the date that the activities necessary to prepare the hotel for its intended use are substantially complete. Depreciation is charged to profit or loss to write off the cost of the asset to its estimated residual value on a straight-line basis over the estimated useful life of each part of an item of property, plant and equipment. Depreciation commences the month following acquisition. The estimated useful lives are currently as follows: Freehold buildings 10 to 50 years Leasehold buildings 10 to 30 years, or the lease term if shorter Leasehold improvements 10 to 30 years, or the lease term if shorter Furniture and equipment 5 to 10 years Infrastructure 5 to 30 years The residual values, depreciation methods, and useful lives are reassessed annually. Gains or losses arising on the disposal of property, plant and equipment are included in profit or loss. Leases As a lessee The group recognises right-of-use assets and corresponding lease liabilities on the statement of financial position at the date at which the leased asset is available for use by the group. Each lease payment is allocated between liability and interest expense. The interest expense is charged to profit and loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is subsequently measured at cost less accumulated depreciation and accumulated impairment losses. The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes. Right-of-use assets are measured at cost comprising the amount of the initial measurement of the lease liability and any lease payments made at or before the commencement date, less any lease incentive received. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the group uses its respective incremental borrowing rates. Lease liabilities include the net present value of fixed payments (including in-substance fixed payments). Variable lease payments that depend on an index or a rate and are initially measured using the index or rate as at the commencement date. Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. Contracts may contain both lease and non-lease components. For leases of property for which the group is a lessee, it has elected not to separate lease and non-lease components and instead accounts for these as a single lease component. The group has no residual value guarantees. Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise mainly IT equipment and small items of furniture. Where the group reassesses the terms of any lease (i.e. it reassesses the probability of exercising an extension or termination option) or modifies the terms of a lease without increasing the scope of the lease or where the increased scope is not commensurate with the standalone price, it adjusts the carrying amount of the lease liability to reflect the payments to be made over the revised term, which are discounted at the applicable rate at the day of the reassessment or modification. For reassessments to the lease terms, an equivalent adjustment is made to the carrying amount of the right-of-use asset, with the revised carrying amount being depreciated over the revised lease term. However, if the carrying amount of the right-of-use asset is reduced due to any further reduction in the measurement of the lease liability it is recognised in profit or loss. When the group modifies the terms of a lease resulting in an increase in scope and the consideration for the lease increases by an amount commensurate with a standalone price for the increased scope, the group accounts for the modifications as a separate new lease. This accounting treatment equally applies to leases for which the group elected the short-term lease exemption, and when the lease terms are subsequently modified. City Lodge Hotels Annual Financial Statements 2026 21
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Intangible assets Internally developed trademarks are not recognised. Expenditure to enhance and maintain such trademarks is charged in full against profit or loss. Expenditure on research activities is recognised in profit or loss as incurred. Software development expenditure is capitalised only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the group intends to and has sufficient resources to complete development and to use or sell the asset. Otherwise, it is recognised in profit or loss as incurred. Subsequent to initial recognition, software development expenditure is measured at cost less accumulated amortisation and any accumulated impairment losses. Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the straight– line method over their estimated useful lives, and is recognised in profit or loss. The estimated useful lives are as follows: Software costs 7 to 15 years Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate. Impairments Non-financial assets The carrying amounts of the group’s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate or estimated using a price to earnings ratio that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Pre-opening expenses Pre-opening expenses of new hotels are charged directly against profit or loss as incurred. Asset replacement reserve Asset replacement reserve relates to advances made to the Body Corporates of Courtyard Hotel Rosebank and Courtyard Hotel Sandton for future capital expenditure for refurbishments and redevelopments, and are capitalised as the costs are incurred. Inventories Inventory is stated at the lower of cost and net realisable value, on a first-in first-out basis, and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated selling expenses. Cash and cash equivalents For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand and bank overdrafts, when applicable. Bank overdrafts are treated as cash and cash equivalents within current liabilities on the statement of financial position. Bank overdrafts are only offset in the statement of cash flows if they meet the following criteria: (i) repayable on demand, (ii) integral to cash management and (iii) fluctuates between positive and overdrawn. Taxation Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised in equity or other comprehensive income. Current taxation comprises taxation payable calculated on the basis of the expected taxable income for the year, using the taxation rates enacted or substantively enacted at the reporting date, and any adjustment of taxation payable for previous years. Deferred taxation is provided based on temporary differences. Temporary differences are differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax base. The amount of deferred taxation provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities using taxation rates enacted or substantively enacted at the reporting date. Deferred taxation is recognised in profit or loss except to the extent that it relates to a transaction that is recognised directly in equity or other comprehensive income in which case it is recognised in equity or other comprehensive income, or a business combination that is an acquisition. The effect on deferred taxation of any changes in taxation rates is recognised in profit or loss, except to the extent that it relates to items previously recognised directly in equity or other comprehensive income in which case it is recognised directly in equity or other comprehensive income. 22 Summary of material accounting policies continued for the year ended 30 June 2026
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Deferred taxation is not recognised for the following temporary differences: • differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit; • differences relating to investments in subsidiaries to the extent that they will not reverse in the foreseeable future; and • taxable temporary differences arising on the initial recognition of goodwill. A deferred taxation asset is recognised to the extent that it is probable that future taxable profits will be available against which the associated unused taxation losses and deductible temporary differences can be utilised. Deferred taxation assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related taxation benefit will be realised. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. Dividend withholding tax is a tax on shareholders receiving dividends and is applicable to all dividends declared on or after 1 April 2012. The company withholds dividend tax on behalf of its shareholders on dividends declared. Amounts withheld are not recognised as part of the company’s tax charge, but rather as part of the dividend paid, recognised directly in equity. Financial instruments Recognition and initial measurement Trade receivables are initially recognised when they are originated. All other financial assets and liabilities are initially recognised when the group becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value, plus for an item not at fair value through profit or loss, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price. Classification and subsequent measurement On initial recognition, a financial asset is classified as measured at amortised cost. A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at fair value through profit or loss: • it is held within a business model whose objective is to hold assets to collect contractual cash flows; • its contractual terms give rise on specific dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Impairment The group has elected to apply the simplified version of the expected credit loss model permitted by IFRS 9 in respect of trade receivables, which involves assessing lifetime credit losses on all balances using the provision matrix. The balance of the group’s financial assets measured at amortised cost are other receivables, loan receivables and cash and cash equivalents to which the general model is applied. Cash and cash equivalents Cash and cash equivalents are measured at amortised cost, using the effective interest method. Non-derivative financial liabilities The group initially recognises debt securities issued on the date that they are originated. All other financial liabilities (including liabilities designated as fair value through profit or loss) are recognised initially on the trade date, which is the date that the group becomes a party to the contractual provisions of the instrument. Financial liabilities are classified as at amortised cost. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains or losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss. Interest expense is recognised using the effective interest method. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability to the amortised cost of the financial liability. Derecognition Financial assets are derecognised if the group’s contractual rights to the cash flows from the financial assets expire or if the group transfers the financial asset to another party without retaining control of substantially all risks and rewards of the asset. Financial liabilities are derecognised if the group’s obligations expire or are discharged or cancelled. The group also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different. In order to determine if a financial liability’s terms have been modified, the company examines whether the present value of the new cash flows under the new terms is at least 10% different from the present value of the remaining cash flows of the original liability, using the original effective interest rate. If the difference is 10% or greater, the existing liability is derecognised and a new financial liability is recognised. In order to perform this assessment, the company applies the discount rate at the date of modification. On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss. Offset Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position when the group has a legally enforceable right to set off the recognised amounts, and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. City Lodge Hotels Annual Financial Statements 2026 23
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Stated capital and equity Ordinary shares are classified as equity. Incremental external costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds. Treasury shares Ordinary shares held by the former B-BBEE structured entities are treated as treasury shares . Long-term incentive scheme shares for employees are treated as treasury shares. Provisions Provisions are recognised when the group has a present legal or constructive obligation as a result of past events, for which it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risk specific to the liability. Revenue from contracts with customers Revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled, in exchange for transferring goods or services to a customer. The group recognises revenue when it transfers control over goods or services to a customer. The group recognises revenue from the following major sources: • Accommodation; • Food and beverage; • Other revenue. The transaction price is recorded as revenue when the performance obligations are satisfied. Accommodation – the performance obligation is met when the accommodation service is consumed. Therefore, revenue is recognised at a point in time. Food and beverage – the revenue is recognised at a point in time when the food and/or beverage is delivered to and accepted by the customer. Other revenue – the revenue is recognised at a point in time. This comprises ancillary services and conferencing revenue and is recognised once the service is complete. Customer payment terms utilising an incidental credit facility are within 30 days of statement. Customers who purchase the group’s services may join the group’s customer loyalty programme and earn points that are redeemable against future purchases of the group’s accommodation and related services. The points accumulate and expire after a period of three years. The group allocates a portion of the consideration received to loyalty points based on standalone selling prices. The amount allocated to the loyalty programme is deferred and is recognised as revenue when loyalty points are redeemed. When estimating standalone selling prices of the loyalty points, the group takes into account the expected redemption rate and the timing of such redemptions based on historical usage and forfeiture rates. The deferred revenue is recognised as contract liabilities, included in trade and other payables. Interest income and expense Interest income comprises interest income on funds invested. Interest income is recognised as it accrues, using the effective interest method. Interest expense comprise interest expense on borrowings and leases. All borrowing costs, not directly attributable to the acquisition, construction or production of qualifying assets, are recognised in profit or loss using the effective interest method. Employee benefits Short-term employee benefits The cost of all short-term employee benefits is recognised during the period in which the employee renders the related service. The liability for employee entitlements to salaries, bonuses and annual leave represent the amounts which the group has a present obligation to pay as a result of employees’ services provided to the reporting date. The liability has been calculated at undiscounted amounts based on current salary rates. Long service awards The group recognises a liability and an expense for long service awards where cash is paid to employees at certain milestone dates in their careers within the group. The method of accounting and frequency of valuation are similar to those used for defined benefit schemes. The actuarial valuation to determine the liability is performed annually. This liability has been disclosed under provisions in the statement of financial position. Retirement benefits Defined-contribution plans Contributions to defined-contribution pension plans are recognised as an expense in profit or loss in the periods during which services are rendered by employees. Share-based payment transactions The share incentive schemes allow certain employees to acquire shares of the company. The fair value of rights granted are recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employees become unconditionally entitled to the rights. The fair value of the rights granted is measured using the stated models, taking into account the terms and conditions upon which the rights were granted. The amount recognised as an expense is adjusted to reflect the actual number of share rights that vest, as well as for the number of share rights that is expected to vest in future, except where forfeiture is due only to share prices not achieving the threshold for vesting. 24 Summary of material accounting policies continued for the year ended 30 June 2026
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The fair value of restricted share plan shares granted are recognised as an employee expense over the period during which the employees become unconditionally entitled to the shares. The amount recognised as an expense is adjusted in the case of forfeiture due to termination of employment prior to vesting. Share-based payment arrangements in which the group receives goods or services as consideration for its own equity instruments are accounted for as equity-settled share-based payment transactions, regardless of how the equity instruments are obtained by the group. The group manages a share trust and treats the share trust set up to facilitate the share-based payment arrangement as an agent, i.e., an extension of the company. In other words, shares held by the trust is treated as treasury shares of the company. Earnings per share The group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing profit for the period by the weighted average number of ordinary shares outstanding, excluding treasury shares during the period. Diluted EPS is determined by dividing profit for the year by the weighted average number of ordinary shares outstanding, excluding treasury shares plus all potential dilutive ordinary shares, which comprise share options granted to employees. Headline earnings per share is calculated in terms of Circular 1-2023 Headline earnings.. Adjusted headline earnings – exceptional items excluded from underlying profit The group uses adjusted headline earnings as a performance measure to determine the underlying profit excluding exceptional items over and above those that are excluded from headline earnings as per the requirements of Circular 1-2023 Headline earnings. Exceptional items are those items of financial performance that are separately disclosed to assist in the understanding of the underlying financial performance achieved. The group considers exceptional items to be those that are not within the normal day-to- day operations of the business and are sufficiently material or unusual by nature or amount that they would distort the financial results if they were not adjusted. This would include headline earnings adjustments. Apart from headline earnings adjustments, further exceptional items include, inter alia, unrealised gains or losses on foreign exchange, gains or losses from corporate transactions including related transaction costs, impairments and impairment reversals of deferred tax assets, hotel pre-opening expenses, other material once-off adjustments and restructure costs (if applicable). For the prior year, the profit on the derecognition of the lease was considered to be a material once-off adjustment. No once-off adjustments were made for the current year. Segment analysis Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM). The CODM has been identified as the group’s CEO and executive committee. The CODM reviews the group’s internal reporting by hotel brand in order to assess performance and allocate resources. Management has determined the operating segments based on the reports reviewed by the CODM which are used to make strategic decisions. The CODM assesses the performance of the operating segments based on revenue, EBITDAR (Earnings before interest, income tax, depreciation, amortisation and rent), and Adjusted EBITDAR (EBITDAR excluding unrealised gains or losses on foreign exchange and exceptional items). The measure also excludes all headline earnings and adjusted headline earnings adjustments that impact EBITDAR. Finance income and finance costs are not included in the results for each operating segment, as the cash and debt position is managed at a group level. City Lodge Hotels Annual Financial Statements 2026 25
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GROUP COMPANY R000 2026 2025 2026 2025 1. PROPERTY, PLANT AND EQUIPMENT At cost Land 169 779 176 373 36 072 36 072 Buildings 2 412 297 2 366 799 1 969 860 1 889 750 – freehold 1 970 225 1 927 822 1 556 349 1 480 052 – leasehold 442 072 438 977 413 511 409 698 Buildings under construction 16 647 6 833 16 647 6 833 Furniture and equipment 853 429 835 775 785 672 763 159 3 452 152 3 385 780 2 808 251 2 695 814 Accumulated depreciation and impairment losses Buildings 887 672 895 071 747 542 742 220 – freehold 600 916 624 880 478 901 488 787 – leasehold 286 756 270 191 268 641 253 433 Furniture and equipment 543 519 554 532 486 119 491 773 1 431 191 1 449 603 1 233 661 1 233 993 Carrying amount Land 169 779 176 373 36 072 36 072 Buildings 1 524 625 1 471 728 1 222 318 1 147 530 – freehold 1 369 309 1 302 942 1 077 448 991 265 – leasehold 155 316 168 786 144 870 156 265 Buildings under construction 16 647 6 833 16 647 6 833 Furniture and equipment 309 910 281 243 299 553 271 386 2 020 961 1 936 177 1 574 590 1 461 821 R000 Land Buildings Furniture and equipment Total Movements in carrying amount for the year GROUP Opening balance – 30 June 2024 142 596 1 387 752 232 260 1 762 608 – At cost 142 596 2 261 191 788 289 3 192 076 – Accumulated depreciation and impairment losses – (873 439) (556 029) (1 429 468) Additions 34 894 151 821 91 234 277 949 Disposals – cost – (31 812) (42 781) (74 593) Disposals – accumulated depreciation – 17 172 41 000 58 172 Depreciation – (40 834) (40 391) (81 225) Loss on foreign exchange movement (1 117) (5 538) (79) (6 734) Closing balance – 30 June 2025 176 373 1 478 561 281 243 1 936 177 Additions – 141 812 82 682 224 494 Disposals – cost (2 814) (59 908) (61 144) (123 866) Disposals – accumulated depreciation – 45 253 60 623 105 876 Depreciation – (45 255) (53 077) (98 332) Loss on foreign exchange movement (3 780) (19 191) (417) (23 388) Closing balance – 30 June 2026 169 779 1 541 272 309 910 2 020 961 26 Notes to the financial statements for the year ended 30 June 2026
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R000 Land Buildings Furniture and equipment Total 1. PROPERTY, PLANT AND EQUIPMENT continued COMPANY Opening balance – 30 June 2024 1 178 1 053 974 222 467 1 277 619 – At cost 1 178 1 778 544 716 995 2 496 717 – Accumulated depreciation and impairment losses – (724 570) (494 528) (1 219 098) Additions 34 894 144 691 88 946 268 531 Disposals – cost – (26 653) (42 783) (69 436) Disposals – accumulated depreciation – 15 883 41 000 56 883 Depreciation – (33 531) (38 245) (71 776) Closing balance – 30 June 2025 36 072 1 154 364 271 385 1 461 821 Additions – 140 294 79 184 219 478 Disposals – cost – (50 370) (56 671) (107 041) Disposals – accumulated depreciation – 32 901 56 151 89 052 Depreciation – (38 224) (50 496) (88 720) Closing balance – 30 June 2026 36 072 1 238 965 299 553 1 574 590 At 30 June 2026, properties in the group and company with a carrying amount of R609.6 million(2025: R446.3 million) are subject to a registered bond to secure interest-bearing borrowings (refer to note 12). The group reassessed the useful lives and residual values for the properties during the current year, and there was no material impact to the depreciation. During February 2026, the group finalised the sale of Courtyard Hotel Arcadia. The hotel, with a carrying value of R17.5 million, was sold for R36.7 million (net of VAT and transaction costs) resulting in a profit before tax of R19.2 million. As part of the disposal process, Gallic Courtyard (Arcadia) Share Block Proprietary Limited (“Gallic Courtyard Arcadia”), a 100% held subsidiary of the company, re-acquired its right-of-use from the company as it was required to sell the hotel unencumbered. In terms of the Share Block Controls Act, the hotel was linked to issued shares of Gallic Courtyard Arcadia which are required to be cancelled upon the disposal of the hotel. The shares have been cancelled by Gallic Courtyard Arcadia for no additional consideration. Considerations for impairment (losses) and reversals of property, plant and equipment, right-of-use assets At the end of each reporting period, the group and company review the carrying amounts of each hotel (which is considered to be an individual cash-generating unit (CGU)) to determine whether there are any indications of impairment. If any such indication exists, then the CGUs recoverable amount is determined. Management has assessed the carrying amount of the individual CGUs for an impairment loss or impairment reversal during the financial year by reviewing cash flow forecasts for the period 2027 to 2031, which we believe adequately reflects the cash flows generated by the underlying hotels. Based on the assessment performed, no impairment loss or impairment reversals have been recognised on PPE and ROU assets during the period (2025: no impairment or impairment reversal was recognised). The recoverable amount of each individual CGU has been based on value-in-use (VIU) using the discounted cash flow model (DCF) by applying projected cash flows over a five-year period. Where references are made to ‘South Africa’ in the impairment information below, this impacts company and group. References to ‘Rest of Africa’ impact group only. Significant judgements and areas of estimation uncertainty Forecast cash flow assumptions The South African economic outlook remains uncertain due to geopolitical tensions, oil supply constraints and higher fuel prices, which may contribute to inflationary pressures, elevated interest rates and increased living costs. These factors could continue to constrain disposable income in the short term. However, improved domestic policies and strengthening investor and consumer confidence provide a positive foundation for economic growth as global conditions stabilise. Management expects hotel occupancy and room rates to continue improving as economic and geopolitical pressures ease. Positive tourism forecasts and increased foreign investment are expected to support the recovery in trading levels and a gradual return to long-term average occupancy. The timing of this recovery has been assessed individually for each hotel, taking into account its specific regional and market conditions. Consistent with the prior year, management’s forecast follows a bottom-up approach (i.e. forecasts are prepared at a CGU level by the local general manager and then submitted, consolidated and reviewed at a head office level per CGU) for FY27 per CGU. For established hotels, which are hotels operating for more than six years, continued improvement in cash flows are expected between FY28 to FY31. Estimated revenue growth for established hotels ranges from 9% for FY27 to 8% for the years thereafter up until FY31 in South Africa. With respect to established hotels in Rest of Africa estimated revenue growth ranges from 9% for FY27 to 7% for the years thereafter up until FY31. (2025: Estimated revenue growth ranged from 8% for FY27 to 7% for the years thereafter up until FY30 in South Africa. Estimated revenue growth ranged from 10% for FY27 to 8% for the years thereafter up until FY30 for established hotels in Rest of Africa.) City Lodge Hotels Annual Financial Statements 2026 27
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1. PROPERTY, PLANT AND EQUIPMENT continued Considerations for impairment (losses) and reversals of property, plant and equipment, right-of-use assets and goodwill continued Forecast cash flow assumptions continued The estimated escalations in revenue are driven by the expected value generated by key strategic developments including the modernisation of key hotels in the portfolio, and Best Available rate optimisation. The South African economy is being boosted by significant investments in hospitality and tourism infrastructure facilities, supported by the implementation of Phase 3 of the Government Business Partnership which focuses on growth, job creation and confidence. Moreover, a consistent rise in international tourist visits, with the country being ranked among the most diverse and appealing travel destinations in Africa, is supporting the market growth. South Africa remains the major source market for the Southern African Development Community (SADC), and therefore the South African factors are expected to have a similar effect in the Rest of Africa. Operating expense escalations trend toward long-term Reserve Bank and Central Bank CPI targets. For newer hotels which have been operating less than six years, management estimates steeper levels of revenue growth, as the hotel establishes itself within its market, and reduced levels of operating expense growth due to the high proportions of fixed costs in hotel operations. Terminal growth rate assumptions The terminal growth rate applied is between 4.0% and 5.5% (2025: between 4.0% to 5.5%) for South African hotels and ranges between 4.0% and 6.5% (2025: between 4.0% and 7.5%) for the Rest of Africa hotels and is based on country-specific target inflations. Discount rate assumptio ns The discount rate represents a risk adjusted discount rate and is calculated by using a weighted average cost of capital (“WACC”) of the respective CGUs. WACC is calculated using a risk-free rate referenced to the 10 year point on the SA Government Bond curve and an equity premium adjusted for specific risks relating to the relevant CGUs (share beta and small stock premium). The pre-tax discount rate utilised in the valuation ranges between 12.3% and 20.9% (2025: 12.8% and 17.5%) for the South African hotels and ranges between 10.6% and 19.1% (2025: 10.7% and 17.1%) for Rest of Africa hotels. Despite a lower risk free rate and the long term borrowing rates increasing, the discount rate for the South African hotels remains similar to the prior year as a result of the debt to equity split. For the rest of Africa hotels the pre-tax discount rate increased marginally compared to the prior year which is a result of a higher risk free rate, country risk premium equity risk premium being applied in calculating the cost of equity. Based on the assessments performed, the recoverable amounts of the CGU’s is higher than the carrying amount as at 30 June 2026, indicating no impairment loss. Based on the impairment assessments performed, no impairments and impairment reversals have been recognised on property, plant and equipment and right-of-use assets in the current or prior year. GROUP COMPANY R000 2026 2025 2026 2025 2. RIGHT-OF-USE ASSETS Opening balance 909 350 917 414 847 795 844 750 Depreciation (95 258) (92 399) (84 568) (81 448) Derecognition for property acquired1 – (16 164) – (16 164) Remeasurement2 42 766 100 657 42 766 100 657 Effects of movement in exchange rates (989) (158) – – Closing balance 855 869 909 350 805 993 847 795 Cost 1 671 748 1 632 488 1 549 500 1 506 734 Accumulated depreciation and impairment losses (815 879) (723 138) (743 507) (658 939) Net carrying amount 855 869 909 350 805 993 847 795 1 The derecognition of property relates to the land of City Lodge Hotel Fourways that was acquired in the prior year. 2 The remeasurement in the current year mainly relates to the group concluding the lease addendum to expand its City Lodge Hotel Waterfall City and the lease term extended for an additional two years. The leasing activities of the group and company relate to the leasing of land and/or buildings. During the year ended 30 June 2026, the group and company did not recognise any new impairments or reversals (2025: no impairment or impairment reversals were recognised for the group and the company). Refer to note 1 for further information on the impairments and related key assumptions and sensitivities. Associated lease liabilities are disclosed in note 13. 28 Notes to the financial statements continued for the year ended 30 June 2026
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GROUP COMPANY R000 2026 2025 2026 2025 3. INTANGIBLE ASSETS AND GOODWILL At cost Software costs 71 966 70 994 71 613 70 612 Goodwill 19 581 19 581 19 581 19 581 91 547 90 575 91 194 90 193 Accumulated amortisation and impairment losses Software costs 55 893 48 300 55 540 47 918 Goodwill 19 581 19 581 19 581 19 581 75 474 67 881 75 121 67 499 Carrying amount Software costs 16 073 22 694 16 073 22 694 Goodwill – – – – 16 073 22 694 16 073 22 694 R000 Software cost Goodwill Total Movements in carrying amount for the year GROUP Opening balance – 30 June 2024 24 457 – 24 457 – At cost 67 580 19 581 87 161 – Accumulated amortisation and impairment losses (43 123) (19 581) (62 704) Amortisation (6 709) – (6 709) Additions 4 946 – 4 946 Disposals - Cost (1 523) – (1 523) Disposals - Accumulated amortisation 1 523 – 1 523 Closing balance – 30 June 2025 22 694 – 22 694 Amortisation (7 622) – (7 622) Additions 1 001 – 1 001 Closing balance – 30 June 2026 16 073 – 16 073 COMPANY Opening balance – 30 June 2024 24 457 – 24 457 – At cost 67 189 19 581 86 770 – Accumulated amortisation and impairment losses (42 732) (19 581) (62 313) Amortisation (6 709) – (6 709) Additions 4 946 – 4 946 Disposal - Cost (1 523) – (1 523) Disposal - Accumulated amortisation 1 523 – 1 523 Closing balance – 30 June 2025 22 694 – 22 694 Amortisation (7 622) – (7 622) Additions 1 001 – 1 001 Closing balance – 30 June 2026 16 073 – 16 073 The group is in the process of replacing its property management system (“PMS”). The remaining amortisation period for the PMS has been assessed as one year (2025: two years). For the remainder of software costs, the remaining amortisation period is six years (2025: seven years). City Lodge Hotels Annual Financial Statements 2026 29
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COMPANY R000 Location Issued share capital % held 2026 2025 4. INTEREST IN SUBSIDIARIES Shares at carrying amount Budget Hotels Proprietary Limited South Africa R100 100 1 073 1 073 City Lodge Hotels (Africa) Proprietary Limited South Africa R700 000 100 100 343 059 343 059 City Lodge Hotels (Botswana) Proprietary Limited Botswana BWP1 100 * * CLHG Mozambique Lda^ Mozambique MZN1 000 000 1 3 3 Courtyard Management Company Proprietary Limited South Africa R100 100 * * Gallic Courtyard (Arcadia) Share Block Proprietary Limited South Africa – – – 1 Gallic Courtyard (Bruma Lake) Share Block Proprietary Limited South Africa R2 584 100 3 3 Gallic Courtyard (Rosebank) Share Block Limited South Africa R3 816 100 4 4 Gallic Courtyard (Sandown) Share Block Limited South Africa R3 067 100 3 3 Property Lodging Investments Proprietary Limited South Africa R100 100 2 000 2 000 346 145 346 146 * Less than R1 000. ^ The majority shareholder (99%) is City Lodge Hotels (Africa) Proprietary Limited, and the group has 100% holding. The company also has an indirect 100% shareholding in City Lodge Holdings (Share Block) Proprietary Limited and City Lodge Hotels (Namibia) Proprietary Limited, and an indirect 99% shareholding in CLHG Mozambique Lda. COMPANY R000 2026 2025 Opening balance 346 146 346 146 Disposal of Gallic Courtyard (Arcadia) Share Block Proprietary Limited (1) – Closing balance 346 145 346 146 The company's shares it holds in Gallic Courtyard (Arcadia) Share Block Proprietary Limited were cancelled for no consideration as a direct result of the sale of Courtyard Hotel Arcadia. Refer to note 1. Based on an assessment of the recoverable amount of the investment in subsidiaries, no additional impairment was identified at the reporting date. 30 Notes to the financial statements continued for the year ended 30 June 2026
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GROUP COMPANY R000 2026 2025 2026 2025 5. DEFERRED TAXATION Movement in deferred taxation assets Opening balance 11 912 26 752 – – Charged to profit or loss 611 (1 017) – – Impairment of deferred tax asset1 (9 495) (13 750) – – Change in corporate tax rate 783 – – – Foreign exchange movement (633) (73) – – Closing balance 3 178 11 912 – – Analysis of deferred taxation assets/(liabilities) Capital allowances – (177) – – Deductible accruals – 1 119 – – Right-of-use asset – (5 634) – – Lease liability – 8 895 – – Prepayments – (3) – – Tax loss 3 178 7 701 – – Unrealised foreign exchange gain – 11 – – 3 178 11 912 – – Movement in deferred taxation liabilities Opening balance 59 580 58 848 58 921 58 188 Charged to profit or loss 5 108 732 5 108 733 Closing balance 64 688 59 580 64 029 58 921 Analysis of deferred taxation liabilities/(assets) Capital allowances 238 643 216 311 237 984 215 652 Income received in advance (14 489) (11 255) (14 489) (11 255) Right-of-use asset 217 618 228 905 217 618 228 905 Lease liability (358 040) (358 481) (358 040) (358 481) Prepayments 2 649 2 693 2 649 2 693 Share options (633) (1 831) (633) (1 831) Accruals (21 060) (16 762) (21 060) (16 762) 64 688 59 580 64 029 58 921 1 The impairment in the current year, is a result of the subdued operational performance in Town Lodge Gaborone following the economic downturn in the country. The previously recognised deferred tax assets of R7.7 million is not likely to be recoverable. In the prior year, there were changes in tax legislation communicated by the Namibia Revenue Authority which impact whether the asset is considered recoverable. Section 21 was amended to limit the amount of assessed losses which may be set-off against taxable income and is limited to N$1 000 000, or 80% of taxable income, whichever is greater. In addition, no assessed loss shall be carried forward as a deduction for more than five years. In light of these changes, a R13.5 million impairment was recognised in the prior year, and a further R1.8 million was recognised in the current year. City Lodge Hotels Annual Financial Statements 2026 31
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5. DEFERRED TAXATION continued The expected manner of recovery of the deferred tax asset and settlement of the liability will be through use. The tax rate used to calculate the deferred tax balance is: • South Africa – 27% (2025: 27%) • Botswana – 24.5% (2025: 22%) • Mozambique – 32% (2025: 32%) • Namibia – 30% (2025: 30%) The R3.2 million (2025: R11.9 million) deferred taxation assets are considered recoverable as they relate to timing differences and tax losses which will be utilised and set-off against future taxable profits. Estimated available tax losses GROUP COMPANY R000 2026 2025 2026 2025 Estimated available tax losses 198 432 209 590 – – Estimated available capital tax losses 9 024 – 9 024 – Tax losses recognised in determining deferred tax assets (10 592) (28 946) – – Unrecognised tax losses 196 864 180 644 9 024 – Unrecognised deferred tax asset pertaining to unutilised tax and capital tax losses 59 934 56 538 2 436 – GROUP COMPANY R000 2026 2025 2026 2025 6. INVENTORIES Food, liquor and beverages 8 404 8 148 8 088 7 691 Food and beverages expensed during the year are included on the statements of profit or loss and other comprehensive income as food and beverage costs. There was no write-off of inventories during the year (2025: nil). COMPANY R000 2026 2025 7. LOAN TO SUBSIDIARY City Lodge Hotels (Botswana) (Pty) Ltd – – Opening balance – – Loan advances 2 500 – Interest income accrued 77 – Impairment loss (2 577) – – – The loan is unsecured, repayable on demand and bears interest at a maximum rate of the three-month JIBAR plus 2.70%. The loan is not in default, however, the subsidiary has had a subdued performance for the year which has resulted in liquidity constraints. The subsidiary is unlikely to generate sufficient profits in the medium term to repay the loan and the credit risk at year end was considered to have significantly increased. The full amount has therefore been provided for. 32 Notes to the financial statements continued for the year ended 30 June 2026
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GROUP COMPANY R000 2026 2025 2026 2025 8. OTHER RECEIVABLES Financial assets 33 507 15 874 29 815 24 281 Amounts due by subsidiaries (refer to note 28.5) – – 11 443 11 007 Sundry receivables1 26 281 8 793 11 146 6 193 Enterprise development loans 7 226 7 081 7 226 7 081 Non-financial assets 73 128 72 943 45 088 40 191 Prepayments 18 998 13 477 17 835 12 340 Asset replacement reserve 27 253 27 851 27 253 27 851 Value added tax (VAT) refundable 26 877 31 615 – – 106 635 88 817 74 903 64 472 1 Sundry receivables includes levies receivable and other sundries. Impairment allowance on other receivables A loss allowance of R7.9 million has been raised in the current year on the amounts due by subsidiaries, City Lodge Hotels (Botswana) Proprietary Limited. The amount due by City Lodge Hotels (Botswana) Proprietary Limited is repayable on demand, however, the subsidiary is unlikely to generate profits to repay the balances due. The credit risk has been considered to have significantly increased at year end and therefore the full gross balance has been provided for. Other than the above, the remainder of other receivables balances are not in default and the credit risk at year end was considered not to have increased. The probability of default was assessed as close to nil and therefore an immaterial loss allowance was raised for the amounts outstanding at year end. GROUP COMPANY R000 2026 2025 2026 2025 9. STATED CAPITAL Authorised - No par value shares Number of ordinary shares of no par value ('000) 10 000 000 10 000 000 10 000 000 10 000 000 Issued and fully paid Opening balance 1 243 133 1 273 133 1 243 133 1 273 133 Repurchase of ordinary shares (152 249) (29 889) (152 249) (29 889) Transaction costs (555) (111) (555) (111) Closing balance 1 090 329 1 243 133 1 090 329 1 243 133 Reconciliation of number of shares in issue Opening balance 590 517 532 598 146 832 590 517 532 598 146 832 Repurchase of ordinary shares (37 890 667) (7 629 300) (37 890 667) (7 629 300) Closing balance 552 626 865 590 517 532 552 626 865 590 517 532 During the year the group acquired 38 041 071 (2025: 7 672 300) shares at an average price of R4.02 per share during the year. The cost, including transaction costs, of the share repurchases totalled R152.8 million. Following the cancellation of 37 890 667 shares, the total number of ordinary no par value shares in issue as at 30 June 2026 is 552 626 865 (2025: 590 517 532). The remaining 150 404 shares were held in treasury shares and cancelled after year end. All unissued ordinary shares are under the control of the directors, with the power to allot and issue these shares for the purposes of the CSP, subject to the maximum overall limit of 5% of the issued shares, in terms of a resolution of members passed at the last annual general meeting. The authority remains in force until the next annual general meeting. City Lodge Hotels Annual Financial Statements 2026 33
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GROUP COMPANY R000 2026 2025 2026 2025 10. TREASURY SHARES Opening balance (520 779) (512 807) (520 779) (512 807) Acquisition of shares (659) – (659) – Incentive scheme shares purchased (1 131) (7 972) (1 131) (7 972) Transfer to other reserves on exercise of vesting rights 10 726 – 10 726 – Closing balance (511 843) (520 779) (511 843) (520 779) Treasury shares include 35 393 908 shares (with a market value of R160 million (2025: R139 million)) held by the SPV’s, and 2 821 475 shares (with a market value of R13 million (2025: R11 million)) held by the 10th Anniversary Employees’ Share Trust. The SPVs and the City Lodge 10th Anniversary Employees’ Share Trust have been aggregated into the results of City Lodge Hotels Limited, as the trust and the SPVs are considered to be acting as agents on behalf of the company. The acquisition of shares consists of 150 404 shares that the group acquired as part of its share re-purchase program which was still in the process of being cancelled with JSE Limited (Refer to Note 9). GROUP COMPANY R000 2026 2025 2026 2025 11. OTHER RESERVES Share-based payment reserve 63 347 70 544 63 347 70 544 Opening balance 70 544 71 600 70 544 71 600 Expense/(reversal) for the year – share incentive scheme (refer to note 17) 3 529 (1 056) 3 529 (1 056) Reserve transferred from treasury shares on exercise of vesting rights (10 726) – (10 726) – The share-based payment reserve relates to the accumulated cost for the future settlement of obligations arising from the share incentive schemes. Foreign currency translation reserve 9 969 6 414 – – Opening balance 6 414 5 924 – – Foreign currency translation differences 3 555 490 – – The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations. Closing balance 73 316 76 958 63 347 70 544 34 Notes to the financial statements continued for the year ended 30 June 2026
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GROUP COMPANY R000 2026 2025 2026 2025 12. INTEREST-BEARING BORROWINGS Loan Facility A is a revolver facility of R200 million in total and bears interest at base rate plus an applicable margin of 1.7% per annum. Outstanding loan capital is repayable on 30 June 2028. 100 000 – 100 000 – Loan Facility B is a revolver facility of R300 million in total and bears interest at the base rate plus an applicable margin of 1.95% per annum. Outstanding loan capital is repayable on 30 June 2029. – – – – Loan Facility C is a revolver facility of R100 million in total and bears interest at the base rate plus an applicable margin of 2.1% per annum. Outstanding loan capital is repayable on 30 June 2030. – – – – Non-current liabilities 100 000 – 100 000 – The movement in interest-bearing borrowings during the year is as follows: Opening balance – – – – Borrowings raised 230 000 80 000 230 000 80 000 Borrowings repaid (130 000) (80 000) (130 000) (80 000) Interest charged 13 610 7 418 13 610 7 418 Interest paid (10 813) (6 645) (10 813) (6 645) 102 797 773 102 797 773 Opening balance – interest 804 31 804 31 Interest accrued included in sundry accruals (3 601) (804) (3 601) (804) Closing balance 100 000 – 100 000 – In the prior year, the company entered into a new finance agreement with its lenders on 30 June 2025 . With the announcement by the South African Reserve Bank (SARB) of its intention to transition from JIBAR to the South African Rand Overnight Index Average (ZARONIA) and the expiry of one of its facilities, the company opted to refinance all three loan facilities and include wording in the agreement to cater for the transition from JIBAR to Zaronia on final adoption by the SARB. At the time of concluding on the new finance agreement, no loan amounts were outstanding. The covenants for all measurement periods during the year ended 30 June 2026 were met. Refer to note 27.6. City Lodge Hotels Annual Financial Statements 2026 35
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GROUP COMPANY R000 2026 2025 2026 2025 13. LEASE LIABILITIES Opening balance 1 435 963 1 417 008 1 327 706 1 297 395 Interest expense accrued 126 594 128 809 117 372 118 354 Capital lease payments (57 959) (46 805) (44 399) (35 778) Interest payments (126 594) (128 809) (117 372) (118 354) Derecognition for property acquired1 – (34 568) – (34 568) Remeasurements2 42 766 100 657 42 766 100 657 Effects of movement in exchange rates (1 686) (329) – – Closing balance 1 419 084 1 435 963 1 326 073 1 327 706 Lease liabilities recognised in the statement of financial position are analysed as: Non-current portion 1 367 322 1 379 217 1 289 741 1 284 433 Current portion1 51 762 56 746 36 332 43 273 1 419 084 1 435 963 1 326 073 1 327 706 1 Derecognition for property acquired includes the derecognition of the lease liability for the City Lodge Fourways lease liability balance as the land was purchased from the landlord in the prior year. 2 The remeasurement in the current year mainly relates to the group concluding the lease addendum to expand its City Lodge Hotel Waterfall City and the lease term has been extended for an additional two years. The group and company has various lease agreements in place where the rentals are determined based on a percentage of turnover. The total cash outflow in relation to variable lease payments amounts to R21.3 million (2025: R6.1 million) for the group and company. Associated right-of-use assets are disclosed in note 2. The maturity analysis is disclosed in note 27.4. GROUP COMPANY R000 2026 2025 2026 2025 14. TRADE AND OTHER PAYABLES Financial liabilities 192 491 197 872 273 532 271 032 Trade payables 85 611 86 600 76 669 81 614 Amounts due to subsidiaries (refer to note 28.4) – – 92 906 82 441 Accruals 67 368 66 190 64 988 63 384 Other trade payables1 39 512 45 082 38 969 43 593 Non-financial liabilities 124 297 99 555 121 076 88 781 Income received in advance2 54 508 43 169 53 665 41 686 Leave pay provision 26 972 22 990 26 313 22 407 Bonus and 13th cheque provisions 29 797 19 565 29 215 19 106 Value added tax (VAT) payable and other 13 020 13 831 11 883 5 582 316 788 297 427 394 608 359 813 1 Other trade payables includes capital expenditure related payables and sundry payables. 2 The total revenue recognised in the current year, which relates to carried forward income received in advance associated with advanced deposits, amounts to R43.2 million (2025: R32.0 million) for the group and R41.7 million (2025: R30.7 million) for the company. The closing balance represents new advance deposits where the performance obligations have not yet been met at year-end. The amounts recognised as income received in advance will generally be utilised within the next 12 months.. 36 Notes to the financial statements continued for the year ended 30 June 2026
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15. REVENUE The group derives revenue at a point in time, together with its customer reward programmes, which are earned as they are redeemed or expire. The group has contract liabilities from income received in advance and the customer reward programmes, which are included within trade and other payables. Revenue increased by 10% compared to the prior year due to an increase in occupancies by two percentage points, and average room rates (ARR) increases of 7% (2025: 7%) during the year, and supported by a continued improvement in food and beverage revenue of 14%. Disaggregation of the revenue from contracts with customers for the year under review: GROUP COMPANY R000 2026 2025 2026 2025 Accommodation 1 735 792 1 588 311 1 663 714 1 522 741 Food and beverage 449 855 393 223 424 675 365 480 Other revenue1 17 267 15 916 16 613 15 291 2 202 914 1 997 450 2 105 002 1 903 512 1 Other revenue comprises conferencing, boardroom hire and miscellaneous revenue. R000 Rooms revenue Food and beverage revenue Other revenue Total 15.1 Revenue by segment GROUP 2026 South Africa1 1 663 714 424 675 16 613 2 105 002 Courtyard Hotel 134 368 45 720 5 280 185 368 City Lodge Hotel 921 978 225 418 6 571 1 153 967 Town Lodge 251 364 79 349 2 925 333 638 Road Lodge 356 004 74 188 1 837 432 029 Rest of Africa 72 078 25 180 654 97 912 1 735 792 449 855 17 267 2 202 914 2025 South Africa1 1 522 741 365 480 15 291 1 903 512 Courtyard Hotel 132 302 45 730 5 323 183 355 City Lodge Hotel 830 826 190 918 6 152 1 027 896 Town Lodge 226 776 67 273 2 247 296 296 Road Lodge 332 837 61 559 1 569 395 965 Rest of Africa 65 570 27 743 625 93 938 1 588 311 393 223 15 916 1 997 450 1 Revenue by segment for Company only includes South Africa. City Lodge Hotels Annual Financial Statements 2026 37
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16. OTHER INCOME GROUP COMPANY R000 2026 2025 2026 2025 Dividend from subsidiary in specie1 – – – 75 000 Licence fees received from subsidiaries – – 4 665 4 727 Other 8 731 8 086 7 510 7 043 Profit on disposal of property, plant and equipment 20 812 42 175 20 812 – Profit on derecognition of lease (refer to note 2 and 13) – 18 404 – 18 404 29 543 68 665 32 987 105 174 1 In the prior year, a dividend was declared by Property Lodging Investments Proprietary Limited and was settled against the outstanding inter- company loan balance with the company. GROUP COMPANY R000 2026 2025 2026 2025 17. OTHER OPERATING COSTS Advertising and promotions 31 022 25 632 25 241 19 512 Auditor's remuneration 8 967 8 981 7 451 7 128 External audit fees 6 940 7 004 5 597 5 656 Non-audit services performed by the external auditor 92 – – – Internal audit and non-audit services performed by other audit firms 1 935 1 977 1 855 1 472 Computer software licenses and maintenance 30 710 23 849 30 675 23 833 Insurance 15 572 15 484 14 996 14 662 Levies paid 18 716 18 640 18 716 18 640 Loss on disposal of property, plant and equipment – 239 – 239 Non-executive directors' fees (refer to note 19) 5 001 4 837 5 001 4 837 Sundry operating costs1 56 074 55 318 40 469 42 426 Staff related costs2 41 220 27 934 40 155 26 926 Security 37 758 36 591 36 716 35 536 Repairs and maintenance 66 654 69 152 64 205 66 515 Variable lease expenses 15 189 15 302 57 004 54 534 Share-based payment expense (refer to note 24) 3 529 (1 056) 3 529 (1 056) – City Lodge 10th Anniversary Employees' Share Trust 14 28 14 28 – City Lodge bonus share plan 2 030 1 575 2 030 1 575 – City Lodge conditional share plan 1 485 (2 659) 1 485 (2 659) 330 412 300 903 344 158 313 732 1 Sundry operating costs include printing, stationery, professional services and consulting fees, bank charges and miscellaneous expenses. 2 Staff related costs include the movement in leave pay provision, discretionary staff and management bonuses, uniform costs, staff refreshments and entertainment, long service awards and training. 38 Notes to the financial statements continued for the year ended 30 June 2026
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GROUP R000 2026 2025 18. RECONCILIATION OF OPERATING PROFIT TO EBITDAR AND ADJUSTED EBITDAR EBITDAR is made up as follows: Operating profit 448 844 445 828 Depreciation and amortisation 105 954 87 934 Depreciation on right-of-use assets 95 258 92 399 Variable lease expenses 15 189 15 302 EBITDAR1 665 245 641 463 Unrealised losses on foreign exchange 28 736 7 912 Profit on disposal of property, plant and equipment2 (19 244) (42 175) Profit on derecognition of lease – (18 404) Adjusted EBITDAR3, 4 674 737 588 796 1 The group defines EBITDAR as earnings before interest, income tax, depreciation, amortisation and rent. 2 The profit on disposal of property, plant and equipment included in the reconciliation relates specifically to the sale of Courtyard Hotel Arcadia in the current year (refer to note 1) and City Lodge Hotel Katherine Street in the prior year. 3 Adjusted EBITDAR is used by the group as a measure of earnings from normal day-to-day operations, and further excludes exceptional items from EBITDAR. 4 Exceptional items are considered to be those that are not within the normal day-to-day operations of the business and sufficiently material or unusual that they would distort the numbers if they were not adjusted. This would include headline and adjusted headline earnings adjustments that impact EBITDAR. R000 Basic salary Performance and other bonus1 Fringe benefits and allowances Pension fund contributions Total annual remuneration Current year share-based payment expense2 Total 19. DIRECTORS' EMOLUMENTS Executive directors 2026 Lindiwe Siddo 3 693 1 222 9 388 5 311 171 5 482 Dhanisha Nathoo 3 908 977 52 410 5 347 186 5 533 Andrew Widegger 7 009 2 314 32 1 121 10 476 434 10 910 14 609 4 513 93 1 919 21 135 791 21 926 2025 Lindiwe Siddo 3 465 336 9 364 4 174 (330) 3 844 Dhanisha Nathoo 3 563 350 53 374 4 340 (288) 4 052 Andrew Widegger 6 581 853 32 1 053 8 519 (816) 7 703 13 609 1 539 94 1 791 17 033 (1 434) 15 599 1 Performance and other bonus includes the accrual for the short term incentive bonuses. 2 This expense represents the IFRS 2 costs for the year of any option or right given or reversed (refer to note 24). Executive directors are full-time salaried employees, engaged on the company’s standard terms and conditions of employment. The executive directors are the only prescribed officers. No other payments were made to the executive directors. City Lodge Hotels Annual Financial Statements 2026 39
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19. DIRECTORS’ EMOLUMENTS continued Conditional share plan FY26 Date of award Grant date price (R) Holding at 30 June 2025 Granted Vested Non- vesting Holding at 30 June 2026 Vesting date Andrew Widegger 1/10/2025 3.91 – 1 999 219 – – 1 999 219 1/10/2028 Lindiwe Siddo 1/10/2025 3.91 – 788 408 – – 788 408 1/10/2028 Dhanisha Nathoo 1/10/2025 3.91 – 844 325 – – 844 325 1/10/2028 Conditional share plan FY25 Date of award Grant date price (R) Holding at 30 June 2025 Granted Vested Non- vesting Holding at 30 June 2026 Vesting date Andrew Widegger 28/10/2024 5.01 1 465 041 – – – 1 465 041 27/10/2027 Lindiwe Siddo 28/10/2024 5.01 577 751 – – – 577 751 27/10/2027 Dhanisha Nathoo 28/10/2024 5.01 601 776 – – – 601 776 27/10/2027 Conditional share plan FY24 Date of award Grant date price (R) Holding at 30 June 2025 Granted Vested Non- vesting Holding at 30 June 2026 Vesting date Andrew Widegger 31/10/2023 4.35 1 588 069 – – – 1 588 069 30/10/2026 Lindiwe Siddo 31/10/2023 4.35 621 878 – – – 621 878 30/10/2026 Dhanisha Nathoo 31/10/2023 4.35 630 072 – – – 630 072 30/10/2026 Conditional share plan FY23 Date of award Grant date price (R) Holding at 30 June 2025 Granted Vested Non- vesting Holding at 30 June 2026 Vesting date Andrew Widegger 7/11/2022 4.06 1 575 466 – – (1 575 466) – 6/11/2025 Lindiwe Siddo 7/11/2022 4.06 611 282 – – (611 282) – 6/11/2025 Dhanisha Nathoo 7/11/2022 4.06 597 414 – – (597 414) – 6/11/2025 40 Notes to the financial statements continued for the year ended 30 June 2026
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19. DIRECTORS’ EMOLUMENTS continued Non-executive directors fees Fees R000 2026 2025 Karen Classen (appointed 20 November 2025) 308 – Stephen Enderle 445 404 Deon Huysamer 685 566 Frank Kilbourn 692 636 Andrew Lapping (resigned 20 November 2025) 219 531 Dr Sizakele Marutlulle 539 482 Ndumi Medupe (resigned 21 November 2024) – 236 Mathukana Manthata 697 641 Bulelani Ngcuka (payment made to Vuwa Investments Proprietary Limited) 1 415 1 341 5 001 4 837 Directors’ interests The directors’ individual interest in the ordinary share capital of the company at 30 June were as follows: Beneficial Direct Indirect 2026 2025 2026 2025 Karen Classen (appointed 20 November 2025) – – – – Stephen Enderle1 900 000 900 000 54 358 553 54 358 553 Deon Huysamer – – – – Frank Kilbourn2 238 000 238 000 218 162 218 162 Andrew Lapping (resigned 20 November 2025) – – – – Dr Sizakele Marutlulle – – – – Mathukana Manthata3 – – 37 790 37 790 Dhanisha Nathoo 349 890 531 243 – – Bulelani Ngcuka4 – – 246 246 Lindiwe Siddo 255 978 354 696 – – Andrew Widegger 3 780 131 4 010 131 – – Total 5 523 999 6 034 070 54 614 751 54 614 751 1 Stephen Enderle indirectly holds shares through Enderle SA Proprietary Limited. The prior year has been restated from 55 144 733 shares to 54 358 553 shares to align to the definition of indirect beneficial interest as per the JSE Listings Requirements. 2 Frank Kilbourn’s direct holding and 75 362 (2025: 75 362) of his indirect holding is pledged as security in his personal capacity. The balance of the indirect holding is unencumbered. 3 Mathukana Manthata’s indirect shareholding reflects shares held in the company through Mathukana Investments Proprietary Limited as well as shares held by her immediate family members. 4 Bulelani Ngcuka’s indirect shareholding reflects his proportionate share of the 14 157 779 (2025: 14 157 779) shares owned by Vuwa Investments Proprietary Limited, following the indirect share repurchase by City Lodge Hotels Limited for the majority shares in Vuwa Hotels (RF) Proprietary Limited in December 2020. No changes in directors’ interests have taken place between the reporting date and the date of issue of these financial statements. City Lodge Hotels Annual Financial Statements 2026 41
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GROUP COMPANY R000 2026 2025 2026 2025 20. INTEREST 20.1 Interest income Bank 1 620 1 807 1 592 1 774 Subsidiaries (refer to note 28) – – 77 – 1 620 1 807 1 669 1 774 GROUP COMPANY 2026 2025 2026 2025 20.2 Interest expense Long-term borrowings – bank (13 610) (7 418) (13 610) (7 418) Lease liabilities (126 594) (128 809) (117 372) (118 354) Short-term borrowings (373) – (373) – Subsidiaries (refer to note 28) – – – – (140 577) (136 227) (131 355) (125 772) No interest was capitalised to property, plant and equipment during 2026 and 2025. GROUP COMPANY R000 2026 2025 2026 2025 21. TAXATION Current – current year 93 588 82 845 78 701 57 151 Current - prior year under provision 51 – – – Deferred – current year 13 175 15 499 5 108 733 Dividend withholding tax 96 85 96 85 106 910 98 429 83 905 57 969 Reconciliation of taxation rate (%) Domestic statutory tax rate 27.0 27.0 27.0 27.0 Adjusted for: – deferred tax assets not recognised on assessed loss 5.0 4.2 – – – effects of capital gains tax – (0.7) – – – effect of changes in tax rates (0.2) 0.4 – – – effect of tax rates in foreign jurisdictions (0.7) (0.6) – – – expenses not in the production of income 0.6 0.2 0.7 0.2 – impairment of deferred tax assets 3.1 4.4 – – – deductible allowances and rebates e.g. solar (0.3) (0.3) (0.3) (0.3) – derecognition of lease – (3.0) – (2.9) – exempt income – dividends received – – – (6.2) – Impairment loss on loan to subsidiary – – 0.2 – – impairment loss on other receivables – – 0.7 – Effective rate of taxation 34.5 31.6 28.3 17.8 42 Notes to the financial statements continued for the year ended 30 June 2026
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22. DIVIDENDS The board approved the declaration of the following dividend in respect of the year ended 30 June 2026. The declaration of future dividends remains subject to satisfying solvency and liquidity requirements. GROUP COMPANY R000 2026 2025 2026 2025 Number 68 of 9 cents per share (2025: Number 66 of 9 cents per share) declared on 11 September 2025 and paid on 6 October 2025 53 147 53 833 53 147 53 833 Number 69 of 8 cents per share (2025: Number 67 of 6 cents per share) declared on 19 February 2026 and paid on 16 March 2026 44 358 35 889 44 358 35 889 Dividends paid to employees by The 10th Anniversary Employee Share Trust 260 273 260 273 Dividends attributable to treasury shares (6 497) (5 732) (6 497) (5 732) 91 268 84 263 91 268 84 263 GROUP COMPANY R000 2026 2025 2026 2025 23. COMMITMENTS Capital Authorised Contracted 123 544 172 893 122 566 163 855 Property, plant and equipment 115 727 172 893 114 750 163 855 Intangible software 7 817 – 7 817 – Not yet contracted 188 715 123 750 186 798 111 656 Property, plant and equipment 162 830 110 194 160 913 98 100 Intangible software 25 885 13 556 25 885 13 556 312 259 296 643 309 364 275 511 The group continues the modernisation and refurbishment program to the portfolio, with a further two hotels currently underway, and four more major refurbishments scheduled to commence later in the new financial year. Sustainability and resilience continues to be a focus area, with Phase 3 of the solar installations planned for FY27, including further deployment of water resilience solutions. Future capital expenditure will be financed out of funds generated from operations and external borrowings. All of the authorised capital expenditure is expected to be spent by 30 June 2027. Guarantees Total guarantees provided to third parties by the group’s bankers on behalf of the company amounted to R8.8 million (2025: R8.8 million) which relates to contingent rent and deposits which were assessed not to be financial guarantee contracts. The directors do not believe any exposure to loss is likely. The issued guarantees have the following expiry dates: – not later than one year – – – – – between one and five years – – – – – later than five years 8 762 8 762 8 762 8 762 City Lodge Hotels Annual Financial Statements 2026 43
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24. EMPLOYEE BENEFITS Retirement benefit information The group and company provide retirement benefits to the group’s permanent employees through a defined-contribution fund. Total contributions to this fund that has been expensed and included within salaries and wages, amounts to R52.8 million (2025: R50.0 million) and company contributions to this fund are fixed at a rate of 10.5% (16% for members who transferred from the historic defined-benefit fund) of pensionable salaries and 72.69% (2025: 75.68%) of the group’s permanent employees are members. Employees who are not members of the above funds are members of the appropriate industry or union fund. Medical aid Certain of the group’s employees are members of the Discovery Health Medical Scheme. There are no obligations for post- retirement medical aid contributions. Share-based payments for group and company Equity-settled conditional share plans (CSP) The Group plan provides for the issue of shares conditional upon performance and employment conditions. The vesting period is generally one to four years. The vesting of the conditional shares are subject to the achievement of specified performance conditions. The CSP FY2022 performance conditions were the debt covenant measures, occupancy levels, free cash flow and EBITDA levels. Furthermore pro rata vesting for CSP FY2022 is conditional upon the employee being in the employment of the group for between 1 and 4 years. The CSP FY2023, CSP FY2024, CSP FY2025 and CSP FY2026 performance conditions are return on capital and headline earnings per share. Furthermore, pro rata vesting for CSP FY2023, CSP FY2024, CSP FY2025 and FY2026 is conditional upon the employee being in the employment of the group for between 3 and 5 years. Fair value is measured using a binomial valuation model. The share-based equity-settled option reversal for the year ended 30 June 2026 in statement of profit or loss and other comprehensive income is R1 484 868 (2025: reversal of R2 659 583). 2026 Number of CSPs CSP FY2026 CSP FY2025 CSP FY2024 CSP FY2023 CSP FY2022 Opening balance – 4 770 252 4 948 402 4 729 389 2 497 576 Granted during the year 6 718 268 – – – – Forfeited during the year – – – – – Vested during the year – – – – – Settled during the year – – – – (2 497 576) Non-vesting during the year – – – (4 729 389) – Closing balance 6 718 268 4 770 252 4 948 402 – – 2025 Number of CSPs CSP FY2025 CSP FY2024 CSP FY2023 CSP FY2022 Opening balance – 5 403 025 5 000 413 2 580 685 Granted during the year 5 018 780 – – – Forfeited during the year (248 528) (454 623) (271 024) (83 109) Vested during the year – – – (1 248 788) Vested shares transferred to a holding account – – – 1 248 788 Expired during the year – – – – Closing balance 4 770 252 4 948 402 4 729 389 2 497 576 CSP FY2026 CSP FY2025 CSP FY2024 CSP FY2023 CSP FY2022 Binomial model inputs as follows: Volatility (%) 24.5 31 33 89 51 Risk-free rate (%) 6.63 7.48 8.01 7.62 4.45 Dividend yield (%) 3.72 3.06 2.91 – – Expected life (years) 3 3 3 3 1 Share price (Rand) 4.03 4.9 4.09 4.63 5.78 Option price (Rand) 3.60 4.47 4.09 4.63 5.78 44 Notes to the financial statements continued for the year ended 30 June 2026
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24. EMPLOYEE BENEFITS continued Equity-settled 10th Anniversary Employee Share Trust The group plan provides for an annual share distribution equal to half of the financial year’s capital growth, if any, of the portfolio of City Lodge shares held by the trust. The distributions to eligible employees (employees in the service of the group for at least one year) are equity-settled three months after year-end, provided that the portfolio’s market value at year-end exceeds the market value at the previous year-end and the outstanding loan payable. Entitlements are forfeited if the employee leaves the group’s service before a distribution takes place. The vesting period is one year. Expected volatility was determined by calculating the historical volatility of the group’s share price over the previous two years. Fair value is measured using a European binomial valuation model. The share-based, equity-settled expense for the year ended 30 June 2026 in profit or loss is R14 107 (2025: R28 220). 2026 Number of shares 2025 Number of shares Opening balance 2 821 475 2 821 475 Distributions during the year – – Closing balance 2 821 475 2 821 475 2026 2025 Per share Total portfolio Per share Total portfolio European binomial model inputs as follows: Volatility (%) 49 49 44 44 Risk-free rate (%) 7.01 7.01 8.02 8.02 Dividend yield (%) 3.9 3.9 4 4 Expected life (years) 1 1 1 1 Effective strike price (Rand) 12.05 34 000 000 12.05 34 000 000 Share price (Rand) 3.80 10 721 605 4.33 12 216 987 Effective option price (Rand) 0.005 14 107 0.01 28 215 Equity-settled restricted share plan (RSP) Participants become owners of ordinary shares, which were acquired on the market. From the grant date, they will immediately benefit from dividends and have shareholder voting rights, thus providing direct alignment between participants and shareholders. The employee will give no consideration for the grant or settlement of an award. The shares are subject to disposal restrictions until the expiry of a three-year vesting period. The share-based, equity-settled expense for the year was R2 029 620 (2025: R1 575 280). 2026 2025 Number of shares Weighted average share price (R) Number of shares Weighted average share price (R) Awarded, but restricted at the beginning of the year 1 058 611 – 735 606 – Awarded during the year 280 320 4.01 400 123 4.93 Forfeited during the year – – (77 118) 4.84 Awarded, but restricted at the end of the year 1 338 931 1 058 611 City Lodge Hotels Annual Financial Statements 2026 45
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GROUP COMPANY R000 2026 2025 2026 2025 25. NOTES TO THE STATEMENTS OF CASH FLOWS 25.1 Cash generated by operations Profit before taxation 309 887 311 408 296 506 325 611 Adjusted for: – depreciation and amortisation 105 954 87 934 96 342 78 485 – depreciation – right-of-use asset 95 258 92 399 84 568 81 448 – dividend income in specie – – – (75 000) – impairment loss on other receivables – – 7 912 – – impairment loss on loan to subsidiary – – 2 577 – – interest income (1 620) (1 807) (1 669) (1 774) – interest expense 13 983 7 418 13 983 7 418 – interest expense - leases 126 594 128 809 117 372 118 354 – profit on the derecognition of lease – (18 404) – (18 404) – (profit)/loss on disposal of property, plant and equipment (20 812) (41 936) (20 812) 239 – share-based payment expense/(credit) 3 529 (1 056) 3 529 (1 056) – unrealised losses on foreign exchange 28 736 7 912 393 180 – other non-cash items 2 600 – 2 600 – Operating cash flows before working capital changes 664 109 572 677 603 301 515 501 Increase in inventories (256) (993) (397) (1 285) Increase in trade and other receivables (31 283) (2 396) (31 009) (6 177) Increase/(decrease) in trade and other payables 24 341 (20 703) 40 086 64 921 656 911 548 585 611 981 572 960 25.2 Taxation paid Balance underpaid at beginning of year (8 204) (8 829) (4 228) (8 443) Current and withholding tax charges (93 735) (82 930) (78 797) (57 236) Balance underpaid at end of year (1 445) 8 204 (2 423) 4 228 (103 384) (83 555) (85 448) (61 451) 25.3 Investment to maintain operations Additions to intangible assets – software costs (1 001) (4 946) (1 001) (4 946) Additions to property, plant and equipment – land – (34 894) – (34 894) – buildings (140 295) (144 691) (140 294) (144 691) – furniture and equipment (79 898) (89 402) (79 184) (88 946) (221 194) (273 933) (220 479) (273 477) Add: Prior year capital accruals (included in trade and other payables) (22 374) – (22 374) – Less: Capital accruals (included in trade and other payables) 13 893 22 374 13 893 22 374 (229 675) (251 559) (228 960) (251 103) 25.4 Investment to expand operations Additions to property, plant and equipment – buildings (1 517) (7 130) – – – furniture and equipment (2 784) (1 832) – – (4 301) (8 962) – – 46 Notes to the financial statements continued for the year ended 30 June 2026
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GROUP Gross Net of tax Gross Net of tax R000 2026 2026 2025 2025 26. EARNINGS PER SHARE 26.1 Headline earnings reconciliation Profit used to calculate basic and diluted earnings per share (EPS) 202 977 212 979 Profit on disposal of property, plant and equipment (20 812) (22 585) (42 175) (29 092) Loss on disposal of property, plant and equipment – – 239 239 Headline earnings 180 392 184 126 Unrealised losses on foreign exchange 28 736 28 736 7 912 7 912 Impairment of deferred tax asset 9 495 9 495 13 750 13 750 Profit on derecognition of leases – – (18 404) (13 435) Adjusted headline earnings1 218 623 192 353 Basic earnings per share (cents) (EPS) – undiluted 38.8 38.3 – diluted 38.7 38.3 Headline earnings per share (cents) (HEPS) – undiluted 34.5 33.2 – diluted 34.4 33.1 Adjusted headline earnings per share (cents) (Adjusted HEPS) – undiluted 41.8 34.6 – diluted 41.6 34.6 26.2 Share statistics Total net shares in issue2 512 808 548 530 Undiluted weighted average number of shares in issue2 523 249 555 362 Dilutive share awards 1 777 149 Diluted weighted average number of shares in issue2 525 025 555 511 Net book asset value per share3 239 230 1 The group uses adjusted headline earnings as a performance measure to determine the underlying profit excluding exceptional items over and above those that are excluded from headline earnings as per the requirements of Circular 1-2023 Headline earnings. This measure is not required by IFRS Accounting Standards but is commonly used in the industry. 2 Net of treasury shares of 39 818 469 (2025: 41 987 605). 3 Net book asset value per share is capital and reserves expressed as a percentage of net shares in issue. This is a non-IFRS measure and has been consistently applied from one year to the next. City Lodge Hotels Annual Financial Statements 2026 47
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27. FINANCIAL INSTRUMENTS 27.1 Financial risk management The group’s activities expose it to a variety of financial risks: market risk (including interest rate risk and currency risk), liquidity risk and credit risk. The group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the group. R000 Financial assets at amortised cost Financial liabilities at amortised cost Total Non-current Current 27.2 Financial instruments by category GROUP At 30 June 2026 Financial assets Investments 800 – 800 800 – Trade receivables 83 837 – 83 837 – 83 837 Other receivables 33 507 – 33 507 – 33 507 Cash and cash equivalents 44 625 – 44 625 – 44 625 Financial liabilities Interest-bearing borrowings – (100 000) (100 000) (100 000) – Lease liabilities1 – (1 419 084) (1 419 084) (1 367 322) (51 762) Trade and other payables – (192 491) (192 491) – (192 491) At 30 June 2025 Financial assets Investments 800 – 800 800 – Trade receivables 70 372 – 70 372 – 70 372 Other receivables 15 874 – 15 874 – 15 874 Cash and cash equivalents 27 372 – 27 372 – 27 372 Financial liabilities Lease liabilities1 – (1 435 963) (1 435 963) (1 379 217) (56 746) Trade and other payables – (197 872) (197 872) – (197 872) 1 Lease liabilities are measured in accordance with IFRS 16. The group’s carrying amount of financial instruments approximates its fair value and therefore no further disclosure is provided in this regard. 48 Notes to the financial statements continued for the year ended 30 June 2026
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27. FINANCIAL INSTRUMENTS continued R000 Financial assets at amortised cost Financial liabilities at amortised cost Total Non- current Current 27.2 Financial instruments by category COMPANY At 30 June 2026 Financial assets Investments 800 – 800 800 – Loan receivable – – – – – Trade receivables 80 893 – 80 893 – 80 893 Other receivables 29 815 – 29 815 – 29 815 Cash and cash equivalents 24 971 – 24 971 – 24 971 Financial liabilities Interest-bearing borrowings – (100 000) (100 000) (100 000) – Lease liabilities1 – (1 326 073) (1 326 073) (1 289 741) (36 332) Trade and other payables – (273 532) (273 532) – (273 532) At 30 June 2025 Financial assets Investments 800 – 800 800 – Trade receivables 68 227 – 68 227 – 68 227 Other receivables 24 281 – 24 281 – 24 281 Cash and cash equivalents 8 323 – 8 323 – 8 323 Financial liabilities Lease liabilities1 – (1 327 706) (1 327 706) (1 284 433) (43 273) Trade and other payables – (271 032) (271 032) – (271 032) 1 Lease liabilities are measured in accordance with IFRS 16. The company’s carrying amount of financial instruments approximate its fair value and therefore no further disclosure is provided in this regard. City Lodge Hotels Annual Financial Statements 2026 49
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27. FINANCIAL INSTRUMENTS continued 27.3 Market risk Market risk is the risk that changes in market rates such as interest rates and foreign exchange rates will affect the group’s income and value of its holding of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimising the return. The group is not significantly exposed to changes in equity prices. (a) Interest rate risk – fluctuations in interest rates impact the value of short-term investments and financing activities, giving rise to the interest rate risk. The group generally adopts a policy of ensuring that its exposure to changes in interest rates is limited by either fixing the rate or by linking the rate to the average medium term, risk-free rate over the period of the respective loan. The group manages its interest rate risk by linking the rate to the one-month or three-month Johannesburg Interbank Agreed Rate (JIBAR) rate plus a margin ranging from 1.7% to 2.1% (2025: 1.7% to 2.1%) or the South African prime rate. The Financial Stability Board has initiated a fundamental review and reform of the major interest rate benchmarks used globally by financial market participants. This review seeks to replace existing interbank offered rates (IBORs) with alternative risk-free rates (ARRs) to improve market efficiency and mitigate systemic risk across financial markets. The South African Revenue Bank (SARB) has indicated its intention to move away from JIBAR and to create an alternative reference rate for South Africa. The South African Reserve Bank (SARB) confirmed that JIBAR’s final publication date will be 31 December 2026. Effective 1 July 2026, all new transactions will reference ZARONIA as no new JIBAR-linked transactions will be issued. At 30 June 2026, based on the information available, the Group does not expect the transition to have a material financial impact. The following contracts have been identified as being impacted by the transition: – Interest-bearing borrowings amounting to R100 million for the Group and Company. The group has included wording in the finance agreements to cater for the transition to ZARONIA. The all-in rate applicable to group borrowings is not expected to be impacted once the succession becomes effective. At 30 June, borrowings and bank overdrafts are linked to the various rates. As at 30 June 2026, there were no bank overdrafts. GROUP COMPANY R000 2026 2025 2026 2025 Linked to three-month JIBAR 100 000 – 100 000 – At 30 June, financial assets are linked to the various rates, the carrying amounts of which are as follows: GROUP COMPANY R000 2026 2025 2026 2025 Linked to three-month JIBAR – – – – Linked to South African prime rate 44 625 27 372 24 971 8 323 Cash flow sensitivity analysis for variable rate instruments A change of 100 basis points in interest rates would have increased/(decreased) profit or loss and equity by the amount shown above. This analysis assumes that all other variables remain constant. Financial assets 446 274 250 83 Financial liabilities (1 000) – (1 000) – 50 Notes to the financial statements continued for the year ended 30 June 2026
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27. FINANCIAL INSTRUMENTS continued 27.3 Market risk (b) Currency risk Currency risk related to investments in foreign entities Foreign exchange risk also arises from exposure in the foreign operations due to trading transactions denominated in currencies other than the functional currency. The following significant exchange rates against the ZAR applied during the year: Average rate Reporting date closing rate R000 2026 2025 2026 2025 1 Botswana Pula is equivalent to 1.260 1.340 1.209 1.333 1 Mozambican Metical is equivalent to 0.270 0.280 0.257 0.278 1 Namibian Dollar is equivalent to 1.000 1.000 1.000 1.000 Currency risk related to foreign transactions Each group entity operates predominantly within its own common monetary area and therefore the group has no significant currency risk with regards to operational activities. At year-end, all group entities had minimal foreign currency trade receivables or payables. It is not the group’s policy to hedge transactions which are denominated in a currency other than the entities’ functional currency, which mainly occurs with purchases. A rand denominated intercompany loan exists between City Lodge Hotels (Africa) Proprietary Limited and CLHG Mozambique Lda. There is significant exposure to foreign exchange gains or losses due to the current volatility between the South African Rand (ZAR) and the Mozambique Metical (MZN). This unrealised loss on the intercompany loan amount to R28.7 million (2025: unrealised loss of R7.9 million). The intercompany loan eliminates on consolidation, however, the movement in the unrealised gains and losses remains. A 1% strengthening of the ZAR against the MZN at 30 June would have decreased profits by R3.7 million (2025: R3.6 million) due to the foreign exchange losses on the foreign-denominated intercompany loan recorded in the functional currency of CLHG Mozambique Lda. This analysis assumes no hedging and that all other variables, in particular interest rates, remain constant. A 1% weakening of the ZAR against the MZN at 30 June would have had the equal but opposite effect, on the basis that all other variables remain constant. This analysis was performed on the same basis for 2025. 27.4 Liquidity risk Liquidity risk is the risk that the group will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The group’s financial liabilities consist of lease liabilities and trade and other payables. Interest bearing borrowings were settled at year end. To manage liquidity risk, the group will continue to generate operational cash flows and has forecast (refer to accounting policies section – going concern and note 31 for further details) to generate sufficient operating cash flows to meet the requirements of the business and make repayments of the financial liabilities as they become due. The group and company further has the following facilities available should it require additional funds to meet its obligations. R000 2026 2025 Banking Facilities Debt facilities 600 000 600 000 Overdraft facilities 115 000 115 000 Total facilities 715 000 715 000 Less: Drawn down portion of debt facilities (100 000) – Total undrawn facilities 615 000 715 000 City Lodge Hotels Annual Financial Statements 2026 51
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27. FINANCIAL INSTRUMENTS continued 27.4 Liquidity risk continued The group’s debt funding is subject to debt covenants which are reviewed on an ongoing basis. The table below analyses the financial liabilities into relevant maturity groupings based on the remaining period at the reporting date to the contractual maturity date: R000 Interest bearing borrowings Lease liabilities Trade and other payables Total GROUP At 30 June 2026 Financial liabilities Carrying amount 100 000 1 419 084 192 491 1 711 575 Contractual cash flows 116 916 2 875 784 192 491 3 185 191 Less than one year 8 458 174 060 192 491 375 009 Year two 108 458 182 449 – 290 907 Year three – 184 292 – 184 292 Years four to five – 344 075 – 344 075 More than five years – 1 990 908 – 1 990 908 At 30 June 2025 Financial liabilities Carrying amount – 1 435 963 197 872 1 633 835 Contractual cash flows – 2 996 301 197 872 3 194 173 Less than one year – 182 926 197 872 380 798 Year two – 172 649 – 172 649 Year three – 182 681 – 182 681 Years four to five – 369 607 – 369 607 More than five years – 2 088 438 – 2 088 438 COMPANY At 30 June 2026 Financial liabilities Carrying amount 100 000 1 326 073 273 532 1 699 605 Contractual cash flows 116 916 2 754 816 273 532 3 145 264 Less than one year 8 458 150 766 273 532 432 756 Year two 108 458 158 593 – 267 051 Year three – 169 174 – 169 174 Years four to five – 311 064 – 311 064 More than five years – 1 965 219 – 1 965 219 At 30 June 2025 Financial liabilities Carrying amount – 1 327 706 271 032 1 598 738 Contractual cash flows – 2 850 584 271 032 3 121 616 Less than one year – 160 118 271 032 431 150 Year two – 148 372 – 148 372 Year three – 157 866 – 157 866 Years four to five – 338 465 – 338 465 More than five years – 2 045 763 – 2 045 763 52 Notes to the financial statements continued for the year ended 30 June 2026
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27. FINANCIAL INSTRUMENTS continued 27.5 Credit risk Credit risk is the risk of financial loss to the group if a counterparty to a financial asset fails to meet its contractual obligations. Trade receivables Trade receivables comprise mainly travel agents and large corporates. Management has a credit policy in place with negotiated credit terms of 30 days. The exposure to credit risk is monitored on an ongoing basis with credit evaluations being performed on all new travel agents or corporates requiring credit. At 30 June 2026, no single customer was in debt in excess of 10% of the total trade receivables balance. The group applies the IFRS 9 simplified approach in measuring ECLs which utilises a lifetime expected loss allowance for all trade receivables. The expected loss rates are based on payment profiles of sales over a period of 12 months and the corresponding historical credit losses experienced over an average of a 36 month period. The group has established a provision matrix that is based on its historical credit losses experience and may be adjusted for specific forward-looking factors affecting the ability of the customers to settle the receivables as well as the payment history of the customer and historical write-offs in relation to the customer. We have considered the impact of macroeconomic factors on the recoverability of trade receivables and have incorporated the factors into the determination of the historical loss rates. A customer will be considered to be in default when it is more than 30 days past due. The outstanding balance that is unrecoverable will be fully provided for where: • The customer is unlikely to pay its credit obligations to the group in full; • The customer is more than 90 days past due; • Management has assessed the customer as being in financial distress; • The customer has been placed under business rescue and has no reasonable expectation of recovery. The group assumes that the credit risk on trade receivables has increased significantly if it is more than 30 days past due. The group identifies specific credit loss allowances if these receivables are greater than 365 days. Travel agents comprise the largest proportion of the group’s trade receivables. The loss allowance for trade receivables has increased from the prior year due to the increase in the trade receivables outstanding in the current period. There has been no significant new debtors nor any significant changes to the credit risk profile. An immaterial loss allowance has been raised on cash and cash equivalents as the group’s bankers have a BB- credit rating and are considered a reputable financial institution, used for investing and cash-handling purposes. The probability of default of these items has been assessed as close to nil. Amounts due by subsidiaries, included in other receivables, has been separately assessed for ECL (refer to note 8). GROUP COMPANY R000 2026 2025 2026 2025 Other receivables 33 507 15 874 29 815 24 281 Trade receivables 83 837 70 372 80 893 68 227 Investments 800 800 800 800 Cash and cash equivalents 44 625 27 372 24 971 8 323 162 769 114 418 136 479 101 631 Trade receivables by type of customer Travel agents 71 926 58 234 69 247 56 358 Large corporates and companies 11 911 12 138 11 646 11 869 83 837 70 372 80 893 68 227 Trade receivables by country South Africa 80 893 68 227 80 893 68 227 Botswana 454 1 555 – – Namibia 2 490 590 – – 83 837 70 372 80 893 68 227 City Lodge Hotels Annual Financial Statements 2026 53
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27. FINANCIAL INSTRUMENTS continued 27.5 Credit risk continued The loss allowance as at 30 June was determined as follows for trade receivables: R000 Current 30 to 60 days 61 to 90 days More than 90 days More than 120 days Total At 30 June 2026 GROUP Expected loss rate (%) 0.37 0.54 4.51 100.00 100.00 1.19 Gross carrying amount – trade receivables 54 681 27 832 1 752 176 403 84 844 Lifetime ECLs 200 149 79 176 403 1 007 COMPANY Expected loss rate (%) 0.26 0.17 1.51 100.00 100.00 0.83 Gross carrying amount – trade receivables 52 614 26 972 1 515 154 313 81 568 Lifetime ECLs 139 46 23 154 313 675 At 30 June 2025 GROUP Expected loss rate (%) 0.44 0.42 3.41 100.00 61.71 4.01 Gross carrying amount – trade receivables 44 493 22 597 2 292 381 3 546 73 309 Lifetime ECLs 195 95 78 381 2 188 2 937 COMPANY Expected loss rate (%) 0.37 0.35 2.84 100.00 59.33 3.69 Gross carrying amount – trade receivables 42 736 22 214 2 218 332 3 339 70 839 Lifetime ECLs 158 78 63 332 1 981 2 612 GROUP COMPANY R000 2026 2025 2026 2025 The movement in the loss allowance in respect of trade receivables during the year was as follow: Opening balance 2 937 2 368 2 612 1 753 Loss allowance (reversed)/raised (1 916) 571 (1 937) 859 Foreign exchange movement (14) (2) – – Closing balance 1 007 2 937 675 2 612 54 Notes to the financial statements continued for the year ended 30 June 2026
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27. FINANCIAL INSTRUMENTS continued 27.6 Capital management The group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern and provide optimal returns for shareholders through maintaining an optimal capital structure. The group defines capital as equity funding provided by shareholders and debt funding from external parties. Shareholder funding comprises stated capital, treasury shares, retained earnings and other reserves as disclosed in the statement of financial position. Debt funding comprises loans from banking institutions and net debt represents gross debt net of all cash reserves. The group is well within and comfortably met the covenants for each measurement period in the 2026 and 2025 financial years. The financial covenants comprise: • Interest cover ratio to be greater than or equal to three times; • Net debt to EBITDA ratio equal to 2.75 times or less; and • Loan to value ratio is required to be not more than 60%. As at 30 June 2026 the actual covenant ratios were met as follow: • Interest cover of 48.5 times; • Net debt: EBITDA of 0.08 times; and • Loan to value ratio of 5.8%. The directors monitor the covenants on a quarterly basis when results are reviewed and cash flow forecasts are presented by management. Based on the current and forecast trading performance, the directors expect that the company will meet the covenant levels for the next 12 months. 28. RELATED PARTIES 28.1 Identity of related parties with whom material transactions have occurred Budget Hotels Proprietary Limited, City Lodge Hotels (Africa) Proprietary Limited, City Lodge Hotels (Botswana) Proprietary Limited, Courtyard Management Company Proprietary Limited, Gallic Courtyard (Arcadia) Share Block Proprietary Limited, Gallic Courtyard (Bruma Lake) Share Block Proprietary Limited, Gallic Courtyard (Rosebank) Share Block Limited, Gallic Courtyard (Sandown) Share Block Limited, Property Lodging Investments Proprietary Limited are subsidiaries of the company. Newshelf 935 (RF) Proprietary Limited, Newshelf 892 Proprietary Limited and Vuwa Hotels Proprietary Limited are subsidiaries of the company, and are also, together with the City Lodge 10th Anniversary Employee Share Trust, aggregated in the company results, as City Lodge Hotels Limited is the sponsor entity. The company also has an indirect shareholding in City Lodge Holdings (Share Block) Proprietary Limited, City Lodge Hotels (Namibia) Proprietary Limited, and CLHG Mozambique Limitada, which is ultimately consolidated in the group. All of the above entities are related parties to the company. Other than the directors’ remuneration (refer to note 19) and information below, there are no other related parties with whom material transactions have taken place. 28.2 Types of related-party transactions Licence fees, which are intellectual property charges for the use of the group’s brands, and turnover based lease rental payments have been made, dividends in specie and interest has been received from/paid to certain related parties. Courtyard Management Company Proprietary Limited is the management company of the Courtyard Hotels. Budget Hotels Proprietary Limited and Property Lodging Investments Proprietary Limited lease land to City Lodge Hotels Limited based on turnover. These are treated as variable lease payments. The Company has provided letter of support in the form of loan facilities to City Lodge Hotels (Botswana) Proprietary Limited to the amount of R15 million of which, R2.5 million has been drawn as at 30 June 2026. The Company has also provided letter of support in the form of loan facilities to City Lodge Hotels (Africa) Proprietary Limited to the amount of R20 million. The facilities remain undrawn as at 30 June 2026. City Lodge Hotels Annual Financial Statements 2026 55
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28. RELATED PARTIES continued COMPANY R000 2026 2025 28.3 Material related-party transactions Subsidiary companies Dividend in specie from related parties Property Lodging Investments Proprietary Limited – 75 000 Licence fees paid to related parties Courtyard Management Company Proprietary Limited 6 199 6 290 Licence fees received from related parties Courtyard Management Company Proprietary Limited 1 319 1 256 City Lodge Hotels (Botswana) Proprietary Limited 1 019 1 198 City Lodge Hotels (Namibia) Proprietary Limited 2 327 2 273 4 665 4 727 Lease payments to related parties Budget Hotels Proprietary Limited 1 617 1 372 Property Lodging Investments Proprietary Limited 40 198 37 860 41 815 39 232 Interest received from related parties City Lodge Hotels (Botswana) (Pty) Ltd 77 – 28.4 Amounts due to subsidiaries Budget Hotels Proprietary Limited 21 037 19 854 Property Lodging Investments Proprietary Limited 59 601 41 629 City Lodge Holdings (Share Block) Proprietary Limited 4 065 4 065 City Lodge Hotels (Africa) Proprietary Limited – 1 541 Courtyard Management Company Proprietary Limited 8 193 15 341 Gallic Courtyard (Arcadia) Share Block Proprietary Limited – 1 Gallic Courtyard (Bruma Lake) Share Block Proprietary Limited 3 3 Gallic Courtyard (Rosebank) Share Block Limited 4 4 Gallic Courtyard (Sandown) Share Block Limited 3 3 92 906 82 441 56 Notes to the financial statements continued for the year ended 30 June 2026
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COMPANY R000 2026 2025 28 RELATED PARTIES continued 28.5 Amounts due by subsidiaries City Lodge Hotels (Africa) Proprietary Limited 7 084 – City Lodge Hotels (Botswana) Proprietary Limited 7 912 6 818 City Lodge Hotels (Namibia) Proprietary Limited 4 359 4 189 19 355 11 007 Less: accumulated loss allowance City Lodge Hotels (Botswana) Proprietary Limited (7 912) – (7 912) – 11 443 11 007 The amounts due to and by subsidiaries are unsecured, interest-free and repayable on demand. 28.6 Loan to subsidiary City Lodge Hotels (Botswana) (Pty) Ltd (refer to note 7) - Gross Amount (2 577) – - Less: Accumulated loss allowance 2 577 – – – GROUP COMPANY R000 2026 2025 2026 2025 28.7 Transactions with key management Key management is defined as executive directors. Key management compensation is as follows (refer to note 19): – short-term employee benefits, including salaries and bonuses 21 135 17 033 21 135 17 033 – equity compensation benefits 791 (1 434) 791 (1 434) 21 926 15 599 21 926 15 599 – short term incentive bonus accrual (4 513) (1 539) (4 513) (1 539) 17 413 14 060 17 413 14 060 City Lodge Hotels Annual Financial Statements 2026 57
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29. CONTINGENT LIABILITIES The group has no contingent liabilities as at 30 June 2026. 30. SUBSEQUENT EVENTS Between 1 July 2026 to 9 September 2026, the group bought back 3 603 994 shares at an average price of R4.29 per share and cancelled 3 587 678 shares, which included 150 404 treasury shares at year end (refer note 10). Following the cancellation of the shares, the total number of ordinary no par value shares in issue as at 10 September 2026 is 549 039 187. The board has approved a final ordinary dividend of 11.0 cents per ordinary share (8.8 cents net after deducting withholding tax) in respect of the year ended 30 June 2026 (2025: 9.0 cents ). The source of the dividend will be from distributable reserves. The dividend will be payable on 5 October 2026 to shareholders registered in the Company's securities register on 2 October 2026. Other than the above, the directors are not aware of any material matter or circumstance arising since the reporting date and the date of this report. 31. LIQUIDITY AND FUNDING The group and company have access to three secured facilities with its lenders, which provides total debt facilities of R600.0 million, and overdraft facilities of R115.0 million. The overdraft facilities remain undrawn and undrawn facilities at the reporting date are R500.0 million . The loan facilities package offers: • Three debt facilities, all of which are revolver facilities, maturing between June 2028 and June 2030. • Additional access to a R300.0 million accordion facility which has been included in the loan agreements, but is subject to the funder's credit committee approval on application. The group and company have not undertaken any restrictive funding arrangements. The group has operating cash flows of R326.1 million (2025: R247.1 million) and continues to generate positive cash flows which will be directed to the planned reinvestment in the group's capital refurbishment programme and returning cash to its shareholders through dividends and share buy-backs. 32. GOING CONCERN The consolidated and separate financial statements for the year ended 30 June 2026 are prepared on a going concern basis. Based on cash flow forecasts, which has considered the projected performance of the group in response to the pressures from global socio-economic forces, restricted consumer spending trends, planned investment in capital refurbishments, sustainability and resiliency infrastructure initiatives, and the cash and funding resources available, the directors believe that the group and company have sufficient resources to continue operations as a going concern in a responsible and sustainable manner. The group has made a profit for the year ended 30 June 2026 of R203.0 million (2025: R213.0 million). As at 30 June 2026, the group has cash and cash equivalents of R44.6 million (2025: R27.4 million). Even though current liabilities exceed current assets by R123.6 million (2025: R167.7 million), the group has adequate liquidity (refer to note 31) to meet its obligations as they become due, over the next twelve months from the reporting date. The company has made a profit for the year ended 30 June 2026 of R212.6 million (2025: R267.6 million). The profit for the year was driven by stable trading performance. As at 30 June 2026, the company has cash and cash equivalents of R25.0 million (2025: R8.3 million). Current liabilities exceed current assets by R239.7 million (2025: R258.6 million). Current liabilities include R92.9 million (2025: R82.4 million) of amounts due to subsidiaries, and therefore these are not obligations external to the group. The company has adequate liquidity (refer to note 31) to meet its obligations as they become due over the next twelve months from the reporting date. All covenants during the measurement periods have been met during the year. The group monitors the covenants on a quarterly basis and does not expect to breach covenants at each of the measurement periods over the next 12 months from reporting date. 58 Notes to the financial statements continued for the year ended 30 June 2026
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33. STANDARDS AND AMENDMENTS EFFECTIVE FOR THE FIRST TIME FOR JUNE 2026 YEAR ENDS The following new standards, and amendments to existing standards have been published that are effective for the group and the company’s accounting period ending on 30 June 2026. Amendments to IAS 21 Lack of exchangeability The amendments in Lack of Exchangeability amend IAS 21 to: • specify when a currency is exchangeable into another currency and when it is not, • specify how an entity determines the exchange rate to apply when a currency is not exchangeable, • require the disclosure of additional information when a currency is not exchangeable. IAS 21 amendments must be applied for financial years commencing on or after 1 January 2025. The group has not been impacted by the amendment. 34. NEW IFRS STANDARDS AND INTERPRETATIONS EFFECTIVE FOR YEARS ENDED AFTER 30 JUNE 2026 At the date of authorisation of these financial statements for the year ended 30 June 2026, the following standards and interpretations were in issue but have not been early adopted by the group: Amendment to IFRS 9 and IFRS 7 Classification and measurement of financial instruments The amendments in classification and measurement of financial instruments amend IFRS 9 and IFRS 7 to: • clarify the requirements for the timing of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled through an electronic cash transfer system; • clarify and add further guidance for assessing whether a financial asset meets the solely payments of principal and interest (SPPI) criterion; • add new disclosures for certain instruments with contractual terms that can change cash flows (such as some instruments with features linked to the achievement of environment, social and governance (ESG) targets); and • make updates to the disclosures for equity instruments designated at Fair Value through Other Comprehensive Income. IFRS 9 and IFRS 7 amendment must be applied for financial years commencing on or after 1 January 2026, with early adoption available. The group will apply the amendment from 1 July 2026. This is not expected to have a material financial impact. New accounting standard – IFRS 18 Presentation and disclosure in financial statements IFRS 18 replaces IAS 1 Presentation of Financial Statements while carrying forward many of the requirements in IAS 1. The objective of IFRS 18 is to set out requirements for the presentation and disclosure of information in general purpose financial statements to help ensure they provide relevant information that faithfully represents an entity's assets, liabilities, equity, income and expenses. IFRS 18 brings three categories of income and expenses, two income statement subtotals and one single note on management performance measures (MPMs). These, combined with enhanced disaggregation guidance, set the stage for better and more consistent information for users – and will affect all companies. In addition, narrow-scope amendments have been made to IAS 7: Statement of Cash Flows, which include changing the starting point for determining cash flows from operations under the indirect method, from ‘profit or loss’ to ‘operating profit or loss’, and removing the optionality around the classification of cash flows from dividends and interest. There are consequential amendments to several other standards. The new IFRS 18 standard must be applied for financial years commencing on or after 1 January 2027 and applied retrospectively. The group will implement the new standard from 1 July 2027 and is currently assessing the detailed implications of applying the new standard on the Group's consolidated and separate annual financial statements. Even though IFRS 18 will not impact the recognition or measurement of items in the financial statements, its impact on presentation and disclosure is expected to be pervasive. In particular, the impact of the adoption is anticipated to include: • The presentation of new subtotals in the statement of profit or loss; • The review and alignment of income and expense classifications into categories; and • Additional disclosures for MPMs. New accounting standard – IFRS 19 Subsidiaries without public accountability: disclosure The objective of the newly issued IFRS 19 in May 2024 is to specify the disclosure requirements an entity is permitted to apply instead of the disclosure requirements in other IFRS Accounting Standards An entity electing to apply IFRS 19 applies the requirements in other IFRS Accounting Standards, except for the disclosure requirements. Instead of the disclosure requirements, the entity applies the requirements in IFRS 19. The new IFRS 19 standard must be applied for financial years commencing on or after 1 January 2027. The group will implement the new standard from 1 July 2027 and is yet to assess the possible impact on the consolidated position of performance of the group. City Lodge Hotels Annual Financial Statements 2026 59
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35. SEGMENT ANALYSIS The segment information has been prepared in accordance with IFRS 8 Operating Segments which defines the requirements for the disclosure of the financial information of an entity’s operating segments. The measurement policies the group uses for segment reporting under IFRS 8 are the same as those used in its financial statements. Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM). The CODM has been identified as the group’s CEO and executive committee. The CODM reviews the group’s internal reporting by hotel brand in order to assess performance and allocate resources. Management has determined the operating segments based on the reports reviewed by the CODM which are used to make strategic decisions. The CODM assesses the performance of the operating segments based on revenue, EBITDAR (Earnings before interest, income tax, depreciation, amortisation, rent and exceptional items), and Adjusted EBITDAR (EBITDAR excluding unrealised gains or losses on foreign exchange). The measure also excludes all headline earnings and adjusted headline earnings adjustments. Finance income and finance costs are not included in the results for each operating segment, as the cash and debt position is managed at a group level. The CODM considers the business from both a hotel brand and geographical basis. The following are the six reportable segments identified and monitored by the CODM: • Courtyard Hotels is the group's luxury brand comprising four hotels (2025: five hotels); • City Lodge Hotels is the group's upper mid-scale brand comprising of 17 hotels (2025: 18 hotels); • Town Lodge is the group's mid-scale brand comprising of 12 hotels; • Road Lodge is the group's economy brand comprising of 23 hotels; • Rest of Africa consists of the group’s non-South African hotels division which owns, operates and manages hotels in Botswana, Mozambique and Namibia; and • Central Office consists of the group’s management division which manages all the hotels. 2026 Material expenses included in EBITDAR Rm Revenue1 EBITDAR2 Adjusted EBITDAR Salaries and wages Property costs Food and beverage costs Rooms related costs Other operating costs4 South Africa 2 105 827 827 (512) (190) (163) (219) (203) Courtyard Hotel 185 60 60 (53) (16) (18) (20) (19) City Lodge Hotel 1 154 529 529 (250) (93) (83) (119) (86) Town Lodge 334 97 97 (96) (33) (31) (39) (39) Road Lodge 432 141 141 (113) (48) (31) (41) (59) Rest of Africa3 98 (5) 23 (27) (6) (7) (7) (28) Central Office – (157) (175) (93) (1) – – (99) 2 203 665 675 (632) (197) (170) (226) (330) Margin 30.2 % 30.6 % 2025 South Africa 1 903 721 721 (479) (181) (143) (196) (190) Courtyard Hotel 183 59 59 (52) (17) (18) (19) (20) City Lodge Hotel 1 028 450 450 (234) (89) (73) (103) (83) Town Lodge 296 83 83 (89) (29) (26) (35) (35) Road Lodge 396 129 129 (104) (46) (26) (39) (52) Rest of Africa3 94 14 22 (25) (5) (8) (8) (27) Central Office – (94) (154) (85) (1) – – (84) 1 997 641 589 (589) (187) (151) (204) (301) Margin 32.1 % 29.5 % 1 All revenue and income from hotel operations are derived from external customers. No one customer contributes more than 10% to the group’s total revenue. 2 Refer to reconciliation of operation profit/loss to EBITDAR in note 18. 3 Adjusted EBITDAR for Rest of Africa excludes unrealised loss on foreign exchange of R28.7 million (2025: R7.9 million). 4 Other operating costs are included in the current year, as well as for the prior year for comparison purposes, in line with the requirements of IFRS 8 and the conclusions reached by the related IFRIC agenda decision. Geographical information South Africa Rest of Africa Total Rm 2026 2025 2026 2025 2026 2025 Property, plant and equipment 1 690 1 577 331 359 2 021 1 936 Right-of-use assets 806 848 50 61 856 909 60 Notes to the financial statements continued for the year ended 30 June 2026
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SHAREHO LDER SPREAD 2026 Beneficial shareholders with holdings exceeding 3% Number of shares owned % of issued shares Enderle SA (Pty) Ltd 54 358 553 9.84 Allan Gray Clients 48 977 224 8.86 Peregrine Group 37 177 030 6.73 Peresec 31 794 757 5.75 Ninety One 26 484 337 4.79 Stanlib 20 099 145 3.64 Government Employees Pension Fund 17 225 783 3.12 Total 236 116 829 42.73 2025 Beneficial shareholders with holdings exceeding 3% Number of shares owned % of issued shares Enderle SA (Pty) Ltd 54 358 553 9.21 Entertainment Holdings (Pty) Ltd 50 001 729 8.47 Allan Gray Clients 49 130 524 8.32 H4 Collective Investments 32 630 140 5.53 Peresec 23 680 863 4.01 Government Employees Pension Fund 20 034 556 3.39 Tsogo Sun Investments (Pty) Ltd 17 993 661 3.05 Total 247 830 026 41.98 2026 Fund managers with a holding greater than 3% of the issued shares Number of shares % of issued capital Allan Gray Clients 81 207 328 14.69 Abax Investments 43 823 237 7.93 Peregrine Capital 37 177 030 6.73 Ninety One 29 781 823 5.39 Oasis Crescent Management Company 16 583 550 3.00 Total 208 572 968 37.74 2025 Fund managers with a holding greater than 3% of the issued shares Number of shares % of issued capital Allan Gray Clients 82 257 245 13.93 Abax Investments 39 321 329 6.66 Peregrine Capital 34 734 378 5.88 Total 156 312 952 26.47 City Lodge Hotels Annual Financial Statements 2026 61 Shareholders’ analysis as at 30 June 2026
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2026 Shareholder spread Number of holders % of total shareholders Number of shares % of issued capital 1 – 1 000 shares 7 744 62.30 1 713 113 0.31 1 001 – 10 000 shares 3 009 24.21 11 620 107 2.10 10 001 – 100 000 shares 1 341 10.79 40 180 158 7.27 100 001 – 1 000 000 shares 265 2.13 80 752 939 14.61 1 000 001 shares and above 72 0.57 418 360 548 75.71 Total 12 431 100.00 552 626 865 100.00 2025 Shareholder spread Number of holders % of total shareholders Number of shares % of issued capital 1 – 1 000 shares 7 915 58.45 1 967 447 0.33 1 001 – 10 000 shares 3 604 26.62 14 101 374 2.39 10 001 – 100 000 shares 1 649 12.18 49 443 040 8.37 100 001 – 1 000 000 shares 299 2.21 87 515 473 14.82 1 000 001 shares and above 74 0.54 437 490 198 74.09 Total 13 541 100.00 590 517 532 100.00 PUBLIC AND NON-PUBLIC SHAREHOLDINGS 2026 Shareholder spread Number of holders % of total shareholders Number of shares % of issued capital Non-public shareholders1 20 0.16 98 578 089 17.84 – Directors 5 0.04 5 523 999 1.00 – Other 15 0.12 93 054 090 16.84 Public shareholders 12 411 99.84 454 048 776 82.16 Total 12 431 100.00 552 626 865 100.00 2025 Shareholder spread Number of holders % of total shareholders Number of shares % of issued capital Non-public shareholders1, 2 25 0.19 99 723 936 16.89 – Directors 8 0.06 6 034 070 1.02 – Other2 17 0.13 93 689 866 15.87 Public shareholders2 13 516 99.81 490 793 596 83.11 Total 13 541 100.00 590 517 532 100.00 1 Non-public, as defined in terms of the JSE Listings Requirements. 2 Restated 33 393 908 shares that were included as public shareholders to non-public shareholders - other to align the disclosure with the definition of non-public shareholders. 62 Shareholders’ analysis continued as at 30 June 2026
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GEOGRAPHIC SPLIT OF BENEFICIAL SHAREHOLDERS 2026 Region Total shareholding % of issued capital South Africa 533 841 406 96.60 Rest of World 8 978 986 1.62 United States 4 598 812 0.83 Namibia 2 727 743 0.49 United Kingdom 2 479 918 0.46 Total 552 626 865 100.00 2025 Region Total shareholding % of issued capital South Africa 569 905 818 96.51 Rest of world 11 210 823 1.90 United States of America 3 959 525 0.67 Namibia 2 606 111 0.44 United Kingdom 2 835 255 0.48 Total 590 517 532 100.00 City Lodge Hotels Annual Financial Statements 2026 63
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CITY LODGE HOTELS LIMITED Incorporated in the Republic of South Africa Registration number: 1986/002864/06 Share code: CLH ISIN: ZAE000117792 DIRECTORS B T Ngcuka (Chairman), A C Widegger (Chief executive officer)*, K Classen, S J Enderle#, G G Huysamer, F W J Kilbourn (Deputy chairman), M S P Marutlulle, , M G Manthata, D Nathoo (Chief financial officer)*, L G Siddo (Chief operating officer)* * Executive # South African and Swiss TRANSFER SECRETARIES Computershare Investor Services Proprietary Limited Rosebank Towers 15 Biermann Avenue Rosebank, 2196 COMPANY SECRETARY M C van Heerden SPONSOR Nedbank Corporate and Investment Banking, a division of Nedbank Limited 64 Administration
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City Lodge Hotel V&A Waterfront