2016 ANNUAL FINANCIAL REPORT Contents Annual Financial Report of The GPT Group 1 Annual Financial Report of GPT Management Holdings Limited and its Controlled Entities 71 Supplementary Information 130 Corporate Directory 132 Corporate Governance The GPT Group (GPT or the Group) comprises GPT Management Holdings Limited (ACN 113 510 188) (GPTMHL) and General Property Trust (Trust). GPT RE Limited (ACN 107 426 504) (GPTRE) AFSL (286511) is the Responsible Entity of the Trust. GPT’s stapled securities are listed on the Australian Securities Exchange (ASX). The third edition of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (Principles) provides a framework for good corporate governance for listed entities. GPT’s Corporate Governance Statement sets out how the Group has complied with the Principles. The Group’s Corporate Governance Statement is available on GPT’s website at: www.gpt.com.au/About-GPT/Corporate-Governance/Principles-and-Policies. GPT has also lodged an Appendix 4G (Key to Disclosures – Corporate Governance Principles and Recommendations) with the ASX. Annual Financial Report of The GPT Group Year ended 31 December 2016 Contents Directors’ Report ............................................................................................................................................................................ 2 Auditor’s Independence Declaration ............................................................................................................................................ 23 Financial Statements .................................................................................................................................................................... 24 Consolidated Statement of Comprehensive Income ............................................................................................................ 24 Consolidated Statement of Financial Position .................................................................................................................... 25 Consolidated Statement of Changes in Equity ..................................................................................................................... 26 Consolidated Statement of Cash Flows ............................................................................................................................... 27 Notes to the Financial Statements ...................................................................................................................................... 28 Result for the year ....................................................................................................................................................... 28 1. Segment information .............................................................................................................................................. 28 Operating assets and liabilities .................................................................................................................................. 33 2. Investment properties ............................................................................................................................................ 33 3. Equity accounted investments ................................................................................................................................ 36 4. Loans and receivables ............................................................................................................................................ 39 5. Intangible assets ..................................................................................................................................................... 40 6. Inventories .............................................................................................................................................................. 40 7. Payables .................................................................................................................................................................. 41 8. Provisions ............................................................................................................................................................... 41 9. Taxation ................................................................................................................................................................... 42 Capital structure .......................................................................................................................................................... 43 10. Equity and reserves ................................................................................................................................................ 44 11. Earnings per stapled security ................................................................................................................................ 46 12. Distributions paid and payable ............................................................................................................................... 47 13. Borrowings ............................................................................................................................................................. 47 14. Financial risk management ................................................................................................................................... 48 Other disclosure items ................................................................................................................................................ 52 15. Cash flows from operating activities ...................................................................................................................... 52 16. Commitments ......................................................................................................................................................... 52 17. Contingent liabilities .............................................................................................................................................. 53 18. Security based payments ....................................................................................................................................... 53 19. Related party transactions .................................................................................................................................... 54 20. Auditor’s remuneration .......................................................................................................................................... 55 21. Parent entity financial information......................................................................................................................... 56 22. Fair value disclosures ............................................................................................................................................ 57 23. Accounting policies ................................................................................................................................................. 60 24. Events subsequent to reporting date ..................................................................................................................... 62 Directors’ Declaration ................................................................................................................................................................... 63 Independent Auditor’s Report ...................................................................................................................................................... 64 The GPT Group (GPT) comprises General Property Trust (Trust) and its controlled entities and GPT Management Holdings Limited (Company) and its controlled entities. General Property Trust is a registered scheme, registered and domiciled in Australia. GPT RE Limited is the Responsible Entity of General Property Trust. GPT Management Holdings Limited is a company limited by shares, incorporated and domiciled in Australia. GPT RE Limited is a wholly owned controlled entity of GPT Management Holdings Limited. Through our internet site, we have ensured that our corporate reporting is timely, complete and available globally at minimum cost to the Trust. All press releases, financial reports and other information are available on our website: www.gpt.com.au. 1 Annual Financial Report of The GPT Group Directors’ Report Year ended 31 December 2016 The Directors of GPT RE Limited, the Responsible Entity of General Property Trust, present their report together with the financial statements of the General Property Trust (the Trust) and its controlled entities (the consolidated entity) for the financial year ended 31 December 2016. The consolidated entity together with GPT Management Holdings Limited and its controlled entities form the stapled entity, The GPT Group (GPT). General Property Trust is a registered scheme, GPT Management Holdings Limited is a company limited by shares, and GPT RE Limited is a company limited by shares, each of which is incorporated and domiciled in Australia. The registered office and principal place of business is the MLC Centre, Level 51, 19 Martin Place, Sydney NSW 2000. 1. Operating and financial review About GPT GPT is an owner and manager of an $11.1 billion diversified portfolio of high quality Australian retail, office and logistics property assets and together with GPT’s funds management platform the Group has