Cedar Woods Properties Limited 2015 Annual Report

ABN 47 009 259 081 For personal use only use personal For About Cedar Woods

Cedar Woods Properties Limited is an Australian property development company. The company was established in 1987 and has been listed on the Australian Securities Exchange since 1994, trading under the security code ‘CWP’. Its market capitalisation is approximately $400m.

The company’s principal interests are in urban land subdivision and built form development for residential, commercial and retail purposes. Its portfolio of assets is located in Western Australia, Victoria and Queensland. The board and management of Cedar Woods have extensive experience in the property industry, with particular expertise in adding value to land holdings through the achievement of government and local authority approvals and the planning, design and delivery process.

Cedar Woods has consistently generated profits and dividends for shareholders, whilst achieving excellence in product delivery, as recognised by several national awards and many state awards, including the categories “Best Residential Estate” and “Environmental Excellence” and most recently, “Best High Density Development”. In the investor relations arena, the company is a past winner of three ARA silver awards for its Annual Report.

Cedar Woods’ projects are sensitively developed with consideration for environmental and community interests and built to a high quality that is renowned in the marketplace. Through the rapid expansion of its built form development portfolio, Cedar Woods has earned a reputation of delivering high quality apartments for both the owner-occupier and investor market.

The company has a strong focus on shareholder value and its record in delivering quality developments to the market has produced a strong earnings stream, providing consistently high returns to shareholders.

Downloadable content

Cedar Woods Properties has taken the opportunity to publish the Corporate Governance statement on its website rather than include in the annual report. A copy of the 2015 Corporate Governance statement can be downloaded from the investor relations section of the website. www.cedarwoods.com.au

Other information that is available in the investor relations section is listed below.

• Board Committee Charters • Risk Management Policy and Internal Compliance and Control System • Investor Communications Policy • Continuous Disclosure Policy • Performance Evaluation Policy

2 only use personal For • Privacy Policy • Primary Objectives and Company Code of Conduct • Securities Trading Policy

• Diversity Policy

Sustainability Reports are available on our website in the Shareholder Reports section.

CEDAR WOODS PROPERTIES LIMITED Corporate Directory ...... G2. G1. Section G:Shareholders’ Information...... F2. F1. Section F:DeclarationandIndependentAuditor’s Report...... ForE6. E5. E4. E3. E2. E1. Section E:OtherInformation...... D3. personalD2. D1. Section D:Unrecognised Items...... C1. Section C:Group Structure ...... B3. B2. B1. Section B:FinancialRisks...... A5. A4. A3. A2. A1. Section A:HowtheNumbersare Calculated...... Notes totheFinancialStatements...... Consolidated CashFlowStatement...... Consolidated StatementofChangesinEquity...... useConsolidated BalanceSheet...... Consolidated StatementofProfit orLossandOtherComprehensive Income...... Financial Statements Auditor’s Independence Declaration...... Directors’ Report:RemunerationReport...... Directors’ Report:ChairoftheHumanResources andRemunerationCommittee’s LettertoShareholders ...... Directors’ Report...... Environmental ...... andSocialGovernance onlyProject Pipelineasat30June2015...... Financial andOperatingReview...... Our BusinessModel...... Cedar Woods’ Charter...... Table ofContents Five Year FinancialPerformance Investors Summary...... Independent Auditor’s ReporttotheMembersofCedar Woods Properties Limited...... Directors’ Declaration...... Parent EntityFinancialInformation...... Segment Information...... Summary ofAccountingPolicies...... Employee Share Scheme...... Remuneration ofAuditors...... Related PartyTransactions ...... Events OccurringAftertheReportingPeriod...... Commitments ...... Contingent Liabilities...... Interests inOther Entities...... Capital ManagementObjectivesandGearing...... Financial RiskManagement...... Significant EstimatesandJudgements Cash FlowInformation...... Equity ...... Non-Financial AssetsandLiabilities...... Financial AssetsandLiabilities...... Profit orLossInformation...... 2015 ANNUALREPORT 107 106 103 102 100 74 98 84 80 76 68 67 50 49 48 47 46 45 44 42 26 24 20 16 14 99 97 96 88 87 86 85 83 82 81 77 69 66 64 58 53 51 8 7 5

3 Table of Contents 4 only use personal For Integrity We are guidedbyfourkeyvalues.TheyactascriticaldriversofCedarWoods’ culture. deliver mediumandhighdensityresidential dwellings. with supportingretail andcommercial developments.We are alsoactiveintheredevelopment ofmajorinfillsiteswhere we A significantpartofourbusinessinvolvescreating vibrant residential communities,typicallyincapitalcitygrowth corridors, marketing ofproperties thatmeettheneedsofourcustomers. Our purposeistocreate long-termvalueforourshareholders through thedisciplinedacquisition,developmentand communities across Australiathrough high-qualityproperty development. We are CedarWoods Properties, anASX300companywithaproud historyofcreating Cedar Woods’ Charter Performance Innovation People andEnvironment ForAgainst thisbackdrop, wemanageourportfoliowiththeaimofdeliveringconsistentannual growth inprofits anddividends. and regional marketsinwhichweoperateisunevenandfluctuates response tothese factors. personalOur customersare influencedbyinterestpolicies.Demandinthemetropolitan rates,theeconomicoutlookandGovernment that itcontinuestoholdbroad customerappealandperformswellinarangeofmarketconditions. Our strategyistogrow anddevelopournationalproject portfolio,diversifiedbygeography, product typeandpricepoint,so use only • • • • • • • • Uphold honesty, truthfulnessandsinceritywhilstremaining fairandethicalwith all stakeholders. Do whatisrightanddowesaywilldo. Maintain astrong financialpositiontoallowusbecompetitiveandengageinopportunitieswhentheyarise. Meet orexceedtheexpectationsofstakeholders,communities,customersandsuppliers. Foster aculture newideasandrewards that encourageslearning, creativity. Strive tocreate and delivernewproducts todevelopandgrow asabusiness. and fosteringacollaborativemutuallysupportiveenvironment. Attract, developandretain thebesttalentforourbusiness,challengingpeople,demonstratingacandoattitude Make positivecontributionstocommunitiesinwhichweoperate. 2015 ANNUALREPORT

5 2015 Annual Report 6 only use personal For For personal use onlymarket conditions: point, sothatitcontinuestoholdbroad customerappealandperformswellinarangeof To grow anddevelopanationalportfolio,diversifiedbygeography, product typeandprice Our BusinessModel to acquisitions Disciplined approach Property Acquisitions

exposure (including JVs) minimise risksandoptimise Structure contractsto financial targets with corporatestrategyand Assess prospects inline closely definescriteria Identify projects thatmeet planning anddelivery Research, design,

timeframe annual budget,costand Manage constructionwithin financial objectives to meetfinancialandnon- and assessmentofdesigns Ongoing marketresearch Achieve required approvals project vision Designs tomeetagreed Development to meetdemand Positioning projects

projects underwrite stagesof Generate pre-sales to management Efficient settlement groups sales conditionsandbuyer Ongoing monitoringof Marketing &Sales 2015 ANNUALREPORT

7 Our Business Model For8 personal use onlyFinancial and Operating Review a) 30 June2015: The followingsummarisestheresults ofoperationsduringtheyearandfinancialpositionconsolidatedentityat Woods Properties Limitedtoshareholders. On behalfoftheBoard, weare pleasedtopresent thefinancialandoperating review ofCedar Financial andOperatingReview CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES b) • • • • • • • 2015 FinancialHighlights FY10 to$42.6minFY15anddividendsdeclared growing from 13centsto28pershare. Cedar Woods hasatrackrecord ofgrowth overthepastfiveyearswithNetProfit after Tax growing from $17.2min Growth inNetProfit After Tax (NPAT) andDividendsPaid $135,000,000, three yearcorporatebankfacilityextendedtoNovember2017. strong interest cover; low levelofbankdebt; pershareearnings of54.3cents,down0.1percent; strong result from theMastersstore saleprocess; full yeardividendsof28centspershare, up2percent; Record netprofit of$42,585,000,up6percent;

$ Millions 10 15 20 25 30 35 40 45 0 5 FY10 NPAT andDividends paidforthepast6years

FY11

NetProfit After Tax FY12 FY13

Dividends Paid FY14 FY15 0 5 10 15 20 25 30

Cents

c) d) For personale) use only 2015 FinancialResultsSummary Key PerformanceIndicators towards WA exposedcompanies. the callinofUpperKedron project (concludedaftertheendof financialyear)andthenegativemarketsentiment The 1yeartotalshareholder return was-24.3%. Despitetherecord profit, thecompany’s share pricewasimpactedby 12 percentand14respectively. onequityof14.9percentandreturn oncapital of19.5percentwereReturn wellabovethecompany’s benchmarksof reflecting thedilutionbrought aboutbytheequityraisinglateinlastfinancial year. As aresult, pershare earnings forFY2015was54.3cents,asmalldecrease of0.1per centontheprevious year, allowingtheBoardearnings, todeclare arecord fullyeardividendof28.0centspershare. The yearclosedwitharecord fullyearnetprofit of$42.6m,beingthefifthconsecutiveyear record profit and the nextsection. Albans (VIC),andmore recently UpperKedron (QLD).Furtherdetailsofachievementsintheproperty portfoliofollowin in future years,withimportantplanningmilestonesachievedatManglesBayandAriella (WA), JacksonGreen andSt projects. Inaddition,plansandapprovals were progressed foranumberofdevelopmentsanticipatedtocommence During theyear, significantprogress wasmadewithstages developedacross thecompany’s property portfolio ofactive LandingTownat theWilliams Centre. Landingaspartofthecompany’sStore atWilliams strategy torecycle capitaloncompleted andmature developments in the2016financialyear. Attheendofhalf,companycompletedsaleMastersHomeImprovement handeddownitsdecisionclearingthewayforcompanytocommencedevelopmentofthisprojectGovernment in Brisbane.Thisgeneratedsignificantmediainterest andinvestoruncertainty, howeverinJuly2015theQueensland conduct acallin(review) oftheBrisbaneCityCouncil’s developmentapproval ofthecompany’s UpperKedron project In thesecondhalf,followingitselectionvictory, announcedthatitwould thenewlyelectedQueensland Government Landing Town LandingShoppingCentre inDecember 2014. Centre withtheopeningofWilliams inMelbourne, significant anniversary.Williams Thecompanyalsoachievedcompletionofits second commercial developmentatthe BrisbaneandPerthtomarkthis celebrated 20yearsasalistedcompanywithcorporateeventsheldinMelbourne, states,thecompanycontinuedtomakesteadyprogresseastern inthe2015financialyear. Inthefirsthalf,company Against thebackdrop ofaweakeningresource economyinWestern Australiaandaburgeoningproperty marketinthe Financial Year Overview Basic earnings pershareBasic earnings Year ended30June Revenue Year ended30June Dividends pershare –fullyfranked Proceeds from Mastersstore sale Return onequity Return Total revenue andproceeds from property sales Return oncapital Return Net profit aftertax Total shareholder return (1year) Total assets Net bankdebttoequity–30June Net bankdebt Interest cover Shareholders’ equity Net assetbackingpershare –historicalcost Shares onissue–endofyear Stock marketcapitalisationat30June Share priceat30June $’000 ’000 % % % % ¢ ¢ $ $ x 178,637 214,637 383,330 285,605 414,970 36,000 42,585 27,909 78,892 (24.3) $’000 2015 2015 54.3 28.0 14.9 19.5 3.62 5.26 9.8 9.9 214,465 214,465 409,948 261,601 572,639 40,313 32,602 78,336 $’000 2015 ANNUALREPORT 2014 2014 54.4 27.5 15.4 19.1 46.6 12.5 10.4 3.34 7.31 - % Change % Change (16.7%) (14.4%) (6.5%) (70.9) (27.5) (28.0) 5.6% 9.2% (0.1) (0.5) (2.7) (4.8) 1.8 0.4 8.4 0.7 - -

9 Financial and Operating Review 10 For personal use onlyFinancial and Operating Review f) CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES demand forproperty inBrisbaneasinvestorschasehigheryieldsandowner-occupiers seekgreater affordability. isexpectedtocauseincreasedhousing cyclethantheotherstatesandanuptickinpricesSydneyMelbourne Australia, withdwellinginvestmentforecast tocontinuegrow atarobust rate.Queenslandisatanearlierphaseinthe In Queensland,StateTreasury isforecasting economicgrowth inFY2015andFY2016fasterthaneveryotherstate has weakened,priceshaveheldupoverthelast12months. In WA, ongoingpopulationgrowth andrelatively lowunemployment continuetounderpindemand,andwhileactivity months. investor activityremaining marketinthelasttwelve high.SolidpricegainshavebeenexperiencedintheMelbourne demandremainsIn Victoria strong forwelllocatedproperty closetotransportinfrastructure andotheramenities,with support demandforresidential property. on record. Thestrong inboundmigrationandashortageofsupplycontinuetoprovide theunderlyingfundamentalsto the peakyearincycle,soliddemandisforecast tocontinuewithFY2016expectedbethesecondhighestyear with theHIAeconomicsgroup forecasting annualdwellingstartswillincrease by18%inFY2015.Althoughthiswillbe Dwelling sectorindicatorsacross thenationpointtosustaineddemandforhousingsupplyspurred bylowinterest rates, Operational ReviewofDevelopments i. approximately 700lotsandthecombinedlandholdingwillhave atotallotyieldofapproximately 1500lots. and are immediatelywestoftheKwinanaFreeway. Fullydeveloped,theadditionallandis expectedtoproduce 68 hectare landholdingownedbyCedarWoods tothesouth.Thecombinedlandholdingscomprise119 hectares the Metropolitan RegionSchemeand‘Development’undertheCityofRockinghamScheme, adjoinstheexisting 50.74 hectares, for$26.25mplusGST, scheduledtosettleon31August2015.Theland,zoned‘Urban’under Shortly aftertheendoffinancialyearcompanypurchased 19and21BaldivisRd,Baldivis,comprising Road, Forrestdale inNovember2014. various reservations toanUrbanZone.AnZoningwassimilarlyinitiatedoverCWP’s landholdinginAnstey Metropolitan RegionSchemeAmendmenttorezone theManglesBayMarinadevelopmentinRockingham from to thecompany’s future prospects. InSeptember2014,theWestern AustralianPlanningCommissioninitiated a Approval milestoneswere achievedattwoprojects intheportfoliothatare expectedtocontributesignificantly outcome ofthisproject. half), writingitdownto$1.0mat30June2015.Salesandmarketing programs are focusedon improving the of itsinvestmentby$6.4mduringtheyear, ($2.5mimpairmentrecognised inthefirsthalfand$3.9msecond property inresource-exposed regional townsinWA. Consequently, thecompanyhasimpaired thecarryingvalue building completedin2013.Therateofsaleshascontinuedatanunsatisfactorypace,reflecting in thedownturn Geraldton intheState’s mid-west.Theproject comprises50luxuryapartmentsandfourretail tenancies,withthe The companyhasinvested,alongwithaprivatesyndicate,intheBataviaMarinaApartments,onwaterfront in with thecompanyhavingachievedsaleandsettlementofbulklotsinthisestate2014. At theElementsproject atSouthHedlandinthePilbararegion, only15ofthe139lotsdevelopedremain forsale, in FY2016. out duringtheyear, withthecompanystartingdevelopmentoffinal122lotstage6whichwillcontributetoprofit Similarly goodlevelsofactivitywere recorded atEmeraldParkinWellard withallbutafewavailabletitled lotsselling At TheRivergumsBaldivis,strong activitylevelscontinuedinstagesclosetotheBaldivisSecondaryCollege. boat penmarinafacilityinthesecondhalf. continued torelease lotsfrom thefinalislandofitsothercanalestate,MarinersCoveandcompletedsale bringing toacloseproject thathaddelivered profits tothecompanyovera20yearperiod.The Also inthefirsthalfcompanysoldlast remaining lotsatitsPortMandurahcanalproject inMandurah apartments. a multi-useprecinct incorporatingresidential agedcare, aretirement village,residential lots,townhousesand St IvesGroup. The project istransformingthe formerTAFE siteinPerth’s suburbofCarine,into middlenorthern The lastlotssoldoutattheCarineRiseproject, aco-developmentbetweenLandCorp,CedarWoods andthe Australian landestates,althoughpricinglevelswere maintained. Activity levelsmoderatedfrom thestrong conditionsexperiencedintheprevious yearatthecompany’s Western Western Australia For personalg) use only iii. ii. i. The company’s strategies,assetoutintheCorporatePlanandshownourbusinessmodel onpage7are: market conditions. product typeandpricepoint,sothatitcontinuestoholdbroad customerappealandperforms wellinarangeof The overarching strategicobjectiveistogrow anddevelopournationalproject portfolio,diversifiedbygeography, company includingspecificrisksaffecting individualprojects andmore generalrisksaffecting ourbusinesssector. In addition,twiceeachyearourAuditandRiskManagementCommittee assessesriskfactorsthatmayaffect the executives, salesmanagersandotheremployees. growth andaddressing keyriskfactors.Theseactionsare implementedasperformancetargetsbysenior The CorporatePlansetsoutanumberofkeyactionitemsandstrategies focusedonachievingdeliveryofearnings 2 percent. financial performance.Thisyear, thecompany reported fullyearnetprofit growth of6percentanddividend growth of in netprofit pershare and earnings andputthecompanyintophalfofalllistedindustrialcompaniesbasedon Cedar Woods’ primaryobjectiveistocreate valueforshareholders asitaimstodeliverconsistentyearongrowth projecting andotherkeyperformanceindicators. earnings Cedar Woods’ CorporatePlanguidesmanagement’s activitiesandprovides afiveyearoutlookforthecompany, Corporate Objectives,StrategyandRisks be considered. Council isexpectedtocommencetheupdateofitsplanningschemeenablebalanceproposed planto on secondandthird homebuyers.Constructionofthefirststageisexpectedtocommenceinearly2016.Brisbane development atUpperKedron, nowbranded,‘Ellendale’,toattractamixofbuyersegments,withparticularfocus GroveFerny railwaystationandTheGap‘parkride’busfacility. CedarWoods planstodeliverahigh-quality developed overa10yearperiod.Theestateisclosetoexistingamenityincludingschools,shoppingcentres, the July 2015anditwillbetheclosestlargescalehousingestatetoBrisbaneCBD.Theproject isexpectedtobe Upper Kedron, 12 kmswestofBrisbane’s CBD.Planningapproval forthefirst480lotswasgrantedsitein In May2014thecompanymadeitsfirstinvestmentinQueenslandwithpurchase of227hectares oflandat Queensland and commercial developmentsare beingplannedanddesignedwhichwillcontributetoprofits infuture years. evident foroffice spaceinthedevelopmentandoffice componentis around 90%leased.Severalother residential Centre andhasprogressively beenleasingthebalanceofretail andoffice tenancies.Gooddemandhasbeen store andachievedarecord LandingShopping yieldof6%.ThecompanycompletedtheconstructionWilliams LandingMastersHomeImprovementDue tothestrong marketforqualityassets,thecompanysoldWilliams St A.Leveltrainlinecrossings willberemoved atbothsitesandnewstationsare proposed tobedelivered. announcedprogressState Government withmajorinfrastructure projects thatwillbenefitbothJacksonGreen and At StA.variousplanningapprovals were achievedandtheplansforstageonelodgedwithCouncilapproval. The a planningpermithasbeenissuedforthefirststageofhousingandproject’s marketingcentre wascompleted. Clayton South.Demolitionwascompletedatbothprojects andsiteremediation worksundertaken.AtJacksonGreen Good progress wasachievedatthecompany’s newhousingdevelopments, StA.inAlbansandJacksonGreen in to bedelivered Landing. inFY2016.Considerablepricegrowth wasalsoachievedatWilliams Several residential Landingandstrong stageswere presales completed atWilliams havebeenrecorded forstages project hasreceived considerableindustryrecognition forits innovativeandcontemporarydesignoutcomes. The successfulRealmCamberwelldevelopmentwascompletedwithfinalstagessettlingearlyintheyear. The progressed withstrong sales,constructionprogress andsettlements. developmentinFootscraywereSeveral otherapartmentandtownhousestagesattheBanburyVillage also The BotanicaApartmentsinFootscray, comprising101apartments,wassoldoutandconstructioncommenced. The company’s projects againperformedwellduringtheyear, inVictoria withgoodsalesandsettlementresults. Victoria approximately 700residential lotsandthecombinedlandholding willhaveatotallotyieldofapproximately 1500lots. company’s existinglandholdingpurchased in2011.Fullydeveloped,theadditionalland isexpectedtoproduce After theendoffinancialyear companypurchased 51 hectares oflandatNorth Baldivis,adjacenttothe second instalmentpaymentonthe landatUpperKedron inBrisbane. and madethe In thelastyearcompanycompleted thesettlementoflandatClaytonSouthinMelbourne Acquisition ofproperties 2015 ANNUALREPORT

11 Financial and Operating Review 12 For personal use onlyFinancial and Operating Review CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES i) h) ii. ii. Development shareholders attheAGM. company reintroduced thedividendreinvestment planandbonusshare planduringtheyearafterfeedback from The dividendpolicy, whichistodistributeapproximately 50percentoftheannualnetprofit, wasmaintained.The company’s targetdebttoequityrangeof20-75percent.Interest coverwasatafavourable9.9times. facility inFY2016.Theyearconcluded withalownetdebttoequityof9.8percentatyearend,temporarily belowthe LandingShoppingCentre andthis isexpectedtoberefinancedthe developmentofWilliams withaninvestment extending thetenure byafurtheryeartoNovember 2017.Inaddition,a$23mbankfacilitywasdrawntofacilitate The companyreviewed itscredit facilitiesduringtheyear, maintainingthecorporatebankfacilitylimitat$135m,and Capital Management projects where theproject risksare generallydiminished. project delayedbyapproximately sixmonths.Thecompanyaimstobalanceitsportfolioatanytimeinfavourof mature project provides bytheQueenslandGovernment anexampleofsuchrisks,with thecompany’s program forthat development, constructionrisksanddelays,pricingcompetition. Therecent callinoftheUpperKedron Individual projects are exposedtoanumberofrisksincludingthoserelated toobtainingthenecessaryapprovals for through theproperty cycle. demographics. Inthepast,companyhasachieveditsprofit objective bymanagingbothpricesandvolumes Whilst houseandlandpricesfluctuate,underlyingdemandwillbedriven bypopulationgrowth andchanging diverse geographicalmarketsandoffering awiderangeofproducts andpricepointstovariousconsumersegments. represent arisktoachievingthecompany’s financialobjectives. Thecompanyaimstomitigatethisriskbyoperatingin and metropolitan), (metropolitan) Victoria andQueensland(metropolitan). Thefluctuationsindemandthesemarkets The companyisalsoexposedtotheproperty cyclesinthemarketswhichitoperates,i.e.Western Australia(regional policy setbytheReserveBankofAustralia,strength ofthelabourmarketandconsumerconfidence. in relation toimmigrationandsupportforthehousingindustrygenerally, theenvironmental policyframework,monetary The generalriskstocompanyperformanceincludethoserelevant totheproperty policy market,includinggovernment Risks across itsportfoliothatwillcontributeinfuture years. (Brabham) inPerth’s corridorduringtheyearandprogressed northeastern approvals foranumberofotherprojects important performanceindicatorformanagement.Thecompanysuccessfullylaunchedanewproject atAriella of product tomeetcustomerdemand.Achievingsufficient pre-sales underwriteseachdevelopmentandisan The companycontinuallyassessesthemarketsinwhichitoperatesorder toensure ithasawideoffering Marketing andsales to thatstrategy. stream. DuringthesecondhalfcompanycompletedsaleofMastersHomeImprovement Store pursuant valuations havematured, withdisposalslikelytobecomearegular componentofthecompany’s future revenue acquisition opportunities.Developmentsmaybesoldoncetheyhaveachievedtheamenityobjectivesandtheir long termownershipofthoseassetswillbebalancedagainstthecompany’s capitalmanagementobjectivesand estates, where thedevelopmentofthosebuildingsisconsistentwithestate’s masterplanobjectives.The Cedar Woods willbuildalimitednumberofcommercial andretail Landingandatother property assetsatWilliams which generatesongoingrevenue bywayofmanagementandsellingfees. an importantco-developmentwithLandCorpandhasprogressed developmentbyCedarWoods Wellard Limited, and efficiently manageitscapital.Thisyear, thecompanysoldfinal releaseoflotsattheCarineRise project, Cedar Woods utilisesjointventures andco-developmentarrangementstodiversifythecompany’s revenue streams apartments atboutiquewaterfront developments. company’s offerings includesmallaffordable housinglotsatitsresidential estatesthrough tohigh-endluxury WAVictoria, andQueensland,offering awidespectrumofdwellingproduct andpricepointstoconsumers.The The companyhasastrategicallylocatedanddiverseresidential portfolioinurbanandregional growth areas in leading design,deliveryandmarketingofprojects tomaximisereturns. Cedar Woods’ core competencyisinproperty development and thecompanycontinuestoachieveindustry- A summaryoftheproject pipelinemaybefoundattheendofthisFinancialandOperatingReviewonpage14. meet thecompany’s objectivesintheyearsaheadandinfluencescompany’s ongoingearnings acquisitionstrategy. The focusontheproject pipelineguidesmanagement’s activitiesbyensuringthere issufficient diversityofproduct to l) k) j) Chairman William Hames For personalm) use only number ofkeychanges: During theyearcompanyhasreviewed frameworkandpracticeshasimplemented a itscorporategovernance responsibilities. Thecharterswere updated duringtheyearasrequired andare publishedonthecompany’s website. and itscommitteesreviewed theirrespective chartersandperformancetoensure theywere properly dischargingtheir The board isconsciousofitsdutytoensure thecompanymeetsitsperformanceobjectives.Duringyearboard Board Matters During theyearcompanyintroduced newstaff inductionandretention initiatives,includingawellbeingprogram. Statementonthecompany’sthe CorporateGovernance website. sets outaframeworkforthecompany’s diversity-related initiatives,strategiesandprograms. Commentaryisprovided in Cedar Woods remains committedtoaninclusiveworkplacethatembracesandpromotes diversity. Thediversitypolicy People andShareholderCorporate Governance reports pages. These reports are availableasseparatedownloadabledocumentsonourwebsitewww.cedarwoods.com.au underthe Report Sustainability ReportingandCorporateGovernance shareholders fortheirongoingsupportofCedarWoods in2015andtheyearsahead. We wouldliketothankourfellowdirectors andstaff fortheirdedicationandhard workin2015.Thanksalsogotoour fraternity. issuing coverageofthecompany. We are pleasedwiththesupport ofourexistingshareholders andtheinvestment profile andbuild awareness ofthestrength ofthecompany’s portfolio, andnotethatthere are five broking firms regularly In FY2015,wehavecontinuedtoactivelyengagewiththeinvestment andbroking communitytoraiseCedarWoods’ funding andapprovals inplace,yourboard remains positiveaboutthecompany’s outlook. currentWith ample levelofsalesactivitycontinues,thecompanyexpectstomaintainprofit momentum intoFY2016. three states.Thecompanyhas$153mofpresales inplaceandanumberofnewprojects commencing.Assuming the Cedar Woods entersFY2016withlowdebt,astrong balancesheetandadiverseportfolioinmajorgrowth regions in growth of2.0percent.(StateTreasury forecasts). cent populationgrowth. TheWestern Australianeconomyisforecast togrow at2.0percentinFY2016withpopulation of 1.8percent anticipated.TheQueenslandeconomyisexpectedtogrow at5.75percentinFY2016with1.75 company operates.Victoria’s economyisexpectedtogrow atasteady2.5percentinFY2016,withpopulationgrowth The medium-to-longtermprospects oftheresidential property sectorremain positiveinthestateswhich around 6%,althoughconsumerconfidence remains softforthetimebeing. are expectedtocontinuesupporttheproperty market.Theunemploymentrateappearstohavepeakednationally business investmentistakinglongerthanexpected.Strong levelsofinboundmigrationandhistoricallylowinterest rates The Australianeconomyisforecast tocontinueitslowgrowth phasenextyearasasustainedrecovery innon-mining Outlook available onthecompany’s websiteandalsoontheASXwebsite. Further detailsofthesechangesare Statementwhichis containedinthisAnnualReportandtheCorporateGovernance • • • • the introduction of aremuneration clawback policy. the introduction of anewequitybasedlongtermincentiveplan, performance assessmenttothecompany’s balancedscorecard, a review oftheremuneration frameworkfor thekeymanagementpersonnel,includingimproved linkageofthe independent directors onallBoard committees, a review ofthecompany’s Board committeesthathasresulted inthecompanyachieving amajorityof Managing Director Paul Sadleir

2015 ANNUALREPORT

13 Report to Shareholders 14 For personal use onlyProject Pipeline Project yields are indicative andsubjecttochange. This chartprovides a5yearoutlook,butsomeprojects willrunfora longer period. as at30June2015 Project Pipeline CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES Banbury Village -Footscray Banbury Village Western Edge-SouthHedland Elements -SouthHedland Bushmead -Hazelmere The Brook atByford Emerald Park-Wellard Waterline -HallsHead WESTERN AUSTRALIA-PERTH Ellendale -UpperKedron QUEENSLAND -BRISBANE LandingTownWilliams Centre Landing Williams St A-Albans Jackson Green -ClaytonSouth Carlingford -Lalor Landing Clara -Williams VICTORIA -MELBOURNE Batavia Marina-Geraldton WESTERN AUSTRALIA-REGIONAL Pinjarra North Baldivis Mangles BayMarina-Rockingham Ariella -Brabham Harrisdale Green - Harrisdale The Rivergums-Baldivis Piara Central-Waters Byford ontheScarp Mariners Cove-Mandurah PROJECT NAME North West West West North West South East North West West Pilbara Pilbara Mid-West South East South West South North East South East South West South East South East South East South South West South LOCATION CORRIDOR / PROJECT TYPE Residential Retail /MixedUseResidential Residential Land&Housing Housing Apartments &Houses Residential Land Apartments &Housing Residential Land Residential Land Residential Land Apartments Residential Land Residential Land Residential Land Marina /Tourist Residential Land Residential /MixedUse Residential Land Residential Land Residential Land Residential Land Canal Residential Land Lots LOTS /UNITS PROJECT 2385 1580 1416 TBC TBC 600 250 300 649 430 600 136 920 868 480 427 540 324 405 970 665 40 54 9 LOTS /UNITS (As of1/7/15) REMAIN 1580 TBC TBC 600 972 250 300 162 122 600 920 868 480 262 493 389 308 293 148 40 16 29 62 9 FY16 FY17 PROJECT LIFE FY18 FY19 FY20 Project yields are indicative andsubjecttochange. This chartprovides a5yearoutlook,butsomeprojects willrunfora longer period. Ellendale -UpperKedron QUEENSLAND -BRISBANE LandingTownWilliams Centre Landing Williams St A-Albans Jackson Green -ClaytonSouth Carlingford -Lalor -Footscray Banbury Village Landing Clara -Williams VICTORIA -MELBOURNE Western Edge-SouthHedland Elements -SouthHedland Batavia Marina-Geraldton WESTERN AUSTRALIA-REGIONAL Pinjarra Bushmead -Hazelmere North Baldivis Mangles BayMarina-Rockingham Ariella -Brabham Harrisdale Green - Harrisdale The Rivergums-Baldivis Piara Central-Waters Byford ontheScarp The Brook atByford Mariners Cove-Mandurah Emerald Park-Wellard Waterline -HallsHead WESTERN AUSTRALIA-PERTH PROJECT NAME North West West West North West South East North West West Pilbara Pilbara Mid-West South East South West South North East South East South West South East South East South East South South West South LOCATION CORRIDOR / Residential Retail /MixedUseResidential Residential Land&Housing Housing Apartments &Houses Residential Land Apartments &Housing Residential Land Residential Land Residential Land Apartments Residential Land Residential Land Residential Land Marina /Tourist Residential Land Residential /MixedUse Residential Land Residential Land Residential Land Residential Land Canal Residential Land Lots PROJECT TYPE LOTS /UNITS PROJECT 2385 1580 1416 TBC TBC 600 250 300 649 430 600 136 920 868 480 427 540 324 405 970 665 40 54 9 LOTS /UNITS (As of1/7/15) REMAIN 1580 TBC TBC 600 972 250 300 162 122 600 920 868 480 262 493 389 308 293 148 16 62 40 29 9 For personal use only FY16 Planning &Design FY17 PROJECT LIFE FY18 Development &Sales FY19 Leasing, Development&Sales 2015 ANNUALREPORT FY20

15 Project Pipeline 16 For personal useEnvironmental only and Social Governance integral partofproject deliveryandpromote renewable energyandreduced energy consumption. Environment andClimateChange-enhancerehabilitate environmental assets, remediate contaminationasan To integratesustainability bestpracticeintoalllevelsofdecisionmakingandproject outcomes. Sustainability Objective: Development Excellence’and‘AffordableHousing’,bothattheElementsproject inSouthHedland. Cedar Woods forUrban isproud Award ofitsachievements in 2015,whichincludeswinningtheinaugural‘RussellPerry business, industryandstakeholderpartners.Itshouldberead inconjunctionwithCedarWoods’ annualSustainabilityReport. targets andoutcomesidentifiedinthebalancedscorecard reporting andallowsustocommunicateourachievements This sectionsummarisesoursustainabilityperformanceforthepastfinancialyear. Itprovides updatesandprogress against impacts andperformanceofourprojects. integrated intothecompany’s culture, processes andstakeholderrelationships. Thishelpsusmanagethenon-financial achieve this,leadershipisprovided atseniorexecutiveleveltoensure thatsustainabilitymanagementandperformanceis Cedar Woods seekstointegratesustainabilitybestpracticeintoalllevelsofdecisionmakingandproject outcomes.To ESG Reporting Social Governance Environmental and CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES quality urbanplacesthatdeliveroflife. Optimising LandUse-deliveringthebestuseoflandbyoptimisingmixandproduct yieldinthecontextofhigh • • • • • FY2015 HighlightsandAchievements • • • FY2015 HighlightsandAchievements harsh Pilbaraclimate. shading andcross ventilationmeasures, theElementsdeliverslow-energyurbandesignandarchitecture inthe Elements, SouthHedlandisdesignedtocomplementthenaturalenvironment. Byadaptingsolarorientation, Checklist andLivingGuide. through frameconstructionaswellproviding anexampleofthedesignprinciplespromoted intheSustainability The Rivergums‘UrbanRetreat’ DemonstrationHomecontinuedtoshowcaseenhancedthermalperformance costs, waterscarcity andotherimpactsofclimatechange. now beenlaunchedatAriella,encouragingnewhomebuilderstomakesmartchoicesaddress escalatingenergy Cedar Woods’ SustainabilityChecklistandSustainableLivingGuidetemplatecontinuestoberolled outandhas contamination. Commonwealthenvironmental approval isnowbeingsought. based onCedarWoods giftingtwo-thirds ofthesiteforconservationmanagementandremediation ofsite Bushmead hasbeenrecognised asdeliveringanimproved bytheStategovernment environmental outcome, retention andmanagementofbiodiversitytoimprove project outcomes. objectives. ThisinformswhatlocallyStateandCommonwealthapprovals are required andopportunitiesfor projects havecontinuedtobesubjectthorough siteanalysisandsurveysattheoutsettodeterminebiodiversity Cedar Woods continuestobuildonitstrackrecord ofbeingthe‘environmentally responsible developer’.All Hedland, where planningcontinues. provision ofsuitableresidential landandlifestyleopportunities.Thiswillcontinue withWestern Edge, also inSouth The Elementsproject hassupportedthegrowth andrevitalisation oftheSouthHedland regional centre through the development ofUpperKedron willalsocontinueinlinewiththe regional planningforsouth-east Queensland. with furtherprogress LandingTown atWilliams Centre, JacksonGreen BanburyVillage, andStAlbans.Planning its trend ofacquiringstrategicurbanrenewal projects alongactivitycorridorsassociatedwithgoodpublic transport urban corridors,withtherecent office acquisitionofanadditional50.7ha inBaldivis.OurMelbourne hascontinued Perth basedprojects prioritygreen continuetobecharacterisedbytheacquisitionofgovernment fieldsprojects in andBrisbanestrategicplanningframeworks. land supplyinlinewiththePerth,Melbourne By thenature ofourbusiness,akeyoutcomeproject deliveryistoassistwithresidential andcommercial Williams Landing TownWilliams Centre, Victoria For personalBushmead, Western Australia useElements, Western Australia only 2015 ANNUALREPORT

17 Environmental and Social Governance 18 For personal useEnvironmental only and Social Governance Housing Diversity-promoting equalityofaccesstohousingforallsectorsthecommunity. CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES Heritage -recognising indigenousandculturalheritage. partner andacontributortoindustry. Stakeholder Engagement-maintainingCedarWoods positionasacompetentandtrustworthycompanyjointventure nurturing astrong ‘senseofcommunity’andmaximisingsocialconnectivity. Community Investment,DevelopmentandIntegration-creating vibrantcommunitiesbyinvestingintheirwellbeing, Occupational Health&Safety-providing asafeworkingenvironment forstaff andstakeholders. • FY2015 HighlightsandAchievements • FY2015 HighlightsandAchievements • • • • • FY2015 HighlightsandAchievements • • • • FY2015 HighlightsandAchievements • • • • FY2015 HighlightsandAchievements Cedar Woods winningthe2015UDIA(WA) ‘AffordableDevelopmentExcellence’Award atElements. price normalisationinthecharacteristicover-heated marketconditions.Thesuccessoftheseinitiativesisreflected in communities, AboriginalCorporations,not-for-profit agencies.Italsosetouttodeliver organisationsandgovernment The Elementsproject sawthesuccessfuldeliveryofaffordable housingsolutionsthrough partnershipswithindigenous heritage isidentifiedandmanagedappropriately. Ethnographic andarchitectural research isundertakenforall projects toensure thatindigenousandEuropean Cedar Woods hascontinuedtorespect IndigenousandEuropean culturalheritageatallofitsproject sites. undertaken forplanningatBushmeadandTheRivergumswiththeadvancementofnewapprovals. which oftenprovides opportunitiestomitigateandaddressActiveengagementstrategieswere communityconcerns. Cedar Woods continues to acknowledge the importance of adopting a proactive approach to community engagement project andoperationalmeetings.Consultantcontractorperformanceassessmentsare carriedoutbi-annually. Project operationswithindustryconsultantsandcontractorsinvolvedaytocommunicationsattendanceat industry committees. Institute ofAustralia,Property CouncilAustraliaandHousingInstituteAustralia.Companystaff participateonmany Cedar Woods hasmaintaineditsmembershipwithkeyindustryassociations,includingtheUrbanDevelopment (Harrisdale) withprofessionalism, transparency andqualityoutcomes.CarineRiseElementsare nowcomplete. (Mangles Bay, CarineRiseandWestern Edge),DepartmentofLands(Elements)andHousing The corporatestrategyistogrow thejointventure portfolioandtorespond toexistingjointventure partnersLandCorp plans whichare developedforeachproject andupdatedannually. stakeholdersisguidedbytargetedrelationshipEngagement withourgovernment engagementandcommunication Elements andMarinersCove. Other localsponsorshipforproject basedcommunitieseventsamountedto approximately $45,000,primarilyat to datehasbenefittedover80communitygroups whichprovide localservices. Landing. Anadditional$70,000wasgrantswere awardedRivergums andWilliams inFY15.Thetotalcontribution Community Grantsprogram atByford ontheScarp,TheBrook atByford, PiaraCentral,HarrisdaleGreen, The support ofnewemergingandexistingcommunitygroups. Attheproject level,Cedar Woods hascontinuedits Cedar Woods iscommittedtocreating vibrantsustainableurbancommunities.Partofthisvisionincludesthe attended andcommunityfeedbackwasverypositive. with friendsandneighbourstoenjoyanoutdoormovietogetherotherfamilyattractions.Theeventswere well Scarp, PiaraCentral,HarrisdaleGreen andatTheRivergums.Familiesenjoyedsittinginouraward winningparks In late2014,CedarWoods launcheditsNeighbourhoodCinemaprogram atTheBrook atByford /Byford onthe experience ofthevariousperformanceswithinvestors,keystakeholdersandamongststaff. the culturalwellbeingofPerthcommunitygenerally, italsoprovided valuable opportunitytoshare theenriching Cedar Woods ArtsFestival.Notonlydiditallowus toinvestin continueditssponsorshipofthePerthInternational related injury orillnessasaresult ofitsactivities. Through leadershipandcommitmentCedarWoods aimstoensure nopersonwillsuffer aseriouspreventable work The newWHSsystemwillbeimplemented throughout CedarWood’s operations. (WHS) systemthatwillensure compliance with thenewWHSAct. The companyhasbeenworkingclosely withitsconsultantstodevelopacomprehensive Work HealthandSafety across AustraliastatestoharmoniseHealthandSafetylaw. Cedar Woods hasprepared itselffortheintroduction oftheModelWork HealthandSafetyActasitisenacted For personal use only 2015 ANNUALREPORT

19 Environmental and Social Governance 20 For personal use onlyDirector’s Report e) d) c) b) a) ended 30June2015. company’) andtheentitiesitcontrolled (together‘theconsolidatedentity’or‘group’) attheendof,orduring,year Your directors present theirreport ontheconsolidatedentityconsistingofCedarWoods Properties Limited(‘the Directors’ Report CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES FY2016, underpinnedbyasignificant bankofpresales already inplaceatthedateofthis report. Subject tomarketconditionscontinuing atcurrent levels,the group anticipatesthatitwill maintainprofit momentum into The consolidatedentitywillcontinue property andQueensland. developmentoperationsinWestern Australia, Victoria Business strategiesandprospects for future financial years the financialandoperating review, commencingonpage8ofthis annual report. Information ontheoperationsandfinancialpositionofgroup anditsbusinessstrategiesprospects issetoutin Financial andoperatingreview of $12,622,669(16.0centspershare) tobepaidon30October2015outofretainedat 30June2015. earnings Since theendoffinancialyeardirectors have recommended thepaymentofafinalfullyfranked ordinary dividend Dividends paidtomembersduringthefinancialyearwere asfollows: Dividends property developerandinvestornosignificantchangeinthenature ofthoseactivitiestookplaceduringtheyear. The principalcontinuingactivitiesoftheconsolidatedentityincourseyearended30June2015were thatof Principal activities this report. The qualifications,experienceandotherdetailsofthedirectors inoffice atthedateofthis reportappearonpage21of RobertBrown forRSBrown) (Alternate Timothy Paul StephenSadleir(ManagingDirector) Stephen ThomasPearce Ronald Packer Robert StanleyBrown (DeputyChairman) GeorgeHames(Chairman) William to thedateofthisreport, exceptwhere stated: The followingpersonswere directors ofCedarWoods Properties Limitedduringthewholeoffinancialyearandup Directors (2014 –12.0cents)perfullypaidshare, paidon30April2015(2014–2014) Interim fullyfrankedordinary dividendfortheyearended30June2015of12cents October 2013) (2013 -15.0cents)perfullypaidshare, paidon31October2014(2013–30 Final fullyfrankedordinary dividendfortheyearended30June2014of15.5cents 12,142 21,390 9,248 $’000 2015 10,668 19,377 8,709 $’000 2014 For personalj) i) useh) onlyg) f) Mr WilliamGHames,BArch (Hons)MCU(Harvard) LFRAIA,MPIA, FAPI (Econ) Information ondirectors this report. the lawsofrelevant states.There havebeennoinstancesofnon-complianceduringtheyearanduptodate respect ofitsdevelopments,andobtainstheplanningapprovals required priortoclearingordevelopmentoflandunder To thebestofdirectors’ knowledge,thegroup complies withtherequirements ofenvironmental legislationin Environmental regulation believe itwouldbelikelytoresult inunreasonable prejudice totheconsolidatedentity. consolidated entityandtheexpectedresults ofoperationshavenotbeenincludedinthisreport becausethedirectors Beyond thecommentsatitems(d)and(e),furtherinformationonlikelydevelopmentsinoperationsof Likely developmentsandexpectedresults ofoperations c. b. a. may significantlyaffect: Other thantheabove,nomattersorcircumstances havearisensince30June2015thatsignificantlyaffected or total 1500lots.Developmentisexpectedtocommencein2016. Coupled withtheexistinglandholdinginthatarea, thetotalarea willcomprise119hectares andisexpectedtoyielda On 4August2015CedarWoods announcedthepurchase of50.74hectares oflandinBaldivisfor$26.25m+GST. Matters subsequenttotheendoffinancialyear There were nosignificantchangesinthestateofaffairs oftheconsolidatedentityduringyear. Significant changesinthestateofaffairs Mr RobertSBrown, MAICD,AIFS None. Other currentlistedcompanydirectorshipsandformerinthelastthreeyears: substantial property experiencetotheBoard uponwhichhehasservedasadirector fortwenty-fiveyears. and establishingHamesSharleyAustralia,anarchitectural andtownplanningconsultingcompany. MrHamesbrings Harvard UniversityinBoston.HeworkedtheUSproperty developmentmarketbefore returning toAustraliain1975 and received aMastersDegree inCityPlanning andUrbanDesignfrom theHarvard GraduateSchoolofDesign,at Mr Hamesisaco-founderofCedarWoods Properties Limited.Heisanarchitect andtownplannerbyprofession, Luiri GoldLimited. Other currentlistedcompanydirectorships andformerlistedcompanydirectorshipsinthelastthreeyears: has servedasadirector ofCedarWoods Properties Limitedfortwenty-sevenyears. Mr Brown bringstotheBoard hisdiversifiedexperienceasadirector ofthesecompanies andotherlistedentities participated inandchaired advisorycommitteesrelated variousWestern Australiangovernment tothehousingindustry. biotechnology andventure capital.Heisapastpresident oftheFederationBuildingSocietiesWA andhas Mr Brown isExecutiveChairmanofWestland Group HoldingsPtyLtd,withresponsibilities inmining,agribusiness, • • • • • • Member oftheNominationsCommitteeuntil31May2015 Chairman oftheBoard ofdirectors, non-executivedirector Member oftheNominationsCommittee Member oftheHumanResources andRemunerationCommittee Member oftheAuditandRiskManagementCommittee Deputy ChairmanoftheBoard ofdirectors, non-executivedirector the consolidatedentity’s stateofaffairs infuture financialyears. the results ofthoseoperationsinfuture financialyears;or the consolidatedentity’s operationsinfuture financialyears;or 2015 ANNUALREPORT

21 Director’s Report 22 For personal use onlyDirector’s Report Mr RonaldPacker,BCom(UWA), FAICD, SolicitorSupreme CourtofEngland&Wales CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES Mr StephenTPearce, BBus(ACC),GradDip(Admin),FCA,AGIA,MAICD None. Other currentlistedcompanydirectorshipsandformerinthelastthreeyears: nine yearsandchairsalloftheBoard’s committees. Trust andiscurrently theChairmanofTerrace Properties andInvestmentsPtyLtd.MrPackerhasservedasadirector for arena. HeistheformerManagingDirector ofPA Property ManagementLimited,theresponsible entityforthePA Property Mr Packerisanindependentdirector whobringstotheBoard awiderangeofproperty experienceinthepublicandprivate Mr PaulSSadleir,BE,MBA,AAPI,FAICD None. Other currentlistedcompanydirectorshipsandformerinthelastthreeyears: member oftheSalvationArmy’s BusinessandIndustryCommittee.MrPearce hasservedasadirector forthepastyear. Financial Officer of AlintaLimited.Heiscurrently non-executiveChairmanoftheLionsEyeInstituteandwaspreviously a the positionofManagingDirector Cross andCEOofSouthern ElectricalEngineeringLimitedand,before that,wasChief and capitalmarkets.Heiscurrently theChiefFinancialOfficer ofFortescueMetalsGroup Ltd.MrPearce previously held companies intheresources, oilandgas,energy andutilitiessectorshassignificantexpertiseacross allareas offinance Mr Pearce isanindependentdirector withalmost30years’seniorexecutiveanddirectorship experienceatpublicly-listed Mr TimothyRBrown, BA,LLB,M.Fin,PostGraduateDiploma(Phil) None. Other currentlistedcompanydirectorshipsandformer directorshipsinthelastthreeyears: a SenatememberofMurdoch University. MrSadleirhasservedasadirector fortwelveyears. aged care inWestern Australia,aDivisionCouncillorattheWA DivisionoftheAustralianInstituteCompanyDirectors and Barrack Mines.Heiscurrently aBoard memberoftheBrightwaterCare Group, oneofthelargestproviders ofresidential manager oftheBunningsWarehouse Property Trust andpreviously heldroles withWesfarmers Limited,Western Powerand and BachelorofEngineeringdegrees from theUniversityofWestern Australia.PriortojoiningCedarWoods, hewas analysis, equityandfinanceraisinginvestor relations management.MrSadleirholdsMastersofBusinessAdministration Mr Sadleirhasextensiveexperienceintheproperty sectorincludingstrategicplanning,portfoliomanagement,acquisition industry, preceded byemploymentinseniorroles withmajoraccountancyfirms. Company Directors. Hebringstothecompanyabackground oftwenty yearsinfinancialmanagementtheproperty He isamemberoftheInstitute Chartered AccountantsinAustraliaandisamemberoftheAustralian Instituteof The CompanySecretary isMrPaulSFreedman, BSc,CA,GAICD.Mr Freedman wasappointedtothepositionin1998. Company Secretary None. Other currentlistedcompanydirectorshipsandformer directorshipsinthelastthreeyears: Curtin University. MrBrown was admittedtotheSupreme CourtofWestern Australiaasabarristerandsolicitorin2004. venture capital.HisqualificationsincludeaBachelorofLawsfrom Notre DameAustraliaandaMastersofFinance from Mr Brown isadirector ofWestland Group HoldingsPtyLtd,withresponsibilities inmining,agribusiness,biotechnologyand • • • • • • • • • • Chairman oftheNominationsCommittee Chairman oftheHumanResources andRemunerationCommittee Chairman oftheAuditandRiskManagementCommittee Non-executive director Member oftheNominationsCommitteefrom 1June2015 Member oftheHumanresources andRemuneration Committeefrom 1June2015 Member oftheAuditandRiskManagementCommittee Non-executive director Managing Director, executivedirector Alternate directorAlternate forMrRobertSBrown n) m) For personal use onlyl) k) W GHameswasamemberoftheNominationsCommitteeuntil1June 2015. 1 June2015.Hewasnotamemberofthesecommitteeswhenthe meetings were heldintheyear. † STPearce wasappointedtotheHumanResources &RemunerationCommitteeandtheNominations Committeeon * Notamemberofthiscommittee. directors) heldduringtheyearended30June2015,andnumbersofmeetingsattendedbyeachdirector: The followingtablesetsoutthenumbersofmeetingscompany’s directors (includingmeetingsofcommittees Meetings ofdirectors As atthedateofthisreport CedarWoods Properties LimitedhadthefollowingcommitteesofBoard: Committees oftheBoard *R SBrown andTRBrown haveashared interest in4,639,980shares. sections 608and609oftheCorporationsAct2001,are asfollows: Directors’ relevant interests inshares ofCedarWoods Properties Limitedatthedateofthisreport, asdefinedby Directors’ interests inshares No share optionswere inexistenceduringtheyearandnonehavebeenissueduptodateofthisreport. Shares issuedontheexercise of options T Brown director) (alternate P SSadleir S TPearce R Packer R SBrown S TPearce W GHames R SBrown Number ofmeetingsheld: R Packer(Chairman) Committee Audit andRiskManagement RBrown* Timothy Paul SSadleir Stephen TPearce Ronald Packer Robert SBrown* GHames William Director Board Meetings S TPearce R SBrown R Packer(Chairman) Remuneration Committee Human Resources and 7 5 7 7 6 7 - Audit andRisk Management 4 4 4 4 - * * Meetings ofCommittees and Remuneration Human Resources S TPearce R SBrown R Packer(Chairman) Nominations Committee † 4 4 4 - * * Interest inordinary shares 2015 ANNUALREPORT Nominations 4,639,980 1,045,445 7,982,584 9,952,636 167,859 15,000 † 3 3 3 3 - *

23 Director’s Report Directors’ Report: Chairman of the Human Resources and Remuneration Committee’s Letter to Shareholders

Dear Shareholders,

I am pleased to provide an introductory overview and summary of the key highlights in relation to remuneration matters for FY2015. As outlined in the Financial & Operating review, Cedar Woods had another successful year in which we reported a record profit and solid progress across the various areas within the company’s operations, as described in our “balanced scorecard” in section r) of this report. The balanced scorecard provides the company’s FY2015 objectives and performance Directors’ Report: Letter to Shareholders Directors’ against targets as assessed by the Board.

At last year’s Annual General Meeting (AGM) in November, we received a significant vote against our remuneration report. Following the AGM, the company consulted with shareholders and proxy advisory groups regarding the concerns raised about Cedar Woods’ remuneration program, noting the need for greater transparency and enhanced structures around the short and long term incentive arrangements for executives. The Board engaged Ernst & Young (EY) to provide advice on remuneration matters and has considered these concerns and through a review process is implementing changes as outlined in the table below.

During FY2014 we introduced the more comprehensive “balanced scorecard” form of reporting and we have made a number of other changes, some of which were introduced during FY2015 and others which were introduced on 1 July 2015, as arrangements for FY2015 were already in place prior to the feedback received at the November AGM.

Review of the The company engaged EY to provide advice on Cedar Woods’ executive remuneration executive remuneration framework with the objective of improving the link between shareholder returns and framework executive remuneration as well as a closer alignment of remuneration with the Corporate strategy. Aspects of the new executive remuneration framework will apply from 1 July 2015 including transitioning to a greater emphasis on variable pay with the introduction of a new long-term incentive program (as outlined below).

Fixed remuneration The company identified where adjustments were appropriate, based on market benchmarking information. For FY2015 the Managing Director’s (MD’s) fixed remuneration remained unchanged and other executives’ fixed remuneration increased by approximately 5%, reflecting sustained high performance of the individual, increased role responsibilities and alignment with market remuneration levels in both listed and non-listed property companies.

Short-term incentives To ensure the STI’s were appropriately aligned to the Corporate plan, the company (“STIs”) continued with its balanced scorecard of measures for determining the STI awards for FY2015.

Long-term incentives Consistent with the intention stated in the FY2014 Remuneration Report, the former LTI plan (“LTIs”) has been reviewed and will be replaced by a new LTI plan effective from 1 July 2015. The new LTI plan has two vesting conditions a) a 3 year service condition and b) two performance conditions measured over a 3 year period: 50 percent of the LTI grant will be tested against a relative total shareholder return (“TSR”) hurdle (measured against the S&P / ASX Small Industrials Index) and 50 per cent against earnings per share (“EPS”) growth

24 only use personal For compared with the Corporate plan targets. The relative TSR performance condition was chosen as it offers a relevant indicator of measuring changes in shareholder value by comparing the company’s return to shareholders against the returns of companies of a similar size and investment profile. The EPS performance condition was chosen as it is a primary determinant of shareholder value in a listed company context.

CEDAR WOODS PROPERTIES LIMITED NED fees The maximum aggregate NED remuneration for FY2015 was $750,000, as approved by shareholders at the company’s FY2014 AGM. Chair and NED fees were increased by 2.5% effective 1 July 2014 to maintain market competitiveness. Total NED fees paid for FY2015 were $469,450.

Clawback policy The company implemented an incentive clawback policy for executives and other staff that applies for FY2015 onwards. Under the policy, the Board may at its absolute discretion claw back vested and unvested incentives in the case where an “inappropriate benefit” has arisen, as may be the case in a material mis-statement of financial results.

Further details on the executive remuneration arrangements and the remuneration outcomes for FY2015 are set out in this Remuneration Report. I look forward to answering any questions you may have at our Annual General Meeting in November.

Yours faithfully, Directors’ Report: Letter to Shareholders Directors’

Ronald Packer Chairman of the Human Resources and Remuneration Committee

For personal use only use personal For 25

2015 ANNUAL REPORT 26 For personal useDirectors’ only Report: Remuneration Report The RemunerationReportispresented underthefollowingsections: Act 2001. The informationprovided inthisremuneration report hasbeenauditedasrequired bysection308(3C)oftheCorporations information forthedirectors andotherkeymanagementpersonnel(“KMP”)fortheyearended30June2015. The directors present CedarWoods Properties Limited’s FY2015RemunerationReportwhichsetsoutremuneration Remuneration Report. Directors’ Report: CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES o) financial report wasauthorisedforissue. commencing from 20July2015.There were nootherchangestoKMPafterthereporting dateandbefore thedate After theendoffinancialyear, the companyappointedBenRosserasthe AustralianStateManager,Western includes theexecutivedirectors andseniorexecutivesofthecompany. indicated, theindividualswere KMPfortheentire financialyear. Forthepurposesofthis report, theterm“executive” The tablebelowoutlinestheKMPofcompanyduringfinancialyearended30June2015.Unlessotherwise indirectly. authority andresponsibility forplanning,directing andcontrolling themajoractivitiesofcompany, directly or The RemunerationReportdetailstheremuneration arrangementsforKMPwhoare definedasthosepersonshaving Introduction u) t) s) r) q) p) o) Introduction S Duplock P Freedman N Blackburne Senior Executives P SSadleir Executive Directors S TPearce R Packer R SBrown W GHames KMP Non-Executive Directors (“NEDs”) Additional statutorydisclosures Non-Executive Director feearrangements Executive contracts Executive remuneration outcomesforFY2015(includinglinktoperformance) Executive remuneration policyandframework Remuneration governance Position employment withthecompanyon 14August2014) Western AustralianStateManager(ceased Chief FinancialOfficer (“CFO”)andCompanySecretary andQueenslandStateManager Victorian Managing Director (“MD”) Independent Non-ExecutiveDirector Independent Non-ExecutiveDirector Non-Executive DeputyChair Non-Executive Chair Term asKMP Part year Full year Full year Full year Full year Full year Full year Full year Page 39 38 37 33 28 27 26 For personal use only p) recommendations totheBoard on: The HumanResources andRemunerationCommitteeisacommitteeoftheBoard. Itisresponsible formaking Role oftheHumanResourcesandRemunerationCommittee Remuneration governance During theyearended30June2015,EYprovided theHumanResources andRemunerationCommitteewith: the CorporationsAmendment(improvingAccountabilityonDirectorandExecutiveRemuneration)Act2011 are precluded from requesting servicesthatwouldbeconsidered tobea‘remuneration recommendation’ asdefinedby of CedarWoods’ management.However, toensure EYremains independent,membersofCedarWoods’ management Remuneration Committeerecognises that,toeffectively performitsrole, itisnecessaryforEYtointeractwithmembers EY’s termsofengagement includespecificmeasures designedtoprotect itsindependence.TheHumanResources and engaged. assist withthereview oftheoverallexecutiveremuneration framework.InFY2014remuneration consultantswere not In FY2015theHumanResources remuneration andRemunerationCommitteeappointedEYasitsexternal advisorto advisors Use ofremuneration Remuneration Committee,andmaybefoundonthecompany’s websiteundertheInvestorRelationslink. StatementprovidesThe CorporateGovernance furtherinformationontherole ofthisHumanResource and packages are appropriate andinlinewiththemarket-seesectionUseofremunerationadvisorsbelow. Committee periodicallyobtainsindependentremuneration informationtoensure NEDfeesandexecutiveremuneration fair andcompetitivealignedwiththelong-terminterests ofthecompany. TheHumanResources andRemuneration The HumanResources andRemunerationCommittee’s objectiveistoensure remuneration policiesandstructures are structures setoutinthisyear’s remuneration report. shareholders oftheprocess thattheBoard wasundertaking,whichhavenowresulted inthenewremuneration enquiring astotheprogress thecompanyhadmadeinrelation toitsremuneration policiesandtheChairman advised Report wasconsidered byshareholders. Thecompanyreceived onegeneralquestion attheAGMfrom ashareholder the FY2014.Thecompanyreceived noquestionsat theAGMwhenresolution theRemuneration concerning At thecompany’s FY2014AGM,75.7percentofeligiblevotescastwere infavouroftheRemuneration Reportfor Remuneration ReportapprovalatFY2014AnnualGeneralMeeting (“AGM”) The clawbackpolicyalsoprovides thattheBoard canrecover anSTIorLTI award previously paidtoanemployee. LTI STI The Board mayexercise itsjudgmentinrelation toSTIorLTI outcomes: Board’s judgment. For FY2015andsubsequentyears,vestedunvestedSTI’s <I’s are subjecttopotentialclawbackbasedonthe Clawback ofremuneration No remuneration recommendations were provided byEYoranyotheradvisorduringthereporting period. • • • • • • remuneration levelsoftheMDandotherexecutives. operation ofincentiveplansandkeyperformancehurdles fortheexecutiveteam,and NED fees, the over-arching executiveremuneration framework, assistance indraftingofremuneration report disclosures. guidance inthereview anddesignoftheexecutiveremuneration framework;and policies. as anymaterialmisstatementsoffinancial results orindividualinstancesof non-compliance withCedar Woods’ at anytimepriorto,orat,thefinalvestingdateofperformance rights andwilltakeaccountoffactorssuch payments, whendeterminingifthere are anymattersimpactingtheinitialperformanceassessment. at theendoffinancialyearwhenassessingperformanceagainst scorecard objectivestodeterminetheSTI 2015 ANNUALREPORT .

27 Directors’ Report: Remuneration Report 28 For personal useDirectors’ only Report: Remuneration Report q) CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES i. initiated toapplyfrom 1July2015.Where relevant, thesechanges havebeenhighlighted. framework forFY2015.Asnoted,followingareview oftheexecutiveremuneration program, changeshavebeen The informationcontainedwithinthissectionoutlinesthedetailspertainingtoexecutiveremuneration policyand Executive remuneration policyandframework

Total remuneration (“TR”) good reward practices: governance executive reward satisfiesthefollowingkeycriteriafor The Board ofdirectors ensures ourapproach to • • • • Principles andstrategy remuneration Fixed Component LTIs STIs and reward Transparency ofthelinkbetweenperformance performance Alignment ofexecutiveremuneration tocompany Acceptability toshareholders Competitiveness andreasonableness Vehicle Performance Rights LTI grantsawarded in – newequitybased From 1July2015 period end ofthe3year paid incashatthe Superseded scheme: Paid incash benefits and non-monetary salary, superannuation Comprises base the disciplinedacquisition,developmentandmarketingofproperties Remuneration strategylinkagestocompanyobjective To create long-termvalueforshareholders through over thelongerterm shareholder value to thecreation of for theircontribution Rewards executives unit outcomes Group andbusiness to achievementof for theircontribution Rewards executives individuals and experienceof market andskills reference torole, remuneration setwith competitive fixed To provide Purpose Company objective individuals: Attract, motivateandretain highperforming having: The frameworkisalignedtoshareholders’ interests by • • • • growth inshareholder wealth Reflects competitive reward forcontribution to experience The remuneration offering rewards capabilityand clawback performance. UnvestedLTIs alsosubjectto pershare (earnings (“EPS”)growth)and internal (relativeexternal totalshareholder return(“TSR”)) From 1July2015-LTIs linkedtobothlongterm subject toclawback STIs linkedtocurrent yearperformanceand both overathree yearperiod annual compoundgrowth rateinEPS, to S&P/ASXSmallIndustrialsIndex and is dependentonTSRperformance relative From 1July2015-Vesting ofnewgrants for minimumofthree years for executivetoremain withthecompany measures overoneyearwithrequirement Financial andnon-financialperformance established atthestartofyear achievement ofpersonalobjectives Linked totheCorporatePlanand contracts increases includedinexecutives’ No guaranteedfixed remuneration remuneration review process are considered duringtheannual Group andindividualperformance Link toperformance For personal use only CFO andCompanySecretary –remuneration mix State Managers-remuneration mix Managing Director -remuneration mix The graphbelowillustratesthecurrent (FY2015)andanticipatedremuneration mixbyFY2018. increases directed intoLTI’s. In makingthistransition,theBoard wishestokeeptotalremuneration increases atmodestlevels,withthemajorityof years, notingsomevariationsmayoccurduringthistimeduetoinfluencingfactorssuchaschangingmarketconditions. for anequitybasedLTI plan.TheBoard intendstransitioningtothenewremuneration mixoverthenextthree financial of “atrisk”componentswithinthetotalremuneration opportunity(remuneration mix)particularlyfortheMDandaneed individual andthecompany. Therecent review ofexecutiveremuneration hasidentifiedaneedforgreater weighting The “atrisk”components(STI’s andLTI’s) ensure aproportion ofremuneration varieswithperformanceofboththe trends, theperformanceofcompanyandindividual,broader economicenvironment. Remuneration levelsare reviewed annuallythrough aprocess thatconsidersmarketdata,insightsintoremuneration period oftime. Based onperformanceandexperience,individualshavethepotentialtomovefrom mediantoupperquartileovera direct industrypeers,bothlistedandunlisted,otherAustraliancompaniesofasimilarsizecomplexity. The company’s approach isgenerallytoposition Total Remunerationbetweenthemedianandupperquartileofour responsibilities andperformancewithintheorganisationalignedwithmarketpractice. The companyaimstoreward executiveswithalevelandmixofremuneration appropriate totheirposition, as outlinedbelow. In FY2015,theexecutiveremuneration frameworkconsistedoffixed remuneration andshortlong-termincentives ii. development andstaff retention. The HumanResources andRemunerationCommitteealsoconsidersissuesofsuccessionplanning,career the Board (basedonarecommendation from theHumanResources andRemunerationCommittee). adjusted upordowninlinewithoverandunderachievementagainstthetargetperformancelevels,atdiscretion of Performance related outcomesare determinedeachyearfollowingtheauditofannualresults. Outcomesmaybe Approach tosettingremuneration By FY18 By FY18 By FY18 Current Current Current Fixedremuneration 50% 63% 67% 69% 75% MaxSTIopportunity 78% MaxLTI opportunity 25% 20% 19% 35% 15% 15% 25% 2015 ANNUALREPORT 13% 12% 10% 8% 2%

29 Directors’ Report: Remuneration Report 30 For personal useDirectors’ only Report: Remuneration Report CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES The totalawarded undertheplaninprevious yearswhich hasyettovestis$315,750. In FY2015atotalof$447,000was awarded under the incentiveplanforparticipants,whichwillveston1July2017. but before thevestingdatethenbonuswouldbe paidout. restriction atitsdiscretion, forexamplewhenanemployeeretires. Ifanemployeewasmaderedundant aftertheaward If theemployeeleftcompanybefore the vestingdatenobonuswaspaid,althoughtheBoard maywaivethis KMP amountsdetailedinsectionr) Executiveremuneration outcomes. the remaining twoyears.TheFY2015LTI awards were basedonthesamecriteria usedforFY2015STIawards, with company andindividualperformancecriteriaassessedinthefirstyear andongoingemploymentwiththecompanyfor in FY2015.Theincentivewasdesignedasacashbonusopportunity thatveststhree yearsafteraward, basedon The companyoperatedalongtermincentiveplan,whichfirstcommenced inFY2012withthefinalgrantsmade FY2015 LTI plan Long-term incentives(LTI) Short-term incentives(STI) iii. leaves CedarWoods? What happensifanExecutive assessed? How isperformance conditions forFY2015? What are theperformance What istheSTIopportunity? How istheSTIdelivered? Who participates? Details ofincentiveplans this regard. entitlement. TheHumanResources andRemunerationCommitteehasdiscretion in Executives wholeavepriortotheendoffinancialyeargenerally forego their determine STIoutcomesinthelightofpersonalandcompanyperformance. The HumanResources andRemunerationCommitteehasthediscretion to recommendations from theMDbefore makingitsdetermination. For seniorexecutives,theHumanResource andRemunerationCommitteewillseek Committee recommends totheBoard theamountofSTItobepaidMD. objectives, theChairmanandChairofHumanResource andRemuneration On anannualbasis,afterconsiderationofperformanceagainstsetbalancedscorecard performance outcomesforFY2015,andSTIawards toKMP. Refer tosectionr)Executiveremuneration outcomesforfurtherdetailsof Sustainability satisfaction Shareholder engagementand People andculture management Financial performanceandrisk Sales andcustomerexperience Developments Business development model are setoutinthetablebelow: The weightingsthatappliedinFY2015tocomponentsofthecompany’s business and individualperformancecriteria. targets setatthebeginningoffinancialyearare metwith regard tobothcompany Actual STIpaymentstoeachexecutivedependontheextentwhichspecific Executive remuneration outcomes. target opportunity. ThemaximumSTIopportunityforKMP’s isdetailedinsectionr) deliver steadyannualgrowth andaccordingly themaximumSTIopportunityis of therole andimpactonorganisationalperformance.Thecompanyseeksto Each executivehasatargetSTIopportunitydependingontheaccountabilities Cash Executives 10% 15% 15% 20% 20% 15% MD 5% Weighting (%) Manager VIC & QLD State 20% 15% 20% 20% 15% 5% 5% Company Secretary CFO and 20% 20% 40% 15% 0% 5% 0% For personal use only The companyhasintroduced anewLTI plan,effective 1July2015.Keyfeatures ofthenewLTI planare asfollows: New LTI planeffective1July2015 to LTI’s? Do clawbackprovisions apply exceeded? performance hurdles are not Is performanceretested if dividends onLTI grants? Do participantsreceive change ofcontrol What happensintheeventof leaves CedarWoods? What happensifanExecutive When doestheLTI vest? grant? determined foreachLTI How are thenumberofrights How istheLTI delivered? What LTI’s are available? Who participates? Why haveanewLTI plan? control. the achievementofpro-rata performanceconditionsatthetimeofchange has passedatthetimeofchangecontrol. Vesting willalsobesubjectto unvested awards willvestbasedontheproportion oftheperformanceperiodthat Unless theBoard determinesotherwise,apro-rata numberoftheparticipant’s unvested Shares: If cessationofemploymentoccurs,thefollowingtreatment willapplyinrespect of released andwithinatradingwindow. period (1July2015to30June2018),withvesting,ifany, occurringonce results are The Board willdeterminetheoutcomesatendofthree yearperformance vest inaccordance withtheperformanceconditionssetoutbelow. financial year. Thisfixesthemaximumnumberofshares andtheactualnumberwill Average PriceofCedarWoods’ shares overthefirstfivetradingdaysof2016 Allocations are made basedonafacevalueapproach usingtheVolume Weighted reference tothemaximumLTI opportunityoutlinedinthepriorsection. The numberofperformancerightsallocatedforeachexecutiveiscalculatedby hurdle ismet).Nodividendsare paid onunvestedLTI awards. provide, whenvested,oneshare at nilcost(provided thespecified performance Awards undertheLTI planare madeintheformofperformancerights,which outcomes. The maximumLTI foreachKMPisdetailedinsectionr)Executiveremuneration in check. become alargerproportion oftotalremuneration, soastokeeptotalremuneration It isintendedforannualgrantstobemadeundertheplanandovertimethese of therole andimpactonorganisationalperformance. Each executivehasamaximumLTI opportunitydependingontheaccountabilities Executives andkeystaff. NEDsare noteligibletoparticipateintheLTI plan. focus onsustainablelongtermgrowth andattractretain keyexecutives. To encourageagreater alignmentoftheinterests ofexecutivesandshareholders, and unvestedincentivesinthecase ofan“inappropriate benefit”arising. staff. Underthepolicy, theBoard mayatitsabsolutediscretion clawbackvested The companyhasinplaceanincentiveclawbackpolicyforexecutives andother No, there are nofurtherretests oftheperformanceconditions. Not priortoanyvesting. unvested Shares to remain ‘onfoot’oncessation ofemployment). performance and/ortime)inspecialcircumstances (asopposedtoallowing The Board willretain discretion toallowforacceleratedvesting(pro-rated for • • date employmentceases. the numberofRightsavailabletovestwillbereduced pro-rata fortimeatthe performance conditionsare met.TheBoard maydetermineinitsdiscretion that foot’ andmayvestattheendoforiginalperformanceperiodtoextent other circumstances determinedbytheBoard), unvestedShares willstay‘on due toillness,totalorpermanentdisablement,retirement, redundancy or If theParticipantceasesemploymentinothercircumstances (forexample, termination forcause,unvestedRightswillnormallybeforfeited. If theParticipantceasesemploymentwithCedarWoods onresignation oron 2015 ANNUALREPORT

31 Directors’ Report: Remuneration Report 32 For personal useDirectors’ only Report: Remuneration Report CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES hurdles? and rewarded againstthese How isperformanceassessed The relevant inputswhensettingtheEPStargetrangeare generally: Weighted numberofsharesonissue: netprofitaftertax: Statutory Where: > =10% Between 5%-10% 5% < 5% EPS compoundannualgrowth rate The vestingscheduleforthiscomponentoftheLTI isasfollows: EPS calculationis: inproportionearnings tothetotalnumberofshares issuedbytheorganisation.The performance ofanorganisation,capturinginformationregarding anorganisation’s EPS compoundannualgrowth rate(50%):EPSisamethodofcalculatingthe > =15%abovetheIndex > Indexandupto15%abovethe At theIndex < Index Relative TSRperformanceoutcome The vestingscheduleisasfollows: over 3years. or above15%oftheIndexrecognises significantout-performanceofthecompany TSR performanceisgreater thantheIndex.MaximumvestingofTSRhurdle at Executives willonlyderivevaluefrom thiscomponentoftheLTI ifthecompany’s used intheinvestmentcommunity. changes toshare priceanddividendspaidtoshowthetotalreturn andiswidely 155 companiesinthisindexatpresent. TSR(Total Shareholder measures Return) than EnergyorMetals&Mining,withCedarWoods rankedapproximately 100thof 100) whohaveaGlobalIndustryClassificationStandard (GICS)classificationother companies includedintheS&P/ASX300(excluding performance.TheASXSmallIndustrialsIndexiscomprisedofthe external Relative TSRhurdle (50%):Therelative TSRhurdle provides acomparisonof categories. operate independently, sothatawards canbemadeundereitherorboth The awards are subjecttotwoequallyweightedperformanceconditionswhich • • • • Shareholder andanalyst(individualconsensus)expectations. guidancethathasbeen providedAny earnings to the market; The levelofstretch associatedwiththosebusinessplantargets; reference tothemostrecent fiveyearforecasts; internal andEPStargetscontainedintheCorporateplan,particularlywith The earnings EPS = Weighted numberofshares onissue Statutory netprofit aftertax for thefinancialyear. The weightednumberofshares onissue calculation date. recent financial-yearendpreceding the as reported byacompanyatthemost 100% Pro-rata between50%and100% 50% Nil vesting Percentage ofEPS-testedrights 100% Pro-rata between50%and100% 50% Nil Percentage ofTSR-testedrightsvesting For personal use only r) overriding objectiveofproviding longtermvaluetoshareholders andlinkstoourbusinessmodelasdescribedonpage7: performance measurement frameworkwillcontinueforFY2016,asitprovides aclosealignmenttothecompany’s The tablebelowoutlinesFY2015STIobjectivesandperformanceagainsttargetsasassessedbytheBoard. This Performance againstSTIbalancedscorecardobjectives Executive remuneration outcomesforFY2015(includinglinktoperformance) assets acquiring quality the portfolioby To buildandreplenish Business development Objective opportunities Pursue jointventure commercial building Residential and time andonbudget. project deliveryon minimize riskwith Maximise value, Developments thorough anddisciplinedmanner and reporting measures ina consistent withapproved checklist investigations fornewacquisitions Undertake duediligence Measures transparency and qualityoutcomes partners withprofessionalism, Respond toexistingjointventure the corporategrowth strategy projects eachyear, consistentwith Acquire 1-2newcomplementary profitability add value,product diversityand Establish allianceswithbuildersto corporate reputation to addproject diversity and Seek newjointventure opportunities Timely approvals achieved Timely Enhanced valueofsites program. budget developmentcostsand Monthly reporting ofactualvs on numerous sitesineachstate. properties inWA. Submittedoffers in eachofVICandQLD18 assessment ofover20properties the siteswepursued.Detailed caused ustobeselectiveon Heated acquisitionsenvironment Outcomes Elements successfullycompleted (Harrisdale). CarineRiseand (Elements) andDept.ofHousing Rise &Western Edge),Dept.Lands with LandCorp(ManglesBay, Carine development agreements) inWA Existing jointventures (or Clayton SouthinVictoria year. Settledonnewacquisitionat No newprojects acquired duringthe consideration and innovation.Newinitiativesunder most projects, adding diversity, sales Builder alliancesoperatingacross on severalopportunities the yearbutdiscussionsunderway No newjointventure projects during granted partialapproval inJuly2015. Thishassincebeen government. subsequently calledinbytheQLD received aheadofprogram but Upper Kedron project approval some projects. with programs butwithdelayson Approvals generallyreceived inline (WA) andUpperKedron (QLD) approvals achievedatManglesBay August 2015.FederalEnvironmental Upper Kedron lotyieldapproved in Successful rezoning atBushmead. applications. line withhighestandbestuse Approvals generallyreceived in budget, withsomedelays Projects generallydelivered within arrangements appropriate contractual Delivery riskmitigatedthrough 2015 ANNUALREPORT Not achieved Not achieved Performance assessment Achieved Achieved Achieved Achieved Achieved Achieved

33 Directors’ Report: Remuneration Report 34 For personal useDirectors’ only Report: Remuneration Report CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES Objective development and sustainable embrace innovation communities which Create quality Developments (continued) customer demand meet marketand Position projects to Sales andcustomerexperience risk controlled manner Continued growth ina Financial performanceandriskmanagement retain staff Attract, motivateand People andculture Innovation andqualityinprojects Sustainability Policy Compliance withCorporate Measures Settlements Enquiry &conversionrates Sales Budget expenditure Pricing Customer satisfaction Satisfactory ROEandROC Growth inNPAT andEPS Conservative gearing(debt/equity) Capital management place Risk managementframeworkin Be apreferred employer training Succession planning&leadership Staff development Staff productivity Accreditation’’ “Waterwise Development Recipient oftheWater Corporation at Carine(WA) Environmental (Enviro) Accreditation achieved across theprojects Good environmental initiatives Outcomes company forecast Settlements achievedtomeet Satisfactory Budgeted salesnotachieved Expenditure withinbudget Pricing generallyatbudgetlevels improved saleservice buyer surveyresults demonstrate Increased buyerreferrals andrecent above companybenchmarks ROE 14.9%,ROC19.5%both below EPSgrowth target NPAT up6%andEPSdown0.1%, but conservative Gearing 10%,belowtargetrange satisfactory terms Maintained capitalavailabilityon Risks identifiedandmitigated - - - were reviewed andintroduced: Progressive HRpolicies&initiatives business Quality staff were attractedtothe industry events on thejobtrainingandattended Selected staff undertookcourses, performance management to achievebettercollaborationand public speaking.Systemsimproved undertaken includingconsumerlaw, Numerous group trainingprograms undertaken performance management minimised, lowabsenteeism, Key targetsachieved,costs - - - New careers sectiononwebsite benefits Wellbeing program andstaff exit interviews New inductionprocedures and Not achieved Not achieved Performance assessment Achieved Achieved Achieved Achieved Achieved Achieved Achieved Achieved Achieved Achieved Achieved Achieved Achieved Achieved Achieved achieved Partially For personal use only STI thatwasavailable. The followingtableoutlinestheproportion andforfeitedinrelation ofmaximumSTIearned toFY2015andthemaximum Total % opportunity Max STI Total $ compliance Heritage; OH&S Housing Diversity; Optimising landuse; Environment; Sustainability the company Shareholders support Objective Shareholder engagementandsatisfaction $450,000 $387,000 86% MD project delivery contamination asanintegralpartof environmental assetsandremediate Enhance andrehabilitate Participation inshare issues Measures energy efficiency management andwateruse Promoting totalwatercycle Company investorrelations program urban places that deliver quality of life urban placesthatdeliverqualityoflife yield inthecontextofhighquality optimising landusemixandproduct Delivering thebestuseoflandby Support forboard resolutions Total shareholder return (TSR) community to housingforallsectorsofthe Promoting equalityofaccess resolutions Proxy advisorssupportboard cultural heritage Recognising indigenousand stakeholders environment forstaff and Providing asafeworking Proportion ofmaximum STI earned inFY2015 earned State Manager VIC &QLD $110,000 $95,700 87% Company Secretary CFO and $65,000 $57,850 89% accreditation atCarineRise. projects. EnviroDevelopment statutory complianceacross all Environmental assessmentand plan reinvestment planandbonusshare Recommenced dividend Outcomes energy initiativesimplemented and plansprepared forallprojects, Urban watermanagementstrategies survey ofinstitutionalinvestors Positive feedbackincludingfrom use anddensityyieldtargets All projects addressing statutoryland shareholders at2014AGM Board resolutions supportedby satisfactory for3and5years page 36,unsatisfactoryfor1year, TSR for1,3and5yearsshownon Elements, CarineRiseandHarrisdale housing strategiesimplementedat each project. Specificaffordable Housing diversitytargetsmetfor resolutions supported report resolution butallother did notsupport2014remuneration Two ofthree proxy advisorfirms protected through project themes for allprojects. Heritage vales Heritage assessmentsundertaken enhancements tobecompleted Policy compliance.OH&Ssystem $63,000 14% MD Proportion ofmaximum STI forfeited inFY2015 State Manager VIC &QLD $14,300 13% 2015 ANNUALREPORT Not achieved Performance assessment Company Secretary CFO and Achieved Achieved Achieved Achieved Achieved Achieved Achieved Achieved $7,150 achieved achieved Partially Partially 11%

35 Directors’ Report: Remuneration Report 36 For personal useDirectors’ only Report: Remuneration Report CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES 1 July2015anewequitybasedLTI schemehasbeenintroduced, asdescribedonpage 31. LTI thatwasavailable.TheLTI outcomesinFY2015were basedonthesamecriteriausedforFY2015STIawards. From The followingtableoutlinestheproportion ofmaximumLTI andforfeitedinrelation earned toFY2015andthemaximum assessed inthefirstyearandare subjecttoongoingemploymentwiththecompanyfor remaining twoyears. For theLTI schemeinplaceFY2015,LTI awards were basedon companyandindividualperformancecriteria Performance againstLTI objectives below: The returns toshareholders ofCedarWoods Properties Limitedoverthelast1,3and5yearsare detailedinthetable consecutive record profit forthecompany. In FY2015,thecompanydelivered arecord profit of$42.6million,anincrease of6percent.Thiswasthe fifth Performance ofshareholderreturnmetrics The LTI awards veston1July2017subjecttotheserviceperiodcondition. earned awarded. may notalwaysbeadirect correlation betweenthestatutorykeyperformancemeasures andthevariableremuneration the variableamountsofremuneration awarded toKMP, thebasisforwhichisoutlinedabove.Asaconsequence,there are showninthetablebelow. However, theseare notnecessarilyconsistentwiththemeasures usedindetermining The measures ofthecompany’s financialperformanceoverthelastfiveyearsas required bytheCorporationsAct2001 dividend growth. Thecompany’s share priceissubjecttomarket factorsthatare beyondthecompany’s control. persharethe returns oftheS&PSmallIndustrialsIndex.Managementisfocussedondeliveringconsistentearnings and Index totalreturn of7.1percentoverthesameperiod.However, thereturns over3and5yearscompare favourablyto The totalshareholder return inFY2015was-23.5percentwhichcompared unfavourablywiththeS&PSmallIndustrials Profit fortheyear($’000) EPS growth toshareholdersReturns over1,3and5years(%) Increase (decrease) inshare price(%) Dividends pershare (cents) pershareBasic earnings (cents) Share pricegrowth Dividend growth (paid dividend) CWP TSR(changeinshare priceanddividends) S&P SmallIndustrialsIndex(XSIAI) Total % opportunity Max LTI Total $ $25,000 $21,500 86% MD Proportion ofmaximumLTI earned inFY2015 earned State Manager VIC &QLD $70,000 $60,900 87% 42,585 (28.0) 2015 28.0 54.3 Company Secretary CFO and $40,000 $35,600 89% 40,313 2014 27.5 54.4 41.4 $3,500 14% MD 1 year (28.0) (23.5) (0.1) 1.8 7.1 36,337 2013 26.0 49.9 45.2 Proportion ofmaximumLTI forfeited inFY2015 State Manager VIC &QLD 9,100 3 years 13% 34,250 13.9 21.5 12.2 0.7 6.1 (11.0) 2012 25.0 53.2 Company Secretary CFO and $4,400 5 years 28,060 11% 13.4 16.5 18.0 26.0 2011 23.0 45.8 63.3 9.7 For personals) use only Executive director Name N Blackburne Senior executives P SSadleir P Freedman S Duplock Total corporate duringtheprevious 3years. under theActwouldbeaverage annualbasesalarythatMr. Sadleirreceived from thecompanyandrelated bodies section 200GoftheCorporations Act. Taking intoaccountMr. Sadleir’s period ofservice,themaximumpayment diminution inhisrole, responsibilities orstatushewillbeentitledtopaidthe maximumamountpermittedunder varied suchthatonterminationby theCompanyonordinary noticeorifheresigns followingamaterialvariation/ ** Aswellasallowingforparticipation (subjecttoshareholder approval) intheLTI Plan,MrSadleir’s contracthasbeen * Fortreatment ofSTIandLTI awards uponcessationof employmentpleaserefer toincentiveplansection. Details oftheremuneration ofeachexecutiveCedarWoods Properties Limitedissetoutbelow. Executive remunerationfortheyearsended30June2015and2014 Mr Sadleir’s totalremuneration packageforFY2015wasasfollows: The ManagingDirector, MrSadleirisemployedunderanongoingcontract. contractfortheManagingDirector Details ofrenegotiatedexecutiveservice of theseagreements. Remuneration arrangementsforexecutivesare formalisedinemploymentagreements. Thefollowingoutlinesthedetails Executives contracts reviewed annuallybytheHumanResources andRemunerationCommitteeforeachKMPdetailsare asfollows: agreements fortheexecutivesprovide forperformancerelated cashbonusesandotherbenefits.Theagreements are Remuneration andothertermsofemploymentfortheexecutivesare formalisedinemploymentagreements. The agreements Service Other seniorexecutives P SSadleir Executive director • • • Maximum LTI opportunityof2%totalremuneration. Maximum STIopportunityis35%oftotalremuneration Fixed remuneration of$800,000perannum Financial 2015 2015 2014 2014 2015 2014 2015 2014 2015 2014 year Cash salary Cash salary 1,509,963 1,759,495 381,217 765,393 362,225 772,270 330,000 320,000 and fees 305,000 33,353 $ Short-term benefits Short-term Contract term No fixedterm No fixedterm 387,000 100,000 427,500 540,550 626,500 95,700 57,850 57,000 42,000 bonus Cash $ - monetary monetary benefits 12,754 18,159 22,990 7,990 7,972 7,268 1,112 1,236 1,085 1,732 Non- $ Employment annuation 33,699 18,783 17,775 23,730 35,000 25,000 25,000 93,315 91,505 Super- 5,833 Post $ terminate contract Notice required to Up to3months 12 months 118,000 21,500 60,900 40,000 35,600 23,750 63,750 Long-term benefits Long-term bonus Cash $ - - - 13,338 24,128 14,437 11,432 service service 34,133 48,076 9,362 9,511 Long- leave $ - - Termination 124,500 124,500 Benefit Up to3monthsbasesalary $ ------Termination benefit* 2015 ANNUALREPORT See below** 1,228,920 1,254,896 2,438,619 2,612,316 573,934 547,191 470,994 436,497 164,771 373,732 Total $ related Perfor- mance 33% 27% 20% 34% 26% 19% 11% % -

37 Directors’ Report: Remuneration Report 38 For personal useDirectors’ only Report: Remuneration Report t) CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES NED remunerationfortheyearsended30June2015and2014 accounting standards. The tablebelowoutlinesfeespaidtoNEDsforFY2015andFY2014inaccordance withstatutoryrulesandapplicable The annualfees(inclusiveofsuperannuation)forFY2014andFY2015are setoutinthetablebelow: NEDs’ annualfeeswere lastreviewed from FY2015(effective date:1July2014). Fee policy for theNEDmaximumaggregate feepoolattheFY2015AGM. (currently setat$750,000).ThetotalofNEDfeespaidinFY2015was$469,450.TheBoard willnotseekanyincrease Remuneration Committee,withinthemaximumaggregate amountapproved bytheshareholders from timeto Remuneration ofNEDsisdeterminedbytheBoard, afterreceiving recommendations from theHumanResources and performance basedremuneration. from timetobytheBoard, takingintoaccountcomparableroles andmarketdata.NEDsdonotreceive additional feesare paidformembershipsofdirectors onsubsidiaryBoards. NEDs’feesandpaymentsare reviewed NEDs’ receive anadditionalfeeforchairingcommittees(nofeesare paidforcommitteemembership).No reflect thedemandswhichare made on,andthe responsibilities oftheNEDs. appointment. Theletterdetailstheterms,includingfees,relevant totheoffice oftheNED.FeesandpaymentstoNEDs On appointmenttotheBoard, allNEDsenterintoaserviceagreement withthecompanyinformofaletter Determination offeesandmaximumaggregateNEDfeepool Non-Executive Director feearrangements Committee member Committee Chair Other NEDs Deputy Chair Chair Total S TPearce* R Packer R SBrown Name W GHames Financial year 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 committee fees Short-term Board and 331,399 405,336 104,348 106,712 135,469 138,538 benefits 74,885 82,270 85,201 9,312 $

Post employment Superannuation 116,850 151,700 FY2015 56,774 64,113 33,730 33,698 10,138 12,531 13,162 12,300 82,000 7,115 9,652 861 Nil $ $ 388,173 469,450 116,000 118,900 114,000 116,850 148,000 151,700 114,000 148,000 FY2014 10,173 82,000 12,000 80,000 Total Nil $ $ For personal use only u)

above includestheshares heldbyrelated partiesoftheKMP. directors’ report whichcomplywiththerequirements ofsections608and609theCorporationsAct2001.Thetable The interests shownabovecomplywithAASB124Related PartyDisclosures anddiffer tothoseshownatiteml)ofthe * Interest ofTRBrown relates toshares alsoshown under RSBrown. purchase. † Includes2,014,439(2014–2,014,439)shares overwhichWGHameshasvotingrights andafirstrightof refusal to during theperiodasremuneration. Woods Properties Limited,includingtheirpersonally-related parties,are setoutbelow. There were noshares granted The numbersofordinary shares in thecompanyheldduringfinancialyearbyeachdirector andotherKMPofCedar Equity instrumentdisclosuresrelatingtoKMP Additional statutorydisclosures T SBrown forRSBrown)* (alternate S TPearce S ADuplock R Packer N JBlackburne RS Brown* S ADuplock N JBlackburne P Freedman Senior executives P SSadleir Executive Directors T SBrown forRSBrown)* (alternate S TPearce R Packer R SBrown* W GHames† 2014 P Freedman Senior executives P SSadleir Executive Directors W GHames† NEDs 2015 NEDs start oftheyear start oftheyear shares atthe shares atthe Number of 1,077,087 4,639,980 7,951,808 9,708,448 Number of 4,639,980 7,973,135 1,049,529 9,905,406 118,770 146,245 160,586 166,782 103,619 15,000 5,576 17 0 - during theyear during theyear Other changes Other changes (118,753) 196,958 (27,558) (42,626) 177,153 15,000 21,327 (5,576) 12,449 18,286 6,196 1,077 2,293 0 0 0 0 - 2015 ANNUALREPORT end oftheyear end oftheyear shares atthe shares atthe 10,082,559 Number of 1,049,529 4,639,980 7,973,135 9,905,406 Number of 4,639,980 7,985,584 1,049,529 103,619 166,782 167,859 105,912 15,000 15,000 18,303 17 0 0

39 Directors’ Report: Remuneration Report 40 For personal useDirectors’ only Report: Remuneration Report v) CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES PwC’s report onthe remuneration report. The remuneration report hasbeenauditedbyPricewaterhouseCoopers(PwC). Seepage101ofthisannualreport for Independent auditofremuneration report balance daterelating totheabovetypesofothertransactions. There are noaggregate amountspayabletodirectors ofCedarWoods Properties Limited,ortheirrelated entities,at Properties Limitedortheirrelated entities: Aggregate amountsofeachtheabovetypesothertransactionswithkeymanagementpersonnelCedarWoods trustee withnobeneficialinterest. Thetransactionswere performedonnormalcommercial termsandconditions. In 2014and2015paymentswere madeforsponsorshipoftheWarren JonesFoundationInc.ofwhichMrRPackerisa commercial termsandconditions. year MrPSSadleirbecameacouncilmemberofAICDWA. Theannualsubscriptionpaidwasperformedonnormal Cedar Woods hasformanyyearsbeenamemberoftheAustralianInstituteCompanyDirectors (AICD).Duringthe as aresult thevalueoftransactionswithWestland SettlementServicesPtyLtdincreased. Settlement Serviceswasengaged,thenumberoflotsthatsettledinFY2015doubleprevious yearand of MrRSBrown. Thechargeswere basedonnormalcommercial termsandconditions.AttheestatesthatWestland Property settlementchargeswere paid toWestland Settlement ServicesPtyLtd,acompanyassociatedwiththefamily increased corporatemarketingactivities. terms andconditions.Thelevelofservicesincreased duringtheyearduetoadditionalshareholder reporting and G Hames.MrHameshasnobeneficialinterest inAxiomDesign.Theserviceswere performedonnormalcommercial During theyearcreative designserviceswere provided byAxiom Design,anentityassociatedwiththefamilyofMrW were consistentwithmarketrates. W GHamesisaprincipal.Thetransactionswere performedonnormalcommercial termsandconditionsfeespaid During theyearplanning,architectural andconsultingserviceswere provided byHamesSharleyArchitects ofwhichMr directors declare theirinterests inthosedealingsandtakeno partindecisionsrelating tothem. may beengagedbythe company toperform the services. Should entities connected with the directors be engaged,the Where entitiesrelated todirectors are abletofulfilthe requisite criteriatoprovide theservicesatcompetitiverates,they for theseservices. services andsettlementservices.Accordingly thecompanyhasahighlevelofknowledgeregarding commercial rates The consolidatedentityusesanumberoffirmsforarchitectural, urbandesignandplanningservices,creative design Other transactionswithkeymanagementpersonnel Investment property related entities: other transactionswithdirectors ofCedarWoods Properties Limitedortheir Aggregate amountsofassetsatbalancedaterelating totheabovetypesof Total amountsrecognised inyear Architectural fees Amounts recognised asinventory Sponsorships Subscriptions Donations Settlement fees Creative designservices Amounts recognised asexpense 268,424 208,675 131,440 59,749 59,749 59,749 10,000 59,585 7,650 2015 $ 0

299,066 187,903 187,903 111,163 187,903 66,835 34,178 2,500 7,650 2014 $ 0 25 August2015 Managing Director P SSadleir y) x) w) Directors’ Report(continued) For personalaa) z) use only 2001 forthefollowingreasons: non-audit servicesbytheauditordidnotcompromise theauditorindependencerequirements oftheCorporationsAct of independenceforauditorsimposedbytheCorporationsAct2001.Thedirectors are satisfiedthattheprovision of Management Committee,issatisfiedthattheprovision ofthenon-auditservicesiscompatiblewithgeneralstandard The Board ofdirectors hasconsidered thepositionand,inaccordance withthe advicereceived from theAudit and Risk out innoteE2theotherinformationsectionofthisreport. Details oftheamountspaidorpayabletoauditorforauditandnon-auditservicesprovided duringtheyearare set auditor’s expertiseandexperience withthecompanyand/orgroup are important. The group maydecidetoemploytheauditoronassignmentsadditionaltheirstatutoryauditdutieswhere the Non-audit services amount ofthepremium paidinrespect ofthepolicy, assuchdisclosure isprohibited underthetermsofcontract. controlled entities.Thedirectors havenotincludedmore specificdetailsofthenature oftheliabilitiescovered orthe or criminalproceedings thatmaybebrought againsttheofficers intheircapacityasofficers ofthecompanyandits Secretary, PSFreedman. Theliabilitiesinsured includecostsandexpensesthatmaybeincurred indefendingcivil insurance policyincludethedirectors, WGHames,RSBrown, RPacker, STPearce, PSSadleirandtheCompany that indemnifiescertainofficers ofthecompanyanditscontrolled entities.The officers ofthecompanycovered bythe During thefinancialyear, Cedar Woods Properties Limitedpaidapremium in respect ofdirectors’ andofficers’ liabilities Insurance ofofficers re-election. HamesretiresMr William byrotation attheforthcomingAnnualGeneralMeetingandbeingeligible,willoffer himselffor Retirement, electionandcontinuationinoffice ofdirectors Cedar Woods Properties Ltd. The directors reporting includingtheremuneration report issignedinaccordance witharesolution ofthedirectors of rounded off inaccordance withthatclassorder tothenearest thousand dollars,orincertaincases,tothenearest dollar. Commission, relating tothe‘rounding off’ofamountsinthedirectors’ report. Amountsinthedirectors’ report havebeen The companyisofakindreferred toinClassOrder 98/0100,issuedbytheAustralianSecuritiesandInvestments Rounding ofamounts part ofthisdirectors’ report andissetouton page42. A copyoftheauditor’s independencedeclarationasrequired undersection307CoftheCorporationsAct2001forms Auditor’s independencedeclaration • • Code ofEthicsforProfessionalAccountants. None oftheservicesunderminegeneralprinciplesrelating toauditorindependenceassetoutinAPES110 impact theimpartialityandobjectivityofauditor All non-auditserviceshavebeenreviewed bytheAuditandRiskManagementCommitteetoensure theydonot 2015 ANNUALREPORT

41 Directors’ Report (continued) 42 For personal useAuditor’s only Independence Declaration CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES Auditor’s IndependenceDeclaration the period. in is This declaration the period. in is This declaration Liability limited by a scheme approved under Professional Professional under approved a scheme by limited Liability T:9238 +619238 3000, 3999, 8 www.pwc.com.au 8 F:+61 Brookfield Place,St 125 Georges PERTH GPO6000, Terrace, BoxD198,6840WA PERTH WA Professional under approved a scheme by limited Liability PricewaterhouseCoopers, 757 433 ABN52780 T:9238 +619238 3000, 3999, 8 www.pwc.com.au 8 F:+61 Brookfield Place,St 125 Georges PERTH GPO6000, Terrace, Box D198,6840WA PERTH WA PricewaterhouseCoopers, 757 433 ABN 52780 PricewaterhouseCoopers Partner Craig Douglas PricewaterhouseCoopers Partner Craig Douglas b) b) a) and knowledge best my of the to that declare a) I 2015, 30June yearended the for Limited Properties Cedar Woods of the audit for auditor lead As and knowledge best my of the to that declare Auditor’s Independence Declaration I 2015, 30June yearended the for Limited Properties Cedar Woods of the audit for auditor lead As Auditor’s Independence Declaration

no contraventions of any applicable code of professional conduct in relation to the audit. the in to relation conduct ofprofessional code applicable any of no contraventions and the audit; to relation audit. the in to relation conduct ofprofessional code applicable any of no contraventions the of requirements independence theauditor of no contraventions and the audit; to relation the of requirements independence theauditor of no contraventions

respect of Cedar Woods Properties Limited and the entities it controlled during controlled it entities the and Limited Properties Cedar Woods of respect during controlled it entities the and Limited Properties Cedar Woods of respect

Standards Legislation. Standards Legislation. Standards belief, there have been: have there belief, been: have there belief,

Corporations Act 2001 Act Corporations 2001 Act Corporations 25 25

August 2015 August

August 2015 August

in in in Perth Perth

For personal use only use personal For 43 44 For personal use onlyFinancial Statements amend andreissue thefinancialstatements. The financialstatementswere authorisedforissuebythedirectors on25August2015. Thedirectors havethepowerto WAWEST PERTH 6005. 50 ColinStreet Ground Floor, Its registered office andprincipalplaceofbusinessis: Cedar Woods Properties Limitedisacompanylimitedbyshares, incorporatedanddomiciledinAustralia. The financialstatementsare presented intheAustraliancurrency. Limited anditssubsidiaries.AlistofmajorsubsidiariesisincludedinnoteC1(a). These financialstatementsare consolidatedfinancialstatementsforthe group consistingofCedar Woods Properties Consolidated CashFlowStatement...... Consolidated StatementofChangesinEquity...... Consolidated BalanceSheet...... Consolidated StatementofProfit orLossandOtherComprehensive Income...... Financial Statements CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES 48 47 46 45 accompanying notes. The aboveconsolidatedstatement ofprofit orlossandothercomprehensive incomeshouldbe read inconjunctionwiththe For personal use onlyFor theYear Ended30June2015 Consolidated StatementofProfit orLossandOtherComprehensive Income Basic and diluted earnings pershareBasic anddilutedearnings equity holdersofthecompany: pershareEarnings forprofit attributabletotheordinary Cedar Woods Properties Limited Total comprehensive incomeattributabletomembersof Total comprehensive incomefortheyear Profit fortheyear Income taxexpense Profit before incometax the equitymethod Share ofnetprofit (loss)ofjointventures accountedforusing Finance costs Other Administration Occupancy Project operatingcosts Other expensesfrom ordinary activities: Cost ofproviding services Cost ofsaleslandandbuildings Expenses Other Income Gain onsaleofinvestmentproperty Interest revenue Rent from properties Services Sale oflandandbuildings Revenue from operations A4(c) &A1(d) C1(d)i A1(d) A1(b) A1(b) A1(c) A1(a) Note 54.3 cents 178,637 170,359 (15,238) (13,442) (17,583) (99,438) 42,585 42,585 42,585 57,823 19,969 (3,397) (6,368) 1,073 1,430 4,018 2,830 $’000 (739) (949) 2015 60 2015 ANNUALREPORT Consolidated 54.4 cents (121,473) 214,465 195,631 (15,253) (13,312) (13,258) (11,167) 40,313 40,313 40,313 55,566 15,908 1,631 1,295 $’000 (606) (581) 2014 973 359 166 -

45 Financial Statements 46 For personal use onlyFinancial Statements The aboveconsolidated balancesheetshouldberead inconjunctionwiththeaccompanying notes. As at30June2015 Consolidated BalanceSheet CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES Contributed equity EQUITY Net assets Total liabilities Total non-current liabilities Derivative financialinstruments Provisions Deferred taxliabilities Other financialliabilities Borrowings Non-current liabilities Total current liabilities Provisions Current taxliabilities Derivative financialinstruments Other financialliabilities Borrowings Trade andotherpayables Current liabilities LIABILITIES Total assets Total non-current assets Lease incentives Investment properties Property, plantandequipment Available-for-sale financialassets Investments accountedforusingtheequitymethod Inventories Deferred developmentcosts Receivables Non-current assets Total current assets Deferred developmentcosts Inventories Trade andotherreceivables Cash andcashequivalents Current assets ASSETS Total equity Retained profits Reserves A4(b) A2(d) A3(d) A3(b) A2(b) A3(b) A3(g) A2(b) A2(g) A3(g) A2(g) A4(c) A4(a) A2(e) A2(e) A3(e) A3(e) A2(c) A3(c) A3(a) A3(a) A2(a) Note A3(f) A2(f) A2(f) 285,605 165,894 119,525 285,605 383,330 306,293 251,109 97,725 42,137 32,106 55,588 22,481 16,063 37,982 77,037 59,181 2,236 7,313 8,365 8,679 2,479 1,029 3,975 5,868 3,069 6,495 9,475 1,886 $’000 2015 186 414 782 68 - - Consolidated 261,601 144,576 116,716 148,347 261,601 409,948 310,066 249,698 74,273 30,241 41,398 74,074 34,316 26,306 34,929 99,882 80,895 10,057 2,185 6,810 5,998 1,668 7,397 2,902 8,854 4,618 8,796 $’000 2014 309 449 644 134 - - - For theYear Ended30June2015 Consolidated StatementofChangesinEquity For The aboveconsolidatedstatementofchangesinequityshouldberead inconjunctionwiththeaccompanyingnotes. personal use only Balance at1July2013 Consolidated Profit fortheyear Total comprehensive incomefortheyear costs andtax Contributions ofequity, netoftransaction capacity asowners: Transactions withownersintheir Transfers from reserves toretained profits Dividends provided fororpaid Balance at30June2014 Balance at1July2014 Profit fortheyear Total comprehensive incomefortheyear costs andtax Contributions ofequity, netoftransaction capacity asowners: Transactions withownersintheir Transfers from reserves toretained profits Dividends provided fororpaid Balance at30June2015 B3(b) B3(b) A4(a) A4(a) Note Contributed 116,716 116,716 119,525 83,795 32,921 32,921 equity 2,809 2,809 $’000 ------Reserves $’000 (187) (187) (123) (123) 496 309 309 186 ------Retained (19,377) 123,453 144,576 144,576 165,894 (19,190) (21,390) (21,267) 40,313 40,313 42,585 42,585 profits $’000 2015 ANNUALREPORT 187 123 - - 207,744 261,601 261,601 285,605 (19,377) (21,390) (18,581) 40,313 40,313 32,921 13,544 42,585 42,585 2,809 $’000 Total - -

47 Financial Statements 48 For personal use onlyFinancial Statements For theYear Ended30June2015 Consolidated CashFlowStatement CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES The aboveconsolidatedcashflow statementshouldbe read inconjunctionwiththeaccompanying notes. Cash andcashequivalentsatthe endoftheyear Cash andcashequivalentsatthebeginningofyear Net (decrease) increase incashandequivalents Net cash(outflows)inflows from financingactivities Dividends paid Payment ofshare issueexpenses Proceeds from share purchase plan Proceeds from share placement Repayment ofborrowings Receipts from customers(incl.GST) Cash flowsfrom operatingactivities Proceeds from borrowings Cash flowsfrom financingactivities Net cashinflows(outflows) from investingactivities Payments forproperty, plantandequipment Payments forinvestmentproperties Advance ofloantoBCMApartmentTrust Repayments ofloanbyCedarWoods Wellard Limited Proceeds from saleofproperty, plantandequipment Proceeds from saleofinvestmentproperties Cash flowsfrom investingactivities Net cashinflows(outflows) from operatingactivities Income taxespaid Borrowing costspaid Interest received Payments forlandanddevelopment Payments tosuppliersandemployees(incl.GST) B3(b) A2(a) A5(a) Note (120,620) 194,015 (30,181) (18,565) (34,082) (15,938) (12,502) (46,777) 22,481 14,723 36,000 (6,910) (1,130) (7,005) (6,163) 1,886 8,796 8,548 2,796 $’000 2015 595 (15) Consolidated - - - (158,149) 231,610 (15,939) (18,265) (52,179) 13,905 25,030 (1,855) (5,400) (6,332) (9,781) (1,794) 5,779 8,796 3,017 5,036 6,000 $’000 (822) (699) 2014 600 589 3 - - For personalContains thedirector’s declarationandtheindependentreport. F Declarationandindependentauditor’s report transactions, share basedpaymentsandafulllistoftheaccountingpoliciesappliedbyentity. Information thatisnotimmediatelyrelated toindividuallineitemsinthefinancialstatements,suchas related party E Otherinformation: impact onthegroup’s financialpositionandperformance. Provides informationaboutitemsthatare notrecognised inthefinancialstatements,butcouldpotentiallyhaveasignificant D Unrecognised items: the group. Explains significantaspectsofthegroup structure andhowchangeshaveaffected thefinancialpositionandperformanceof useC Group structure: performance andwhatthegroup doestomanagetheserisks. Discusses thegroup’s exposure tovariousfinancialrisks,explainshowtheseaffect thegroup’s financialpositionand B Financialrisks: were affected bysignificantestimatesandjudgementsmadeincalculatingthefinalnumbers. the sectionfurtherexplainswhataccountingpolicieshavebeenappliedtodeterminetheselineitemsandhowamounts the contextofoperationsgroup, orwhere there havebeensignificantchangesthat required specificexplanations; onlyProvides abreakdown ofthoseindividuallineitemsinthefinancialstatementsthatdirectors considermost relevant in A Howthenumbersare calculated: The notesare setoutinthefollowingmainsections: The Financialstatementsare presented intheAustraliancurrency. subsidiaries isincludedinnoteC1. These are theconsolidatedfinancialstatementsofCedar Woods Properties Limitedanditssubsidiaries.Alistofmajor Notes totheFinancialStatements 2015 ANNUALREPORT

49 Notes to the Financial Statements 50 For personal useA – Howonly the Numbers are Calculated

a) A5. c) b) Reserves a) A4. g) Provisions f) e) d) c) b) a) Inventories A3. g) f) Borrowings e) d) c) b) a) A2. d) c) b) a) A1. by significantestimatesandjudgementsmadeincalculatingthefinalnumbers. explanations, whataccountingpolicieshavebeenappliedtodeterminetheselineitemsandhowtheamountswereaffected relevant inthecontextofoperationsgroup,orwheretherehavebeensignificantchangesthatrequiredspecific This sectionprovidesabreakdownofthoseindividuallineitemsinthefinancialstatementsthatdirectorsconsidermost How theNumbersareCalculated Section A: CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES Reconciliation ofprofit afterincometaxtonetcash outflows from operating activities...... Cash flowinformation...... Retained profits ...... Movement inordinary share capital...... Equity ...... Deferred tax...... Investment properties ...... Property, plantandequipment...... Investments accountedforusingtheequitymethod...... Deferred developmentcosts...... Non-Financial assetsandliabilities...... Other financialliabilities...... Derivative financialinstruments...... Trade andotherpayables...... Available-for-sale financialassets...... Trade andotherreceivables ...... Cash andcashequivalents...... Financial assetsandfinancialliabilities...... Earnings pershareEarnings ...... Income tax...... Expense items...... Gain onsaleofinvestmentproperty ...... Profit orlossInformation...... 66 66 65 65 64 64 63 61 60 59 59 59 59 58 57 56 56 55 55 54 54 53 52 52 52 51 51 b) For personal use onlya) A1. ProfitorLossInformation facilities, theapplicableborrowing costsofthosefacilitiesare capitalised. facility duringtheyear, inthiscase5.10%(2014–6.09%)perannum.Where qualifyingassetsare financed byspecific the amount of borrowing costs to becapitalised is theweighted average interest rateapplicable to the entity’s corporate Where qualifyingassetshavebeenfinancedbytheentity’s corporatefacility, thecapitalisationrateusedtodetermine i. Profit before incometaxexpenseincludesthefollowingspecificexpenses: Expense items Gain onsaleofinvestmentproperty Cedar Woods Wellard Limited Reversal ofprovision forimpairmentofloanto Available forsalefinancialassets Other -writedownofassets/(reversal of provision) Employee benefitsexpense Depreciation ofinvestmentproperty Depreciation ofproperty, plantandequipment Superannuation funds–definedcontribution Provision forcustomerrebates Other provisions Minimum leasepayments Rental expenserelating tooperatingleases Net lossondisposalofproperty, plantandequipment Finance costsexpensed Less: amountcapitalised Unrealised financialinstrumentgains Calculated usingeffective interest method Interest andfinancecharges Finance costs Net gainondisposalofinvestmentproperty Carrying valueofinvestmentproperty disposed Proceeds from saleofinvestmentproperty Gain onsaleofinvestmentproperty Capitalised borrowingcosts Notes Notes i. (16,031) 19,969 36,000 (4,440) 6,368 9,774 1,015 3,671 2,592 5,822 6,368 3,397 $’000 $’000 $’000 (577) 2015 2015 2015 301 778 803 18 2015 ANNUALREPORT - Consolidated Consolidated Consolidated (5,262) (1,035) 9,697 2,450 1,330 5,458 $’000 $’000 $’000 (359) (920) 2014 2014 2014 676 314 282 704 664 606 43 - - -

51 A1 – How the Numbers are Calculated c) Income tax

This note provides an analysis of the group’s income tax expense and how the tax expense is affected by non- assessable and non-deductible items.

i. Income tax expense

Consolidated 2015 2014 Notes $’000 $’000 Current tax 16,987 17,421 Deferred tax 55 (1,004) Adjustments for current tax of prior periods (1,804) (1,164) Income tax expense attributable to profit 15,238 15,253 A1 – How the Numbers are Calculated A1 – How the Numbers are

Deferred income tax expense (revenue) included in income tax expense comprises: (Increase) in deferred tax assets A3(f) (3,065) (143) Increase (decrease) in deferred tax liabilities A3(f) 3,120 (861) 55 (1,004)

ii. Numerical reconciliation of income tax expense to prima facie tax payable

Consolidated 2015 2014 $’000 $’000 Profit before income tax 57,823 55,566

Tax at the Australian tax rate of 30% (2014 – 30%) 17,347 16,670

Tax effect of amounts which are not deductible in calculating taxable income: - Share of net profit of joint venture (322) (292) - Sundry items 17 39 (305) (253) Adjustments for current tax of prior periods: - Research and development (1,804) (1,164) (1,804) (1,164)

Income tax expense 15,238 15,253

d) Earnings per share

2015 2014

52 only use personal For Basic earnings per share (cents) 54.3 54.4 Diluted earnings per share (cents) 54.3 54.4

Net profit attributable to the ordinary owners of the company ($’000) 42,585 40,313 Weighted average number of ordinary shares used as the denominator in the calculation of earnings per share and diluted earnings per share 78,430,698 74,150,376

CEDAR WOODS PROPERTIES LIMITED

For personal use onlyThe group holdsthefollowingfinancialinstruments: iii. ii. i. This noteprovidesinformationaboutthegroup’s financialinstruments,including: A2. FinancialAssetsandLiabilities *Excludingprepayments Total Total Other financialliabilities Available-for-sale financialassets Derivative financialinstruments Borrowings Trade andotherreceivables* Trade andotherpayables 2014 Cash andcashequivalents 2014 Total Total Available-for-sale financialassets Other financialliabilities Derivative financialinstruments Borrowings Trade andotherreceivables* Trade andotherpayables 2015 Financial Liabilities Cash andcashequivalents 2015 Financial Assets involved Information aboutdeterminingthefairvalueofinstruments,includingjudgementsandestimationuncertainty Accounting policies Specific informationabouteachtypeoffinancialinstrument Notes Notes A2(b) A2(d) A2(b) A2(d) A2(g) A2(g) A2(c) A2(e) A2(a) A2(c) A2(e) A2(a) A2(f) A2(f) Derivatives used for hedging Available for sale 7,397 7,397 1,029 1,029 $’000 $’000 644 644 68 68 ------

amortised cost amortised cost Liabilities at assets at Financial 132,261 21,221 64,557 12,425 41,398 26,306 77,963 12,682 32,106 10,796 29,794 16,063 8,796 1,886 $’000 $’000 2015 ANNUALREPORT - - - -

132,905 28,618 64,557 12,425 41,398 26,306 78,031 13,711 32,106 10,796 29,794 16,063 7,397 8,796 1,029 1,886 $’000 $’000 Total Total 644 68

53 A2 – How the Numbers are Calculated 54 For personal useA2 – Howonly the Numbers are Calculated b) a) CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES Trade andotherreceivables mentioned above. exposure tocredit riskatthereporting dateisthecarryingamount ofeachclasscashandequivalents The Group’s exposure tointerest rateriskisdiscussedinsectionB2.Financialmanagement. Themaximum 0 to2.0%(2014:–2.8%)perannumdependingonthebalances. interestCash atbankincludescashheldindaytotransactionaccountsanddepositearning from The abovefigure reconciles totheamountofcashshowninstatementflowsatendyear. ii. i. Cash andcashequivalents Cash atbankandinhand Loan toCedarWoods Wellard Limited Loans toBCMApartmentTrust (Secured) Loan toBCMApartmentTrust (Unsecured) Loans –employeeshare scheme(discontinued) Non-Current Prepayments Loan toBCMApartmentTrust (Secured) Other receivables Trade receivables Current None oftheseare impaired, orpastduebutnotimpaired. Other non-current receivables andloansunderthediscontinuedemployeeshare schemeare non-interest bearing. The fairvaluesofnon-current receivables ofthegroup approximate thecarryingvalues. There are nopastdueorimpaired tradereceivables at30June2015(2014–$nil). management). Trade receivables are initiallyrecorded atfairvalueandsubsequentlycarriedamortisedcost. Current tradeandotherreceivables includeinterest andnon-interest bearingreceivables (seeB2.Financialrisk tradeandotherreceivables Current trade andotherreceivables are outlinedinnoteE4(k). within 30daysandtherefore are allclassifiedascurrent. Thegroup’s impairmentandotheraccountingpoliciesfor current assets.Ifnot,theyare presented asnon-current assets.Trade receivables are generallydueforsettlement are notquotedinanactivemarket.Ifcollectionoftheamountsisexpectedoneyearorless they are classifiedas business. Loansandotherreceivables are non-derivativefinancialassetswithfixedordeterminable payments and Trade receivables are amountsduefrom customersforgoodssoldorservicesperformed intheordinary courseof receivables Classification astradeandother Notes i &ii i &ii E3 iv v v ii 1,886 1,886 3,040 9,475 1,748 6,623 3,069 $’000 $’000 2015 2015 122 982 29 - - Consolidated Consolidated 10,057 8,796 8,796 2,250 7,759 4,618 2,610 1,974 $’000 $’000 2014 2014 34 48 - - d) For personal usec) only ii. i. other payablesare assumedtobethesameastheir fairvaluesduetotheirshort-termnature. Trade payablesare unsecured andare usually paidwithin30daysofrecognition. Thecarryingamountsoftradeand v. iv. iii. Trade andotherpayables Available-for-sale financialassets Other payables GST payable Accruals Trade payables Special unitintrust–atfairvalue Unlisted securities entities. Refer tonoteA2(f)forinformationonnon-current assetspledgedassecuritybytheparent entityoritscontrolled assetspledgedassecurity Non-current recorded. The specialunit(classB)hasbeenassessedforimpairmentandawritedownof$6,368,000(2014:$676,000) joint venture innoteA3(c)andthe1specialunit(classB)isdisclosedasanavailable-for-sale financialassetabove. $6,000,000 intheBCMApartmentTrust (BCM),on30March 2012.Theordinary unitsare disclosedasaninterest in in Geraldton,WA, theconsolidatedentityacquired 100ordinary unitsfor$1eachand1specialunit(classB) in determiningfairvalueofunlistedsecurities.ForthepurposesBataviaCoastMarinaApartmentsproject Refer toB2.Financialriskmanagementforfurtherinformationaboutthemethodsusedandassumptionsapplied Unlisted securities working capital. financefacilityprovidedits external by Westpac Bank,payoutthemezzaninefinancefacilityandhaveaccessto rate onthesefacilitiesisBBSYplus4.5%perannum.TheseenabledBCMApartmentTrust topayout Apartment Trust, secured overapartmentsintheBataviaCoastMarinaApartmentsdevelopment.Theinterest In theyearended30June2015,newfinancefacilitieswere provided byCedar Woods Properties LimitedtoBCM loantoBCMApartmentTrustSecured Properties LimitedtoBCMApartmentTrust, withaninterest rateof22.5%perannum. During theyearended30June2014,anunsecured mezzaninefinancefacilitywasprovided byCedar Woods Mezzanine loantoBCMApartmentTrust facility termexpired on1July2015. year ended30June2015themezzanineloanfacilitywasrepaid infulltoCedarWoods Properties Limitedandthe A mezzanineloanfacilityhasbeenprovided tothejointventure entity, CedarWoods Wellard Limited.Duringthe Loan toCedarWoods Wellard Limited 16,063 3,560 6,226 6,275 1,029 1,029 $’000 $’000 2015 2015 2 2015 ANNUALREPORT Consolidated Consolidated 11,731 11,992 26,306 2,381 7,397 7,397 $’000 $’000 2014 2014 202

55 A2 – How the Numbers are Calculated 56 For personal useA2 – Howonly the Numbers are Calculated f) e) CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES i. The fairvalueofnon-current borrowings equalstheircarryingamount. i. Borrowings Derivative financialinstruments Interest rateswapcontracts Non-current liabilities Interest rateswapcontracts Current liabilities Amortisation offacilityfees Facility feescapitalised(amortisedovertheperiodoffacility) Current Bank loans–secured (Corporatefacilities) Non-Current LandingShoppingCentreBank loan–secured facility) (Williams mortgage over the Williams LandingShopping Centre disclosedininvestmentpropertiesmortgage overthe Williams atA3(e). LandingShoppingCentre facilitydisclosedincurrentThe Williams borrowings issecured byafirst registered registered charges overitsassetsandundertakingsinrelation tothecorporateloanfacility(seebelow). Woods Properties Limited andapplicablesubsidiaryentities.CedarWoods Properties Limitedhasprovided first consolidated entity’s landholdings,andfirst registered charges,guaranteesandindemnitiesprovided byCedar Bank tradingasBankwest(2014- $20,843,601) are secured byfirst registered mortgagesoversomeofthe Bank loansof$3,800,000provided byANZBank(2014-$20,843,601)and$3,800,000provided byCommonwealth All oftheconsolidatedentity’s assetsare pledgedassecurityforthegroup’s financefacilities. Security forborrowings financial instrumentsatfairvalueis recognised inprofit orloss. The group isnotapplyinghedgeaccountingtothesederivatives.Thegainorlossfrom re-measuring thederivative approximately 66%(2014–72%)ofthevariableloansoutstandingatbalancedate,withtermsexpiringin2019. certain levelsbetween2.49%-2.50%perannum(2014–5.5%6.0%annum).Swapscurrently inplacecover The swapseffectively fixinterest ratesapplicabletobankbillsissuedwithadurationof1month(BBSYBid)at projected borrowings are protected fortheperiodfrom 1July2015to28June2019. consolidated entityhasentered intointerest rateswapcontractsunderwhichpartoftheconsolidatedentity’s It isthegroup’s policytoprotect partoftheloansfrom exposure tofluctuationsininterest rates.Accordingly the The bankloanscurrently bearanaveragevariableinterest rateof3.72%perannum(2014–4.44%annum). Interest rateswapcontracts to fluctuationsininterest ratesinaccordance withthegroup’s financialriskmanagementpolicies. The group ispartytoderivativefinancialinstrumentsinthenormalcourseofbusinessorder tomanageexposure Instruments usedbythegroup 22,481 22,481 7,313 7,600 $’000 $’000 (702) 2015 2015 415 68 68 - Consolidated Consolidated 41,398 41,687 (1,285) $’000 $’000 2014 2014 644 644 996 - - - Forg) personal use only ii. Other financialliabilities Duetovendorsofproperties undercontractsofsale Non-Current Due tovendorsofproperties undercontractsofsale Current Financial riskmanagement. Details ofthegroup’s exposure toriskarisingfrom current andnon-current borrowings are setoutinnoteB2 was anaveragerateof3.99%perannum. LandingShoppingCentreFebruary 2016.Theinterest loanfacilityisvariableandat30June2015 ontheWilliams conditions ofthefacilityimposecertaincovenantsincludingloan-to-valuationratio.Theextendsto17 Centre andthisisexpectedtoberefinanced withaninvestmentfacilityintheyearending30June2016.The Williams LandingShopping In August2014,a$23mbankfacilitywasdrawntofinancethedevelopmentof terms andconditions,whichwere drawntoatotalamountof$13,688,000at30June2015(2014-$12,620,000). The corporatefacilitiesincludebankguaranteeof$15,000,000(2014-$15,000,000)subjecttosimilar per annum(2014–4.44%). required. Theinterest onthecorporateloanfacilitiesisvariableandat 30June2015wasanaveragerateof3.72% trustee, providing theflexibilityforotherbankstoenter, shouldthegroup’s requirements grow andmore lendersare development andfuture acquisitions.Thefundingstructure hasbeensetupasaclubfacilitywithsecurity to-valuation ratio.Thecorporatefacilitiesprovide fundingfortheconsolidatedentity’s existingoperations,ongoing conditions ofthefacilitiesimposecertaincovenantsastoconsolidatedentity’s revenue, interest coverandloan- by ANZBankandCommonwealthtradingasBankwest.Thefacilitiesexpire on30November2017.The The consolidatedentityhastotalcorporatefinancefacilitiesof$135,000,000,with$67,500,000eachprovided Unrestricted accesswasavailabletothefollowinglinesofcredit atbalancedate: Financing arrangements Total facilities(loanandguarantees) Corporate facilities Total Facilities Unused atbalancedate Used atbalancedate Total facility Williams LandingShoppingCentre facility Unused atbalancedate Used atbalancedate Unused atbalancedate Used atbalancedate 135,000 113,712 114,231 158,000 32,106 32,106 22,481 23,000 21,288 43,769 $’000 $’000 2015 2015 519 - - 2015 ANNUALREPORT Consolidated Consolidated 135,000 135,000 30,241 30,241 34,316 34,316 54,307 80,693 54,307 80,693 $’000 $’000 2014 2014 - - -

57 A2 – How the Numbers are Calculated 58 For personal useA3 – Howonly the Numbers are Calculated a) A3. Non-FinancialAssetsandLiabilities CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES ii. i. Inventories Refer tonoteE4(g)fortherecognition andclassification ofinventory. Accounting forinventory Refer tonoteA2(f)forinformationoncurrent assetspledgedassecuritybytheparent entityoritscontrolled entities. assetspledgedassecurity Current The 1992valuationswere independentvaluationswhichwere basedoncurrent marketvaluesatthattime. The 1992valuationswere independentvaluationswhichwere basedoncurrent marketvaluesatthattime. - atnetrealisable value Aggregate carryingamount - capitaliseddevelopmentcosts - capitaliseddevelopmentcosts Non-current inventory - atvaluation30June1992 - atvaluation30June1992 Current inventory Total Inventory - landatcost Property heldforresale Non-Current - landatcost Property heldforresale Current Notes i &ii i &ii 251,109 310,290 251,109 203,787 42,054 59,181 42,972 59,181 16,031 5,117 $’000 $’000 $’000 2015 2015 2015 151 178 Consolidated Consolidated Consolidated 249,698 330,593 249,698 200,370 44,069 80,895 56,998 80,895 23,570 5,033 $’000 $’000 $’000 2014 2014 2014 226 327 d) c) For personal use only b) Refer tonoteA2(f) forinformationonnon-current assetspledgedassecurityby theparent entityoritscontrolled entities. assets pledgedassecurity Non-current ii. i. Property, plantandequipment Investments accountedforusingtheequitymethod Deferred developmentcosts Net bookvalue At endoftheyear Assets disposed Charge foryear At startoftheyear Accumulated depreciation onPlantandEquipment At endoftheyear Assets disposed Additions At startoftheyear Plant andEquipmentatCost Shares injointventures Unlisted securities Deferred developmentcosts Non-Current Deferred developmentcosts Current Ltd, thetrusteeofBCM. The consolidatedentityalsoowns10ordinary shares for$1each(a50%interest) inChampionBayNomineesPty profit/loss andnetassetsofBCM.RefertonoteA2(c)fordetails. Apartment Trust. Theconsolidatedentity’s interests intheordinary unitsdonotentitleittoashare oftherevenue, The consolidatedentityowns100ordinary unitsfor$1each(a50%interest intheordinary units)intheBCM BCM ApartmentTrust development companyincorporatedinAustralia.SeenoteC1(b). The consolidatedentityownsa32.5%(2014:32.5%)interest inCedarWoods Wellard Limited,aproperty Cedar Woods Wellard Limited 2,479 2,107 1,818 4,586 1,130 3,486 3,975 5,868 5,868 6,495 6,495 $’000 $’000 $’000 2015 2015 2015 301 (12) (30) 2015 ANNUALREPORT Consolidated Consolidated Consolidated 1,668 1,818 1,551 3,486 2,850 2,902 8,854 8,854 $’000 $’000 $’000 2014 2014 2014 699 134 134 282 (15) (63)

59 A3 – How the Numbers are Calculated 60 For personal useA3 – Howonly the Numbers are Calculated e) CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES iv. iii. ii. i. Investment properties Closing balanceattheendofyear Completed investmentproperty Property underconstruction Represented by: Closing balanceattheendofyear Investment properties disposed Depreciation Transfer from inventory Capitalised expenditure Opening balanceatthestartofyear Non-current assets–atcost cancellable leasesare receivable asfollows: Investment properties are leasedtotenantsunderlongtermoperatingleases.Minimumleasepaymentsnon- Leasing arrangements centre forfuture developmentwhichisonthe sametitle. 2015 is$52.3mexclusiveofGST, basedonanindependentvaluation.Thisincludeslandsurrounding theshopping LandingShoppingCentre whichmakesupcompletedinvestmentpropertyThe fairvalueoftheWilliams at30June Fair valueofinvestmentproperty Amounts recognised inprofitorlossforinvestmentproperties Amounts recognised For investmentproperties thatwere underconstructionat30June2014;depreciation hadnotyetcommenced. Investments propertiesunderconstruction Later than5years Net gainondisposalofinvestmentproperty Later thanoneyearbutnotlater5years Direct operatingexpensesfrom property thatgeneratedrental income Within oneyear Within Rental income Notes A1(a) i (16,031) 47,674 32,972 19,969 11,835 37,982 37,982 37,982 15,143 34,929 (1,015) 2,867 3,700 4,956 $’000 $’000 $’000 (740) 2015 2015 2015 - Consolidated Consolidated Consolidated 56,028 44,501 14,161 18,405 34,929 16,524 34,929 11,301 9,356 2,171 9,781 $’000 $’000 $’000 (314) 2014 2014 2014 769 (17) - -

For personal usef) only vi. i. Assets Deferred tax v. entities. Refer tonoteA2(f)forinformationonnon-current assetspledgedassecuritybytheparent entityoritscontrolled assetspledgedassecurity Non-current Leasing incentives after more than12months Deferred taxassetsexpectedtoberecovered within 12months Deferred taxassetsexpectedtoberecovered Increase indeferred taxassetscredited toequity tax expense Increase indeferred taxassetscredited toincome Deferred taxassetsattheendofyear Deferred taxassetsatthestartofyear Net deferred taxassets provisions Set-off ofdeferred taxassetspursuanttoset-off Total deferred taxassets Sub-total other Other Derivative financialinstruments Borrowing Costs Share issueexpenses Other Provision foremployeebenefits Available forsalefinancialassetsatfairvalue Provision forcustomerrebates Amortisation ofleaseincentives Inventory attributable to: The balancecomprisestemporarydifferences Lease incentives Notes A4(a) A1(c) (7,299) 7,299 3,498 3,801 7,299 3,065 4,230 7,299 7,001 1,549 2,117 2,501 $’000 $’000 2015 2015 298 210 834 782 830 (48) 33 20 35 4 2015 ANNUALREPORT - Consolidated Consolidated (4,230) 4,230 1,246 2,984 4,230 3,840 4,230 1,177 3,053 1,774 $’000 $’000 2014 2014 143 247 193 640 314 772 507 30 - - - - -

61 A3 – How the Numbers are Calculated 62 For personal useA3 – Howonly the Numbers are Calculated CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES ii. Liabilities after more than12months Deferred taxliabilitiesexpectedtobesettled within 12months Deferred taxliabilitiesexpectedtobesettled Deferred taxliabilitiesattheendofyear (credited) toincometaxexpense Increase (decrease) indeferred taxliabilitiesdebited Deferred taxliabilitiesatthestartofyear Net deferred taxliabilities provisions Set off ofdeferred taxassetspursuanttoset-off Total deferred taxliabilities Sub-total other Other Available forsalefinancialassetsatfairvalue Revaluation reserve Lease incentives Other Prepayments Deferred developmentcosts - directly toequity - toprofit orloss (Charged) /credited - toprofit orloss (Charged) /credited - directly toequity Inventory Amounts recognisedinprofitorloss attributable to: The balancecomprisestemporarydifferences At 30June2015 At 30June2014 At 1July2013 Movements Inventory 2,501 1,994 $’000 507 507 - - - for customer Provision rebates 2,117 1,774 1,755 $’000 343 19 - -

fair value Available assets at financial for sale Notes A1(c) 1,549 1,549 $’000 - - - - -

for employee Provision benefits $’000 772 834 128 644 62 - -

(7,299) 9,535 5,627 3,908 9,535 3,120 6,415 2,236 9,535 9,204 3,706 5,087 $’000 2015 331 235 411 15 81 - Consolidated 1,177 1,441 Other $’000 (883) (511) 298 247 4 (4,230) 6,415 4,906 1,509 6,415 7,276 2,185 6,415 5,884 2,694 3,075 4,230 7,299 3,065 3,840 $’000 $’000 (861) 2014 Total 531 361 137 115 143 247 33 4 - For personal useg) only i. Provisions Employee benefits Non-current Customer rebates Dividends Employee benefits Current claims andpaymentsmaynotbemadewithin12monthsofbalance date. Customers are generallyentitledtocustomerrebates within12monthsofbalancedate,however insomeinstances Movements in customer rebate provisions Movements incustomerrebate Carrying amountatendofyear Payments - toprofit orloss Charged /(credited) - toprofit orloss Charged /(credited) Charged toprofit orloss Carrying amountatstartofyear At 30June2014 Movements At 30June2015 At 1July2013 Inventory 2,012 5,087 3,075 2,933 $’000 142 development Deferred 1,012 3,706 2,694 3,209 costs $’000 (515) Notes i Prepayments $’000 (213) 296 411 115 328

(2,528) 7,057 3,671 5,914 8,365 7,057 1,305 $’000 $’000 $’000 2015 2015 2015 414 414 3 2015 ANNUALREPORT Other $’000 Consolidated Consolidated Consolidated (200) (275) 331 531 806 (2,387) 5,914 3,120 2,450 9,535 6,415 7,276 5,851 6,810 5,914 $’000 $’000 $’000 $’000 (861) 2014 2014 2014 Total 449 449 893 3

63 A3 – How the Numbers are Calculated 64 For personal useA4 – Howonly the Numbers are Calculated a) A4. Equity CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES Movement inordinary share capital ii. i. person orbyproxy, isentitledtoonevote,anduponapolleachshare isentitledtoonevote. in proportion tothenumberofshares held.Onashowofhandseveryholderordinary shares present atameetingin Holders ofordinary shares are entitledtoparticipateindividendsandtheproceeds onanywindingupofthecompany Start oftheyear Ordinary shares issuedon31October2013at$6.95 Shares issuedpursuanttothedividendreinvestment plan: Ordinary shares issuedon30April2014at$7.21 Transaction costsarisingonshare issues Ordinary shares issuedon30April2015at$5.35 Transaction costsarisingonshare issues Ordinary shares issuedon31October2013 Share issuedpursuanttothebonusshare plan: Ordinary shares issuedon30April2014 Ordinary shares issuedon30April2015 13 May2014 Ordinary shares issuedunderinstitutionalplacement on Share issuedpursuanttothecapitalraising: 18 June2014 Shares issuedundershareholder purchase planon Transaction costsarisingonshare issues End oftheyear mechanism asthedividendreinvestment plan,includinganydiscount. the dividendforegone. Theentitlementforshares issuedundertheplaniscalculatedbasedon thesamepricing dividends buttoreceive insteadadditionalfullypaidshares issuedas‘BonusShares’ totheequivalent valueof The companyhasestablishedabonusshare planunderwhichholdersofordinary shares mayelectnot toreceive plan Bonus share may beissuedundertheplanatadiscounttomarketprice, discretion oftheDirectors. have allorpartoftheirdividendsatisfiedbytheissuenewordinary shares ratherthan beingpaidincash.Shares The companyhasestablishedadividendreinvestment planunderwhichholders ofordinary shares mayelectto plan Dividend reinvestment 78,336,371 78,891,681 526,833 555,310 28,477 Shares 2015 ------73,359,551 78,336,371 3,680,941 4,976,820 324,751 162,834 740,586 48,381 19,327 Shares 2014 - - - - - 116,716 119,525 2,819 2,809 $’000 2015 (10) ------116,716 83,795 25,030 32,921 2,257 1,174 5,036 $’000 (565) 2014 (11) - - - - - c) For personal use only b) Retained profits current assets.RefertonoteE4(g). The assetrevaluation reserve wasuseduntil 1992torecord increments anddecrements ontherevaluation ofnon- purpose ofreserves isprovided below thetable. The followingtableshowsthecompositionandmovementinreserves duringtheyear. Adescriptionofthenature and Reserves Retained profits at theendofyear Dividends provided fororpaid Transfers from reserves Properties Limited Net profit attributabletomembersofCedar Woods Retained profits at thestartofyear Balance attheendofyear Transfer toretained profits Balance atthebeginningofyear a) Assetrevaluation reserve Movements a) Assetrevaluation reserve (pre 1992) Composition Notes Notes B3(b) A4(b) A4(c) 165,894 144,576 (21,390) 42,585 $’000 $’000 (123) 2015 2015 123 186 309 186 186 2015 ANNUALREPORT Consolidated Consolidated 144,576 123,453 (19,377) 40,313 $’000 $’000 (187) 2014 2014 187 309 496 309 309

65 A4 – How the Numbers are Calculated 66 For personal useA5 – Howonly the Numbers are Calculated a) A5. CashFlowInformation CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES Net cashinflows(outflows) from operatingactivities Increase (decrease) indeferred taxliability Increase (decrease) incurrent incometaxpayable (Increase) indeferred taxassets Decrease inavailable-for-sale financialassets (Increase) decrease inotherdeferred developmentcosts (Decrease) increase inotherfinancialliabilities (Decrease) increase increditors Decrease (increase) indebtors (Increase) decrease incapitalisedborrowing costs Transfer from inventoriestoinvestmentproperties Decrease (increase) ininventories Increase inprovisions Increase inprovisions foremployeebenefits Changes inoperatingassetsandliabilities Share ofprofit inequityaccountedinvestment Accrued interest on receivables Fair valuegainonderivativefinancialinstrument Reversal ofprovision forimpairmentofloantoCedarWoods Wellard Limited Gain onsaleofinvestmentproperties Loss onsaleofnon-current assets Amortisation ofleaseincentives Depreciation Profit afterincometax Reconciliation ofprofit afterincometaxtonetcashinflows(outflows) fromoperatingactivities (32,451) (10,503) (19,969) 20,303 42,585 (3,069) (3,375) (4,956) (1,073) 8,548 3,120 2,681 6,368 7,434 1,143 1,316 $’000 (870) (577) 2015 377 18 48 (2) - Consolidated (14,162) (79,720) (1,794) 52,954 40,313 (2,008) (6,648) (1,060) (1,035) 5,461 5,355 $’000 (143) (861) (973) (920) 2014 676 255 596 19 43 64 - - For personalb) Dividends a) B3. d) c) b) usea) B2. a) B1. onlyfinancial positionandperformance. This sectionofthenotesdiscussesgroup’s exposuretovariousrisksandshowshowthesecouldaffectthegroup’s Financial Risks Section B: Capital managementobjectivesandgearing...... Capital managementobjectivesandgearing...... Fair valuemeasurement ...... Liquidity risk...... Credit risk...... Market risk...... Financial riskmanagement...... Significant estimatesandjudgements...... Significant estimatesandjudgements...... 2015 ANNUALREPORT 75 74 74 72 71 71 69 68 68 69

67 B – Financial Risks 68 For personal use onlyB1 – Financial Risks a) about eachoftheseestimatesandjudgementsispresentedbelow. are morelikelytobemateriallyadjusteddueestimatesandjudgementsturningoutwrong.Detailedinformation oftheareasthatinvolvedahigherdegreejudgementorcomplexityanditemswhich This noteprovidesanoverview actual results.Managementalsoneedstoexercisejudgementinapplyingthegroup’s accountingpolicies. The preparationoffinancialstatementsrequirestheuseaccountingestimateswhich,bydefinition,willseldomequal B1. SignificantEstimatesandJudgements CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES applying thegroup’s accountingpolicies. There were nocriticaljudgementsotherthanthoseinvolvingestimatesreferred toabove,thatmanagementmadein iii. ii. i. year are discussedbelow. of causingamaterialadjustmenttothecarryingamountsorpresentation ofassetsandliabilitieswithinthenextfinancial expectations offuture eventsthatmayhaveafinancialimpactontheentity. Thejudgementsthathaveasignificantrisk Estimates andjudgementsare continuallyevaluatedandare basedonhistoricalexperienceandotherfactors,including Significant estimatesandjudgements and future contracts. based onmarketconditionsexistingattheendofeachreporting period.Theseincludesalesrates,prices techniques. Thegroup usesitsjudgementtoconsideravarietyofscenariosandmakeassumptionsthatare mainly The fairvalueoffinancialinstrumentsthatare nottradedinanactivemarketisdeterminedusingvaluation Estimated fairvalueofavailableforsalefinancialassets may besubstantiallyimpaired. ReferalsotonoteE4(g). development approvals. Iftheapprovals are notreceived whenanticipatedtherecoverable amountofinventory properties includedininventory, includinginsomecases,judgementregarding thelikelihoodandtimingofobtaining future developmentcosts.Thisrequires judgementastothefuture cashflowslikelytobegeneratedfrom the The recoverable amountofinventoryisestimatedbasedonanassessmentnetrealisable valueincluding -valuation Inventory twelve months,basedonmanagement’s salesforecasts. assets. Inventoryisclassifiedascurrent onlywhensalesare expectedto result in realisation ofcashwithinthenext Judgement isexercised withrespect toestimatingtheclassificationofinventorybetweencurrent andnon-current -classification Inventory The group’s activitiesexposeittoavarietyoffinancialrisks: performance. Currentyearprofitandlossinformationhasbeenincludedwhererelevanttoaddfurthercontext. This noteexplainsthegroup’s exposuretofinancialrisksandhowthesecouldaffectthegroup’s futurefinancial B2. FinancialRiskManagement The group holdsthefollowingfinancialinstruments: these risksissetoutbelow. Management committee.Furtherdetailonthetypesofriskstowhichgroup isexposedandthewaygroup manages Financial riskmanagementisconsidered partoftheoverallriskmanagementprogram overseenbytheAuditandRisk Fora) personal use only Derivative financialinstruments Borrowings Other financialliabilities Trade andotherpayables Financial liabilities Available-for-sale financialassets Trade andotherreceivables Cash andcashequivalents Financial assets ii. i. Market risk interest raterisk June 2015thisloan hasbeenfullyrepaid andthefacilityexpired on1July2015. Thegroup has issuedloanstothe The group issuedaloantoCedarWoods Wellard Limited thatbearsaninterest rateof16%(2014–16%).At30 cash inflowsare notmateriallyexposedtochanges inmarketinterest rates. As theconsolidatedentitydoesnot haveasignificantportfolioofinterest-bearing assets,the incomeandoperating raterisk Cash flowandfairvalueinterest rates. Anincrease ordecrease insalespricesof10%hasa+/-$1,000,000impactonnetprofit aftertax. variety ofscenariosandmakingassumptionsthatare basedonmarket conditions,includingsalespricesand The fairvalueoftheavailable-for-sale financial assetsisdeterminedusingvaluationtechniques,consideringa The consolidatedentityhasnoforeign exchangeexposure andminimalexposure topriceriskonequitysecurities. Price risk Market risk– Liquidity risk Credit risk Risk trade andotherreceivables, Cash andcashequivalents, available-for-sale financial Long termborrowings at Exposure arisingfrom assets andderivative financial instruments and otherliabilities variable rates Borrowings Management ofdeposits Cash flowforecasting Sensitivity analysis actual cashflows Ageing analysis Measurement Credit ratings Forecast and 78,031 29,794 32,106 16,063 12,544 15,459 Contractual arrangements 1,029 1,886 $’000 funding arrangements 2015 Ongoing checksby Interest rateswaps 68 Management 2015 ANNUALREPORT management Flexibility in 132,905 41,398 64,557 26,306 14,675 30,868 7,397 8,796 $’000 2014 644

69 B2 – Financial Risks 70 For personal use onlyB2 – Financial Risks CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES iv. iii. The weightedaverageinterest rateatyearendis6.59%(2014:18.8%) impact ofchanges ininterest rates uponthegroup. The potentialimpactonfinancials assetsisnotsignificant.Refertocommentsaboveforfurtherinformation onthe The potentialimpactofachangein bankinterest ratesof+/ -1% isnotsignificanttothegroup’s netprofit andequity. rate sensitivityanalysis Summarised interest An analysisbymaturityisprovided inB2(c) below. The weightedaverageinterest rateatyearendis3.72%(2014:4.44%) receivables andborrowings issetoutbelow. The consolidatedentity’s exposure tointerest rateriskandthe effective weightedaverageinterest ratefor lower endofthecompany’s availablefacilities. loan atbalancesheetdatebecausetheofwas$30,081,000(2014-$41,687,000),being interest rateswapsorcapstoachievethiswhennecessary. Theswapsdescribedabovecovered 66%ofthebank The consolidatedentity’s policyistolimitasignificantproportion ofitsborrowings toamaximumfixedrateusing cover 66%(2014-72%)ofthevariableloanoutstandingatbalancedate,withtermsexpiringin2019. (BBSY Bid)atcertainlevelsbetween2.49%-2.495%(2014–5.5%6.0%)perannum.Swapscurrently inplace Interest rateswapcontractseffectively fixinterest ratesapplicabletobankbillsissuedwithadurationof1month Instruments usedbythegroup The group addresses thisriskbyvirtueofmanagingitspricing,product offer andplanneddevelopmentprograms. There isanindirect exposure tointerest ratechangescausedbytheimpactoftheseuponproperty market. the consolidatedentity’s projected borrowings are protected fortheperiodfrom 1July2015to28June2019. Accordingly theconsolidatedentityhasentered intointerest rateswapcontractsunderwhichasignificantpartof management products inthecontextofprevailing monetarypolicyoftheReserveBankandeconomicconditions. consolidated entityreviews thepotentialimpactofvariableinterest ratechangesandconsidersvariousinterest rate interest rates.Borrowings issuedatvariableinterest ratesexposethegroup tocashflowinterest raterisk.The Interest rateriskarisesfrom exposures tolongtermborrowings, where thoseborrowings are issuedatvariable of ratesexposethegroup tofairvalueinterest raterisk. BCM ApartmentTrust thatbearsaninterest rateofBBSYplus4.5%.Loansissuedatfixed ratesoratafixedrange Loan tojointventure Loan toBCMApartmentTrust Employee share loans Other financialliabilities Other receivables Receivables Bank loans Interest bearingliabilities - variable bearing Interest bearing Interest 32,106 32,106 - fixed 9,663 9,663 $’000 $’000

- - - -

- variable 2015 2015 bearing Interest bearing interest 30,081 30,081 2,881 2,852 $’000 $’000 Non- 29 - - -

12,544 62,187 32,106 30,081 9,663 2,852 $’000 $’000 Total Total 29 -

- variable bearing Interest bearing Interest 64,557 64,557 - fixed 4,584 2,610 1,974 $’000 $’000 - - -

- variable 2014 2014 bearing Interest bearing interest 10,091 41,687 10,057 41,687 $’000 $’000 Non- 34 - - -

106,244 14,675 64,557 10,057 41,687 2,610 1,974 $’000 $’000 Total Total 34

For personalc) use only b) i. $1,886,000 (2014-$8,796,000)tocovershorttermfundingrequirements. RefertoA2(f)iifordetails. At 30June2015thegroup hadundrawncommittedfacilitiesof$113,712,000(2014-$80,690,000)andcash underlying businesses,thegroup aimsatmaintainingflexibilityinfundingbykeepingcommittedcredit linesavailable. actual cashflowsandmatchingthematurityprofiles offinancialassetsandliabilities.Duetothedynamicnature ofthe consolidated entity’s financialcommitments.Thegroup managesliquidityriskbycontinuouslymonitoringforecast and Prudent liquidityriskmanagementimpliesmaintainingsufficient cashandavailablecredit facilitiestomanagethe Liquidity risk (class A,classBandC). held bytheBCMApartmentTrust. Themajorityoftheloanstakepriority overpaymentofanyreturn tothespecialunits In relation totheloansBCMApartmentTrust, loansare secured bywayofregistered firstmortgagesoverproperty carrying amountoftheavailable-for-sale financialasset. represented ontheboard ofthetrusteecompany. Themaximumexposure tocredit riskatthereporting dateisthe fixed ispreferentialreturn toany being return received bytheotherordinary unitholderandtheconsolidatedentityis B) entitlestheconsolidatedentitytoafixed uponthe return repurchase ofthe1specialunit(classB)atcost.The disclosed asanavailable-for-sale financialassetinnoteA2(c).UndertheBCMtrustdeed1specialunit(class 2012. Theordinary unitsare disclosedasaninterest injoint venture innoteA3(c)andthe1specialunit(classB)is 100 ordinary unitsfor$1eachand1specialunit(classB)$6,000,000inBCMApartmentTrust (BCM)on30March For thepurposesofBataviaCoastMarinaApartmentsproject inGeraldton,WA theconsolidatedentityacquired guarantees. contractual arrangementsthatbindthecounterparty, providing securityagainstinappropriate presentation ofthebank Credit riskmayariseinrelation tobankguaranteesgivencertainparties.Theseare supportedby trading banks. Derivative counterpartiesandcashdepositsare placedwithhighcredit qualityfinancialinstitutions,suchasmajor amount ofthefinancialassetsassummarisedabove. encumbrances ontheunderlyinglandtitles.Themaximumexposure tocredit riskatthereporting dateisthecarrying detailed inindividualcontractsare adhered to.Forlandunderoptiontheconsolidatedentitysecures itsrightsbywayof financial capacityofcustomers.Ongoingchecksare performedbymanagementtoensure thatsettlementterms Policies andprocedures are inplacetomanagecredit riskincludingmanagementofdeposits andreview ofthe entity’s developmentsdoesnotgenerallypasstocustomersuntilfundsare received. The consolidatedentityhasminimalexposure tocredit riskfrom customersastitletolotsorunitsintheconsolidated Credit risk have beenestimatedusinginterest ratesapplicableatthereporting date. bearing liabilitiesare thecontractualundiscountedcashflows.Forvariableinterest rateliabilitiesthecashflows period atthereporting datetothecontractualmaturitydate.Theamountsdisclosedintablefornon-interest The tablesbelowanalysethegroup’s financialliabilitiesinto relevant maturitygroupings basedonthe remaining Maturities offinancialliabilities Non-interest bearing Non-derivatives Group –at30June2015 Fixed rate Variable rate Derivatives Total Less than 16,063 23,145 39,208 1 year $’000 - -

and 2years Between 1 $’000 - - - - - and 5years Between 2 39,000 47,521 8,453 $’000 68 - contractual cash flows 16,063 39,000 31,598 86,729 $’000 2015 ANNUALREPORT Total 68 Carrying amount 16,063 32,106 29,794 78,031 $’000 68

71 B2 – Financial Risks 72 For personal use onlyB2 – Financial Risks CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES d) ii. i. financial instruments. This noteprovides informationonthejudgementsandestimatesmadebygroup indeterminingthefairvaluesof Fair valuemeasurement issuer entity. based onmanagement’s estimateoftheperiodover whichthereturn willbereceived andtheperformanceof balance sheet).Theunlistedequity securitiesprovide afixed andthefairvalueof securities isdetermined return included inlevel3.Thisisthecase forunlistedequitysecurities(classifiedasavailable-for-sale financialassetsin the Level 3–Ifoneormore ofthesignificantinputsisnotbased onobservablemarketdata,theinstrumentsis instruments are includedinlevel2. provided bytradingbanks)isdeterminedusingmarketvaluations provided bythosebanksatreporting date.These Level 2–Thefairvalueoffinancialinstrumentsthatare nottradedinanactive market(suchasderivatives the financialassetsheldbygroup isthecurrent bidprice.Theseinstrumentsare includedinlevel 1. based onquoted(unadjusted)marketpricesattheendofreporting period.Thequotedmarketpriceusedfor Level 1–Thefairvalueoffinancialinstrumentstradedinactivemarkets(such aspubliclytradedderivatives)is Valuation fairvalues techniquesusedtodetermine value at30June2015and2014: The followingtablepresents thegroup’s financialassetsand financialliabilitiesmeasured and recognisedatfair thetable. follows underneath financial instrumentsintothree levelsprescribed undertheaccountingstandards. Anexplanationofeachlevel To provide anindicationaboutthereliability oftheinputsused indeterminingfairvalue,thegroup classifiesits Fair valuehierarchy Available-for-sale financialassets Assets As at30June2014 Available-for-sale financialassets Assets As at30June2015 Non-interest bearing Non-derivatives Group –at30June2014 Total assets Total assets Derivatives usedforhedging Liabilities Fixed rate Derivatives usedforhedging Liabilities Total liabilities Total liabilities Variable rate Derivatives Total Less than Notes Notes A2(c) A2(e) A2(c) A2(e) 26,306 35,042 61,992 1 year $’000 644 -

and 2years Between 1 Level 1 Level 1 $’000 $’000 $’000 ------and 5years Between 2 Level 2 Level 2 39,000 47,213 86,213 $’000 $’000 $’000 644 644 68 68 ------contractual cash flows 148,205 Level 3 Level 3 26,306 74,042 47,213 1,029 1,029 7,397 7,397 $’000 $’000 $’000 Total 644 - - - - 132,905 Carrying amount 26,306 64,557 41,398 1,029 1,029 7,397 7,397 $’000 $’000 $’000 Total Total 644 644 644 68 68 For personal use only iii. details. received andtheextendedperiodoverwhichreturn isnowexpectedtobereceived. RefertonoteA2(c)for The reduction infairvalueoftheequitysecuritiestableabovereflects the reduced expectedtobe return The followingtablepresents thechangesinlevel3instrumentsforyearended30June2015: inputs(level3) usingsignificantunobservable Fair valuemeasurements Closing balance30June2015 Write downofassetsintheprofit or loss-unrealised Opening balance30June2014 Available For sale (6,368) 1,029 7,397 $’000 2015 ANNUALREPORT

(6,368) 1,029 7,397 $’000 Total

73 B2 – Financial Risks 74 For personal use onlyB3 – Financial Risks a) B3. CapitalManagementObjectivesandGearing CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES i. settlement ofdevelopments. outside ofthisrangeare acceptable,dependinguponthetimetableforacquisitionpaymentsandconstruction The group’s guidelineistotargetgearinggenerallywithin therangeof20-75%althoughperiodswhere thegearingis In order tomaintainoradjustthecapitalstructure, thegroup whichmayinclude: willconsiderarangeofalternatives optimal capitalstructure toreduce thecostofcapital. so thatitcancontinuetoprovide returnsforshareholders andbenefitsforotherstakeholderstomaintainan The consolidatedentity’s objectiveswhenmanagingcapitalare tosafeguard itsabilitytocontinueasagoingconcern, Capital managementobjectivesandgearing The gearingratioswere asfollows: gearing isthenaddressed byutilisingcapitalmanagementinitiativesasdiscussedabove. managed byreference toaguidelinewhich setsthedesirableupperandlowerlimitsforgearingratio.Thegroup’s calculated asinterest bearingbankdebtnetofcashandequivalentsdividedbyshareholders’ equity. Gearingis Gearing isameasure usedtomonitorthelevelsofdebtinbusinessfundoperations.Thegearingratiois Gearing ratio Shareholders’ equity Net debt Less: cashandequivalents Total interest bearingbankdebt • • • • • cover ratio. period. Keycovenantsincluderequirements inrelation toamaximumloanvaluationratioandminimuminterest Under thetermsofmajorborrowing facilities,thegroup hascompliedwithcovenantsthroughout thereporting LoanCovenants sale ofassets. return ofcapitaltoshareholders issue ofnewsecurities adjusting thedividendpolicy raising orreducing borrowings A2(a) Note A2(f) 285,605 28,195 30,081 (1,886) 9.9% $’000 2015 261,601 32,891 41,687 (8,796) 12.6% $’000 2014 For personal use only b) ii. iii. i. Dividends June 2015,butnotrecognised asaliabilityatyearendisbelow: aggregate amountoftheproposed dividend expectedtobepaidon30October2015outofretained profits at30 of 16.0centsperfullypaidordinary share (2014–15.5cents),fullyfrankedbasedonthetaxpaidat30%.The In additiontotheabovedividends,sinceyearenddirectors haverecommended thepaymentofafinaldividend attheyearend Dividends notrecognised recognised asaliabilityatyearend,willbereduction inthefranking accountof$5,410,000(2014-$5,204,000). The impactonthefrankingaccount ofthedividendrecommended bythedirectors sinceyearend,butnot (c) (b) (a) The aboveamountsrepresent thefrankingaccountsatendoffinancialyear, adjustedfor: from frankingcredits arisingfrom thepaymentofincometaxinnextfinancialyear. The frankedportionsofthefinaldividendproposed at30June2015willbefrankedfrom existingfrankingcredits or Franked Dividends Ordinary shares Ordinary Total - Appliedtotheemployeeshare loans - Satisfiedbyshares underthedividend reinvestment plan - Paidincash (2014 –12.0cents)perfullypaidshare Interim dividendfortheyearended30June2015of12.0cents - Appliedtotheemployeeshare loans - Satisfiedbyshares underthedividend reinvestment plan - Paidincash (2013 –15.0cents)perfullypaidshare Final dividendfortheyearended30June2014of15.5cents Fully frankedbasedontaxpaidat30% on atax-paidbasisof30%(2014–30%) Franking credits availableforthesubsequentfinancialyear Dividends notrecognised atyearend Franking credits thatwillarisefrom thereceipt ofdividendsrecognised asreceivables atthereporting date. Franking debitsthatwillarisefrom thepaymentofdividendsrecognised asaliabilityatthereporting date; Franking credits thatwillarisefrom thepaymentofcurrent taxliability; 21,390 12,138 64,443 12,623 2,819 6,427 $’000 $’000 $’000 2015 2015 2015 3 3 2015 ANNUALREPORT - Consolidated Consolidated Consolidated 19,377 57,458 12,142 1,174 7,532 2,258 8,407 $’000 $’000 $’000 2014 2014 2014 3 3

75 B3 – Financial Risks 76 For personal use onlyC – Group Structure d) c) b) a) Subsidiaries C1. performance ofthegroupasawhole. This sectionprovidesinformationwhichwillhelpusersunderstandhowthegroupstructureaffectsfinancialpositionand Group Structure Section C: CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES Summarised financialinformationforjointventures ...... Commitments andcontingentliabilitiesinrespect ofthejointventures ...... Interests injointventures ...... Interests inOtherEntities...... 79 78 78 77 77

For personal use onlya) C1. InterestsinOtherEntities policy describedinnoteE4(b). The consolidatedfinancialstatementsincorporatetheassets,liabilitiesand results inaccordance withtheaccounting voting rightsheldbythegroup. Thesubsidiariesare incorporatedorestablishedinAustralia. solely ofordinary shares thatare helddirectly bythegroup andtheproportion ofownershipinterest heldequalsthe The group’s subsidiariesat30June2015are setoutbelow. Unlessotherwisestated,theyhaveshare capitalconsisting Subsidiaries Zamia Property PtyLtd Yonder Property PtyLtd Woodbrooke Property PtyLtd LandingTownWilliams Centre PtyLtd LandingShoppingCentre TrustWilliams LandingShoppingCentre PtyLtd Williams LandingHomeImprovement TrustWilliams LandingHomeImprovement Pty Ltd Williams PropertyVintage PtyLtd Upside Property PtyLtd Terra Property PtyLtd Silhouette Property PtyLtd Osprey Property PtyLtd Lonnegal Property PtyLtd Kayea Property PtyLtd Jarrah Property Pty Ltd Huntsman Property PtyLtd Geographe Property PtyLtd PtyLtd Gaythorne Galaway HoldingsPtyLtd Flametree Property PtyLtd Eucalypt Property PtyLtd Esplanade (Mandurah)PtyLtd Dunland Property PtyLtd Daleford Property PtyLtd Cranford PtyLtd Cedar Woods Property SalesPtyLtd Cedar Woods Properties ManagementPtyLtd Cedar Woods Properties InvestmentsPtyLtd Cedar Woods Properties HarrisdalePtyLtd Company 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 2015 Equity Holding 2015 ANNUALREPORT 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 2014

77 C1 – Group Structure 78 For personal use onlyC1 – Group Structure b) CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES c) incorporation (ororigin)isAustraliaforallentities. Set outbeloware thejointventures ofthegroup asat30June 2015.Theprincipalplaceofbusinessandcountry Interests injointarrangements BCM ApartmentTrust hasnocommitmentsforexpenditure orcontingentliabilities at30June2015(2014:nil). (2014: $102,766)bankguaranteestovariouslocalauthoritiessupportingdevelopmentandmaintenancecommitments. Cedar Woods Wellard Limitedhasnocommitmentforexpenditure at30June 2015(2014:nil)andprovided $27,667 Carine JointVenture hasnocommitmentsforexpenditure orcontingentliabilitiesat30June2015(2014:nil). Commitments andcontingentliabilitiesinrespect ofthejointventures the trusteeofBCM. The consolidatedentityalsoowns10ordinary shares for$1each(a50%interest) inChampionBayNomineesPtyLtd, entitle ittoashare oftherevenue, profit/loss ornetassetsofBCM.RefertonoteA2(c)fordetails. Batavia CoastMarinaApartmentsproject inGeraldton.Theconsolidatedentity’s interest intheordinary unitsdoesnot 100 ordinary unitsfor$1each(a50%interest intheordinary units)intheBCMApartmentTrust, whichownsthe BCM ApartmentTrust, ownstheBataviaCoastMarinaApartmentsproject inGeraldton. Theconsolidatedentityowns Cedar Woods Wellard LimitedisdevelopingtheEmeraldParkresidential estate atWellard, WA. sheet inaccordance withtheaccountingpolicydescribedinnoteE4(b). revenue andassets.Theconsolidatedentity’s interest intheassetsemployedCJVare includedinthebalance Western Australia.Theconsolidatedentityhasa50%participatinginterest intheCJVandisentitledto50%ofits precinct includinganagedcare facility, retirement livingandresidential housingdevelopmentonStatelandinCarine, Carine JointVenture (CJV)isajointventure withanagedcare andretirement livingprovider, todevelopamixeduse The carryingamountrepresents theamountattributabletogroup. Carine JointVenture Name ofentity Cedar Woods Wellard Limited BCM ApartmentTrust % ofownership 2015 32.5 50 50 % interest 2014 32.5 50 50 % Joint Operation Joint Venture Joint Venture relationship Nature of liabilities, income Share ofassets, Equity method Equity method and expenses Measurement method Carrying amount 3,975 $’000 2015 (38) - 1,554 2,902 $’000 2014 - For personal use only d) i. Cedar Woods Properties Limited’s share ofthoseamounts. information disclosedreflects theamountspresented inthefinancialstatementsof relevantjointventures andnot The followingtableprovides summarisedfinancialinformationforthosejointventures thatare materialtothegroup. The Summarised financialinformationforjointventures Net assets Total liabilities Non-current liabilities Total current liabilities Total assets Total non-current assets Total current assets Other current assets Cash Current assets Cedar Woods Wellard Limited Group’s share in$ Group’s share in% Movements in carrying amounts–CedarWoodsMovements incarrying Wellard Limited the activitieswithoutco-operationofothers. The directors havedeterminedthattheydonotcontrol CedarWoods Wellard Limitedasnooneinvestorcandirect development companyincorporatedinAustralia. The consolidatedentityownsa32.5%(2014–32.5%)interest inCedarWoods Wellard Limited,aproperty At startoftheyear Contingent liabilities(bankguarantees) Liabilities Assets Revenue contingent liabilities Share ofjointventure’s revenue, assets,liabilitiesand Share ofprofit afterincometax Income taxbenefit/(expense) Share ofprofit before incometax At endoftheyear Share ofprofit afterincometax 10,800 14,216 16,302 32.5% 2,902 5,298 4,748 1,073 1,533 3,975 1,073 8,617 2,183 2,086 2,086 5,502 4,620 $’000 $’000 (678) (460) 2015 2015 (9) 2015 ANNUALREPORT - (2,875) 10,351 10,914 19,760 32.5% 1,929 6,422 6,099 2,902 6,093 3,316 9,409 8,846 6,975 1,871 3,547 $’000 $’000 2014 2014 604 973 369 973 (33)

79 C1 – Group Structure 80 For personal use onlyD – Unrecognised Items D3. D2. D1. satisfy therecognitioncriteria. This sectionofthenotesprovidesinformationaboutitemsthatarenotrecognisedinfinancialstatementsastheydo Unrecognised Items Section D: CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES Events occurringafterthereporting period...... Commitments ...... Contingent liabilities...... 83 82 81 For personal use onlya) At 30June2015thegroup hadcontingentliabilitiesinrespect of: D1. ContingentLiabilities local authoritiessupportingdevelopmentandmaintenancecommitments. At 30June2015bankguaranteestotalling$13,688,000(2014-$12,620,000)hadbeenprovided tovariousstateand Bank guarantees 2015 ANNUALREPORT

81 D1 – Unrecognised Items 82 For personal use onlyD2 – Unrecognised Items c) b) D2. Commitments CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES substantially completedinthenext12months. (2014 -$26,810,000)andforlandscapingconstructionwas$987,000$2,342,000).Thisworkwillbe yet tobecompletedforcivilworkswas$11,331,000(2014-$12,079,000),buildingconstruction$22,982,000 construction fordevelopmentofitsprojects intheordinary courseofbusiness.Thetotalamountcontractedforwork At 30June2015theconsolidatedentityhadcommitmentsundercivilworks,buildingconstructionandlandscaping Capital commitments varying terms,escalationclausesandrenewal rights.Onrenewal, thetermsofleasesare renegotiated. The group leasesvariousoffices undernon-cancellableoperatingleasesexpiringwithin5years.Thehave reporting datebutnotrecognised asliabilitiesare payableasfollows: Commitments forminimumleasepaymentsinrelation tonon-cancellableoperatingleasescontractedforatthe Non-cancellable operatingleases Later than1yearbutnotlater5years Within 1year Within 2,878 2,167 $’000 2015 711 Consolidated 1,843 1,151 $’000 2014 692 For personal use only year 2016. hectares oflandownedbyCedarWoods. Developmentofthecombinedlandholdingisexpectedtocommenceincalendar purchase priceis$26.25mplusGSTandscheduledtosettleon31August2015.Thelandadjoinstheexisting68 In August2015CedarWoods purchased landat19and21BaldivisRoad,comprising50.74hectares. The D3. Eventsoccurringafterthereportingperiod 2015 ANNUALREPORT

83 D3 – Unrecognised Items 84 For personal use onlyE – Other Information E6. E5. E4. E3. E2. E1. related partytransactions,sharebasedpaymentsandafulllistoftheaccountingpoliciesappliedbyentity. Section Econtainsinformationthatisnotimmediatelyrelatedtoindividuallineitemsinthefinancialstatements,suchas Other Information Section E: CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES Parent entityfinancialinformation...... Segment information...... Summary ofaccountingpolicies...... Employee share scheme...... Remuneration ofauditors...... Related partytransactions...... 97 96 88 87 86 85

E – Other Information h) g) f) e) d) c) b) For personal use onlya) E1. RelatedPartyTransactions Loans torelated parties The followingbalancesare outstandingattheendofreporting periodinrelation totransactionswithrelated parties: Outstanding balancesarisingfrom sales/purchases ofgoodsandservices This guaranteehassubsequentlybeenremoved postyearend. guarantee duringtheyearaspartofaninterest bearingloantoCWWL,withinterest chargedat16%(2014–16%-17%). given inrelation to performanceundertakingsgivenbyCWWL.Noamount(2014–nil)wasadvancedinrelation tothis Woods Wellard Limited(CWWL),ajointventure entityowned32.5%(2014–32.5%)bythegroup. Theguaranteehasbeen Cedar Woods Properties Limitedhasprovided aperformanceguaranteeinrespect ofthebankfacilityprovided toCedar Guarantees are basedonnormaltermsandconditions,atmarketratesthetimeofenteringintoagreements. Management andsellingfeesare derivedaccording tomanagementagreements inplacebetweentheparties.These Terms andconditions totalling $1,361,275(2014-$1,749,173)from CedarWoods Wellard Limited. Cedar Woods Properties ManagementPty Ltd andCedarWoods Property Sales derivedmanagementandsellingfees Transactions withotherrelated parties The parent entitywithinthegroup isCedarWoods Properties Limited. Parent entity ownership interests heldbytheparent entityare set outinnoteC1. The group consistsofCedarWoods Properties Limitedanditscontrolled entities.Alistoftheseentitiesandthe Group Additional disclosures relating tokeymanagementpersonnelare setoutintheDirectors’ Report. Key managementpersonnelcompensation End ofyear Interest charged Loan repayments received Beginning oftheyear Loan toCedarWoods Wellard Limited Cedar Woods Wellard Limited Current receivables (salesofgoodsandservices) Termination benefit Long-term employeebenefits Post-employment benefits Short-term employeebenefits (2,796,146) 2,610,154 2,474,008 2,908,070 185,992 124,500 152,133 157,429 2015 2015 2015 $ $ $ 2015 ANNUALREPORT - - - Consolidated (6,000,000) 7,668,823 2,740,384 2,610,154 3,000,489 941,331 111,826 148,279 2,060 2,060 2014 2014 2014 $ $ $ -

85 E1 – Other Information 86 For personal use onlyE2 – Other Information value oftheauditservices. auditor infuture years, withtheobjectivethatvalueofnon-auditservicesprovided bytheauditfirmdoesnotexceed The workonR&D(andanyothernon-auditassignmentsofsignificantscale)willbeperformedbyadifferent firmtothe and doesnotimpacttheindependenceofauditor. committee issatisfiedthattheworkperformedonnon-auditservicesconductedbyateamseparatefrom theauditteam services provided islowerinFY2015thanFY2014.Theauditorhasprovided anindependencedeclarationandthe Fees fornon-auditservicesare lowerinFY2015thanFY2014andasidefrom theR&Dwork,extentofothernon-audit higher thantheprevious yearwhenthere wasonlyoneyear’s R&Dassignment. work. There were twoR&DassignmentsinFY2015(fortheFY2013andFY2014taxyears),henceassociatedcostwas The majorityofnon-auditservicesfeesinFY2015andFY2014relate toresearch anddevelopment(R&D)taxincentive objectivity oftheauditor. approved bytheAuditandRiskManagementCommitteetoensure theydonotadverselyimpacttheindependenceand advice, taxadviceandreviews, research anddevelopmentadviceotheradvice.Allnon-auditservicesare reviewed and the auditor’s expertiseandexperiencewiththeconsolidatedentityisimportant.Theseassignmentsrelate toaccounting The consolidatedentitymaydecidetoengagetheauditoronassignmentsadditionaltheirstatutoryauditdutieswhere Audit FeesinFY2015include$24,250relation totheFY2014auditthatwere subsequentlybilledinFY2015. The statutoryauditrequirements forthegroup vary from yeartoandcan haveanimpactonthelevelofauditfees. During theyearfollowingfeeswere paidorpayabletotheauditorofparent entity: E2. RemunerationofAuditors CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES entities andco-developmentprojects - Auditandreview ofthefinancialstatementsparent entity, controlled Assurance services PricewaterhouseCoopers –Australianfirm Total feesfornon-auditservices - Othertaxationadviceandreviews - Research anddevelopmentadvice Non-audit services 239,007 534,981 295,974 266,649 29,325 2015 $ 176,929 500,038 323,109 259,209 63,900 2014 $ For personal use onlyfrom employeesinrelation toloansgrantedinfinancialyearsprior2010.Noamountswere duefrom formeremployees. free loansfrom thecompanyandrepaid bydividends.At30 June 2015,$29,000(2014-$34,000)remained outstanding The employeeshare planhasbeendiscontinued.Undertheplan,certainemployeeswere grantedshares fundedbyinterest E3. EmployeeShareScheme 2015 ANNUALREPORT

87 E3 – Other Information 88 For personal use onlyE4 – Other Information a) are fortheconsolidatedentityconsistingofCedarWoods Properties Limitedanditssubsidiaries. These policieshavebeenconsistentlyappliedtoalltheyearspresented, unlessotherwisestated.Thefinancialstatements The principalaccountingpoliciesadoptedinthepreparation oftheseconsolidatedfinancialstatementsare setoutbelow. ofAccountingPolicies E4. Summary CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES b) iv. iii. ii. i. Woods Properties Limitedisafor-profit entityforthepurposeofpreparing thefinancialstatements. and Interpretations issuedbytheAustralianAccountingStandards Board andtheCorporationsAct2001.Cedar These generalpurposefinancialstatementshavebeenprepared inaccordance withAustralianAccountingStandards Basis ofpreparation ii. i. Subsidiaries Principles ofconsolidation currency ofCedarWoods Properties Limited. The consolidatedfinancialstatementsare presented inAustraliandollars,whichisthefunctionalandpresentation currency Functional andpresentation financial statements,are disclosedinB1. involving ahigherdegree ofjudgementorcomplexity, orwhere assumptionsandestimatesare significanttothe management toexercise itsjudgementintheprocess ofapplyingthegroup’s accountingpolicies.Theareas The preparation offinancialstatements requires the useofcertaincriticalaccountingestimates.Italso requires Critical accountingestimates of available-for-sale financialassetsandderivativeinstruments. These financialstatementshavebeenprepared underthehistoricalcostconvention,asmodifiedby revaluation Historical costconvention AccountingStandardsInternational Board (IASB). The financialstatementsoftheCedar Woods Properties Limitedgroup alsocomplywithIFRSasissuedbythe FinancialReportingStandards(IFRS). Compliance withInternational recognised atcostintheconsolidatedbalance sheet.Detailsofthejointventures are setoutinnoteC1(b). Joint ventures –Interest injointventures are accountedforusingtheequitymethod(seebelow),afterinitiallybeing joint operations,whichhavebeen incorporated inthefinancialstatementsunderappropriate headings. Joint operations-Theconsolidated entityrecognises itsdirect righttoassets,liabilities,revenues andexpensesof and jointventures. investor, ratherthanthelegalstructure ofthejointarrangement. Theconsolidatedentityhasbothjointoperations either jointoperationsorventures. Theclassificationdependsonthecontractual rightsandobligationsofeach Joint arrangements–UnderAASB11Arrangements,investments injointarrangementsare classifiedas Joint arrangements consolidation. All inter-company balancesandtransactionsbetween companieswithintheconsolidatedentityare eliminatedupon date thatcontrol ceases. fully consolidatedfrom thedateonwhichcontrol istransferred totheparent. Theyare de-consolidatedfrom the The acquisitionmethodofaccountingisusedtoaccountforbusiness combinationsbythegroup. Subsidiariesare generally accompanyingashareholding ofone-halformore ofthevotingrights. Subsidiaries are those entitiesoverwhichtheparent thefinancialandoperatingpolicies, hasthepowertogovern consolidated entityorthegroup. Cedar Woods Properties Limitedanditssubsidiaries togetherare referred tointhesefinancialstatementsasthe Woods Properties Limited(parent) asat30June2015andtheresults ofallsubsidiaries fortheyearthenended. The consolidatedfinancialstatementsincorporatetheassetsandliabilitiesofallentitiescontrolled byCedar c) For personald) use only iii. v. iv. iii. Dividends ii. Interest i. taxes paid.Thefollowingspecific recognition criteriamustalsobemetbefore revenue is recognised: Revenue ismeasured atthefairvalueofconsiderationreceived orreceivable andisrecognised netofdiscountsand Revenue recognition directly inequityrespectively. comprehensive incomeordirectly inequity. Inthiscase,thetaxisalsorecognised inothercomprehensive income or Current anddeferred taxisrecognised inprofit andloss,excepttotheextentthatit relates toitems recognised inother liabilities oftheseentitiesare setoff intheconsolidatedfinancialstatements. consolidation legislation.Asaconsequence,theseentitiesare taxed asasingleentityandthedeferred taxassetsand Cedar Woods Properties LimitedanditswhollyownedAustraliancontrolled entitieshaveimplementedthetax liabilities andwhenthedeferred taxbalancesrelate tothesametaxationauthority. Deferred taxassetsandliabilitiesare offset whenthere isalegallyenforceable righttooffset current taxassetsand future taxableamountswillbeavailabletoutilisethosetemporarydifferences andlosses. Deferred taxassetsare recognised fordeductibletemporarydifferences andunusedtaxlossesonlyifitisprobable that those taxrateswhichare enactedorsubstantivelyenacted. is determinedusingthetaxratesexpectedtoapplywhenassets are recovered orliabilitiesare settled,basedon bases ofassetsandliabilitiestheircarryingamountsintheconsolidatedfinancialstatements.Deferred income tax Deferred incometaxisprovided infull,using theliabilitymethod,ontemporarydifferences arisingbetweenthetax the reporting period. The current incometaxchargeiscalculatedonthebasisoflawsenactedorsubstantiallyatend differences andtounusedtaxlosses,ifany. on theincometaxrateinAustraliaadjustedbychangesdeferred taxassetsandliabilitiesattributabletotemporary The incometaxexpenseorrevenue fortheperiodistaxpayableoncurrent period’s taxableincomebased Income tax share ofmovementsinothercomprehensive income. recognise thegroup’s share ofthepost-acquisitionprofits orlossesoftheinvesteeinprofit orloss,andthe group’s Under theequitymethodofaccounting,investmentsare initiallyrecognised atcostandadjustedthereafter to Equity method with contractualarrangements. Commission andfeeincomeisrecognised whentherighttoreceive inaccordance theincomehasbeenearned Commissions andfees Income from operating leasesisrecognised onastraightlinebasisovertheperiodofeachlease. Lease income Dividends are recognised asrevenue whentherighttoreceive paymentisestablished. on impaired loansisrecognised usingtheoriginal effective interest rate. effective interest rateoftheinstrument,andcontinuesunwindingdiscountasinterest income.Interest income the carryingamounttoitsrecoverable amount,beingtheestimatedfuture cashflowdiscountedattheoriginal Interest incomeisrecognised usingtheeffective interest method.Whenareceivable isimpaired, thegroup reduces Revenue arisingfrom thesaleoflandandbuildingsheldforresale isrecognised atsettlement. Sale oflandandbuildings 2015 ANNUALREPORT

89 E4 – Other Information 90 For personal use onlyE4 – Other Information e) CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES g) f) h) ii. i. pershareEarnings i. Inventories andoptionsoverland overdrafts are shownwithinborrowings incurrent liabilitiesonthebalancesheet. call whichare readily convertibletocashonhandandare subjecttoaninsignificantriskofchangesinvalue.Bank For cashflowstatementpresentation purposes,cashandequivalentsincludesonhand,depositsat Cash andcashequivalents or loss. In instanceswhenthedeferred developmentcostsare reimbursed bythelandowner, theyare expensedintheprofit not expectedtobereimbursed within12monthsofthereporting period,whichare classifiedasnon-current assets. as deferred developmentcostsinthebalancesheet.Theyare includedincurrent assets,exceptforthosewhich are Development costsincurred bythegroup forthedevelopmentoflandnotheldasanassetbygroup are recorded Deferred developmentcosts shares. weighted averagenumberofordinary shares isadjustedtoreflect theconversionofalldilutivepotentialordinary account ofanyeffect onborrowing costsassociatedwiththeissueofdilutivepotentialordinary shares. The pershare pershare usedinthedeterminationofbasicearnings totake Diluted earnings adjuststheearnings pershare Diluted earnings bonus elementsinordinary shares issuedduringtheyear. Limited bytheweightedaveragenumberofordinary shares outstandingduringthefinancialyear, adjustedforany pershareBasic earnings isdeterminedbydividingtheprofit attributabletoownersofCedar Woods Properties pershare Basic earnings expensed through costofsales. When property issold,thecostoflandandattributabledevelopmentcosts,includingborrowing costs,is The acquisitionoflandisrecognised whenanunconditionalpurchase contractexists. reserves inrespect ofthoseassetstoretained earnings. still heldbytheconsolidatedentity. Whenrevalued assetsare sold,itispolicytotransferanyamountsincludedin net revaluation increment forlandrevalued priorto1July1992whichisnowclassifiedasinventoryand which isitsdeemedcost.Theamountremaining intheAssetRevaluationReserverepresents thebalanceof reflected inthebalancesheetandalso recognised inequity. Thebalanceofthislandisstatedat1992valuation, and initiallyrecorded atcostwithregular independentvaluationsbeingundertaken.Increments ordecrements were Prior to1July1992theconsolidatedentity’s landassetswere classifiedonacquisitionasnon-current investments development iscompleted,are expensedasincurred. months, basedonmanagement’s salesforecasts. Borrowing costsincurred priortoactivedevelopmentandafter classified ascurrent inventoryonlywhensalesare expectedto result in realisation ofcashwithinthenexttwelve for developmentandsaleisregarded asinventoryandisclassifiedsuchinthebalancesheet.Property is the estimatedcostsofcompletionandnecessarytomakesale.Allproperty held during development.Netrealisable valueistheestimatedsellingpriceinordinary courseofbusinessless value. Costincludesacquisitionandsubsequentdevelopmentcosts,applicableborrowing costsincurred Since 1July1992,property purchased fordevelopment andsaleisvaluedatthelowerofcostnetrealisable Property heldfordevelopmentandresale l) k) j) i) For m) personal use only used are: consolidated entity. Theexpectedusefullivesofitemsproperty, plantandequipmentthedepreciation methods cost ofeachitemproperty, plantandequipment,includingleasedoveritsexpectedusefullifetothe cost lessdepreciation. Depreciation iscalculated onastraightlineordiminishingvaluebasistowriteoff thenet Property, plantandequipmentissubstantiallymadeupoffurniture, fittingsand equipmentandisstatedathistorical Property, plantandequipment for possiblereversal oftheimpairmentatendeachreporting period. identifiable cashgeneratingunits,whichisgenerallytheproject level.Assetsthatsuffered animpairmentare reviewed in use.Forthepurposesofassessingimpairment,assetsare grouped atthelowestlevelforwhichthere are separately recoverable amount.Therecoverable amount ofanassetisthehigheritsfairvaluelesscostsdisposaland not berecoverable. Animpairmentlossisrecognised fortheamountbywhichasset’s carryingamountexceedsits Assets are tested forimpairmentwhenevereventsorchangesincircumstances indicatethatthecarryingamountmay Impairment ofassets consolidated entity’s financiersforasimilarborrowing undercomparabletermsandconditions. their present valuesatthedateofacquisition.Thediscountrateusedisincremental borrowing rateappliedbythe Where settlementofanypartcashconsiderationisdeferred, theamountspayableinfuture are discountedto of theassetsgiven,orliabilitiesundertakenatdateacquisition.Acquisitionrelated costsare expensedasincurred. The acquisitionmethodofaccountingisusedtoaccountforallbusinesscombinations.Costmeasured asthefairvalue Business combinations classified asheldforsaleare presented separatelyfrom theotherassetsinbalancesheet. Non-current assetsare notdepreciated oramortisedwhilethey are classifiedasheldforsale.Non-current assets the dateofsalenon-current asset(ordisposal)isrecognised atthedateofderecognition. but notinexcessofanycumulativeimpairmentlosspreviously recognised. Againorlossnotpreviously recognised by costs tosell.Againisrecognised foranysubsequentincrease infairvaluelesscoststosellofanasset(ordisposal), An impairmentlossisrecognised foranyinitialorsubsequentwrite-downoftheasset(ordisposal)tofairvalueless lower ofcarryingamountandfairvalue,lesscoststosell. transaction ratherthanthrough continuinguseandasaleisconsidered highlyprobable. Theyare measured atthe Non-current assetsare classifiedasheldforsaleiftheircarryingamountwillbe recovered principallythrough asale Assets classifiedasheldforsale ii. i. investments were acquired. Managementdeterminestheclassificationofitsinvestmentsatinitial recognition. loans andreceivables andavailableforsalefinancialassets.Theclassificationdepends onthepurposeforwhich The group classifiesitsfinancialassetsinthefollowingcategories:atfairvalue through profitorloss, Investments andotherfinancialassets profit orloss. Gains andlossesondisposalsare determinedbycomparingproceeds withcarryingamount.Theseare includedinthe The assets’residual values andusefullivesare reviewed forimpairmentandadjustedifappropriate, at eachreporting date. • the balancesheet. Loansandreceivables are carried atamortisedcostusingtheeffective interest method. after thereporting periodwhichare classifiedascurrent assets.Loansand receivables are included in receivables in in anactivemarket.Theyare includedinnon-current assets, exceptforthosewithmaturitieslessthan12months Loans andreceivables are non-derivativefinancialassetswithfixedordeterminable paymentsthat are notquoted Loans andreceivables expected tobesettledwithin12months,otherwisetheyare classified asnon-current. for tradingunlesstheyare designedashedges.Assetsinthiscategoryare classified ascurrent assets iftheyare in thiscategoryifacquired principallyforthepurposeofsellinginshortterm.Derivatives are classifiedasheld Financial assetsatfairvaluethrough profit orlossare financialassetsheldfortrading.Aassetisclassified Financial assetsatfairvaluethroughprofitorloss Plant andequipment–3to15years(straightlinediminishingvaluemethods) 2015 ANNUALREPORT

91 E4 – Other Information 92 For personal use onlyE4 – Other Information CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES n) o) iii. ii. i. Investment property iv. Superannuation iii. ii. i. Employee benefits interest rate.Thelossisrecognised inprofit orloss. incurred. Inthecaseofloansandreceivables, thecashflowsare discountedatthefinancialasset’s original effective amount andthepresent valueofestimatedfuture cashflows,excludingfuture credit lossesthathavenotbeen is impaired. Ifthere isevidenceofimpairment,thelossmeasured asthedifference betweentheasset’s carrying The group assessesattheendofeachreporting periodwhetherthere isobjectiveevidencethatafinancialasset comprehensive income. are carriedatfairvalue.Changesinthevaluenotarisingfrom impairmentorinterest are recognised inother current assetsasmanagementdoesnotintendtosellthemwithin12months.Available-for-sale financialassets that are eitherdesignatedinthiscategoryornotclassifiedanyoftheothercategories.Theyare includedinnon- Available-for-sale financialassets,comprisingmarketableequitysecuritiesandothersecurities,are non-derivatives Available-for salefinancialassets against rental incomeovertheleaseperiod. Lease incentivesprovided underanoperatingleasebytheGroup aslessorare recognised onastraightlinebasis Lease incentives the balancesheetwhere itmeetstherelevant criteria.Netgainsorlossesonsaleare disclosedintheprofit orloss. When thecompanyelectstodisposeofinvestmentproperty, itispresented asassetsclassifiedheldfor salein investment property buildingsis40years. off thenetcostofeachinvestmentoveritsexpectedusefullifetoconsolidatedentity. Theexpectedusefullifeof property andisstatedathistoricalcostlessdepreciation. Depreciation iscalculatedonastraightlinebasistowrite the consolidatedentity. Investmentproperty includesproperties underconstructionforfuture useasinvestment Investment property, principallycomprisingretail property, isheldforlongtermrental yieldsandisnotoccupiedby Investment property they are payable.Theconsolidatedentitydoesnotoperateany definedbenefitsuperannuationfunds. Contributions bytheconsolidated entity toemployees’superannuationfundsare charged totheprofit orlosswhen obliged orwhere pastpracticehascreated aconstructiveobligation. The group recognises during thefinancialyearwhere aliabilityandexpenseforbonusesearned contractually Bonus plans cash flows. date onnationalcorporatebondswithtermstomaturitythatmatch, ascloselypossible,theestimatedfuture departures andperiodsofservice.Expectedfuture paymentsare discountedusingmarketyieldsatthereporting to thereporting date.Considerationisgiventoexpectedfuture wageandsalarylevels, experienceofemployee as thepresent valueofexpectedfuture paymentstobemadeinrespect ofservicesprovided byemployeesup which theemployeesrender therelated serviceisrecognised intheprovision foremployeebenefitsandmeasured The liabilityforlongserviceleavewhichisnotexpectedtobesettledwithin12monthsaftertheendofperiodin employeebenefitobligations Other longterm obligations are presented aspayables. measured attheamountsexpectedtobepaidwhenliabilitiesare settled.Allothershort-termemployeebenefit reporting dateare recognised inotherpayablesrespect ofemployees’services uptothereporting dateandare Liabilities forwagesandsalaries,bonusesannualleaveexpectedtobesettledwithin12monthsofthe obligations Short term x) Forw) v) personalu) t) s) user) onlyq) p) scheme. carrying amountdirectly. Receivablesincludeprepayments andloansmadeunderthediscontinued employeeshare Collectability oftradereceivables isreviewed regularly. Receivablesthatare uncollectableare writtenoff byreducing the interest method,lessprovision forimpairment.Trade receivables are generallydueforsettlementwithinoneyear. Trade receivables are recognised initiallyatfairvalueandsubsequentlymeasured atamortised costusingtheeffective Trade andotherreceivables used tomakestrategicdecisions.TheManagingDirector hasbeenidentified asthechiefoperatingdecisionmaker. Management hasdeterminedtheoperatingsegmentbasedonreports reviewed by theManagingDirector thatare Segment reporting equity asadeduction,netoftax,from theproceeds. Ordinary shares are classifiedasequity. Incremental costsdirectly attributabletotheissueofnewshares are shownin Contributed equity Routine operatingmaintenanceandrepairs are chargedasexpensesincurred. Maintenance discretion oftheentity, onorbefore theendoffinancialyearbutnotdistributedatbalancedate. Provision ismadefortheamountofanydividenddeclared, beingappropriately authorisedandnolongeratthe Dividends months ofbalancedate. provision oflandscapingandfencingrebates andotherincentives,towhichcustomersare generallyentitledwithin12 Provision ismadefortheestimatedliabilityarisingfrom obligationsinexistenceatbalancedatetocustomersforthe Provisions forcustomerrebates the costsofqualifyingassetsduringperiodwhenassetisbeingprepared foritsintendeduseorsale. Borrowing costsare recognised asexpensesintheperiodwhichthey are incurred, exceptwhere theyare includedin of theliabilityforatleast12monthsafterendreporting period. or expired. Borrowings are classifiedascurrent liabilitiesunlessthegroup hasanunconditionalrighttodefersettlement Borrowings are removed from thebalancesheetwhenobligationspecifiedincontractis discharged,cancelled the facilitywhendrawdownoccurs. probable thatsomeorallofthefacilitywillbedrawndown.Inthiscasefeeisdeferred untilthecommencementof Fees paidontheestablishmentofloanfacilitiesare recognised astransactioncostsoftheloantoextentthatitis amount isrecognised inprofit orlossovertheperiodofborrowings usingtheeffective interest method. measured atamortisedcost.Anydifference betweentheproceeds (netoftransactioncosts)andtheredemption Borrowings are initiallyrecognised atfairvalue,netoftransactioncostsincurred. Borrowings are subsequently Borrowings andborrowing costs the leaseterm.Therespective leasedassetsare includedinthebalancesheetasinvestmentproperties. Lease incomefrom operatingleaseswhere thegroup isalessor isrecognised inincomeonastraightlinebasisover from theleasedassets. charged totheprofit orlossintheperiodswhichtheyare incurred asthis represents ofbenefitderived thepattern transferred totheconsolidatedentityaslesseeare classifiedasoperatingleases.Operatingleasepaymentsare Leases ofproperty, plantandequipmentinwhichasignificantportionoftherisks rewards ofownershipare not Leases recognition. the financialyearandwhichare unpaid.Theseamountsare unsecured andare usuallypaidwithin30to60daysof These amountsrepresent liabilitiesforgoodsandservicesprovided totheconsolidatedentitypriorendof Trade andotherpayables 2015 ANNUALREPORT

93 E4 – Other Information 94 For personal use onlyE4 – Other Information aa) z) y) CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES ii. i. notes tothefinancialstatements. The adoptionofAASB119explainedandsummarisedbelow. Theotherstandards onlyaffected thedisclosures inthe AASB 2014-1AmendmentstoAustralianAccountingStandards arising fromAASB119(September2011);and AASB 119EmployeeBenefits(September2011)and2011-10AmendmentstoAustralianAccountingStandards commencing 1July2014: The group hasappliedthefollowingstandards andamendmentsforthefirsttimeannual reporting period New accountingstandards andinterpretations activities whichare recoverable from, orpayableto,taxationauthorities,are presented asoperatingcashflows. Cash flowsare presented onagross basis.TheGSTcomponentsofcashflowsarising from investingorfinancing recoverable from, orpayableto,thetaxationauthorityisincludedwithotherreceivables orpayablesinthebalancesheet. Receivables andpayablesare statedinclusiveoftheamountGSTreceivable orpayable.ThenetamountofGST expense. recoverable from thetaxationauthority. Inthiscaseitisrecognised aspartofthecostassetor Revenues, expensesandassetsare recognised netoftheamountassociatedGST, unlesstheGSTincurred isnot Goods andservicestax(GST) other incomeorexpenses. remeasured totheirfairvalueateachreporting date.Changes tofairvalueare takentoprofit orlossandare includedin Derivatives are initiallyrecognised atfairvalueonthedateaderivativecontractisentered intoandare subsequently Derivatives out below. 2015 reporting periods.Thegroup’s assessmentoftheimpactthesenewstandards andinterpretations isset Certain newaccountingstandards andinterpretations havebeenpublishedthatare notmandatoryfor30June New accountingstandardsnotyetadopted since themajorityofleaveisstillexpectedtobetakenwithinashortperiodafterendreporting period. basis andnolongersplitintoshorttermlongportion.However, theimpactofthischangewasimmaterial This changesthemeasurement oftheseobligations,astheentire obligationisnowmeasured onadiscounted service beingprovided, annualleaveobligationsare nowclassifiedaslong-termemployeebenefitsintheirentirety. obligations. Where theentitydoesnotexpectallannualleavetobetakenwithin12monthsofrespective The adoptionoftherevised AASB119EmployeeBenefitschangedtheaccountingforgroup’s annualleave Employee benefits Instruments AASB 9Financial Title ofStandard instruments standard. complete thenewfinancial latest amendmentsnow impairment model.These also introduced anew measurement rulesand to theclassificationand AASB madefurtherchanges In December2014,the rules forhedgeaccounting. liabilities andintroduces new financial assetsand and derecognition of classification, measurement Instruments addresses the AASB 9Financial Nature ofchange any suchliabilities. the group doesnothave through profit orlossand are designatedatfairvalue for assetsorliabilitiesthat only affects theaccounting as thenewrequirements financial assetsandliabilities the group’s accountingfor have asignificantimpacton date isnotexpectedto standard attheoperative The applicationofthe Impact after 1January2018. years commencingonor Must beappliedforfinancial / Dateofadoptionbygroup Mandatory applicationdate For personalbb) use only thousand dollars,orincertaincases,tothenearest dollar. Amounts inthefinancialstatementshavebeen rounded off inaccordance withthatClassOrder tothenearest Commission, relating tothe‘rounding off’ ofamountsinthefinancialstatements. The companyisofakindreferred toinClass Order 98/0100,issuedbytheAustralianSecuritiesandInvestments Rounding ofamounts consolidated entityinthecurrent orfuture reporting periodsandonforeseeable future transactions. There are nootherstandards thatare notyeteffective andthatare expectedtohaveamaterialimpactonthe Customers from Contractswith AASB 15Revenue Title ofStandard the dateofinitialapplication. that are notcompletedasof the newrulestocontracts They willonlyneedtoapply the comparativeperiod. 2017), i.e.withoutrestating initial application(e.g.1July onthedateof earnings adjustments inretained will recognise transitional Under thisapproach entities approach fortheadoption. modified retrospective The standard permits a of risksandrewards. replaces theexistingnotion – sothenotionofcontrol transfers toacustomer control ofagoodorservice revenue isrecognised when based ontheprinciplethat The newstandard is contracts. which coversconstruction services andAASB111 contracts forgoodsand AASB 118whichcovers of revenue. Thiswillreplace standard fortherecognition The AASBhasissuedanew Nature ofchange months. over thenexttwelve assessments oftheimpact will makemore detailed statements. Thegroup on thegroup’s financial impact ofthenewrules not abletoestimatethe At thisstage,thegroup is new rules. assessing theimpactof Management iscurrently Impact by thegroup: 1July2017. Expected dateofadoption after 1January2017. years commencingonor Mandatory forfinancial / Dateofadoptionbygroup Mandatory applicationdate 2015 ANNUALREPORT

95 E4 – Other Information 96 For personal use onlyE5 – Other Information share andnettangibleassetspershare. The ManagingDirector assessestheperformanceofoperatingsegmentbasedonnetprofit per aftertax,earnings All ofthegroup’s assetsare heldwithinAustralia. The group sellsproducts tothepublicandisnotreliant uponanysinglecustomerfor10%ormore ofthegroup’s revenue. of group level. outcome ofthosedecisionsonthegroup asawhole.Materialdecisionstoallocateresources are generallymadeatawhole The ManagingDirector informationtomakestrategicdecisions,basedprimarilyupontheexpectedfuture usestheinternal reportingThe internal provided totheManagingDirector includeskeyperformanceinformationatawholeofgroup level. business unitsordivisions. The group engagesinproperty investmentanddevelopmentwhichtakesplaceinAustralia.Thegroup hasnoseparate group operatesasinglebusinessingeographicarea andhencehasonereportable segment. The board hasconsidered thebusinessfrom bothaproduct andageographicperspectivehasdeterminedthatthe make strategicdecisions. The board hasdeterminedtheoperatingsegmentbasedonreports reviewed bytheManagingDirector thatare usedto E5. SegmentInformation CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES For personal use onlyThe individualfinancialstatementsfortheparent entityshowthefollowingaggregate amounts: the consolidatedfinancialstatements,exceptasdetailedinnotes(i)and(ii)below. The financialinformationfortheparent entity, Cedar Woods Properties Limited,hasbeenprepared onthesamebasisas E6. ParentEntityFinancialInformation Total comprehensive income Profit fortheyear Retained earnings Issued capital Shareholders’ equity Net assets Total liabilities Current liabilities Total assets Current assets Balance sheet ii. i. amounts receivable from orpayabletootherentitiesinthegroup. Assets orliabilitiesarisingundertax fundingagreements withthetaxconsolidatedentitiesare recognised ascurrent obligations topaytaxinstalments. the headentitywhenitisissued.The headentitymayrequire paymentofinterimfundingamountstoassistwithits The amountsreceivable/payable underthetaxfunding agreement are dueupon receipt ofthefunding advice from financial statements. legislation. Thefundingamountsare determinedbyreference totheamountsrecognised inthe100%subsidiaries’ and deferred taxassetsrelating tounusedtaxlossesthatare transferred totheparent underthetaxconsolidation the parent foranycurrent taxpayableassumedandare compensatedbytheparent foranycurrent taxreceivable The entitieshavealsoentered intoataxfundingagreement underwhichthe100%subsidiaries fullycompensate tax-consolidated group. deferred taxassetsarisingfrom unusedtaxlossesandcredits assumedfrom controlled entitiesinthe deferred taxamounts,CedarWoods Properties Limitedalsorecognises thecurrent taxliabilities(orassets)andthe tax-consolidated group continuestobeastandalonetaxpayerinitsownright.Inaddition toitsowncurrent and account fortheirowncurrent anddeferred taxamounts.Theseamountsare measured asifeachentityinthe The headentity, CedarWoods Properties Limited,andthecontrolled entitiesinthetax-consolidatedgroup consolidation legislation. Cedar Woods Properties Limitedanditswholly ownedAustraliancontrolled entitieshaveimplementedthetax Tax consolidationlegislation the parent entity’s profit orloss,ratherthanbeingdeductedfrom the carryingamountoftheseinvestments. to subsidiariesasanadditionalsource oflongtermcapital.Dividendsreceived from jointventures are recognised in investments intheformofinterest free loanswhichhavenofixed repayment termsandwhichhavebeenprovided parent entityinterests thatinsubstanceform partoftheparent entity’s investmentinthesubsidiary. Theseinclude Woods Properties Limited.Suchinvestmentsincludebothinshares issuedbythesubsidiaryandother Investments insubsidiariesandjointventure entitiesare accountedforatcostinthefinancialstatementsofCedar entities Investments insubsidiariesandjointventure 218,192 119,525 218,192 315,404 (89,411) 31,525 31,525 98,667 97,212 51,095 $’000 2015 2015 ANNUALREPORT (104,998) 201,263 116,716 201,263 306,261 (63,154) 32,104 32,104 84,547 53,893 $’000 2014

97 E6 – Other Information 98 For personal Fuse – Declaration andonly Independent Auditor’s Report Auditor’s Report Declaration andIndependent Section F: CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES F2. F1. Independent Auditor’s ReporttotheMembersofCedarWoods Properties Limited...... Directors’ Declaration...... 100 99 a) In thedirectors’ opinion: F1. Directors’Declaration For personal25 August2015 Perth, Western Australia Managing Director P SSadleir useThis declarationismadeinaccordance witharesolution ofthedirectors. 295A oftheCorporationsAct2001. The directors havebeengiventhedeclarationsbyManagingDirector andChiefFinancialOfficer required bysection AccountingStandardsthe International Board. FinancialReportingStandardsNote E4(a)confirmsthatthefinancialstatementsalsocomplywithInternational asissuedby b) only ii. i. accordance withtheCorporationsAct2001,including: the financialstatementsthatare setoutinthefinancialstatementssectionandnotesonpages44to97 are in and payable. there are reasonable grounds tobelievethatthecompanywillbeablepayitsdebtsasandwhentheybecomedue for thefinancialyearendedonthatdate;and giving atrueandfairviewoftheconsolidatedentity’s financialpositionasat30June2015andofitsperformance reporting requirements; and complying withAccountingStandards, theCorporationsRegulations2001andothermandatoryprofessional 2015 ANNUALREPORT

99 F1 – Declaration and Independent Auditor’s Report 100 For personal F2use – Declaration andonly Independent Auditor’s Report to themembersofCedarWoods PropertiesLimited F2. IndependentAuditor’s Report CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES aapproved Standards Legislation. scheme by limited Liability Professional under T:9238 +619238 3000, 3999, 8 www.pwc.com.au 8 F: +61 Brookfield Place,St 125 Georges PERTH Terrace, WA aapproved StandardsLegislation. scheme by limited Liability Professional under PricewaterhouseCoopers, 757 433 ABN52780 T:9238 +619238 3000, 3999, 8 www.pwc.com.au 8 F:+61 Brookfield Place,St 125 Georges PERTH Terrace, WA PricewaterhouseCoopers, 757 433 ABN52780 2001 Act the of requirements independence the with have complied we audit, our In conducting Independence 2001 Act the of requirements independence the with have complied we audit, our In conducting our audit opinion. Independence audit the that We believe our audit opinion. report. financial ofthe presentation the overall evaluating as audit the that We believe well as the directors, by made estimates accounting of the reasonableness and used policies accounting con internal entity’s the of effectiveness report. financial ofthe presentation the overall evaluating as onthe opinion an expressing of purpose the for but not circumstances, in the areappropriate that well as the directors, by made estimates accounting of the reasonableness and used policies accounting procedures audit design to in order report financial ofthe presentation fair and preparation entity’s con internal entity’s the of effectiveness the c to relevant control internal considers auditor the assessments, risk those In making onthe opinion an expressing of purpose the for but not circumstances, in the areappropriate that error. or fraud to due whether report, financial the of misstatement material of risks the of assessment procedures audit design to in order report financial ofthe presentation fair and preparation entity’s procedur The report. financial in the the c to relevant control internal considers auditor the assessments, risk those In making disclosures and the amounts about evidence audit obtain to procedures performing involves audit An error. or fraud to due whether report, financial the of misstatement material of risks the of assessment procedur The report. financial in the misstatement. material is freefrom report financial the whether assurance obtain reasonable disclosures and the amounts about evidence audit obtain to procedures performing involves audit An pla and engagements audit to relating requirements ethical with relevant comply we that require standards Those Standards. Auditing Australian with in accordance audit our misstatement. material is freefrom report financial the whether assurance obtain reasonable responsibili Our pla and engagements audit to relating requirements ethical with relevant responsibilityAuditor’s comply we that require standards Those Standards. Auditing Australian with in accordance audit our responsibili Our responsibilityAuditor’s accordance in view fair and true a gives that report financial ofthe preparation the for responsible are company the of The directors responsibilityforthefinancial report Directors’ accordance in view fair and true a gives that report financial ofthe preparation the for responsible are company the of The directors co responsibilityforthefinancial report Directors’ it the entities and company the comprises entity The consolidated entity). (theconsolidated Limited Properties Woods forCedar declaration directors’ the and notes explanatory other policies, accounting co the for statement flow cash equity consolidated and it the entities and company the comprises entity The consolidated entity). (theconsolidated Limited in changes of statement consolidated income, comprehensive other and loss or profit of statement Properties Woods forCedar declaration directors’ the and notes explanatory other policies, accounting consolidated the 2015, 30June at as sheet balance consolidated the comprises which company), the for statement flow cash equity consolidated and Properties Cedar Woods of report financial accompanying the audited We have in changes of statement consolidated income, comprehensive other and loss or profit of statement financial report the on Report consolidated the 2015, 30June at as sheet balance consolidated the comprises which company), Properties Cedar Woods of report financial accompanying the audited We have Properties Limited financial report the on Report Independent auditor’s report to membersthe of Cedar Woods Properties Limited Independent auditor’s report to membersthe of Cedar Woods Statements 101 AASB Standard Accounting with accordance in state, also directors err or fraud to due whether misstatement, material from is free that financial report Statements ofthe preparation the enable to is necessary determine the directors as control internal such for and 101 AASB Standard Accounting with accordance in state, also directors err or fraud to due whether misstatement, material from is free that financial report ofthe preparation the enable to is necessary determine the directors as control internal such for and ntrolled at year’s end or from time to time during the financial year. financial the time during to time from or end year’s at ntrolled year. financial the time during to time from or end year’s at ntrolled . .

, that the financial statements comply with International Financial Reporting Standards. Reporting Financial International with comply statements financial , the that Standards. Reporting Financial International with comply statements financial , the that ty is to express an opinion on the financial report based on our audit. We conducted Weconducted audit. our based on report financial onthe opinion an express is to ty Weconducted audit. our based on report financial onthe opinion an express is to ty

evidence we have obtained is sufficient and appropriate to provide a basis for a provide to appropriate sufficient and is obtained have we evidence basis for a provide to appropriate sufficient and is obtained have we evidence

with Australian Accounting Standards and the the and Standards Accounting Australian with the and Standards Accounting Australian with

es selected depend on the auditor’s judgement, including the the including judgement, the auditor’s on depend es selected the including judgement, the auditor’s on depend es selected trol. An audit also includes evaluating the appropriateness of of appropriateness the evaluating includes also audit An trol. of appropriateness the evaluating includes also audit An trol.

6000, GPO6000, BoxD198,6840 PERTH WA GPO6000, BoxD198,6840 PERTH WA year ended on that date, a summary of significant significant of asummary date, that on ended year significant of asummary date, that on ended year

Presentation of Financial ofFinancial Presentation ofFinancial Presentation n and perform the audit to to theaudit perform n and to theaudit perform n and Corporations Act 2001 Act Corporations 2001 Act Corporations Limited (the (the Limited (the Limited or. In Note E4, the the E4, Note In or. the E4, Note In or. Corporations Corporations

onsolidated onsolidated onsolidated

For personal use only June 2015 complies with section 300A of the of 300A section with 2015June complies 30 yearended the for Limited Properties Woods Cedar of report remuneration the opinion, In our opinion Auditor’s 2001 the of 300A with section in accordance report remuneration ofthe presentation 30 year ended the report for thedirectors’ of 33 to 20 pages in included report remuneration the audited We have Remuneration Report the on Report (a) opinion: In our opinion Auditor’s Properties Limited (cont’d) Independent auditor’s report to the conducted in accordance with Australian Auditing Standards. Auditing Australian with in accordance conducted (b) PricewaterhouseCoopers Douglas Craig Douglas Partner

. Our responsibility is to express an opinion on the remuneration report, ba report, remuneration onthe anopinion express is to responsibility . Our Act 2001 Act the with is inaccordance Limited Properties Woods Cedar of report the financial disclosed in Note E4. in Note disclosed the finan (ii) (i)

2015 and of its performance for the year ended on that date; and date; that on ended year forthe performance its of 2015 and Interpretations) and the and Interpretations) Accounting Australian the (including Standards Accounting Australian with complying theconsolidated of view fair and true giving a

June 2015. The directors of the company are responsible for the preparation and and preparation forthe areresponsible thecompany of directors The 2015. June

, cial report and notes also comply with International Financial Reporting Standards as as Standards Reporting Financial International with comply also notes and report cial including:

Corporations Regulations 2001 Regulations Corporations

Corporations Act 2001 Act Corporations

membersof Cedar Woods entity's financial position as at 30 June 30June at as position financial entity's

.

.

2015 ANNUALREPORT Corporations Act Act Corporations sed on our audit audit our on sed Corporations 25 August 2015 25 August Perth 2

101 F2 – Declaration and Independent Auditor’s Report 102 For personal use onlyG – Shareholders’ Information G2. f) e) d) c) b) a) G1. share registerandpastfinancialperformance. This sectionprovidesinformationforshareholdersondistributionsandothershareholderbenefits,thecompositionof Shareholders’ Information Section G: CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES Five yearfinancialperformance...... Shareholder information...... Shareholders’ timetable...... Dividend re-investment planandBonusshare plan...... Electronic paymentofdividends...... Shareholder discountscheme...... Dividend anddividendpolicy...... Investors’ Summary...... 106 104 103 103 103 103 103 103 b) a) G1. Investors’Summary For personale) d) c) use only main termsandconditionsfollows: any residential lot,or2.5%off thelistedpriceofhousesorapartmentsatgroup’s developments.Asummaryofthe The group operatesashareholder discountschemewhichentitlesshareholders toa5%discountoff thelistedpriceof Shareholder discountscheme financial yearis16centspershare, fullyfranked.Thedividendwillbepaidon30October2015. The dividendpolicyistodistributeapproximately 50%ofthefullyearnetprofit aftertax.Thefinaldividendforthe2015 Dividend anddividendpolicy Shareholders’ timetable final dividendforthe2015financialyear. accordance withtherulesofeachplan.Thedividendre-investment planandbonusshare planare inoperationforthe the group’s capital.Shareholders canchangetheirparticipationstatusintheplansbycompletinganelectionform The dividendre-investment planandbonusshare planare operatedfrom timetoaspartofmeasures tomanage Dividend re-investment planandBonusshare plan Computershare Investor ServicesPtyLtd,byvisitingwww.computershare.com.au. Shareholders wishingtotakeadvantageofthisfacilityforthefirsttimeshouldcontactCompany’s Share Registrar, by direct credit. Paymentsare electronically credited onthedividendpaymentdateandconfirmedbymailedadvice. shareholders. Shareholders maynominatea bank,buildingsocietyorcredit unionaccountforthepaymentofdividends The group continuestooffer theelectronic paymentofdividends,whichisnowinusebythemajorityour Electronic paymentofdividends the fulltermsandconditions. The aboveisasummaryofthemainconditionsandshareholders shouldapplytothecompanyorvisitwebsitefor Full yearresult anddividendannouncement Third quarterupdate Interim dividendpaymentdate Half-year result announcement Annual GeneralMeeting First quarterupdate Final dividendpaymentdate Share register closesfordividend(Record date) Dividend announcement • • • The shareholder discount schemedoesnotapplytolotsordwellingsatjointventure projects. to anystatutoryrestrictions; and There isnolimittothenumberoflotsordwellingswhichashareholder maypurchase underthescheme,subject dwelling toqualifyforthediscount; Shareholders mustholdaminimumnumberof1,000shares foratleast12monthsbefore purchasing alotor 2015 ANNUALREPORT 9 November2015 30 October2015 26 August2015 2 October2015 February 2016 October 2015 29 April2016 August 2016 May 2016

103 G1 – Shareholders’ Information 104 For personal use onlyG1 – Shareholders’ Information f) CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES ii) i) The shareholder informationsetoutbelowwasapplicableat31August2015. Shareholder Information Twenty register asdisclosedintheshare shares ofordinary largestshareholders There were 221holdersoflessthanamarketableparcel ofshares. Distribution of ordinary shares Distribution ofordinary Australian ExecutorTrustees Limited(No2Account) Ramneg PtyLtd(LangSuperannuationFund) Mr JHTucker &Mrs KJTucker (Tucker FamilySuper FundA/C) Croftwell PtyLtd Leblon Holdings Pty Ltd (William HamesSuperFundA/C) Leblon HoldingsPtyLtd(William AMP LifeLimited HSBC CustodyNominees(Australia)Limited(NT-Comnwlth SuperCorpA/C) Mr PaulSadleir BNP ParibasNomsPtyLtd(DRP) Helen KayePoynton Citicorp NomineesPtyLtd Australian ExecutorTrustees Limited(No1Account) Beach CorporationPtyLtd Australian FoundationInvestmentsCompanyLimited Zero NomineesPtyLtd 100,000 andover Westland Group HoldingsPtyLtd 10,001 –100,000 National NomineesLimited 5,001 –10,000 Hamsha NomineesPtyLtd(TheNowraProjects UnitFundA/C) HSBC CustodyNominees(Australia)Limited 1,001 –5,000 JP MorganNomineesAustraliaLimited 1 –1,000 54,700,193 1,045,445 1,085,857 1,677,095 1,846,715 1,894,742 2,384,963 3,859,186 4,150,921 4,639,980 5,880,355 6,218,138 7,530,624 8,334,483 of holders of shares 430,863 442,977 460,002 525,209 628,482 696,172 967,984 Number Number 2,630 1,042 403 342 786 57

78,891,681 62,651,606 10,605,890 Percentage 2,532,209 2,774,081 of shares of shares 327,895 Number 69.34 10.56 0.55 0.56 0.58 0.67 0.80 0.88 1.23 1.33 1.38 2.13 2.34 2.40 3.02 4.89 5.26 5.88 7.45 7.88 9.55

For personal use only iv) iii) 1 shall haveonevote. On ashowofhandseverymemberpresent inpersonorbyproxy shallhaveonevoteanduponapolleachshare shares Ordinary The votingrightsattachingtoeachclassofequitysecuritiesare setoutbelow: Voting rights As disclosedinsubstantialshareholder noticeslodgedwiththeASXat31August2015. shares ofordinary Substantial shareholders Percentage ofissuedcapitalheldasatthedatenoticeprovided. Westoz FundsManagementPtyLtd Westpac BankingCorporation Robert StanleyBrown andrelated entities William GeorgeHamesandrelated entities William 4,493,661 5,635,833 7,967,627 9,314,668 of shares Number 2015 ANNUALREPORT

Percentage of shares 10.87 12.90 6.13 7.19 1

105 G1 – Shareholders’ Information 106 For personal use G2only – Shareholders’ Information All figures in$’000exceptwhere stated G2. FiveYear FinancialPerformance CEDAR WOODS PROPERTIES LIMITED CEDAR WOODSPROPERTIES Investment ininventoryduringyear onEquity Return Interest cover(times) EBIT Margin Dividend pershare, fullyfranked(cents) pershareEarnings (cents) Key PerformanceMeasures Total assets Financial Position Net profit aftertax Income taxexpense Operating profit before tax Finance costs Share price–endofyear($) Net tangibleassetsbackingpershare ($) Number ofshares onissue–endofyear(‘000) Shareholders’ equity Total liabilities beforeEarnings interest andtax Proceeds from investmentProperties Revenue from operations Financial Performance Earnings pershareEarnings growth % Stock Marketcapitalisationat30June Net bankdebttoequity Net bankdebt Total shareholder return % Dividend growth %(paiddividend) Share pricegrowth % Number ofemployeesat30June Financial Year Returns toshareholdersReturns over1,3,&5years 120,620 285,605 383,330 178,637 414,970 78,892 97,725 42,585 15,238 57,823 61,220 36,000 27,909 14.9% 34.3% 3,397 9.8% 2015 28.0 54.3 5.26 3.62 9.9 62 148,347 158,149 261,601 409,948 214,465 572,639 78,336 40,313 15,253 55,566 56,172 32,602 15.4% 26.2% 12.5% 2014 27.5 54.4 10.4 7.31 3.34 606 56 - 145,474 207,744 301,024 172,751 379,269 73,360 93,280 36,337 15,105 51,442 53,022 37,762 17.5% 30.7% 18.2% 1 Year 1,580 (23.5) (28.0) 2013 26.0 49.9 12.6 5.17 2.83 (0.1) 382 1.8 54 184,626 238,314 170,474 256,995 72,190 53,688 34,250 15,023 49,273 53,092 97,401 18.6% 31.1% 3 Year 3,819 1,271 3,822 2.1% 2012 25.0 53.2 3.56 2.56 21.5 13.9 8.8 0.7 6.1 48 104,046 102,348 129,549 233,595 131,839 247,272 61,818 28,060 12,180 40,240 42,106 55,100 21.7% 31.9% 42.5% 5 Year 1,866 2011 23.0 45.8 4.00 2.10 13.4 26.0 16.5 18.0 9.1 41 - Corporate Directory

A.B.N. 47 009 259 081

Directors William George Hames, BArch (Hons) MCU (Harvard) LFRAIA, MPIA, FAPI (Econ) – Chairman Robert Stanley Brown, MAICD, AIFS – Deputy Chairman Ronald Packer, BCom (UWA), FAICD, Solicitor Supreme Court of England & Wales Stephen Thomas Pearce, BBus(ACC), Grad Dip (Admin), FCA, AGIA, MAICD Paul Stephen Sadleir, BE, MBA, AAPI, FAICD – Managing Director Timothy Robert Brown, BA, LLB, M.Fin, Post Grad Dip (Phil) (Alternate for R S Brown)

Company Secretary Paul Samuel Freedman, BSc, CA, GAICD

Registered office and principal place of business Ground Floor, 50 Colin Street WEST PERTH WA 6005

Postal address: P.O. Box 788 West Perth WA 6872

Phone: (08) 9480 1500 Fax: (08) 9480 1599 Email: [email protected] Website: www.cedarwoods.com.au

Share registry Computershare Investor Services Pty Ltd Level 11, 172 St Georges Terrace PERTH WA 6000

Auditor PricewaterhouseCoopers 125 St Georges Terrace PERTH WA 6000

Securities exchange listing Cedar Woods Properties Limited shares are listed on the Australian Securities Exchange (ASX)

For personal use only use personal For ASX code: CWP 107

Annual general meeting Venue: Kings Park Function Centre, Fraser Avenue, West Perth WA 6005 Time: 10.00am Date: Monday 9 November 2015

2015 ANNUAL REPORT For personal use only use personal For

www.cedarwoods.com.au