2017 Annual Report 2017
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ANNUAL REPORT 2017 Annual Report 2017 Ingenia Communities Holdings Limited Annual Reports FOR THE YEAR ENDED 30 JUNE 2017 Contents Directors’ Report 1 Auditor’s Independence Declaration 22 Consolidated Statement of Comprehensive Income 23 Consolidated Balance Sheet 25 Consolidated Cash Flow Statement 26 Consolidated Statement of Changes in Equity 27 Notes to the Financial Statements 28 1. Summary of significant accounting policies 28 2. Accounting estimates and judgements 34 3. Segment information 36 4. Earnings per security 38 5. Revenue 39 6. Finance expense 39 7. Income tax expense 40 8. Trade and other receivables 40 9. Inventories 41 10. Investment properties 41 11. Assets and liabilities held for sale 47 12. Plant and equipment 47 13. Intangibles 47 14. Deferred tax asset and liabilities 48 15. Trade and other payables 48 16. Borrowings 48 17. Retirement village resident loans 50 18. Issued securities 51 19. Reserves 52 20. Accumulated losses 52 21. Commitments 52 22. Contingent liabilities 52 23. Share-based payment transactions 53 24. Capital management 54 25. Financial instruments 54 26. Fair value measurement 59 27. Auditor’s remuneration 60 28. Related parties 60 29. Company financial information 61 30. Subsidiaries 62 31. Notes to the cash flow statement 63 32. Subsequent events 64 Directors’ Declaration 65 Independent Auditor’s Report 66 Securityholder Information 126 Investor Relations 128 Corporate Directory 129 www.ingeniacommunities.com.au Ingenia Communities Holdings Limited 1 Directors’ Report FOR THE YEAR ENDED 30 JUNE 2017 The directors of Ingenia Communities Holdings Limited Robert Morrison – (“ICH” or the “Company”) present their report together Non-Executive Deputy Chairman with the Company’s financial report for the year ended Mr Morrison was appointed to the 30 June 2017 (the “current year”) and the Independent Board in February 2013. Mr Morrison Auditor’s Report thereon. The Company’s financial brings to the board extensive report comprises the consolidated financial report of the experience in property investments, Company and its controlled entities, including Ingenia property development, portfolio Communities Fund (“ICF” or the “Fund”) and Ingenia management, capital raising as well Communities Management Trust (“ICMT”) (collectively, the as institutional funds management. “Trusts”). In this report, the Company and the Trusts are During his 21 years at AMP Limited, Mr Morrison’s executive referred to collectively as the “Group”. roles included Head of Property for Asia Pacific and Director of Asian Investments. Mr Morrison’s investment The shares of the Company are “stapled” with the units of experience includes senior portfolio management roles the Trusts and trade on the Australian Securities Exchange where he managed both listed and unlisted property (“ASX”) effectively as one security. Ingenia Communities funds on behalf of institutional investors. Mr Morrison RE Limited (“ICRE” or “Responsible Entity”), a wholly was previously a Non-Executive Director of Mirvac Funds owned subsidiary of the Company is the responsible entity Management Limited, an Executive Director of AMP Capital of the Trusts. In this report, the Company and the Trusts Limited and a National Director of the Property Council of are referred to collectively as the Group. Australia. He is a founding partner and Executive Director In accordance with Accounting Standard AASB 3 Business of alternative investments firm, Barwon Investment Combinations, the stapling of the Company and the Trusts Partners. Mr Morrison holds a Bachelor of Town and is regarded as a business combination. The Company has Regional Planning (Hons) and a Master of Commerce. Mr been identified as the parent for preparing consolidated Morrison is a member of the Audit and Risk Committee and financial reports. is Chair of the Investment Committee. Philip Clark AM – Directors Non-Executive Director The directors of the Company at any time during or since Mr Clark was appointed to the Board the end of the financial year were: in June 2012. Mr Clark is the Chair of SCA Property Group Limited. Non-Executive Directors (“NEDs”) He is a member of the J.P. Morgan Jim Hazel (Chairman) Advisory Council and also chairs a number of government and private Robert Morrison (Deputy Chairman) company boards. He was Managing Philip Clark AM Partner and Chief Executive Officer of Minter Ellison and Amanda Heyworth worked with that firm from 1995 until June 2005. Prior to joining Minter Ellison, Mr Clark was Director and Head of Valerie Lyons (appointed, 1 March 2017) Corporate with ABN Amro Australia and prior to that he Norah Barlow ONZM (resigned, 15 November 2016) was Managing Partner with Mallesons Stephen Jaques for 16 years. Mr Clark’s qualifications include a Bachelor of Arts, Bachelor of Law and a Masters of Business Executive Directors Administration. Mr Clark is Chair of the Remuneration Simon Owen (Managing Director and Chief and Nomination Committee. Executive Officer) (“MD” and “CEO”) Amanda Heyworth – Qualifications, Experience and Special Responsibilities Non-Executive Director Jim Hazel – Ms Heyworth is a professional Non-Executive Chairman company director and currently Mr Hazel was appointed to the Board serves on the boards of a number of in March 2012. Mr Hazel has had an private, university and Government extensive corporate career in both bodies. She previously served as the banking and retirement sectors. Executive Director of a venture His retirement village operations capital fund which specialised in experience includes being Managing technology investments. Early in her career, she worked Director of Primelife Corporation as a Federal Treasury economist and held management Limited (now part of Lend Lease). Other current listed roles in the finance and technology sectors. company directorships include Bendigo and Adelaide Bank Ms Heyworth has particular strengths in strategy, Limited and Centrex Metals Limited. He also serves on the managing growth and marketing having worked as a Boards of Coopers Brewery Limited and the University venture capital investor for over a decade and been of South Australia. Mr Hazel was previously on the board involved in numerous product launches. She holds a MBA of ImpediMed Limited. Mr Hazel holds a Bachelor of from the Australian Graduate School of Management’s Economics and is a Senior Fellow of the Financial Services MBA program and has taught strategy and marketing Institute of Australasia and a Fellow of the Australian for the AGSM in both Australia and Hong Kong. Institute of Company Directors. Mr Hazel is a member of the Investment Committee. 2 Annual Report 2017 Directors’ Report FOR THE YEAR ENDED 30 JUNE 2017 | CONTINUED Ms Heyworth has strong finance and accounting Institute of Australia and a member of the Australian credentials. She has been involved in over 40 capital Institute of Superannuation Trustees. Ms Lyons is a member raisings and M&A transactions and holds a BA of the Audit and Risk Committee, Investment Committee (Accounting) with a major in finance from the University and Remuneration and Nomination Committee. of South Australia and has post graduate qualifications in accounting and finance. Ms Heyworth is Chair of the Audit Simon Owen – and Risk Committee and is a member of the Remuneration MD and CEO and Nomination Committee. Mr Owen joined the Group in November 2009 as the Chief Valerie Lyons – Executive Officer. He initiated the Non-Executive Director internalisation of management and Ms Lyons was appointed to the Board exit from the ING Group as well as in March 2017. Ms Lyons has over 30 Ingenia’s focus on lifestyle parks. years experience in executive, non- He brings to the Group in-depth executive and advisory roles across sector experience. Mr Owen is the health, aged care and retirement, currently a Director of BIG4 Holiday Parks, Australia’s and finance and superannuation leading holiday parks group representing 180 parks across sectors. Ms Lyons has held CEO Australia and is a past member of the Retirement Living and CFO roles in well regarded Division Council (part of the Property Council of Australia). seniors and disability service organisations including He is also a past National President of the Retirement Uniting AgeWell, Villa Maria and Southern Cross Care (Vic) Villages Association (now part of the Retirement Living with prior directorships including Leading Age Services Council), the peak industry advocacy group for the Australia (LASA), Catholic Health Australia (CHA) and owners, operators, developers and managers of retirement Aged and Community Services Australia (ACSA). Ms Lyons communities in Australia, a role he held for four years. is currently a Non-Executive Director of Health Employees Mr Owen has over 20 years’ experience working in ASX Superannuation Trust Australia (HESTA) and registered listed groups with roles across finance, funds management, disability and aged care provider Independence Australia mergers and acquisitions, business development and Group. She also serves as a Non-Executive Member of sales and marketing. Prior to joining Ingenia Communities, the Audit & Risk Board committee for the Australian Mr Owen was the CEO of Aevum, a formerly listed Digital Health Agency (ADHA), a government agency with retirement company. Mr Owen is a qualified accountant responsibility for all national digital health services and (CPA) with a Bachelor of Business (Accounting) and a systems. Ms Lyons holds a Bachelor of Business Studies postgraduate diploma in