KSS Information Memorandum 2021

Operations

Management

CIO

Board Management/ CEO

COO

Team

Board

Board

Board

Operations

Management

Identification required to store Checked daily as per Atlas Page Daily CCTV Integrity Procedure

Cyber incident response in planning & development stage

Cyber education strategies implemented; effort ongoing. Vulnerability scans extended to cloud workloads

Unchanged September 2019

Reviewed September 2017 Brand Guidelines Set

Best Practice/ Skillbuilder training

Leadership Team

Board Meeting Agenda item Board Meeting Agenda item

Board Meeting Agenda item Board Meeting Agenda item Board Meeting Agenda item

Board Meeting Agenda item

- Introduction of cyber security education programme and cyber incident response in progress. - N ew security f oundation in Win 10 and depreciation of legacy s ystems mitigates risk significantly. SOE deployment completed August 2020. Mitigating resilience factors: - Prime location selection of Kennards Self Storage Assets – high barriers to entry. - Asset Quality Ma intenance. - Brand leadershi p position. - St rong operational team.

Risk mitigation practices and actions: - Foste ring employee engagement and constructive culture. - pay higher industry wage levels to be an employer of choice. - Reward s ystem that includes performance base bonuses. - Recognition program to celebrate achievements of teams an d team mem bers. No action required.

- Sale of delinquent’s goods , customer damage or theft. - Upset customers can activate negative media attention. - Customer property damage or loss (typically from water entry/ or break-in and theft) and resulting in upset customers. - Large scale break-ins and loss of goods (Wine cellars and safe deposits hold the highest concentration of values). Older ‘ranch style’ developments without door alarms are higher break-in risk, t han ‘big box’ Sam Kennard. - Pursui t and adoption of ‘Best Practice’ for disposal of unpaid customer goods. - Execution of Brand look and feel. - Execu tion of customer service and reputation. - Social Medi a engagement – centralised management. - Enforcing identification require men ts of all customers deters criminal activity. - Comprehensive CCTV surveillance systems. - Training and development programs Risk m itiga tion and Actions: - Annual C yber Audits followed by remediation plan ning against evolving weaknesses and new expl oits .

- Multiple locations and multiple markets. - Strong employee engagement to customer service. - Capital intensive nature provides Barrier to Entry. - I nner urban loc ations have highest Barriers to E ntry due to land scarcity. - Sound investment metrics on returns

- Continuous improvement and our own offering to differentiate and meet market. - Probability of refinance not being available is considered low. - Managing Cove nants and future finance needs. - Refinance includes a 3 rd Lender and stagger ed Debt Tenor. - Maintain ratios within agreed thresholds. Risk Mitigation Practices and Strategies: - Sound gearing ratio. - Some countercyclical customer types. - Broad geographic spread of assets. Risk Mitigation Practices and Strategies: - Hedging of interest rates with stagge red expiry. - De bt reduction.

Risk mitiga tion p ractices and actions: - W H&S policies and practices in place and kept on our intranet. - Asbestos Registers ke p t on all properties with Asbestos. - Administr ative nature of duties are low risk. - Forklifts do not require licence. Train ing provided to customers. Waiver required and utilised in centres.

- Maintain a healthy paranoia and follow development of such technologies and assess potential impact. - Remain aware of their benefits and features. - Market take-up/acceptance.

- Self Storage has counter-cyclical attributes – with some customer types storing more in a slower economy.

and enclosed storage centres. Non-alarmed spaces also higher risk. - Criminal activity on our properties (drugs, terrorist related). Breach of systems and/or customer data privacy

Kennards Self Storage significant borrowings mean the company is exposed to several finance risks; including: - Inability to secure refinance on maturity of debt facility. - Interest rate increases. - Asset Valuation impairment leading to debt covenant breach.

Technological innovation on leading to substitution of the service of self storage for an alternative is not considered likely.

An enduring long term shift toward the “new minimalism” leading to reduction in demand for discretionary storage, could be a risk for our industry sector. Is this probable? Peer to peer and pickup and delivery (POD) type storage providers Aggregators storage compare websites

Overbuilding and aggressive competition are a risk, and would be significantly detrimental if widespread. Oversupply would reduce occupancy, prices and income for Kennards Self Storage.

The Australian Finance culture is refinance on a 3 year cycle. Refusal by lenders to do this would damage both parties. Probability of this event is considered low.

Kennards Self Storage is exposed to risk of economic slowdown. A widespread recession would see Kennards Self Storage income decline.

Properties are a place that has visits by the public and employees. Kennards Self Storage undertakes general administrative duties. So risk is low. Use of forklift by customers/ staff represents highest risk activity.

High team turnover diminishes skill base. Recent turnover of people in 2019/20 circa 18.9%.

Kennards Self Storage customers pay in-advance so default credit and bad debt exposure is low.

• Cyber Breach & Data Brea ch

Self Storage Market Risk • Competition Risk

• Substitution Risk

• Demand Reduction Risk • Disrupters

Operational Risk • WH & S

• Staff Turnover

• Consumer Credit Risk

• Internet & Social Media (You Tube, Twitter, Facebook, etc)

Treasury/ Finance Risk

Economic Risk

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