ANNUAL REPORT 2019

The Avenues Cnr Tenth Avenue & Devonport Road, Tauranga. Ph 07 571 0400. Bayswater 60 Maranui Street, Mt Maunganui. Ph 07 547 4047. Coastal Villas Spencer Russell Drive, Paraparaumu. Ph 04 296 6333. Crestwood 38 Golf Road, New Lynn, Auckland. Ph 09 826 2000. Dannemora Gardens 30 Matarangi Road, Botany Downs, Auckland. Ph 09 272 2467. Edgewater Village 14 Edgewater Drive, Pakuranga, Auckland. Ph 09 577 1600. Forest Lake Gardens 2 Minogue Drive, Te Rapa, Hamilton. Ph 07 849 8243. Greenwich Gardens 5 Greenwich Way, Unsworth Heights, Auckland. Ph 09 440 6790. Greenwood Park 10 Welcome Bay Road, Welcome Bay, Tauranga. Ph 07 544 7500. Gulf Rise 89 Symes Drive, Red Beach, Auckland. Ph 021 599 550. Hibiscus Coast Village 101 Red Beach Road, Red Beach, Auckland. Ph 09 421 9718. Hillsborough Heights 1381 Dominion Road Extension, Mt Roskill, Auckland. Ph 09 626 8060. Highlands 49 Aberfeldy Avenue, Highland Park, Auckland. Ph 09 533 0600. Kapiti Village 1 Henley Way, Paraparaumu. Ph 04 296 1790. Longford Park Village 1 Longford Park Drive, Takanini, Auckland. Ph 09 295 0040. The Orchards 123 Stanley Road, Glenfield, Auckland. Ph 09 444 4010. Oakridge Villas 30 Oakridge Drive, Kerikeri. Ph 09 407 8549. Palmerston North Village Cnr Carroll & Fitchett Streets, Palmerston North. Ph 06 350 6400. Papamoa Beach Village Cnr Parton Road & Te Okuroa Drive, Papamoa. Ph 07 542 1933. Powley 135 Connell Street, Blockhouse Bay, Auckland. Ph 09 627 0700. The Poynton 142 Shakespeare Road, Takapuna, Auckland. Ph 09 488 5700. Pinesong 66 Avonleigh Road, Titirangi, Auckland. Ph 09 817 1800. Somervale 33 Gloucester Road, Mt Maunganui. Ph 07 572 9020. 7 Saint Vincent 7 St Vincent Avenue, Remuera, Auckland. Ph 09 524 1420. Waitakere Gardens 15 Sel Peacock Drive, Henderson, Auckland. Ph 09 837 0512. CONTENTS

COMPANY OVERVIEW What We Do 05 Financial and Operating Highlights 07 Our Year 09 Chair and CEO Report 11 Q&A with Chief Executive Glen Sowry 15 How We Create Value 17 • Building for the Future 21 • Exceptional Communities 31 • Passionate about our Customers 35 • People Powered 38 • Serious about Sustainability 41 Our Board of Directors 43 Our Executive Team 45 Five Year Performance Summary 47 Corporate Governance Statement 49

GROUP FINANCIAL STATEMENTS Consolidated Statement of Comprehensive Income 56 Consolidated Statement of Movements in Equity 57 Consolidated Balance Sheet 58 Consolidated Cash Flow Statement 59 Notes to the Group Financial Statements 61 Independent Auditor’s Report 92

STATUTORY INFORMATION Interests Register 99 Director Information 102 Other Statutory Information 105 Shareholder Information 107 Directory 109

This Annual Report is signed for and on behalf of the Board of the Company by:

K.R. Ellis A.B. Ryan Chair Director 5 September 2019 5 September 2019

3 METLIFECARE LIMITED ANNUAL REPORT 2019 4 AT A GLANCE

25 VILLAGES

DEVELOPMENT 8 LOCATIONS VILLAGE 97% OCCUPANCY METLIFECARE MORE THAN WHAT WE DO 5600 RESIDENTS 1000 STAFF

We are in the business of providing CARE rewarding lifestyles for New Zealand’s 96% OCCUPANCY older people, by developing, owning and operating high-quality retirement villages.

Since 1984, we have been an industry leader in providing vibrant social communities and an outstanding level of care for our residents. OF ESTABLISHED CARE HOMES HAVE 100% 3 OR 4 YEAR MOH CERTIFICATION*

* Ministry of Health certification at time of publication

AT A GLANCE DEVELOPMENT LAND BANK 3984 INDEPENDENT LIVING HOMES 1104 INDEPENDENT LIVING HOMES AND 494 CARE APARTMENTS CARE APARTMENTS

CARE BEDS AND SUITES 223 CARE BEDS 440 AND SUITES

5 METLIFECARE LIMITED ANNUAL REPORT 2019 6 FINANCIAL OPERATING HIGHLIGHTS HIGHLIGHTS Year to 30 June 2019 Year to 30 June 2019

Net Profit village occupancy After Tax $39.2m 97%

care occupancy Net Underlying 96% Profit1 before tax $90.5m resales margin Underlying 35% Operating Cash Flow1 $55.9m development margin Investment 21% in new and existing village $240m new homes and care development 182 beds delivered

Total Assets occupation right $3.5bn 470 agreements settled

Embedded care capacity increase Value per Unit1 $281k 19%

increase in settlement Total Dividend per 7% volume for Year 11cents share 81% staff retention rate 1 These measures are non-GAAP measures. The definitions of these and other non-GAAP financial measures in this report can be found in the FY19 results presentation. A copy of the FY19 results presentation can be found on Metlifecare’s website: www.metlifecare.co.nz/investor-centre/investor-presentations

7 METLIFECARE LIMITED ANNUAL REPORT 2019 8 OUR YEAR

• Pinesong care suites certified JUL 18 • Earthworks commence at Orion Point JAN 19

• Greenwich Gardens Kowhai Building opens • Works commence at Crestwood on • Sponsorship of the Auckland Philharmonia 13 new homes AUG 18 Orchestra’s ‘Unwrap the Music’ Series FEB 19 commences

• AUT appointed to develop the ‘Your Best You’ resident wellbeing programme • Bayswater bar area upgrade • Winner at NZ Aged Care Association awards SEP 18 • Cheese Scone the Movie World MAR 19 for the best Built and Grown Environment. Premiere at The Poynton Finalist for two other awards

• Botany land purchase - extra land to expand site and provide increased golf course • Crestwood pop-up café opens frontage OCT 18 • Staff Wellbeing Programme and Portal APR 19 • Partnership with Surrogate Grandparents to launched hold firstNew Zealand Grandparents Day

• Waitakere Gardens Rosecourt building • Community consultation with Beachlands regeneration complete and Maraetai residents NOV 18 • Granted Standing Consent by the OIO MAY 19 • Kapiti Village café upgrade • Pinesong café upgrade

• Gulf Rise display home opens • Earthworks commence at Pohutukawa • Botany community consultations Landing, Beachlands DEC 18 • Settlement of Oakridge Villas land purchase JUN 19 • Hibiscus Coast Village café upgrade of adjacent site for village expansion

9 METLIFECARE LIMITED ANNUAL REPORT 2019 10 Glen Sowry, CEO, Kim Ellis, Chair 1 outperformed both the market and our unit valuations. In care, Underlying Profit Before Tax ($m) the higher contribution was also driven by consistently high occupancy and strong premium revenue growth.

These gains were partially offset by increased costs associated with village and care expansion, and increased property 90.5 82.0 87.2 investment at our villages. 66.1 Operating cash flow improved 8% to $119.9 million, with 52.4 underlying operating cash flow (which excludes development

sales, net interest and buyback costs) strong at $55.9 million. FY15 FY16 FY17 FY18 FY19 The fair value of Metlifecare’s investment properties grew by $53.9 million, lower than last year’s $132.7 million and reflective Underlying Operating of the easing rate of housing market price growth over the Cashflow1 ($m) year. Accordingly, reported net profit after tax, which includes the non-realised fair value increase in the Company’s assets, was $39.2 million, 68% lower than last year’s $122.6 million. 55.9 This result was also impacted by a $16.3 million non-cash 50.6 52.1 54.7 impairment related to the construction of the two new care homes at The Avenues and Papamoa Beach Village, which were 34.5 completed in June 2019.

The value of the Company’s total assets at balance date FY15 FY16 FY17 FY18 FY19 increased by 7% to $3.5 billion, driven by the 8% lift in investment property value. Total Assets ($m) The sales of new homes were pleasing, with 116 new ORAs settled over the year, 18% higher than last year. An additional 45 homes were under contract at balance date. The average selling 3,516 3,287 price per new home increased by 5% to $689,000, generating a 2,959 total realised development margin of $16.9 million, or 21%. 2,586 Over the year we also settled 354 resales of ORAs, up 3% on 2,227 last year, with a further 70 homes under contract at balance date. The average selling price per home rose 6% to $572,000 CHAIR AND care homes over the year. This rapid expansion has in no way and drove a 15% lift in realised resales gains to $71.5 million. FY15 FY16 FY17 FY18 FY19 compromised quality, with two thirds of our established care homes now having a ‘gold standard’ Ministry of Health four- INCREASED DIVIDEND CEO REPORT year audit certification. The steep improvement in quality in the Net Assets per Share past couple of years is a testament to our resident-led model of In line with Metlifecare’s policy to distribute 30% to 50% of care as well as the expertise and commitment of our care team. underlying operating cash flow in dividends, the Board has declared a final dividend of 7.25 cents per share, bringing the $6.96 We have also celebrated development milestones with the $6.89 total for the year to 11 cents, 10% higher than last year. The $6.43 completion of the final stage of Papamoa Beach Village, and unimputed dividend will be paid on 20 September 2019, with welcoming the first residents to our new-generation Gulf Rise $5.32 Welcome to Metlifecare’s Annual Report a record date of 13 September 2019. Village at Red Beach. Papamoa Beach Village’s residents are for the 2019 financial year. This year, as we $4.29 pleased with their new community centre as well as the addition celebrate 35 years of proven experience of a new care home and dementia wing at the village. PRUDENT CAPITAL MANAGEMENT In the period under review, $240 million was invested in land as a retirement village operator, we are Overall, 2019 has seen us achieve strategic milestones FY15 FY16 FY17 FY18 FY19 purchases, village development, reinvestment projects and while also continuing to deliver on the promise of providing pleased to report continued advancement care homes. exceptional service and care for residents. Dividend History towards our vision to create enriching living Metlifecare’s gearing increased to 15% at balance date as the Interim Dividend cps result of the increased development activity. This level of Full Year Dividend cps 11.00 experiences for older people. FINANCIAL OVERVIEW Final Dividend cps 10.00 gearing remains the lowest of the publicly listed operators, A solid operating performance over the year lifted underlying 8.05 It has been a year of steady progress, highlighted by improved highlighting the strength of Metlifecare’s balance sheet and its Declared in: 7.25 profit before tax1 to $90.5 million, 4% higher than the same 6.75 operating earnings and ongoing investment in our village capacity to fund ongoing targeted growth. 5.75 period last year. 5.80 environments, resident experiences and people. 4.50 In December 2018, we completed a review of the Company’s The increase in profit was driven primarily by solid revenue 4.00 We are especially pleased with our sales performance and funding structure for the next phase of accelerated growth, 3.00 growth, up 14% to $131 million as the result of increased 3.25 3.75 continued high levels of village and care demand, which reflect resulting in the bank debt facility being increased to $450 1.75 2.25 settlement volumes and margins, as well as a significantly 1.50 the quality and desirability of Metlifecare’s offering in tighter million. With year-end drawn debt of $278 million, this higher contribution from our care business. We were pleased FY15 FY16 FY17 FY18 FY19 market conditions. provides significant additional headroom to support our future to note the continued strong demand for our villages in development pipeline while maintaining the Company’s prudent Our care business has enjoyed a strong year of growth, challenging market conditions. In settling 7% more occupation 1 These are non-GAAP measures. adding 19% to its capacity with the completion of three new right agreements (ORAs) with 6% average price increases, we

11 METLIFECARE LIMITED ANNUAL REPORT 2019 12 Resales & Average ORA Price ($000) • Being passionate about our customers 644 PEOPLE LOOKING AHEAD 574 615 • Harnessing the power of our people 429 471 357 The Board wishes to acknowledge and thank Metlifecare’s Metlifecare’s ambition is to create living experiences which 320 333 The significant investment we are making in village 243 260 entire team of employees and contractors for the way they enrich the lives of residents and empower them to live their environments, resident programmes and care is resonating bring to life our values of respect, passion, teamwork and best life. We are highly aware that with the new generation 104 132 90 well. We are not only receiving great feedback from of retirees now entering the market, the preferences 88 88 integrity, and go the extra mile to enrich the lives of our residents, they are also spreading the word to others. residents. We wish to especially acknowledge the valued and expectations of our customers are increasingly 314 259 233 255 264 While this investment has created some short-term impacts contributions of Jan Martin, our long-serving General changing. Innovation in design, construction and customer on earnings, we are seeing the benefits of this approach Manager Sales who has recently retired, and Charlie experiences will be key to sucess in the future. FY15 FY16 FY17 FY18 FY19 through strong applications, increased resident referrals Anderson, our General Manager Development & Assets ILU Volume SA Volume Accordingly we will continue investing in our villages, our ILU Price and positive resident satisfaction, with the impact expected SA Price who is leaving in September. We recently welcomed care environments and resident experiences to ensure to continue in the longer term. our new General Manager Sales, Sandra King, who will the quality of our villages delights existing residents and Our resident-directed model of care is now recognised as continue to build the capability and momentum of our upholds the same promise for residents of the future. one of the highest-quality in the sector. The 96% average sales operation. Development Sales & Average Having thoroughly reviewed our development programme ORA Price ($000) occupancy of our care homes reflects the value placed We are now seeing real benefits from the Company’s against changing market conditions, we have full by residents and their families on our care, as well as 694 711 ongoing investment in its people. Our employees are 634 confidence that our new villages will provide a compelling 580 584 the choice of options across the group. Our premium more engaged and we have further improved our overall proposition to attract and delight residents in the years to 453 offering continues to grow rapidly, with premium revenues employee retention to 81%. Our reputation as a sector- come. Programme timings have been recalibrated, and 390 381 402 373 quadrupling in the last two years and set to increase as the 5 leading employer of choice is firmly established and we are the development and expansion of eight new and existing 2 new care homes reach occupancy targets. 10 attracting high calibre people with aligned values to all parts villages is steadily progressing. We will monitor progress to 2 18 While the wellbeing of our residents has always been top- of the business. ensure the timing and staging of our developments remains 133 128 80 80 106 of-mind at Metlifecare, we have now taken it to the next We see ongoing investment in employee development as prudent in a tight construction environment. level by establishing a partnership with AUT to develop FY15 FY16 FY17 FY18 FY19 critical to our continuous improvement. In the past year Our growth momentum will build as we plan the next ‘Your Best You’ - a tailored wellbeing programme for ILU Volume SA Volume around 80% of our people participated in 11,400 hours of phase of development through the coming years, including ILU Price SA Price residents based on six dimensions of wellbeing (see training and development and we are proud that 38% of our strengthening our land bank through further strategic page 37). Our residents are not only receiving great workforce is engaged in long-term leadership development land acquisitions. This expansion will be underpinned by enjoyment from a wide variety of activities but are also programmes. a strong balance sheet with low gearing and attractive building a better understanding of how different activities funding options available to us. Realised Resale Gain can contribute to their overall wellbeing. We also continue to invest in the health, safety and 80 250 wellbeing of our people. A strong health and safety Thank you to our shareholders, residents and our 70 culture is well embedded across the organisation and our committed staff, who continue to support Metlifecare as 202 200 BUILDING FOR THE FUTURE 60 182 contractor partners. Pleasingly, Metlifecare reported its they have for the past 35 years. 172 Metlifecare’s development programme, which includes 50 150 lowest annual total ACC claims in five years (for the 2018 projects currently under way at eight villages, made steady We often say that ours is a people business and that will 40 71.5 levy year) and has adopted the Accredited Employer 111 62.3 progress over the year. We completed 182 new homes and remain core to our purpose in the years ahead as we adapt 30 55.3 100 Programme which, in the event of an injury, will enable 79 46.5 care beds during the year, with another 33 new homes, and evolve to embrace changing customer needs and

Resale Gain ($m) 20 better support and management of injured staff. 31.0 50 originally anticipated for completion by year end, to be expectations. 10 completed in the first half of FY20. We also recognise the increasing importance of staff 0 0 Resale Gain per Setttlement ($000) wellbeing, given the impact that healthy and happy FY15 FY16 FY17 FY18 FY19 We have strengthened our development pipeline with two employees have on our residents’ daily lives. The launch new sites, adjacent to our existing greenfield site at Botany of our new staff wellbeing programme has been positively and the existing village in Kerikeri. These purchases will received by employees and their families, with strong levels enhance the development opportunity at each location and of participation. We look forward to receiving feedback add considerable value to both sites. from staff and developing the programme over time to gearing profile. At the half year, we advised that we would In May 2019, Metlifecare became the first retirement village achieve the best outcomes for our people. Kim Ellis be exploring a potential retail bond issue, with a view to operator to be granted a standing consent for residential Chair land purchases by the Overseas Investment Office (OIO). replacing a portion of bank debt and achieving greater BOARD This consent acts as a form of ‘pre-approval’ and allows diversity and tenor of funding. Preparatory work is now The Board’s workplan has continued at pace during the us to make up to 12 land transactions of up to 120 hectares completed. of non-sensitive residential land in the next three years, year with the depth of directors’ diverse experience, without requiring individual OIO approvals. This will skills and perspectives providing a strong foundation for ENRICHING THE LIVES OF OUR provide greater certainty to vendors and quicker settlement robust discussion and decision making. The focused sub- RESIDENTS timeframes. committee structure continues to provide strong leadership and excellent contributions in the key focus areas for the Metlifecare’s ambition is to create living experiences which As the construction environment has tightened, we have business, drawing on the extensive and highly relevant skills Glen Sowry enrich the lives of residents and empower them to live the continued to monitor the development programme to of the members. CEO way they choose. We aim to achieve this through four key ensure it remains prudent. While some shorter-term timing At this year’s Annual Shareholders’ Meeting, Carolyn Steele outcomes: changes have been made to the programme which may affect the build rate in the coming year, there is no change will be standing for re-election, with the unanimous support • Building for the future to our longer-term growth ambitions, and development of the Board. • Creating exceptional communities momentum continues across all sites.

13 METLIFECARE LIMITED ANNUAL REPORT 2019 14 Q: Where do you see the future of Q: After achieving strong momentum in development retirement villages – especially with delivery, Metlifecare’s build rate has slowed. Are you the next generation starting to set their still committed to growth? sights on village living? A: Yes, we certainly are committed to profitable growth. A: We are already welcoming the first After delivering 182 units and beds this financial year, of the baby boomer generation into our we have re-assessed our future developments and are villages. By understanding their changing planning to deliver some of the projects slightly later than expectations, we will be increasing our we had originally envisaged. Given the current slower focus on innovating for the resident real estate market and construction cost environment, experience in the period ahead. We are our proposed future development delivery numbers will confident that our product is already maximise profitable development outcomes. We are unique and highly attractive, as is the recruiting for a new General Manager Development who exceptional personalised customer care will lead this development programme. Charlie Anderson, Q&A WITH we provide. We’re constantly looking our outgoing General Manager, is leaving shortly having to the future and trying to anticipate established a high-performing team of development what future customers will want to see managers who are working hard to optimise our current CHIEF in our villages in years to come so that developments, ensuring maximum shareholder value in a their expectations are not only met, complex construction environment. but exceeded. We remain committed EXECUTIVE to developing more sustainable Q: What are you focusing on for FY20? communities, both through construction and through responsible consumption of A: Creating exceptional experiences for customers GLEN SOWRY resources. remains a key priority as this is why we exist as a business. We will look to continue innovating in a manner that adds long-term value to Metlifecare. The incoming Q: Metlifecare has really increased its focus on care – General Manager of Sales, Sandra King, brings new what impact is this having on the business? ideas and energy, along with a fresh perspective, to the Q: The housing market has its challenges at the moment business. Metlifecare’s Chief Executive A: We have really lifted the emphasis on the quality - how has this affected demand for your villages? Officer Glen Sowry joined the and breadth of care across our portfolio in the last two to Targeted land acquisitions, profitable developments and A: Interestingly, applications are up on the prior year. three years. We take great pride in our unique homestead sales are particular areas of focus over the coming year Company in April 2016. We This is very encouraging as it means that the Metlifecare model of care homes where residents and their families and beyond. We have also re-aligned our sales team to ask Glen about this year’s brand and experience continues to attract people to buy interact in homely common areas – very different to increase our investment and focus on selling our new achievements and what lies into our villages. The housing market conditions have traditional care home configurations. We are also focusing village developments. All of this is not possible without meant that these applications can take longer to convert on introducing more care services to our “independent the continued development of our people to ensure we ahead for Metlifecare. to unconditional as future customers sometimes do not living” villages so that our future customers know they can are delivering the best quality service and care to our sell their houses as quickly as they did 12 months ago. be cared for at all of our villages, whether there is a care village and care residents. Q: What achievements is Metlifecare particularly Demand continues to be strong and we have maintained home on site or not. proud of this year? 97% occupancy at our villages. Additionally, we are leveraging the network effect of care. Q: What inspires you the most about your job? A: I am really proud of what our sales team has For example, the residents at Greenwood Park now have A: Metlifecare is a proven and successful retirement achieved this year. In a tighter real estate market, we the comfort of numerous nearby options in the Bay of Q: What are residents saying about why they enjoy village operator with 35 years of heritage. From this have delivered strong results that have led to our Plenty, especially the new care home at The Avenues living in a Metlifecare village? foundation we are working hard to re-think and redefine underlying profit increasing from $87.2 million last year which is just a short drive away. The effect of all our A: The most common feedback that I receive from what retirement living can and should be in the future as to $90.5 million. efforts in these areas is that we are now offering a full residents when I visit our village communities is that continuum of care across our portfolio – something that we adapt to meet the discerning expectations of our next It also gives me great pride that we completed two new they wish they had come into our villages earlier. The future customers are focused on when making their initial generation of customers - which is an exciting challenge. homestead model care homes in the Bay of Plenty, both camaraderie, activities and energy at our villages really assessment of villages. We have committed and passionate people working in opening this month. This further strengthens our position does bust the myths associated with more traditional We are also pleased to introduce our first dedicated all of our villages who, every day, enrich the lives of our in the Bay of Plenty and provides a full continuum of care or historic “aged care” perceptions. Our barista-made dementia care home into our portfolio at Papamoa residents. for not only these two villages but also, in conjunction coffees and à-la-carte dining offerings at many of our Beach Village, which will be replicated at several new As we evolve our village design and development activity with our successful care home at Somervale, the region villages are highly attractive to over-70s. Inter-village developments in the next few years. Demand for these we will never lose sight of the very personal and real generally. sports and social events, plus the resident-run newsletters services is strong within our aging population, and will impact our wonderful staff make each and every day, and activities calendars are also part of the unique social Our strong certification record in the year has also been complement the support we already provide for dementia which is ultimately what our business has always been, fabric of our villages and many of our customers thrive on an excellent achievement for our care team. patients in our current care homes and villages. and will continue to be, about. their new-found social circles once they have made the call to move into one of our villages.

15 METLIFECARE LIMITED ANNUAL REPORT 2019 16 HOW WE CREATE VALUE

17 METLIFECARE LIMITED ANNUAL REPORT 2019 18 OUR VALUE CREATION MODEL

VILLAGES RELATIONSHIPS PEOPLE EXPERTISE ENVIRONMENT FINANCES

Creating homes and Prioritising our residents Fostering a motivated Leveraging our unique Respecting and Demonstrating prudent communities that our and communities is at the and caring workforce know-how, specialist protecting natural capital and cashflow residents and their heart of everything we do and supplier skills and years of resources today and management to ensure families love partnerships experience into the future continued investment, SOURCES OF VALUE growth and returns

CO ED M T IN A H T M R T E E E N R L W S C E O I CREATING T R I C A Y

G

C ENRICHING L

A LIVING OUR EXPERIENCES BUSINESS

C UST ER EX OM E PERIENC

OUR VALUES ARE: RESPECT, INTEGRITY, TEAMWORK AND PASSION

PASSIONATE ABOUT EXCEPTIONAL COMMUNITIES PEOPLE POWERED BUILDING FOR THE FUTURE OUR CUSTOMERS Through deep understanding Through unique, thoughtful design Through engaging skilled, passionate Through innovative, sustainable design, of customer needs, we and services that delight and staff who embody our commitments cost-effective construction principles, provide sector-leading care empower residents, our villages are to safety, personal development, and efficient use of capital and materials, and living environments that the community of choice for current wellbeing and innovation, we remain we create quality villages that attract and OUTCOMES enable our residents to live and future residents an employer of choice delight residents their best lives

19 METLIFECARE LIMITED ANNUAL REPORT 2019 20 Puriri Building at Greenwich Gardens

BUILDING FOR THE FUTURE

Through innovative, sustainable design, cost- effective construction principles, and efficient use of capital and materials, we create quality villages that attract and delight residents

Unique, thoughtfully-designed villages that connect with their surrounding DEVELOPMENT HIGHLIGHTS communities are the hallmark of Metlifecare’s approach to village NEW LAND • Additional land purchased at Botany and Oakridge Villas design. As we look to the future of retirement villages, we offering will meet the changing expectations of the next understand that the next generation of retirees have a generation. • 112 independent living villas and apartments at three villages taste for modern, sustainable villages that offer a balanced COMPLETED • Two new care homes at The Avenues and Papamoa Beach Village lifestyle of hassle-free living, safety, security and a sense This approach also applies to our care homes, which are • Care home conversion at Pinesong of belonging, with access to care services when required. designed in keeping with our villages and enable residents to choose a model of care that suits them. The quality They want to feel connected to their local environment, • 81 homes under construction and attention to detail of our homestead-style care home VILLAGES IN and to live in a place that is part of a vibrant • Earthworks completed at Pohutukawa Landing and Orion Point at Greenwich Gardens was recognised in September neighbourhood rather than living behind a wall. PROGRESS • Crestwood villas at final stage of build 2018 at the New Zealand Aged Care Association Awards, That’s why our villages are mainly designed by local where we were proud winners of the Built and Grown architects to align with the lifestyle, amenities and Environment award. We have since built three more care VILLAGES IN • Design and Consent progressed on Botany and Edgewater values of the area. We work hard to learn about our homes in the homestead style, each tailored to their local PLANNING • Greenwich Gardens and Gulf Rise - next stage consents lodged neighbourhoods and consult with our communities to village environment. understand their lifestyle preferences and ensure that our

21 METLIFECARE LIMITED ANNUAL REPORT 2019 22 GULF RISE Stage One

NEW VILLAGES

PAPAMOA BEACH VILLAGE NOW COMPLETE Recently we celebrated the final stage of Papamoa Beach Village with the completion of a new homestead-style care home, 29 new villas and a fabulous new village centre. With more than 40% of our newest residents buying at the recommendation of an existing resident, we are confident that this winning formula will continue to appeal.

FIRST RESIDENTS MOVE INTO GULF RISE Excitement has also built over the year as we have approached the milestone of welcoming the first residents to our new Gulf Rise village in Red Beach, Auckland. Gulf Rise is a new concept in urban retirement living, with open entrances, a central boulevard and roads that connect seamlessly with the wider neighbourhood, integrating the village into the local community. The latest security technology ensures we meet our residents’ safety and security needs while allowing the village to remain open and inviting.

Our new residents love their contemporary homes, and we are looking forward to growing a vibrant community with them.

35 homes delivered

Artist’s impression of Pavilion building PAPAMOA currently under construction BEACH VILLAGE GULF RISE

29 homes delivered 24 care beds and 16 dementia care beds delivered 200 homes planned or in development 40 care beds planned

23 METLIFECARE LIMITED ANNUAL REPORT 2019 24 BOTANY

NEW VILLAGES IN DEVELOPMENT

We are well advanced on site works at our new villages in Beachlands and Orion Point. With the recent additional land purchase at Botany, we have had the opportunity to expand the village design and are now ready to commence consenting.

COMMUNITIES PLAY A KEY ROLE IN VILLAGE DESIGN Community engagement is crucial to new village development, so we can ensure our villages reflect and celebrate the unique local character, and that residents can feel a genuine sense of connectedness and belonging.

Community sessions were recently held for our new villages in Beachlands and Botany, where more than 250 interested locals attended to view and discuss our design concepts. We were pleased to receive valuable feedback about local lifestyles and amenities, and suggestions about how our villages can interact with their local communities. This feedback has been actively used to shape and improve our village design. Resource Consent Image The Beachlands and Maraetai communities also helped name the new village when, asked for a name to reflect the local region, many suggested ‘Pohutukawa’. We are therefore delighted to call our newest village ‘Pohutukawa Landing’. 215 homes 40-bed care home

POHUTUKAWA Resource Consent Image LANDING ORION POINT

Earthworks underway

Earthworks underway Resource Consent Image

195 homes 36-bed care home 247 homes 40-bed care home

Numbers indicative only 25 METLIFECARE LIMITED ANNUAL REPORT 2019 26 GREENWICH GARDENS

EXPANSION OF CURRENT VILLAGES

MAXIMISING OUR EXISTING VILLAGE PORTFOLIO New homes will be completed at Gulf Rise, Crestwood and Greenwich Gardens villages. A new parcel of land in Kerikeri will enable the expansion of our popular Oakridge Villas village, with new villas and a homestead-style care home targeted for completion in the next financial year. Another homestead-style care home was completed at The Avenues in Tauranga, which welcomes its first residents in September. By FY20 year-end construction is scheduled to be under way at Edgewater, with a new care home, new common amenities and a substantial increase in the independent living unit numbers.

48 delivered, 100 planned or in development

OAKRIDGE VILLAS CRESTWOOD

Work in progress at Crestwood

38 homes 40-bed care home 13 homes

Figures reflect homes delivered or under development/planned 27 METLIFECARE LIMITED ANNUAL REPORT 2019 28 EDGEWATER OUR DEVELOPMENT PIPELINE

VILLAGES DESIGN CONSENTING CONSTRUCTION COMPLETED

Papamoa Beach villas, care home & common amenities

Greenwich Gardens Puriri apartments

Greenwich Gardens Manuka apartments

Greenwich Gardens Karaka apartments

Greenwich Gardens Nikau apartments Resource Consent Image Greenwich Gardens (stage 7/8) 46 homes 24-bed care home Gulf Rise villas

Gulf Rise Rakino apartments THE AVENUES Gulf Rise apartments & common amenities

Pohutukawa Landing

Botany

Orion Point

VILLAGE EXPANSION

The Avenues care home

Crestwood villas

Edgewater apartments & care home

Oakridge Villas 30-bed care home delivered villas & care home

Figures reflect homes delivered or under development/planned

29 METLIFECARE LIMITED ANNUAL REPORT 2019 30 We all deserve to live somewhere we feel comfortable, that fits with our individual preferences and provides a sense of belonging. At Metlifecare, we strive to create villages which embrace and celebrate the uniqueness of their local communities so our residents feel a genuine sense of connection.

INVESTING IN OUR VILLAGE ENVIRONMENTS We continue to invest in our villages to ensure they are maintained to a level that reflects changing building standards as well as the expectations of our residents. Over the past year we refurbished 420 homes, and are presently carrying out broader regeneration projects in five existing villages.

As our residents’ needs are changing for social, recreational and wellness activities, our plan to refresh and modernise communal amenities at our existing villages continues. This programme includes upgrading bars and cafés, gardens, swimming pools, leisure facilities and social spaces. In the past year, communal spaces were upgraded at ten different villages, each being received with great enthusiasm by residents who are now making the most of their new facilities.

EXCEPTIONAL COMMUNITIES FINDING OUR FIT Just as we all live in different communities for a reason, it’s no Through unique, thoughtful design and different when it comes to choosing a retirement village. This is why services that delight and empower residents, we developed a unique approach our villages are the community of choice for called ‘Find your Fit’, allowing future current and future residents residents to choose from a range of FIND YOUR FIT Metlifecare villages within an area IN ONE OF 25 UNIQUE VILLAGES to find the home and community that’s right for them. While the Your unique pursuits, passions and preferences don’t retire just because you have. No matter how you pictured your quality of our care and support ideal retirement lifestyle, you’ll fi nd it in one of 25 distinctive is consistently high throughout Metlifecare villages. Each has a range of accommodation options, from villas to serviced apartments to care homes, Metlifecare, each of our villages all with the highest quality facilities. has a unique feel, with village amenities and activities reflecting To fi nd out more, call us on 0800 367 847 or visit metlifecare.co.nz HIGHLIGHTS the characteristics of the local neighbourhood.

CONTINUED VILLAGE • Modernisation and upgrade projects completed at ten villages Future customers are encouraged INVESTMENT • 420 homes refurbished to find their perfect fit in our villages through attending inter- village events such as regional CARE GROWTH • Three villages with new care homes/suites open days, taster tours and by CONTINUES • 19% increased care capacity joining in village activities. This is an excellent opportunity to make new friends and find out more STRONG VILLAGE • Village occupancy 97% about what our villages have to DEMAND • Care occupancy 96% offer, and what makes the village a perfect fit for them.

HIGH LEVELS OF • New Resident satisfaction at 100% for ‘met or exceeded expectations’ SATISFACTION Source: 2019 Resident Satisfaction Survey

RAD4334

• Sales price growth 2.5% higher than REINZ list price growth STRONG REVENUES • 60% increase in premium care revenues

31 METLIFECARE LIMITED ANNUAL REPORT 2019 32 CARE AT ITS BEST paperwork. Our electronic resident care system is being rolled out progressively through all care homes, while Our care business goes from strength to strength, with Medimap, an electronic medication management system one of this year’s highlights being the completion of is used at all care homes and is currently being extended three new care homes, adding new accommodation for to serviced apartments. 90 residents. Our 96% average occupancy remains one of the highest in the sector, and our excellent resident satisfaction scores justifiably recognise the value our Care home lounge at Greenwich Gardens residents and their families place on the quality of our resident-directed model of care. This is also shown in the high demand for our premium care offering, which has seen premium care revenues quadruple in the past two years.

Industry recognition for Metlifecare’s standard of care also continues to grow, with two thirds of our established care homes now having the gold-standard four-year certification from the Ministry of Health (MOH). This WELCOME TO THE TOI TOI DEMENTIA fully functioning kitchen just like the one at home, where certification acknowledges the quality of our clinical COMMUNITY residents and their families can prepare food, or they can systems, care processes, training and risk management. help us do it. They can enjoy social time in the intimate Anticipation is building as we prepare to welcome dining and lounge areas, and for ‘me time’ there’s a Winning the Built and Grown Environments Award at the residents to the brand new Toi Toi Dementia Community at private secure garden with a number of features for 2018 NZ Aged Care Association Awards also provides Papamoa Beach Village. stimulation and interest.” industry acknowledgement for Metlifecare’s design innovation in our homestead-model care homes. We While people with mild dementia are well supported Mary says the design and décor is based on the latest were also pleased to be recognised as finalists for our at other Metlifecare villages, the Toi Toi Community is research regarding colour and texture to assist with innovative approaches in the Excellence in Food for Care Metlifecare’s first dedicated care wing for people with dementia. “We’ve given considerable thought to how Homes category and the Training and Development advanced dementia, featuring the same award-winning design elements will support our residents by providing Award for our Resident-Directed Care Training. The digital homestead design as Metlifecare’s other new care homes. the right mix of stimulation and relaxation. For example, revolution continues with our latest innovations allowing Metlifecare’s Regional Clinical Manager – Bay of Plenty, with the inclusion of woodland mural/wallpaper in the staff to spend more time with residents and less time on Mary Stewart describes our approach to secure dementia hallways to provide visual stimulation, or in the use of care: intuitive colour coding such as bright colours for residents’ doors and wall-coloured doors for staff-only areas.” “Our homestead-style approach will allow our residents 1 Metlifecare Care Home MOH audit certification to live the way they want in a home-like environment, with Mary and her team of specialist carers have been working 10 Care suite at The Avenues their care being individually designed around their needs. hard to prepare for our new residents and are looking 9 Residents live in small groups as they would in a family forward to welcoming them to the Toi Toi Community. 8 7 home, with private and shared spaces. This includes a 6 FINDING OUR FIT – PROVIDING 5 CHOICE IN CARE 4 In the same way as our villages reflect the values and 3 characteristics of their local communities, care is 2 individualised to suit the needs of each resident. 1 0 Our West Auckland network of care homes provides an FY17 FY18 FY19 excellent example of how our residents can ‘Find their Fit’ New or 2 year 3 year 4 year in care. The individualised, resident-directed approach to

1 At time of publication care remains constant, yet each care home has its own unique personality.

Whilst Powley offers a spiritually supportive community, Premium Revenue ($m) Crestwood appeals to lovers of nature and animals with its expansive views over the adjacent golf course and its menagerie of animals. Pinesong’s boutique care suites are ideal for those seeking a more intimate care environment, 2.5 within the supportive community of the wider village.

Across town on the North Shore, Greenwich Gardens offers a homestead model of care which reflects the 1.6 social and community approach of the village – so much so that independent residents voluntarily and actively help 0.6 at the care home and attend many care home events. 0.2 FY15 FY16 FY17 FY18 FY19 Woodland mural/wallpaper in the hallways

33 METLIFECARE LIMITED ANNUAL REPORT 2019 34 At Metlifecare our ambition is to create as the library. This resident-led approach empowers our residents and promotes greater independence and pride. enriching living experiences for our Over the past year we have invested in strengthening the residents. support for new residents and their families through the We believe the key to achieving this ambition is the transition of leaving the family home and settling into continued understanding of the needs of our residents village life. Providing one ‘concierge style’ point of contact – both now and in the future. This enables us to create at each village to assist with anything from operating new communities that offer the lifestyle, experiences and appliances to finding new friends is receiving excellent community relationships to support our residents in living feedback. their best lives. This year has also seen an increased focus on wellbeing Residents play the lead role in driving social connections as we introduce ‘Your Best You’ and other wellbeing at our villages: designing the village activity schedule, initiatives across Metlifecare. The following stories provide coordinating clubs and groups, planning social and a snapshot of a few successful initiatives and how they inter-village events and managing village amenities such are enriching our residents’ lives. PASSIONATE ABOUT OUR ‘Toppee Flat’ performs at The Poynton CUSTOMERS Through deep understanding of customer needs, we provide sector-leading care and living environments that enable our residents to live their best lives

HIGHLIGHTS

RESIDENT REFERRALS • 17% increase in settled contracts generated by referrals

‘YOUR BEST YOU’ • Greenwich Gardens pilot successfully completed WELLBEING PROGRAMME • AUT wellbeing audits underway for all villages Proud sponsor of the APO’s Unwrap the Music series HIGH QUALITY MODEL • 67% of care homes with four-year MOH certification OF CARE RECOGNISED • 100% of established care homes at three or four-year certification MAGIC IN THE MUSIC In February this year, we were excited to commence The sponsorship has received enthusiastic support from a new community partnership with the Auckland our residents, with more than 500 having already enjoyed Philharmonia Orchestra (APO). exclusive concert rehearsals at the Auckland Town Hall • New resident transition service in place at all villages and first-class performances at our villages. We are NEW RESIDENT SUPPORT Music is tremendously important to our residents, • Net promoter score for new residents: 46% looking forward to developing the partnership further. providing brain stimulation, relaxation and an opportunity for social gatherings. Knowing this, we were delighted to have the opportunity to help the APO achieve its goal of bringing music to the wider community. SATISFACTION SURVEYS • 97% Resident Satisfaction with staff in villages

35 METLIFECARE LIMITED ANNUAL REPORT 2019 36 Residents work out at Greenwich Gardens

PEOPLE POWERED Through engaging skilled, passionate staff who embody our commitments to safety, personal development, wellbeing and innovation, we remain an employer of choice

‘YOUR BEST YOU’ - A HOLISTIC APPROACH TO WELLBEING HIGHLIGHTS What does holistic wellness look like for This is done on a village-by-village basis as each activity schedule is designed and run by village residents to suit HIGHLY ENGAGED • Increased overall employee engagement to 81% older people? At Metlifecare we call it both their unique mix of interests as well as the local EMPLOYEES • 11,400 hours of training for 80% of employees being ‘Your Best You’. recreational environment. Recognising that everyone has different wellbeing The six dimensions of Wellness explained needs - which continue to change as our lives do - STRONG • Total staff 81% • Care staff 87% Metlifecare has worked with the Auckland University of Physical STAFF RETENTION The physical dimension involves taking care of your physical body. Being Technology (AUT) School of Health Science to develop physically fit, choosing healthy foods, and getting enough sleep can maximize your energy and prevent many chronic illnesses. Avoiding harmful elements like Six Dimensions of Wellbeing for Seniors (pictured). AUT tobacco, excessive alcohol and drugs helps your body be its best without hindrances. • Introduction of Wellbeing Programme and Portal is a natural partner for this programme, with more than ONGOING FOCUS ON • Asbestos Management Training Programme launched 20 years of research experience covering the health and Occupational / Vocational The occupational dimension involves personal satisfaction and enrichment in HEALTH AND SAFETY • Village Traffic Management Plan developed with residents activities of older people. your life through choice of profession, career, and personal performance. For older adults this may include finding ways to add meaningful activity to their day. ‘Your Best You’ started with a pilot programme at Intellectual Greenwich Gardens, where AUT reviewed residents' The intellectual dimension encourages life-long learning. Stimulating mental In the retirement and aged care sector, the need to develop and retain skilled, high calibre activities that expand a person’s knowledge and skills both in the classroom activities schedule against the dimensions, to ensure it and beyond. provided a well-balanced selection, then trialled their people is stronger than ever. By continuing to invest in our people, with emphasis on Social approach with residents fully involved in the feedback The social dimension encourages contributing to your community by encouraging healthier living and initiating better communication with those learning and development, health and safety and a rewarding and enjoyable workplace, loop. around you. Supporting the interdependence of your community with the natural surroundings gives opportunities to live in harmony with others and with our environment. Participating in positive social relationships including friends, we have continued to cement the reputation of Metlifecare as an employer of choice. To provide additional inspiration we enlisted Wayne ‘Buck’ family, and community.

Shelford (former All Blacks captain and PE Trainer for Emotional EMPLOYER OF CHOICE the Navy) as an ambassador and to act as an impartial The emotional dimension recognises and accepts the wide range of emotions that make us human. It includes the ability to develop satisfying relationships We have been very pleased to continue improving employee retention over the past year to an average of 81%, with participant. Over the 30-day programme, Buck and the with others, as well as enjoy the unique person that you are. Managing your life in personally rewarding ways, and taking responsibility for your actions. significant improvement in the retention of caregivers reaching 87% (compared to an industry average of 73.1%*). residents self-rated themselves against the six dimensions Spiritual Metlifecare’s reputation as an employer of choice has also enabled us to successfully meet a major challenge in to measure progress. The spiritual dimension recognizes our search for meaning and purpose in life. Having your actions fall in line with your beliefs and values works towards developing a healthy world view. Pondering the meaning of life for yourself recruiting and training more than 100 skilled staff to support our two new care homes and expanding villages in the Now AUT is working with each village to ensure all six involves respecting the decisions of others to follow their own path. Bay of Plenty. In a tight labour market, we received several hundred applications, a testament to our reputation as an dimensions are present in their activities schedule. employer of choice. All roles are now filled, with our new employees being available to work across our three Bay of Reproduced with permission of AUT’s School of Sport & Recreation Plenty care homes if needed.

* New Zealand Aged Care Association Aged Residential Industry Profile 2017-8.

37 METLIFECARE LIMITED ANNUAL REPORT 2019 38 CONTINUED INVESTMENT IN LEARNING AND DEVELOPMENT Over the year, around 11,400 hours of training were delivered SUPPORTING EMPLOYEE WELLBEING across the organisation, via a combination of online and face-to-face training. Around 80% of employees participated Concurrent with the development of in some form of training, with 38% engaged in long-term Your Best You for residents, we have development programmes. introduced a wellbeing programme An online Learning Management System was introduced, for employees and their families. The enabling staff to complete e-learning programmes, resulting programme includes a personal wellbeing in a 15% reduction in training cost. survey and provides education and assistance via a digital platform, as well In March 2019 our clinical training capability was significantly as the personal support of 25 wellbeing boosted with the addition of an in-house nurse educator, champions throughout the Company. who is leading the drive for ongoing clinical improvement through training and education. This has created additional opportunities for staff to gain new skills as well as enabling consistency of training across our teams.

INCREASED EMPLOYEE ENGAGEMENT Metlifecare measures employee engagement through its FOCUS ON SAFETY AT WORK shows that positive progress is being made with an annual Qualtrix (previously IBM Kenexa) survey, where we incident close out rate of 90%. achieved an impressive 81% overall engagement and were Improved health and safety performance and culture well above the New Zealand average on the majority of continues to be a focus at Metlifecare. In 2019 our During the year Metlifecare was accepted into the engagement measures. initiatives included a two-day training course for health ACC Accredited Employer Programme (AEP) which has and safety representatives, ongoing training for asbestos enabled us to better manage any workplace injuries A major factor in strengthening employee engagement and manual handling, and the introduction of company- and rehabilitation, as well as early intervention. We are and performance has been the introduction of Metlifecare wide standard operating procedures for hazard and risk now focusing on better identification of injury causation, ‘engagement champions’ – a group of employees who management. and the subsequent introduction of injury prevention volunteer as an additional internal communication programmes. As further demonstration of the embedded channel and support for local managers. The engagement Whilst increased emphasis on the reporting of near culture of health and safety in the organisation, the annual champions provide a more informal means of delivering misses and injuries has resulted in LTIFR and TRIFR Health and Safety Hero award recognises staff who have information and receiving feedback than through a direct measures lifting over the year our internal monitoring exemplified our health and safety principles. manager and receive regular training and briefings.

39 METLIFECARE LIMITED ANNUAL REPORT 2019 40 for our stakeholders and our business. This process is Report – entirely consistent with Metlifecare’s approach already underway and being driven by the Executive Team to sustainability which is an integral part of the way we go with strong involvement across the business. about the day-to-day business of creating value.

A number of current practices already contribute positively For example, you can view our Ministry of Health and over the coming months we will build on these as well certifications on page 33 and our health & safety initiatives as introducing new initiatives to propel us towards our are outlined on page 39. You will find information on aspiration of building a more sustainable future. You will find Metlifecare’s corporate governance practices on pages 49 examples of our current initiatives throughout this Annual to 52.

SUSTAINABILITY MATRIX 2019

1 2 HIGH

17 12 13 4 8 6 10 7 9 16 14 3 15 11 5 STAKEHOLDER IMPACT STAKEHOLDER LOW LOW HIGH BUSINESS IMPACT

1 Care 7 Risk Management 13 Maintenance Metlifecare’s Kapiti Village residents were SERIOUS empowered and supported to turn a vegetation 2 Resident / Customer Experience 8 Strategy and Innovation 14 Sustainable Behaviour dump ground into a useable potting shed and Diversity and Inclusion 9 Transparent Disclosure of Information Energy Efficiency / Renewable Energy native tree walk area with excellent results. 3 15 ABOUT 4 Occupational Health and Safety 10 Data Privacy and Confidentiality 16 Waste Management SUSTAINABILITY 5 Employer of Choice 11 Stakeholder Engagement 17 Building Design 6 Economic Performance 12 Corporate Governance & Compliance

SOCIAL GOVERNANCE ENVIROMENTAL Matrix indicates those activities with the highest importance We recognise our continued success Recognising the need to develop an enduring framework for our sustainability initiatives, we’ve worked alongside our depends on taking a holistic view of stakeholders to understand the material factors that are at BUILDING SUSTAINABILITY company performance. Metlifecare is the heart of our business and where our focus can deliver When our residents move into their homes at new Metlifecare developments, they become part of the green revolution, committed to creating a better future for the most impact. Through the process of engaging with joining the growing number of our villages contributing to a more sustainable future. our residents, shareholders, community representatives, our residents and their families, our staff, Our latest homes incorporate energy saving features such as 2.6 R-rated insulation that exceeds code requirements, double staff, Iwi partners and industry professionals, we have a glazing, heat pumps, LED lighting and appliances that are both water and energy efficient. These features are not only good our suppliers, our shareholders and the clear understanding of what really matters and this will for the environment, they also benefit our residents through lower energy costs and improved health outcomes. We also communities we serve. underpin our focus for measuring and improving our make efforts to implement more sustainable practices through construction. Initiatives have included the use of fixed- performance as our journey continues. plumbed toilets to reduce chemical use, as well as focusing on construction waste such as plastic shrink wrap and metal to Last year we shared with you the first steps of our ensure it is minimised and recycled. sustainability journey as we started formalising our approach The stakeholder consultation process led to the Our residents are able to enjoy the beautiful surroundings, knowing that chemical use in the gardens is minimised. Our to addressing the Environmental, Social and Governance development of our sustainability matrix which sets out the residents have taken the initiative to introduce their own sustainable practices with many of our villages using on-site (ESG) issues that relate to our business and impact upon our Environmental, Social and Governance matters that were composting, worm farms and mulch which both reduce waste and minimise the need for irrigation. Many of our residents stakeholders. Twelve months on, we’re pleased to report collectively identified as key to keeping our business on a spend time planting village allotments and vegetable beds, enjoying the bounty harvested from the gardens. that we’re making solid progress in embedding sustainability sustainable footing. into the way we work, the way we interact with stakeholders Our next steps will include measuring our performance Our landscaping plans for new developments at Greenwich Gardens and Gulf Rise included a focus on the regeneration of and the environment, and the decisions we’re making for the in each material aspect and creating meaningful natives, as well as specific planting to attract birds and butterflies. longer term. improvement goals that will deliver a positive impact

41 METLIFECARE LIMITED ANNUAL REPORT 2019 42 Christopher Aiken Mark Binns Rod Snodgrass Kim Ellis Carolyn Steele Noeline Whitehead Alistair Ryan

MARK BINNS LLB CAROLYN STEELE BMS (HONS) INDEPENDENT DIRECTOR NON-INDEPENDENT DIRECTOR Appointed 1 August 2017 Appointed 13 December 2013 Mark is a professional director and former Chief Executive Carolyn has substantial experience in capital markets, mergers Officer who brings substantial experience in construction, and acquisitions and investment management. Until 2016 property development and asset management to the Board. Carolyn was a Portfolio Manager at Guardians of New Zealand Until 2017, Mark was Chief Executive Officer of Meridian Energy, Superannuation, the Crown entity which manages the New where he led the company through the largest Initial Public Zealand Superannuation Fund. Prior to joining the Guardians in Offering in New Zealand’s history. Prior to that, Mark spent 2010, Carolyn spent more than ten years in investment banking 22 years at Fletcher Building and Fletcher Challenge, where he at Forsyth Barr and Credit Suisse First Boston/First NZ Capital. rose to the position of Chief Executive of Fletcher Building’s Carolyn is currently a director of WEL Networks, Ultrafast Fibre, Infrastructure Division. Green Cross Health, the Halberg Foundation and is a Trustee of Mark is currently a director of Auckland International Airport, the New Zealand Football Foundation. Te Puia Tapapa and Crown Infrastructure Partners, and a Carolyn chairs the Resident Experience & Care Committee and Trustee of the Auckland War Memorial Museum, where he is a member of the Audit & Risk and Nominations & Corporate Chairs the Future Museum Capital Programme Committee. Governance Committees. Mark is a member of the Nominations & Corporate Governance and Development Committees, and chairs the People & Remuneration Committee. DR. NOELINE WHITEHEAD PHD, MN (HONS), PG DIP HEALTH SCIENCES, RN NON-INDEPENDENT DIRECTOR ALISTAIR RYAN MCOM (HONS) Appointed 19 June 2013 INDEPENDENT DIRECTOR Noeline is an experienced senior nurse and senior manager Appointed 23 August 2012 with more than 30 years in residential aged care. Noeline’s Alistair is an experienced director with wide corporate and previous roles include an Honorary Teaching Fellow at the financial experience in listed companies and his background University of Auckland, Director of Nursing at Bethesda Care, includes a 16-year career at SKYCITY Entertainment Group and a Clinical Nurse Director with Counties Manukau District where he held senior management roles, including Chief Health Board. Financial Officer. Prior to SKYCITY, Alistair was a Corporate Noeline has made a significant contribution to New Zealand’s Services Partner with Ernst & Young, based in Auckland. He is residential aged care sector through her membership of currently a director of Kingfish, Barramundi, Marlin Global and national committees and her long association with the Eden Kiwibank. He is also a member of the FMA’s Audit Oversight Alternative organisation. Her passion for resident wellbeing Committee. OUR BOARD OF brings expertise and a strong focus on clinical practice and Alistair chairs Metlifecare’s Audit & Risk Committee and is a resident care to the Board. member of the Nominations & Corporate Governance and Noeline is a member of the Resident Experience & Care, DIRECTORS People & Remuneration Committees. Development and Nominations & Corporate Governance Committees.

ROD SNODGRASS BCA INDEPENDENT DIRECTOR KIM ELLIS BCA (HONS), BENG (HONS) CHRISTOPHER AIKEN BA CHAIR, INDEPENDENT DIRECTOR INDEPENDENT DIRECTOR Appointed 1 August 2017 Rod has broad experience in corporate strategy, business Appointed 25 August 2014 Appointed 23 August 2012 and product innovation, digital growth, transformation and Kim is an experienced director and former Chief Executive Chris has over 26 years’ experience in the property sector, and disruption in the New Zealand communications and media Officer. He is currently the Chair of NZ Social Infrastructure is currently Chief Executive Officer of HLC, which is running sector. He held senior executive roles at Spark and Vector. Rod Fund and the Sleepyhead Group, and a director of Freightways, the development of approximately 50,000 homes under brings a global strategic view of the technology industry having Port of Tauranga, Fonterra Shareholders’ Fund and Ballance master plan across New Zealand. He is a member of the previously been on the Boards of the Mobile World Capital Agri-Nutrients. Auckland Urban Design Panel and is an adviser to Government agencies on large scale property matters. Advisory Board, Telco Futures Forum, Southern Cross Cables, Kim was the Managing Director of Waste Management NZ Ltd XtraMSN and Yahoo!Xtra in NZ and AAPT and 3 Mobile in for 13 years until 2006. Prior to that, he held a number of CEO Chris has also had an extensive technology career, and is a Australia. positions. former director of Auckland City Council Property Board, and a former Chair of North Harbour Stadium, Telecom Retail Rod is currently a director of JUCY Group, Geo Chapter 2 Kim chairs the Metlifecare Board and the Nominations & Holdings and Origin Quarries Group. and SMX, a Trustee of Springboard Trust, an Ice Angel and a Corporate Governance Committee, and is a member of the member of AUT’s Auteur’s Influencers Panel. Audit & Risk, Development and People & Remuneration Chris chairs Metlifecare’s Development Committee and is Rod is a member of the Resident Experience & Care, Committees. a member of the Nominations & Corporate Governance Committee. Development and Nominations & Corporate Governance Committees.

43 METLIFECARE LIMITED ANNUAL REPORT 2019 44 Tanya Bish Andrew Peskett Huma Houghton Richard Thomson Glen Sowry Julie Garlick Richard Callander Sandra King Charlie Anderson

SANDRA KING GENERAL MANAGER SALES Sandra was appointed General Manager Sales in July 2019. She is an accomplished and proven commercial sales leader with a track record of building high quality integrated sales organisations. She leads a team of passionate sales staff who are responsible for the sale of new village units and the resale of existing units to new residents. With an extensive background in strategy and transformation projects, she has previously held senior executive roles with both NZME and Fairfax as well as the Managing Director role for both Professional PR and Pacific Publications NZ. Prior to joining Metlifecare Sandra was a business consultant for Prime Strategies, driving business improvements in the SME market.

“I’m passionate about caring and supporting our future residents through their journey into one of our unique and high quality retirement living communities.”

ANDREW PESKETT BA (HONS), LLB GENERAL COUNSEL & COMPANY SECRETARY OUR EXECUTIVE TEAM Andrew brings 24 years’ legal experience to Metlifecare, having worked in leading law firms in London and in-house at Beca, JULIE GARLICK BCOM, FCIM prior to joining the Company in 2007. GENERAL MANAGER MARKETING Julie joined Metlifecare in October 2017 after four years as He heads the legal and settlements teams and has dual INSEAD AMP MN (HON), BCOM, NZRCOMPN GLEN SOWRY TANYA BISH responsibility for leading legal compliance and corporate CHIEF EXECUTIVE OFFICER CLINICAL NURSE DIRECTOR General Manager Marketing at SKYCITY Entertainment Group, governance, as well as leading the Company’s acquisitions, Glen has led Metlifecare since April 2016 and prior to his Tanya joined the Metlifecare team in July 2015 after eight years where she oversaw its transformation into an entertainment, disposals and corporate transactions. appointment, was Chief Executive Officer of Housing New at Waitemata District Health Board. She is a Registered Nurse dining and accommodation leader. Prior to that she played a Zealand with 67,000 properties across the country. with over 20 years’ experience working in teams caring for and similar role repositioning The Warehouse Group in the highly “I’m passionate about supporting the Company’s operational supporting older adults. competitive retail sector. teams to deliver first-class service to customers in innovative ways, Glen has held several senior roles at Air New Zealand, leadership of a high-performing team and driving value to our Television New Zealand and Telecom. He spent 10 years at Tanya and her team are responsible for all aspects of resident Julie and her team are responsible for connecting with future shareholders.” Air New Zealand, initially as Head of Corporate Affairs and care and the customer experience provided in our care homes. and existing customers and bringing Metlifecare’s brand and Government Relations, then leading the domestic and short customer proposition to life. “I’m passionate about ensuring we assist our residents to live haul international airlines overseeing a major financial and “I’m passionate about ensuring Metlifecare remains relevant in the way they choose, having control over their decisions and CHARLIE ANDERSON BCM competitive turnaround of the Tasman network. maintaining connections both within the village and in their an increasingly demanding and competitive landscape by OUTGOING GENERAL MANAGER “I’m passionate about leading Metlifecare towards a successful community.” listening and responding to customers’ ever-changing needs, PROPERTY & DEVELOPMENT* future where we create environments that residents are proud to dreams and wants.” Charlie was appointed in July 2015. He has 24 years’ property call home, where our staff love working and which create ever development and management experience, with a strong track increasing value for our investors”. RICHARD CALLANDER record in managing large scale development projects across all GENERAL MANAGER OPERATIONS HUMA HOUGHTON BA (HONS), CIPD, CFHRINZ, PGDIP property sectors in New Zealand and Australia during his career. GENERAL MANAGER HUMAN RESOURCES Richard was appointed General Manager Operations in January Charlie and his team are responsible for achieving Metlifecare’s Huma was appointed to the Metlifecare Executive Team RICHARD THOMSON BCOM, LLB (HONS), PGDIP 2015 after 16 years with SKYCITY Entertainment Group both growth objectives through the acquisition and development of CHIEF FINANCIAL OFFICER overseas and in New Zealand, where he was most recently in January 2017 to lead the organisation’s strategic people new sites to the delivery of well-designed villages. Richard joined the Metlifecare team in September 2017 from the General Manager of its Queenstown casinos. Richard management. Huma joined the Company from JMW “I’m passionate about creating villages with a real point of Air New Zealand where he was Group General Manager has extensive executive management experience in customer Consultants where she specialised in executive coaching, difference, through design innovation, building quality and strong Commercial, leading commercial strategies including revenue service and a proven track record delivering sustainable growth designing and delivering transformational leadership connections with local communities. We endeavour to create management and pricing. Richard brings a strong blend of for shareholders and positive outcomes for key stakeholders. development programmes, and consulting with senior places that anyone would want to live in, not just our residents.” technical corporate finance skills and investment banking Richard and his team are responsible for all aspects of village leadership teams.

experience from previous roles at PwC and JPMorgan. operations and delivering a high-quality customer experience to Previously, Huma was the Executive General Manager * Charlie has resigned and finishes in September 2019 Metlifecare’s residents every day. Richard and his team are responsible for Metlifecare’s financial Capability and Organisation Development for Z Energy, and risk management as the Company focuses on its growth, “I’m passionate about giving our residents an outstanding village where she embedded a high performance culture, winning innovation and commercial performance agenda. experience, through committed teams, operational excellence and multiple awards for her work. She has also worked for large service innovation across all of our villages.” organisations in the United Kingdom and New Zealand including “I’m passionate about building a modern, progressive, intelligent Deloitte, Vero and Spark. business that is successful, thoughtful and engages positively with all those who are touched by it.” “I’m passionate about enabling the ongoing growth and development of our people, to build a high performing organisation with unrelenting focus on exceptional service delivery.”

45 METLIFECARE LIMITED ANNUAL REPORT 2019 46 YEAR ENDING 30 JUNE (NZ$m) FY19 FY18 FY17 FY16 FY15

OPERATING PERFORMANCE

Resales of occupation rights 354 343 321 4012 3672

New sales of occupation rights 116 98 130 138 82

Total sales of occupation rights 470 441 451 539 449

New homes completed 112 185 187 73 133

New care beds completed 70 69 48 35 -

Total development completed 182 254 235 108 133

Total homes in portfolio 4478 4380 4198 4025 4033

Total care beds in portfolio 440 370 342 354 359

FINANCIAL PERFORMANCE

5 YEAR Total Revenue ($m) 131.0 114.9 109.0 106.0 101.5 PERFORMANCE Underlying Profit1 ($m) 90.5 87.2 82.0 66.1 52.4 SUMMARY Net Profit After Tax ($m) 39.2 122.6 251.5 228.7 122.7

Operating Cash Flow ($m) 119.9 111.0 129.6 130.4 83.3

Underlying Operating Cash Flow1 ($m) 55.9 54.8 52.1 50.6 34.5

Total Assets ($m) 3,515.7 3,286.6 2,958.6 2,586.4 2,227.4

Total Equity ($m) 1,485.0 1,468.1 1,370.1 1,133.0 911.4

Net Assets per share ($) 6.96 6.89 6.43 5.32 4.29

Dividends (cps) 11.00 10.00 8.05 5.75 4.50

Loan to Value Ratio 15% 9% 5% 7% 6%

1 These are non-GAAP measures. 2 Excludes Wairarapa

47 METLIFECARE LIMITED ANNUAL REPORT 2019 48 BOARD The Board has adopted a formal Board Charter that details the Board’s roles and responsibilities. Broadly these are to:

• Set strategy, review business and financial plans and monitor management’s performance against those benchmarks, ensuring adequate resources are made available CORPORATE • Appoint, provide counsel to and review the performance of the CEO • Approve senior executive appointments, remuneration and consider succession GOVERNANCE • Ensure that an effective risk management framework is operating • Set the capital structure, approve major investments and divestments, and approve STATEMENT and monitor financial reporting • Lead all aspects of governance including setting ethical standards, reviewing conduct, and assessing the Board’s effectiveness in carrying out its functions

The Board schedules a minimum of six meetings each year. An annual work programme, set out in the Board Charter, and a standing agenda, together with written reports and presentations from the CEO and senior management, address and update This statement is a summary of the Corporate directors on strategy and operational matters. Governance Statement approved by the Board of Directors SKILLS OF THE BOARD (the Board) of Metlifecare Limited (the Company) on The Board has determined that to operate effectively and to meet its responsibilities 5 September 2019. The full statement is available at: it requires competencies in disciplines including governance, aged care, property, finance and capital markets, risk and compliance, legal and regulatory and people. www.metlifecare.co.nz/investor-centre/charters-policies The current mix of skills and experience is considered appropriate for the responsibilities and requirements of governing the Company. The Board of directors of Metlifecare (“the Board”) is responsible for promoting the success of Metlifecare and its subsidiaries in its role as one of the leading retirement village operators in New Zealand in a way which ensures that the interests INDEPENDENT DIRECTORS of shareholders and stakeholders are promoted and protected. The Board believes The Board has seven non-executive directors. The Board has determined that as at that strong principles of corporate governance protect and enhance the assets of 5 September 2019 the following five directors are independent: Kim Ellis, Chris Aiken, the Company for the benefit of all shareholders. The Company's governance policies Mark Binns, Alistair Ryan and Rod Snodgrass. All five directors have independent provide guidance for the effective oversight of the Company by the Board on behalf of status as they are not executive officers of Metlifecare and they do not have a its shareholders, employees and other material stakeholders. Disqualifying Relationship (as that term is defined in the NZX Listing Rules).

Metlifecare’s Board and Committee charters and policies, NZX releases, annual The Board has determined that there are two non-independent directors, being and interim reports and other material are available on the Company’s website at Carolyn Steele and Dr Noeline Whitehead. Carolyn Steele is considered to be www.metlifecare.co.nz/investor-centre. non-independent due to her being deemed a representative of the New Zealand Superannuation Fund (a substantial product holder of Metlifecare). Dr Noeline CODE OF ETHICS Whitehead is now deemed to be non-independent due to her close family ties (mother) with Executive member Tanya Bish - under the new NZX Listing Rules this is The Code of Ethics describes the practices that all directors, employees and cited as a factor impacting a director’s independence. Dr Noeline Whitehead was an contractors are expected to follow to ensure that high standards of corporate and independent director as at 30 June 2019 (under the former NZX Listing Rules). individual behaviour are observed. It governs the conduct of the Company and includes details on the responsibility of employees to report concerns. The roles of Chair, Chair of the Audit & Risk Committee and CEO are not held by the same person. The Conflicts of Interest Policy details the process to be adopted in relation to potential conflicts of interest. The Board does not have a tenure policy, however the current directors have served periods of time which are considered appropriate. SHARE TRADING The Trading Policy addresses the Company’s requirements for all employees and DIRECTOR DEVELOPMENT representatives of the Company in relation to trading in Metlifecare’s shares. The The Board’s annual work programme includes an extensive programme of village fundamental rule in the policy is that insider trading is prohibited at all times. The visits. Directors are encouraged to undertake continuing education and development requirements of the policy are separate from, and in addition to, the legal prohibitions of further skills to remain current on how to best perform their duties as directors of on insider trading in New Zealand. an issuer.

Directors are encouraged rather than required to own Metlifecare shares. New directors are provided with a letter of appointment setting out the Board’s expectations of them, copies of key Company documents, an introduction to the activities of the group including its portfolio of villages and the opportunity to meet with and ask questions of management.

49 METLIFECARE LIMITED ANNUAL REPORT 2019 50 DIVERSITY The Nominations & Corporate Governance Committee test period is being introduced in 2019. Several tranches of the including without management present. is responsible for the director appointment process and legacy Long Term Incentive Plan are yet to vest. A focus on diversity throughout the organisation recognises corporate governance principles. that a diversified work force (including at Board and The director remuneration pool of $723,000 was approved at SHAREHOLDER RELATIONS management levels) contributes to improved business The People & Remuneration Committee is responsible the 2017 Annual Shareholders’ Meeting. A breakdown of the fees The Shareholder Communications Policy sets out a framework performance, enables innovation and is fair to all. The CEO for matters related to people strategies and issues and is set out on page 102. Directors do not currently receive any to enable shareholders to engage with the Company in an and General Manager Human Resources have responsibility remuneration. remuneration in the form of Metlifecare shares. informed manner and for market participants to be able to for implementing the policy across the organisation. The The Resident Experience & Care Committee is responsible for make assessments of the Company’s prospects and value. A measurement of diversity objectives will be an area of the governance and oversight of the customer experience, the RISK MANAGEMENT AND AUDIT comprehensive set of information is released to the NZX and increased focus in the 2020 financial year. ASX and is available in the Investor section of the Company’s provision of care services to residents, and the safe operation Management of risk is a high priority to ensure the protection website. The gender breakdown of the Board and employees is as of the care and village environments. of the Group’s staff, the environment, Company assets follows: and reputation. The Company has a comprehensive risk The Market Disclosure Policy sets out the procedures that are Each Committee undertakes regular self-reviews initiated by management system in place which is used to identify and followed to ensure that, consistent with legal and regulatory their chair and reports back to the Board. Additionally, all as at 30 June 2019 as at 30 June 2018 manage all risks. The Audit & Risk Committee oversees the requirements, market releases are timely, orderly, and accurate directors are encouraged to, and regularly do, attend meetings Male Female Male Female external and internal audits programmes. Management reports and that all parties in the investment community have similar of Commitees that they are not a member of. Board 5 2 5 2 regularly on specific high-level risk management issues. access to information. Officers/ The Audit & Risk Committee has responsibility for ensuring the The Company issues its Notices of Meeting at least 20 working 5 4 5 4 TAKEOVERS Executives independence of the external auditor. Samuel Shuttleworth from days prior to the annual meeting(s) of shareholders. Voting The Board has a Takeover Response Manual that establishes PwC has been Metlifecare’s external auditor since 2019. The fee at the meeting is conducted by poll. The Board is committed Employees 260 889 262 846 protocol that will apply if there is a takeover offer for paid to the auditor in 2019 for audit services was $469,000. The to ensuring that shareholders have the right to vote on major Metlifecare. The manual is reviewed and updated at least fee for approved non-audit services was $203,000. The auditor decisions. annually. The Board has also considered the Company’s is regularly invited to meet with the Audit & Risk Committee, BOARD AND SENIOR MANAGEMENT valuation model that provides an indicative value of PERFORMANCE Metlifecare.

Every two years the Board engages an external provider to The loop walk close to Orion Point undertake a performance evaluation. The most recent review REPORTING AND DISCLOSURE was conducted between May and September 2018. The Board is committed to reporting Metlifecare’s financial The People & Remuneration Committee annually reviews the and non-financial information in an objective, balanced, and CEO’s performance and makes recommendations to the Board clear manner. The Annual Report is an important document on remuneration of the CEO and members of the Executive for communicating financial performance as well as updating Team. The CEO reviews the performance of Executive Team on progress with Metlifecare’s non-financial performance members. including strategy and operations. Commentary on key non- financial matters is available in the Chair and CEO report on pages 11 to 14. BOARD COMMITTEES The Board operates five standing committees which operate Information on Metlifecare’s approach to identifying and under the following Charters approved by the Board: managing its environmental, social and governance risks is set out on pages 41 and 42. • Audit & Risk Committee Charter As a listed company Metlifecare must ensure its financial • Development Committee Charter and other information is reliable and of high quality, allowing • Nominations & Corporate Governance Committee Charter compliance with the NZX Rules and the ASX Rules. The Market • People & Remuneration Committee Charter Disclosure Policy and Shareholder Communications Policy set • Resident Experience & Care Committee Charter out a framework to ensure compliance with the Listing Rules. Each Committee annually agrees a programme of matters Directors are responsible on behalf of the Company for the to be addressed over the following twelve-month period. preparation and fair presentation of the financial statements. Proceedings of all Committee meetings are reported to the The CEO, CFO and General Counsel/Company Secretary Board and minutes of all Committee meetings are made provide the Board with a confirmation that the financial available to directors. statements comply with the requirements of the Financial Markets Conduct Act 2013. The Audit & Risk Committee assists the Board in fulfilling its responsibilities by overseeing, reviewing and providing advice to the Board relating to financial information and reporting, REMUNERATION compliance with continuous disclosure and other regulatory A full report on remuneration is set out on pages 105 and requirements, audit functions and risk management. 106. CEO remuneration is the responsibility of the People & Remuneration Committee. Executive remuneration The Development Committee is responsible for monitoring recommendations are made to the Committee by the CEO. future site opportunities, new developments, remediation, Packages include a base salary and an ‘at risk’ Short Term refurbishment and long-term maintenance works, product Incentive (STI) linked to specific strategic goals. and services safety together with health and safety in the development environment. A “rights based” Employee Share Scheme with a three-year

51 METLIFECARE LIMITED ANNUAL REPORT 2019 52 Gulf Rise villa interior GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

53 METLIFECARE LIMITED ANNUAL REPORT 2019 54 Metlifecare Limited Group Financial Statements 2019

Consolidated Statement of Comprehensive Income Consolidated Statement of Comprehensive Income ForFor the yearyear ended ended 30 30 June June 2019 2019

30 June 30 June $000 Note 2019 2018 1 Income Operating revenue 2.1 124,280 114,759 Other income 2.3 6,500 - Interest income 248 184 Total income 131,028 114,943 Change in fair value of investment properties 3.1 53,860 132,696

Share of profit arising from joint venture, net of tax 151 1,951

Expenses Employee costs (53,057) (49,656) Property costs 2.2 (28,933) (24,689) Other expenses 2.2 (29,242) (25,045) Change in fair value of residents’ share of capital gains (3,644) (4,663) Impairment 3.3 (16,317) (3,849) Depreciation 3.3 (4,971) (3,539) Amortisation (833) (631) Finance costs 4.6 (1,874) (264) Total expenses (138,871) (112,336) Profit before income tax 46,168 137,254 Income tax expense 6.1 (6,935) (14,672) Profit for the year 39,233 122,582

Other comprehensive income Items that may be reclassified subsequently to profit or loss: Loss on cash flow hedges 6.5 (799) (313) Items that will not be reclassified to profit or loss: Share of other comprehensive income arising from joint venture, net of tax (11) 22 Gain on revaluation of care homes, net of tax 4.5 498 364 Other comprehensive (loss) / income, net of tax (312) 73 Total comprehensive income 38,921 122,655

Profit attributable to shareholders of the parent company 39,233 122,582

Total comprehensive income attributable to shareholders of the 38,921 122,655 parent company

Profit per share for profit attributable to the equity holders of the company during the year Basic (cents) 4.2 18.4 57.6 Diluted (cents) 4.2 18.4 57.5

1 See note 1.5 for details regarding the restatement of change in fair value of investment properties for the year ended 30 June 2018 and note 5 for details about restatements for changes in accounting policies.

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

55 METLIFECARE LIMITED ANNUAL REPORT 2019 56 Metlifecare Limited Group Financial Statements 2019 Metlifecare Limited Group Financial Statements 2019

Consolidated StatementStatement ofof MovementsMovements inin EquityEquity Consolidated BalanceBalance SheetSheet For the the year year ended ended 30 June30 June 2019 2019 ass at 30 une June 2019

Employee 30 June une ul Share ote 2019 Contributed Retained Hedging Revaluation Scheme Total $000 Note Equity Earnings Reserve Reserve Reserve Equity Assets Balance at 1 July 2017 306,895 1,055,906 - 7,009 378 1,370,188 Cash and cash euivalents 3,431 1 Restatement 1.5 - (5,727) - - - (5,727) rade receivales and other assets 23,477 Changes in accounting ropert plant and euipent 53,393 1 5 - 87 - - - 87 policies ntangile assets 1,000 Restated balance at 1 July 2017 306,895 1,050,266 - 7,009 378 1,364,548 nvestent properties 3,423,615 nvestent in oint venture 10,788 Comprehensive income / (loss) Total assets 3,515,704 Profit for the year 1 - 122,582 - - - 122,582 Other comprehensive - - (313) 386 - 73 Liabilities income / (loss) Total comprehensive income - 122,582 (313) 386 - 122,655 rade and other paales 41,290 / (loss) erivative financial instruents 1,545 Employee share scheme 4.4 - - - - 210 210 nterest earing liailities 279,208 Transfer from employee eferred anageent fees 126,271 4.4 129 - - - (129) - share scheme reserve efundale occupation right agreeents 1,458,439 Transfer from revaluation eferred ta liailit 123,976 - 345 - (345) - - reserve Total liabilities 2,030,729 Dividends paid to 4.3 - (19,281) - - - (19,281) Net assets 1,484,975 shareholders Balance at 30 June 2018 307,024 1,153,912 (313) 7,050 459 1,468,132 Equity Balance at 1 July 2018 307,024 1,153,912 (313) 7,050 459 1,468,132 Contriuted euit 307,137 Comprehensive income / (loss) eserves 7,070 Profit for the year - 39,233 - - - 39,233 etained earnings 1,170,768 Other comprehensive Total equity 1,484,975 - - (799) 487 - (312) income / (loss) Total comprehensive income ee note for details regarding the restateent of investent properties at une and note for details aout restateents for - 39,233 (799) 487 - 38,921 changes in accounting policies / (loss)

Employee share scheme 4.4 - - - - 307 307 he roup inancial tateents presented are signed for and on ehalf of etlifecare iited and ere Transfer from employee 4.4 113 8 - - (121) - authorised the oard for issue on ugust share scheme reserve Dividends paid to 4.3 - (22,385) - - - (22,385) shareholders Balance at 30 June 2019 307,137 1,170,768 (1,112) 7,537 645 1,484,975

1 See note 1.5 for details regarding the restatement of change in fair value of investment properties and note 5 for details about restatements for changes in accounting policies.

llis an Chair irector ugust ugust

The above consolidated statement of movements in equity should be read in conjunction with the accompanying notes.

he aove consolidated alance sheet should e read in conunction ith the accopaning notes

57 METLIFECARE LIMITED ANNUAL REPORT 2019 58 Metlifecare Limited Group Financial Statements 2019 Metlifecare Limited Group Financial Statements 2019

ConsolidatedConsolidated CashCash FlowFlow StatementStatement Consolidated CashCash Flow Statement (continued) (continued) Foror thethe earyear ended ended 30 une June 2019 For thethe year year ended ended 30 30 June June 2019 2019

Reconciliation of Profit after Tax with Net Cash Inflow from Operating Activities 30 June une 2019 30 June 30 June Cash flows from operating activities $000 2019 2018 1 eceipts fro residents for anageent fees 29,937 122,582 eceipts fro residents for village and care fees 69,041 Profit after tax 39,233 eceipts fro residents for sale of ne refundale occupation right agreeents 74,437 Adjustments for: eceipts fro residents for resale of refundale occupation right agreeents 207,585 Change in fair value of investment properties (53,860) (132,696) aents to residents for refundale occupation right agreeents (146,802) Change in the fair value of residents' share of capital gains 3,644 4,663 aents to suppliers and eploees (112,354) Employee share scheme 307 210 et received 976 Depreciation and impairment 21,288 7,388 nterest received 346 Amortisation 833 631 nterest paid (1,955) Deferred tax expense 6,921 14,652 et uac costs for offaret units associated ith regeneration and Loss on disposal of property, plant and equipment 201 471 (1,308) reediation Share of profit arising from joint venture, net of tax (151) (1,951) Net cash inflow from operating activities 119,903 Items classified as investing activities: Cash flows from investing activities Other income (6,500) - et advances to repaents fro oint venture (106) Changes in working capital relating to operating activities: ividends received fro oint venture 75 Trade receivables and other assets (2,621) (6,191) aents for propert plant and euipent (16,652) Trade and other payables 917 910 aents for intangiles (627) Deferred management fees 9,311 10,773 aents for investent properties (213,742) Refundable occupation right agreements 100,380 89,584 Capitalised interest paid (8,415) Net cash inflow from operating activities 119,903 111,026 eceipts fro settleent incoe 6,500 1 Net cash outflow from investing activities (232,967) See note 1.5 for details regarding the restatement of change in fair value of investment properties for the year ended 30 June 2018 and note 5 for details about restatements for changes in accounting policies. Cash flows from financing activities ividends paid (22,385) The above consolidated cash flow statement should be read in conjunction with the accompanying notes. et proceeds fro orroings 123,135 rincipal paents of lease liailities (553) Net cash inflow from financing activities 100,197 Net (decrease) / increase in cash and cash equivalents (12,867) Cash and cash euivalents at the eginning of the financial ear 16,298 Cash and cash equivalents at the end of the financial year 3,431

ee note for details aout restateents for changes in accounting policies

he aove consolidated cash flo stateent should e read in conunction ith the accopaning notes

59 METLIFECARE LIMITED ANNUAL REPORT 2019 60 Metlifecare Limited Group Financial Statements 2019 Metlifecare Limited Group Financial Statements 2019

Notes toto thethe Group Group Financial Financial Statements Statements Notes to thethe GroupGroup Financial Financial Statements Statements

1 GENERAL INFORMATION 1 GENERAL INFORMATION (continued)

s se ules e ass u e ru aal aees are reare e au 1.4 Goods and Services Tax (GST) les are ule e e e relae ll aounts are shon eclusive of goods and services ta other than trade receivales and trade 1.1 Reporting entity paales ecept here the aount of incurred is not recoverale fro the taation authorit hen this occurs the is recognised as part of the cost of the asset or as an epense as applicale e ru aal aees resee are r eleare e e a a s susares eer e ru as a ue e ru s a eraes reree llaes e 1.5 Comparative information eala eleare e s a le lal a rrae a le e eala e here necessar certain coparative inforation has een reclassified to confor to changes in aress s resere e s eel e ree eare ula presentation in the current ear efer to note for the ipact of the changes in accounting policies on the e ru s esae as a r r e r aal rer urses adoption of andator ne and aended tandards and nterpretations during the ear

1.2 Going concern he valuation of investent properties incorporates cash flos for certain assets and liailities ithin the ar ese ru aal aees r ssue e rers ae sere a lue a Valuer’s discounted cash flo odel that are alread recognised separatel on the alance sheet and e asee a uaae eerra e rus era errae e ru ll accordingl need to e adusted for in deterining the fair value of investent properties he roup has ue ee all las uer e u ales lu lae aal eas identified in the current ear that the fair value of investent properties deterined the aluer included a aa sue leels lu loans etended to residents to help facilitate their transfer fro independent living units to serviced apartents he value of the loans as separatel recognised on the alance sheet ut not adusted for in e rers lu sere e ll deterining the fair value of investent properties in the prior periods s a conseuence the coparative e rus as l reas r e er s r e ae s e aal periods have een restated as suarised the folloing the fair value of investent properties at saees une has decreased ul decreased the change in fair value of investent ree as errae l e uerl e ere properties for the ear ended une has decreased ith a reduction in retained earnings at reas ea lae a une of ul decreased his adustent has reduced net tangile assets at aalale ura ls uer e re eele a r aal ales une cents per share and asic and diluted earnings per share cents here as no a rear all e aers e ae e rers elee reas arrae a e ru ipact on the cash flos or underling profit for the ear ended une aal aees ae ee reare uer e er e 1.6 Critical judgements, estimates and assumptions 1.3 Basis of preparation he preparation of financial stateents in accordance ith reuires the use of certain critical e ral au les ae e reara ese ru aal aees are se u accounting estiates and udgeents t also reuires anageent to eercise its udgeent ased on el a e relea e slsures ese les ae ee ssel ale all e ers historical eperience and other factors including epectations of future events that are elieved to e resee uless erse sae reasonale under the circustances in the process of appling the roups accounting policies he areas involving a higher degree of udgeent or copleit or areas here assuptions and estiates Statutory base are significant to the roup inancial tateents are as follos eleare e s a a resere uer e aes a s a er evenue recognition anageent fees note ers ar e aal ares u e a s als lse e a ar air value of investent properties note and care hoes note a e usrala eures ae as a re e s e ru aal eferred ta note aees ae ee reare arae e reurees ar e aal ares u e a ar s ules a e s ules 1.7 Fair value hierarchy ese ru aal aees ae ee reare arae e eala eerall ee he roup easures investent propert care hoes and interest rate saps at fair value he roup u rae e l e eala uales eraal aal classifies its fair value easureents using a fair value hierarch that reflects the significance of the inputs er aars a er alale e eala aal er aars a used in aing the easureents he fair value hierarch has the folloing levels aurae es as arrae r rr ees e l eraal aal uoted prices unadusted in active arets for identical assets or liailities evel er aars e ru s a er rr e arae nputs other than uoted prices included ithin evel that are oservale for the asset or liailit e alae see r e ru s resee e lu ass ere e asses a lales are either directl ie as prices or indirectl ie derived fro prices evel resee e rer er lu nputs for the asset or liailit that are not ased on oservale aret data ie unoservale inputs evel Historical cost convention ese ru aal aees ae ee reare uer e sral s e as e he level in the fair value hierarch ithin hich the fair value easureent is categorised is deterined on e realua ese reres are es a erae aal srues the asis of the loest input to the fair value easureent f a fair value easureent uses oservale inputs that reuire significant adustent ased on unoservale inputs the easureent is a evel easureent

61 METLIFECARE LIMITED ANNUAL REPORT 2019 62 Metlifecare Limited Group Financial Statements 2019

Notes toto thethe Group Group Financial Financial Statements Statements Notes to thethe GroupGroup Financial Financial Statements Statements

1 GENERAL INFORMATION (continued) 2 OPERATING PERFORMANCE

1.8 Foreign currency translation s se res aal ra au ual le es e ru aal aees a e rers ser s relea e e e era errae e ru lu Functional and presentation currency reeue rer rrae a asra eeses Both the functional and presentation currency of Metlifecare Limited and its subsidiaries is New Zealand dollars ($). s se als lues erl r ere aa a aal easure eree llae erars a rese erl r as a alerae r easure asss easur Transactions and balances era a eele errae s s s a aal easure ere are lel e Foreign currency transactions are translated into New Zealand dollars using the exchange rates prevailing at ssees e alula s alerae errae easure er reree llae the transaction date. Foreign exchange gains and losses resulting from the settlement of such transactions erars are recognised in the consolidated statement of comprehensive income of each Group entity. 2.1 Operating Revenue 1.9 Notes to the Group Financial Statements 30 June ue The notes include information which is required to understand the Group Financial Statements and is 2019 material and relevant to the operations, financial position and performance of the Group. The notes to the aaee ees 55,460 Group Financial Statements are organised into the following sections: es e sal a sere ees 35,783 Vllae ees 29,615 2 Operating performance er reeue 3,422 2.1 Operating revenue Page 64 124,280 2.2 Expenses Page 65 Revenue recognition 2.3 Underlying Profit before taxation Page 66 eeue rses e ar alue seres re e s a seres a eeue s rese as 3 Investment property and other assets lls 3.1 Investment properties Page 67 Management fees 3.2 Refundable occupation right agreements Page 70 ua r areees er e r ua a u r sere aare a are 3.3 Property, plant and equipment Page 71 sere leases uer aaee ee s aale e reses e rus eee l us a sere aares r e r sare e use a ee 4 Shareholders' equity and funding 4.1 Contributed equity Page 74 ales e aaee ee s alulae as a ereae e ua r areee au a 4.2 Earnings per share Page 75 arues l r a se er ase e ers e ual ras e urre slsure 4.3 Dividends Page 75 saee a ua r areee arues aaee ees a e rae er au r a 4.4 Share-based payments Page 76 au ree ears 4.5 Reserves Page 77 e e re aaee ees as lease e s a ral au esae a 4.6 Interest bearing liabilities Page 77 uee e aaee ee s rese a srale ass e saee reese e er e aerae eee le sa reses s ears r eee l us 5 Changes in Accounting Policies 5.1 NZ IFRS 9 Financial Instruments Page 79 a ears r sere aares e ears ee ue a ue s 5.2 NZ IFRS 15 Revenue from Contracts with Customers Page 79 esae a a rease e aerae eee le sa reses e ear ul reue 5.3 NZ IFRS 16 Leases Page 79 aaee ee reeue a a erease e ear ul rease aaee ee reeue 6 Other disclosures e aaee ee s aale as e rese a e e reae e rese e 6.1 Income tax expense Page 82 reuale ua r areee au ue e ru as e r se e reuale 6.2 Trade receivables and other assets Page 85 ua r areee au a e aaee ee reeale 6.3 Trade and other payables Page 85 6.4 Financial instruments Page 86 ear e e aaee ee reeale a as e e rese e saee reese 6.5 Financial risk management Page 86 e as aaee ee reeue s rese as a eerre aaee ee lal e alae 6.6 Related party transactions Page 89 see 6.7 Segment information Page 90 Rest home, hospital and service fees 6.8 Commitments Page 90 6.9 Contingencies Page 90 es e sal a sere ee ares are ere e ual are ass areees 6.10 Subsequent events Page 90 ea are rese eeue s rese ase e al ees are reles e e 6.11 Subsidiaries of the group and joint venture investment Page 90 e s r seres are re e are rese

63 METLIFECARE LIMITED ANNUAL REPORT 2019 64 Notes toto thethe Group Group Financial Financial Statements Statements Notes to thethe GroupGroup Financial Financial Statements Statements 2 OPERATING PERFORMANCE (continued) 2 OPERATING PERFORMANCE (continued) 2.1 Operating Revenue (continued) 2.3 Underlying Profit before taxation Village fees 30 June ue Vllae ees are eale ea reses ua r areee a relae e era ss 2019 e llae eeue s rese ase e eel ees are rele e er a rese as Profit for the year 39,233 ue a u r sere aare Less non-recurring items: er e selee ree (6,500) Other revenue r r e ear elu reurr es 32,733 er reeue r e ru lues rese reurse reeres a asra ees llee Less: ua r areee ras ssue rr eeue s rese a e e e ae ar alue ese reres (53,860) seres are re a aree e rese Add: Information about major customers are rer la a eue 16,317 ealse resale as eeues r e rus lares user e e eala ere s lue al reeue s 71,489 ealse eele ar 16,883 lues are ee reeue r elle ere susse ae are reses reee res e r a eese 6,935 sal leel are eeue reee r e sr eal lue res e sal a sere Underlying Profit before taxation 90,497 ees a llaes ees aue erl r ere aa alulae ssel earear s eere r e e r 2.2 Expenses aer a e ru ause r e a e ll (a) 30 June ue Non-recurring items: se es a relae e rar aes a are eee 2019 reur reular Other income - settlement receipt: eeer a areee as reae r a selee Profit before income tax includes the following expenses: assae ul aers era uls e selee au as Property costs reee auar e resul e es r ar e reurr era les a er rer ss 12,436 errae e usess ears a aeae ese reres 15,246 (b) Change in fair value of investment properties: urealse as alua aes reer e ears a aeae rer la urure a eue 1,251 (c) Impairment of property, plant and equipment: ares a suseue reersals are al rer ss 28,933 lsses assae are e alua aes are elue as e ru s e usess Other expenses a era are es sru e asse r resale reer e ese ss 6,488 (d) Realised resale gains: e realse rease alue r e resale ua r areees are a r 7,643 ur e ear ealse resale as are a easure e as eerae r reases sell res er ele ss 2,816 ua r areees reses less as aus a aae reses r ua ss 3,310 reae reuale ua r areees r e rees rl rese a e ss ssal rer la a eue 201 ae selee e rere easure alls r aus aale e aae rese a alae as 38 ae us a ae ee resele e ear ealse resale as elue eerre aaee er llae era eeses 3,798 ees a reurse ss er era eeses 4,390 (e) Realised development margin: rereses e eele ars elere r e rs e sale Fees paid to PricewaterhouseCoopers New Zealand ua r areees ealse eele ar s e ar ae selee r u a ree aal saees 469 e rs e sale a ua r areee ll e eele e u e ar e a reasur asr seres 114 alula s ase e aual sell re ual us sele ur e ear a lues e a lae seres 35 ll ss eue reuera ear asr seres 54 rel aruale sru ss rae ruree asr seres - a rrae are la e ass e sral s r urase re e la al ees a reaeruseers e eala 672 a rrae sare rasruure ss se a sae e a reasur asr seres ss aalse (114) reerale a al eese ees a reaeruseers e eala 558 aalse eres e ae le ss arue e u al er eeses 29,242 ars are alulae ase e a sae s lee er ele ss lue sa relae ss su as sa ra a urs sru ss la a rasruure reerale a aalse eres assae ees a reaeruseers e eala r e au a ree aal saees lue areas lu aaee es aees a a are ales are elue r e reeal au ees r e searae au ea ual reree llae e ss ae e e eele ar s alulae ese areas are elue as e are asses a slae ru us aeral resls ase e aal resul ea ual reree sur e sale ua rs r all suseue resales raer a us e rs e sale llae (f) Tax expense: e a urre a eerre aa s ree reer e

65 METLIFECARE LIMITED ANNUAL REPORT 2019 66 Metlifecare Limited Group Financial Statements 2019 Metlifecare Limited Group Financial Statements 2019

Notes to the Group Financial Statements Notes to the Group Financial Statements Notes to the Group Financial Statements Notes to the Group Financial Statements 3 INVESTMENT PROPERTY AND OTHER ASSETS 3 INVESTMENT PROPERTY AND OTHER ASSETS (continued)

pp b 3.1 Investment Properties (continued) p pp b Development land (continued) p p eele la s alue ase ree arale rasas e rus la alues rae eee er suare ere s a s s a s rease 3.1 Investment Properties erease e s rae ul resul a er ler ar alue eele la s a eeral rule as reae us e earl saes sru la arals a er 30 June 0 aa la learl ee r uure eele as la r eele s es a es use 000 2019 0 Retirement villages under development p b 3,182,632 5 ere e sae eele sll reures susaal r su a raal le ll e p b p 187,304 aee a r lse alae ae r e ar alue ese reres uer eele a e pp p p - 5 relal eere a s e e arr au s less a are s sere e pp p (181) e ar alue are s eere ser e alue r rress a aaees 53,860 esae e asse alue le b 3,423,615 Unsold stock

eele u e sl s usl s s alue ase ree arale rasas 5 pp 0 0 ause r ssal ss l ss a a allae r r a rs s rereses e ar alue pp e rus eres usl s a ue 30 June 0 Retirement villages 000 2019 0 assess e are alue e rus eres a reree llae as uerae a as l aalss ere a e rese alue s e ar alue ese reres s eere us us p 147,098 a are sa a userale e ru as aerse ese reres as eel uer e p 72,550 55 ar alue erar arae Fair Value Measurement. e ll sa 3,203,967 00 assus ae ee use eere e ar alue pp 3,423,615 serale u 2019 Investment properties al r rae aae aual rer re r er e pp p b p 0% - 3.5% as l er ears b p p p p al u r rae aae aual rer re 2.6% - 3.1% p b p r er e as l er ears pp rea su rae 12.5% - 16.5% Valuation processes e ses e ar alue ese rer aes sa assus s se u e pp p ale el p p p pp e p ppp su rae su rae r raes r raes alue p pp p – 50 bp – 50 bp 30 June 2019 p p p b b b Valua 1,479,170 eree (53,640) 57,260 98,595 (77,287) eree (4%) 4% 7% (5%) Disposals e 0 0 p p su rae su rae r raes r raes alue b p b – 50 bp – 50 bp ue Development land Valua p p p pp eree p b b p p eree p p pp eee ere are eee are elu p b p p usl s eree llaes easure a ar alue aes a lues usl s p b p p

67 METLIFECARE LIMITED ANNUAL REPORT 2019 68 Metlifecare Limited Group Financial Statements 2019 Metlifecare Limited Group Financial Statements 2019

Notes to the Group Financial Statements Notes to the Group Financial Statements Notes to the Group Financial Statements Notes to the Group Financial Statements 3 INVESTMENT PROPERTY AND OTHER ASSETS (continued) 3 INVESTMENT PROPERTY AND OTHER ASSETS (continued)

3.1 Investment Properties (continued) 3.2 Refundable Occupation Right Agreements he occpanc period is a significant coponent of the R alation and is drien fro a onte arlo silation he silations are dependent on the deographic profile of the illage age and gender of 30 June 0 residents and the reason for departing a nit he reslting stailised departing occpanc period is an 000 2019 0 estiate of the long rn occpanc ter for residents n increase in the stailised departing occpanc period ill hae a negatie ipact on the alation and a decrease in the stailised departing occpanc ill b p 1,859,679 hae a positie ipact on the alation Residents’ share of capital gains 34,927 55 he alation calclates the epected cash flos for a ear period ears ith stailised (19,775) b (416,392) 0 departing occpanc assptions set ot elo b p 1,458,439 550 tailised departing occpanc ears 2019 p p p ericed apartents 3.8 - 4.9 b p b ndependent liing nits and apartents 6.3 - 9.0 p p p b he R alation also incldes ithin the forecast cash flos the rops epected costs relating to an p p b non or anticipated reediation ors he estiate of the gross cash flos inclded for reediation ors p p is oer a for ear period oer a fie ear period he increase in the alloance for p b p reediation ors reflects frther inestigatie or condcted oer the period across the portfolio and p b b p pdated estiates of the cost of the reired ors he estiates are ased on crrentl aailale pb p b p inforation R has also inclded ithin the forecast cash flos the rops epected costs associated ith p b b seisic strengthening ors of b Other relevant information p pp p p b he alation of inestent properties is adsted for cash flos relating to refndale occpation right p b p agreeents residents share of capital gains loans to residents deferred anageent fees and anageent p p fee receiales hich are alread recognised separatel on the alance sheet and also reflected in the p pp p disconted cash flo odel reconciliation eteen the alation aont and the aont recognised on p b b the alance sheet as inestent properties is as follos b 30 June ne Estimated maturity 2019 p pp b b 0 p 0 0 p eelopent land 147,098 Retireent illages nder deelopent 72,550 p 0 p 0 0 Retireent illages easred at fair ale per R 1,620,131 p b nestent properties at alation 1,839,779 p b b ls iailit to residents 2,022,260 ess Receiale fro residents (438,424) otal inestent properties 3,423,615 30 June 0 orroing costs of arising fro financing dran for the constrction of inestent 000 2019 0 properties and care hoes nder deelopent ere capitalised dring the ear erage capitalisation rates 123,756 of per ann per ann ere sed representing the orroing costs of the loans sed 1,334,683 to finance the proects 1,458,439 550 Registered ortgages or an encrance in faor of the stattor sperisors of the illageoning ssidiar copanies are recognised as first charges oer the freehold land of those copanies to protect the interests of the residents in the eent of failre the ssidiar copanies as operators of the illages to osere oligations nder the deeds of sperision occpation right agreeents and lifecare agreeents etlifecare iited holds a second registered ortgage and second registered general secrit agreeent oer its holloned operating ssidiaries not crrentl engaged in the deelopent of retireent illages to secre fnding ade aailale to each of these ssidiaries

69 METLIFECARE LIMITED ANNUAL REPORT 2019 70 Metlifecare Limited Group Financial Statements 2019 Metlifecare Limited Group Financial Statements 2019

Notes toto thethe Group Group Financial Financial Statements Statements Notes to thethe GroupGroup Financial Financial Statements Statements

3 INVESTMENT PROPERTY AND OTHER ASSETS (continued) 3 INVESTMENT PROPERTY AND OTHER ASSETS (continued)

3.3 Property, Plant and Equipment 3.3 Property, Plant and Equipment (continued) Plant, Furniture & Rightofse assets relating to leases of office preises are capitalised and recognised ithin propert plant Freehold Construction Equipment and eipent at the coenceent date of the lease and coprise the initial lease liailit pls an initial Land & Work in and Motor Right of Use indirect costs incrred and restoration costs less an lease incenties receied he rightofse asset is Buildings Progress Vehicles Assets Total depreciated oer the shorter of the assets sefl life and the lease ter on a straightline asis At 30 June 2017 ll other propert plant and eipent is initiall recorded at cost ost incldes ependitre that is directl ost or alation attritale to the acisition of the asset he cost of selfconstrcted assets incldes aterial and direct cclated depreciation laor and an other costs directl attritale to ringing the asset to its oring condition for its intended and ipairent losses se lant and eipent is sseentl easred at cost less acclated depreciation and ipairent et oo ale losses if an Year ended 30 June 2018 seent to initial recognition freehold land and ildings for care hoes are carried at a realed aont hich is the fair ale at the date of the realation less an sseent acclated depreciation pening net oo aont on ildings and acclated ipairent losses if an since the assets ere last realed air ale is Realation of are oes ransfers fro inestent deterined reference to aret ased eidence hich is the aont for hich the assets cold e properties echanged eteen a noledgeale illing er and a noledgeale illing seller in an ars length dditions transaction as at the alation date ransferred fro n realation srpls is recognised in other coprehensie incoe nless it reerses a realation constrction or in decrease of the sae asset preiosl recognised in the stateent of coprehensie incoe n realation progress deficit is recognised in the stateent of coprehensie incoe nless it directl offsets a preios srpls in isposals the sae asset in other coprehensie incoe n acclated depreciation at realation date is Redction in the eliinated against the gross carring aont of the asset and the net aont is restated to the realed realation of care hoes aont of the asset pon disposal an realation resere relating to the particlar asset eing sold is pairent epreciation transferred to retained earnings ndependent alations are perfored annall at the alance sheet date losing net oo aont he rops care hoes encopassing freehold land and ildings ere aled the independent At 30 June 2018 registered aler R for all reporting periods presented ost or alation R deterined the fair ale of all care hoe assets sing an earningsased ltiple approach here the cclated depreciation loer of actal or proected earnings efore interest ta depreciation aortisation and rent is capitalised at and ipairent losses et oo ale rates of eteen to to he alation prepared has een split eteen land iproeents chattels plant and goodill to deterine the fair ale of the assets oodill of Year ended 30 June 2019 in respect of care hoe assets inclded in the R alation is not recognised in the rop pening net oo aont 36,367 6,303 10,057 2,042 54,769 inancial tateents he realation net of applicale deferred incoe taes as recognised in other Realation of are oes 691 - - - 691 coprehensie incoe and is shon in the Realation Resere in shareholders eit dditions 1,001 15,673 2,612 - 19,286 ransferred fro s the fair ale of freehold land and ildings is deterined sing inpts that are noserale the rop constrction or in 13,721 (13,990) 269 - - has categorised propert plant and eipent as eel nder the fair ale hierarch in accordance ith progress R Fair Value Measurement. isposals - - (65) - (65) he significant noserale inpts sed in the fair ale easreent of the rops portfolio of land and pairent (8,062) (7,986) (269) - (16,317) ildings are the capitalisation rates applied to indiidal nit earnings significant decrease increase in epreciation (576) - (4,012) (383) (4,971) the capitalisation rate old reslt in a significantl higher loer fair ale easreent losing net oo aont 43,142 - 8,592 1,659 53,393 At 30 June 2019 ost or alation 43,142 - 32,772 3,447 79,361 cclated depreciation - - (24,180) (1,788) (25,968) and ipairent losses et oo ale 43,142 - 8,592 1,659 53,393

71 METLIFECARE LIMITED ANNUAL REPORT 2019 72 Metlifecare Limited Group Financial Statements 2019 Metlifecare Limited Group Financial Statements 2019

Notes toto thethe Group Group Financial Financial Statements Statements Notes to thethe GroupGroup Financial Financial Statements Statements

3 INVESTMENT PROPERTY AND OTHER ASSETS (continued) 4 SHAREHOLDERS' EQUITY AND FUNDING

3.3 Property, Plant and Equipment (continued) his section incldes disclosres related to the rops capital strctre and eternal fnding arrangeents f freehold land and ildings ere stated on a historical cost asis the aonts old e as follos 30 June ne 4.1 Contributed Equity 2019 30 June ne 30 June ne 2019 2019 et oo ale 32,201 Shares hares $000

epreciation is proided on a straight line asis on propert plant and eipent other than freehold land Total Issued and fully paid up capital at rates calclated to allocate the assets cost or alation less estiated residal ale oer their estiated (including treasury shares) sefl lies coencing fro the tie the assets are held read for se as follos alance at eginning of the ear 213,132,290 307,024 reehold ildings ears hares issed net of transaction costs 172,432 113 lant frnitre and eipent ears alance at end of the ear 213,304,722 307,137 otor ehicles ears 30 June ne he residal ales and sefl lies of assets are reieed and adsted if appropriate at each alance sheet 2019 date Shares hares

Impairment of non-financial assets Treasury shares ssets that are sect to depreciation or aortisation are reieed for ipairent heneer eents or alance at eginning of the ear 397,028 changes in circstances indicate that the carring aont a not e recoerale n ipairent loss is hares issed nder the senior recognised for the aont hich the assets carring aont eceeds its recoerale aont after eectie share plan 172,432 redcing the carring aont an aont that the asset has een realed he recoerale aont is hares esting nder the senior the higher of an assets fair ale less costs to sell and ale in se or the prposes of assessing eectie share plan (46,532) ipairent assets are groped at the loest leels for hich there are separatel identifiale cash flos alance at end of the ear 522,928 cash generating nits ains and losses on disposals are deterined coparing proceeds ith the carring aont hese are 30 June ne inclded in the stateent of coprehensie incoe ithin other epenses 2019 n ipairent loss after redcing the carring ale of the assets an associated realation as et tangile assets per share asic $6.96

recognised in the stateent of coprehensie incoe in the depreciation and ipairent line in respect to ee note for details of the ipact on net tangile assets per share relating to the restateent of change in fair ale of inestent properties the folloing care hoes for the ear ended ne 30 June ne et tangile assets represents total assets less total liailities less intangile assets he shares on isse at the 2019 end of the ear is sed to calclate the net tangile assets per share inal costs attrited to the constrction of the care ll ordinar shares are athorised and ran eall ith one ote attached to each fll paid ordinar share apaoa each hoe eceeded the alation perfored on he shares hae no par ale rdinar shares are classified as eit and are recognised net of increental copletion R eclding goodill of 7,508 costs directl attritale to the isse of ne shares he opan incrred no transaction costs issing inal costs attrited to the constrction of the care shares dring the ear nil he enes hoe eceeded the alation perfored on copletion R eclding goodill of 8,688 reasr shares relate to shares issed nder the senior eectie share plan that are held on trst the rop hese shares are acconted for as treasr shares the rop ntil sch tie as the are cancelled Redction in the ale of land related to the ne care he enes or est to eers of the senior eectie tea he esting of these shares is sect to achieeent of hoe eing constrcted - perforance hrdles he final constrction costs for the ne care hoe oerale opened in oeer eceeded the alation perfored on copletion R 633 Total 16,829 n the ear ended ne an ipairent loss of in respect to a preiosl recognised ipairent as reersed to reflect the increase in the alation of the care hoe

73 METLIFECARE LIMITED ANNUAL REPORT 2019 74 Metlifecare Limited Group Financial Statements 2019 Metlifecare Limited Group Financial Statements 2019

Notes to the Group Financial Statements Notes toto thethe Group Group Financial Financial Statements Statements Notes to the Group Financial Statements

4 SHAREHOLDERS' EQUITY AND FUNDING (continued) 4 SHAREHOLDERS' EQUITY AND FUNDING (continued)

4.2 Earnings Per Share 4.4 Share-based Payments

Basic Share Scheme asic earnings per share is calclated diiding the profit attritale to eit holders the eighted he opan operates a enior anageent hare chee the chee hich is intended to align the aerage ner of ordinar shares eclding treasr shares on isse dring the ear interests of eecties and other senior anageent ith the interests of shareholders and proide a contining incentie to these eploees oer the long ter 30 June ne ards of shares depend on satisfaction of perforance hrdles and an assessent of otal hareholder 2019 Retrn coparison ith the peer grop eing eers of the nde at the date of grant and in the ftre other listed retireent illage operators hares issed nder the chee are entitled to rofit attritale to eit holders 39,233 diidends eighted aerage ner of ordinar shares on isse s 212,760 Share rights issued asic earnings per share cents 18.4 he chee is acconted for as an insstance share rights schee reconciliation of the share rights on Diluted isse is proided elo ilted earnings per share is calclated diiding the profit attritale to eit holders the eighted 30 June ne aerage ner of ordinar shares adsted for an shares to e issed nder the share right schee for 2019 hich perforance hrdles old hae een et ased pon the opans perforance p to the hare rights otstanding at l 397,028 reporting date and to the etent to hich the are diltie ranted dring the ear 172,432 ested dring the ear (46,532) 30 June ne hare rights otstanding at ne 522,928 2019 he tale elo sets ot aonts recognised in respect to share ased paents rofit attritale to eit holders 39,233 30 June ne ilted eighted aerage ner of ordinar shares on isse s 213,264 2019 ilted earnings per share cents 18.4 hare ased paent epense recognised in the consolidated 307 ee note for details of the ipact on asic and dilted earnings per share relating to the restateent of change in fair ale of inestent stateent of coprehensie incoe ithin eploee epenses properties for the ear ended ne cclated eploee share ased paent epense recognised 645 in the eploee share schee resere 4.3 Dividends 30 June ne ring the ear ended ne shares ested of the preiosl ents per 2019 recognised share ased paent epense as transferred to share capital share $000 he fair ale of the insstance share rights granted is recognised as an eploee epense in the profit or loss coponent of the stateent of coprehensie incoe ith a corresponding entr in the eploee share Recognised amounts schee resere he total aont to e epensed oer the esting period is deterined reference to the inal diidend for - fair ale of the insstance share rights granted eclding the ipact of an nonaret esting conditions nteri diidend for - onaret esting conditions are inclded in assptions aot the ner of insstance share rights inal diidend for 14,386 that are epected to ecoe eercisale nteri diidend for 7,999 otal diidends paid 22,385 t each alance sheet date the rop reises its estiates of the ner of insstance share rights that n gst the directors approed a diidend of cents per share aonting to he are epected to ecoe eercisale t recognises the ipact of the reision of original estiates if an in diidend record date is epteer and paent ill occr on epteer the profit or loss coponent of the stateent of coprehensie incoe and a corresponding adstent to eit oer a three ear period roision is ade for the aont of an diidend declared on or efore the alance date t not distrited s part of this chee interestfree loans are proided to the eecties and senior anageent at grant at alance date dates hich ill e settled for insstance share rights that est a cash ons forfeited insstance Imputation credits share rights offset the reaining loan alance he eleent of this ons ill e treated as a cash he iptation credit alance for the rop at ne is nil nil o ta paents ere ade settled shareased paent transaction ith a liailit for accring oer the esting period fter dring the ear and diidends paid ere nipted esting to the date of eercise this liailit is adsted reference to the aret ale of the shares hanges in the fair ale of this liailit ill e recognised in profit or loss

75 METLIFECARE LIMITED ANNUAL REPORT 2019 76 Metlifecare Limited Group Financial Statements 2019 Metlifecare Limited Group Financial Statements 2019

Notes toto thethe Group Group Financial Financial Statements Statements Notes to thethe GroupGroup Financial Financial Statements Statements

4 SHAREHOLDERS' EQUITY AND FUNDING (continued) 4 SHAREHOLDERS' EQUITY AND FUNDING (continued)

4.5 Reserves 4.6 Interest Bearing Liabilities (continued) Revaluation Reserve Bank loans The bank loans comprise the Core Revolving Credit Facility, Development Facility and Working Capital Facility, ne 30 June effective 8 March 2012 as amended from time to time as detailed below. 2019 On 20 December 2018 the bank facilities were renegotiated and extended. The maturities of the Core alance at eginning of the ear 7,050 Revolving Credit Facility of $175m (2018: $175m), the Development Facility of $275m (2018: $175m) and the hare of lossgain on realation of care hoe arising fro oint Working Capital Facility of $2m (2018: $2m) are detailed below. (11) entre net of ta Proceeds from the sale of units and apartments that are funded from the Development Facility are required ain on realation of care hoes 691 to be repaid against the Development Facility. a on realation of care hoes (193) Drawn Balances Redction in the realation of care hoes refer note - ransfer on reclassification of deelopent land - 30 June 30 June alance at end of the ear 7,537 $000 Facility Limit 2019 2018 he realation resere records changes in the realation of propert plant and eipent Core Facility 175,000 144,333 15,000 Hedging Reserve Development Facility 275,000 133,470 139,668 he hedging resere records the effectie portion of acclated changes in the fair ale of interest rate Working Capital Facility 2,000 - - saps sed in cash flo hedges his is recognised in the profit or loss hen the hedged ite affects the profit Total 452,000 277,803 154,668 or loss refer note Investment property valuation (refer note 3.1) 1,839,779 1,715,988 Loan to Valuation Ratio 15.1% 9.0% 4.6 Interest Bearing Liabilities Maturities 30 June ne 2019 30 June 30 June $000 Facility Limit 2019 2018 an loans 277,803 apitalised det costs (637) On demand 2,000 - - 277,166 Between one and two years 83,333 83,333 70,333 ease liailities 2,042 Between two and three years 141,667 141,667 61,333 otal interest earing liailities 279,208 More than three years 225,000 52,803 23,002 Total 452,000 277,803 154,668 Borrowings orroings are initiall recognised at fair ale net of transaction costs incrred and are sseentl Security easred at aortised cost n difference eteen the proceeds net of transaction costs and the A Negative Pledge Deed has been entered into by the operating subsidiaries in favour of the banks in which redeption aont is recognised in the stateent of coprehensie incoe oer the period of the the subsidiaries have undertaken not to create or permit to exist any mortgage or other charge over their orroings sing the effectie interest ethod assets or revenues without obtaining the prior written consent of the Group's Lenders. Metlifecare Limited has issued a letter of support for the bank borrowings of the 50% joint venture entity orroing costs incrred for the constrction of an alifing asset are capitalised dring the period of tie Metlifecare Palmerston North Limited. that is reired to coplete and prepare the asset for its intended se ther orroing costs are epensed as incrred Financial covenants The Group must comply with certain financial covenants under the debt facility agreements. During the year Lease liabilities ended 30 June 2019, the Group was in compliance with its financial covenants (2018: in compliance). ease liailities relating to leases of office preises are easred ased on the present ale of the fied and ariale lease paents less an cash lease incenties receiale ach lease paent is allocated eteen Finance Costs the liailit and finance cost he finance cost is charged to profit or loss oer the lease period so as to 30 June 30 June prodce a constant rate of interest on the reaining alance of the liailit for each period ease paents $000 2019 2018 associated ith loale assets and for lease ters of onths or less are recognised on a straightline Interest expense 7,472 3,905 asis as an epense in profit or loss Facility costs 2,817 1,812 Less: interest expense and facility costs capitalised (8,415) (5,453) Total finance costs 1,874 264 Interest on borrowings is charged using the BKBM Bill Rate plus a margin and line fees. Interest rates applicable in the year to 30 June 2019 ranged from 3.49% to 3.77% per annum (2018: 3.46% to 3.66% per annum). Derivative financial instruments used to manage interest rate risk are set out in note 6.5.

77 METLIFECARE LIMITED ANNUAL REPORT 2019 78 Metlifecare Limited Group Financial Statements 2019 Metlifecare Limited Group Financial Statements 2019

Notes to the Group Financial Statements Notes to thethe GroupGroup Financial Financial Statements Statements Notes to the Group Financial Statements

5 CHANGES IN ACCOUNTING POLICIES 5 CHANGES IN ACCOUNTING POLICIES (continued)

he rop adopted all andator ne and aended R tandards and nterpretations dring the ear 5.3 NZ IFRS 16 Leases (continued) inclding R Financial Instruments and R Revenue from Contracts with Customers. he rop (a) New accounting policy (continued) elected to earl adopt R Leases fro l he ipact of the changes in acconting policies on At the inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or adoption of these ne standards is sarised elo contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time 5.1 NZ IFRS 9 Financial Instruments in exchange for consideration. R replaces the gidance in for the recognition classification and easreent of financial Right-of-use assets are capitalised at the commencement date of the lease and comprise the initial lease assets and financial liailities derecognition of financial instrents ipairent of financial assets and hedge liability, plus any initial indirect costs incurred and restoration costs, less any lease incentives received. The acconting R has een adopted retrospectiel and in accordance ith the transitional proisions of right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line R coparatie figres hae not een restated basis. R estalishes three priar easreent categories for financial assets aortised cost fair ale Lease liabilities are measured based on the present value of the fixed and variable lease payments, less any throgh other coprehensie incoe and fair ale throgh profit or loss he asis of classification depends cash lease incentives receivable. Each lease payment is allocated between the liability and finance cost. The on the entits siness odel and the contractal cash flo characteristics of the financial asset inancial finance cost is charged to profit or loss over the lease period so as to produce a constant rate of interest on assets that ere preiosl classified as loans and receiales nder are no categorised as the remaining balance of the liability for each period. financial assets at aortised cost he change in classification has not affected the easreent of these The recognition exemptions available under NZ IFRS 16 have been applied to lease payments associated with assets low-value assets, and for lease terms of 12 months or less, which are recognised on a straight-line basis as an pairent of financial assets is assessed ased on the epected credit loss odel nder R rather expense in profit or loss. than the incrred loss odel that as preiosl sed he rop has applied the siplified approach (b) Adjustments recognised on adoption of NZ IFRS 16 peritted nder R hich reires epected lifetie losses to e recognised fro initial recognition of trade receiales ased on crrent historic and forardlooing inforation pected lifetie losses hae On adoption of NZ IFRS 16, the Group has recognised a right-of-use asset within property, plant and een easred reieing trade receiales ased on the tpe of detor and das since resident departre equipment and a corresponding lease liability within interest bearing liabilities in relation to leases which had ash and cash eialents are also sect to the ipairent reireents of R pplication of the previously been classified as operating leases under the principles of NZ IAS 17 Leases, except where the ne ipairent odel has not had a aterial ipact on the carring ale of epected credit losses and no recognition exemptions were applied to short-term leases and leases of low-value assets. The liabilities were adstents hae een ade to the opening ipairent proision alance measured at the present value of the lease payments, discounted at a rate of 7.5%. This is an estimated he hedge acconting reireents of ill contine to e applied to eisting deriatie financial discount rate based on similar assets with similar tenure in proximity to the office premises. At 30 June 2019, a instrents in designated hedging relationships on transition isclosre in relation to the rops hedging right-of-use asset of $1.7m and a corresponding lease liability of $2.0m have been recognised. relationships is inclded in note Occupation right agreements confer the right to occupancy of a unit or serviced apartment and are considered leases under NZ IFRS 16. On adoption of NZ IFRS 16, the Group has recognised an adjustment for recognition 5.2 NZ IFRS 15 Revenue from Contracts with Customers of management fees relating to transfers from an independent living unit or apartment to another R reires reene recognition that depicts the transfer of proised goods or serices to cstoers independent living unit or apartment or a serviced apartment, deferring the management fees historically in an aont that reflects the consideration to hich the entit epects to e entitled to in echange for recognised into later periods. Management fee revenue continues to be recognised on a straight-line basis in those goods or serices R has een adopted sing the fll retrospectie approach and no practical the statement of comprehensive income over the average expected length of stay of residents. As a result, epedients hae een applied investment properties and deferred management fees have been impacted. doption of R has not had a aterial ipact on the recognition or easreent of reene the The impact of the adoption of NZ IFRS 16 on the Group's consolidated balance sheet, consolidated statement rop Rest hoe hospital and serice fees and illage fees contine to e recognised at the point in tie of comprehensive income and consolidated cash flow statement for those comparatives presented within the goods or serices are proided to residents these Group Financial Statements, including the opening balance sheet at 1 July 2017, are presented on page 81. 5.3 NZ IFRS 16 Leases A reconciliation between the operating lease commitments disclosed as at 30 June 2017 and the lease he rop has elected to earl adopt R Leases ith a date of initial application of l liabilities recognised on adoption of NZ IFRS 16 on 1 July 2017 is provided below. R has een adopted sing the fll retrospectie approach as peritted nder the specific transition 1 July proisions in the standard oparaties for the ear ended ne and the opening alance sheet at $000 2017 l hae een restated Operating lease commitments disclosed as at 30 June 2017 2,823

(a) New accounting policy Discounted at the date of initial application 2,101 he rop leases spport office preises and arios propert plant and eipent nder noncancellale Add: finance lease liabilities already recognised as at 30 June 2017 102 operating lease agreeents he leases reflect noral coercial arrangeents ith aring ters Add: adjustment for lease variations 724 escalation clases and reneal rights Less: low-value and short-term leases recognised on a straight-line basis as expense (47) Lease liabilities recognised as at 1 July 2017 2,880

79 METLIFECARE LIMITED ANNUAL REPORT 2019 80 Metlifecare Limited Group Financial Statements 2019 Metlifecare Limited Group Financial Statements 2019

Notes to the Group Financial Statements Notes to the Group Financial Statements Notes to the Group Financial Statements Notes to the Group Financial Statements

5 CHANGES IN ACCOUNTING POLICIES (continued) 6 OTHER DISCLOSURES 5.3 NZ IFRS 16 Leases (continued) his section incldes additional inforation that is considered less significant in nderstanding the financial (b) Adjustments recognised on adoption of NZ IFRS 16 (continued) perforance and position of the rop t st e disclosed to copl ith e ealand eialents to he folloing tales sho the adstents recognised for each indiidal line ite ine ites that ere not nternational inancial Reporting tandards affected the changes hae not een inclded 6.1 Income Tax Expense Consolidated Balance Sheet ne l 30 June ne 2019

ropert plant and eipent ncrease (a) Income tax expense nestent properties ncrease rrent ta 14 Total assets ncrease eferred ta 6,921 ncoe ta epense nterest earing liailities ncrease 6,935 eferred anageent fees ncrease (b) Numerical reconciliation of income tax expense to prima facie tax eferred ta liailit ecrease rofit efore incoe ta 46,168 Total liabilities ncrease a at the e ealand ta rate of 12,927 Net assets ncrease a effect of aonts hich are not dedctile taale in calclating taale incoe Retained earnings ncrease on taale incoe and non dedctile ependitre 3,315 Total equity ncrease apitalised interest (2,356) Consolidated Statement of Comprehensive Income on taale ipact of inestent propert realation (15,080) ear ended oeent in propert alation 7,086 ne hare of profit arising fro oint entre (42) dstent for tiing difference of proisions 1,009 perating reene ecrease rior period adstent 76 Total income ecrease ncoe ta epense 6,935

hange in fair ale of inestent properties ncrease (c) Recognised deferred tax liability ther epenses ecrease Balance 1 July Recognised in Recognised Balance 30 June epreciation ncrease 2018 income in Reserves 2019 inance costs ncrease ropert plant and eipent (5,841) (286) (193) (6,320) Total expenses ncrease nestent propert (142,026) (12,247) - (154,273) Profit before income tax ecrease eferred anageent fees 1,821 (1,382) - 439 ncoe ta epense ecrease Recognised ta losses 25,180 7,165 - 32,345 Profit for the year ncrease ther ites 3,693 (171) 311 3,833 et deferred ta liailit (117,173) (6,921) 118 (123,976) Total comprehensive income ncrease Consolidated Cash Flow Statement alance l Recognised in Recognised alance ne ear ended incoe in Reseres ne ropert plant and eipent nestent propert aents to sppliers and eploees ecrease eferred anageent fees Recognised ta losses nterest aid ncrease ther ites Net cash inflow from operating activities ecrease et deferred ta liailit rincipal paents of lease liailities ncrease Net cash inflow from financing activities ecrease

81 METLIFECARE LIMITED ANNUAL REPORT 2019 82 Metlifecare Limited Group Financial Statements 2019 Metlifecare Limited Group Financial Statements 2019

Notes toto thethe Group Group Financial Financial Statements Statements Notes to thethe GroupGroup Financial Financial Statements Statements

6 OTHER DISCLOSURES (continued) 6 OTHER DISCLOSURES (continued)

6.1 Income Tax Expense (continued) 6.1 Income Tax Expense (continued) o o s p or p ur r r r o uros osss or Group Deferred tax - recognition based on contractual cash flows u n calclating deferred ta nder the held for se ethodolog the rop has ade significant dgeents to o ps or r s p o urr rs o s o deterine taale teporar differences he carring ale of the Group’s inestent propert is pp o r us s rr sss s ru o porr deterined on a disconted cash flo asis and incldes cash flos that are oth taale and nontaale in rs ss o sss s r rr ous Group the ftre nl those cash flos ith a ftre ta conseence priaril in respect of anageent fees s s o osss reslt in a taale teporar difference n deterining the taale teporar difference the directors hae rr sss s r ros or porr rs rs p o pp sed the contractal cash flos on the asis that the contractal arrangeents for an occpation right sss r ror or s r s s o os rs r or agreeent coprise to gross cash flos eing an occpation right agreeent deposit pon entering the sus r rs r pp o uu ous o nit and the refnd of this deposit pon eit that are nontaale and need to e eclded to deterine the u porr rs o sur rr ss or po s taale teporar differences arising on inestent properties or r porr rs rs ro roo o ss or o he rop has recognised deferred ta in relation to the present ale of cash flos ith a ftre ta rr ss or s ros ro o s porr rs ros conseence as proided R iited that arise fro the depreciale coponents ie ildings of the rso or usss oo o rso o r inestent propert nclded ithin the R alation is also the present ale of the capital gains ou pro or pro or oss associated ith the inestent propert hich are nontaale and priaril attritale to the capital rr sss r ros o s pro uur ous o us groth of the nondepreciale coponents ie land o deferred ta has een recognised against these os porr rs osss aonts urr rr s ru o ous ros r u r so ros he rop considered hether deferred ta shold e recognised on the asis that anageent fees are r u sso urr or rr s r ros s ous s usu receied at the end of the ccpation Right greeent R period ie pon refnd of the R deposit a of set off on eit a resident or at the eginning of the R period ie at tie of the receipt of the Key assumptions related to deferred tax R deposit he rop considers it appropriate to recognise and easre deferred ta ased on the Deferred tax - recognition based on 'value-in-use' anageent fee eing receiale at the end of the R period as the eliee it est represents the Group’s Income Taxes pros r s ru prsupo s propr sur contractal entitleent hold the anageent fee e treated as receied at the eginning of the R r u ur s ror r rou s s prsupo s ru period an additional deferred ta liailit of old e recognised in the alance sheet s propr s pr s propr s usss o os n additional crrent ear ta epense of and a corresponding redction in net profit o s o osu sus o oo s o s propr or after ta of old also e recognised rr rou s Group rus prsupo osrs or us ooo or ppropr rprss Group’s usss o Group s or opror o poroo o r r s s osus sus o oo s o s s propr rou opr s or rop s s or urror o o usss o s o o s s propr ss rr rsp o s proprs s ssss o ss o ss u rs rou us ss u s rs s s ou rr ro o pro ror pror o uso o osss s oprs o us rr o u op r pror o uso o osss

83 METLIFECARE LIMITED ANNUAL REPORT 2019 84 Metlifecare Limited Group Financial Statements 2019 Metlifecare Limited Group Financial Statements 2019

Notes to the Group Financial Statements Notes toto thethe Group Group Financial Financial Statements Statements Notes to the Group Financial Statements

6 OTHER DISCLOSURES (continued) 6 OTHER DISCLOSURES (continued) 6.2 Trade Receivables and Other Assets 6.4 Financial Instruments 30 June u Group os oo ors o srus 2019 Financial assets at amortised cost - sss oprs s s us r r rs 6,056 s r sss u prps upo r r rs 9,833 Financial liabilities at amortised cost s oprs r r s u rps 2,335 po s rs r s u upo rs ous u ro r prs 246 poss p or usos 820 Financial liabilities at fair value through profit or loss s oprs rs ps os or rs 4,187 6.5 Financial Risk Management o rs or sss 23,477 Group s pos o r o rss r rs u rs r rs r rs r rs or sss r p o ur os o u rs Groups or rs pror osrs o o rs r rs r ros r u r susu sur ors os us ss o s po rs s o pror o Group s rs o ss proso or pr proso or pr o r s rr ou ur pos ppro or o rors or or rs rs s ssss s o sp ppro o p r oss o rurs rsur rs rss p osss o ros ro roo o r rs s o urr Group uss r os o sur r ps o rs o s pos u ss sor orroo oro p osss r sur r r ss s o rs rs o r r rs ss or r rs ro o rs s o p o or s s rs prur ppo o pr Group uss r srus su s rs r sp ors o r o s o r p o rr u o p r osss o us s rs r rs posurs rs r us us or oo purposs o s r o op pr proso or or spu srus

6.3 Trade and Other Payables (a) Market risk

30 June u (i) Foreign exchange risk 2019 Group os o r posur o or rs

r rors 4,244 (ii) Cash flow and fair value interest rate risk ur rors rus 26,782 Groups rs r rs rss ro or orros orros ssu r rs pos u 3,855 Group o s o rs r rs po s 6,409 s o r u rs r rss r oor or o o ss o r or ps 41,290 oors s rs r pro s ppropr prss rs r ss os sur rors rus u s o purs pr or ro srs o or or osro ppro pror o r o rs r sps o oso poso s p o r ur rs r posur oo r or ps r p o ur os o r or oos ps r ros r u susu sur ors os us u s s r rs o o pr po rs rs ou ru rs o Groups pros r ppro ou rs u Creditors and other accruals pss r rou o ou o rus ss o p o rpor pro r Derivative financial instruments r oso s p s ous rprs s or ous Group s r o rs r sps o ru s posur o r o r rs o o rpor pro ous r usur r usu p s o ps or or orros roo rs r sps r ros r u o or s r o r susu Employee entitlements sur r u o rpor r u o rs r sps s u s prs s or s srs u oor s u uu s u o s uur s os sou us r rs Group s r ros rsp o pos srs up o rpor r sur ous ors rs r sps s ur r u rr p o p s r s s or ouu s r ros s sur ous p or p

85 METLIFECARE LIMITED ANNUAL REPORT 2019 86 Metlifecare Limited Group Financial Statements 2019 Metlifecare Limited Group Financial Statements 2019

Notes to the Group Financial Statements Notes to the Group Financial Statements Notes to the Group Financial Statements Notes to the Group Financial Statements

6 OTHER DISCLOSURES (continued) 6 OTHER DISCLOSURES (continued) 6.5 Financial Risk Management (continued) 6.5 Financial Risk Management (continued) (c) Liquidity risk Cash flow hedges Group rs rprs s r rosps o rss r r o rs r sps r s s o rosps rs r sp s oros o r rs rss o r rs r o rs r suss rr or ou poro o s r u o rs r sp s r r r rous sr ors or o ros or oprs o uu rsr poro o o o s s r osr r rs s r u o rs r sp s ros pro or oss s rosps ss rs u o s ourpr rs o r rs o r ru u rs ps su s o u rou u o rs rs r rs sps os ou u ou o o r s uu u s p o rss o oss s s rs ps or s o ors s rur pror Group Group oors ro orss o u or orros r rurs o sur su s o opro s roo o ur o orro s s so os o r orro s or os o o u Group s rs r sp rs p o oo prp ou s orro s u ors s o osro Groups ps o r us o or ppro o ous o op urpus s opr s s us o rp or p prp o os s rs Groups rs posur o prp or s or rs r sps ro or poso o r poso r or rs r o rs rosps r s s pr o Groups rsur s u oo susrs r s o ro o ro s s o rs r sp oo ou o rou rop ous r o ss s opsss rps ro s oo ou o os rss ps o supprs rps ps o rss ur oupo r rs oo us o rs r sps ous u r urs r s oos Maturity profile of financial liabilities o sos ur ss o Groups oru usou s os r o 30 June u s 2019 Less than Later than o o rs 20,000 1 year 1 year o rs 35,000 o rs r sps 55,000 30 June 2019 r u osss o r o poro o s o s r ros r or ps 34,881 - or oprs o orrspo ou ros s os 8,410 291,449 oso s u u o ous rss ro r srus 452 543 rsr o pro or oss s s s 617 2,056 u oupo r rs 1,458,439 - (b) Credit risk 1,502,799 294,048 r rs rss ro s s us r srus poss s suos s s r posur ro r rs 30 June 2018 r or ps Group s o s oros o r rs Groups po rurs sur pos ro os rss or r r r o oup u ror Group os o r srus s r rs us o ss s rprs u s s r rs ssss o proso rur or pr o r rs s o u oupo r rs o or s rsp o sss Group rs o srus rous ourprs or ss s s o r r or s os o os r ur o s r p r o or pros o o rur or or or sur o suppor srus os r ouso o pro Groups s s us r pos o o or r s o pror upo r rs r rp o rs o o o u or sr pr o oos s o p u o r oors r r o ourpr s o p ous rp o oupo r rs osr p ur o ru oupo r r s so o rs sor p uror uos

87 METLIFECARE LIMITED ANNUAL REPORT 2019 88 Metlifecare Limited Group Financial Statements 2019 Metlifecare Limited Group Financial Statements 2019

Notes to the Group Financial Statements Notes to the Group Financial Statements Notes to thethe GroupGroup Financial Financial Statements Statements

6 OTHER DISCLOSURES (continued) 6 OTHER DISCLOSURES (continued)

6.5 Financial Risk Management (continued) 6.7 Segment information

(d) Capital risk management Group oprs o opr s o rr s opr so Group s s p rs rr o s r ros o o p s u o r or o rors rs opr rsus o rur ss s sos o p u orro ros su s rs or o o u ros posur o u rsour oo s o r o Group rsus s os s o r rs posurs o rs o ur o prous srs pro p ss o usors sr Groups os p r o sur Groups o ou s o rrss opr s or orr o pro rurs or srors s or or sors o op p sruur o ru os o p 6.8 Commitments

(e) Fair value estimation 30 June u r u o sss s us s or roo sur 2019 or sosur purposs rr u o sss s r ssu o Capital commitments ppro r r us uss ors sos s os or or u o urr 53,782 53,782 6.6 Related Party Transactions 6.9 Contingencies oo rsos r rr ou r prs oror s su or ors r or s (a) Key management personnel compensation Group’s ssss o ou u po p o Group s s prso r us uor or sr ro o oro s o osr r o Group r opso p or p s s ou o rors r rur rou rors s pss 6.10 Subsequent Events 30 June u usu o Group r oo or or purs o s s 2019 Group s urr osr rs o s or rs or sorr po s 3,885 uus rors ppro o s pr sr ou o or u o r sr p 657 ror s pr p our o pr o 4,542 r r o urr susu s u ss r uors rors (b) Transactions and balances 6.11 Subsidiaries of the Group and Joint Venture Investment ur r u Group o o ur op r rso or Group r rp o ro o ur op susr ops r o orpor o u Operating entities s u o ur op o o op ors Grs r s (c) Terms and conditions sus os os r p sorou s os r r Joint venture company advances oor r os r ro o s u ro o ur op r sur o Gr ur r r r r po rp u o os o o o ro o r sr r so s s rs rs r u o s o Group rsur r os o us r o r ouu rs rs pp o pro o u r ro o pr u r os s r o o pr u r rsoo r or r or Grs r us (d) Directors' fees r r r rrs r Gr Grs r oo ur r u o rors s r p s us r Groo r r Group ou o uror G rors s r u r pss o r Gu s

89 METLIFECARE LIMITED ANNUAL REPORT 2019 90

Metlifecare Limited Group Financial Statements 2019

Notes to the Group Financial Statements Notes to the Group Financial Statements

6 OTHER DISCLOSURES (continued)

6.11 Subsidiaries of the Group and Joint Venture Investment (continued) Independent auditor’s report Dormant and non operating entities To the shareholders of Metlifecare Limited oor r r os orr so or We have audited the group financial statements which comprise: susrs p or o opr s o rr s  the consolidated balance sheet as at 30 June 2019;  the consolidated statement of comprehensive income for the year then ended; Investment in Joint Venture - Palmerston North  the consolidated statement of movements in equity for the year then ended; Group s rs o ur op r rso or  o ur op r rso or s orpor s the consolidated cash flow statement for the year then ended; and o u  the notes to the group financial statements, which include significant accounting policies.

prp o r rso or s orsp o Our opinion rr In our opinion, the accompanying group financial statements of Metlifecare Limited (the Company), including its subsidiaries (the Group), present fairly, in all material respects, the financial position of Principles of consolidation the Group as at 30 June 2019, its financial performance and its cash flows for the year then ended in accordance with New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS) Subsidiaries and International Financial Reporting Standards (IFRS). usrs r os s u sp purpos s oro op oro ss op s pos o or s rs o r rurs ro s o Basis for opinion s o os rurs rou s por or ssss oro po o We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs rs r sus r o ou (NZ)) and International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of rsus o susrs u oso ss ro o our report. oro os u oro ss We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for Intercompany our opinion. rop rsos s urs s o rsos Group ops r We are independent of the Group in accordance with Professional and Ethical Standard 1 (Revised) rs osss r so uss rso pros o pr Code of Ethics for Assurance Practitioners (PES 1) issued by the New Zealand Auditing and Assurance o ss rsrr ou pos o susrs r oss pos op Standards Board and the International Ethics Standards Board for Accountants’ Code of Ethics for Group Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. Joint venture entities o ur s r ou or us u o rss o ur s r Our firm carries out other services for the Group in the areas of tax compliance, executive ros os us rr o ros Groups sr o posuso remuneration benchmarking advisory services and debt and treasury advisory services. The provision pros or osss os or oprs o of these other services has not impaired our independence as auditor of the Group. rs s o rsos Group s o ur s r o o Groups rs o ur s rs osss r so uss rso pros o pr o ss rsrr

PricewaterhouseCoopers, 188 Quay Street, Private Bag 92162, Auckland 1142, New Zealand T: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz

91 METLIFECARE LIMITED ANNUAL REPORT 2019 92

Our audit approach Key audit matter How our audit addressed the key audit matter Overview aluation of inestment properties and ternal aluations care homes An audit is designed to obtain reasonable assurance whether the financial e reeive an isusse the eternal valuation statements are free from material misstatement. The Group’s retirement village portfolio, report ith the aluer e onfirme that the as islose in note an of the valuation approah for eah village as in aorane For the purpose of our audit, we used a threshold for overall Group group finanial statements, inlues ith the aounting stanars an suitale for use in materiality of $2,485,000 which represents approximately 2% of investment properties of ,,, etermining the arring value of investment operating revenue. We applied this benchmark because, in our view, it is a an are homes enompassing freehol properties an are homes at une key financial metric used in assessing the performance of the Group and lan an uilings of ,, an is not as volatile as other profit or loss measures. represents the maorit of the assets hel t as evient from our isussions ith management We agreed with the Audit and Risk Committee that we would report to the Group as at une an the aluer, an from our revie of the valuation them misstatements identified during our audit above $124,000 as well report that lose attention ha een pai to eah as misstatements below that amount that, in our view, warranted nvestment properties an are homes are villages iniviual harateristis an its overall reporting for qualitative reasons. arrie at fair value nvestment ualit, geographi loation an esirailit as a We have determined that there is one key audit matter: properties uner evelopment that are not hole suffiientl progresse to enale fair value Valuation of investment properties and care homes to e relial etermine are arrie at e assesse the aluers ualifiations, epertise an Materiality ost less an impairment their oetivit an e foun no eviene to suggest The scope of our audit was influenced by our application of materiality. that the oetivit of the aluer, in their performane The valuation of the Groups retirement of the valuations, as ompromise Based on our professional judgement, we determined certain quantitative thresholds for materiality, village portfolio is inherentl suetive including the overall Group materiality for the group financial statements as a whole as set out above. ue to, amongst other fators, inputs into e arrie out proeures, on a sample asis, to test These, together with qualitative considerations, helped us to determine the scope of our audit, the the valuations that are unoservale hether speifi information supplie to the aluer nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both through availale maret information an the Group reflete the unerling reors hel the individually and in aggregate on the group financial statements as a whole. also onsiers the iniviual Group or the items teste, the information as Audit scope harateristis of eah village, its loation, onsistent We designed our audit by assessing the risks of material misstatement in the group financial its resient profile an the epete future statements and our application of materiality. As in all of our audits, we also addressed the risk of ash flos for that partiular village Assumptions management override of internal controls including among other matters, consideration of whether ur or over assumptions fouse on villages here there was evidence of bias that represented a risk of material misstatement due to fraud. The eistene of signifiant estimation the assumptions use anor earonear fair value We tailored the scope of our audit in order to perform sufficient work to enable us to provide an unertaint, ouple ith the fat that movement suggeste a possile outlier versus the rest opinion on the group financial statements as a whole, taking into account the structure of the Group, onl a small perentage ifferene in of the portfolio an the ier retirement village setor the accounting processes and controls, and the industry in which the Group operates. iniviual propert valuation Key audit matters assumptions, hen aggregate, oul e have reviee the estimate ost of remeiation result in material misstatement, is h e ors assessing the reasonaleness of alulations Key audit matters are those matters that, in our professional judgment, were of most significance in have given speifi auit fous an an assumptions use an orroorating the relevant our audit of the group financial statements of the current year. We have one key audit matter, which is attention to this area information ith thir part assessments the valuation of investment properties and care homes. This matter was addressed in the context of our audit of the group financial statements as a whole, and in forming our opinion thereon, and we do ommissione management, here appliale e not provide a separate opinion on this matter. The valuations ere arrie out an also assesse the reasonaleness of management inepenent thir part valuer, estimates of osts to omplete evelopments that are imite the aluer pratiall omplete an value the aluer at une The aluer engage the ompan is a ell non firm, ith eperiene in the e also engage our on inhouse valuation speialist setor in hih the Group operates to hallenge the or performe an assumptions use the aluer on a sample asis n partiular, e ompare the assumptions use the aluer to our

40

93 METLIFECARE LIMITED ANNUAL REPORT 2019 94 Key audit matter How our audit addressed the key audit matter report that includes our opinion easonable assurance is a high level of assurance, but is not a n etermining a valuation, the aluer inhouse valuation specialist’s knowlege gaine from guarantee that an audit conducted in accordance with s and s will alwas detect a material too into aount propert speifi revieing valuations of similar properties, non misstatement when it eists isstatements can arise from fraud or error and are considered material information suh as urrent unit priing, transations an maret ata if, individuall or in the aggregate, the could reasonabl be epected to influence the economic urrent an antiipate resiential decisions of users taken on the basis of these group financial statements propert groth, apitalisation rates an erall aluation estimates further description of our responsibilities for the audit of the group financial statements is located at resient profiles for investment properties eause of the suetivit involve in etermining the External Reporting Board’s website at: an apitalisation rates an proforma valuations for iniviual properties ith the eistene httpswwwrbgovtnstandardsforassurancepractitionersauditorsresponsibilitiesaudit earnings for are homes The aluer then of alternative assumptions an valuation methos, e report applie these assumptions in onuntion etermine a range of values that ere onsiere ith availale maret ata an reasonale to evaluate the valuations use the This description forms part of our auditor’s report. transations, to arrive at a range of Group f e fin an error in a valuation or etermine ho e report to valuation outomes, from hih a point that the valuation is outsie the reasonale range, e This report is made solely to the Company’s shareholders, as a body. Our audit work has been estimate as erive ue to the uniue oul evaluate the error or ifferene against our undertaken so that we might state those matters which we are required to state to them in an auditor’s nature of eah propert, the assumptions overall materialit to etermine if there is a material report and for no other purpose o the fullest etent permitted b law, we do not accept or assume applie too into onsieration the misstatement in the group finanial statements responsibilit to anone other than the ompan and the Company’s shareholders, as a body, for our iniviual propert harateristis at a audit work, for this report or for the opinions we have formed resient level, as ell as the ualities of The valuations aopte the Group ere all ithin the propert as a hole, inluing an aeptale range e also onsiere hether or estimates for foreast remeiation ors not there as ias in etermining iniviual valuations The engagement partner on the audit resulting in this independent auditor’s report is Samuel an foun no eviene of ias huttleworth

or and on behalf of nformation other than the roup financial statements and auditor’s report The iretors are responsile for the annual report ur opinion on the group finanial statements oes not over the other information inlue in the annual report an e o not an ill not epress an form of assurane onlusion on the other information t the time of our auit, there as no other information availale to us n onnetion ith our auit of the group finanial statements, our responsiilit is to rea the other information an, in oing so, onsier hether the other information is materiall inonsistent ith hartered ccountants uckland the group finanial statements or our nolege otaine in the auit, or otherise appears to e ugust materiall misstate f, ase on the or e have performe on the other information that e obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, e are reuire to report that fat esponsibilities of the irectors for the roup financial statements The iretors are responsile, on ehalf of the ompan, for the preparation an fair presentation of the group finanial statements in aorane ith an , an for suh internal ontrol as the iretors etermine is neessar to enale the preparation of finanial statements that are free from material misstatement, hether ue to frau or error n preparing the group finanial statements, the Directors are responsible for assessing the Group’s ailit to ontinue as a going onern, islosing, as appliale, matters relate to going onern an using the going onern asis of aounting unless the iretors either inten to liuiate the Group or to ease operations, or have no realisti alternative ut to o so Auditor’s responsibilities for the audit of the roup financial statements ur oetives are to otain reasonale assurane aout hether the group finanial statements, as a whole, are free from material misstatement, whether due to fraud or error, and to issue an auditor’s

95 METLIFECARE LIMITED ANNUAL REPORT 2019 96 Papamoa Village interior

STATUTORY INFORMATION

97 METLIFECARE LIMITED ANNUAL REPORT 2019 98 INTERESTS Director Entity Nature of Interest

REGISTER Carolyn Steele Steele Family Trust Trustee

Halberg Foundation Director

(A) GENERAL DISCLOSURES New Zealand Football Foundation Trustee The following are particulars of general disclosures of interest by directors of Metlifecare Limited in the year to 30 June Green Cross Health Limited Director 2019, pursuant to section 140(2) of the Companies Act 1993. Where applicable, the disclosure also includes directorships of subsidiaries of the relevant companies. WEL Networks Limited Director

Ultrafast Fibre Limited Director Director Entity Nature of Interest Dr Noeline Whitehead PASS Consultants Director/Officer Kim Ellis Port of Tauranga Limited Director Notes: FSF Management Company Limited Director * Interest ceased during the year + New Freightways Limited Director

Ballance Agri-Nutrients Limited Director

New Zealand Social Infrastructure Fund Limited Director (B) SPECIFIC DISCLOSURES Sleepyhead Group Limited Director As previously advised, Dr. Noeline Whitehead’s daughter, Tanya Bish is a member of the Executive Team. Please refer to Chris Aiken Murray Aynsley Properties Limited Director page 50 of this report for further information.

Catalina Advisory Limited Director/Shareholder (C) INDEMNITY AND INSURANCE Alumnus Properties Limited Shareholder The Company has effected insurance and given indemnities to its directors, including directors of subsidiary companies, HLC Officer in accordance with the Companies Act 1993.

Cameron Trust Trustee (D) USE OF COMPANY INFORMATION Hurstmere Property Trust Trustee During the year the Board did not receive any notices from directors of the Company requesting use of Company Mark Binns Auckland International Airport Limited Director information. No subsidiary board received any notice from its directors requesting use of the subsidiary’s information.

Auckland War Memorial Museum Trustee (E) DIRECTORS’ SHARE DEALINGS AND RELEVANT INTERESTS Crown Infrastructure Partners Limited Director During the year to 30 June 2019 four directors, Alistair Ryan, Rod Snodgrass, Kim Ellis and Mark Binns, disclosed to the + Te Puia Tapapa GP Limited Director Board, under section 148 of the Companies Act 1993 and sections 297(2) and 298(2) of the Financial Markets Conduct Act Alistair Ryan Barramundi Limited Director 2013, particulars of acquisitions or dispositions of relevant interests in ordinary shares in the Company.

Kingfish Limited Director • Alistair Ryan made the following share purchases: • 1,500 shares at $6.49 per share on 2 October 2018; and Marlin Global Limited Director • 2,000 shares at $5.06 per share on 27 February 2019, FMA’s Audit Oversight Committee Member a total of 3,500 shares. Kiwibank Limited Director • Rod Snodgrass purchased 2,000 shares at $5.15 per share on 18 December 2018. * Christchurch Casinos Limited Director • The Ellis Trust (of which Kim Ellis is trustee) made the following share purchases:

* Evolve Education Group Limited Director • 10,000 shares at $5.15 per share on 5 March 2019; and • 10,000 shares at $5.10 per share on 6 March 2019, Rod Snodgrass The Exponential Agency Limited Director/Shareholder a total of 20,000 shares. Jucy Group Limited (NZ) Director • The Annette Ellis Trust (of which Kim Ellis is a director of a trustee company) made the following share purchases: + Yellow Drill Limited (formerly Genoapay Limited) Director/Shareholder • 29,000 shares at $5.12 per share on 5 March 2019; and + Chapter 2 Sports Limited Director • 29,100 shares at $5.10 per share on 6 March 2019,

SMX Limited (NZ) Director a total of 58,100 shares. • Mark Binns purchased 15,000 shares at $4.33 per share on 26 June 2019. Springboard Trust Trustee

* Vector Limited Officer

99 METLIFECARE LIMITED ANNUAL REPORT 2019 100 Six directors (in italics below) had relevant interests in the ordinary shares in the Company as at 30 June 2019. DIRECTOR

Directors’ Interests Number of Shares INFORMATION Ellis Trust (Kim Ellis and MK Trustee 2015 Limited as Trustees) 185,000

Annette Ellis Trust (A.M. Ellis* and MK Trustee 2015 Limited as Trustees) - 73,100 interested director Kim Ellis COMPANY DIRECTORS Mark Binns 15,000 The Company’s directors are set out in the directory on page 110. Remuneration and other benefits received by directors during the year to 30 June 2019: Alistair Ryan 13,904

Cameron Trust (Chris Aiken and W.A. Aiken as Trustees) 9,051 Director Director Fees $ Rod Snodgrass 7,000 Kim Ellis 165,000 Noeline Whitehead 4,000 Alistair Ryan 97,500 *(A.M. Ellis is the wife of Kim Ellis) Chris Aiken 95,000

Mark Binns 92,500

Carolyn Steele 92,500

Rod Snodgrass 87,500

Dr Noeline Whitehead 87,500

The above fees exclude GST and expenses.

Allocated payments are set out below:

Current Fee Allocation $ Position (Plus GST if any)

Chair of Board (inclusive of Committee fees) – Kim Ellis 165,000

Non-Executive Director Base Fee (directors excluding Chair) 82,500 Chris Aiken, Mark Binns, Alistair Ryan, Rod Snodgrass, Carolyn Steele and Dr Noeline Whitehead (total 495,000) Chair Audit & Risk Committee – Alistair Ryan 12,500

Chair Development Committee – Chris Aiken 12,500

Chair Resident Experience & Care Committee – Carolyn Steele 7,500

Chair People & Remuneration Committee – Mark Binns 7,500

Committee Member Fee (Committee Members excluding Nominations & 2,500 Corporate Governance Members and Chair of each Committee) (total 17,500)

Total Allocated 717,500

Unallocated 5,500

Pool 723,000

101 METLIFECARE LIMITED ANNUAL REPORT 2019 102 Greenwich Gardens

Remuneration and other benefits received by directors of Metlifecare Palmerston North Limited (a jointly controlled entity) during the year to 30 June 2019. The fees set out below to Glen Sowry, Richard Thomson and Richard Callander were paid to Metlifecare Limited.

Director Director Fees $

Richard Callander 5,000

Keith Hindle 5,000

Jane Hughes 5,000

Rebecca Mellish 5,000

Glen Sowry 5,000

Richard Thomson 5,000

Subsidiary Company Directors Glen Sowry and Richard Thomson held the office of directors of all the Company’s wholly owned subsidiaries during the year to 30 June 2019, being Forest Lake Gardens Limited, Hibiscus Coast Village Holdings Limited, Hillsborough Heights Village Holdings Limited, Longford Park Village Holdings Limited, Longford Park Village Limited, Metlifecare Bayswater Limited, Metlifecare Botany Limited, Metlifecare Coastal Villas Limited, Metlifecare Crestwood Limited, Metlifecare Dannemora Gardens Limited, Metlifecare Edgewater Limited, Metlifecare Greenwich Gardens Limited, Metlifecare Greenwood Park Limited, Metlifecare Gulf Rise Limited, Metlifecare Highlands Limited, Metlifecare Kapiti Limited, Metlifecare Oakridge Limited, Metlifecare Orion Point Limited, Metlifecare Papamoa Beach Limited, Metlifecare Pinesong Limited, Metlifecare Pohutukawa Landing Limited, Metlifecare Powley Limited, Metlifecare 7 Saint Vincent Limited, Metlifecare Somervale Limited, Metlifecare The Avenues Limited, Metlifecare The Orchards Limited, Metlifecare The Poynton Limited, Metlifecare Holdings Limited and Waitakere Group Limited.

Alistair Ryan held the office of director of Metlifecare LTIP Trustee Limited.

No director of any wholly owned subsidiary company received any director’s fees or other benefits as a director of a subsidiary.

Jointly Controlled Entity (50% Shareholding) as at 30 June 2019 The following persons held the office of director of Metlifecare Palmerston North Limited, a jointly controlled entity, during the year: Richard Callander, Keith Hindle, Jane Hughes, Rebecca Mellish, Glen Sowry and Richard Thomson.

103 METLIFECARE LIMITED ANNUAL REPORT 2019 104 EMPLOYEES’ REMUNERATION OVER $100,000 The number of employees, or former employees of the Company, or any subsidiary, not being directors, who during the year, received remuneration and other benefits valued at or exceeding $100,000, are set out below. Remuneration includes OTHER salary, employer KiwiSaver contributions, performance bonus payments, termination settlement payments, insurance premiums and the value of shares transferred to employees under the Metlifecare Long Term Incentive Plan during the STATUTORY year ended 30 June 2019. Number of Number of Remuneration Remuneration Employees Employees INFORMATION $100,000 - $110,000 13 $240,000 - $250,000 2 $110,000 - $120,000 9 $270,000 - $280,000 1

$120,000 - $130,000 15 $280,000 - $290,000 2 CHIEF EXECUTIVE OFFICER REMUNERATION $130,000 - $140,000 3 $290,000 - $300,000 1 Metlifecare has an employment agreement with Glen Sowry in relation to his employment as Chief Executive Officer. The $140,000 - $150,000 2 $350,000 - $360,000 1 total remuneration package for Mr Sowry for the period to 30 June 2019 comprised: $150,000 - $160,000 4 $360,000 - $370,000 1 • Fixed Remuneration, including base salary, matched KiwiSaver contributions up to a maximum of 3%, and other $160,000 - $170,000 3 $370,000 - $380,000 1 benefits. $170,000 - $180,000 3 $480,000 - $490,000 1 • Short Term Incentive (STI) payments offered and payable at the discretion of the Board. The STI paid in the financial year ended 30 June 2019 was in relation to performance delivered for the year to 30 June 2018 and had a potential $180,000 - $190,000 6 $490,000 - $500,000 1 value of 40% of base salary. In order to be eligible for the STI, a financial “gateway” target had to first be met following $190,000 - $200,000 4 $810,000 - $820,000 1 which the Board assessed the STI on the basis of 70% organisational KPIs and 30% individual KPIs. These included asset delivery, sales and other profitability metrics as well as customer satisfaction and employee engagement and $200,000 - $210,000 2 Total Number of Employees Paid 76 were set in order to ensure that the Chief Executive Officer was incentivised to meet and/or exceed the Company’s strategic and operational targets. An applicable STI payment for the period 1 July 2018 to 30 June 2019 will be paid DONATIONS in FY20. The Company paid a total of $40,710 in donations in the year to 30 June 2019. This consisted of $33,210 to various • Participation in the Senior Executive Long Term Incentive Plan (LTIP) has been offered to the Chief Executive Officer Residents’ Committees to enable residents to pay for specific items and $7,500 to the Westpac Rescue Helicopter. at the discretion of the Board. This performance incentive is designed to align senior executive remuneration with financial outcomes for shareholders for the longer term. Shares were purchased using an interest free loan. The shares NZX WAIVERS vest after three years if all performance hurdles are met. No waivers were granted by the NZX in favour of the Company, or relied on, in the 12 month period to 30 June 2019.

CHIEF EXECUTIVE OFFICER REMUNERATION 30 JUNE 2017 TO 30 JUNE 2019 LIMITATIONS ON THE ACQUISITION OF COMPANY SECURITIES Total The Company is not subject to Chapters 6, 6A, 6B and 6C of the Australian Corporations Act 2001 dealing with the Year Base Salary STI LTIP1 KiwiSaver Remuneration acquisition of shares (including substantial holdings and takeovers).

$270,000 (shares issued, Limitations on the acquisition of securities imposed under New Zealand law are as follows: FY19 $600,000* $187,200** not vested) $23,616 $810,816 • In general, securities in the Company are freely transferable and the only significant restrictions or limitation in $193,050 (shares issued, relation to the acquisition of securities are those imposed by New Zealand laws relating to takeovers, overseas FY18 $595,074* $203,431** $23,973 $822,478 not vested) investment and competition $191,858 (shares issued, • The New Zealand Takeovers Code creates a general rule under which the acquisition of 20% or more of the voting FY17 $585,053* $57,000** $8,822 $650,875 not vested) rights in the Company or the increase of an existing holding of 20% or more of the voting rights of the Company can occur in certain permitted ways. These include a full takeover offer in accordance with the Takeovers Code, *Actual salary paid including annual leave an acquisition approved by an ordinary resolution, an allotment approved by an ordinary resolution, a creeping **Actual STIs that were paid for performance during previous financial year 1 Gross figures, not taxable acquisition (in certain circumstances), or compulsory acquisition of a shareholder holding 90% or more of the shares • The Overseas Investment Act 2005 (as amended) and Overseas Investment Regulations 2005 regulate certain investments in New Zealand by overseas interests. In general terms, the consent of the New Zealand Overseas Investment Office is likely to be required where an ‘overseas person’ acquires shares in the Company that amount to 25% or more of the shares issued by the Company, or if the overseas person already holds 25% or more, the acquisition increases that holding • The Commerce Act 1986 is likely to prevent a person from acquiring shares in the Company if the acquisition would have, or would be likely to have, the effect of substantially lessening competition in the market.

PLACE OF INCORPORATION The Company is incorporated in New Zealand with a Certificate of Incorporation number 237544.

CREDIT RATING The Company has no credit rating.

105 METLIFECARE LIMITED ANNUAL REPORT 2019 106 SPREAD OF HOLDINGS SHAREHOLDER As at 12 July 2019 Size of holdings Number of % Number of % shareholders shares held

INFORMATION 1 – 1,000 1,277 28.53 706,362 0.33

1,001 – 5,000 2,053 45.86 5,296,442 2.48

5,001 – 10,000 580 12.96 4,269,877 2.00 TWENTY LARGEST SHAREHOLDERS 10,001 - 100,000 507 11.33 11,698,101 5.48 As at 12 July 2019 100,001 and over 59 1.32 191,333,940 89.71

TOTAL 4,476 100.00 213,304,722 100.00 REGISTERED SHAREHOLDER Number of Shares % Shares

1 HSBC Nominees A/C NZ Superannuation Fund Nominees Limited 42,363,688 19.86

2 BNP Paribas Nominees (NZ) Limited 13,556,112 6.36 SUBSTANTIAL PRODUCT HOLDERS The entities who, under section 293 of the Financial Markets Conduct Act 2013, were Substantial Product Holders in the 3 Citibank Nominees (New Zealand) Limited 13,132,741 6.16 Company as at 30 June 2019 were:

4 JPMorgan Chase Bank NA NZ Branch-Segregated Clients Acct 12,045,785 5.65 Substantial Product Holders Shares % 5 Accident Compensation Corporation 11,659,436 5.47 New Zealand Superannuation Fund Nominees Limited 42,156,178 19.76 6 HSBC Nominees (New Zealand) Limited 10,216,245 4.79 ANZ New Zealand Investments Limited, ANZ Bank New Zealand Limited, 7 FNZ Custodians Limited 9,053,795 4.24 ANZ Custodial Services New Zealand Limited, ANZ New Zealand Investments Nominees Limited and OnePath Funds Management Limited (Australia) 25,249,386 11.84 8 ANZ Wholesale Trans-Tasman Property Securities Fund 7,725,802 3.62 Investment Services Group Limited 13,701,326 6.42

9 MFL Mutual Fund Limited 7,311,086 3.43 Accident Compensation Corporation 10,686,944 5.01

10 Generate Kiwisaver Public Trust Nominees Limited 6,475,050 3.04 Notes: a. The total number of voting securities of the Company on issue at 30 June 2019 was 213,304,722 ordinary fully paid shares. All shares carry one vote per share. 11 ANZ Wholesale Australasian Share Fund 6,069,229 2.85 b. The percentage column in the table above reflects each product holder’s holding as a percentage of the current issued share capital of the Company. This percentage may have changed from the percentage that was disclosed by the product holder in the relevant disclosure notice, due to further shares being issued or traded after the disclosure was made. 12 JBWere (NZ) Nominees Limited 4,851,678 2.27

13 Forsyth Barr Custodians Limited 4,238,837 1.98 NET TANGIBLE ASSETS PER SECURITY 14 New Zealand Depository Nominee Limited 1,841,332 0.86 30 June 2019 30 June 2018 15 Custodial Services Limited 1,628,484 0.76 $6.96 $6.88 16 FNZ Custodians Limited 1,308,463 0.61

17 Custodial Services Limited 1,191,320 0.55

18 Custodial Services Limited 1,112,187 0.52

19 Investment Custodial Services Limited 910,880 0.42

20 PT (Booster Investments) Nominees Limited 702,555 0.32

TOTAL 157,394,705 73.76

107 METLIFECARE LIMITED ANNUAL REPORT 2019 108 Directors Executive Team

Kim Ellis - Chair Glen Sowry Chief Executive Officer Chris Aiken Richard Thomson Mark Binns Chief Financial Officer Alistair Ryan Tanya Bish Rod Snodgrass Clinical Nurse Director

Carolyn Steele Richard Callander General Manager Operations Dr Noeline Whitehead Julie Garlick General Manager Marketing DIRECTORY Huma Houghton General Manager Human Resources

Sandra King General Manager Sales

Andrew Peskett General Counsel & Company Secretary

Charlie Anderson (has resigned, finishes in September 2019)

Registered Office (New Zealand) SHARE REGISTRAR NEW ZEALAND Computershare Investor Services Limited Level 4, 20 Kent Street Newmarket, Auckland 1023 Level 2, 159 Hurstmere Road, Postal Address: PO Box 37463 Takapuna, Auckland 0622 Parnell, Auckland 1151 Postal Address: Private Bag 92119 Telephone: 09 539 8000 Victoria Street West, Auckland 1142 Facsimile: 09 539 8001 Investor Enquiries: 09 488 8777 www.metlifecare.co.nz www.computershare.co.nz/investorcentre

Registered Office (Australia) SHARE REGISTRAR AUSTRALIA Computershare Investor Services Pty Limited Level 61, Governor Philip Tower 1 Farrer Place, Sydney NSW 2000 Australia Postal Address: GPO Box 2975 Telephone: +61 2 9296 2000 Melbourne, Victoria 3001, Australia Facsimile: +61 2 9296 3999 Investor Enquiries: Telephone: +61 3 9415 4062

[email protected]

Lawyers Auditor Chapman Tripp PricewaterhouseCoopers Level 35 PwC Tower 23 Albert Street 188 Quay Street, Auckland 1142 Auckland 1010

Bankers Stock Exchange Listings ANZ Bank New Zealand Limited NZX Main Board Bank of New Zealand ASX Official List – ASX Foreign Exempt Listing ASB Bank Limited Westpac New Zealand Limited

109 METLIFECARE LIMITED ANNUAL REPORT 2019 110