Centuria Capital Group
Annual Report 2021
Centuria Capital Group – Annual Report 2021 | A
Contents
01
02
04
05
08
10
12
18
About Centuria
Our values and capabilities
Vision & Strategy
Australasian Real Estate Platform
Chairman’s Report
Key Metrics
Joint CEO Report
Key Financial Metrics
20
Expanding Our Funds Management Platform
23 Major direct real estate and corporate acquisitions
24
26
28
30
32
36
39
44
47
69
72
Proven growth through corporate initiatives
Leveraging strong capital transaction and
asset management capabilities
Development pipeline
Real estate funds management platform
Sustainability at Centuria
Board of Directors
Senior Executives
Centuria’s people
Directors’ Report
Lead Auditor’s Independence Declaration
Financial Statements
117 Directors’ Declaration
118
Independent Auditor’s Report
124 Corporate Governance Statement
126 Additional Stock Exchange Information
127 Corporate Directory & Disclaimers
A C K N O W L E D G E M E N T O F C O U N T R Y
Our group manages property throughout Australia and New
Zealand. Accordingly, Centuria pays its respects to the traditional
owners of the land in each country, to their unique cultures and
to their elders past and present.
The artwork on the cover of this report was commissioned by
Centuria and created by Toby Bishop, a young Kungarakan artist
who lives on the South Coast of NSW. The design uses dots and
lines to represent tracks and journeys. It depicts people walking in
similar directions towards a positive future.
B | Centuria Capital Group – Annual Report 2021
About Centuria
Centuria Capital Group
(ASX: CNI) is a leading
Australasian fund manager
included in the S&P/ASX
200 Index (GICS code –
Diversified Real Estate),
formed over 23 years ago.
We are a specialist, external funds manager
with a suite of investment products include
listed and unlisted real estate funds,
investment bonds and more latterly real estate
debt.
By FY21 close, CNI grew to $17.4billion¹ of
assets under management, of which, 95%
comprises real estate funds across industrial,
healthcare, decentralised office, agriculture,
large-format retail and daily-needs retail
sectors within Australia and New Zealand.
Centuria is the manager of Australia’s largest
listed pure-play industrial and office REITs,
Centuria Industrial REIT (ASX: CIP) and
Centuria Office REIT (ASX: COF), and New
Zealand diversified listed REIT, Asset
Plus Limited (NZX: APL). CIP and COF are
included in the S&P/ASX 200 and 300 Indices,
respectively. CIP and COF are also included in
the FTSE EPRA Nareit Global Index, enabling
them to be readily compared with international
peers. Collectively, the listed REITs comprised
a $5.5billion platform.
Centuria’s $11billion unlisted real estate
funds platform includes a series of single-
asset funds, multi-asset closed funds and
multi-asset open ended funds. Significantly,
the breadth of these funds expanded during
the year following the merger of Perth-
based, Primewest Group, which increased
the Group’s portfolio weighting in West
Australia. Additionally, the Group services four
institutional mandates, collectively totalling
$2.3billion.
Centuria further diversified its product suite
through a 50% acquisition of Bass Capital,
now known as Centuria Bass Credit, which
provides unlisted real estate debt fund
opportunities to high net worth investors.
The corporate expansion of the Group through
the Primewest and Bass acquisitions, has
allowed Centuria to expand into new asset
classes and increase the geographic reach
of its platform.
In addition, during FY21, Centuria acquired
a record $2.5billion² of real estate for the
various funds it manages. These properties
were throughout Australia and New Zealand
and were in each of the asset classes
described above.
Centuria was active in acquiring healthcare
real estate assets which support the growth of
Centuria Healthcare (established following the
63% acquisition of Heathley Limited in 2019)
and Centuria New Zealand (following the 2020
acquisition of Augusta Capital).
Throughout FY21, Centuria’s investment bond
platform increased its fund options by 25%
while increasing its adviser approved product
lists by 85%, which has expanded its assets
under management to $0.9billion.
With a 23-year track record, Centuria
continues to provide compelling investment
products to its broad network of investors.
A strong start to FY22 has resulted in CNI’s
assets under management increasing to more
than $18billion³. Real estate funds management
continues to underpin CNI’s external funds
management platform, comprising of more
than $17billion of AUM that is split between
approximately $6billion of listed real estate
and $11billion of unlisted real estate.
Includes commenced development projects valued on an as if completed basis, cash and other assets, assets exchanged but not settled
Includes Primewest acquisitions post April 2021 merger announcement. Includes assets exchanged but not settled
1
2
3 AUM as at 30 September 2021. All figures above are in Australian dollars (currency exchange ratio of AU$1.000:NZ$1.0486). Numbers presented may not add up
precisely to the totals provided due to rounding. Includes commenced development projects valued on an as if completed basis, cash and other assets, assets
exchanged but not settled. Does not include assets exchanged post 30 September 2021
CENTURIA CAPITAL (CNI) FUNDS MANAGEMENT PLATFORM
$17.4bn
GROUP ASSETS UNDER MANAGEMENT (AUM) 30 JUNE 2021
$16.5bn REAL ESTATE AUM1
$5.5bn
LISTED REAL ESTATE
$11.0bn
UNLISTED REAL ESTATE
$0.9bn
INVESTMENT BONDS
S
T
N
E
M
T
S
E
V
N
I
-
O
C
D
E
T
S
L
I
$3.1bn
CENTURIA
INDUSTRIAL REIT
ASX:CIP
$2.1bn
$0.3bn
$7.9bn
CENTURIA
OFFICE REIT
ASX:COF
ASSET PLUS
LIMITED
NZX:APL
SINGLE
ASSET
FUNDS
$1.6bn
MULTI
ASSET CLOSED
ENDED FUNDS
$1.5bn
MULTI
ASSET OPEN
END FUNDS
CENTURIA
INVESTMENT BONDS
GUARDIAN FRIENDLY
SOCIETY
CENTURIA LIFE
$612m
Note: AUM as at 30 June 2021. All figures above are in Australian dollars (currency exchange ratio of AU$1.000:NZ$1.0753)
Numbers presented may not add up precisely to the totals provided due to rounding
1
Includes commenced development projects valued on an as if completed basis, cash and other assets, assets exchanged but not settled
2 Based on the respective close prices for COF, CIP and APL at Wednesday, 30 June 2021. Includes ownership by associates of Centuria Capital Group
-
S
T
N
E
M
T
S
E
V
N
O
C
D
E
T
S
L
N
U
$246m
I
I
Centuria Capital Group – Annual Report 2021 | 01
$1.1bn
ON BALANCE SHEET
$250m
CASH ON HAND
Centuria Office
(ASX:COF)
$240m (19.9%)2
Centuria Industrial
(ASX:CIP)
$350m (17.1%)2
Asset Plus
(NZX:APL)
$22m (19.9%)2
Primewest unlisted
real estate
$30m
Centuria unlisted
real estate and debt
$162m
Centuria properties
held for development
$54m
Our values and capabilities
02 | Centuria Capital Group – Annual Report 2021
WE ARE HONEST, TRANSPARENT & RESPECTFULAs Centurians, we take pride in how we develop strong and lasting relationships within our business and with our investors, tenants, and partners. We do this in how we communicate with, support, and respect one another.WE SUPPORT EACH OTHER TO GROWWe seek opportunities to encourage personal development and support collective growth. We reward and celebrate success and like to promote from within.WE DO WHAT IT TAKESWe love challenges and finding unique ways to solve problems. We have a focus on growth and a commitment to always act ethically and in the best interests of our stakeholders.WE WORK & THRIVE AS AN INTEGRATED & AGILE TEAMAt Centuria, we are bigger than the individual parts. We embrace diversity and collaborate with colleagues and partners to achieve success. LISTED: 2 WOOLWORTHS WAY, WARNERVALE, NSW
Centuria Capital Group – Annual Report 2021 | 03
WE SUPPORT EACH OTHER TO GROWWE ARE HONEST, TRANSPARENT & RESPECTFULWE DO WHAT IT TAKESWE WORK & THRIVE AS AN INTEGRATED & AGILE TEAMTRANSPARENT COOPERATION TRANSACTIONAL VELOCITY THOROUGH PROCESS PERSONAL INTERACTION V I S I O N
A leading Australasian
property funds manager
Our people are leaders in their field
throughout Australia and New Zealand.
We leverage our geographic diversity, our
in-depth market knowledge in favoured
sectors, and our access to capital to grow
funds under management with a strong
focus on earnings growth.
SIX MAJOR REAL
ESTATE ASSET
CLASSES
We utilise our
balance sheet to
support expansion
across healthcare,
large format retail,
daily needs retail,
office and industrial
markets
STRONG
DISTRIBUTION
NETWORK
Service and further
realise the potential
of our market-leading
retail investor
network across
east and west coast
Australia and New
Zealand
E X E C U T I O N
DELIVER RECURRING
REVENUES, UNLOCK
PERFORMANCE FEES
Strong recurring
revenue fees underpin
distributions
Realise underlying
performance fees
embedded in
unlisted funds
PLATFORM
EXPANSION
Expand the Australia
and NZ unlisted
platforms.
Maintain strong
A-REIT presence.
Initiate new
vehicle(s) based on
sector, scalability and
market viability.
GROWTH
OPPORTUNITIES
Utilise expanded
Capital Transactions
team to identify and
execute on direct real
estate opportunities
Select corporate
acquisitions where
accretive
C L E A R & S I M P L E T H E M E S
Deliver income and capital growth
from carefully selected, high-
growth asset sectors to a broad
range of Centuria investor profiles
Focus on long term,
predictable
earnings growth
Committed to building
Centuria’s brand and
portfolios throughout
Australia and NZ
CNI platform now highly
scalable with ASX 200
index inclusion
Increased alignment to
alternative’s including
Healthcare and
Agriculture while building
out traditional Industrial,
Office and Retail markets
Further diversify capital
sources – grow $2.3
billion institutional
mandates
04 | Centuria Capital Group – Annual Report 2021
LISTED/UNLISTED: 203 PACIFIC HIGHWAY, ST LEONARDS, NSW
Australasian real estate platform
Real estate platform expansion to $16.5B¹ | +106% over FY21
Asset Sectors
$16.5B AUM
0.1
0.8
1.1
1.3
1.3
4.8
7.1
$8.0B
0.1
0.2
0.6
0.2
2.2
4.6
Agriculture
Other²
Healthcare
Large format retail
Daily needs retail
Industrial
$8.0B
1.7
6.3
Geographies
$16.5B AUM
0.1
2.2
14.2
Other³
New Zealand
FY20
FY21
FY20
FY21
Office
Australia
Fund Types
$16.5B AUM
1.5
1.6
5.5
7.9
Capital Sources
$16.5B AUM
1.7
4.7
4.6
5.5
Unlisted
institutional
Unlisted
wholesale
Unlisted
retail
Multi asset open
ended funds
Multi asset closed
ended funds
Listed REITS
$8.0B
0.3
3.7
4.0
$8.0B
0.6
0.5
4.0
2.9
FY20
FY21
FY20
FY21
Single asset funds
Listed REITS
Note: AUM as at 30 June 2021. All figures above are in Australian dollars (currency exchange ratio of AU$1.000:NZ$1.0753).
Numbers presented may not add up precisely to the totals provided due to rounding
1
2
3
Includes commenced development projects valued on an as if completed basis, cash and other assets, assets exchanged but not settled
Includes Centuria Bass, tourism, shopping centres and land syndicates in the US, NZ and WA
Includes US syndicates from Primewest merger
Centuria Capital Group – Annual Report 2021 | 05
Centuria Capital Group – Annual Report 2021 | 05
Enhanced sector diversification
creates new growth opportunities
$16.5B
REAL ESTATE PLATFORM1,2
OFFICE
INDUSTRIAL
$7.1B
AUM
$4.8B
AUM
DAILY NEEDS
RETAIL (‘DNR’)
$ 1.3B
AUM
LARGE FORMAT
RETAIL (‘LFR’)
$ 1.3B
AUM
43%
FY21
58%
FY20
29%
FY21
28%
FY20
8%
FY21
2%
FY20
8%
FY21
1%
FY20
HEALTHCARE
INDUSTRIAL
$4.8B
$1.1B
AUM
AUM
29%
7%
FY21
8%
FY20
AGRICULTURE
$0.1B
AUM
1%
FY21
-
FY20
Note: AUM as at 30 June 2021. All figures above are in Australian dollars (currency exchange ratio of
AU$1.000:NZ$1.0753). Numbers presented may not add up precisely to the totals provided due to rounding
1
Includes commenced development projects valued on an as if completed
basis, cash and other assets, assets exchanged but not settled
2 Other AUM includes Centuria Bass, tourism, shopping centres and land
syndicates in the US, NZ and WA
UNLISTED: 1521 FOREST ROAD, ORANGE, NSW
06 | Centuria Capital Group – Annual Report 2021
A $16.5bn leading Australasian
real estate platform1
WA
NT
SA
QLD
NSW
ACT
VIC
TAS
North
Island
South
Island
New South Wales
ACT
Auckland
$2,990m ACROSS 70 PROPERTIES
$469m ACROSS 6 PROPERTIES
$1,581m ACROSS 39 PROPERTIES
Queensland
South Australia
Other New Zealand
$2,845m ACROSS 82 PROPERTIES
$631m ACROSS 19 PROPERTIES
$580m ACROSS 28 PROPERTIES
Victoria
Tasmania
$2,778m ACROSS 56 PROPERTIES
$21m ACROSS 2 PROPERTIES
Western Australia
$3,992m ACROSS 111 PROPERTIES
Note: Figures as at 30 June 2021. All figures above are in Australian dollars (currency exchange ratio of AU$1.000:NZ$1.0753)
Numbers presented may not add up precisely to the totals provided due to rounding. Summary excludes Centuria Bass AUM and US syndicates from Primewest merger
1
Includes commenced development projects valued on an as if completed basis, cash and other assets, assets exchanged but not settled
Centuria Capital Group – Annual Report 2021 | 07
Centuria Capital Group – Annual Report 2021 | 07
Chairman’s report
GARRY CHARNY
Chairman
Dear Investor,
On behalf of the Board, it is my pleasure
to introduce Centuria Capital Group’s
2021 annual report.
As I write this report, the fog of
COVID-19 seems to be lifting and
work will be able to return to normal
or, at least, the new normal. That will
be a blessing as FY 2021 presented
its own source of unique travails and
challenges- which I am pleased to say
the Group as a whole has dealt with
resolutely and successfully.
08 | Centuria Capital Group – Annual Report 2021
08 | Centuria Capital Group – Annual Report 2021
THE YEAR THROUGH COVID-19
Centuria benefitted from a strong start to FY21, which continued as we
saw some early signs of the pandemic unwinding however this proved
a little optimistic as the year progressed and much of Australia soon
endured lockdowns or State isolation by the year end.
As a group we reflected on how best to execute our long-term goals
in these conditions. Whilst business confidence in certain sectors
was diminished, Centuria’s portfolio, whilst diverse, suffered limited
exposure to the worst-affected asset classes. Our decentralised office
assets have proven very resilient, and we while we were pleased
to support the State and Federal government initiatives to provide
rental support to, for example, small retail premises within our office
investments vacancy was low and revenues continued to be strong.
Our Industrial portfolio benefitted from a massive swing towards
logistics investment as Australia moved to online purchasing and
supply chain infrastructure was identified as the sector most likely to
benefit. The decision to enter the industrial sector in 2017 has turned
out to be remarkably prescient with CIP our industrial manager-REIT
becoming a class leader and making a record level of acquisitions in
FY21.
In addition to organic growth we continued with our multi-faceted
approach by completing the acquisition of the Perth-based Primewest
Group, and a 50% acquisition of unlisted credit fund provider Bass
Capital (now known as Centuria Bass Credit). Primewest , in particular,
brought us a successful complementary business driven by like-
minded principals, with a geographic emphasis in the west. Centuria
has now become a true Australasian entity.
PERFORMANCE
Centuria’s strong performance and growth was recognised with the
Group’s milestone inclusion in the S&P/ASX200 Index inclusion (July
2021), GICS re-classification to Diversified Real Estate (September
2020) and MSCI small cap index inclusion (November 2020).
Throughout the 2021 Financial Year, the Group doubled its Assets Under
Management (AUM) to $17.4billion¹ (+98% on FY20). More specifically,
across our real estate platform, unlisted funds increased 175% to $11
billion while listed fund increased 37% to $5.5 billion. This is in addition
to our investment bonds business contributing a steady $0.9 billion.
The Group continued to broaden its investment product offering with
the launch of six unlisted funds, expanding its development pipeline to
$1.9 billion² and branched into new asset classes including agriculture,
Large Format Retail (LFR) and Daily Needs Retail (DNR), via our merger
with Primewest.
Additionally, Centuria Industrial REIT (ASX: CIP) was included in the
Financial Times Stock Exchange (FTSE) European Public Real Estate
Association (EPRA) National Association of Real Estate Investment
Trusts (Nareit) Global Real Estate Index in June 2021 with Centuria
Office REIT (ASX: COF) included in September 2021.
Since year end, the Centuria Office REIT (ASX: COF) has also been
admitted to the EPRA Nareit index. The FTSE EPRA Nareit inclusion
enables our REITs to be more easily compared to international peers.
The Augusta Capital business has now been fully integrated and
has made a strong contribution to FY21 earnings. We have a strong
commitment to our New Zealand platform (now renamed Centuria NZ)
and we are grateful to the New Zealand team which is ably led by local
CEO Mark Francis. Mark and the co-founder of Augusta, Bryce Barnett,
contribute strongly to our group strategy and earnings.
ESG
Our Environmental, Social and Governance (ESG) initiatives
continue to be a critical focus of attention during FY21.
Prior to our AGM we will deliver our first Sustainability Report,
which will outline in detail our framework and ongoing
commitments. The Report will, inter alia, highlight the Group’s:
• Support for the Taskforce on Climate-Related Financial Disclosure
(TCFD) recommendations
• Continued diversity drive including its membership of the Diversity
Council of Australia; and
• Commitment to delivering sustainable properties with high Green-
star and NABERS ratings through our $1.9billion development
pipeline and maximising sustainability in our existing portfolio.
During FY22, the Group will continue to focus on wider
sustainability initiatives across our New Zealand and Western
Australian portfolios and we note that:
• COF has achieved an average portfolio 4.7-star NABERS energy
rating and 3.2-star NABERS water rating
• CIP delivered one of Australia’s first 5-Star Green Star Design
& As-Built ratings under the new version 1.3 guidelines for its
recently completed industrial facility in Bundamba, QLD.
CULTURE, GOVERNANCE AND DIVERSITY
As part of our ESG initiatives, Centuria is pleased to report it has
further diversified its Board and Responsible Entity Boards. This
year we welcomed Kristie Brown to the Centuria Capital Group
Board (CNI), which now has a 29% female representation. Gender
and diversity remain a critical focus throughout the organization as
we continue to make improvements.
We also welcomed Nicole Green to the Centuria Property Funds
Limited’s (CPFL) Board and Jennifer Cook to Centuria Property
Funds No.2 Limited’s (CPF2L) Board. These Responsible Entity
Boards are led by independent chairmen, Matthew Hardy and
Roger Dobson, respectively.
Finally, Natalie Collins, a current CPF2L member has kindly
agreed to also join the Centuria Healthcare Asset Management
Limited Board.
After eight years with Centuria, Nicholas Collishaw stepped down
as a non-executive director of CNI and its responsible entities on
30 August 2021. Nick remains a good friend of Centuria, we thank
him for his invaluable contribution and wish him well in all his
future endeavours.
Last, but certainly not least, during FY21 Centuria established
a Culture and ESG Board Committee comprising independent
non-executive directors, which complements the existing
ESG management committee. This Board Committee will help
drive policy and culture across the entire Group including the
fundamental areas of diversity and inclusion, climate initiatives,
employee engagement and satisfaction, modern slavery, and
related issues and is led by CNI Independent Non-Executive
Director, Susan Wheeldon.
MANAGEMENT AND INTEGRATION
Centuria’s New Zealand team has now been fully integrated into the
Group. Already the New Zealand platform expanded by 35% within
FY21 to $2.3billion in assets under management (AUM). The Board
and I would like to congratulations to Mark Francis, Centuria NZ CEO,
and his team for such a successful first year within the Group, again in
trying circumstances.
Equally, the Board and I warmly welcome our new West Australian
team. The transfer of all Primewest securities completed on 19 July
2021 and integration into the wider Group is well underway. Since
our off-market offer in April 2021 until 30 June 2021, Primewest’s
AUM expanded 12% to $5.6billion. The organisation built by David
Schwartz, John Bond and Jim Litis is a testament to their abilities and
we appreciate the trust they have shown us in becoming part of a
bigger and hopefully better group.
We warmly welcome our new Centuria Bass Credit colleagues who
have joined our Sydney and Melbourne offices. Founders Giles Borten
and Nicholas Goh bring a wealth of experience across unlisted,
non-bank credit funds, which further broadens Centuria’s suite of
unlisted vehicles.
Emphasising the breadth of our offering, during the year, Centuria
Healthcare continued to grow from under the direction of managing
director, Andrew Hemming. Our healthcare portfolio expanded 35%
during FY21 to $1.1billion. We congratulate Andrew and the healthcare
team for delivering a strong performance. Centuria retains a 64%
interest in Centuria Healthcare following our investment in the
original Heathley Limited entity in 2019.
I would also like to congratulate Ross Lees in his role as Head of
Funds Management, for the exceptional work his has done on our
core office and industrial assets.
CONCLUSION
Finally, the Board thanks you, our loyal investors, for your commitment
to Centuria – not only throughout this financial year but the many
years we have benefited from your support. We do not take that
support lightly and we strive to make Centuria not only a leader in our
sector but a company that better reflects the values and mores of
modern society.
I would also like to thank my fellow Board members and Responsible
Entity Board members for your commitment and leadership
throughout this unchartered, pandemic-impacted environment. Not
least of all, my thanks also to the Senior Management team who has
been at the coalface of it all. in this trying year. In particular, our joint
CEO’s whose complementary skills and dedication have ensured
another successful year of growth.
With rising vaccination rates and lifting of restrictions, we remain
optimistic the effects of COVID will diminish throughout Australia
and New Zealand. Australia has benefited from a remarkably resilient
economy throughout FY21 and Centuria remains well-poised for
future growth throughout FY22.
We look forward to welcoming you all to Centuria’s upcoming
Virtual AGM on in late November 2021.
GARRY CHARNY
Chairman
Note: AUM as at 30 June 2021. All figures above are in Australian dollars (currency exchange ratio of AU$1.000:NZ$1.0753).
Numbers presented may not add up precisely to the totals provided due to rounding
Includes commenced development projects valued on an as if completed basis, cash and other assets, assets exchanged but not settled
Development projects and development capex pipeline, including fund throughs
1
2
Centuria Capital Group – Annual Report 2021 | 09
Key metrics: Delivering strong growth and
creating value across the platform
$17.4bn
13.2cps
11.0cps
61.8%
Group AUM¹
98% growth over FY20
FY22 OEPS
guidance
+10% increase above
FY21 OEPS
FY22 DPS
guidance
+10% increase above
FY21 DPS
12 month total
securityholder
return2
S&P/ASX200 Index +27.8%
S&P/ASX200 AREIT Index +33.2%
LISTED: ARNOTT’S, 23-41 GALWAY
AVENUE, MARLESTON, SA
10 | Centuria Capital Group – Annual Report 2021
12.0cps
FY21 OEPS3
10.0cps
FY21 DPS
+17.6% increase over original FY21
guidance of 8.5cps4
$2.5bn
$1.9bn
$1.5bn
FY21 gross real
estate acquisitions⁵
Record 12-month period
Development
pipeline6
FY21 valuation
increase
1 AUM as at 30 June 2021. Includes
commenced development projects
valued on an as if completed basis,
cash and other assets, assets
exchanged but not settled
2 Source: Moelis Australia. Based
on movement in security price
from ASX closing on 1 July 2020
to ASX closing on 30 June 2021
plus distributions per security paid
during the respective period(s)
assuming re-investment of all
distributions. Past performance
is not a reliable indicator of future
performance
4
3 Operating EPS (OEPS) is calculated
based on the Operating NPAT of
the Group divided by the weighted
average number of securities
Initial FY21 Distribution per security
(DPS) guidance of 8.5 cents
announced on 12 August 2020.
FY21 DPS guidance upgraded to
9.0cps on 22 October 2020. FY21
DPS guidance upgraded to 10.0cps
on 10 February 2021
Includes Primewest acquisitions
post April 2021 merger
announcement. Includes assets
exchanged but not settled
6 Development projects and
5
development capex pipeline,
including fund throughs
Centuria Capital Group – Annual Report 2021 | 11
Joint CEOs letter
JASON HULJICH
JOHN MCBAIN
Joint CEO
Joint CEO
Dear Security Holder,
It is our pleasure to present the 2021
Centuria Capital Group Annual Report.
Despite challenges arising from the
Covid-19 pandemic, including State
lockdowns and border closures, Centuria
delivered a strong FY21 performance.
By year end the Group doubled its
assets under management (AUM) to
$17.4 billion¹ (+98% on FY20), integrated
two new corporate acquisitions and
acquired $2.5 billion² in direct real estate
on behalf of our funds management
vehicles. These totals have continued
to grow during FY22.
The financial year was bookended with the start of FY21 seeing COVID
affects unwind only to end with restrictions re-introduced. Whilst
these headwinds affected all businesses, Centuria’s performance
proved highly resilient, owing in part to its geographic dispersion,
with operating offices across Queensland, New South Wales, Victoria,
New Zealand and now Western Australia. This meant our teams could
continue to effectively asset manage within their jurisdiction as well
as inspect and transact on potential acquisitions.
This flexibility enabled us to continue to execute our growth strategy
with corporate acquisitions providing expansion into new markets,
where we have built Centuria market share by adding new funds
management businesses, which have a proven asset acquisition and
distribution capability.
During the period, we completed the integration of Centuria New
Zealand (formerly Augusta Capital), which expanded its AUM by 35%
to $2.3billion with the support of the Group’s strong balance sheet
In April, Centuria completed an off-market merger with Western
Australia based property fund manager Primewest Group. Primewest’s
AUM increased 12% to $5.6billion by year end and the integration of
this business is near completion.
Pleasingly, this business has continued to perform strongly into
FY22 and the quality of assets it has executed on coupled with the
investment capacity of its loyal investor base, has fully vindicated the
decision to combine the businesses.
12 | Centuria Capital Group – Annual Report 2021
12 | Centuria Capital Group – Annual Report 2021
In April, we acquired 50% of real estate credit funds provider, Bass
Capital, which is now known as Centuria Bass Credit. This entity
contributed $0.4 million to the Group’s FY21 operating earnings, as
part of the group’s new Development Finance business segment, and
has performed well to date in FY22 in favourable market conditions.
FINANCIAL RESULTS
During FY21, the Group delivered a $143.5 million⁴ Statutory Net
Profit After Tax with a $70.2 million⁵ operating NPAT. Operating profit
attributable to property funds management increased 40% to $45.9
million.
FY21 also saw Centuria diversify its capital sources with the issuance
of our first listed debt notes – Centuria Capital No.2 Fund (ASX:
C2FHA). The notes mature in 2026, raised $190 million and the listed
security has performed positively at a premium to issue price to date.
Combined corporate and funds management activity culminated in
the Group delivering a 62% - 12-month Total Shareholder Return³,
outperforming the S&P/ASX 200 Index (+27.8%) and the S&P/ASX200
AREIT Index (+33.2%). Centuria delivered a total securityholder return
of 130% over the three-year period FY19 - FY21 outperforming the
wider S&P/ASX 200 Index (ASX: XJO) by circa 105%.
During FY21 Centuria Capital was included in the S&P/ASX200
Index. The Centuria Industrial REIT (ASX: CIP) was also included in
the Financial Times Stock Exchange (FTSE) European Public Real
Estate (EPRA) National Association of Real Estate Investment Trusts
(Nareit) Global Developed Index. Inclusion in the FTSE EPRA Nareit
enables CIP to be more easily compared with its international peers.
The Centuria Office REIT (ASX:COF) was admitted to the EPRA Nareit
Global Developed Index post FY21 in September this year.
SOCIAL AND ENVIRONMENTAL CONSIDERATIONS
Centuria takes its role as a responsible corporate steward very
seriously. During FY21, the Board and management made a
concerted effort to increase focus on our social, environmental and
governance initiatives. In executing on this commitment during
FY21 we appointed a General Manager - Sustainability who of
course comprises a significant additional member of the existing
Management ESG Committee.
During FY21, Centuria established a Culture and ESG Board Committee
comprising a majority of non-executive directors and chaired by CNI
non-executive director Susan Wheeldon. The board through these
committees directly oversees Centuria’s ESG policies including
Modern Slavery, diversity and inclusion, employee engagement,
climate change and related issues.
This year Centuria releases its first Sustainability Report alongside
our Sustainability Framework. These documents detail how the
entire Centuria Group intends to approach and collaborate with
our investors and tenants, our response to climate change and our
community endeavours.
The Sustainability Report will be released prior to our 2021 Annual
General Meeting and will be available on the Centuria website.
This is an enduring commitment and sustainability is a journey – one
which will continue to evolve as the business grows and will impact
all aspects of our business.
Operating Earnings Per Security⁶ (OEPS) of 12.0 cents along with a
distribution of 10.0 cents per stapled security, were underpinned by
continued growth in recurring revenues accounting for 92% of total
Group revenues (FY20: 86%). FY21 OEPS, was delivered with reduced
contributions by performance fees as a source of operating revenues,
reflecting the Group’s focus on achieving scale and improving
margins.
Centuria Group’s total operating revenues rose 40% to $212.7 million
and Operating Profit After Tax rose 32% to $70.2 million⁵. The merger
of Primewest strengthened the Group’s balance sheet, with net asset
value per security⁷ increasing from $1.44 to $1.92 during the year.
As at 30 June 2021, cash reserves increased to almost $250 million,
representing an operating gearing ratio⁸ of 3.9%. The strong cash on
hand provides the Group with flexibility to consider future platform
growth opportunities and continued support for our unlisted property
funds.
Balance sheet flexibility increased as a result of the $198.7million
listed notes issuance, which repaid a portion of Centuria’s legacy
corporate bonds and extended the majority of our debt maturity to
beyond four years. As a result of the new listed debt, the Group’s
operating gearing ratio increased slightly to 3.9%, however, our
operating interest cover ratio⁹ has increased to 7.0 times compared
to 5.4 times for FY20, as the Group benefited from increased recurring
operating EBIT, as well as the lower interest rate environment.
Centuria recognised $17.9 million of performance fee income, in line
with expected fund expiries across the Group’s unlisted real estate
division. A further $21.4 million10 of unrecognised performance fees
remain latent within our unlisted portfolio. The Group’s co-investment
earnings into its listed REITs, namely CIP, COF and APL and unlisted
investments yielded $36.4m, up from $32.1 million for the prior year.
Development profit contributed an operating profit of $4.5 million,
representing a 150% increase compared with the previous period and
is further supported by a growing $1.9 billion development pipeline.
The Investment bond division’s reduced profitability to $0.9
million, reflects the lower prevailing interest rates impacting our
capital guaranteed products. During FY21 policyholders approved
a restructure of the capital guaranteed bonds to convert them to
unit-linked products and we have also created distribution cost
efficiencies which will combine to optimise policyholder returns
and divisional profitability.
Note: AUM as at 30 June 2021. All figures above are in Australian dollars (currency exchange ratio of AU$1.000:NZ$1.0753).
1
2
3
4
5
6
7
8
9
10
Numbers presented may not add up precisely to the totals provided due to rounding
Includes commenced development projects valued on an as if completed basis, cash and other assets, assets exchanged but not settled
Includes Primewest acquisitions post April 2021 merger announcement. Includes assets exchanged but not settled
Source: Moelis Australia. Based on movement in security price from ASX closing on 1 July 2020 to ASX closing on 30 June 2021 plus distributions per security paid
during the respective period(s) assuming re-investment of all distributions. Past performance is not a reliable indicator of future performance
Attributable to Securityholders
Operating NPAT of the Group comprises of the results of all operating segments and excludes non-operating items such as transaction costs, mark to market
movements on property and derivative financial instruments, the results of Benefit Funds, Controlled Property Funds and share of equity accounted net profit in excess
of distributions received
Operating EPS is calculated based on the Operating NPAT of the Group divided by the weighted average number of securities
Number of securities on issue 30 June 2021: 787,802,693 (at 30 June 2020: 509,998,482)
Gearing ratio is calculated based on (operating borrowings less cash) divided by (operating total assets less cash)
Operating interest cover ratio is calculated based on operating finance costs divided by operating profit before tax excluding finance costs
(excluding reverse mortgages)
The underlying property funds managed by Centuria Capital Group have accrued total performance fees of $45.6m as at 30 June 2021. $24.2m of this amount
has been recognised life to date with the latent unrecognised performance fees being $21.4m estimated over the next two financial years
Centuria Capital Group – Annual Report 2021 | 13
CORPORATE INTEGRATIONS
In April 2021, Centuria made an off-market cash and scrip takeover
offer for 100% of Primewest Group securities. By 19 July 2021, all
Primewest securities were acquired by Centuria, resulting in the
company delisting from the ASX.
Primewest has a 26-year history and brings a $5.6billion real estate
platform into the Group. With assets predominantly in Western
Australia, Primewest’s property portfolio complements Centuria’s
largely East Coast Australia and New Zealand platform, creating a
geographically diversified Australasian real estate platform.
Primewest’s Large Format Retail (LFR), Daily Needs Retail (DNR) and
Agriculture real estate investments complement Centuria’s exposure
to healthcare, industrial and decentralised office real estate assets
across listed and unlisted funds – further diversifying the merged
group by asset class, fund type, tenant profiles and investor profiles.
Additionally, Primewest’s three institutional mandates collectively
total $1.8 billion with over $670 million of investment capacity.
The Primewest team is successfully integrating into the Centuria
fold. Both Primewest and Centuria share many symmetries. Both
businesses were established in the 1990s with small property
syndications, with each growing to managing substantial unlisted
funds and in the case of Centuria three REIT’s. The combined
business has greater scale across each of our asset classes and
delivers more efficient operations through pooled resources.
Primewest’s three founding partners, David Schwartz, Jim Litis and
John Bond, remain part of the fabric of the Primewest business.
Additionally, Bruce McCully has been promoted to General Manager of
the Western Australia office. All Primewest funds continue to operate
on the same terms, conditions, and covenants and we are engaging
well with Primewest’s investor clients.
PLATFORM EXPANSION
Strong growth has been the dominant theme for Centuria throughout
FY21 across each of its pillars. Across all real estate entities, AUM
doubled (106%) to $16.5billion. In particular, our listed real estate
platform increased by 37% to $5.5 billion and unlisted real estate
increased by 175% to $11.0bn. In addition, our investment bonds
business expanded 12.5% to $0.9billion.
This growth was underpinned by strong organic acquisition activity
with 50 high-quality assets secured for $2.5 billion11 (+108%,
FY20). Landmark acquisitions included the $417m Telstra Data
Centre, Clayton VIC, the NZ$178m Visy Glass Manufacturing facility,
Auckland NZ, the $224m Footscray A-Grade office building, which is
91% leased to the VIC Government, and $416 million in healthcare
acquisitions, notably including $190million of assets for CHPF and a
doctor-led JV with Medibank for a private hospital with an estimated
value on development completion of $64million.
Complementing these acquisitions was a $1.5billion valuation gain,
underlining the quality of Centuria’s property portfolio.
Over FY21 the Group’s real estate portfolio12 increased 143% to 340
assets with 2,280 tenants. The portfolio provides a healthy six-year
weighted average lease expiry (WALE)12,13 and 94.6% occupancy12,13.
Impressively, Centuria achieved a 98.8%13 average rent collection
through this covid-affected period. Through Centuria’s in-house
property management capabilities, more than 437,000sqm13 was
leased across 215 leasing transactions.
Demonstrating alignment with our investors, Centuria Capital
continues to be the largest shareholder of its managed REITs,
Centuria Office REIT (ASX: COF) with a 19.9% co-investment, Centuria
Industrial REIT (ASX: CIP), a 17.7% co-investment and Asset Plus
Limited (NZX: APL) a 19.99% co-investment.
Like our successfully integrated Augusta Capital (now known
as Centuria New Zealand) and Heathley Limited (now Centuria
Healthcare), the Primewest team will benefit from the Group’s larger
balance sheet, enabling further expansion particularly across the LFR,
DNR and agricultural sectors.
COF remains Australia’s largest listed pure-play office REIT with a
22-asset portfolio worth $2billion. The REIT is exposed to Australia’s
better performing office markets in metropolitan, regional and near-
city markets, which lend themselves to good workforce commutability
and attractive, affordable rents.
Centuria’s New Zealand business has also successfully expanded
by 35% throughout FY21 now with $2.3billion of AUM. FY21 was
punctuated by the acquisition of Visy’s Glass Manufacturing facility in
Auckland for NZ$178 million. It was the largest New Zealand single-
asset retail fund to date. The Visy fund raised NZ$110million, from 820
retail investors. The NZ business has an experienced management
team led by CEO Mark Francis and fellow founder Bryce Barnett and
we see good potential to continue to grow this business.
During FY21, COF achieved a record year of leasing with 61
transactions across 52,077sqm, accounting for 18.1% of its portfolio
Net Lettable Area (NLA). The high level of leasing activity was
complemented by a $16.3million valuation increase in the second
half of FY21, which contributed to COF’s Net Tangible Assets (NTA)
of $2.48 per unit and $76.9million statutory net profit. Most recently,
COF secured a significant $405milllion debt refinance, which
increases its weighted average debt maturity to 4.2 years (from 2.3
years) and signifies strong support and confidence in the quality of
its office portfolio.
CIP remains Australia’s largest listed pure-play industrial REIT with
a 62-asset portfolio worth $2.9billion as at 30 June 2021. However,
CIP began FY22 by further expanding its portfolio to 67 high-quality
industrial assets worth $3.1billion. During FY21, CIP transacted
18 high-quality acquisitions worth $966million14. This included
$631million worth of assets across two new high conviction industrial
sub-sectors, Data Centres and Cold Storage, as well as $335million
worth of urban infill logistics acquisitions.
The quality of CIP’s portfolio was illustrated with more than a
half-billion-dollar valuation uplift ($587million) during the period.
Additionally, the REIT’s portfolio Weighted Average Capitalisation Rate
(WACR) compressed 151bps from 6.05% to 4.54% during FY21. CIP
delivered strong leasing transactions of nearly 240,000sqm across 33
deals, which accounted for more than a fifth (22%) of the portfolio’s
gross lettable area (GLA). Major long term leasing transactions were
undertaken with, Woolworths and Visy amongst others.
11
12
13
14
Includes transactions post April 2021 Primewest merger announcement, assets exchanged but not settled
Excludes Land, Development Assets, Indirect Holdings and Primewest Tourism Assets, assets exchanged but not settled at 30 June 2021
Excludes Primewest assets, assets exchanged but not settled at 30 June 2021
Before transaction costs. Includes assets exchanged but not settled as at 30 June 2021. 95-105 South Gippsland Highway, Dandenong South development as
is complete value
14 | Centuria Capital Group – Annual Report 2021
UNLISTED: 1 MCNAB AVENUE, FOOTSCRAY, VIC
The diversified APL NZ REIT performed well throughout FY21,
providing a NZ$15.95million profit (FY20, -NZ$14.96million loss).
It comprises a $0.3billion AUM platform including $130million in
committed projects. These include an office development currently
being constructed at Munroe Lane, Albany, which is 63% pre-let to
the Auckland Council on a 15-year lease, and an office redevelopment
asset at 35 Graham Street, Auckland.
Centuria’s unlisted platform continued to broaden its product offering
with the launch of six funds including:
• Single-asset – Centuria Government Income Fund No.1
• Single-asset – Visy Penrose Fund
• Multi-asset – Centuria Healthcare Property Fund
• Multi-asset – Centuria Industrial Income Fund
• Multi-asset – Centuria NZ Property Fund
The Group services more than 12,000 Australasian investors
throughout its unlisted platform. The majority of the unlisted funds
(c.72%) are single-asset funds, with the remainder of the platform
comprising multi-asset closed-ended funds (14.5%) and multi-asset
open-ended funds (13.5%). Of the latter, Centuria Healthcare Property
Fund generated a portfolio of nine assets worth $190million during
the period.
Centuria has also grown its institutional mandate capital to
$2.3billion. Through our merger with Primewest, the Group has two
mandates with a southeast Asian investment group including a
$930million DNR mandate and $587million office mandate. Primewest
also established a $272million joint venture with Blackrock for the
purchase of 140 St George’s Terrace, Perth. These mandates add to
Centuria’s existing $500m healthcare mandate with AXA / Grosvenor.
In addition to the expanding real estate funds, Centuria’s
Development division completed $127million worth of industrial, LFR
and social infrastructure developments. It has a further $1.9billion
pipeline comprising office developments (25.1%), industrial
developments (8.3%), healthcare properties (37.8%), LFR centres
(4.8%) and other developments outside these asset classes (24%).
The development team is committed to delivering high quality,
sustainable, energy-efficient real estate that minimises carbon
emissions.
FY22 OUTLOOK
Centuria Capital has begun FY22 with a strengthened corporate
profile arising from S&P/ASX 200 Index inclusion and with strong
growth across Australasia, as Centuria NZ and Primewest contribute
to total performance.
Our increased platform size, greater asset-class diversity, enlarged
geographic footprint and stronger capital transactions team have all
combined to increase deal flow significantly, deal flow being a core
driver of revenue growth. By virtue of the Centuria platform coming
of scale through FY21 we will begin to witness the benefit of higher
revenues against relatively fixed costs.
Our larger in-house distribution networks throughout Australia and
New Zealand have continued to show strong support for Centuria
unlisted funds and the recent oversubscription of the $224 million
Centuria Government Income Fund No1 is a prime example of the
momentum Centuria has in the current deposit rate climate. We
anticipate this will continue during FY22 and will extend the scale
of our open-ended unlisted funds i.e. Diversified, Healthcare and
Industrial (NZ).
Centuria Capital Group – Annual Report 2021 | 15
Both COF and CIP concluded successful capital raisings in early
FY22 acquiring $700 million of very high quality assets and we
are confident that as Australia returns to work, sentiment towards
office investment will steadily build and that confidence in the
industrial sector will remain strong.
In conclusion, FY21 has proved the resilience of the Group and
the strength of the team’s ability to deliver strong results despite
the challenges faced by the ongoing pandemic. We would like
to thank the people at the heart of the Centuria business – our
Team.
We also believe the additional sector-diversity offered by
our entry into the DNR and LFR sectors will help promote a
wider opportunity set for our investors. Primewest have also
successfully launched a second unlisted agriculture fund
(PWAT2). We believe the agricultural sector operates on sound
demand-led fundamentals and this is a sector we intend to
further expand into on a group-wide basis in both Australia and
New Zealand.
Our achievements throughout FY21, namely the expansion of
our business, leading to increased management fee revenues,
have laid the foundations for providing FY22 Operating earnings
per security guidance of 13.2 cents and distribution guidance of
10 cents per security, both up 10% on the prior corresponding
period.
We are well-positioned to unlock further growth and create
additional value into FY22 and beyond consolidating our leading
position in the Australasian funds management market. We remain
committed to building the Centuria brand across Australasia with
increased market relevance in the direct property and equity
capital markets. At the same time, we are committed to build
on the ESG initiatives we will set out in the soon to be released
Sustainability Framework and Sustainability Report and we
encourage Investors to access these important documents on
our website.
In addition, we thank the Chairmen and the Directors of both the
Group and Responsible Entity boards and external committees
across our organisation. Their support and guidance remain
paramount to the ongoing evolution and success of our
organisation.
Finally, we sincerely thank securityholders and all our
stakeholders for your on-going support and the confidence you
place in our organisation. We look forward to engaging with you in
the year ahead.
JOHN MCBAIN
Joint CEO
JASON HULJICH
Joint CEO
16 | Centuria Capital Group – Annual Report 2021
UNLISTED: 1 WILLIAM STREET, PERTH, WA
Centuria Capital Group – Annual Report 2021 | 17
Key financial metrics
Strong performance
in COVID-19 backdrop
LISTED: 100 BROOKES ST, FORTITUDE VALLEY, QLD
18 | Centuria Capital Group – Annual Report 2021
FY22 guidanceOperating EPS 13.2cps Distribution per security 11.0cps Announced 11 August 2021 OPERATING NET PROFIT AFTER TAX ($m)1
OPERATING EARNINGS PER SECURITY2 (CENTS)
70.2
16.3
45.1
45.7
53.3
10.3
12.7
12.0
12.0
15.5
FY17
FY18
FY19
FY20
FY21
FY17
FY18
FY19
FY20
FY21
STATUTORY NET PROFIT AFTER TAX ($m)3
NET ASSETS PER SECURITY ($)
143.5
1.92
54.8
50.9
1.29
1.32
1.44
1.16
17.3
21.1
FY17
FY18
FY19
FY20
FY21
FY17
FY18
FY19
FY20
FY21⁴
DISTRIBUTIONS PER SECURITY (CENTS)
10.0
9.70
8.20
9.25
7.50
TOTAL SECURITYHOLDER RETURN (%)
S&P/ASX A-REIT 200 Index (accum.)
CNI
61.8%
34.4%
33.2%33.2%
24.3%
23.3%
19.3%
13.0%
6.1%
FY17
FY18
FY19
FY20
FY21
FY17
FY18
FY19
FY20
FY215
-6.3%
1 Operating NPAT of the Group comprises of the results of all
operating segments and excludes non-operating items such as
transaction costs, mark to market movements on property and
derivative financial instruments, the results of Benefit Funds,
Controlled Property Funds and share of equity accounted net profit
in excess of distributions received
2 Operating EPS is calculated based on the Operating NPAT of the
Group divided by the weighted average number of securities
3 Attributable to securityholders
4 Number of securities on issue at 30 June 2021:
787,802,693 (at 30 June 2020: 509,998,482)
-21.3%
5 Source: Moelis Australia. Based on movement in security price
from ASX closing on 1 July 2020 to ASX closing on 30 June 2021
plus distributions per security paid during the respective period(s)
assuming re-investment of all distributions. Past performance is
not a reliable indicator of future performance
Centuria Capital Group – Annual Report 2021 | 19
Expanding our funds management platform
ASSETS UNDER MANAGEMENT (AU$ billion)
$17.4B
11.0
46%
CAGR1
$6.2B
$3.8B
1.5
1.5
0.8
$4.9B
1.9
2.1
0.9
2.6
2.7
0.9
$8.8B
4.0
4.0
0.8
5.5
0.9
Unlisted real estate
Listed real estate
Investment Bonds
FY17
FY18
FY19
FY20
FY21
1 CAGR calculated from 30 June 2017 to 30 June 2021
20 | Centuria Capital Group – Annual Report 2021
LISTED: 1 LAHRS ROAD, ORMEAU, QLD
GROUP AUM MOVEMENT (AU$ billion)
5.0
0.2
0.9
0.1
-0.3
0.8
-0.4
$17.4B
17.4
1.5
2.5
$8.8B
8.8
FY20
Property
Acquisitions1
Valuations2
Primewest
Merger
Bass Capital
Merger
Investment
Bonds
VitalHarvest
AUM
Property
Divestments3
FY21
Includes Primewest acquisitions post April 2021 merger announcement. Includes assets exchanged but not settled
Includes Primewest assets
1
2
3 Divestment of 465 Victoria Avenue, Chatswood, NSW reflected as 100% interest
Centuria Capital Group – Annual Report 2021 | 21
UNLISTED: VISY FACILITY, PENROSE AUCKLAND, NZ
22 | Centuria Capital Group – Annual Report 2021
Major direct real estate
and corporate acquisitions
FY17
FY19
FY20
FY21
$1.4B
$0.6B
$1.7B
$5.2B
AUM
AUM
AUM
AUM
CORPORATE
Over $11 billion of
transformational initiatives
FY19
FY20
FY21
$0.6B
AUM
$1.1B
AUM
$0.5B
AUM
NISHI
REAL ESTATE
Centuria Capital Group – Annual Report 2021 | 23
Centuria Capital Group – Annual Report 2021 | 23
Proven growth
through corporate initiatives
Centuria Industrial REIT
A S X : C I P
32%
CAGR
$3.1B
ASSETS UNDER MANAGEMENT1
$0.9B
HY17
FY21
244% AUM growth
Recurring revenues: ~$5.9m (HY17) ~$20.2m (FY21)
Australia’s largest listed pure play industrial REIT
NTA per unit: $2.36 (HY17) $3.83 (FY21)
1 Includes commenced development projects valued on an as if completed
basis, cash and other assets, assets exchanged but not settled
LISTED: TELSTRA DATA CENTRE
COMPLEX, CLAYTON, VIC
Centuria Healthcare
35%
CAGR
$1.1B
$0.6B
ASSETS UNDER MANAGEMENT1
FY19
FY21
63.06% economic interest acquired May 2019
83% AUM growth
Recurring revenues: $9.8m (FY21)
Established $209m CHPF, $500m institutional mandate,
$0.7bn development pipeline
UNLISTED: 1521 FOREST
ROAD, ORANGE, NSW
1 Includes commenced development projects valued on an as if completed
basis, cash and other assets, assets exchanged but not settled
24 | Centuria Capital Group – Annual Report 2021
Centuria New Zealand
35%
INCREASE
$2.3B
$1.7B
ASSETS UNDER MANAGEMENT1
FY20
FY21
Augusta acquisition in July 2020
35% AUM growth, record period for NZ business
Recurring revenues: $24.0m (HY21) $24.4m (FY21)
CNI support enables: Visy (Penrose Fund), APL co-investment
NZ$147m Munroe Lane development underway
1 Includes commenced development projects valued on an as if completed
basis, cash and other assets, assets exchanged but not settled
LISTED: 6-8 MUNROE LANE,
ALBANY, AUKLAND, NZ
Primewest
12%
INCREASE
$5.6B
$5.0B
ASSETS UNDER MANAGEMENT1
APR. 21
FY21
SINCE MERGER ANNOUNCEMENT (APRIL 2021)
Merger completed June 2021
12% AUM growth
$35.7m pro-rata annualised recurring revenues
UNLISTED: 140 ST GEORGES
TERRACE, PERTH, WA
1 Includes commenced development projects valued on an as if completed
basis, cash and other assets, assets exchanged but not settled
Centuria Capital Group – Annual Report 2021 | 25
$2.5bn
50 assets acquired, 75% via off
market or select campaigns
Includes transactions post April 2021 Primewest merger
announcement, assets exchanged but not settled
Leveraging strong
capital transaction capabilities
FY21 RECORD GROSS REAL ESTATE ACQUISITIONS
$2.5B
108%
ABOVE FY20
PERIOD
$1.2B
$0.9B
FY19
FY20
FY21¹
Includes Primewest acquisitions post April 2021 merger announcement. Includes assets exchanged but not settled
1
26 | Centuria Capital Group – Annual Report 2021
98.8%
Avg rent collected over
entire real estate platform²
July 2020 – June 2021
UNLISTED: VERMONT PRIVATE HOSPITAL, BURWOOD HWY, VIC
Leveraging strong active
asset management capabilities
CENTURIA PLATFORM’S TOP 10 TENANTS BY INCOME (%)1
GOVERNMENT
WOOLWORTHS LIMITED
TELSTRA
CORPORATION LIMITED
ARNOTT’S
VISY
HEALIUS
3.2%
3.0%
2.4%
2.2%
1.8%
15.0%
6.0 year
CENTURIA PLATFORM’S
WEIGHTED AVERAGE
LEASE EXPIRY (WALE)
BY INCOME1,2
94.6%
CENTURIA
PLATFORM’S TOTAL
OCCUPANCY BY
AREA1,2
SEVEN NETWORK
1.4%
BENDIGO AND
ADELAIDE BANK LTD
AWH PTY LTD
1.3%
1.2%
Office
Industrial
Healthcare
Retail
1 Excludes Land, Development Assets, Indirect Holdings and Primewest Tourism Assets, assets exchanged but not settled at 30 June 2021
2 Excludes Primewest assets, assets exchanged but not settled at 30 June 2021
Centuria Capital Group – Annual Report 2021 | 27
$1.9 billion development
pipeline to seed funds
Development fees
and profits provide
growing income
$442m est. value
on completion of CNI
balance sheet development
assets.6 committed projects,
(107,000sqm GLA)
CNI will selectively
use its balance sheet
to seed and expand
its property funds
$53.7m carrying
value of CNI balance
sheet development
assets
LISTED: 6-8 MUNROE LANE, ALBANY,
AUCKLAND, NZ (ARTIST IMPRESSION)
28 | Centuria Capital Group – Annual Report 2021
LISTED: 42 HOEPNER ROAD, BUNDAMBA, QLD
BALANCE SHEET PROPERTIES HELD FOR DEVELOPMENT GENERATE NO FEE INCOME. PROJECTS INCLUDE:
CARDIFF, NEWCASTLE
COOK ST, AUCKLAND
LAKEVIEW, QUEENSTOWN
MANN ST, EAST GOSFORD
MAN ST, QUEENSTOWN
KEW, MELBOURNE PRIVATE HOSPITAL
ASSET CLASS
Office
Industrial
Healthercare
Large Format Retail
Other/Social Infrastructure²
FY21
COMPLETIONS
(AUD $M)
$ -
$18
$ -
$56
$53
AREA
SQM
-
10,500
COMMITTED
PIPELINE
(AUD $M) 1,2,3
$198
$130
AREA
SQM
25,600
62,200
-
$366
49,600
12,250
$20
6,800
18,750
$437
102,500
FUTURE
PIPELINE
(AUD $M)1,3
AREA
SQM
TOTAL
PIPELINE
(AUD $M)1,2
26,000
7,200
32,450
18,700
$479
$158
$722
$92
$281
$28
$357
$72
$20
TOTAL
AREA
SQM
51,600
69,360
82,050
25,500
4,500
$457
107,000
Total¹
$127
41,500
$1,150
246,700
$758
88,850
$1,908
335,510
Note: All figures above are in Australian dollars (currency exchange ratio of AU$1.000:NZ$1.0753).
Numbers presented may not add up precisely to the totals provided due to rounding
1 Development projects and development capex pipeline, including fund throughs
2 Lakeview Queenstown JV reflected at a 25% interest
3 Estimated value at completion
Centuria Capital Group – Annual Report 2021 | 29
Unlisted property: AUM growth
to $11 billion (+175% for FY21)
$2.0m
$17.9m
$21.4m
57%
31%
FY21
PERFORMANCE FEE
CASH COLLECTED
FY21
RECOGNISED
PERFORMANCE FEES
FY21
LATENT UNDERLYING
PERFORMANCE FEES1
UNLISTED AUM WITH
EXPIRY REVIEW DATES AT
OR BEYOND FIVE YEARS
UNLISTED
AUM WITH NO FUND
EXPIRY REVIEW DATE
ASSET SECTORS
$4.0bn
in FY20
$billions
ASSET SECTORS
$11.0bn
in FY21
$billions
Office - 2.3
Industrial - 0.6
Healthcare - 0.6
Office - 4.8
Industrial - 1.7
Healthcare - 1.1
Agriculture - 0.1
Daily needs retail - 0.2
Large format retail - 0.1
Other - 0.2
Daily needs retail - 1.3
Large format retail - 1.3
Other - 0.7
FUND TYPES
$4.0bn
58+
73+
Multi asset open ended funds - 0.6
Single asset funds - 2.9
in FY20
$billions
FUND TYPES
I 43+
73+
$11.0bn
Multi asset open ended funds - 1.5
Single asset funds - 7.9
in FY21
$billions
Multi asset closed ended funds - 0.5
Multi asset closed ended funds - 1.6
1 The underlying property funds managed by Centuria Capital Group have accrued total performance fees of $45.6m as at 30 June 2021. $24.2m of this
amount has been recognised life to date with the latent unrecognised performance fees being $21.4m estimated over the next two financial years
30 | Centuria Capital Group – Annual Report 2021
16
+
16
+
4
+
2
+
4
+
15
+
10
+
2
+
12
+
12
+
6
+
I
15
+
12
+
I
15
+
12
+
I
Listed property: AUM growth
to $5.5 billion (+37% for FY21)
ARTIST IMPRESSION
ASX:COF
ASX:CIP
CENTURIA OFFICE REIT
CENTURIA INDUSTRIAL REIT
NZX:APL
ASSET PLUS
Australia’s largest
pure-play Office REIT
Australia’s largest
pure-play Industrial REIT
A QUALITY PORTFOLIO OF
DE-CENTRALISED, HIGHLY
CONNECTED AND AFFORDABLE
OFFICE SPACE
A QUALITY PORTFOLIO OF FIT FOR
PURPOSE INDUSTRIAL ASSETS,
SITUATED IN INFILL LOCATIONS
WITH CLOSE KEY INFRASTRUCTURE
Targeting long
term total returns
A YIELD PLUS GROWTH
INVESTMENT STRATEGY
THROUGH SELECT NEW
ZEALAND REAL ESTATE
$2.0bn
AUM
22
$3.1bn
AUM
68
$0.3bn
AUM3
6
HIGH QUALITY ASSETS
HIGH QUALITY ASSETS3,4
HIGH QUALITY ASSETS3,4
19.9%
CNI CO-INVESTMENT¹
98.3%
17.1%
CNI CO-INVESTMENT¹
$966m
19.99%
CNI CO-INVESTMENT¹
$130m
FY21 AVG. RENT COLLECTED2
ACQUISITIONS | 18 HIGH QUALITY ASSETS
ACTIVE INITIATIVES UNDERWAY
INCLUDED IN THE
INCLUDED IN THE
S&P/ASX 300 INDEX
S&P/ASX 200 INDEX
AND FTSE EPRA NAREIT INDEX
AND FTSE EPRA NAREIT INDEX
$0.1bn
MARKETCAPITALISATION5
82%
PORTFOLIO INCOME FROM GOVERNMENT,
ASX LISTED & MULTINATIONAL TENANTS
63%
PORTFOLIO INCOME FROM TELCO,
CONSUMER STAPLES & PHARMACEUTICALS
71%
PORTFOLIO INCOME FROM GOVERNMENT,
NZX LISTED & MULTINATIONAL TENNANTS
Includes associates of Centuria Capital Group
1
2 As COVID-19 impacts and the National Code of Conduct on Commercial Leases
remained active, it is possible that further rent relief claims could be
received for FY21 period
Includes commenced development projects valued on an as if completed basis
Includes assets exchanged but not settled at 30 June 2021
3
4
5 Based on the respective APL close price on 30 June 2021
Centuria Capital Group – Annual Report 2021 | 31
Sustainability at Centuria
Centuria Capital will be releasing its first Sustainability Report this
year. Highlights to be featured in this report are summarised here.
Centuria Capital’s sustainability framework flows through to the
listed REITs (ASX:CIP and ASX:COF).
ENVIRONMENTAL
SOCIAL
GOVERNANCE
ESG REPORTING
Centuria Capital to release its
first Sustainability Report
CLIMATE ACTION
Centuria supports the
recommendations of the TCFD
ENVIRONMENTAL DATA
Energy, emission (scope 1 & 2), and water
data collected for assets within COF
CENTURIA OFFICE REIT
NABERS Sustainability Portfolio Index Ratings
Energy 4.7 Stars | Water 3.2 Stars
CENTURIA INDUSTRIAL REIT
42 Hoepner Road, Bundamba: One of
Australia’s first 5 Star Green
Star Industrial assets
MEMBER
Of the Diversity Council of Australia
BOARD DIVERSIFICATION
Appointment of 4 independent
directors to Group and RE Boards
TENANT ENGAGEMENT1
91% of surveyed tenants would
recommend Centuria as an asset manager
(ASX:CNI) CENTURIA CAPITAL: Kristie Brown
(ASX:COF) CPFL: Nicole Green
(ASX:CIP) CPF2L: Jennifer Cook, Natalie Collins
SPECIALISED HEALTHCARE REAL
ESTATE UNDER MANAGEMENT
COMPLETED $72.2M OF SOCIAL
AND AFFORDABLE HOUSING
EMPLOYEE ENGAGEMENT2
94% of employees enjoy
working at Centuria
CULTURE & ESG BOARD
COMMITTEE ESTABLISHED3
Oversight of modern slavery, diversity
& inclusion, climate change
FIRST MODERN SLAVERY
STATEMENT DELIVERED
Over a third of cleaning contracts by
value assessed using the Property Council
of Australia Informed 365 platform
GENDER DIVERSITY AT CENTURIA
63% male employees | 37% female employees
EMPLOYEE TRAINING
Code of Conduct
Financial Education
Cyber Security
LISTED: 100 BROOKE ST, FORTITUDE VALLEY, QLD
1 Centuria Capital undertakes regular tenant surveys. The figure reported from the Group’s FY21 survey
2 Centuria Capital undertakes regular employee engagement surveys The reported figure is from the Group’s FY21 survey
3 The Centuria Culture and ESG Board Committee is chaired by Susan Wheeldon, Independent Non-Executive Director of Centuria Capital Limited
32 | Centuria Capital Group – Annual Report 2021
LISTED: 818 BOURKE STREET, DOCKLANDS, VIC
Our Group-wide (all entities) approach to Sustainability is overseen by Centuria
Capital (ASX:CNI), its Board, Committees and Executive Management team.
Regular monitoring and review of the Group’s Sustainability initiatives is undertaken
by Centuria’s ESG Management Committee¹, Culture and ESG Board Committee
comprised of independent directors and ultimately by the Centuria Capital Board.
CENTURIA’S BOARD GROUP
CENTURIA CAPITAL (ASX:CNI)
CNI
BOARD
ARCC
AUDIT, RISK & COMPLIANCE
COMMITTEE
NOMINATION &
REMUNERATION
COMMITTEE
CULTURE & ESG COMMITTEE
CPFL
BOARD
CPFL
ARCC
ASX:COF
CPF2L
BOARD
ASSET PLUS
BOARD
UNLISTED
FUNDS &
OPERATIONS
CPF2L
ARCC
ASX:CIP
ASSET PLUS
ARCC
NZX:APL
CENTURIA CAPITAL BOARD COMMITTEES PROVIDE OVERSIGHT OF ALL LISTED AND
UNLISTED ENTITIES UNDER CENTURIA CAPITAL AS PART OF THEIR RESPONSIBILITIES UNDER ASX:CNI
CONFLICTS COMMITTEE / MANAGEMENT ESG COMMITTEE
CENTURIA CAPITAL EXECUTIVE MANAGEMENT TEAM
All of Centuria’s listed
REITs have an independent
Audit, Risk and
Compliance Committee
Centuria Capital (ASX:CNI)
various Committees provide
ESG strategy and indirect
oversight of ASX:COF and
ASX:CIP as a governing
body of CNI
Centuria Executive
Management Team jointly
reports into CNI, COF and
CIP Independent Boards
1 The Centuria Culture and ESG Board Committee is chaired by Susan Wheeldon, Independent Non-Executive Director of Centuria Capital Limited
Centuria Capital Group – Annual Report 2021 | 33
Sustainability at Centuria
Centuria has focused efforts on
reputable and repeated volunteering
and fundraising programmes. We aim
to create long term partnerships with
community based organisations.
ST LUCY’S SCHOOL
St Lucy’s School is a primary and secondary school for students
with disabilities. It provides excellence in education that empowers
students with the values, knowledge, attitudes and skills to flourish
and participate fully in society. Centuria have supported St Lucy’s
School since 2011. Throughout the year, the Centuria team helped
raise over $140,000 in donations and our staff have regularly
participated in activities to support the school.
The flagship event is our annual trivia night, when all our partners and
peers come together to fundraise. During the reporting period, the
Centuria team were unable to physically attend St Lucy’s School due
to COVID-19 and had limited participation on the team volunteer day.
However, we practiced virtual volunteering by wrapping Christmas
presents in a remote manner.
MEMBERSHIPS, ASSOCIATIONS
& EXTERNAL INITIATIVES
AUSTRALIA MEMBERSHIPS
MEMBER OF THE PROPERTY
COUNCIL OF AUSTRALIA
MEMBER OF THE DIVERSITY
COUNCIL AUSTRALIA
Supporter of the recommendations
of the TASKFORCE ON CLIMATE-
RELATED FINANCIAL DISCLOSURES
MEMBER OF THE PROPERTY
FUNDS ASSOCIATION OF
AUSTRALIA GROUP
NEW ZEALAND MEMBERSHIPS
MEMBER OF THE PROPERTY
COUNCIL OF NEW ZEALAND
MEMBER OF THE NEW ZEALAND
GREEN BUILDING COUNCIL
MEMBER OF MATES
IN CONSTRUCTION
34 | Centuria Capital Group – Annual Report 2021
Social and affordable
housing case study
PARTNERING WITH COMPASS
HOUSING (TIER 1 SERVICE
PROVIDER) AND TETRIS CAPITAL
• CNI equity contribution circa $20m
• Centuria: Developer
• Compass: Community housing
provider (Tenant)
• Tetris: Upfront take out party
In FY21, Centuria’s development division
completed four social and affordable housing
developments, providing 190 new affordable
homes through four projects, across NSW’s
Hunter and Central Cost, collectively
worth $72.2 million. The schemes delivered
vital housing for the Gosford and Newcastle
communities, accommodating over 300
frontline and key workers and their families.
Centuria was responsible for sourcing the
development sites, providing development
funding and implementing its development
expertise to deliver these projects.
DEVELOPMENT OF 316
MAITLAND ROAD, MAYFIELD, NSW
318 MAITLAND ROAD,
MAYFIELD, NEWCASTLE
45 PENDLEBURY ROAD,
CARDIFF, NEWCASTLE
23-25 YOUNG STREET,
WEST GOSFORD
357-359 MANN STREET,
WEST GOSFORD
Centuria Capital Group – Annual Report 2021 | 35
Board of directors
John
McBain
EXECUTIVE
DIRECTOR &
JOINT CEO
Jason
Huljich
EXECUTIVE
DIRECTOR &
JOINT CEO
Joint CEO John McBain’s 40-year real estate
career in both Australasia and the UK spans
the commercial and industrial markets and
more latterly the healthcare and agriculture
real estate sectors.
He is an executive director of Centuria
Capital Limited, Centuria Life Limited,
Centuria Healthcare Limited and Primewest
Management Limited and a non-executive
director of Centuria Bass Credit Limited. John
is a director of NZX-listed Asset Plus Limited
and an alternate director of Centuria Funds
Management NZ Limited and Centuria NZ
Industrial Fund Limited. He also serves on
the Centuria NZ and Centuria Healthcare
Management committees as well as the
Centuria Life Investment Committee.
John and Jason Huljich founded Centuria
Capital together and the Group now oversees
more than $17 billion of assets under
management including four separate publicly
listed vehicles and 300 staff throughout
Australia, New Zealand and The Philippines.
John is chiefly responsible for Centuria’s
corporate team including corporate
acquisitions and mergers. His responsibilities
include corporate strategy as well as
leadership of the Finance, Company
Secretarial, Compliance and Governance,
Corporate Investor Relations, Marketing,
Communications and Centuria Life teams,
who report directly to him. He jointly steers
the Senior Executive Committee and serves
on the Sustainability and Non-Financial
Risks Committee and the ESG Management
Committee.
Since 2007, John has been instrumental in
the integration of several businesses into the
Group, including the 360 Capital Group (2016),
a majority interest in Heathley Limited (now
Centuria Healthcare) (2019), New Zealand-
based Augusta Capital Limited (2020) and
Primewest Group (2021).
This corporate acquisition strategy, together
with a highly successful asset acquisition
and funds management programme overseen
by fellow CEO Jason Huljich, has seen the
pair oversee significant growth in both the
company’s size and shareholder returns
culminating in Centuria Capital Limited
entering the S&P/ASX 200 Index in July 2021.
John has a property valuation qualification
from The University of Auckland.
Joint CEO Jason Huljich’s 25-year real estate
career spans the commercial and industrial
real estate sectors. He co-founded Centuria
Capital, with Joint CEO, John McBain.
He is an executive director of Centuria
Capital Group, Centuria Life Limited, Centuria
Healthcare Limited, Centuria Healthcare Asset
Management Limited, Primewest Management
Limited, as well as director of Centuria Funds
Management (NZ) Ltd, Centuria NZ Industrial
Fund Limited and non-executive director of
Centuria Bass Credit Limited.
Jason shares the helm of Centuria with John,
collectively overseeing more than $17 billion
of assets under management and c.300 staff
throughout Australia, New Zealand and the
Philippines.
Jason is chiefly responsible for the company’s
real estate portfolio and funds management
operations including the listed Centuria
Industrial REIT (ASX: CIP) and Centurial
Office REIT (ASX: COF), as well as Centuria’s
extensive range of unlisted funds across
Australia and New Zealand. Several unlisted
funds regularly feature in the Top 10
Performing Core Funds in the Property Council
of Australia / MSCI Australia Unlisted Retail
Quarterly Property Funds Index.
Since Centuria was established, Jason has
been pivotal in raising over $5 billion for the
listed and unlisted vehicles. He has been
central to positioning Centuria as Australia’s
fourth largest external manager. Centuria
Capital Group (CNI) and CIP are included in
the S&P/ASX 200 Index and CIP is also part
of the FTSE EPRA Nareit Global Index. COF is
included in the S&P/ ASX 300 Index.
Jason has a hands-on approach to the real
estate operations throughout the company’s
platform. The Transactions, Development,
Funds Management, Distribution and Asset
Management teams all report directly to him.
Jason’s career began after graduating with
a Bachelor of Commerce (Commercial Law
major) from the University of Auckland. He is a
Property Funds Association (PFA) of Australia
Past President. The PFA is the peak industry
body representing the $125 billion direct
property investment industry. Jason currently
sits on the Property Council of Australia’s
Global Investment Committee.
Garry
Charny
CHAIRMAN
Garry was appointed as Chairman of
the Centuria Capital Group Board on 30
March 2016. He has significant board-
level experience with listed and unlisted
companies across a diverse range of sectors
including property (Trafalgar Corporate,
which became 360 Capital), and Manboom;
retail (Apparel Group, Sportscraft, and Saba);
technology (General Electric EcXpress and
1st Available) and media (Boost Media,
Macquarie Radio, and April Entertainment).
Currently, he is Managing Director and
founder of Wolseley Corporate, an Australian
corporate advisory and investment house
that consults on local and international
transactions in the USA, United Kingdom,
Malaysia, India and throughout South-East
Asia. Wolseley specialises in mergers and
acquisitions, strategic corporate advice and
contentious matters resolution.
Garry is also Chairman of Spotted Turquoise
Films, an international Film and Television
Company based in Sydney and Los Angeles,
and Chairman of Shero Investments, a Sydney
based investment company.
Previously, he was co-founder and Chairman
of Boost Media International, an international
media advisory business with offices in
Sydney, New York, Toronto, Kuala Lumpur and
Delhi. He was also President of Boost Media
LLC (USA).
From 1983-1995, Garry practised as
a Barrister-at Law at the Sydney Bar
specialising in corporate, commercial, equity
and media. He was an Adjunct Lecturer in
Law at the University of NSW.
36 | Centuria Capital Group – Annual Report 2021
Susan
Wheeldon
INDEPENDENT
NON-EXECUTIVE
DIRECTOR
Nicholas
Collishaw
NON-
EXECUTIVE
DIRECTOR
retired 30.8.21
Peter
Done
INDEPENDENT
NON-EXECUTIVE
DIRECTOR
Susan joined the Centuria Capital Group Board
as an Independent Non-Executive Director in
August 2016. She brings extensive experience
across international commercial markets
within ICT, real estate, legal, aviation and
online retail sectors.
Currently, Susan is Country Manager for
Australia, New Zealand and Oceania at Airbnb.
Previously, she served in a number of roles,
including Head of Government & Performance
and Head of Agency at Google, working with
major national and global companies to
develop and deliver growth strategies that
future-proof and build clients’ businesses and
brands in a constantly changing environment.
During her career Susan has held a number
of senior roles in Australia and the United
Kingdom across a diverse range of industries
including global law firms DLA Piper and King
& Wood Mallesons, working with the Virgin
Australia & Virgin Atlantic airline brands,
as Vice President of Groupon, and as Head
of Brand & Retail at AMP Capital Shopping
Centres.
She holds an MBA from the Australian
Graduate School of Management (AGSM)
and is a member of Australian Institute of
Company Directors.
Nicholas has been a Non-Executive Director
of Centuria Capital Group since October
2017. Previously he was Centuria Capital’s
CEO of Listed Property Funds, joining in May
2013. Nicholas brings to the Boards more
than 30 years experience across domestic
and international real estate and investment
markets.
Between 2008 and 2012, he was Mirvac
Group’s CEO and Managing Director,
responsible for successfully guiding the real
estate development and investment company
through the Global Financial Crisis and
implementing sustained growth strategies.
Nicholas has held senior positions with James
Fielding Group, Paladin Australia, Schroders
Australia and Deutsche Asset Management.
He has extensive experience in all major real
estate markets in Australia and investment
markets in the United States, United Kingdom
and the Middle East.
Nicholas is currently Executive Director and
Co-Founder of Lincoln Place, an Australian
funds manager specialising in the retirement
sector, as well as Chairman of Redcape Hotel
Group.
Following the reporting date, Nicholas
resigned from the Centuria Capital Board
effective 30 August 2021.
Peter joined the Centuria Capital Group Board
as an Independent Non-Executive Director
in November 2007. He is also Chairman
of Centuria Capital Group’s Audit, Risk
Management and Compliance Committee.
He has extensive knowledge in accounting,
audit and financial management in the
property development and financial services
industries, corporate governance, regulatory
issues and Board processes through his many
senior roles.
Peter hails from a 38-year career at KPMG.
From 1979, he held the position of Partner until
his retirement in 2006. During his 27 years
as Partner, Peter was the lead audit partner
for many clients, including those involved in
property development, primary production and
television and film production and distribution.
Peter holds a Bachelor of Commerce
(Accounting) from the University of New
South Wales and is a Fellow of Chartered
Accountants Australia and New Zealand.
Centuria Capital Group – Annual Report 2021 | 37
Board of directors
Kristie
Brown
INDEPENDENT
NON-EXECUTIVE
DIRECTOR
John
Slater
INDEPENDENT
NON-EXECUTIVE
DIRECTOR
Kristie is an experienced real estate
investment and legal professional
who joined the Centuria Board as an
Independent Non-Executive Director as well
as a member of the Group’s Audit, Risk and
Compliance Committee (ARCC).
Ms Brown is a founding partner of
investment firm, Couloir Capital, and
established Danube View Investments
following 16 years at blue-chip law firms.
John was appointed to the Board on 22 May
2013 having previously been an adviser to the
Centuria Life Friendly Society since 2011.
John was a senior executive at KPMG Financial
Services prior to establishing a financial
advisory practise. Since its acquisition he
has focused on consulting activities and he
has been a Board Member of Centuria Capital
Limited since 2016. He also serves on the
Nominations and Remuneration Committee
John has deep experience in all financial
market sectors gained over a 35 year career.
He serves on the Investment Committees
of Centuria Life and the Over Fifty Guardian
Friendly Society and continues to be active in
Investment Committee activities in reflect of
other non-aligned financial group’s.
UNLISTED: EXCHANGE TOWER, 2 THE ESPLANADE PERTH, WA
38 | Centuria Capital Group – Annual Report 2021
Senior Executives
John
McBain
EXECUTIVE
DIRECTOR &
JOINT CEO
Jason
Huljich
EXECUTIVE
DIRECTOR &
JOINT CEO
Simon
Holt
CHIEF
FINANCIAL
OFFICER
Refer to bio on page 36.
Refer to bio on page 36.
Simon joined Centuria Capital as Chief
Financial Officer in May 2016. He brings with
him a wealth of local and global experience
covering the corporate, treasury and listed
securitisation areas.
He is accountable for financial and treasury
management of the Group and, with the Joint
CEOs, is also tasked with a specific focus
on expanding the parent company, Centuria
Capital.
Simon was most recently Chief Financial
Officer of WorleyParsons where he spent
eight years. Previously, he held a range of
senior Finance positions at Westfield Group
and Westfield Trust, again spanning eight
years.
Simon is a Chartered Accountant and holds a
degree in Business (major in Accounting and
Marketing). He is also a Member of Australian
Institute of Company Directors.
Centuria Capital Group – Annual Report 2021 | 39
Centuria Capital Group – Annual Report 2021 | 39
Senior Executives
Anna
Kovarik
GROUP CHIEF
RISK OFFICER
& COMPANY
SECRETARY
Ross
Lees
HEAD OF FUNDS
MANAGEMENT
Andrew
Essey
HEAD OF
TRANSACTIONS
Anna joined Centuria in July 2018 in the role
of General Counsel and Company Secretary.
In July 2020 Anna was promoted to Group
Chief Risk Officer and Company Secretary.
Prior to joining Centuria, Anna held the
position of Group Risk Manager at Mirvac
Group and was previously Head of Group
Insurance for AMP and General Counsel
and Company Secretary at AMP Capital
Brookfield.
Anna holds a Masters of Information
Technology, a BA (Hons) in Systems
Management, and was awarded a distinction
in the Global Executive MBA program at the
University of Sydney. She is qualified as a
solicitor in both the UK and NSW and was a
senior associate at Allens law firm in Sydney
where she specialised in the areas of real
estate and funds management.
Ross is the Head of Centuria’s Real Estate
Funds Management business, responsible
for both listed and unlisted property funds,
which include two ASX-listed REITs as well as
22 unlisted funds, worth just under $7 billion.
Ross joined the company in 2017 as Centuria
Industrial REIT (ASX: CIP) Fund Manager,
transforming the REIT into Australia’s largest
domestic pure play industrial REIT.
He brings more than 16 years of investment
management experience to Centuria, having
held senior transactional and portfolio
management positions for peers including
Dexus, LOGOS Group and Stockland.
Ross holds a Master of Applied Finance
from Macquarie University and Bachelor of
Business (Property Economics) from UWS.
Andrew joined Centuria Capital Group in early
2013, and has held senior positions including
National Leasing Manager, Fund Manager
and, most recently, Head of Transactions.
Andrew is responsible for originating and
managing the Group’s property transactions
and overseeing of the acquisitions team.
He has transacted more than $4 billion of
office and industrial real estate on behalf of
Centuria.
Prior to joining Centuria, he was a Director for
DTZ’s Sydney North Shore Agency, focused
on leasing and sales within the North
Shore industrial and office park markets.
Throughout his six years with DTZ, Andrew
directly transacted more than 180 deals on
behalf of institutional and private investors.
Andrew holds a Bachelor of Business
Administration from Radford University,
Virginia, USA with a Major in marketing and a
Minor in economics.
40 | Centuria Capital Group – Annual Report 2021
40 | Centuria Capital Group – Annual Report 2021
André
Bali
HEAD OF
DEVELOPMENT
Victor
Georos
HEAD OF
PORTFOLIO
& ASSET
MANAGEMENT
Since 2007, André Bali has overseen all
Centuria’s project and property development
functions, including development and debt
funds.
Victor joined Centuria as Senior Portfolio
Manager in April 2013 and was appointed
Head of Portfolio and Asset Management
in July 2015.
In his role he is responsible for overseeing
portfolio and asset management of
Centuria’s portfolio, including the
development and implementation of
strategies to enhance value through active
asset management and development. Victor
works closely with the Funds Management
team and the Development team. In addition
Victor manages the Centuria Property Fund’s
Valuation program and is actively involved
with the constant review of best practice
policies and procedures.
Victor has extensive experience in asset and
investment management, development and
funds management, across the office, retail
and industrial sectors, with a key focus on
results and ability to build high performance
teams across all sectors. Prior to joining
Centuria Victor held senior positions with
GPT Group and LendLease, including Head of
Industrial & Business Parks at GPT.
Victor holds a Bachelor of Land Economy
and a Graduate Diploma of Finance and
Investment (FINSIA).
He is responsible for both passive and
active management of Centuria and Centuria
Healthcare’s listed and unlisted portfolio
including capital works, planning, strategic
repositioning of assets to maximise returns,
development and project management, joint
ventures and partnerships, and working
closely with Centuria’s leasing, capital
transactions and funds management teams
to enhance value for Centuria’s investors.
André has more than 30 years experience in
development and investment management
across numerous sectors including office,
health residential, industrial and retail.
Currently he oversees c.$1.6billion worth of
development projects throughout Australasia
across industrial, healthcare, office, dementia
care residences, social and affordable
housing, hotel and residential projects (as at
31 December 2021).
Prior to Centuria, André founded and
operated a specialised property consulting
and advisory company. His experience also
includes several senior positions in a number
of property development companies.
André holds an Honours Degree in Applied
Science from UNSW, Masters of Commerce
(Land Economics) from UWS, Grad Cert of
Finance from AGSM, AAPI, MAICD and held
non-executive roles on several not-for-profit
organisations including Habitat for Humanity.
Michael
Blake
HEAD OF
CENTURIA LIFE
With more than three decades in the wealth
management industry across blue-chip
Australian and multinational corporations,
Michael Blake joined Centuria in 2016 and
is responsible for investment bond products
provided by Centuria Life.
He is chiefly responsible for Centuria
Life’s P&L, strategic direction, funds under
management growth, product development
and directly reports to the Centuria Life
Limited (CLL) Board. He manages a team of
five in addition to working with Centuria’s
distribution team to raise the profile
and investments in Centuria LifeGoals
Investment Bond products.
Prior to his current position, Michael was
pivotal in launching the unlisted Centuria
Diversified Property Fund.
Michael joined Centuria after 12 years with a
prominent international real estate investor
and manager, where he secured several
industry awards including Fund Manager
of the Year and Direct Property and A-REIT
of the Year. Prior to this, he held various
National Sales Manager and State Manager
roles for financial institutions across a 21-
year period.
He is a member of the Property Funds
Association (PFA). Michael holds a Bachelor
of Financial Administration from the
University of New England, a Diploma of
Financial Planning from the Royal Melbourne
Institute of Technology (RMIT), a Master of
Business Administration from Macquarie
University, and is a graduate of the Australian
Institute of Company Directors.
Centuria Capital Group – Annual Report 2021 | 41
Centuria Capital Group – Annual Report 2021 | 41
Senior Executives
Sara
Stacey
HEAD OF
MARKETING
Bruce
McCully
HEAD OF
RETAIL - GENERAL
MANAGER, WA
Mark
Francis
CEO -
CENTURIA
NEW ZEALAND
Sara is Head of Marketing, responsible
for Centuria’s full end-to-end marketing
strategy, planning and execution across
the Group’s business entities and channels
within Australia and New Zealand, which
incorporates brand positioning, real
estate capital fundraising campaigns and
investment bond promotions.
Since joining the Group in May 2019,
Sara has been instrumental in supporting
Centuria’s growth through the introduction
of a new Corporate brand while integrating
several merged businesses including
Heathley Limited (now Centuria Healthcare),
Bass Capital (now Centuria Bass Credit),
Augusta Capital (now Centuria NZ) and most
recently Primewest.
Sara brings more than 20 years global
marketing experience to Centuria, with a
strong financial markets background. Her
career spans senior roles within prestigious
international institutions including Pictet
Asset Management, BlueBay Asset
Management (now part of the Royal Bank
of Canada) and State Street Global Advisors
where she transferred to the Sydney office
in 2015 as Head of Marketing – Australia.
Her successful career has been recognised
with several marketing awards including
the Financial Standard’s Marketer of the
Year 2016, Advertising Campaign of the Year
2016 & 2017, Social Media Campaign of the
Year 2017 and Marketing Team of the Year
2017 (finalist).
Sara studied a Chartered Institute of
Marketing (CIM) accreditation from the
London Metropolitan University and holds
a Graphic Design Diploma (Merit) from
Colchester Institute, UK.
Bruce is General Manager of Western
Australian following Centuria’s merger with
Primewest.
In addition, he is Head of Retail and is
responsible for the Group’s $2.6billion retail
portfolio and expanding retail acquisitions
across unlisted funds and on behalf of
several institutional mandates. He oversees
all operations throughout west coast
Australia across development, transactions,
leasing, asset management and facilities
management.
Bruce joined Primewest in February 2020,
bringing more than 30 years of retail
property expertise to the Group. Prior to this,
he was Coles Group State Property Manager
across WA, SA & NT for more than 10 years.
Additionally, Bruce has held senior roles
with Macquarie Bank, Centro Properties and
Metcash.
Bruce is a licenced Real Estate Agent
and holds an MBA from the University
of Western Australia, a Diploma of
Business Management and Certificate of
Management from the University of Western
Australia and is a member of the Property
Council of Australia WA.
CEO of Centuria’s New Zealand division,
Mark Francis, has a career spanning more
than 25 years across financial and real
estate markets. He founded Augusta Capital
in 2001 and assumed his current position at
the helm of Centuria’s New Zealand entity
following the companies’ merger.
Mark is a board member of the Centuria
Funds Management NZ and the Centuria NZ
Industrial Fund as well as a Centuria Capital
Senior Executive Committee member. He
is also Managing Director of the NZX-listed
Asset Plus Limited (NZX: APL).
He is responsible for overseeing a
A$2.3billion real estate portfolio spanning
office, industrial, healthcare, retail and
tourism assets across listed and unlisted
funds while managing a team of more than
40 staff across three offices.
Since merging with Centuria (July 2020),
the New Zealand business increased assets
under management by 35%, contributing
A$24.4milion in recurring revenues to
the Group. Mark was at the forefront of
executing one of Australasia’s largest
single-asset unlisted funds underpinned
by the NZ$178m Visy Glass manufacturing
facility in Penrose, Auckland (March 2021).
Prior to founding Augusta, Mark was
an equity analyst with Hendry Hay
MacIntosh (now Merrill Lynch in NZ) before
undertaking property development roles
with Force Corporation Limited and Village
Roadshow Australia Pty Ltd.
Mark graduated from the University of Otago
with a Bachelor of Commerce (Finance).
42 | Centuria Capital Group – Annual Report 2021
42 | Centuria Capital Group – Annual Report 2021
Alexandra
Koolman
GROUP
COMMUNICATIONS
MANAGER
Alexandra is Group Communications
Manager, responsible for internal and
external communications across Centuria’s
c.$17billion listed and unlisted equity and
debt funds, ESG initiatives and investment
bonds.
She joined the company in April 2020,
bringing extensive domestic and
international corporate communications
and public relations experience within
commercial, residential, build-to-rent and
development real estate disciplines.
Alexandra brings more than 18 years
experience to Centuria, having held
senior positions with Australian property
developers and British real estate agencies,
including Colliers International.
She holds a Bachelor of Business
(Public Relations) from the Queensland
University of Technology (QUT).
LISTED: 825 ANN STREET, FORTITUDE VALLEY, QLD
Centuria Capital Group – Annual Report 2021 | 43
Centuria’s people
INTERNATIONAL WOMEN’S DAY CENTURIA PANEL
INTERNATIONAL WOMEN’S DAY CENTURIA PANEL
CENTURIA BRISBANE STAFF
CENTURIA BASS CAPITAL DIRECTORS
44 | Centuria Capital Group – Annual Report 2021
44 | Centuria Capital Group – Annual Report 2021
CENTURIA NZ SENIOR TEAM
CENTURIA MELBOURNE OFFICE
CENTURIA DEVELOPMENT SOCIAL AND AFFORDABLE HOUSING PROJECT
CENTURIA CHAIRMAN & JOINT CEOS - NAIDOC WEEK
PRIMEWEST GROUP FOUNDERS
Centuria Capital Group – Annual Report 2021 | 45
Centuria Capital Group – Annual Report 2021 | 45
46 | Centuria Capital Group – Annual Report 2021
Directors’ Report
For the year ended 30 June 2021
The directors of Centuria Capital Limited (the ‘Company’) present
their report together with the consolidated financial statements of the
Company and its controlled entities (the ‘Group’) for the financial year
ended 30 June 2021 and the auditor’s report thereon.
ASX listed Centuria Capital Group consists of the Company and its
controlled entities including Centuria Capital Fund (‘CCF’). The shares
in the Company and the units in CCF are stapled, quoted and traded
on the Australian Securities Exchange (‘ASX’) as if they were a single
security under the ticker code ‘CNI’.
Responsibilities
• Chairman of the Centuria Capital Limited and Centuria Funds
Management Limited Boards
• Member of the Conflicts Committee (stepped down as Chairman on
1 May 2021)
• Chairman of the Nomination and Remuneration Committee
• Member of the Centuria Capital Limited and Centuria Funds
Management Limited Audit, Risk Management and Compliance
Committee
• Chairman of the Centuria Life Limited Board
DIRECTORS AND DIRECTORS’ INTERESTS
• Member of the Centuria Life Limited Audit Committee
Name
Appointed
Directorship of
other listed entities
• Member of the Centuria Life Limited Risk and Compliance Committee
Resigned
• Chairman of the Centuria Healthcare Pty Limited Board
Mr Garry Charny
23 Feb 2016
None
Mr Peter J. Done
28 Nov 2007
Mr John R. Slater
22 May 2013
Ms Susan Wheeldon
31 Aug 2016
Ms Kristie Brown
15 Feb 2021
Mr Nicholas Collishaw 27 Aug 2013
Centuria Industrial
REIT (CIP) (i)
Centuria Office REIT
(COF) (ii)
None
None
None
Centuria Industrial
REIT (CIP) (i)
Centuria Office REIT
(COF) (ii)
Redcape Hotel
Group (RDC) (iii)
Mr John E. McBain
10 Dec 2006 None
Mr Jason C. Huljich
28 Nov 2007
Mr Wee Peng Cho
15 Feb 2021
None
None
• Chairman of the Over Fifties Guardian Friendly Society Limited Board
• Member of the Over Fifties Guardian Friendly Society Limited Audit
Committee
• Member of the Over Fifties Guardian Friendly Society Limited Risk
and Compliance Committee
Interests in CNI
Ordinary stapled securities: 406,753
MR PETER J. DONE, B.COMM, FCA.
Independent Non-Executive Director
Experience and expertise
Peter was appointed to the Board on 28 November 2007. Peter was a
Partner at KPMG for 27 years until his retirement in June 2006.
He has extensive knowledge in accounting, audit and financial
management in the property development and financial services
industries, corporate governance, regulatory issues and Board
processes through his many senior roles.
1 Apr 2021
(i) Director of Centuria Property Funds No. 2 Limited as responsible entity for
Centuria Industrial REIT
(ii) Director of Centuria Property Funds Limited as responsible entity for Centuria
Office REIT
(iii) Director of Redcape Hotel Group Management Limited as responsible entity for
Redcape Hotel Trust 1 and Redcape Hotel Trust 2
MR GARRY S. CHARNY, BA. LL.B.
Independent Non-Executive Director and Chairman
Experience and expertise
Garry was appointed to the Board on 23 February 2016 and appointed
Chairman of Centuria Capital Group on 30 March 2016. Garry is also
Chairman of Centuria Life Limited and Over Fifty Guardian Friendly
Society Limited.
He is Managing Director and founding principal of Wolseley Corporate,
an Australian based corporate advisory and investment house which
transacts both domestically and internationally.
He has significant, board-level experience in listed and unlisted
companies across a diverse range of sectors including property, retail,
technology and media. He formerly practised as a barrister in the fields
of commercial and equity.
Other directorships
Garry is Chairman of Wolseley Corporate. He is also Chairman
of Spotted Turquoise Films, an international Film and Television
company based in Sydney and Los Angeles. He is Chairman of Shero
Investments, a Sydney based investment company.
Other directorships
None
Responsibilities
• Member of the Centuria Capital Limited and Centuria Funds
Management Limited Boards
• Member of the Nomination and Remuneration Committee
• Chairman of the Centuria Capital Limited and Centuria Funds Management
Limited Audit, Risk Management and Compliance Committee
• Member of the Centuria Life Limited Board
• Chairman of the Centuria Life Limited Audit Committee
• Chairman of the Centuria Life Limited Risk and Compliance
Committee
• Member of the Centuria Life Limited Investment Committee
• Member of the Centuria Property Funds Limited Board (stepped
down as Chairman on 1 June 2021)
• Member of the Centuria Property Funds Limited Audit, Risk
Management and Compliance Committee (stepped down as
Chairman on 1 June 2021)
• Member of the Centuria Property Funds No. 2 Limited Board
(stepped down as Chairman on 29 July 2020)
• Member of the Centuria Property Funds No. 2 Limited Audit, Risk
Management and Compliance Committee (stepped down as
Chairman on 29 July 2020)
• Member of the Over Fifties Guardian Friendly Society Limited Board
• Chairman of the Over Fifties Guardian Friendly Society Limited Audit
Committee
• Chairman of the Over Fifties Guardian Friendly Society Limited Risk
and Compliance Committee
Interests in CNI
Ordinary stapled securities: 1,506,182
Centuria Capital Group – Annual Report 2021 | 47
Directors’ Report
For the year ended 30 June 2021
MR JOHN R. SLATER, DIP.FS (FP), F FIN.
MS KRISTIE BROWN, B. COMM, B. LAW (HONS)
Independent Non-Executive Director
Independent Non-Executive Director
Experience and expertise
Kristie Brown is an experienced real estate investment and legal
professional who joins the Centuria Board as an Independent Non-
Executive Director as well as a member of the Group’s Audit, Risk
and Compliance Committee (ARCC). Ms Brown is a founding partner
of investment firm, Couloir Capital, and established Danube View
Investments following 16 years at blue-chip law firms.
Other directorships
Director of Colouir Capital
Responsibilities
• Member of the Centuria Capital Limited and Centuria Funds
Management Limited Boards
• Member of the Centuria Capital Limited and Centuria Funds
Management Limited Audit, Risk Management and Compliance
Committee
Interests in CNI
Ordinary stapled securities: Nil
MR NICHOLAS R. COLLISHAW, SAFIN, FAAPI, FRICS.
Non-Executive Director
Experience and expertise
Nicholas has been a Non-Executive Director of Centuria Capital Group
since October 2017. Previously he was Centuria Capital’s CEO of Listed
Property Funds, joining in May 2013. Nicholas brings to the Boards more
than 30 years experience across domestic and international real estate
and investment markets.
Between 2005 and 2008, he was Mirvac Group’s Executive Director,
Investment. Between 2008 and 2012, he was Mirvac Group’s CEO,
responsible for successfully guiding the real estate development
and investment company through the Global Financial Crisis and
implementing sustained growth strategies.
Nicholas has held senior positions with James Fielding Group, Paladin
Australia, Schroders Australia and Deutsche Asset Management. He has
extensive experience in all major real estate markets in Australia and
investment markets in the United States, United Kingdom and the Middle
East.
Other directorships
Chairman of Redcape Hotel Group Management Ltd
Responsibilities
• Member of the Centuria Capital Limited and Centuria Funds
Management Limited Boards
• Member of the Culture and ESG Committee
• Member of the Centuria Property Funds Limited Board
• Member of the Centuria Property Funds No. 2 Limited Board
• Member of the Centuria Healthcare Asset Management Limited
Board
Interests in CNI
Ordinary stapled securities: 4,360,037
Experience and expertise
John was appointed to the Board on 22 May 2013 having previously
been an adviser to the Centuria Life Friendly Society since 2011.
John was a senior executive at KPMG Financial Services prior to
establishing a financial advisory practise. Since its acquisition he has
focused on consulting activities and he has been a Board Member of
Centuria Capital Limited since 2016. He also serves on the Nominations
and Remuneration Committee.
John has deep experience in all financial market sectors gained over
a 35 year career. He serves on the Investment Committees of Centuria
Life and the Over Fifty Guardian Friendly Society and continues to be
active in Investment Committee activities other non-aligned financial
groups.
Other directorships
None
Responsibilities
• Member of the Centuria Capital Limited and Centuria Funds
Management Limited Boards
• Member of the Nomination and Remuneration Committee
• Member of the Centuria Capital Limited and Centuria Funds
Management Limited Audit, Risk Management and Compliance
Committee
• Member of the Centuria Life Limited Board
• Chairman of the Centuria Life Limited Investment Committee
• Member of the Over Fifties Guardian Friendly Society Limited
Investment Committee
Interests in CNI
Ordinary stapled securities: 3,110,677
MS SUSAN WHEELDON, MBA.
Independent Non-Executive Director
Experience and expertise
Susan was appointed to the Board on 31 August 2016.
Susan is Country Manager for Australia and New Zealand at Airbnb.
Previously, she served in a number of roles, including Head of
Government & Performance and Head of Agency at Google, working
with major national and global companies to develop and deliver
growth strategies that future-proof and build clients’ businesses and
brands in a constantly changing environment.
She has previous experience in retail property asset management at
AMP Capital Shopping Centres, as Head of Brand & Retail, responsible
for delivering alternative revenue from 38 retail assets across Australia
and New Zealand with combined annual sales in excess of $5 billion.
Other directorships
None
Responsibilities
• Member of the Centuria Capital Limited and Centuria Funds
Management Limited Boards
• Member of the Conflicts Committee
• Chairman of the Culture and ESG Committee
• Member of the Centuria Life Limited Board (resigned on 28 July
2020)
Interests in CNI
Ordinary stapled securities: Nil
48 | Centuria Capital Group – Annual Report 2021
MR JOHN E. MCBAIN, DIP. URBAN VALUATION
MR JASON C. HULJICH, B. COMM.
Executive Director and Joint Chief Executive Officer
Executive Director and Joint Chief Executive Officer
Experience and expertise
Joint CEO John McBain’s 40-year real estate career in both
Australasia and the UK spans the commercial and industrial markets
and more latterly the healthcare and agriculture real estate sectors.
Experience and expertise
Joint CEO Jason Huljich’s 25-year real estate career spans the
commercial and industrial real estate sectors. He co-founded
Centuria Capital, with Joint CEO, John McBain.
He is an executive director of Centuria Capital Limited, Centuria Life
Limited, Centuria Healthcare Limited and Primewest Management
Limited and a non-executive director of Centuria Bass Credit
Limited and NZX listed Asset Plus Limited (NZ). He is an alternate
director of Centuria Funds Management (NZ) and Augusta Industrial
Fund Limited (NZ). He also serves on the Centuria Life Investment
committee.
John and Jason founded Centuria Capital together and the group
now oversees $17 billion of assets under management including four
separate publicly listed vehicles and 300 staff throughout Sydney,
Melbourne, Brisbane, and Manilla.
John is chiefly responsible for Centuria’s corporate team including
corporate acquisitions and mergers. His responsibilities include
corporate strategy as well as leadership of the Finance, Company
Secretarial, Compliance and Governance, Corporate Investor
Relations, Marketing, Communications and Centuria Life teams
who report directly to him. He jointly steers the Senior Executive
Committee and serves on the Sustainability and Non-Financial Risks
Committees.
Since 2007, John has been instrumental in the integration of several
businesses into the Centuria group, including the 360 Capital Group
(2016), a majority interest in Heathley Asset Management (now
Centuria Healthcare) (2019), New Zealand-based Augusta Capital
Limited (2020) and Primewest Group (2021).
This corporate acquisition strategy together with a highly successful
asset acquisition and funds management programme overseen by
fellow CEO Jason Huljich has seen the pair oversee significant growth
in both company size and shareholder returns culminating in Centuria
Capital Limited entering the S&P ASX 200 Index in July 2021.
He has a property valuation qualification from The University of
Auckland.
Other directorships
None
Responsibilities
Group Joint Chief Executive Officer
Interests in CNI
Ordinary stapled securities: 7,062,484
Performance rights granted: 2,298,002
He is an executive director of Centuria Capital Group, Centuria Life
Limited, Centuria Healthcare Limited, Centuria Healthcare Asset
Management Limited, Primewest Management Limited, Centuria
Capital (NZ) No. 1 Limited, Centuria Funds Management (NZ) Limited
and Augusta Industrial Fund Limited. He is a non-executive director of
Centuria Bass Credit Limited.
Jason shares the helm of Centuria with John, collectively overseeing
more than $17 billion of assets under management and c.300 staff
throughout Australia, New Zealand and the Philippines.
Jason is chiefly responsible for the company’s real estate portfolio
and funds management operations including the listed Centuria
Industrial REIT (ASX: CIP) and Centurial Office REIT (ASX: COF), as
well as Centuria’s extensive range of unlisted funds across Australia
and New Zealand. Several unlisted funds regularly feature in the Top
10 Performing Core Funds in the Property Council of Australia / MSCI
Australia Unlisted Retail Quarterly Property Funds Index.
Since Centuria was established, Jason has been pivotal in raising over
$5 billion for the listed and unlisted vehicles. He has been central to
positioning Centuria as Australia’s fourth largest external manager.
Centuria Capital Group (CNI) and CIP are part of the S&P/ASX 200
Index and CIP is also part of the FTSE EPRA Nareit Global Index. COF is
part of the S&P/ ASX 300 Index.
Jason has a hands-on approach to the real estate operations
throughout the company’s platform. The Transactions, Development,
Funds Management, Distribution and Asset Management teams all
report directly to him.
Jason’s career began after graduating with a Bachelor of Commerce
(Commercial Law major) from the University of Auckland. He is a
Property Funds Association of Australia Past President.The PFA is
the peak industry body representing the $125 billion direct property
investment industry. Jason currently sits on the Property Council of
Australia’s Global Investment Committee.
Other directorships
None
Special responsibilities
Group Joint Chief Executive Officer
Member of the Culture and ESG Committee
Interests in CNI
Ordinary stapled securities: 5,289,612
Performance rights granted: 2,165,023
Centuria Capital Group – Annual Report 2021 | 49
Directors’ Report
For the year ended 30 June 2021
DIRECTORS’ MEETINGS
The following table sets out the number of directors’ meetings (including meetings of committees of directors) held during the financial year and
the number of meetings attended by each director (while they were a director or committee member).
Director
Mr Garry S. Charny
Mr Peter J. Done
Mr John R. Slater
Ms Susan Wheeldon
Mr Nicholas R. Collishaw
Mr John E. McBain
Mr Jason C. Huljich
Ms Kristie Brown
Mr Wee Peng Cho
Board
Meetings
Audit, Risk, Management
& Compliance
Committee Meetings
Nomination &
Remuneration
Committee Meetings
Conflicts
Committee
Meetings
A
27
26
27
26
25
26
26
12
3
B
27
27
27
27
27
27
27
12
4
A
6
6
5
#
#
#
#
1
#
B
6
6
6
#
#
#
#
1
#
A
6
6
6
#
#
#
#
#
#
B
6
6
6
#
#
#
#
#
#
A
12
#
#
12
#
#
#
#
#
B
12
#
#
12
#
#
#
#
#
A = Number of meetings attended
B = Number of meetings held during the time the Director held office during the year
# = Not a member of committee
COMPANY SECRETARY
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Anna Kovarik was appointed to the position of Company Secretary on 5
July 2018.
Significant changes in the state of affairs of the Group during the
financial year were as follows:
Anna holds a Masters of Information Technology, a BA (Hons) in
Systems Management and was awarded a distinction in the Global
Executive MBA program at the University of Sydney. She is qualified as
a solicitor in both the United Kingdom and New South Wales and was a
senior associate at Allens law practice in Sydney.
Prior to joining Centuria, Anna held the position of Group Risk Manager
at Mirvac Group and was previously Head of Group Insurance for AMP
and General Counsel and Company Secretary at AMP Capital Brookfield.
PRINCIPAL ACTIVITIES
The principal activities of the Group during the financial year were
the marketing and management of investment products including
direct interest in property funds, friendly society investment bonds,
property and development finance and other liquid investments
across Australasia.
• Contributed equity attributable to Centuria Capital Group increased
to $1,405,456,000 reflecting equity raisings undertaken during
the year. This included stapled securities issued as partial
consideration for the takeover of Augusta Capital Limited and
Primewest Group Limited (Primewest) during the year and the
vesting of rights under the Executive Incentive Plan. Details of
changes in contributed equity are disclosed in Note C10 to the
consolidated financial statements.
•
•
•
In December 2020, the Group refinanced the corporate notes,
reducing the fixed component of Tranche 1 from $30,708,000 to
$19,447,000, reducing the variable component of Tranche 1 from
$26,040,000 to $8,350,000, increasing the fixed component of
Tranche 3 from $18,115,000 to $29,366,000 and increasing the
variable component of Tranche 3 from $13,960,000 to $31,650,000.
In April 2021, the Group issued $198,693,000 of listed redeemable
notes with a variable interest rate of 4.25% plus the bank bill rate
which is due to mature on 21 April 2026.
In April 2021, the Group repaid $19,447,000 of the 7.0% fixed rate
secured notes, $45,000,000 of the 6.5% fixed rate secured notes
and $8,350,000 of the variable rate secured notes.
• The Group acquired a 50% interest in Bass Capital Partners Pty Ltd
(Centuria Bass) for $25,417,876 cash consideration. Centuria Bass
is considered a joint venture and treated as an equity accounted
investment commencing from 22 April 2021.
• On 3 June 2021, the Group had received commitments to
acquire 70.1% of Primewest securities and declared the offer as
unconditional. As a result, the Group has been deemed to attain
control over Primewest on 3 June 2021. The offer consisted of a
cash component of $0.20 and a scrip component of 0.473 Centuria
stapled securities per Primewest security. The Group had acquired
98.37% of Primewest securities at 30 June 2021, with the remaining
1.63% under compulsory acquisition. The Group has accounted for
Primewest as a wholly owned subsidiary as at 30 June 2021.
50 | Centuria Capital Group – Annual Report 2021
OPERATING AND FINANCIAL REVIEW
The Group recorded a consolidated statutory NPAT for the year
of $149,639,000 (2020: $22,087,000). Statutory NPAT has been
prepared in accordance with the Corporations Act 2001 and Australian
Accounting Standards, which comply with International Financial
Reporting Standards.
The Group recorded an operating profit after tax of $70,211,000 (2020:
$53,253,000). Operating profit after tax excludes non-operating items
such as transaction costs, fair value movements and share of net profit
of equity accounted investments in excess of distributions received.
The statutory NPAT includes a number of items that are not considered
operating in nature, the table below provides a reconciliation from
statutory profit to operating profit.
Operating profit
after tax $’000
Segment
2021
2020
Increase/
(Decrease)
$’000
Increase/
(Decrease)
% Highlights
Property Funds
Management
44,558 36,286
8,272
Co-Investments
26,066
19,166
6,900
Developments
3,419
1,232
2,187
23
36
178
Property and
Development
Finance
Investment Bonds
Management
286
-
286
-
547
1,710
(1,163)
(68)
Corporate
(4,665)
(5,141)
(A)
(B)
(C)
(D)
(E)
Reconciliation of statutory
profit to operating profit
2021
$’000
2020
$’000
Operating profit
after tax
70,211 53,253
Statutory profit after tax
149,639
22,087
A detailed Segment Profit and Loss as well as a detailed Segment Balance
Sheet are outlined in Notes B1 and C1, respectively.
24.6
4.7
Operational highlights for the key segments were as follows:
Statutory earnings per security
(EPS) (cents)
Less non-operating items:
Unrealised (gain)/loss on fair value
of investments and derivatives
Transaction and other costs
Impairment charges in relation
to seed capital
(Profit)/loss attributable to controlled
property funds
Eliminations between the operating and
non-operating segment
Share of equity accounted net loss/
(profit) in excess of distributions received
Write-off of capitalised borrowing costs in
relation to repayment of secured notes
Tax impact of above non-operating
adjustments
Operating profit after tax
(79,843)
4,503
34,837
6,208
-
550
(12,456)
1,323
6,681
(3,347)
175
(1,486)
2,349
1,229
(837)
70,211
(8,148)
53,253
Operating EPS (cents)
12.0
12.0
A summary of the Group’s operating segments is provided in Note A5
of the Financial Report. The Operating NPAT for the Group comprises
the result of the divisions which report to the Joint CEOs and Board
of Directors for the purpose of resource allocation and assessment of
performance.
(A) Property Funds Management
For the year ended 30 June 2021, excluding the after tax impact of
performance fees, the Property Funds Management segment profit
increased by $10,793,000 or 51% reflecting the growth in AUM.
For the year ended 30 June 2021, Property Funds Management
operating NPAT of $44,558,000 was higher than the prior year
ending 30 June 2020 by $8,272,000 primarily due to the impact of
acquisitions in the first half of the financial year and full year impact
of the acquisition of Augusta Capital Limited.
The increase in AUM was primarily attributable to approximately
$2.0 billion in organic acquisitions with 6 assets valued at $837
million acquired in listed vehicle CIP and the remainder of the
increase relating to other acquisitions in CIP, single asset funds and
Healthcare properties.
(B) Co-Investments
For the year ended 30 June 2021, the Co-Investments segment
operating NPAT increased by $6,900,000. This was primarily due to
additional units acquired during the year in COF and CIP, as well as
an increase in underwiting activity for newly established funds in
New Zealand.
The operating profit after tax for the Co-Investments segment
represents the distributions and returns generated from investment
stakes held less applicable financing costs.
(C) Developments
For the year ended 30 June 2021, the Developments segment
operating net profit after tax was $3,419,000. This segment has been
introduced in the year ending 30 June 2021 due to development
earnings contributing to a larger share of the Group’s earnings.
The prior year segment disclosure has been restated to reflect the
Development segment.
(D) Property and development finance
For the year ended 30 June 2021, the Property and development
finance segment’s operating NPAT was $286,000. This segment was
created from the Group’s acquisition of 50% interest in Bass Capital
Partners Pty Ltd (Centuria Bass), a real estate debt fund provider, for
$25,417,876 cash consideration.
Centuria Capital Group – Annual Report 2021 | 51
Directors’ Report
For the year ended 30 June 2021
Centuria Bass is considered a joint venture and treated as an
equity accounted investment commencing from 22 April 2021. The
operating results of Centuria Bass are shown in Note B1 as the Group’s
proportionate share.
in future financial years has not been included in this report
because disclosure of the information would be likely to result in
unreasonable prejudice to the Group.
1.80
8,690
8 Jul 2020
3.40
16,420
8 Jul 2020
NON-AUDIT SERVICES
1.20
7,203
29 Jan 2021
3.30
19,811
29 Jan 2021
During the financial year, KPMG, the Group’s auditor, has performed
services in addition to the audit and review of the financial statements.
Details of amounts paid or payable to KPMG are outlined in Note F4 to
the financial statements.
(E) Investment Bonds Management
For the year ended 30 June 2021, the Investment Bonds Management
segment’s operating NPAT decreased by $1,163,000 to $547,000
primarily due to the impact of the low interest rate environment
resulting in an increase in Capital Guaranteed Fund rebates.
EARNINGS PER SECURITY (EPS)
2021
Operating
2021
Statutory
2020
Operating
2020
Statutory
Basic EPS (cents/security)
Diluted EPS (cents/security)
12.0
11.9
24.6
24.2
12.0
11.6
4.7
4.6
DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions paid or declared by the Group during the
current financial year were:
Cents per
security
Total
amount
$’000
Date
paid
Dividends/distributions
paid during the year
Final 2020 dividend
(100% franked)
Final 2020
Trust distribution
Interim 2021 dividend
(100% franked)
Interim 2021
Trust distribution
Dividends/distributions
declared during the year
Final 2021 dividend
(100% franked)
Final 2021
Trust distribution
2.10
12,605
30 Jul 2021
3.40
20,408
30 Jul 2021
EVENTS SUBSEQUENT TO THE REPORTING DATE
In July 2021, $34,100,000 cash consideration was received for the two
final social affordable housing developments, 45 Pendlebury Road,
Cardiff NSW and 357-359 Mann Street, North Gosford NSW.
Other than the above, there has not arisen in the interval between
30 June 2021 and the date hereof any item, transaction or event of a
material and unusual nature likely, in the opinion of the directors of
the Company, to affect significantly the operations of the Group, the
results of those operations, or the state of affairs of the Group, in future
financial periods.
LIKELY DEVELOPMENTS
The Group continues to pursue its strategy of focusing on its core
operations, utilising a strengthened balance sheet to provide
support to grow and develop these operations.
Further information about likely developments in the operations
of the Group and the expected results of those operations
52 | Centuria Capital Group – Annual Report 2021
ENVIRONMENTAL REGULATION
The Group has policies and procedures to identify and appropriately
address environmental obligations that might arise in respect of the
Group’s operations that are subject to significant environmental laws
and regulation. The Directors have determined that the Group has
complied with those obligations during the financial year and that there
has not been any material breach.
INDEMNIFICATION OF OFFICERS AND AUDITORS
The Company has agreed to indemnify all current and former directors
and executive officers of the Company and its controlled entities
against all liabilities to persons (other than the Company or a related
body corporate) which arise out of the performance of their normal
duties as a director or executive officer unless the liability relates to
conduct involving a lack of good faith.
The Company has agreed to indemnify the directors and executive
officers against all costs and expenses incurred in defending an action
that falls within the scope of the indemnity and any resulting payments.
The directors have not included details of the nature of the liabilities
covered or the amount of premium paid in respect of the directors’
and officers’ liability and legal expenses insurance contracts, as such
disclosure is prohibited under the terms of the contracts. The Company
has not otherwise, during or since the end of the financial year, except
to the extent permitted by law, indemnified or agreed to indemnify an
officer or auditor of the Company or any related body corporate against
a liability incurred as an officer or auditor.
The directors are satisfied that the provision of non-audit services
during the year, by the auditor (or by another person or firm on
the auditor’s behalf) is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001.
The directors are of the opinion that the services as disclosed in
the financial statements do not compromise the external auditor’s
independence, based on advice received from the Audit, Risk
Management & Compliance Committee, for the following reasons:
• all non-audit services have been reviewed and approved to ensure
that they do not impact the integrity and objectivity of the auditor;
and
• none of the services undermine the general principles relating to
auditor independence as set out in the Code of Conduct APES 110
Code of Ethics for Professional Accountants issued by the Accounting
Professional and Ethical Standards Board, including reviewing or
auditing the auditor’s own work, acting in a management or decision-
making capacity for the Company, acting as advocate for the Company
or jointly sharing economic risks and rewards.
A copy of the auditor’s independence declaration as
required under section 307C of the Corporations Act 2001
is set out on page 69.
ROUNDING OF AMOUNTS
The Group is an entity of a kind referred to in ASIC Legislative Instrument
2016/191, related to the ‘rounding off’ of amounts in the Directors’
Report and financial statements. Amounts in the Directors’ Report and
financial statements have been rounded off, in accordance with the
instrument to the nearest thousand dollars, unless otherwise indicated.
LISTED: 1 ASHBURN ROAD, BUNDAMBA, QLD
Centuria Capital Group – Annual Report 2021 | 53
Directors’ Report
For the year ended 30 June 2021
REMUNERATION COMMITTEE CHAIR’S LETTER
DEAR INVESTOR,
As chair of the Nomination and Remuneration Committee, I am pleased
to present the remuneration report for the year ended 30 June 2021. This
report has been approved by the Board and is intended to be informative
and digestible whilst complying with our statutory reporting obligations.
Our remuneration philosophy aims to fairly reward and retain the people
who we believe play a crucial role in the achievement of our long-term
objectives and is a key source of our competitive advantage as a leading
Australasian funds manager in the S&P/ASX200 Index. As we continue to
grow and mature as a company, we have sought to substantially improve
the disclosure of our remuneration structure and practices to clearly link
the performance of Centuria Capital Group and to reflect our core value
of pay for performance.
IMPROVEMENTS IN DISCLOSURE
Throughout FY21, we have sought feedback from our investors and
various stakeholder groups and have worked to not only improve
transparency of our remuneration report but to better articulate the
remuneration practices we have adopted. We, as a Board, believe these
remuneration practices are fit for purpose and not only align with our
somewhat complex structure but also drive long-term performance for
our securityholders. As such, we have included a more comprehensive
overview of the overall structure of the Group and deeper rationales for
the adoption of a Joint CEO structure. More details of this can be found
on page 56 of the remuneration report.
EXECUTIVE REMUNERATION CHANGES
Additionally, as discussed in last year’s Notice of Meeting, we have made
a number of adjustments to the performance hurdles for executives’
variable awards, making the outcome more aligned with our comparator
peers, whilst continuing to align with investor’s interests. For the Long-
Term Incentive (LTI) grants made in respect of the FY20-FY23 period
we replaced the Assets Under Management (AUM) performance hurdle
with a combination of Relative and Absolute Total Securityholder Return
(TSR) hurdles assessed against AREIT peers in the S&P/ASX200. The
introduction of the Relative and Absolute TSR performance hurdles
to the LTI programme aligns executive’s interests with securityholder
outcomes and provides a direct comparison of Centuria’s performance
against their comparator group of peers. Again as foreshadowed in the
Notice of Meeting in relation to the 2020 AGM, LTI grants proposed for
the FY21-24 period will now vest over year’s three and four rather than in
year three as was previously the case, i.e. vesting in FY24/FY25.
Further, we have amended the Short-term Incentive (STI) hurdles to
ensure the awards are demonstrably not only tied to performance
but also create an ongoing annual focus on imperative business
and operational issues that create the type of company we are all
striving towards. More details of this can be found on page 60 of the
remuneration report, respectively.
NON-EXECUTIVE DIRECTOR REMUNERATION CHANGES
Effective from 1 June 2021, a new fee structure which covers the Board
and Board Committee roles across Group (including CNI and other
operating entities) has been adopted to improve the transparency
of fees paid to directors. Further, the fee schedule has been
benchmarked against AREIT peers in the S&P/ASX200 to align director
remuneration with market practice as well as recognising the significant
responsibilities each director has in the various Boards and Board
Committees they sit across the Group. More details of the fee structure
can be found on page 66 of the remuneration report.
The fees have been designed to be comparable to our peers in order to
attract the highest quality talent to the Board. Expanding the breadth
and depth of Board membership across the Group has been a key priority
of the current Board to ensure a drive towards optimal independence
and diversity in all its forms. In February 2021, Centuria appointed Kristie
Brown to the Centuria Capital Limited Board. In July 2021, Centuria also
appointed Nicole Green to the Board of Centuria Property Funds Limited
54 | Centuria Capital Group – Annual Report 2021
54 | Centuria Capital Group – Annual Report 2021
and Jennifer Cook to the Board of Centuria Property Funds No. 2 Limited
the Responsible Entity Boards of Centuria Office REIT and Centuria
Industrial REIT respectively. Professor Simon Rice, OAM, has been
elevated to Chair of the Group’s Conflicts Committee and Matt Hardy to
the Chair of Centuria Property Funds Limited. Finally, Susan Wheeldon
has been appointed to Chair our new Culture and ESG Committee.
FY21 PERFORMANCE AND REMUNERATION OUTCOMES
Despite tough market conditions in the office market due to the ongoing
impact of the COVID-19 pandemic, Centuria has had successful financial
year in terms of relative securityholder price (+55.3%) to the broader
ASX200 industrial and real estate indices. Additionally, the Group
strategies to diversify out of pure office into other asset classes and to
enter M&A where it is appropriate have been instrumental in keeping our
TSR healthy and growing CNI’s market capitalisation.
For FY21, Centuria’s one-year TSR was 61.8% with the three-year TSR
being 130.1%. This resulted in 100% of the absolute TSR component
of the Tranche 6 Long-Term Incentive (LTI) awards to vest in FY21.
Furthermore, under the stewardship of the executive team, the Group
has grown its AUM from $6.2 billion in FY19 to $17.4 billion at the end of
FY21. This represents a compound annual growth rate in AUM of 67.5%
over the three-year period. Consequently, 100% of the AUM component
of the Tranche 6 LTI awards vested in FY21.
It is difficult to think of any other combination of strategies which would
have produced this result and despite COVID-19’s effect on office
fund generation, with the finalisation of the acquisition of the Augusta
(NZ) and Primewest funds management businesses the executive
team has the Group poised to enter FY22 with very healthy EPS growth
metrics. Operating EPS for FY21 was 12.0 cents per security, which was
comfortably within FY21 guidance range. This result, combined with our
substantial year-on-year growth in AUM of 97.7% and strong continued
equity flows resulted in 100% of the financial component of the FY21
Short-Term Incentive (STI) to be awarded to the executive team.
The executive team also made substantial headway on non-financial
milestones across culture, risk management and sustainability, which
the Board believes has contributed to the continued strong financial
performance as well as positioning the Group to continue on its growth
path. Consequently, 100% of the non-financial component of the FY21
STI was awarded to the executive team.
As a maturing company, we will continue to engage in an open and
meaningful dialogue with our securityholders and other stakeholders
surrounding our remuneration policies and their contribution to Group’s
performance as well as our understanding of securityholder concerns
and local and global market best practices. We hope, through our
continued evolution of our remuneration practices and ongoing financial
performance, that we look forward to your support at our 2021 Annual
General Meeting.
Yours sincerely,
Garry Charny
Chairman of the Board and Chairman of the Nomination & Remuneration
Committee
AUDITED REMUNERATION REPORT
We are pleased to present the Remuneration Report for the period
ending 30 June 2021.
This Remuneration Report has been prepared in accordance with
section 300A of the Corporations Act 2001 (Cth) (Act) and the
applicable Corporations Regulations 2001 (Cth). The remuneration
report provides information about the remuneration arrangements
for key management personnel (KMP), which includes non-executive
Directors and the Group’s most senior management for the year
ended 30 June 2021.
For clarity, the STI and LTI amounts awarded to Joint CEOs and CFO
were calculated on gross fixed remuneration amounts in as much as
they do not allow a deduction for the wage reductions implemented
by the Group in the interest of securityholders during initial
COVID-19 pandemic conditions. For the period of 1 July 2020 to 30
November 2020, the Board of Directors and Joint CEOs reduced fixed
remuneration/board fees by 15%.
Other staff members agreed to fee reductions in the range 5% to
12.5% over the same period. These deductions are permanent and
will not be reimbursed by the Group.
The report is structured as follows:
• Details of KMP covered in this report;
The term ‘senior management’ is used in this remuneration report to
refer to the executive directors and the Chief Financial Officer.
NOMINATION AND REMUNERATION COMMITTEE
The Board has an established Nomination & Remuneration Committee
which operates under the delegated authority of the Board of Directors.
A summary of the Nomination & Remuneration Committee charter is
included on the Centuria Capital Group website.
The functions of the Committee in respect of remuneration include:
• Making recommendations to the Board regarding the remuneration
of non-executive members of Centuria’s Board, subsidiary boards
and committees which shall be reviewed annually;
• An annual review of the Joint CEO’s remuneration and the
application of incentive programs; and
• An annual review of the application of the short-term and long-term
incentive schemes and policies for executives and staff.
Additionally, the function of the Committee in respect of Board, Joint
CEO’s and senior executive performance include:
• Evaluating the performance of the Board, including committees and
individual directors;
• Assessing the performance of the Joint CEO’s and senior executives
• Remuneration oversight and key principles;
against their key performance indicators; and
• Remuneration of executive directors and senior management;
• Key terms of employment contracts;
• Non-executive director remuneration; and
• Director and senior management equity holdings
and other transactions.
DETAILS OF KMP COVERED IN THIS REPORT
The following persons had authority and responsibility for planning,
directing and controlling the activities of the Group, directly or
indirectly, including any director (whether executive or otherwise) of
the Company during the full financial year.
Name
Role
Term
Non-Executive Directors
Mr Garry S. Charny
Mr Peter J. Done
Mr John R. Slater
Ms Susan Wheeldon
Ms Kristie Brown
Mr Nicholas R. Collishaw
Executive Directors
Mr John E. McBain
Mr Jason C. Huljich
Executives
Mr Simon W. Holt
Independent Non-
Executive Director
and Chairman
Independent Non-
Executive Director
Independent Non-
Executive Director
Independent Non-
Executive Director
Full term
Full term
Full term
Full term
Independent Non-
Executive Director
Part-year (from
15 Feb 2021)
Non-Executive
Director
Executive Director
and Joint Chief
Executive Officer
Executive Director
and Joint Chief
Executive Officer
Full term
Full term
Full term
Chief Financial
Officer
Full term
• Ensuring other human resource management programs, including
performance assessment programs are in place.
The following Non-Executive Directors of Centuria are members of the
Nomination & Remuneration Committee
• Mr Garry Charny (Non-Executive Committee Chair)
• Mr. John Slater (Non-Executive Director)
• Mr. Peter Done (Non-Executive Director)
The Committee is authorised by the Board to obtain external professional
advice, and to secure the attendance of advisors with relevant
experience if it considers this necessary. There were no remuneration
recommendations made by external advisers during the year.
REMUNERATION POLICY AND LINK TO PERFORMANCE
Group Structure
Centuria Capital Group is an ASX-listed specialist investment manager
with a 35-year track-record of delivering a range of products and
services to investors, advisers and securityholders. Our business is
centred around property funds management and investment bonds,
with the following key areas of focus:
• Centuria Property Funds which specialises in listed property funds
(AREITs) and unlisted property funds including;
• Listed REITS, COF and CIP in Australia;
• Listed property fund Asset Plus Limited (NZ);
• the Centuria Diversified Property Fund;
• the Centuria Healthcare Property Fund;
• the Augusta Industrial fund (NZ);
• 120 closed-end unlisted property funds in Australia and New
Zealand;
• Centuria Bass (50% interest in real estate credit supplier);
• Centuria LifeGoals Investment Bonds which deliver innovative
solutions to help clients meet their investment goals.
The Group encompasses a portfolio of wholesale and retail funds, a
healthcare business with related wholesale and retail funds, and a
New Zealand business with listed and unlisted funds. It is noted that
the listed REITs also are not staffed and responsibility for these are
managed by the executive team and employees of CNI. The Group
structure is outlined below on page 56.
Centuria Capital Group – Annual Report 2021 | 55
Directors’ Report
For the year ended 30 June 2021
The combined market capitalisation of the listed headstock (Centuria Capital Group) and its two listed REITS, CIP and COF, is over approximately
$5.8 billion.
Given the overall size of the Group, the complexities of the business it operates and its international scope, the Board has adopted a number of
remuneration practices that reflect this. These are present in our adoption of the Joint CEO structure as well as the new Directors’ Fees Schedule,
which are discussed further in the sections below of this report. These are present in our adoption of the Joint CEO structure as well as the new
Directors’ Fees Schedule, which are discussed further in page 56 and 66 of this report, respectively.
Centuria Capital Fund
Stapled entity with CNI
and Responsible Entity
of CFML
Centuria Funds
Management Limited
Trustee of Centuria
Capital No. 2 Fund and
Centuria No. 3 Fund
Centuria Capital
Limited
ASX-listed headstock
of the Group
Centuria Life Limited
APRA License Holder
& AFSL
Over Fifty Guardian
Friendly Socity Limited
Mutual Fund Society
Centuria Property
Funds Limited
Responsible Entity of COF
and other unlisted entities
Centuria Property
Funds No. 2 Limited
Responsible entity of CIP
and other unlisted entities
Centuria Unlisted
Funds
Centuria Investment
Services Pty Ltd
Centuria Office REIT
(ASX:COF)
ASX-listed Property Fund
Centuria Industrial REIT
(ASX:CIP)
ASX-listed Property Fund
Centuria Properties
No. 3 Ltd
Centuria Canberra
No. 3 Pty Ltd
Centuria Institutional
Investments
No. 3 Pty Ltd
• The Board have recognised the significant importance that a strong
succession plan has on any business. The Joint CEOs have worked
seamlessly together for over 20 years. By creating the Joint CEO role
for Mr Huljich in 2019, the Board believes it has moved to ensure
investors have confidence in the future direction of the Group, and
that, with Joint CEOs, the business has two strong leaders, pulling
together to optimise investor value in a tried and tested operative
way. The Joint CEO structure has been adopted to ensure any future
departure is without disruption to the Group’s operations, which will
inevitably lead to superior outcomes for securityholders.
The remuneration of the Joint CEOs reflects the position they hold
in the REIT industry and their experience and achievements gained
from working together over a period of 25 years at Centuria. Given
the complimentary skill sets of the two CEOs and their division of key
responsibilities (outlined above), the Board believes the remuneration
of the Joint CEOs is a benefit for investors by removing the need for
expensive key resources which many other AREIT peers require, such
as Chief Investment Officers or Chief Operations Officers.
Through the Joint CEO structure, the Group is able to minimise the
size of the senior executive group to be leaner and nimbler than its
peers, which the Board believes is a significant competitive advantage
and in the long-term best interests of securityholders. As part of its
benchmarking process, the Board believes the reduced executive
committee size and adoption of the Joint CEO structure is a significant
cost-saving practice for the Group in comparison to its peers, with
the total executive cost being between 68% and 71% lower than its
competitors amongst ASX AREIT peers.
The Nomination & Remuneration Committee, as well as the Board,
annually review the appropriateness of the Joint CEO structure
to ensure its efficiency and effectiveness by assessing the joint
performance of the CEOs in delivering strong shareholder outcomes
within the context of the Group’s continued growth comparatively to
AREIT peers’ performance and total executive team costs.
Remuneration Philosophy
The Group recognises the important role people play in the
achievement of its business strategy and long-term objectives and
as a key source of competitive advantage. To grow and be successful
across these two areas, the Group must be able to attract, motivate
and retain capable individuals with exceptional talent, expertise,
experience and relationships. Our Group is able to achieve this goal by
following the principles of:
• Delivering value for shareholders in the most efficient manner -
which is reflective in the Joint CEO structure that optimises the
size of the senior executive group in relation to its peers to make it
leaner and more agile than our peers. Overall cost of remuneration is
managed and linked to operating performance of the Group.
• Ensuring competitive, at-risk rewards are provided to attract and
retain the best executive talent, with a focus on retention.
•
Including senior staff in the Long Term Incentive equity plan to
provide a sense of ownership and alignment and in FY20 and FY21
distributing securities to all non-LTI staff to encourage ownership
and alignment.
The main objective in rewarding the Group’s senior management for
their performances is to ensure that shareholders’ wealth is maximised
through the Group’s continued growth.
Joint CEO Structure
The Joint CEO structure was established in 2019 as an important part
of the Group’s long-term management succession and retention plan.
In support of the Joint CEO structure the Board takes into account the
following matters:
• The Joint CEOs have a strong background in all aspects of the
business but also have complementary skills sets, which allows
them to focus on different areas in the management of the multiple
complexities of the business given the Group’s overall structure.
Mr Huljich has primary oversight of funds management, distribution
and property services and Mr McBain has primary oversight of
corporate functions (corporate strategy, M&A, finance, treasury, legal,
communications and investor relations) and the Life business;
56 | Centuria Capital Group – Annual Report 2021
REMUNERATION OF SENIOR MANAGEMENT
Remuneration Structure
The below table outlines the components of senior management’s remuneration and the underpinning rationale for
each element of the remuneration structure. The Nomination & Remuneration Committee ensures the criteria used
to assess and reward staff include financial and non-financial measures of performance.
The table below summarises the key features of executive remuneration and the objectives of each element.
Fixed
At-Risk
Total Executive Remuneration
Type of Remuneration
Remuneration
Short-term Incentive
Long-term Incentive
Senior executives participate
in the Group’s LTI plan
which is assessed against
securityholder returns over
a three-year performance
period. The significant
weighting towards relative TSR
in the LTI aligns executive’s
interests with securityholder
outcomes and provides a
direct comparison of the
Group’s performance against
their comparator group
of peers. Refer to the LTI
Structure section for further
details.
Equity with performance
assessed over three years
(vesting in Year 3 and 4).
How is it set?
Fixed remuneration is set
with reference to market
competitive rates in
comparative ASX listed AREITs
for similar positions, adjusted
to account for the experience,
ability and productivity of the
individual employee.
Senior executives participate
in the Group’s STI plan which
is assessed against key areas
of financial and non-financial
performance that are designed
to create an ongoing annual
focus on imperative business
and operational issues that
create the type of company we
all strive towards. Refer tothe
FY21 STI Scorecard for further
details.
Awarded in cash or shares
at the Board’s discretion.
How is it delivered?
• Base Salary
• Superannuation
• Other benefits such
as maintained motor
vehicles
• Other eligible salary
sacrifice benefits
What is the objective?
• Attract and retain
key talent
• Be competitive
• Drive annual financial
growth targets and
securityholder returns
• Support delivery of the
business strategy and
growth objectives
• Reward value creation
over a one-year period
whilst supporting the
long-term strategy
•
Incentivise desired
behaviours in line with the
Group’s risk appetite
•
Incentivise long-term
value creation
• Drive alignment
of employee and
securityholder interests
Remuneration mix
Remuneration packages include a mix of fixed and variable remuneration and short and long-term performance-
based incentives. The proportion of fixed and variable remuneration for senior management (excluding the Joint
CEOs) is established by the Joint CEOs and the Nomination & Remuneration Committee. The proportion of fixed
and variable remuneration for the Joint CEOs is established solely by the Nomination & Remuneration Committee.
While the allocation may vary from period to period, the graph below details the approximate fixed and variable
components for senior management.
Centuria Capital Group – Annual Report 2021 | 57
Directors’ Report
For the year ended 30 June 2021
POTENTIAL JOINT CEO REMUNERATION MIX
(AT TARGET OPPORTUNITIES)
POTENTIAL JOINT CEO REMUNERATION MIX
(AT MAXIMUM OPPORTUNITIES)
POTENTIAL CFO REMUNERATION MIX
(AT TARGET OPPORTUNITIES)
POTENTIAL CFO REMUNERATION MIX
(AT MAXIMUM OPPORTUNITIES)
41.7%
33.3%
33.3+
28+
25.0% 37.7+
26.4%
28.6%
35.8%
35.7%
35.7%
37.7%
FIXED
STI
LTI
32.2%
33.9%
F 33.9+
33.9%
Historical performance, shareholder wealth and
remuneration
FINANCIAL PERFORMANCE
The Group’s overall objective is to reward executive directors and
senior management based on the Group’s performance and build on
shareholders’ wealth but this is subject to market conditions for the
year. The graph below sets out the Group’s operating net profit after
tax for the past five years.
5-year Operating Financial Performance
$’000
$80,000
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$-
FY17
FY18
FY19
FY20
FY21
The table below sets out summary information about the Group’s
earnings for the past five years.
5 year summary
Operating profit
after tax ($'000)
Statutory profit after
tax attributable to
Centuria Capital
Group securityholders
($'000)
Share price at
start of year
Share price at
end of year
Interim dividend
Final dividend
Special non-cash
dividend
30 June
2021
30 June
2020
30 June
2019
30 June
2018
30 June
2017
70,211
53,253
45,706
45,087
15,489
143,456
21,105
50,795
54,765
17,323
$1.79
$1.77
$1.40
$1.23
$1.05
$2.78
$1.79
$1.77
$1.40
$1.23
4.5cps
4.5cps 4.25cps
4.1cps 2.3cps
5.5cps
5.2cps
5.0cps
4.1cps 5.2cps
-
-
7.8cps
- 17.27cps
Statutory basic
earnings per Centuria
Capital Group security 24.6cps
Operating basic
earnings per Centuria
Capital Group security 12.0cps 12.0cps
4.7cps
14.2cps
19.8cps 11.5cps
12.7cps
16.3cps 10.3cps
TOTAL SECURITYHOLDER RETURN (TSR)
The acquisition of the Primewest business in 2021 was a major
transaction for Centuria Capital. On 16 July 2021, following this
transaction, Centuria Capital joined the S&P ASX200 index ranked #154
and this ranking is expected to move to circa #130 - #140 when the
forthcoming index rebalance takes into account the post-transaction
free float market capitalisation.
Due to the factors set out on page 62 and subject to the qualification
also outlined, the Group considers the following ASX-listed entities as
its most comparable peers which forms the basis of its remuneration
benchmarking exercises:
• Charter Hall Group (ASX: CHC)
• Goodman Group (ASX: GMG)
• Stockland (ASX: SGP)
• Mirvac Group (ASX: MGR)
• Dexus (ASX: DXS)
• GPT Group (ASX: GPT)
• Scentre Group (ASX: SCG)
• Vicinity Centres (ASX: VCX)
58 | Centuria Capital Group – Annual Report 2021
25.0
+
41.7
+
F
26.4
+
35.8
+
33.9
+
32.2
+
F
36
+
35.8
+
F
Centuria believes that important factors driving this outcome include:
• the selection of a lean senior management team and incentivising
them appropriately;
• the synergy and cohesiveness that exists between management
and a diverse Board enabling long term strategies to be set and
implemented seamlessly;
• a recognition that the culture that exists within the group is tangible
and promotes a productive, diverse, rewarding working atmosphere
where employees strive to out-perform.
This special combination of highly complementary and experienced
Joint CEO’s, stable and highly motivated management team and highly
responsive, experienced and diverse Board members has provided
consistently high levels of performance in terms of TSR and dividend
flows when accurately and properly compared to its true peer set and
consistent outperformance against the S&P ASX 200 index (and the
S&P ASX 200 REIT index).
These performance metrics hold true over both one and three year
periods and the company believes maintaining and encouraging this
special combination of talent, drive and experience has will prove
proven highly beneficial to securityholders over the long term.
Fixed Remuneration
Fixed remuneration consists of base remuneration (which is calculated
on a total cost basis and includes any FBT charges related to employee
benefits including motor vehicles), as well as employer contributions to
superannuation funds.
For senior management excluding the Joint Chief Executive Officers,
this is reviewed annually by the Joint Chief Executive Officers and the
Nomination & Remuneration Committee. The process consists of a
review of Group, business unit and individual performance as well as
relevant comparative remuneration in the market. The same process is
used by the Nomination & Remuneration Committee when reviewing
the fixed remuneration of the Joint Chief Executive Officers.
Senior management are given the opportunity to receive their fixed
remuneration in a variety of forms including cash and salary sacrifice
items such as motor vehicles, motor vehicle allowances and/or
additional superannuation contributions.
(i) Short-term Incentives (STI)
The objective of the STI program is to link the achievement of the
Group’s non-financial and financial targets with the remuneration
received by senior management accountable for meeting those
targets. The potential STI available is set at a level to provide sufficient
incentive for senior management to achieve operational targets and
such that the cost to the Group is reasonable in the circumstances.
The graphs and table below highlight Centuria’s strong performance
against the nominated AREIT peers, the broader S&P/ASX200 Index
and the S&P 200 AREIT Index.
Total Shareholder Return - 1 year (since the start of FY21)
Total Shareholder Return - 3 years (since the start of FY19)
TOTAL SHAREHOLDER RETURN
Nominated Peers
30 Jun 20
to 30 Jun 21
30 Jun 20
to 6 Aug 21
30 Jun 18
to 30 Jun 21
30 Jun 18
to 6 Aug 21
1 Year
3 Years
Centuria Capital Group
Peer
Peer
Peer
Peer
Peer
Peer
Peer
Peer
Indices
61.8%
64.1%
44.7%
48.5%
39.3%
29.6%
22.0%
15.0%
24.2%
83.4%
130.1% 160.8%
77.9%
162.0% 184.0%
60.5%
42.2%
40.8%
133.4% 158.9%
40.9%
50.2%
34.9%
51.7%
24.8% (28.4%)
(31.0%)
20.4%
26.4%
24.8%
19.8% (30.4%)
(27.5%)
19.1%
9.4%
5.0%
S&P ASX 200 / A-REIT
S&P ASX 200
33.2%
27.8%
37.2%
31.8%
25.1%
31.6%
28.7%
35.7%
A major focus for FY21 was the consolidation of Centuria Capital as the
fourth largest external property funds manager in Australia. Centuria’s
growth strategy was executed throughout the reporting period with
measurably higher total securityholder returns than six of the eight
nominated peer set.
Centuria Capital Group – Annual Report 2021 | 59
Directors’ Report
For the year ended 30 June 2021
STI Structure
FY21 STI PLAN STRUCTURE
Performance Period
Opportunity
12 Months
Joint-CEOs
CFO
125% of total fixed remuneration at maximum.
100% of total fixed remuneration at maximum.
How the STI is paid
STI awards may be settled in either cash and/or shares at the Board’s discretion.
Performance measures &
conditions
Financial measures (60%)
• Growth in Assets Under Management (AUM)
• Operating Earnings Per Share (EPS) Growth
• Equity Flow Growth
Non-financial measures (40%)
• Staff Engagement
How are STI targets set?
In determining STI hurdle targets, the following factors are considered by the Committee and Board:
• Non-Financial Risk Management
• Environmental, Social and Governance (ESG)
• Performance of peer fund managers over a range of asset classes;
• Direct returns from asset classes in particular property, equities and fixed interest;
• Outlook for financial markets including fixed interest returns;
• Effect financial market views on asset values eg cap rate compression or expansion;
• Performance of Centuria compared to other peer managers; and
• Quality of Centuria’s financial products compared to market and how contemporary they are in this context.
How is the STI assessed?
At the Board’s absolute discretion, the Group’s Senior Management may be provided with the opportunity to
receive an annual, performance-based incentive.
The Nomination & Remuneration Committee assesses annually the individual scorecards of participants against
the KPIs in determination of the annual STI outcome. The ‘STI Achieved’ section outlines the overall scorecard
outcomes for FY21.
What happens when an executive
ceases employment?
Joint-CEOs
CFO
Is there any STI deferral?
No
If employment terminates part way through a financial year
(other than for termination for serious misconduct), the
Joint CEOs are entitled to the STI for the full financial year.
If employment terminates part way through a financial year, the
CFO forfeits any applicable STI for the relevant financial year.
60 | Centuria Capital Group – Annual Report 2021
FY21 Performance Measures and Objectives
FY21 STI SCORECARD
Performance Hurdle
FINANCIAL METRICS
Weighting
Target Criteria
Outcomes
Growth in AUM
30%
• Target = $10.81 billion, resulting in 100% of the
award vesting.
For FY21, the company’s total AUM was $17.4 billion,
representing a growth of approximately 97.7% from
the prior reporting period (FY20: $8.8 billion).
• Outperformance target = $11.28 billion, resulting
in 125% granting of the award.
Operating EPS
15%
• Original Target = guidance
• Outperformance target = guidance +15%cps
This achievement was above outperformance
(+20.0%).
For FY21, the company’s operating EPS was
12.0cps.
Equity Flow Growth
15%
• Target = 17.5% resulting in 100% of award
Year-on-year equity flow growth was 28%.
resulting in 125% granting of award.
This achievement was above outperformance.
NON-FINANCIAL METRICS
Staff Engagement***
15%
Non-financial Risk
Management
10%
vesting
• Outperformance target = 20% resulting in
125% granting of award.
The company conducts annual company-wide
surveys with employees.
Results from these surveys are calculated
into a score, with vesting occurring at these
achievement points:
• Score of 55% = 50% of the award
• Score of 65%= 75% of the award
• Score of 75% and over = 100% of the award
Equity flows relate to equity raised from public
sources for property funds - FY21 result was
normalised to exclude FY21 COF office result
($461m). Due to COVID-19 effect on commercial
office fund opportunity FY22 performance could not
include office flows.**
This achievement was above outperformance.
There has been significant ongoing work in staff
engagement, which has recorded positive results.
These include the following:
• Regular staff engagement surveys have been
conducted, which are independently assessed;
• During FY21, the executive management team
initiated the “Centuria People” online staff
performance and staff engagement system; and
• During FY21, the executive management
team initiated a team leadership programme
supervised by an independent consultant
whereby 10 future leaders join an intensive
leadership skills programme.
The Board assessed the outcomes of the staff
engagement surveys in conjunction with the above
initiatives as meeting Target, resulting in 100% of
the award being achieved.
The Non Financial Risk Committee exists to
provide a regular conduit for important non-
financial information to flow between management
and the Board.
The main criteria employed to assess performance
were:
The Board noted the work of the Committee as it
related to a number of important non-financial risks
eg unit pricing policies, potential conflict issues,
fund restructuring issues, performance reporting
issues, group risks, DRP issues and a large number
of other relevant issues.
• Regular attendance by KMP’s
• Regular and accurate formal Board reporting
The Board monitored the achievements of the
Committee in raising each issue and implementing
transparent solutions.
• Ensuring that all relevant matters within the
ambit of the Committee were brought to the
Board’s attention in a timely manner
The Board assessed the outcomes of the Non-
Financial Risk Committee as meeting Target,
resulting in 100% of the award being achieved.
Centuria Capital Group – Annual Report 2021 | 61
Directors’ Report
For the year ended 30 June 2021
Performance Hurdle
Weighting
Target Criteria
Outcomes
ESG
15%
The ESG metric is assessed against key
achievements in the implementation of the
company’s ESG strategy, including:
•
Improving diversity throughout the Group; and
• Development and roll-out of the company’s
environmental and sustainability initiatives
across the Group.
Management has executed the following steps in
relation to ESG during FY21;
• Establishment of management ESG committee
with members comprising relevant divisional
executives. This committee will be central to
establishing Centuria’s improving ESG outcomes.
• Oversight and publication of the Company’s first
Sustainability Report in FY21 to coincide with the
holding of the 2021 AGM.
• Recruitment and establishment of ESG specific
team within the organisation including a
new appointment - the General Manager -
Sustainability.
The Board assessed the outcomes of the above
actions as meeting Target, resulting in 100% of the
award being achieved.
*During FY21 the Board had a particular focus on AUM growth as a dedicated strategy to qualify Centuria Capital for inclusion in the S&P ASX 200 index. This goal was
achieved on 16 July 2021.
** Due to COVID-19 conditions for majority of year Key Management Personnel waived their rights to 125% awards grants irrespective of qualification
*** The Australian office market was impacted adversely during the majority of FY21 and in particular Australian office AREITS were not in a position to raise capital and this
applied to Centuria Office REIT (COF) amongst others. The Board carefully considered the steps the executive team took to protect returns to COF securityholders and provide
resilience. COF’s returns have remained stable throughout the national pandemic, COF was one of the few REIT’s which provided market FFO and distribution guidance at all
times during the pandemic and in addition FY21 results were at the top end of the FFO guidance range and at distribution guidance. The Board also took careful note of the
executive teams approach to and success in preparing COF for the period when the office markets recover. Recent evidence of strong market earnings guidance for FY22
together with COF’s likely inclusion in the global EPRA NAREIT index in the September 2021 rebalance provides contemporary evidence of those efforts.
**** Employee engagement is measured as a score through an annual Company-wide survey conducted independently by “Leaders Aligned” who reports directly to the CNI Board.
In addition to the scorecard above, the Board took into consideration the following non-financial achievements made in FY21 in determining the
final outcome of the FY21 STI awards:
• For a six month period (five months included in FY21) in response to the onset of COVID-19, the KMP’s (and Board members) reduced their
remuneration by agreement by 15%.
• During FY21 CIP was included in the S&P ASX 200 for the first time in history and the EPRA NAREIT indices and acquired in excess of $1 billion in
assets.
• During FY21 Centuria increased its commitment to Sustainability and ESG outcomes with the appointment of a General Manager - Sustainability,
its commitment to provide an initial Sustainability Report prior to the 2021 AGM and confirmation of Centuria’s formal support of the Task Force
on Climate Related Financial Disclosures and the establishment of a Culture and ESG Board Committee amongst other initiatives.
• During FY21 the acquisition of Primewest became unconditional and Centuria Capital’s market capitalisation grew to circa $2.2 billion, and
noting Centuria’s inclusion in the S&P ASX 200 index as at 16 July 2021. Refer to page 59 regarding Centuria Capital Group’s index rankings.
• With the addition of the Augusta and Primewest businesses, guidance for FY22 operating EPS and FY22 DPS is predicted to be plus 10.0% over
the FY21 result.
• The addition of the Primewest distribution network has added 900 ultra-high net worth investors to Centuria’s existing network making it the
largest HNW network amongst its Australian peers. Adding the Centuria NZ network amplifies this presence.
• The acquisition of a 50% interest in Centuria Bass was completed.
•
Integration of Augusta (NZ) completed with name change in place and execution of largest Australian retail unlisted syndicate in the last 15 years
(VISY) in FY21.
• Group performance achieved against COVID-19 backdrop where new office funds have been impossible to produce the post FY21 successful
capital raising for $220 million Footscray office fund itself industry-leading and an important milestone for Centuria as we move through and out
of COVID-19 in an office fund generation sense.
62 | Centuria Capital Group – Annual Report 2021
STI ACHIEVED
The table below outlines the percentage of target STI achieved (and forfeited) in relation to financial and non-financial KPIs, and the total STI
awarded, for each executive in 2021.
Financial
Non-Financial
Executive
Opportunity* Weighting
Achieved
Forfeited Weighting
Achieved
Forfeited STI Awarded
STI on Maximum
John McBain (Joint CEO)
Jason Huljich (Joint CEO)
Simon Holt (CFO)
$1,687,500
$1,687,500
$715,000
60%
60%
60%
100%
100%
100%
0%
0%
0%
40%
40%
40%
100%
100%
100%
0% $1,687,500
0% $1,687,500
0% $643,500
* STI opportunities for FY21 remained at their contractual level and were not impacted by the fixed remuneration reductions implemented in response to the COVID-19 pandemic.
(ii) Long-term Incentives (LTI)
The Group has an Executive Incentive Plan (“LTI Plan”) which forms a key element of the Group’s incentive and retention strategy for senior
management under which Performance Rights (“Rights”) are issued.
The primary objectives of the LTI Plan include:
• focusing executives on the longer term performance of the Group to drive long term shareholder value creation;
• ensure senior management remuneration outcomes are aligned with shareholder interests, in particular, the strategic goals and performance of
the Group; and
• ensure remuneration is competitive and aligned with general market practice by ASX listed entities.
Rights issued under the LTI Plan are issued in accordance with the thresholds approved at the Annual General Meeting (AGM).
LTI STRUCTURE
LTI Plan Structure
Performance Period
Opportunity
Instrument
3-years performance with 75% of any LTI award vesting in Year 3 with the remaining 25%
vesting in Year 4
• Joint-CEOs
• CFO
• 125% of total fixed remuneration at maximum
• 95% of total fixed remuneration at maximum
Performance rights. The allocation of the LTI grants is on a face value basis using the volume weighted
average price of the Company’s shares over the five ASX Trading Day’s immediately preceding 1 July of
the grant year (being the date of the commencement of the performance period).
Each Performance Right is a right to acquire one Security in the Group (or an equivalent cash amount),
subject to the achievement of the “performance hurdles” set out below.
Performance metrics
Relative
Total
Securityholder
Return
(RTSR) (75%)
RTSR (compounded) when ranked to the comparator
group of S&P/ASSX 200 A-REIT Accumulation Index
stocks over the performance period
Performance Rights subject to
RTSR Hurdle that vest
• Exceeds the comparator group 75th percentile
• 100%
Absolute
Total
Securityholder
Return
(ATSR) (25%)
• More than the comparator group 50th percentile
• Between 50% to 100% progressive pro-rata
and less than 75th percentile
vesting (i.e. on a straight-line basis)
• Equal to the comparator group 50th percentile
• 50%
• Less than the comparator group 50th percentile
• 0%
Annual ATSR achieved over the
performance period
Performance Rights subject to ATSR Hurdle
that vest
• 15% or greater
• Between 10% and 15%
• 10%
• Less than 10%
• 100%
• Between 25% to 100% progressive pro-rata
vesting (i.e. on a straight-line basis)
• 25%
• 0%
Centuria Capital Group – Annual Report 2021 | 63
Directors’ Report
For the year ended 30 June 2021
LTI Plan Structure
Rationale for the
performance metric
and conditions
What happens when an
executive
ceases employment?
Malus and Clawback
Dividends and voting
rights
Re-testing
Change of Control
provisions
Both RTSR and ATSR measure the return Securityholders would earn if they held a notional number of
Securities over a period of time. RTSR provides a relative measure of growth in the Group’s Security price
in comparison to relative peers (being the S&P/ASX 200 AREIT accumulation index). ATSR provides an
absolute measure of growth in the Group’s Security price. The ATSR target is determined with reference
to the following factors which can impact future performance:
• Performance of peer fund managers over a range of asset classes;
• Direct returns from asset classes in particular property, equities and fixed interest;
• Outlook for financial markets including fixed interest returns;
• Effect financial market views on asset values eg cap rate compression or expansion;
• Performance of Centuria compared to other peer managers; and
• Quality of Centuria’s financial products compared to market and how contemporary they are in this
context.
By combining RTSR with an ATSR measure, executives can be rewarded for driving positive returns
and investors have the confidence that interests are aligned with long term business growth and the
creation of shareholder wealth. The inclusion of an ATSR metric has been designed to counter-balance
RTSR outcomes which may vest when overall market conditions are down.
If a participant ceases to be employed by the Group before the end of the Performance Period, whether
the Performance Rights lapse will depend on the circumstances of cessation. If a participant ceases
employment due to resignation, termination for cause or termination for gross misconduct, all unvested
Performance Rights will lapse at cessation unless the Board determines otherwise. If a participant
ceases employment for any other reason prior to Performance Rights vesting, a pro-rata number
of unvested Performance Rights (based on the Performance Period that has elapsed at the time of
cessation) will remain unvested until the end of the original Performance Period and vest to the extent
that the relevant performance hurdles have been satisfied at any time. The balance of Performance
Rights will lapse at cessation.
In the event of fraud, dishonesty or material misstatement of financial statements, the Board may make
a determination, including lapsing unvested Performance Rights or ‘clawing back’ Securities allocated
upon vesting, to ensure that no unfair benefit is obtained by a participant.
Rights do not carry a right to vote or to dividends or, in general, a right to participate in other corporate
actions such as bonus issues.
Awards are tested once, at the end of the performance period of three years. There is no further
retesting of the performance conditions
If a change of control event occurs, the Board has a discretion to determine whether any unvested
Performance Rights should ultimately vest, lapse or become subject to different vesting conditions.
In making such a determination, the Board may have regard to any factors that the Board considers
relevant, including the period elapsed, the extent to which the vesting conditions have been satisfied
and the circumstances of the event.
LTI GRANTS
Currently, the Group operates three tranches of the LTIP as below:
Tranche
Grant Date
Performance Period
6
7
8
1 February 2019
1 July 2018 to 30 June 2021
18 October 2019
1 July 2019 to 30 June 2020
26 November 2020
1 July 2020 to 30 June 2023
64 | Centuria Capital Group – Annual Report 2021
The table below outlines Rights which were previously granted to senior management and testing against those conditions.
Trance
KMP
6
Mr John E. McBain
Mr Jason C. Huljich
Mr Simon W. Holt
7
Mr John E. McBain
Mr Jason C. Huljich
Mr Simon W. Holt
8
Mr John E. McBain
Mr Jason C. Huljich
Mr Simon W. Holt
No. of Rights
granted
Performance
Period
Vesting
Conditions
Achievement of
Conditions
No. of Rights
Vesting
1 July 2018 -
30 June 2021
AUM Growth
Hurdle
AUM Growth was 29.1%
resulting in 100% vesting
Absolute TSR
Growth Hurdle
Absolute TSR was 27.5%,
resulting in 100% vesting
1 July 2019 -
30 June 2022
FUM Growth
Hurdle
Absolute TSR
Growth Hurdle
1 July 2020 -
30 June 2023
Relative TSR
Growth Hurdle
Absolute TSR
Growth Hurdle
N/A
N/A
N/A
N/A
159,575
478,724
126,330
378,989
57,624
172,872
187,500
562,500
187,500
562,500
69,514
208,542
682,278
227,426
682,278
227,426
274,630
91,543
159,575
478,724
126,330
378,989
57,624
172,872
-
-
-
-
-
-
-
-
-
-
-
-
Value
$1.11
$0.19
$1.11
$0.19
$1.11
$0.19
-
-
-
-
-
-
-
-
-
-
-
-
KEY TERMS OF EMPLOYMENT CONTRACTS
Group Joint Chief Executive Officers
Mr John E. McBain, was appointed as Chief Executive Officer of the Group in April 2008. Mr Jason C. Huljich, was appointed as Joint Chief Executive
Officer of the Group in June 2019. Mr John E. McBain and Mr Jason C. Huljich are employed under contract. The summary of the major terms and
conditions of their employment contracts are as follows:
• Fixed Compensation plus superannuation contributions;
• Car parking within close proximity to the Company’s office;
• Eligible to participate in the bonus program determined at the discretion of the Board;
• The Group may terminate this employment contract by providing six months written notice or provide payment in lieu of the notice period plus an
additional six months. Any payment in lieu of notice will be based on the total fixed compensation package; and
• The Group may terminate the employment contract at any time without notice if serious misconduct has occurred. When termination with cause
occurs the Joint Chief Executive Officers are only entitled to remuneration up to the date of termination.
The Nomination & Remuneration Committee ensures severance payments due to the Joint Chief Executive Officers on termination are limited to
pre-established contractual arrangements which do not commit the Group to making any unjustified payments in the event of non-performance.
Other senior management (standard contracts)
All senior management are employed under contract. The Group may terminate their employment agreement by providing three months written
notice or providing payment in lieu of the notice period (based on the total fixed compensation package).
NON-EXECUTIVE DIRECTOR REMUNERATION
Objective
The Board seeks to set aggregate remuneration at a level that provides the Group with the ability to attract and retain directors of the highest
calibre, whilst incurring a cost that is acceptable to shareholders.
• Non-executive directors receive adequate remuneration to attract and retain the requisite talent;
• Reflect the complexity of the Group structure and the time commitment associated with oversight of multi-faceted operating entities within the
Group; and
• The structure should align the non-executive directors with investors, not providing any disincentive to take independent action.
Structure
The Constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive directors shall be determined from time
to time by a general meeting. An amount not exceeding the aggregate amount determined is then divided between the directors as agreed. An
aggregate maximum amount of not more than $2,000,000 per year was approved at the 2017 Annual General Meeting.
Each director receives a fee for being a director of Group companies and an additional fee is paid to the Chairman and to the Chairman of each
Centuria Capital Group – Annual Report 2021 | 65
Directors’ Report
For the year ended 30 June 2021
Board Committee. The payment of the additional fees to each Chairman
recognises the additional time commitment and responsibility
associated with the position. Non-executive directors do not receive
equity as a form of payment.
Centuria Property Funds No. 2 Limited
Board
Chair
$115,000
Member(i)
$30,000 / $45,000
Audit, Risk Management &
Compliance Committee
Centuria Healthcare Pty Ltd
Board
Centuria Healthcare Asset Management Ltd
Board
Chair
Member
Chair
Member
Chair
Member
-
$10,000
$70,000
-
$50,000
$40,000
Note (i): Committee members who are also Directors on the Centuria Capital Group
Board are remunerated $30,000 and all other committee members are remunerated
$45,000 (from 1 July 2021 this has increased to $55,000).
Related Party Transactions
In 2020, the Board established a Conflicts Committee to assist
the boards of Centuria entities when they are considering matters
involving conflicts of interests. This committee is overseen by an
external independent chair, being Professor Simon Rice AO. One of the
key oversight roles of the Conflicts Committee is monitoring related
party transactions involving board members of Centuria entities.
Amongst its AREIT peers in the S&P/ASX200, Centuria is the only
company to have such a committee.
Following feedback from investors and other stakeholders, a review
of consulting fees paid to entities related to Board members was
undertaken. Traditionally, any directors who were associated with
entities that received consulting fees had their independence tested
by reference to ASIC guidelines on independence and through an
external review.
Every independent director has had their independence confirmed
through that process. Notwithstanding that confirmed independence
and compliance with all appropriate guidelines, the Board has now
adopted a policy that, moving forward, as a matter of general principle,
third party consultancy fees should not be paid to entities that are
related to independent directors.
Accordingly, whilst there was some work that needed to be completed,
from 1 June 2021, no consulting fees will be paid to entities associated
with CNI directors.
During the financial year, the following transactions occurred between
the Group and key management personnel:
• Wolseley Corporate Pty Ltd, a related party of Mr Garry S. Charny, was
paid $328,707 (inclusive of GST) (2020: $556,050) for corporate
advisory fees.
• Tailwind Consulting Pty Ltd, a related party of Mr John R. Slater was
paid a total of $211,977 (inclusive of GST) (2020: $271,558) for
consultancy services.
$335,000
$110,000
$20,000
$10,000
$50,000
$15,000
-
$10,000
$20,000
$10,000
$90,000
$30,000
-
$10,000
-
-
$70,000
-
As highlighted on page 55, the Centuria structure, whilst not unique,
comprises multiple operating entities, both listed and unlisted. These
include CNI, COF, CIP, Centuria Life, Centuria Healthcare, Centuria New
Zealand, Centuria Bass Credit and Primewest. Each Board of these
entities has specific requirements and obligations. In recognition of
the complexity of the Group, the multiple entities and in the interests
of good governance and transparency, the Group has adopted a new
Directors’ fees schedule which is disclosed in the table below.
The new fee schedule covers the Board and Board Committee
roles across the headstock and other operating entities which the
Centuria directors sit on. The fee schedule is designed to improve
transparency while recognising that each board is responsible for
actively overseeing the financial position and monitoring the business
and affairs of the entity on behalf of the stakeholders, to whom they are
accountable.
In determining the fee schedule, the non-executive director fees were
benchmarked against the same peer group of S&P/ASX200 AREIT
companies used to determine levels of executive committee pay.
Additionally, the complexity of the overall Group and the commitment
levels required by non-executive directors was considered in setting
the level of fees.
The new fee schedule, outlined below, became effective from 1 June 2021:
Director Fees’ Schedule
Centuria Capital Limited
Board
Audit, Risk Management &
Compliance Committee
Conflicts Committee
Nominination and
Remuneration Committee
Chair
Member
Chair
Member
Chair
Member
Chair
Member
Culture and ESG Committee
Chair
Centuria Life Limited
Board
Audit Committee
Member
Chair
Member
Chair
Member
Risk & Compliance Committee
Chair
Member
Chair
Member
Investment Committee
Centuria Property Funds Limited
Board
Audit, Risk Management &
Compliance Committee
66 | Centuria Capital Group – Annual Report 2021
Chair
$110,000
Member(i)
$30,000 / $45,000
Chair
Member
$15,000
$10,000
Statutory Remuneration Table to KMP and NED
The following table discloses total remuneration of executive directors and senior management in accordance with
the Corporations Act 2001:
Short-term
employee benefits
Post
employment
benefits
Other long-term benefits
Year
Salaries
($)
Short Term
Incentive
($)
Super-
annuation
($)
Long service
leave
($)
Share-based
payments
($)
Total
$
Executive KMP
Mr John E. McBain
2021
1,243,228
1,687,500
2020
1,310,732
945,000
Mr Jason C. Huljich
2021
1,239,678
1,687,500
2020
1,307,092
945,000
2021
2020
656,066
643,500
686,550
436,150
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
309,767
235,777
190,351
196,324
146,045
135,409
97,528
99,995
183,459
124,993
35,476
-
-
-
-
-
-
-
-
-
-
-
-
-
Mr Simon W. Holt
Non-Executive KMP
Mr Garry S. Charny
Mr Peter J. Done
Mr John R. Slater
Ms Susan Wheeldon
Mr Nicholas R. Collishaw
Note (i)
Ms Kristie Brown
Note (ii)
Total
22,398
22,397
21,694
21,003
21,694
21,003
28,043
20,849
6,997
8,977
13,874
12,864
9,265
9,499
17,429
11,874
3,370
-
83,748
858,689
3,895,563
3,151
466,609
2,747,889
1,403
840,072
3,790,347
19,703
399,961
2,692,759
59,642
311,886
1,692,788
-
-
-
-
-
-
-
-
-
-
-
-
-
169,260
1,312,963
-
-
-
-
-
-
-
-
-
337,810
256,626
197,348
205,301
159,919
148,273
106,793
109,494
200,888
77,783
214,650
-
-
38,846
-
2021
4,101,598
4,018,500
144,764
144,793
2,010,647
10,420,302
2020
4,096,872
2,326,150
128,466
22,854
1,113,613
7,687,955
Note (i): Mr Collishaw’s role changed from Executive Director and CEO - Listed Property Funds to Non-Executive Director effective 1
January 2018. Mr Collishaw’s share based payment amount relates to expense recognised on performance rights granted to him under
Tranche 5 while he was still employed as an Executive Director. Since 1 January 2018, Nick Collishaw has received neither consulting fees
or salary payments for executive duties as he ceased employment as an executive.
Note (ii): Ms Kristie Brown was appointed to the Board on 15 February 2021.
Centuria Capital Group – Annual Report 2021 | 67
Directors’ Report
For the year ended 30 June 2021
DIRECTOR AND SENIOR MANAGEMENT EQUITY HOLDINGS AND OTHER TRANSACTIONS
Director and senior management equity holdings
Set out below are details of movements in fully paid ordinary shares held by directors and senior management as at
the date of this report.
Movement
Balance at
30 June 2021
Changes prior
to signing
Balance at
signing date
Name
Mr Garry S. Charny
Mr Peter J. Done
Mr John R. Slater
Ms Susan Wheeldon
Ms Kristie Brown
Balance at
1 July 2020
369,676
1,328,982
3,038,570
-
-
37,077
406,753
177,200
1,506,182
72,107
3,110,677
-
-
-
-
–
–
–
–
-
–
406,753
1,506,182
3,110,677
-
-
4,360,037
Mr Nicholas R. Collishaw
3,861,523
498,514
4,360,037
Mr John E. McBain
Mr Jason C. Huljich
Mr Simon W. Holt
6,441,053
603,049
7,044,102
18,382
7,062,484
3,718,114
1,571,498
5,289,612
511,036
266,853
777,889
–
–
5,289,612
777,889
This report is made in accordance with a resolution of Directors.
Mr Garry S. Charny
Director
Mr Peter J. Done
Director
Sydney
11 August 2021
68 | Centuria Capital Group – Annual Report 2021
68 | Centuria Capital Group – Annual Report 2021
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Centuria Capital Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Centuria Capital
Group for the financial year ended 30 June 2021 there have been:
(i)
(ii)
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the
audit.
KPM_INI_01
PAR_SIG_01
PAR_NAM_01
PAR_POS_01
PAR_DAT_01
PAR_CIT_01
KPMG
Paul Thomas
Partner
Sydney
11 August 2021
@2021 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms
affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name
and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited
by a scheme approved under Professional Standards Legislation.
37
Centuria Capital Group – Annual Report 2021 | 69
70 | Centuria Capital Group – Annual Report 2021
Financial statements
8 CENTRAL AVE, EVELEIGH, NSW
Centuria Capital Group – Annual Report 2021 | 71
Financial Report Contents
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
A About the report
A1 General information
A2 Significant accounting policies
A3 Other new Accounting Standards and Interpretations
A4 Use of judgements and estimates
A5 Segment summary
B Business performance
B1 Segment profit and loss
B2 Revenue
B3 Expenses
B4 Finance costs
B5 Taxation
B6 Earnings per security
B7 Dividends and distributions
C Assets and liabilities
C1 Segment balance sheet
C2 Receivables
C3 Financial assets
C4 Investment properties
C5 Property held for development
C6 Intangible assets
C7 Payables
C8 Borrowings
C9 Right of use asset/Lease liability
C10 Contributed equity
C11 Commitments and contingencies
D Cash flows
D1 Operating segment cash flows
D2 Cash and cash equivalents
D3 Reconciliation of profit for the period to net cash flows from operating activities
E Group structure
E1 Interests in associates and joint ventures
E2 Business combination
E3 Interests in material subsidiaries
E4 Parent entity disclosure
F Other
F1 Share-based payment arrangements
F2 Guarantees to Benefit Fund policyholders
F3 Financial instruments
F4 Remuneration of auditors
F5 Events subsequent to the reporting date
Directors’ declaration
Independent auditor’s report
72 | Centuria Capital Group – Annual Report 2021
72 | Centuria Capital Group – Annual Report 2021
73
74
75
77
78
78
78
78
79
79
80
81
81
83
85
85
86
88
88
89
89
91
91
94
95
96
96
97
98
99
99
100
100
100
100
101
101
103
104
106
107
107
108
108
116
116
117
118
Consolidated statement of
comprehensive income
For the year ended 30 June 2021
Revenue
Share of net profit of equity accounted investments
Net movement in policyholder liability
Fair value movements of financial instruments and property
Expenses
Cost of Sales
Finance costs
Profit before tax
Income tax expense
Profit after tax
PROFIT AFTER TAX IS ATTRIBUTABLE TO:
Centuria Capital Limited
Centuria Capital Fund (non-controlling interests)
External non-controlling interests
Profit after tax
Foreign currency translation reserve
Total comprehensive income for the year
TOTAL COMPREHENSIVE INCOME FOR THE YEAR IS ATTRIBUTABLE TO:
Centuria Capital Limited
Centuria Capital Fund (non-controlling interests)
External non-controlling interests
Total comprehensive income
PROFIT AFTER TAX ATTRIBUTABLE TO:
Centuria Capital Limited
Centuria Capital Fund (non-controlling interests)
Profit after tax attributable to Centuria Capital Group securityholders
Notes
B1, B2
E1
B3
B4
B5
2021
$’000
228,932
3,070
5,788
103,929
(111,185)
(44,679)
(20,289)
165,566
(15,927)
149,639
23,431
120,025
6,183
149,639
(757)
148,882
22,674
120,025
6,183
148,882
23,431
120,025
143,456
2020
$’000
162,373
8,310
34,445
(48,280)
(97,723)
(17,320)
(18,602)
23,203
(1,116)
22,087
20,956
149
982
22,087
(421)
21,666
20,535
149
982
21,666
20,956
149
21,105
EARNING PER CENTURIA CAPITAL GROUP SECURITY
Basic (cents per stapled security)
Diluted (cents per stapled security)
EARNINGS PER CENTURIA CAPITAL LIMITED SHARE
Basic (cents per share)
Diluted (cents per share)
B6
B6
Cents
Cents
24.6
24.2
4.0
4.0
4.7
4.6
4.7
4.5
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying
notes.
Centuria Capital Group – Annual Report 2021 | 73
Consolidated statement of
financial position
As at 30 June 2021
Cash and cash equivalents
Receivables
Income tax receivable
Financial assets
Other assets
Investment properties held for sale
Property held for development
Deferred tax assets
Equity accounted investments
Investment properties
Right of use asset
Intangible assets
Total assets
Payables
Provisions
Borrowings
Provision for income tax
Interest rate swaps at fair value
Benefit Funds policyholder's liability
Call/Put option liability
Deferred tax liabilities
Lease liability
Total liabilities
Net assets
EQUITY
Equity attributable to Centuria Capital Limited
Contributed equity
Reserves
Retained earnings
Total equity attributable to Centuria Capital Limited
Equity attributable to Centuria Capital Fund (non-controlling interests)
Contributed equity
Retained earnings
Notes
D2
C2
2021
$’000
2020
$’000
273,351
174,458
127,197
68,729
B5(b)
977
755
C3
990,524
773,417
8,679
10,795
C5
B5(c)
E1
C4
C9
C6
-
53,744
42,526
55,637
208,140
19,947
861
31,295
39,519
32,955
167,110
21,393
790,551
280,120
2,571,273
1,601,407
C7
88,675
76,532
4,077
2,201
C8
426,642
265,051
B5(b)
1,764
31,205
5,998
33,388
303,650
311,535
22,690
B5(c)
100,572
C9
21,757
17,167
35,825
22,564
1,001,032
770,261
1,570,241
831,146
C10
386,634
177,149
3,720
283,058
2,901
17,074
673,412
197,124
C10
1,018,822
545,744
(183,970)
(9,771)
Total equity attributable to Centuria Capital Fund (non-controlling interests)
834,852
535,973
Total equity attributable to Centuria Capital Group securityholders
1,508,264
733,097
Equity attributable to external non-controlling interests
Contributed equity
Retained earnings
Total equity attributable to external non-controlling interests
Total equity
31,781
30,196
61,977
57,230
40,819
98,049
1,570,241
831,146
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
74 | Centuria Capital Group – Annual Report 2021
Consolidated statement of
changes in equity
For the year ended 30 June 2021
Balance at
1 July 2020
Profit for the year
Foreign currency
translation
reserve
Total
comprehensive
income for the
year
Acquisition of
subsidiaries with
Non-controlling
interests
Transactions with
owners in their
capacity
as owners
Equity settled
share based
payments
expense
-
-
Centuria Capital Limited
Centuria Capital Fund
(non-controlling interests)
External non-controlling
interests
Contributed
equity
$’000
Reserves
$’000
Retained
earnings
$’000
Contributed
equity
$’000
Retained
earnings
$’000
Total
$’000
Total
$’000
Total
attributable
to Centuria
Capital Group
Security-
holders
$’000
Contributed
equity
$’000
Retained
earnings
$’000
Total
$’000
Total
equity
$’000
177,149
2,901
17,074
197,124
545,744
(9,771) 535,973
733,097
57,230 40,819 98,049 831,146
-
-
-
23,431
23,431
-
120,025 120,025
143,456
-
6,183
6,183 149,639
(757)
-
(757)
-
-
-
(757)
-
-
-
(757)
-
(757)
23,431
22,674
-
120,025 120,025
142,699
-
6,183
6,183 148,882
-
-
-
-
-
-
-
18,992
(917)
18,075
18,075
-
2,671
2,671
-
5,685
5,685
8,356
-
-
-
-
-
8,356
-
3,058
1,482
1,576
-
3,058
-
-
-
3,058
Dividends and
distributions paid/
accrued
-
Securities issued
209,208
Cost of equity
raising
(1,205)
-
-
-
(19,808)
(19,808)
-
(40,219)
(40,219)
(60,027)
- (3,295)
(3,395) (63,322)
- 209,208
475,185
-
475,185
684,393
-
(1,205)
(2,107)
-
(2,107)
(3,312)
-
-
-
-
- 684,393
-
(3,312)
Fair value
differential on
acquisition
(impact of
transaction as part
of stapled
group)
Purchase of
external non-
controlling
interests
Deconsolidation
of controlled
property funds
Balance at
30 June 2021
-
-
-
- 259,690 259,690
- (259,690)(259,690)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(42,982) (13,387) (56,369) (56,369)
-
(1,459)
793
(666)
(666)
386,634
3,720 283,058
673,412 1,018,822 (183,970) 834,852 1,508,264
31,781 30,196
61,977 1,570,241
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Centuria Capital Group – Annual Report 2021 | 75
Consolidated statement of
changes in equity
For the year ended 30 June 2021
Centuria Capital Limited
Centuria Capital Fund
(non-controlling interests)
External non-
controlling interests
Contributed
equity
$’000
Reserves
$’000
Retained
earnings
$’000
Contributed
equity
$’000
Retained
earnings
$’000
Total
$’000
Total
$’000
Total
attributable
to Centuria
Capital Group
Security-
holders
$’000
Contributed
equity
$’000
Retained
earnings
$’000
Total
$’000
Total
equity
$’000
128,164
2,101
12,438
142,703
343,438
19,067 362,505
505,208
32,927
13,233
46,160
551,368
-
-
20,956
20,956
-
(421)
-
(421)
-
(421)
20,956
20,535
-
-
795
1,221
-
-
-
2,016
-
-
-
-
-
149
149
21,105
-
-
(421)
149
149
20,684
-
-
-
982
982
22,087
-
-
(421)
982
982
21,666
-
-
-
-
-
42,982
13,386
56,368
56,368
2,016
-
-
-
2,016
-
- (16,320)
(16,320)
- (28,987)
(28,987)
(45,307)
-
(3,375)
(3,375)
(48,682)
49,845
(1,655)
-
-
-
-
-
-
-
49,845
205,216
-
205,216
255,061
1,459
(1,655)
(2,910)
-
(2,910)
(4,565)
-
-
-
1,459 256,520
-
(4,565)
-
-
-
-
-
(20,138)
16,593
(3,545)
(3,545)
177,149
2,901
17,074
197,124
545,744
(9,771) 535,973
733,097
57,230
40,819
98,049
831,146
Balance at
1 July 2019
Profit for
the year
Foreign currency
translation
reserve
Total
comprehensive
income for the
year
Acquisition of
subsidiaries with
Non-controlling
interests
Equity settled
share based
payments
expense
Dividends and
distributions paid/
accrued
Stapled securities
issued
Cost of equity
raising
Deconsolidation
of controlled
property
funds
Balance at
30 June 2020
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
76 | Centuria Capital Group – Annual Report 2021
Consolidated statement of
cash flows
For the year ended 30 June 2021
Net cash provided by operating activities
D3
22,862
Cash flows from operating activities
Management fees received
Performance fees received
Rent received
Distributions received
Interest received
Payments to suppliers and employees
Cash received on development projects
Interest paid
Income taxes paid
Applications - Benefits Funds
Redemptions - Benefits Funds
Cash flows from investing activities
Proceeds from sale of related party investments
Purchase of investments in related parties
Repayment of loans by related parties
Loans to related parties
Loans repaid by other parties
Proceeds from sale of investment property
Payments in relation to investment properties
Purchase of equity accounted investments
Disposal of equity accounted investments
Purchase of other investments
Payments for property, plant and equipment
Cash balance on acquisition of subsidiaries
Purchase of subsidiaries
Collections from reverse mortgage holders
Purchase of property held for development
Benefit Funds net disposals of investments in financial assets
Return of investment to external non-controlling interests
Notes
2021
$’000
2020
$’000
110,355
1,772
15,333
38,832
2,191
75,476
37,231
19,261
35,083
3,232
(135,469)
(92,582)
42,723
(15,355)
(10,280)
15,611
(42,851)
33,988
(128,519)
3,750
(31,216)
6,702
861
-
(26,089)
5,000
-
(3,343)
105,308
-
(13,171)
(9,634)
20,383
(42,153)
33,126
53,554
(111,831)
11,800
(11,800)
-
23,500
(21,108)
(14,102)
-
(6,115)
(522)
15,773
(104,996)
(40,852)
888
(22,621)
21,319
(356)
1,646
(1,295)
6,764
(4,230)
Net cash used in investing activities
(139,324)
(98,818)
Cash flows from financing activities
Proceeds from issues of securities to securityholders of Centuria Capital Group
Equity raising cost paid
Proceeds from borrowings
Repayment of borrowings
Capitalised borrowing costs paid
Distributions paid to securityholders of Centuria Capital Group
Proceeds from issues of securities to external non-controlling interests
Distributions paid to external non-controlling interests
Net cash provided by financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of year
133,073
(2,611)
242,616
(98,645)
(4,877)
(52,124)
1,376
(3,227)
215,581
99,119
174,458
(226)
273,351
205,736
(4,317)
6,549
(49,887)
(1,311)
(39,377)
1,459
(3,375)
115,477
49,785
124,673
-
174,458
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Centuria Capital Group – Annual Report 2021 | 77
Notes to the financial statements
For the year ended 30 June 2021
A About the report
A1 GENERAL INFORMATION
A2 SIGNIFICANT ACCOUNTING POLICIES
The shares in Centuria Capital Limited, (the ‘Company’) and the
units in Centuria Capital Fund (‘CCF’) are stapled and trade together
as a single stapled security (‘Stapled Security’) on the ASX as
‘Centuria Capital Group’ (the ‘Group’) under the ticker code ‘CNI’.
The Group is a for-profit entity and its principal activities are the
marketing and management of investment products including
property investment funds and friendly society investment bonds,
as well as co-investments in property investment funds.
STATEMENT OF COMPLIANCE
The consolidated financial statements are general purpose
financial statements which have been prepared in accordance
with Australian Accounting Standards adopted by the Australian
Accounting Standards Board (AASB) and the Corporations Act 2001.
The consolidated financial statements comply with International
Financial Reporting Standards (IFRS) adopted by the International
Accounting Standards Board (IASB).
The consolidated financial statements of the Group comprising the
Company (as ‘Parent’) and its controlled entities for the year ended
30 June 2021 were authorised for issue by the Group’s Board of
Directors on 11 August 2021.
BASIS OF PREPARATION
The consolidated financial statements have been prepared on
the basis of historical cost, except for financial assets at fair value
through profit and loss, other financial assets, investment properties
and derivative financial instruments which have been measured at
fair value at the end of each reporting period. Cost is based on the
fair values of the consideration given in exchange for assets. All
amounts are presented in Australian dollars, which is the company’s
functional currency, unless otherwise noted.
Assets and liabilities have been presented on the face of the
statement of financial position in decreasing order of liquidity and
do not distinguish between current and non-current items.
GOING CONCERN
The financial report has been prepared on a going-concern
basis, which assumes continuity of normal business activities
and the realisation of assets and settlement of liabilities in the
ordinary course of business. The COVID-19 pandemic has created
uncertainty on the global and local financial markets and may
impact on the ability of funds managed by the Group to meet their
obligations. The Group has completed an extensive assessment on
key investments and receivables and remains confident that it will
be able to continue as a going concern. Refer to Note C3.
ROUNDING OF AMOUNTS
The Group is an entity of a kind referred to in ASIC Legislative
Instrument 2016/191, related to the ‘rounding off’ of amounts in
the Directors’ Report and financial statements. Amounts in the
Directors’ Report and financial statements have been rounded off,
in accordance with the instrument to the nearest thousand dollars,
unless otherwise indicated.
The accounting policies and methods of computation in the
preparation of the consolidated financial statements are
consistent with those adopted in the previous financial year
ended 30 June 2020 with the exception of the adoption of new
accounting standards outlined below or in the relevant notes to the
consolidated financial statements.
When the presentation or classification of items in the consolidated
financial statements has been amended, comparative amounts are
also reclassified, unless it is impractical. Accounting policies are
selected and applied in a manner that ensures that the resulting
financial information satisfies the concepts of relevance and
reliability, thereby ensuring that the substance of the underlying
transactions or other events are reported.
These financial statements contain all significant accounting policies
that summarise the recognition and measurement basis used and
which are relevant to provide an understanding of the financial
statements. Accounting policies that are specific to a note to the
financial statements are described in the note to which they relate.
FOREIGN CURRENCY TRANSACTIONS
Transactions in foreign currencies are translated into the respective
functional currencies of Group companies at the exchange rate at
the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies
are translated into the functional currency at the exchange rate
at the reporting date. Non-monetary assets and liabilities that are
measured at fair value in a foreign currency are translated into
the functional currency at the exchange rate when the fair value
was determined. Non-monetary items that are measured based on
historical cost in a foreign currency are translated at the exchange
rate at the date of the transaction. Foreign currency differences are
generally recognised in profit or loss.
However, foreign currency differences arising from the translation of the
following items are recognised in Other Comprehensive Income (OCI):
• an investment in equity securities designated as at Fair value
through OCI (FVOCI) (except on impairment, in which case foreign
currency differences that have been recognised in OCI are
reclassified to profit or loss);
• a financial liability designated as a hedge of the net investment in a
foreign operation to the extent that the hedge is effective; and
• qualifying cash flow hedges to the extent that the hedges are
effective.
FOREIGN OPERATIONS
The assets and liabilities of foreign operations, including goodwill
and fair value adjustments arising on acquisition, are translated into
the Australian dollar (AUD) at the exchange rate at the reporting
date. The income and expenses of foreign operations are translated
into AUD at the exchange rates at the date of the transactions.
Foreign currency differences arising from the translation of
foreign operations are recognised in OCI and accumulated into
the translation reserve, except to the extent that the translation
difference is allocated to NCI.
78 | Centuria Capital Group – Annual Report 2021
A3 OTHER NEW ACCOUNTING STANDARDS
A4 USE OF JUDGEMENTS AND ESTIMATES
In preparing these consolidated financial statements, management
has made judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets
and liabilities, income and expense that are not readily apparent from
other sources. The judgements, estimates and assumptions are based
on historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates.
Information about critical judgements in applying accounting policies
that have the most significant effect on the amounts recognised in the
consolidated financial statements is included in the following notes:
• Note B2 Revenue - Performance fees
• Note C4 Investment properties
• Note C6 Intangible assets
• Note F3 Financial instruments
AND INTERPRETATIONS
The AASB has issued new or amendments to standards that are first
effective from 1 July 2020.
The following amended standards and interpretations that have been
adopted do not have a significant impact on the Group’s consolidated
financial statements.
Standards now effective:
AASB 2018-6
Clarifies the definition of a business as per AASB 3 Business
Combinations and is applied prospectively to future acquisitions.
AASB 2018-7
Clarifies the definition of material as applied across all reporting
standards as per AASB 101 Presentation of Financial Statements
with intention of increasing a user’s focus on the material items in a
financial report.
AASB 2014-10
Clarifies the requirements for recording the sale or contribution of
assets between an investor and its associate or joint venture.
Standards not yet effective:
AASB 17 INSURANCE CONTRACTS
AASB 17 Insurance Contracts establishes principles for the recognition,
measurement, presentation and disclosure of insurance contracts
issued. It also requires similar principles to be applied to reinsurance
contracts held and investment contracts with discretionary
participation features issued. The objective is to ensure that entities
provide relevant information in a way that faithfully represents
those contracts. This information gives a basis for users of financial
statements to assess the effect that contracts within the scope of
AASB 17 have on the financial position, financial performance and cash
flows of the entity. The Group are currently assessing the impact of
AASB 17 Insurance Contracts.
AASB 2020-3
Amendments to Australian Accounting Standards Annual Improvements
2018-2020 and Other Amendments This amendment adds to AASB 3 a
requirement that, for transactions and other events within the scope of
AASB 137 or IFRIC 21, an acquirer applies AASB 137 or IFRIC 21 (instead
of the Conceptual Framework) to identify the liabilities it has assumed
in a business combination and explicit statement that an acquirer does
not recognise contingent assets acquired in a business combination.
AASB 2020-1
Amendments to Australian Accounting Standards - Classification
of liabilities as current or non-current (Amendments to AASB 101)
Under existing AASB 101 requirements, companies classify a liability
as current when they do not have an unconditional right to defer
settlement of the liability for at least twelve months after the end of the
reporting period. As part of its amendments, the Board has removed the
requirement for a right to be unconditional and instead, now requires
that a right to defer settlement must have substance and exist at the
end of the reporting period. It is expected that the changes will have
minimal impact to the Group.
Centuria Capital Group – Annual Report 2021 | 79
Notes to the financial statements
For the year ended 30 June 2021
A5 SEGMENT SUMMARY
As at 30 June 2021 the Group has six reportable operating segments. These reportable operating segments are
the divisions which report to the Group’s Joint Chief Executive Officers and Board of Directors for the purpose of
resource allocation and assessment of performance.
The reported segments have changed from those disclosed in the previous financial report as a result of the growth
of the developments business. Previously development business was included within Property Funds Management
however has now been broken out into its own segment
The reportable operating segments are:
Operating Segments
Description
Property Funds Management
Management of listed and unlisted property funds.
Co-Investments
Development
Direct interest in property funds, properties held for development and other
liquid investments
Completion of structured property developments which span sectors
ranging from Commercial Office, Industrial and Health through to Affordable
Housing and Residential Mixed Use. Developments is a new segment in the
current year, the comparative information provided has been re-presented
accordingly to conform to the current periods presentation.
Property and Development
Finance
Provision of real estate secured non-bank finance for development projects,
bridge finance and residual stock.
Investment Bonds Management
Corporate
Management of the Benefit Funds of Centuria Life Limited and management
of the Over Fifty Guardian Friendly Society Limited. The Benefit Funds
include a range of financial products, including single and multi-premium
investments.
Overheads for supporting the Group’s operating segments and management
of a reverse mortgage lending portfolio.
In addition, the Group also provides disclosures in relation to a further four non-operating segments, which are:
Non-operating segments
Description
Non-operating items
Benefit Funds
Controlled Property Funds
Eliminations
Comprises transaction costs, mark-to-market movements in property and
derivative financial instruments, share of equity accounted net profit in excess
of distributions received and all other non-operating activities.
Represents the operating results and financial position of the Benefit Funds
of Centuria Life Limited which are required to be consolidated in the Group’s
financial statements in accordance with accounting standards.
Represents the operating results and financial position of property funds
which are managed by the group and consolidated under accounting
standards. The Group’s principal activities do not include direct ownership of
these funds for the purpose of measuring control under accounting standards
and deriving rental income. Therefore the results attributable to the controlled
property funds are excluded from operating profit. However, the performance
management of the controlled property funds is included in operating profit,
aligned with how performance of the business is assessed by management of
the Group.
Elimination of transactions between the operating segments and the
other non-operating segments above, including transactions between the
operating entities within the Group, the property funds controlled by the
Group and the benefit funds.
The accounting policies of reportable segments are the same as the Group’s accounting policies.
Refer below for an analysis of the Group’s segment results:
• Note B1 Segment profit and loss
• Note C1 Segment balance sheet
• Note D1 Operating segment cash flows
80 | Centuria Capital Group – Annual Report 2021
B Business performance
B1 SEGMENT PROFIT AND LOSS
For the year ended
30 June 2021
Notes
Property
Funds
Management
$’000
Co-
Investments
$’000
Management fees
73,437
7,433
- 83,398
Property
and
development
finance
$’000
Investment
Bonds
Management
$’000
Corporate
$’000
Operating
profit
$’000
Non
operating
items
$’000
Benefits
Funds
$’000
Controlled
Property
Funds
$’000
Eliminations
$’000
Statutory
profit
$’000
Development
$’000
2,528
-
-
-
50,271
-
-
78
-
-
-
-
12
-
-
-
-
-
-
830
-
-
35,753
-
-
40
7,881
17,908
420
-
769
170
-
3,977
-
-
5,090
-
-
-
-
863
-
-
-
-
-
-
-
-
-
7,881
17,908
-
-
-
- 50,271
-
769
1,283
(863)
20
2,786
3,806
162
240
-
3,977
-
-
-
-
-
-
-
-
-
-
- 35,753 (1,469)
8,813
-
-
-
5,090
552
1,736
2,340
-
-
-
1,441
-
73
-
-
-
-
-
-
-
-
-
-
-
-
-
-
768
-
-
-
-
-
-
-
-
-
10,212
3,464
(3,879)
79,519
-
-
-
-
-
7,881
17,908
420
50,271
769
(60)
4,514
-
-
10,452
7,441
(2,371)
40,726
-
-
-
1,441
5,090
2,500
-
-
-
87
B2 109,652
36,623
52,889
863
8,005
4,684 212,716 (2,332)
11,095
13,763
(6,310) 228,932
E1
-
-
-
-
-
-
-
-
-
-
-
(44,679)
-
-
-
-
-
-
-
-
-
-
-
-
-
3,070
-
-
5,788
-
-
-
-
3,070
5,788
-
79,843 20,348
8,048
(4,310) 103,929
- (44,679)
-
-
-
- (44,679)
B3 (45,811)
(234)
(3,708)
(440)
(7,086) (16,382) (73,661) (4,503) (29,741)
(7,159)
3,879 (111,185)
B4
(1,133)
(11,168)
(6)
-
(3)
(2,578) (14,888) (3,262)
(3)
(2,196)
60 (20,289)
62,708
25,221
4,496
423
916 (14,276)
79,488 72,816
7,487
12,456
(6,681) 165,566
Property
acquisition fees
Property
performance fees
Financing Fees
Development revenue
Property sales fees
Interest revenue
Rental income
Recoverable
outgoings
Distribution/dividend
revenue
Premiums -
discretionary
participation features
Underwriting fees
Other income
Total Revenue
Share of net profit
of equity accounted
investments
Net movement in
policyholder liabilities
Fair value movements
of financial
instruments and
property
Cost of sales
Expenses
Finance costs
Profit/(Loss)
before tax
Income tax benefit/
(expense)
B5 (18,150)
845
(1,077)
Profit/(Loss) after tax
44,558
26,066
3,419
(137)
286
(369)
9,611
(9,277)
837
(7,487)
-
- (15,927)
547 (4,665)
70,211 73,653
-
12,456
(6,681) 149,639
Profit/(loss) after tax
attributable to:
Centuria Capital
Limited
44,558
4,534
3,419
Centuria Capital Fund
-
21,532
-
286
-
547(24,026) 29,318 (5,887)
-
19,361 40,893 79,540
Profit/(loss) after
tax attributable to
Centuria Capital Group
securityholders
Non-controlling
interests
44,558
26,066
3,419
286
547 (4,665)
70,211 73,653
Profit/(loss) after tax
44,558
26,066
3,419
-
-
-
-
286
-
-
-
-
547 (4,665)
70,211 73,653
-
-
-
-
-
-
-
23,431
1,824
(2,232) 120,025
1,824
(2,232) 143,456
10,632
(4,449)
6,183
12,456
(6,681) 149,639
Centuria Capital Group – Annual Report 2021 | 81
Notes to the financial statements
For the year ended 30 June 2021
B1 SEGMENT PROFIT AND LOSS (CONTINUED)
For the year ended
30 June 2020
Property
Funds
Management
$’000
Co-
Investments
$’000
Notes
Investment
Bonds
Management
$’000
Corporate
$’000
Development
$’000
Management fees
52,302
1,137
9,667
-
-
-
-
-
Operating
profit
$’000
63,106
6,854
21,509
19,075
2,919
3,597
823
-
-
-
-
-
42
2,851
-
-
-
-
394
-
-
-
Non
operating
items
$’000
Benefits
Funds
$’000
Controlled
Property
Funds
$’000
Eliminations
$’000
Statutory
profit
$’000
-
-
-
-
-
-
-
-
-
-
-
-
-
2,353
-
-
-
-
20
22
-
-
12,691
3,747
(6,027)
57,079
-
-
-
-
(131)
-
-
6,854
21,509
19,075
2,939
5,841
13,514
3,747
(2,757)
27,853
-
-
1,750
2,212
-
-
66
31,785
(6,363)
5,188
444
416
1,066
2,047
-
-
-
1,750
99
-
-
-
-
-
445
-
-
31,785
-
-
6,854
21,509
-
2,919
259
429
-
-
-
121
-
-
19,075
-
-
-
-
-
-
84,393
32,230
20,656
10,125
4,311
151,715
(6,363) 9,390
16,546
(8,915)
162,373
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,849
461
- 34,445
-
-
-
-
8,310
34,445
-
(34,837)(13,383)
(6,165)
6,105 (48,280)
Property
acquisition fees
Property
performance fees
Development revenue
Property sales fees
Interest revenue
Rental income
Recoverable outgoings
Distribution/dividend
revenue
Premiums -
discretionary
participation features
Other income
Total Revenue
E1
Share of net profit
of equity accounted
investments
Net movement in
policyholder liabilities
Fair value movements
of financial instruments
and property
Expenses
Cost of sales
Finance costs
Profit/(Loss)
before tax
B3
(30,217)
(117)
(1,537)
(7,581) (14,696)
(54,148)
(6,758) (34,229)
(8,614)
6,026 (97,723)
-
-
(17,320)
-
-
(17,320)
-
-
-
-
(17,320)
B4
(11)
(12,522)
-
(3)
(1,873)
(14,409)
(1,229)
(5)
(3,090)
131
(18,602)
54,165
19,591
1,799
2,541 (12,258)
65,838 (41,338) (3,321)
(1,323)
3,347
23,203
Income tax benefit/
(expense)
B5
(17,879)
(425)
Profit/(Loss) after tax
36,286
19,166
(567)
1,232
(831)
7,117 (12,585)
8,148
3,321
-
-
(1,116)
1,710
(5,141)
53,253 (33,190)
-
(1,323)
3,347
22,087
Profit/(loss) after tax
attributable to:
Centuria Capital Limited
36,286
568
1,232
1,710 (15,822)
23,974
(3,018)
Centuria Capital Fund
Profit/(loss) after
tax attributable to
Centuria Capital Group
securityholders
Non-controlling
interests
-
18,598
-
-
10,681
29,279 (30,172)
36,286
19,166
1,232
1,710
(5,141)
53,253 (33,190)
-
-
-
-
-
-
-
Profit/(loss) after tax
36,286
19,166
1,232
1,710
(5,141)
53,253 (33,190)
-
-
-
-
-
-
-
-
-
20,956
1,042
149
1,042
21,105
(1,323)
(1,323)
2,305
982
3,347
22,087
82 | Centuria Capital Group – Annual Report 2021
B2 REVENUE
Revenue has been disaggregated in the segment profit and loss in Note B1
(A) RECOGNITION AND MEASUREMENT
Type of revenue
Description
Management
fees
The Group provides:
a) fund management services to property funds in accordance with the fund
constitutions. The services are provided on an ongoing basis and revenue is
calculated and recognised in accordance with the relevant constitution. The fees
are invoiced and paid monthly in arrears.
b) property management services to the owners of property assets in accordance
with property services agreements. The services are utilised on an ongoing
basis and revenue is calculated and recognised in accordance with the
specific agreement. The fees are invoiced monthly with variable payment terms
depending on the individual agreements.
Revenue
recognition
policy
Over-time
Over-time
c) lease management services to the owners. The revenue is recognised when
the specific service is delivered (e.g. on lease execution) and consideration is
due 30 days from invoice date.
Point-in-time
d) short-term development management services to the owners of property
assets in accordance with development management agreements. Revenue is
calculated in accordance with the specific agreement and invoiced in accordance
with the contract terms. Consideration is due from the customer based on the
specific terms agreed in the contract and is recognised when the Company has
control of the benefit.
Point-in-time
Distribution/dividend revenue from investments is recognised when the
shareholder’s right to receive payment.
Point-in-time
Interest revenue is accrued on an over-time by reference to the principal
outstanding using the effective interest rate.
Rental income from investment property is recognised in profit or loss on a
straight line basis over the term of the lease.
Over-time
Over-time
Distribution/
dividend
revenue
Interest
Revenue
Rental
Income
Centuria Capital Group – Annual Report 2021 | 83
Notes to the financial statements
For the year ended 30 June 2021
Type of revenue
Description
Performance
fees
The Group receives a performance fee for providing management services where
the property fund outperforms a set internal rate of return (IRR) benchmark at
the time the property is sold. Consideration is due upon successful sale of the
investment property if the performance hurdles are satisfied.
Revenue
recognition
policy
Over-time
In measuring the performance fees to be recognised each period, consideration
is given to the facts and circumstances with respect to each investment property
including external factors such as its current valuation, passage of time and
outlook of the property market.
Performance fees are only recognised when they are deemed to be highly
probable and the amount of the performance fees will not result in a significant
reversal in future periods.
The Group’s performance fees are recognised over-time under AASB 15 Revenue
from Contracts with Customers.
The key assumptions made in estimating the amount of performance fee revenue
that is highly probable include:
>2 years from forecast fund end date:
It is assumed that the highly probable threshold is only met when the forecast
end date of the fund is within two years from balance date. The forecast end date
is generally based on the relevant fund end date as expressed in the relevant PDS
or a revised fund end date in the event that an alternative strategy is undertaken
by the Group, in which case the unbooked portion of any forecast performance
fees are recognised over the extended term of the fund. In instances where the
fund term is extended beyond two years from the reporting date and the Group
has already accrued a performance fee in prior periods, the Group will continue to
accrue any additional fee over the extended remaining period.
Probability thresholds for sensitivity to property valuations:
The level of constraint applied to performance fee revenue is adjusted depending
on remaining fund tenure. Specifically, a discount in property values between
10.0% to 20.0% is applied, depending on when in the two-year window the fund
is expected to wind up. In instances where the fund term is extended beyond two
years from the reporting date and the Group has already accrued a performance
fee in prior periods, a discount in property values between 2.5% to 10.0% is
applied depending on the remaining fund term as it is assumed the fund term
extension was on the basis that fund performance can be further enhanced,
thereby reducing the risk of valuation decrements and increasing the likelihood of
achieving the full performance fee.
Fair value of investment properties:
The fair value of investment properties is based on the latest available valuation
of the underlying property from the published financial statements or board
approved valuations.
The Group recovers the costs associated with general building and tenancy
operation from lessees in accordance with specific clauses within lease
agreements. These are invoiced monthly based on an annual estimate. The
consideration is due 30 days from invoice date. Should any adjustment be
required based on actual costs incurred, this is recognised in the statement of
financial performance within the same reporting period and billed annually.
Recoverable
outgoings
Property
acquisition
fees
The Group provides property acquisition related services to property funds and
the revenue is based on a fixed percentage included in the PDS issued at the
establishment of the fund. The consideration is due upon successful settlement
of the investment property.
Property sales
fees
The Group provides sales services to the owners of property assets in
accordance with property management agreements. The consideration is due
upon successful sale of the investment property.
Development
revenue
In 2019, the Group entered into agreements to develop four social affordable
housing dwellings in the greater Newcastle, NSW area. The Group recognises
development revenue based on satisfaction of performance obligations on an
over-time basis as its customers control the land on which the developments are
being delivered.
Over-time
Point-in-time
Point-in-time
Over-time
84 | Centuria Capital Group – Annual Report 2021
(B) TRANSACTION PRICE ALLOCATED TO THE REMAINING
PERFORMANCE OBLIGATIONS
The following table includes revenue expected to be recognised in the
future related to performance obligations that are unsatisfied (or
partially unsatisfied) at the reporting date.
B3
EXPENSES
2021
$’000
2020
$’000
Employee benefits expense
49,410
33,653
Unrecognised
performance
obligations
2021
$’000
Unrecognised
performance
obligations
2020
$’000
Recognised
in 2020
$’000
Recognised
in 2021
$’000
Consulting and professional fees
Property outgoings and fund expenses
Transaction costs
Administration fees
4,077
5,652
5,220
1,943
4,964
6,601
6,125
2,220
17,908
21,388
21,509
2,334
Claims - discretionary participation features
26,804
29,209
Cost of sales - development
44,679
17,320
Property
performance fees*
Development
revenue
49,664
2,280
19,075
53,239
Management fees**
22,308
86,544
11,964
38,654
* The underlying property funds managed by the Group have accrued total
performance fees of $45,613,000 as at 30 June 2021.
Based on the assumptions outlined in B2(a), the total estimated amount of
performance fees available to the Group to recognise in the future is $21,388,000.
** Only relates to unlisted property funds management fees which have defined
fund terms.
(C) TRANSACTIONS WITH RELATED PARTIES
Management fees are charged to related parties in accordance with
the respective trust deeds and management agreements.
2021
$
2020
$
Property management fees paid
Other expenses
Depreciation Expense
4,168
10,180
3,731
2,810
9,198
2,943
155,864
115,043
(A) TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
(i) Transactions with directors
For transactions with directors, refer to details included in the Audited
remuneration report on page 55.
(ii) Key management personnel compensation
The aggregate compensation paid to key management personnel of
the Group is set out below:
2021
$
2020
$
75,021,656
52,412,451
Short-term employee benefits
8,120,098
6,423,022
31,620,548
18,362,378
Post-employment benefits
Other long-term employment benefits
17,908,370
21,508,771
Share-based payments
144,764
144,793
128,467
22,854
2,010,647
1,113,613
10,420,302
7,687,956
7,881,250
6,854,484
3,725,242
4,474,097
Detailed information on key management personnel is included in the
Audited remuneration report.
582,098
408,358
B4
FINANCE COSTS
Sales fees from Property Funds managed
by Centuria
769,175
2,938,640
2021
$’000
2020
$’000
701,934
229,297
Operating interest charges
12,497
11,595
Management fees from Property Funds
managed by Centuria
Distributions from Property Funds
managed by Centuria
Performance fees from Property Funds
managed by Centuria
Property acquisition fees from Property
Funds managed by Centuria
Management fees from Over Fifty
Guardian Friendly Society
Fees from Debt funds managed by
Centuria
Interest income on loans to Property
Funds managed by Centuria
Interest income on loans to Property
Funds managed by Centuria
Distributions and interest from Debt
Funds managed by Centuria
1,194,002
5,089,589
-
-
144,493,864
107,188,476
(i) Terms and conditions of transactions with related parties
Investments in property funds and benefit funds held by certain
directors and director-related entities are made on the same terms
and conditions as all other investors and policyholders. Directors
and director-related entities receive the same returns on these
investments as all other investors and policyholders.
The Group pays some expenses on behalf of related entities and
receives a reimbursement for those payments.
Bank loans in Controlled Property Funds
interest charges
Reverse mortgage facility interest
charges
Loss/(gain) on derivatives on fair value
hedges
(Gain)/loss on financial assets fair value
hedges
Other finance costs
Finance lease interest
2,196
3,090
2,334
2,093
8,080
4,667
(8,080)
(4,667)
2,139
1,123
595
1,229
20,289
18,602
Centuria Capital Group – Annual Report 2021 | 85
Notes to the financial statements
For the year ended 30 June 2021
profit or loss.
B5 TAXATION
Current tax expense in respect
of the current year
Adjustments to current tax
in relation to prior years
Deferred tax (benefit)/expense
relating to the origination and
reversal of temporary differences
Adjustments to deferred tax in
relation to prior years
Adjustments to deferred tax in
relation to tax rate adjustments
Income tax expense
RECOGNITION AND MEASUREMENT
The Group’s finance costs include:
•
interest expense recognised using the effective interest method; and
• the net gain or loss on hedging instruments that is recognised in
(B) CURRENT TAX ASSETS AND LIABILITIES
Current tax assets/(liabilities) attributable to:
Income tax payable - Australia
Income tax receivable - New Zealand
Income tax payable to benefit fund
policy holders
2021
$’000
2020
$’000
(996)
977
(768)
(787)
(3,064)
755
(2,934)
(5,243)
(C) MOVEMENT OF DEFERRED TAX BALANCES
Financial year ended 30 June 2021
Opening
balance
$’000
Movement
$’000
Closing
balance
$’000
2021
$’000
2020
$’000
7,048
14,310
61
7,109
3,211
17,521
Deferred tax assets
Provisions
Transaction costs
8,904
(13,687)
Capital losses
Revenue tax losses
(86)
(2,439)
Financial derivatives
-
15,927
(279)
1,116
Property held for development
Right of use asset/Lease liability
Equity accounted investment
Other
2,164
3,762
25,128
1,118
2,757
3,964
103
523
-
1,334
625
(347)
1,825
(438)
(22)
(55)
-
85
3,498
4,387
24,781
2,943
2,319
3,942
48
523
85
39,519
3,007
42,526
Deferred tax liabilities
Indefinite life management rights
(33,253)
(53,425)
(86,678)
Accrued performance fees
(1,498)
(4,847)
(6,345)
Accrued income
(290)
(62)
(352)
(A) RECONCILIATION OF INCOME TAX EXPENSE
The prima facie income tax expense on profit before income tax
reconciles to the income tax expense in the consolidated financial
statements as follows:
Profit before tax
Less: profit not subject to income tax
Income tax expense calculated at 30%
Add/(deduct) tax effect of amounts which
are not deductible/(assessable):
2021
$’000
165,566
(114,680)
50,886
15,266
2020
$’000
23,203
(2,283)
20,920
6,276
Unrealised gain/(loss)
on financial assets
Other
Financial year ended 30 June 2020
Tax offset for franked dividends
(389)
(227)
Reversal of prior year equity
accounted contribution
Non-allowable expenses - other
Utilisation of capital losses
Adjustments to current tax in relation
to prior years
Effects of different tax rates of
subsidiaries operating in other
jurisdictions
Income tax expense
Deferred tax assets
-
(6,000)
Provisions
1,007
-
844
(550)
(26)
773
Transaction costs
Capital losses
Revenue tax losses
Financial derivatives
Property held for development
Right of use asset/Lease liability
Equity accounted investment
69
15,927
-
1,116
(381)
(403)
(6,413)
(6,794)
-
(403)
(35,825)
(64,747)
(100,572)
Opening
balance
$’000
Movement
$’000
Closing
balance
$’000
1,560
-
604
3,762
2,164
3,762
26,792
(1,664)
25,128
4,021
(2,903)
-
-
-
-
2,757
3,964
103
523
1,118
2,757
3,964
103
523
32,373
7,146
39,519
The tax rate used in the above reconciliation is the corporate tax rate of
30% payable for Australian corporate entities on taxable profits under
Australian tax law. There has been no change in the corporate tax rate
when compared with the previous reporting period. Taxable income
derived for New Zealand tax purposes is at the tax rate of 28%.
Deferred tax liabilities
Indefinite life management rights
(27,638)
(5,615)
(33,253)
Accrued performance fees
Accrued income
Unrealised gain/(loss)
on financial assets
Other
Transaction costs
Financial derivatives
(6,115)
(290)
(1,432)
(138)
(4,733)
(2,521)
4,617
(1,498)
-
(290)
1,051
(265)
4,733
2,521
(381)
(403)
-
-
(42,867)
7,042
(35,825)
86 | Centuria Capital Group – Annual Report 2021
RECOGNITION AND MEASUREMENT
Income tax expense represents the sum of the tax currently payable
and payable on a deferred basis.
(i) Current tax
The tax currently payable is based on taxable income for the year.
Taxable income differs from profit as reported in the consolidated profit
or loss because of items of income or expense that are assessable or
deductible in other years as well as items that are never assessable or
deductible. The Group’s liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the end of the
reporting period.
(ii) Deferred tax
Deferred tax is recognised on temporary differences between the carrying
amounts of assets and liabilities and the corresponding tax bases.
Deferred tax liabilities are generally recognised for all assessable
temporary differences. Deferred tax assets are recognised for all
deductible temporary differences, unused tax losses and tax offsets,
to the extent that it is probable that sufficient future taxable profits
will be available to utilise them.
However, deferred tax assets and liabilities are not recognised for:
• assessable temporary differences that arise from the initial
recognition of assets or liabilities in a transaction that is not a
business combination which affects neither taxable income nor
accounting profit;
• assessable temporary differences relating to investments in
subsidiaries, associates and joint ventures to the extent that the
Group is able to control the timing of the reversal of the temporary
differences and it is probable that they will not reverse in the
foreseeable future; and
• assessable temporary differences arising from goodwill
The carrying amount of deferred tax assets is reviewed at the end of
each reporting period and reduced to the extent that it is no longer
probable that sufficient taxable income will be available to allow all or
part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that
are expected to apply in the period in which the liability is settled
or the asset realised, based on tax rates (and tax laws) that have
been enacted or substantively enacted by the end of the reporting
period. The applicable rates are 30% for deferred tax assets and
liabilities arising to the Australian subsidiaries of the Company and
28% for deferred tax asset and liabilities arising to the New Zealand
subsidiaries of the Company. The measurement of deferred tax assets
and liabilities reflects the tax consequences that would follow from the
manner in which the Group expects, at the end of the reporting period,
to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same
taxation authority and the Group intends to settle its current tax assets
and liabilities on a net basis.
(iii) Tax consolidation
The Company and all its wholly-owned Australian resident subsidiaries
are part of a tax consolidated group under Australian taxation law.
The Company is the head company of the tax consolidated group. Tax
expense/benefit, deferred tax assets and deferred tax liabilities arising
from temporary differences of the members of the tax consolidated
group are recognised in their separate financial statements using a
‘standalone taxpayer’ approach. Under the tax funding agreement
between members of the tax consolidated group, amounts are
recognised as payable to or receivable by each member in relation to
the tax contribution amounts paid or payable between the Company
and the members of the the tax consolidated group.
The Benefit Funds are part of the tax consolidated group, and they are
allocated a share of the income tax liability attributable to Centuria Life
Limited equal to the income tax liability that would have arisen to the
Benefit Funds had they been stand-alone entities.
Centuria Capital Fund (‘CCF’) and its sub-trusts are not part of the tax
consolidated group. Under current Australian income tax legislation,
trusts are not liable for income tax, provided their securityholders are
presently entitled to the net (taxable) income of the trust including
realised capital gains, each financial year.
Primewest Group Limited (Primewst Group) is not a wholly-owned
subisidary of the Company for tax purposes at 30 June 2021 and is its
own tax consolidated group at 30 June 2021. Primewest Group’s tax
rate was 27.5% prior to the company’s acquisition of Primewest Group
Limited. The tax rate was increased to 30% retrospectively on the date
of acquisition in accordance with Australian tax legislation. Subsequent
to the year-ended 30 June 2021, Primewest Group formed part of
the Company’s consolidated tax group as a result of the Company
acquiring the remaining interest post year-end.
Centuria Healthcare Pty Ltd (‘Centuria Healthcare’) is not a wholly-
owned subsidiary of the Company at 30 June 2021. Centuria Healthcare
has formed its own tax consolidated group with its wholly-owned
subsidiaries at 30 June 2021. Centuria Healthcare is the head company
of the Centuria Healthcare tax consolidated group. Tax expense/
benefit, deferred tax assets and deferred tax liabilities arising from
temporary differences of the members of the tax consolidated
group are recognised in their separate financial statements using a
‘standalone taxpayer’ approach. As no tax funding agreement existed
at 30 June 2021 between the members of the tax consolidated group,
any amounts payable or receivable in relation to the tax contribution
for each entity is recognised as a contribution of capital with the head
company of the tax consolidated group.
The New Zealand tax resident subsidiaries of the Company are all
stand-alone taxpayers from a New Zealand income tax perspective as
they have not elected to form a consolidated group for New Zealand
tax purposes.
(iv) Current and deferred tax for the period
Income taxes relating to items recognised directly in equity
are recognised directly in equity and not in the statement of
comprehensive income. In the case of a business combination, the
tax effect is included in the accounting for the business combination.
Centuria Capital Group – Annual Report 2021 | 87
Notes to the financial statements
For the year ended 30 June 2021
B6 EARNINGS PER SECURITY
Basic (cents per stapled security)
Diluted (cents per stapled security)
2021
Cents
24.6
24.2
2020
Cents
4.7
4.6
The earnings used in the calculation of basic and diluted earnings per security is the profit for the year attributable
to Centuria Capital Group securityholders as reported in the consolidated statement of comprehensive Income.
The weighted average number of ordinary securities used in the calculation of basic and diluted earnings per
security is as follows:
Weighted average number of ordinary securities (basic)
Weighted average number of ordinary securities (diluted) (i)
2021
2020
584,215,946 444,644,883
591,683,198 460,824,844
(i) The weighted average number of ordinary securities used in the calculation of diluted earnings per security is determined as if 30 June
2021 was the end of the performance period of the grants of Rights under the LTI Plan. All Rights that would have vested if 30 June 2021
was the end of the performance period are deemed to have been issued at the start of the financial year.
B7
DIVIDENDS AND DISTRIBUTIONS
Dividends/distributions paid during the year
Final year-end dividend (fully franked)
Final year-end distribution
Interim dividend (fully franked)
Interim distribution
Dividends/distributions declared during the year
Final dividend (fully franked) (i)
Final distribution (i)
2021
2020
Cents per
security
Total
$’000
Cents per
security
Total
$’000
1.80
3.40
1.20
3.30
2.10
3.40
8,690
16,420
7,203
19,811
12,605
20,408
0.50
4.50
1.70
2.80
1.80
3.40
1,918
17,262
7,630
12,567
8,690
16,420
(i) The Group declared a final dividend/distribution in respect of the year ended 30 June 2021 of 5.5 cents per stapled security which
included a fully franked dividend of 2.1 cents per share and a trust distribution of 3.4 cents per unit. The final dividend had a record date of
25 May 2021 and was paid on 30 July 2021. The total amount paid of $33,013,000 (2020: $25,110,000) has been provided for as a liability
in these financial statements.
(ii) In addition to the dividends and distributions paid to Group securityholders, the Group paid distributions of $3,295,000 (2020:
$3,375,000) to external non-controlling interests and has a distribution payable of $11,500,000 to Primewest Group securityholders.
(A) FRANKING CREDITS
Amount of franking credits available to shareholders of the
Company for subsequent financial years (i)
(i) Before taking into account the impact of the final dividend paid on 30 July 2021.
2021
$’000
2020
$’000
11,297
10,427
Of the franking credit balance of $11,297,000 at 30 June 2021, $3,758,000 relates to the Centuria Capital Limited tax
consolidated group, $3,162,000 relates to the Centuria Healthcare tax consolidated group and $4,377,000 relates to
the Primewest tax consolidated group.
88 | Centuria Capital Group – Annual Report 2021
C Assets and liabilities
C1 SEGMENT BALANCE SHEET
Total assets
921,621
912,132
102,835
25,704
2,991 126,462 2,091,745 311,063 216,494
(48,029) 2,571,273
As at
30 June 2021
ASSETS
Cash and cash
equivalents
Receivables
Contract Asset
Income tax receivable
Financial assets
Other assets
Property held for
development
Deferred tax assets
Equity accounted
investments
Investment properties
Right of use asset
Intangible assets
LIABILITIES
Payables
Provisions
Borrowings
Provision for
income tax
Interest rate swap at
fair value
Benefit Funds policy
holders' liability
Call/Put option liability
Property
Funds
Management
$’000
Notes
Co-
Investments
$’000
Development
$’000
Property
and
development
finance
$’000
Investment
Bonds
Management
$’000
Operating
balance
sheet
$’000
Benefits
Funds
$’000
Controlled
Property
Funds
$’000
Corporate
$’000
Eliminations
$’000
Statutory
balance
sheet
$’000
D2
C2
C2
B5
C3
C5
B5
E1
C4
C9
C6
54,497
158,418
47,573
27,910
-
306
-
-
-
695,871
141
-
28,553
-
-
-
790,551
-
-
-
29,933
-
-
-
9,526
2,462
32,938
-
-
13
53,744
4,152
-
-
-
-
-
-
-
-
-
-
-
-
25,704
-
-
-
2,638 24,558 249,637
16,835
6,879
-
273,351
269
8,715
86,929
6,049
1,475
(194)
94,259
-
-
-
32,938
671
977
-
-
- 54,309 750,180 288,179
84
8,441
8,679
-
53,744
9,821
42,526
-
-
-
-
55,637
-
-
-
- 208,140
19,947
19,947
- 790,551
-
-
-
-
-
-
-
-
-
-
-
-
-
32,938
977
(47,835)
990,524
-
-
-
-
-
-
-
8,679
53,744
42,526
55,637
208,140
19,947
790,551
-
-
-
-
-
-
C7
5,593
29,220
3,308
2,417
-
-
C8
-
298,440
15,955
B5
5,658
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,230 44,541
83,892
385
4,592
(194)
88,675
-
-
1,660
4,077
-
-
-
4,077
7,006 321,401
- 106,428
(1,187)
426,642
- (4,662)
996
768
- 31,205
31,205
-
-
-
- 303,650
- 22,690
22,690
-
-
-
4,238
94,312
6,260
21,757
21,757
-
-
-
-
-
-
-
-
-
-
-
-
-
1,764
31,205
303,650
22,690
100,572
21,757
1,230 128,435 580,330 311,063 111,020
(1,381) 1,001,032
817,879
584,472
83,572
25,704
1,761
(1,973) 1,511,415
-
105,474
(46,648) 1,570,241
Centuria Capital Group – Annual Report 2021 | 89
Deferred tax liability
B5(c)
90,074
Lease liability
C9
-
Total liabilities
Net assets
103,742
327,660
19,263
Notes to the financial statements
For the year ended 30 June 2021
C1 SEGMENT BALANCE SHEET (CONTINUED)
Property
Funds
Management
$’000
Notes
Co-
Investments
$’000
Development
$’000
Investment
Bonds
Management
$’000
Corporate
$’000
Operating
balance
sheet
$’000
Benefits
Funds
$’000
Controlled
Property
Funds
$’000
Eliminations
$’000
Statutory
balance
sheet
$’000
As at
30 June 2020
ASSETS
Cash and cash
equivalents
Receivables
Income tax receivable
Financial assets
Other assets
Investment properties
Property held for
development
D2
C2
C3
C4
24,514
50,707
118
6,985
67,137 149,461 22,585
2,412
-
174,458
24,651
7,744
26,537
1,780
4,818
65,530
4,192
88
(1,081)
68,729
306
-
-
464,191
331
-
-
205
-
31,295
-
-
1
-
-
-
449
755
-
- 58,904 523,095 289,359
206 10,052
10,795
-
-
-
-
-
31,295
-
-
-
167,110
-
-
-
-
-
-
-
755
(39,037)
773,417
-
-
-
-
-
-
-
-
10,795
167,110
31,295
39,519
32,955
861
21,393
280,120
-
-
-
-
-
-
-
-
Deferred tax assets
28,899
-
193
104
10,323
39,519
Equity accounted
investments
E1
Investment properties
held for sale
Right of use asset
-
-
-
Intangible assets
C6 280,120
32,955
861
-
-
-
-
-
-
-
-
-
-
32,955
861
- 21,393
21,393
-
- 280,120
Total assets
358,821
587,958
26,849
9,075 173,076 1,155,779 316,136 169,610
(40,118) 1,601,407
LIABILITIES
Payables
Provisions
Borrowings
Provision for
income tax
Interest rate swap at
fair value
Benefit Funds policy
holders' liability
Call/Put option liability
Lease liability
Total liabilities
Net assets
C7
1,922
20,749
2,495
2,345 43,145
70,656
2,220
4,737
(1,081)
76,532
873
-
C8
-
167,291
2,420
-
-
-
-
-
-
-
-
-
-
-
150
-
-
-
-
-
-
-
-
-
2
-
1,328
2,201
13,017 180,308
-
-
-
-
2,201
85,920
(1,177)
265,051
494
3,064
2,934
-
- 32,752
32,752
-
636
-
- 311,535
2,923
36,378
(533)
17,167
17,167
- 22,564
22,564
-
-
-
-
-
-
-
-
-
-
-
-
5,998
33,388
311,535
35,825
17,167
22,564
38,468
188,240
2,645
2,347 133,390 365,090 316,136
91,293
(2,258)
770,261
320,353
399,718
24,204
6,728 39,686 790,689
-
78,317
(37,860)
831,146
Deferred tax liability
B5(c)
33,253
200
90 | Centuria Capital Group – Annual Report 2021
C2 RECEIVABLES
Receivables from
related parties
Other receivables(i)
Contract assets - Development
Notes
2021
$’000
2020
$’000
C2(a)
63,252
26,098
RECOGNITION AND MEASUREMENT
Receivables are initially recognised at fair value and subsequently
at amortised cost using the effective interest rate method, less an
allowance for impairment. Due to the short-term nature of these
financial rights, their carrying amounts are estimated to represent
their fair values.
31,007
16,094
32,938
26,537
127,197
68,729
(i) Contract assets - development
The timing of revenue recognition, billings and cash collections
results in billed accounts receivable (trade receivables) and
unbilled receivables (contract assets) on the consolidated
statement of financial position.
(i) Other receivables includes $16,400,000 of receivables from the sale of
Vitalharvest shares.
All receivables are current except for $21,127,000 of performance fees
receivable which are non-current.
The Group does not hold any collateral or other credit enhancements
over these balances nor does it have a legal right of offset against any
amounts owed by the Group to the counterparty.
In respect of the Social Affordable Housing Developments within the
Property Funds Management segment, billing occurs subsequent to
revenue recognition, resulting in contract assets.
C3 FINANCIAL ASSETS
Notes
2021
$’000
2020
$’000
(A) RECEIVABLES FROM RELATED PARTIES
The following amounts were owed by related parties of the Group at
the end of the financial year:
Investments in trusts, shares and
other financial instruments at
fair value
271,911
267,282
Performance fees owing from property
funds managed by Centuria
Management fees owing from property
funds managed by Centuria
Loan receivable from Centuria
Government Income Property Fund
Recoverable expenses owing from
property funds managed by Centuria
Distribution receivable from
Centuria Industrial REIT
Distribution receivable from
Centuria Office REIT
Receivable from Over Fifty
Guardian Friendly Society
Sales fees owing from property
funds managed by Centuria
Distribution receivable from unlisted
property funds managed by Centuria
2021
$
2020
$
Investment in related party unit
trusts at fair value
C3(a)
664,304
440,529
24,296,035
9,385,830
Reverse mortgage receivables(ii)
Loans receivable(i)
-
6,702
54,309
58,904
990,524
773,417
Financial assets are classified as non-current assets.
(i) This is an unsecured loan to a third party that accrues interest at 10% per annum.
(ii) Whilst some mortgages are likely to be repaid during the next 12 months, the
Group does not control the repayment date.
13,772,263
7,294,799
11,248,798
-
5,913,021
336,300
3,941,846
3,182,678
3,336,852
3,484,055
-
-
1,104,355
1,022,000
743,345
288,220
63,252,160
26,098,237
The loan receivable from Centuria Government Income Property Fund
accrues interest at 10.00% per annum, and expires 9 June 2022.
Centuria Capital Group – Annual Report 2021 | 91
Notes to the financial statements
For the year ended 30 June 2021
C3
FINANCIAL ASSETS (CONTINUED)
(A) INVESTMENTS IN RELATED PARTY UNIT TRUSTS CARRIED AT FAIR VALUE THROUGH PROFIT OR LOSS
The following table details related party investments carried at fair value through profit and loss.
Fair value
$
2021
Units
held
Ownership
%
Fair value
$
2020
Units
held
Ownership
%
Financial assets held by the Group
Centuria Industrial REIT
Centuria Office REIT
Augusta Industrial Fund
Asset Plus Limited
344,998,908
92,741,642
16.81% 215,809,359
68,078,662
189,290,479
80,893,367
15.72%
158,152,599
78,293,366
48,584,204
39,279,014
16.10%
17,232,050
19,000,000
21,915,324
72,507,288
19.99%
9,705,148
30,528,933
Centuria Healthcare Direct Medical Fund No.2
16,386,598
16,991,495
11.08%
10,305,433
11,025,391
Matrix Trust
Pialba Place Trust
Augusta Property Fund
5,892,821
5,106,431
3,908,561
5,129,345
3,645,664
3,850,000
Centuria Healthcare Aged Care Property Fund
No.1
2,948,651
5,513,559
Primewest Large Format Retail Trust No. 2
2,439,720
2,430,000
5.00%
23.32%
10.00%
9.21%
6.64%
Dragon Hold Trust
Albany Brooks Gardens Trust
Centuria Scarborough House Fund
Primewest 251 St Georges Terrace Trust
1,500,000
1,500,000
10.00%
422,950
105,921
104,126
642,143,927
275,000
102,836
104,126
1.60%
0.22%
0.27%
-
-
-
-
-
-
-
-
-
-
-
-
97,694
102,836
-
-
417,051,271
Financial assets held by the Benefit Funds
Centuria Office REIT
Centuria Industrial REIT
Centuria SOP Fund
15,875,494
6,784,399
1.32%
18,956,484
9,384,398
5,137,580
1,381,070
1,147,200
1,000,000
0.25%
3.28%
3,446,506
1,087,226
1,064,000
1,000,000
22,160,274
664,304,201
23,466,990
440,518,261
17.01%
15.22%
10.00%
18.85%
7.48%
0%
0%
0%
0%
0%
0%
0.22%
0%
1.82%
0.27%
3.28%
5,748,988
5,513,559
9.21%
Related party unit trusts carried at fair value through profit and loss
30 June 2021
$’000
30 June 2020
$’000
Opening balance
Investment purchases
Acquisition of subsidiary
Carrying value transferred from controlled property funds
Disposal
Foreign currency translation
Fair value (loss)/gain
Carrying value transferred from/(to) equity accounted investments
Fair value gain on discontinuing equity accounted investments
440,529
126,584
14,366
9,860
(16,604)
(145)
89,714
-
-
664,304
14,571
105,176
26,937
-
(28,194)
-
(108,138)
378,407
51,770
440,529
92 | Centuria Capital Group – Annual Report 2021
RECOGNITION AND MEASUREMENT
All financial assets are recognised and derecognised on trade date
where the purchase or sale of a financial asset is under a contract
whose terms require delivery of the financial asset within the
timeframe established by the market concerned. Financial assets
are initially measured at fair value plus transaction costs, except for
those financial assets classified as at fair value through profit or loss
(“FVTPL”), which are initially measured at fair value only.
Financial assets are classified as financial assets at FVTPL when the
financial asset is either held for trading or it is designated as at fair
value through profit or loss.
Financial assets at FVTPL are stated at fair value, with any gains or
losses arising on remeasurement recognised in profit or loss. The net
gain or loss recognised in profit or loss incorporates any dividend or
interest earned on the financial asset and is included in the statement
of comprehensive income.
AASB 9 contains three principal classification categories for financial
assets:
• measured at amortised cost;
• measured at fair value through other comprehensive income
(FVOCI); and
• measured at FVTPL.
The classification depends on the entity’s business model for managing
the financial assets and the contractual terms of the cash flows.
(i) Financial assets at amortised cost
Loans and receivables are initially recognised at fair value and
subsequently at amortised cost using the effective interest rate method
less any allowance under the Expected Credit Loss (“ECL”) model.
(ii) Recoverability of loans and receivables
At each reporting period, the Group assesses whether financial
assets carried at amortised cost are ‘credit-impaired’. A financial
asset is ‘credit-impaired’ when one or more events that has a
detrimental impact on the estimated future cash flows of the
financial asset have occurred.
The Group recognises loss allowances at an amount equal to lifetime
ECL on trade and other receivables. Loss allowances for financial
assets measured at amortised cost are deducted from the gross
carrying amount of the assets.
Lifetime ECLs result from all possible default events over the expected
life of the trade receivables and are a probability-weighted estimate of
credit losses. Credit losses are measured as the difference between
cash flows due to the Group in accordance with the contract and the
cash flows that the Group expects to receive.
The Group analyses the age of outstanding receivable balances and
applies historical default percentages adjusted for other current
observable data as a means to estimate lifetime ECL, including
forecasts of interest rates and inflation, as well as the financial stress
of counterparties and their ability to operate as a going concern. Debts
that are known to be uncollectable are written off when identified.
Given that COVID-19 is an ongoing situation, the Group has
continued to analyse the age of outstanding receivable balances
post balance sheet date and applied estimated percentages of
recoverability to estimate ECL, as well as the financial stress of
counterparties and their ability to operate as a going concern. Debts
that are known to be uncollectible are written off when identified.
(iii) Financial assets at fair value through profit and loss
All financial assets not classified as measured at amortised cost or
FVOCI as described above are measured at FVTPL. This includes
all derivative financial assets. On initial recognition, the Group may
irrevocably designate a financial asset that otherwise meets the
requirements to be measured at amortised cost or at FVOCI or at
FVTPL if doing so eliminates or significantly reduces an accounting
mismatch that would otherwise arise.
A financial asset (unless it is a trade receivable without a significant
financing component that is initially measured at the transaction
price) is initially measured at fair value plus, for an item not
at FVTPL, transaction costs that are directly attributable to its
acquisition.
Financial assets at FVTPL are subsequently measured at fair value.
Net gains and losses, including any interest or dividend income, are
recognised in profit or loss.
Financial assets recognised at FVTPL include reverse mortgage loan
receivables, reverse mortgage derivatives and investments in trusts.
Centuria Capital Group – Annual Report 2021 | 93
Notes to the financial statements
For the year ended 30 June 2021
C4
INVESTMENT PROPERTIES
KEY ESTIMATE AND JUDGEMENTS
Property
2021
$’000
2020
$’000
Asset
type
2021
Capitali-
sation
rate %
2021
Discount
rate %
2021
Valuer
111 St George
Terrace, Perth WA 159,000 155,000
Office
6.50% 6.75% Colliers
Foundation Place,
QLD
31,500
-
Large
format
retail
6.25% 6.37% Colliers
60 Investigator
Drive, QLD
26 Westbrook
Parade, WA
40 John rice
Avenue, SA
8-10 Warneford St,
Sandy Bay TAS
120 and 122
Spencer St, South
Bunbury, WA
7,250
- Childcare
6.00%
-% Colliers
5,220
- Childcare
6.50%
-% Colliers
5,170
- Childcare
6.50%
-%
JLL
-
5,610Healthcare
-%
-%
-
6,500Healthcare
-%
-%
Total fair value
208,140 167,110
Investment properties are classified as non-current.
(A) VALUATION TECHNIQUES AND SIGNIFICANT
UNOBSERVABLE INPUTS
The investment properties recognised by the Group are properties
owned by related party funds that are taken to be controlled by
the Group under accounting standards. Investment properties are
properties held either to earn rental income or for capital appreciation
or for both. Investment properties are initially recorded at cost which
includes stamp duty and other transaction costs. Subsequently, the
investment properties are measured at the fair value with any change
in value recognised in profit or loss. The carrying amount of investment
properties includes components relating to deferred rent, lease
incentives and leasing fees.
An investment property is derecognised upon disposal. Any gain or loss
arising on derecognition of the property (calculated as the difference
between the net disposal proceeds and the carrying amount of the
asset) is included in profit or loss in the period in which the property is
derecognised.
The fair value of the investment properties were determined by
the directors of the Responsible Entity of the relevant fund or by
an external, independent valuation company having an appropriate
recognised professional qualification and recent experience in the
location and category of the properties being valued. Fair value is
based on market values, being the estimated amount for which a
property could be exchanged on the date of valuation between a
willing buyer and willing seller in an arm’s length transaction after
proper marketing wherein the parties had each acted knowledgeably,
prudently and without compulsion.
2021
$’000
2020
$’000
The valuations were prepared by considering the following valuation
methodologies:
Opening balance
167,110
177,500
Acquisition of investment properties
-
15,116
Capital improvements and
associated costs
Gain/(loss) on fair value
Change in deferred rent and lease
incentives
356
4,660
5,712
(6,141)
(2,068)
(525)
Deconsolidation of controlled property funds
(12,110)
Acquisition of subsidiary
49,140
-
-
Sale of investment property
Closing balance ^
-
(23,500)
208,140
167,110
^ The carrying amount of investment properties includes components related
to deferred rent, capitalised lease incentives and leasing fees amounting to
$10,575,100 (30 June 2020: $12,704,534).
• Capitalisation approach: the annual net rental income is capitalised
at an appropriate market yield to arrive at the property’s market
value. Appropriate capital adjustments are then made where
necessary to reflect the specific cash flow profile and the general
characteristics of the property.
• Discounted cash flow approach: this approach incorporates
the estimation of future annual cash flows over a 10 year period
by reference to expected rental growth rates, ongoing capital
expenditure, terminal sale value and acquisition and disposal costs.
The present value of future cash flows is then determined by the
application of an appropriate discount rate to derive a net present
value for the property.
• Direct comparison approach: this approach identifies comparable
sales on a dollar per square metre of lettable area basis and
compares the equivalent rates to the property being valued to
determine the property’s market value.
The valuations reflect, when appropriate, the type of tenants actually
in occupation or responsible for meeting lease commitments or likely
to be in occupation after letting of vacant accommodation and the
market’s general perception of their credit-worthiness; the allocation
of maintenance and insurance responsibilities between the lessor
and lessee; and the remaining economic life of the property. It has
been assumed that whenever rent reviews or lease renewals are
pending with anticipated reversionary increases, all notices and,
where appropriate, counter notices have been served validly and
within the appropriate time.
The most significant unobservable input used in the above valuation
techniques and its relationship with fair value measurement is the
capitalisation rate. The higher/lower the rate, the lower/higher the
fair value.
94 | Centuria Capital Group – Annual Report 2021
C5 PROPERTY HELD FOR DEVELOPMENT
Property
30 June 2021
$’000
30 June 2020
$’000
209 Kotham Road, Victoria, Australia
54 Cook Street, Auckland, New Zealand
17-19 Man Street, Queenstown, New
Zealand
Range of inputs FY21
27-29 Young St, West Gosford, Australia
(B) FAIR VALUE MEASUREMENT
The fair value measurement of investment properties has been
categorised as a Level 3 fair value as it is derived from valuation
techniques that include inputs that are not based on observable
market data (unobservable inputs).
Significant
unobservable
inputs
Fair value
measurement
sensitivity to
significant
increase in
input
Fair value
measurement
sensitivity to
significant
decrease in
input
Market rent
Increase
Decrease
$572psm to
$593psm
Capitalisation rate
Decrease
Increase
6.00% to 6.50%
Discount rate
Decrease
Increase
6.37% to 6.75%
A further sensitivity analysis was taken by the Group to assess the fair
value of investment property values. The table below illustrates the
valuation of movements in capitalisation rates and discount rate:
Fair value at
30 June 2021
$’000
Capitalisation
Rate impact
-0.25%
$’000
Capitalisation
Rate impact
+0.25%
$’000
Investment properties
208,140
8,141
(7,549)
20,281
20,905
11,263
1,295
53,744
31,295
2,611
(162)
20,000
-
53,744
-
19,884
10,116
1,295
31,295
-
-
-
1,295
30,000
31,295
Opening balance
Capital expenditure
Foreign currency translation
Acquisitions
Acquisition of subsidiary balance
Recognition and measurement
Properties held for development relates to land and property
developments that are held for sale or development and sale in
the normal course of the Group’s business. Properties held for
development are carried at the lower of cost or net realisable value.
The calculation of net realisable value requires estimates and
assumptions which are regularly evaluated and are based on historical
experience and expectations of future events that are believed to be
reasonable under the circumstances. Properties held for development
are classified as non-current assets unless they are contracted to be
sold within 12 months of the end of the reporting period, in which case
they are classified as current assets.
Centuria Capital Group – Annual Report 2021 | 95
Notes to the financial statements
For the year ended 30 June 2021
C6
INTANGIBLE ASSETS
2021
$’000
2020
$’000
Goodwill
481,696
167,938
Indefinite life management rights
308,855
112,182
790,551
280,120
2021
$’000
2020
$’000
EXPENSES
Expenses in 2022 are based on the budget for 2022 and are assumed
to increase at a rate of 5.0% (2020: 5.0%) per annum for the years
2023-2026. The directors believe this is an appropriate growth rate
based on past experience.
DISCOUNT RATE
Discount rates are determined to calculate the present value of future
cash flows. A pre-tax rate of 9.37% (2020: 9.44%) is applied to cash
flow projections. In determining the appropriate discount rate, regard
has been given to relevant market data as well as Group specific inputs.
280,120
157,663
319,216
102,403
196,799
20,054
TERMINAL GROWTH RATE
Beyond 2026, a growth rate of 3.0% (2020: 3.0%), in line with long
term economic growth, has been applied to determine the terminal
value of the asset.
Opening balance
Acquired goodwill
Acquired management rights
Foreign currency translation
29
-
-
Purchase price accounting adjustments
(5,613)
790,551
280,120
Goodwill and management rights are solely attributable to the
Property Funds Management cash generating unit with recoverability
determined by a value in use calculation using profit and loss
projections covering a five year period, with a terminal value
determined after five years.
RECOGNITION AND MEASUREMENT
(i) Indefinite life management rights
Management rights acquired in a business combination are initially
measured at fair value and reflect the right to provide asset and
fund management services in accordance with the management
agreements.
(ii) Goodwill
Goodwill acquired in a business combination is measured at cost and
subsequently measured at cost less any impairment losses. The cost
represents the excess of the cost of a business combination over the
fair value of the identifiable assets, liabilities and contingent liabilities
acquired.
(iii) Impairment
Goodwill and intangible assets that have an indefinite useful life
are tested annually for impairment, or more frequently if events or
changes in circumstances indicate that they might be impaired. Other
assets are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount may not be
recoverable.
An impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount. For the purpose
of assessing impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash inflows that are largely
independent of the cash inflows from other assets or groups of assets
(cash generating units or CGUs). Non-financial assets other than
goodwill that were previously impaired are reviewed for possible
reversal of the impairment at each reporting date.
KEY ESTIMATES AND JUDGEMENTS
The key assumptions used in the value in use calculations for the
Property Funds Management cash-generating unit are as follows:
REVENUE
Revenues in 2022 are based on the Board approved budget for 2022 and
are assumed to increase at a rate of 7.5% (2020: 7.5%) per annum for
years 2023-2026. The directors believe this is a prudent and achievable
growth rate based on past experience.
96 | Centuria Capital Group – Annual Report 2021
SENSITIVITY TO CHANGES IN ASSUMPTIONS
As at 30 June 2021, the estimated recoverable amount of intangibles
including goodwill relating to the Property Funds Management
cash-generating unit exceeded its carrying amount by $585,400,000
(2020: $322,400,000). The table below shows the key assumptions
used in the value in use calculation and the amount by which each
key assumption must change in isolation in order for the estimated
recoverable amount to be equal to its carrying value.
Revenue
growth rate
(average)
Pre-tax
discount rate
Expenses
growth rate
Assumptions used in value in use
calculation
Rate required for recoverable
amount to equal carrying value
7.50%
9.37%
5.00%
(0.92%)
13.89%
15.19%
C7 PAYABLES
Sundry creditors (i)
Dividend/distribution payable (ii)
Accrued expenses
2021
$’000
22,550
44,513
21,612
88,675
2020
$’000
36,498
25,110
14,924
76,532
(i) Sundry creditors are non-interest bearing liabilities and are payable on
commercial terms of 7 to 60 days.
(ii) Includes the Primewest final distribution payable for the year ended 30 June
2021 of $11,500,000.
All trade and other payables are considered to be current as at 30 June
2021, due to their short-term nature.
RECOGNITION AND MEASUREMENT
Payables are recognised when the Group becomes obliged to make
future payments resulting from the purchase of goods and services.
Due to the short-term nature of these financial obligations, their
carrying amounts are estimated to represent their fair values.
C8 BORROWINGS
Notes
2021
$’000
2020
$’000
Secured listed redeemable notes C8(a)
198,693
-
Floating rate secured notes
Fixed rate secured notes
Development facility
Reverse mortgage bill
facilities and notes
C8(b)
C8(b)
C8(c)
C8(d)
Secured facility - New Zealand
C8(e)
66,650
75,000
29,366
93,823
15,955
-
7,006
7,440
7,422
5,610
Secured bank loans in
Controlled Property Funds
Borrowing costs capitalised
C8(f)
106,505
85,920
(C) DEVELOPMENT FACILITY
In 2021, the Group had drawn down amounts to fund its social
affordable housing developments. Details of the amounts drawn and
the maturity of each development facility are as follows:
Development Classification
Maturity
date
Facility
limit
$’000
Draw
down
$’000
Borrowing
costs
$’000
2021
$’000
2020
$’000
45
Pendlebury
Road
(Cardiff)
357-359
Mann Street
Current
Current
7 Apr
2022 10,842
7,901
- 7,901
7 Apr
2022 10,258 8,054
- 8,054
15,955
-
-
-
(4,973)
(2,724)
426,642
265,051
The facilities above are secured against each of the respective
developments.
The terms and conditions relating to the above facilities are set out below.
(A) SECURED LISTED REDEEMABLE NOTES
On 21 April 2021, the Fund issued $198,693,000 of listed redeemable
notes with a variable interest rate of 4.25% plus the bank bill rate
which is due to mature on 21 April 2026. These notes are secured
against assets within certain subsidiaries of the Group.
(B) SECURED NOTES
The Group has issued fixed and floating corporate notes as per below.
These notes are secured against assets within certain subsidiaries of
the Group.
In December 2020, the Group refinanced the corporate notes, reducing
the fixed component of Tranche 1 from $30,708,000 to $19,447,000,
reducing the variable component of Tranche 1 from $26,040,000
to $8,350,000, increasing the fixed component of Tranche 3 from
$18,115,000 to $29,366,000 and increasing the variable component of
Tranche 3 from $13,960,000 to $31,650,000.
Fixed
Classification
Coupon
Rate
Due Date
2021
$’000
2020
$’000
(D) REVERSE MORTGAGE BILL FACILITIES AND NOTES
(SECURED)
As at 30 June 2021, the Group had $7,006,000 (2020: $7,422,000)
non-recourse notes on issue to ANZ Bank, secured over the remaining
reverse mortgages held in Senex Warehouse Trust No.1 (a subsidiary
of the Group) due to mature on 30 September 2021 and is classified as
current as at 30 June 2021.
The facility limit as at 30 June 2021 is $8,200,000 (2020: $8,200,000)
and is reassessed every 6 months with a view to reducing the facility in
line with the reduction in the reverse mortgage book. Under the facility
agreement, surplus funds (being mortgages repaid (including interest)
less taxes, administration expenses and any hedge payments) are
required to be applied against the facility each month.
By 30 June 2021, the Group has negotiated the refinancing of the
reverse mortgage borrowings with ANZ, however the agreement could
not be executed due to due to the impact of COVID-19 lockdown
measures in NSW Australia. Under the extension agreement, the loan
will mature on 30 September 2022 and the facility limit will reduce to
$7,500,000.
Tranche 1
Tranche 2
-
-
7.0%
6.5%
Tranche 3
Non-current
5.0%
21 April
2021
21 April
2023
21 April
2024
Facility
-
-
30,708
Amount used at reporting date
Amount unused at reporting date
45,000
2021
$’000
8,200
(7,006)
1,194
2020
$’000
8,200
(7,422)
778
29,366
18,115
29,366
93,823
(E) SECURED FACILITY - NEW ZEALAND
The borrowings facilities for New Zealand are outlined as follows.
These facilities are secured against assets within certain subsidiaries
of the Group.
Maturity
date
Facility
limit
$’000
Funds
available
$’000
Draw
down
$’000
Borrowing
costs
$’000
Total
$’000
Classification
Floating
Classification
Coupon
Rate
Due Date
2021
$’000
2020
$’000
Tranche 1
-
Tranche 2
Non-current
Tranche 3
Non-current
BBSW
+4.5%
BBSW
+4.25%
BBSW
+4.50%
21 April
2021
21 April
2023
21 April
2024
-
26,040
35,000
35,000
31,650
13,960
66,650
75,000
30 June 2021
New Zealand
Investment
Facility
30 June 2020
New Zealand
Investment
Facility
Non-
current
30 Nov
2022
11,160 3,720
7,440
- 7,440
7,440
Current
30 Jun
2021
5,610
- 5,610
- 5,610
5,610
Centuria Capital Group – Annual Report 2021 | 97
Notes to the financial statements
For the year ended 30 June 2021
(F) BANK LOANS - CONTROLLED PROPERTY FUNDS
(SECURED)
Each controlled property fund has debt facilities secured by first
mortgage over each of the fund’s investment property and a first ranking
fixed and floating charge over all assets of each of the funds. Details of
the amounts drawn and the maturity of each facility are as follows:
Fund
Classification
Maturity
date
Facility
limit
$’000
Funds
available
$’000
Draw
down
$’000
Borrowing
costs
$’000
Total
$’000
30 June 2021
Centuria 111
St Georges
Terrace Fund
Primewest
Property
Income Fund
30 June 2020
Centuria 111
St Georges
Terrace Fund
Nexus
Property Unit
Trust
30 Jun
Current
2022 90,000 5,957 84,043
(148)83,895
Non-
current
Non-
current
19 Feb
2024 22,600
- 22,600
(77) 22,533
106,428
30 Jun
2022 90,000 6,644 83,356 (193) 83,163
Non-
current
4 Dec
2022 2,805
- 2,805
(48) 2,757
C9
RIGHT OF USE ASSET/LEASE LIABILITY
The Group has seven operating lease commitments outlined below:
Lease
Original
term
Extension
option
Fixed annual
rent increase
Level 41 Chifley Square, Sydney NSW 10 years
5 years
4.0%
Level 32, 120 Collins Street,
Melbourne VIC
Level 2, 348 Edward Street, Brisbane
QLD
5 years
5 years
-
-
56 Clarence Street, Sydney NSW
7 years
5 years
307 Murray Street, Perth WA
5 years
5 years
38-35 Gaunt Street, Auckland NZ
8 years
-
3.75%
3.5%
4.0%
4.0%
2.5%
331-335 Devon Street East, New
Plymouth NZ
3 years
3 years
CPI
Right of use asset
Opening balance
Additions of new leases
85,920
Depreciation on right of use asset
Acquisition of subsidiary balance
RECOGNITION AND MEASUREMENT
Borrowings are initially recognised at fair value, net of transaction
costs. They are subsequently measured at amortised cost using the
effective interest rate method.
Lease liability
Opening balance
2021
$’000
2020
$’000
21,393
19,724
-
(2,404)
958
19,947
2021
$’000
977
(1,961)
2,653
21,393
2020
$’000
22,564
19,724
Additional lease liability from new lease
-
976
Cash lease payments
Finance lease interest
Acquisition of subsidiary balance
(2,962)
(2,018)
1,123
1,032
982
2,900
21,757
22,564
98 | Centuria Capital Group – Annual Report 2021
C10
CONTRIBUTED EQUITY
2021
2020
Centuria Capital Limited
No. of securities
$’000
No. of securities
$’000
Balance at beginning of the period
Equity settled share based payments expense
Stapled securities issued
Cost of equity raising
Balance at end of period
509,998,482
1,921,149
275,883,062
-
787,802,693
177,149
1,482
209,208
(1,205)
386,634
383,557,332
1,529,427
124,911,723
-
509,998,482
128,164
795
49,845
(1,655)
177,149
2021
2020
Centuria Capital Fund (non-controlling interests)
No. of securities
$’000
No. of securities
$’000
Balance at beginning of the period
Equity settled share based payments expense
Stapled securities issued
Cost of equity raising
Balance at end of the period
509,998,482
1,921,149
275,883,062
-
545,744
383,557,332
343,438
-
475,185
(2,107)
1,529,427
124,911,723
-
-
205,216
(2,910)
545,744
787,802,693
1,018,822
509,998,482
Fully paid ordinary securities carry one vote per security and carry the right to distributions.
On 29 June 2017, the Group issued 20,098,470 options to subscribe
for stapled securities. The options have an exercise price of $1.30 per
stapled security and expire on 29 June 2022. Half of these options
(10,049,235) were exercised on 12 December 2019 with the remaining
10,049,235 being exercised on 9 December 2020.
The Group issued 24,930,259 stapled securities in relation to the
completion of the Augusta Capital Limited (now known as Centuria
New Zealand) acquisition during the year-ended 30 June 2021.
The Group issued 53,336,998 stapled securities in relation to
a $120,000,000 equity raising completed in October 2020. The
Group issued 184,514,578 stapled securities between 8 June
2021 and 30 June 2021 in satisfaction of the scrip component of
the offer consideration for the acquisition of a 98.4% interest in
Primewest Group. The scrip component for the remaining 1.6% of
3,051,812 stapled securities has been included as issued as the
Group has accounted for Primewest as a wholly owned subsidiary
as at 30 June 2021.
RECOGNITION AND MEASUREMENT
Incremental costs directly attributed to the issue of ordinary shares are
accounted for as a deduction from equity, net of any tax effects.
C11 COMMITMENTS AND CONTINGENCIES
AUSTRALIAN GUARANTEES
The Group has provided bank guarantees of $3,349,911 for commercial
leases with respect to its Sydney and Melbourne office premises. These
bank guarantees are cash collateralised.
The above guarantees are issued in respect of the Group and do not
constitute an additional liability to those already existing in interest
bearing liabilities on the statement of financial position.
NEW ZEALAND GUARANTEES
Under the Development Agreement with Queenstown Lakes District
Council (QLDC) as part of the Lakeview joint venture, the Group
have provided a guarantee of the Partnership’s obligations under
the Development Agreement, with a maximum capital commitment
of NZ$14,000,000. The Group’s total aggregate liability under this
guarantee is capped at NZ$4,250,000. Refer to Note E1 Interests in
associates and joint ventures for more information.
CAPITAL COMMITMENTS
At 30 June 2021 the Group has capital commitments of NZ$1,300,000.
In addition, the Company has committed up to a further NZ$12,800,000
of capital over approximately the next 10 years in its joint venture
partnership with Ninety Four Feet.
As part of the Man St, Queenstown property held for development in
New Zealand, commitments of approximately NZD$2,700,000 have
been made to the project managers of the development.
As part of the Cook St, Auckland, property held for development in New
Zealand, commitments of approximately NZD$10,600,000 have been
made to the project managers of the development.
CONTINGENT LIABILITIES
The directors of the Group are not aware of any contingent
liabilities in relation to the Group, other than those disclosed in the
financial statements, which should be brought to the attention of
securityholders as at the date of completion of this report.
Centuria Capital Group – Annual Report 2021 | 99
Notes to the financial statements
For the year ended 30 June 2021
D Cash flows
D1
OPERATING SEGMENT CASH FLOWS (I)
D2 CASH AND CASH EQUIVALENTS
For the year ended 30 June 2021
Cash flows from operating activities
Management fees received
Performance fees received
Distributions received
Interest received
Cash received on development projects
Other income received
2021
$’000
2020
$’000
100,765
82,127
1,772
37,231
35,021
29,938
1,483
43,866
240
988
-
823
Payments to suppliers and employees
(129,500)
(82,102)
Income tax paid
Interest paid
(7,438)
(8,581)
(11,626)
(9,889)
Net cash provided by operating activities
34,583
50,535
Cash flows from investing activities
Proceeds from sale of related party investments
13,908
53,554
Purchase of investments in related parties
(128,662) (122,688)
Repayment of loans by related parties
Loans to related parties
6,702
11,800
3,750 (11,800)
Purchase of equity accounted investments
(26,089)
(12,977)
Purchase of other investments
Payments for plant and equipment
-
(6,115)
(343)
(522)
Cash balance on acquisition of subsidiaries
97,841
15,773
Purchase of subsidiaries
(26,977)
(40,852)
Purchase of Property Held for Development
(22,621)
(1,295)
Collections from reverse mortgage holders
888
1,646
Proceeds from sale of investments
1,047
Purchase from sale of equity accounted investments
5,000
Cash contribution to related party
(78,019)
-
-
-
Net cash used in investing activities
(153,575) (113,476)
Included in cash and cash equivalents is $1,828,994 (2020: $23,621,773)
relating to amounts held by Senex Warehouse Trust No.1 and the Benefit
Funds which is not readily available for use by the Group.
D3 RECONCILIATION OF PROFIT FOR THE
PERIOD TO NET CASH FLOWS FROM
OPERATING ACTIVITIES
Profit for the year
Adjustments for:
Depreciation and amortisation
Non-cash development income
Share-based payment expense
Amortisation of borrowing costs
2021
$’000
2020
$’000
149,639
22,087
3,731
2,943
(11,417)
(19,075)
3,058
2,628
2,014
995
Non-cash performance and sales fees
(16,297)
(7,099)
Fair value movement of financial assets
(96,443)
42,032
Interest revenue from reverse mortgages
(2,744)
(2,631)
Interest expense reverse mortgage facility
1,522
1,126
Equity accounted profit in excess of distribution paid
(1,601)
(1,978)
Unrealised foreign exchange loss
112
Unrealised (gain)/loss on investment properties
(7,554)
Amortisation of lease incentives
Costs paid for debt issuance
Finance lease interest
Changes in net assets and liabilities:
(Increase)/decrease in assets:
Receivables
Prepayments
Deferred tax assets
Increase/(decrease) in liabilities:
-
6,260
1,665
1,311
1,229
1,881
4,877
1,210
(6,691)
22,603
8,603
(349)
(1,212)
(12,926)
(5,939)
(8,528)
(5,399)
4,963
12,484
510
(3,701)
3,998
(7,885)
(28,024)
22,862
33,126
Cash flows from financing activities
Proceeds from issue of securities
Equity raising costs paid
Proceeds from borrowings
Repayment of borrowings
Costs paid to issue debt
Distributions paid
133,073 205,736
(2,611)
(4,317)
241,900
-
(98,620)
(35,771)
(2,187)
(1,628)
(52,124)
(39,377)
Other payables
Tax provision
Deferred tax liability
Provisions
Policyholder liability
Net cash flows provided
by operating activities
Net cash provided by financing activities
219,431
124,643
Net increase in operating cash and cash
equivalents
Cash and cash equivalents at the beginning
of the period
100,439
61,702
149,461
87,759
Effects of exchange rate changes on cash and
cash equivalents
(263)
-
Cash and cash equivalents at the end of the period
249,637
149,461
(i) The operating segment cash flows support the segment note disclosures of
the Group and provide details in relation to the operating segment cash flows
performance of the Group. The operating segment cash flows exclude the impact
of cash flows attributable to Benefit Funds and Controlled Property Funds. Refer to
page 77 for the full statutory cash flow statement of the Group.
100 | Centuria Capital Group – Annual Report 2021
RECOGNITION AND MEASUREMENT
For the purposes of the statement of cash flows, cash and cash
equivalents includes cash on hand and in banks. Cash equivalents
are short-term, highly liquid investments that are readily convertible
to known amounts of cash, which are subject to an insignificant risk
of changes in value and have a maturity of three months or less at the
date of acquisition. Bank overdrafts are shown within borrowings in the
statement of financial position.
E Group Structure
E1
INTERESTS IN ASSOCIATES AND JOINT VENTURES
In February 2020, the Group increased its ownership stakes in the Centuria Diversified Property Fund to 22.7%. From that date, the Group has equity
accounted its interest in that fund. The ownership stake decreased to 20.4% by 30 June 2021.
The Group’s subsidiary, Augusta Lakeview Holdings Limited (Lakeview Holdings) has signed a partnership agreement with NFF QT Development Unit
Trust (NFF) to establish QT Lakeview Partnership (the Joint Venture) to develop the Lakeview site in Queenstown, New Zealand. Lakeview Holdings
has a 25% interest in the Joint Venture which represents a maximum capital commitment to Lakeview Holdings of NZ$14,000,000. The Joint Venture
has entered into a development agreement with the Queenstown Lakes District Council to develop a range of residential, hotels, co-working, co-living,
hospitality and retail options on the 3 hectare site on a staged basis, with construction estimated to take more than 10 years and phased over 7 stages.
On 22 April 2021, the Group acquired 50% of Bass Capital Partners Pty Ltd (Centuria Bass) for $25,417,876 with the option to fully acquire the
remaining 50% interest in five years. From that date, the Group has equity accounted its interest in Centuria Bass offers non-banking finance for real
estate secured transactions including development projects, bridge finance and residual stock.
% of ownership
interest
30 June 2021
%
% of ownership
interest
30 June 2020
%
Principal
activity
Carrying amount
30 June 2021
$’000
Carrying amount
30 June 2020
$’000
Name of entity
Centuria Diversified Property Fund
Centuria Bass Credit
QT Lakeview Developments Limited
Total equity accounted investments
20.40
50.00
25.00
22.68
Property investment
0.00
Non-bank finance
25.00
Property investment
28,144
25,704
1,789
55,637
The below table shows the movement in carrying amounts of equity accounted investments from 1 July 2020 to 30 June 2021.
Carrying amounts of equity
accounted investments
Opening balance as at 1 July 2020
Acquisition of investments
Share of net (loss)/profit after tax
Distributions received/receivable
Disposal of investment
Foreign exchange translation
Closing balance as at 30 June 2021
QT Lakeview
Developments Limited
$’000
Centuria Diversified
Property Fund
$’000
Centuria
Bass Credit
$’000
1,125
671
-
-
-
(7)
1,789
31,830
-
2,784
(1,470)
(5,000)
-
28,144
-
25,418
286
-
-
-
25,704
The below table shows the movement in carrying amounts of equity accounted investments from 1 July 2019 to 30 June 2020.
Movements in carrying amounts of
equity accounted investments
Opening balance as at 1 July 2019
Acquisition of investments
Acquisition of subsidiary that held significant influence
Share of net (loss)/profit after tax
Distributions received/receivable
Carrying value transferred from/(to) financial assets
Fair value gain/(loss)
Gain of control of Augusta Capital Limited on
30 June 2020
Augusta Capital
Limited
$’000
QT Lakeview
Developments
Limited
$’000
Centuria
Diversified
Property Fund
$’000
Centuria
Office REIT
$’000
Centuria
Industrial REIT
$’000
-
20,285
-
(584)
-
-
16,517
(36,218)
-
-
1,125
-
-
-
-
-
-
-
-
(502)
502
203,435
7,500
-
2,785
(3,291)
183,278
12,976
-
6,611
(3,057)
31,830
(210,429)
(199,808)
(378,407)
-
-
-
-
-
-
-
-
16,517
(36,218)
32,955
Closing balance as at 30 June 2020
-
1,125
31,830
The Group equity accounted Centuria New Zealand from 12 May 2020 to 30 June 2020. On 30 June 2020, the Group consolidated Centuria New Zealand.
Centuria Capital Group – Annual Report 2021 | 101
31,830
-
1,125
32,955
Total
$’000
32,955
26,089
3,070
(1,470)
(5,000)
(7)
55,637
Total
$’000
386,713
40,761
1,125
8,310
(5,846)
Notes to the financial statements
For the year ended 30 June 2021
(A) SUMMARISED FINANCIAL INFORMATION FOR ASSOCIATES AND JOINT VENTURES
The tables below provide summarised financial information for those associates. The information disclosed reflects the amounts presented in the
consolidated financial statements of the relevant associates and not the Group’s share of those amounts.
QT Lakeview Developments Pty Ltd
Centuria Diversified Property Fund
Centuria Bass Credit
Summarised balance sheet
(excluding intangibles)
Cash and cash equivalents
Other current assets
Total current assets
Other non-current assets
Total tangible non-current assets
Other current liabilities
Total current liabilities
Borrowings
Other non-current liabilities
Total non-current liabilities
Net tangible assets
Group share in %
Group share
Goodwill
Carrying amount
Summarised statement of
comprehensive income
Revenue
Interest income
Net (loss)/gain on fair value
of investment properties and
other investments
Finance costs
Other expenses
Other income
Gain/(loss) on fair value of investments
Profit/(loss) from continuing operations
Profit/(loss) for the year
Other comprehensive income
Total comprehensive income/(loss)
30 June 2021
$’000
30 June 2020
$’000
30 June 2021
$’000
30 June 2020
$’000
30 June 2021
$’000
30 June 2020
$’000
-
-
-
7,156
7,156
-
-
-
-
-
-
-
-
4,501
4,501
-
-
-
-
-
7,156
4,501
11,868
2,099
13,967
180,742
180,742
5,767
5,767
65,150
-
65,150
123,792
18,013
11,633
29,646
166,588
166,588
3,812
3,812
64,988
351
65,339
127,083
19,079
598
19,677
96,081
96,081
1,788
1,788
6
110,538
110,538
3,432
25.00%
25.00%
20.44%
22.68%
50.00%
1,789
-
1,789
1,125
-
1,125
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
25,303
2,841
28,144
13,912
-
(1,125)
(1,388)
(5,409)
-
9,920
28,822
3,008
31,830
1,716
23,988
25,704
10,919
24
(10,919)
(1,233)
(3,699)
-
(351)
15,618
4
-
(13)
(11,222)
504
-
15,910
(5,259)
4,891
15,910
(5,259)
-
-
15,910
(5,259)
4,891
-
4,891
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
102 | Centuria Capital Group – Annual Report 2021
Fair Value
$’000
105,308
18,839
21,494
310
2,983
49,140
196,799
958
(20,991)
(1,165)
(59,040)
(22,515)
(1,032)
291,088
IDENTIFIABLE ASSETS ACQUIRED AND LIABILITIES ASSUMED
The assets and liabilities recognised as a result of the acquisition are
as follows:
E2 BUSINESS COMBINATION
(A) PRIMEWEST GROUP LIMITED ACQUISITION
On 3 June 2021, the Group declared the acquisition of Primewest Group
Limited (Primewest) unconditional, obtaining acceptances for 70.1% of
total Primewest securities outstanding. Primewest securityholders who
accepted the offer received $0.20 in cash plus 0.473 Centuria Capital
Group securities for each Primewest security.
By 30 June 2021, the Group had acquired 98.37% of Primewest
securities, with the remaining 1.63% under compulsory acquisition. The
Group has accounted for Primewest as a wholly owned subsidiary as at
30 June 2021. The provisional acquisition accounting is outlined below.
CONSIDERATION TRANSFERRED
The following table summarises the acquisition date fair value of each
major class of consideration transferred.
Cash and cash equivalents
Receivables
Financial assets
Other assets
Deferred tax assets
Investment properties
Intangible assets - indefinite life management rights
Right of use asset
Payable(i)
Equity (Company shares issued)(ii)
Equity (Fund units issued)(ii)
Total consideration transferred
$’000
Payables
55,595
120,913
240,669
417,177
Income tax payable
Deferred tax liability
Borrowings
Lease liability
Total identifiable net assets acquired
(i) Payable
On 3 June 2021, the Group had not yet paid the cash component
of the Offer consideration. The Payable represents the Group’s
obligation to pay $0.20 cash per Primewest security to each Primewest
securityholder who had accepted the Offer as at 3 June 2021.
(ii) Equity issued
The fair value of the ordinary shares issued by the Company and
ordinary units issued by the Fund is based on the listed security
price of CNI on 3 June 2021 of $2.75 and attributed 33.50% to
Company shares and 66.50% to Fund units.
PROVISIONAL GOODWILL
Provisional goodwill arising from the acquisition has been recognised
as follows:
Consideration transferred
Non-controlling interest, based on the acquisition date
fair value(i)
Fair value of identifiable net assets
Provisional goodwill(ii)
$’000
417,177
193,127
(291,088)
319,216
(i) Non-controlling interest
The non-controlling interest reflects the portion of Primewest securities
that had not been acquired by the Group at the acquisition date and
represents the interests that continue to be held by existing Primewest
securityholders at the acquisition date fair value. This non-controlling
interest had been acquired by 30 June 2021.
(ii) Provisional goodwill
The provisional goodwill is attributable mainly to Primewest’s work
force and established business practices and relationships. None of
the provisional goodwill recognised is expected to be deductible for tax
purposes.
TRANSACTION RELATED COSTS
Transaction related costs of $4,900,000 were incurred for year in respect
of the acquisition of Primewest, of which $4,400,000 were expensed
in the profit and loss and $500,000 were recorded against equity.
Centuria Capital Group – Annual Report 2021 | 103
Notes to the financial statements
For the year ended 30 June 2021
E3
INTERESTS IN MATERIAL SUBSIDIARIES
The Group’s principal subsidiaries at 30 June 2021 are set out below. Unless otherwise stated, they have issued capital consisting solely of ordinary
shares or units that are held directly by the Group, and the proportion of ownership interests held equals the voting rights held by the Group. The
subsidiaries of the Group were incorporated in the following jurisdictions, Australia, New Zealand and Singapore with principal places of business
corresponding with the respective geographic jurisdictions. The parent entity of the Group is Centuria Capital Limited.
Australian subsidiaries
Centuria Capital Fund
Centuria Capital Health Fund
Centuria Capital No. 2 Fund
Centuria Capital No. 2 Industrial Fund
Centuria Capital No. 2 Office Fund
Centuria Capital No. 3 Fund
Centuria Capital No. 4 Fund
Centuria Capital No. 5 Fund
Centuria Capital No. 7 Fund
Centuria Healthcare Property Fund
Centuria Lane Cove Debt Fund
Centuria 111 St Georges Terrace Fund
Primewest Property Fund
Primewest USA Trust
Primewest 140 St Georges Terrace Fund
Primewest Property Income Fund
Senex Warehouse Trust No. 1
Nexus Property Unit Trust
80 Grenfell Street Pty Ltd
A.C.N. 062 671 872 Pty Limited
Ahnco Pty Ltd*
Amberlee Nominees Pty Ltd
Belmont Road Development Pty Limited
Belmont Road Management Pty Limited
Centuria 57 Wyatt Street Pty Ltd
Centuria 61-67 Wyatt St Pty Limited
Centuria 80 Flinders Street Pty Limited
Centuria Business Services Pty Limited
Centuria Canberra No. 3 Pty Limited
Centuria Developments (Cardiff) Pty Limited
Ownership interest
%
30 June
2021
30 June
2020
0%
(100%
NCI)
0%
(100%
NCI)
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
0% 100%
100% 100%
42% 42%
100%
100%
100%
48%
-
-
-
-
100% 100%
0% 59%
100% 100%
100% 100%
63% 63%
100% 100%
100% 100%
100% 100%
100%
0%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
Centuria Developments (Mann Street) Pty Limited
100% 100%
Centuria Developments (Mayfield) Pty Limited
100% 100%
Centuria Developments (Young Street) Pty Limited
100% 100%
Centuria Developments Pty Limited
Centuria Employee Share Fund Pty Ltd
Centuria Finance Pty Ltd
Centuria Funds Management Limited
100% 100%
100% 100%
100% 100%
100% 100%
Centuria Healthcare Asset Management Limited*
63% 63%
Centuria Healthcare Asset Management Nominee 1 Pty Ltd*
63% 63%
Australian subsidiaries
Ownership interest
%
30 June
2021
30 June
2020
Centuria Healthcare Energy Company Pty Ltd*
63% 63%
Centuria Healthcare Funds Distributions Limited*
63% 63%
Centuria Healthcare Investments Pty Ltd*
63% 63%
Centuria Healthcare Property Services Pty Limited*
63% 63%
Centuria Healthcare Pty Ltd
Centuria Heathcare Developments Pty Ltd*
63% 63%
63% 63%
Centuria Industrial Property Services Pty Limited
100% 100%
Centuria Institutional Investments No. 3 Pty Limited
100% 100%
Centuria Investment Holdings No. 4 Pty Limited
Centuria Investment Holdings Pty Limited
100% 100%
100% 100%
Centuria Investment Management (CDPF) Pty Ltd
100% 100%
Centuria Investment Management (CIP) Pty Ltd
100%
-
Centuria Investment Management (CMA) No. 2 Pty Limited
100% 100%
Centuria Investment Management (CMA) Pty Limited
100% 100%
Centuria Investment Management (Property) No. 1 Pty Ltd
100%
Centuria Investment Management (Property) No. 2 Pty Ltd
100%
Centuria Investment Management (Property) No. 3 Pty Ltd
100%
-
-
-
Centuria Investment Services Pty Limited
Centuria Life Limited
Centuria Nominees No. 3 Pty Limited
Centuria Platform Investments Pty Limited
Centuria Properties No. 3 Limited
Centuria Property Funds Limited
Centuria Property Funds No. 2 Limited
Centuria Property Services Pty Limited
Centuria Richlands Pty Ltd
Centuria SubCo Pty Limited
CHPF 1 Pty Ltd
CHPF 2 Pty Ltd
CHPF 3 Pty Ltd
CHPF Cairns Pty Ltd
CHPF Kallangur Pty Ltd
CHPF South Bunbury Pty Ltd
Crestway Nominees Pty Ltd
Forrestdale Home Pty Ltd
Fromnex Pty Limited
Heathley Finance Company Pty Ltd*
Heathley Funds Management Pty Ltd*
Heathley Investor Services Pty Limited*
Heathley Nominees Pty Ltd*
Just across the river Pty Ltd
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100% 100%
100%
-
100% 100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
-
-
-
-
-
-
31.5% 31.5%
63% 63%
63% 63%
63% 63%
63% 63%
100%
-
104 | Centuria Capital Group – Annual Report 2021
Australian subsidiaries
Mainriver Holdings Pty Ltd
More than meets the eye Pty Ltd
Over Fifty Capital Pty Ltd
Over Fifty Funds Management Pty Ltd
Over Fifty Investments Pty Ltd
Over Fifty Seniors Equity Release Pty Ltd
Primewest (1 Forrest Place) Pty Ltd
Primewest (1060 Hay Street) Pty Ltd
Primewest (15 Ogilvie Road) Pty Ltd
Primewest (307 Murray Street) Pty Ltd
Primewest (359 Scarb Beach Road) Pty Ltd
Primewest (380 Scarborough Beach Road) Pty Ltd
Primewest (380A Scarborough Beach Road) Pty Ltd
Primewest (382 Scarborough Beach Road) Pty Ltd
Primewest (384 Scarborough Beach Road) Pty Ltd
Primewest (511 Abernethy Road) Pty Ltd
Primewest (607 Bourke Street) Pty Ltd
Primewest (616 St Kilda Road) Pty Ltd
Primewest (Australia Place) Pty Ltd
Primewest (Busselton) Pty Ltd
Primewest (Cannington) Pty Ltd
Primewest (Cottesloe Central) Pty Ltd
Primewest (Erskine) Pty Ltd
Primewest (Gauge Circuit) Pty Ltd
Primewest (Hillbert Rd) Pty Ltd
Primewest (Joondalup House) Pty Ltd
Primewest (Lot 4 Davidson Street Kalgoorlie) Pty Ltd
Primewest (Melville) Pty Ltd
Primewest (Neerabup) Pty Ltd
Primewest (Northlands) Pty Ltd
Primewest (Osborne Park) Pty Ltd
Primewest (Wattleup) Pty Ltd
Primewest Agrichain Management Pty Ltd
Primewest Corporate Holdings Pty Limited
Primewest Enterprises Pty Ltd
Primewest Funds Ltd
Primewest Group Limited
Primewest Management Ltd
Primewest P/Q Pty Ltd
Primewest Real Estate Pty Ltd
Primewest USA Holdings Pty Ltd
Primwest (135 Clayton Street) Pty Limited
PWG Property Pty Ltd
Riodell Holdings Pty Ltd
Stead Road Pty Ltd
Teewana Farm Pty Ltd
Ownership interest
%
30 June
2021
30 June
2020
100%
100%
-
-
100% 100%
100% 100%
100% 100%
100% 100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
New Zealand Subsidiaries
Centuria Capital (NZ) Limited (formerly Centuria New
Zealand Holdings Limited)
100% 64%
Centuria Capital (NZ) No. 1 Limited (formerly Augusta
Capital Limited)
100% 64%
Centuria Capital (NZ) No. 2 Limited (formerly Augusta
Capital No. 1 Limited)
100% 64%
Centuria Funds Management (NZ) Limited (formerly
Augusta Funds Management Limited)
100% 64%
Centuria Lakeview Holdings Limited (formlerly Augusta
Lakeview Holdings Limited)
100% 64%
Centuria Property Holdco Limited (formerly Augusta
Property Holdco Limited)
100% 100%
Singapore subsidiaries
Centuria Capital Private Limited (Singapore)
100% 100%
* The ownership percentage outlined above for these subsidiaries reflects the Group’s
economic ownership. The Group holds a 50% voting right in each of these subsidiaries.
RECOGNITION AND MEASUREMENT
(i) Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company.
The Group controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability
to affect those returns through its power over the entity. The financial
statements of subsidiaries are included in the consolidated financial
statements from the date on which control commences until the date
on which control ceases.
Intra-group balances and transactions, and any unrealised income
and expenses arising from intra-group transactions, are eliminated in
preparing the consolidated financial statements.
The Company is required by AASB 10 Consolidated Financial
Statements to recognise the assets, liabilities, income, expenses
and equity of the benefit funds of its subsidiary, Centuria Life Limited
(the “Benefit Funds”). The assets and liabilities of the Benefit Funds
do not impact the net profit after tax or the equity attributable to
the securityholders of the Company and the securityholders of the
Company have no rights over the assets and liabilities held in the
Benefit Funds.
In order to reflect the assets and liabilities pertaining to the
Benefit Funds being attributable to policyholders (as approved to
securityholders) an equal and offsetting policyholder liability is
recognised on consolidation. In addition, on consolidation of the
various income and expenses attributable to the Benefit Funds an
equal and opposite net change in policyholder liabilities is recorded in
the statement of comprehensive income.
The Company has majority representation on the Board of the Over
Fifty Guardian Friendly Society Limited (Guardian). However, as
Guardian is a mutual organisation, the Company has no legal rights to
Guardian’s net assets, nor does it derive any benefit from exercising its
power and therefore does not control Guardian.
Centuria Capital Group – Annual Report 2021 | 105
Notes to the financial statements
For the year ended 30 June 2021
E4 PARENT ENTITY DISCLOSURE
As at, and throughout the current and previous financial year, the
parent entity of the Group was Centuria Capital Limited.
Result of parent entity
Profit or loss for the year
Total comprehensive income for the year
Financial position of parent
entity at year end
Total assets
Total liabilities
Net assets
2021
$’000
2020
$’000
28,258
28,258
22,152
22,152
847,907
212,554
(179,578)
(26,207)
668,329
186,347
The parent entity presents its assets and liabilities are classified as
current, except for the parent entity’s investments in subsidiaries.
The assets of the parent entity mainly consist of cash, short term
receivables, investments in subsidiaries and deferred tax assets. The
parent entity’s investment in subsidiaries are measured at cost. The
liabilities of the parent entity mainly consist of short term payables.
Total equity of the parent
entity comprising of
Share capital
Share-based incentive reserve
Retained earnings/(loss)
Total equity
386,633
177,149
4,898
276,798
3,322
5,876
668,329
186,347
(A) GUARANTEES ENTERED INTO BY THE PARENT ENTITY
The parent entity has, in the normal course of business, entered
into guarantees in relation to the debts of its subsidiaries during the
financial year.
(B) COMMITMENTS AND CONTINGENT LIABILITIES
OF THE PARENT ENTITY
The parent entity has bank guarantees of $3,349,911 for commercial
leases with respect to its Sydney and Melbourne office premises.
These bank guarantees are cash collateralised.
The above guarantees are issued in respect of the parent entity and
do not constitute an additional liability to those already existing in
liabilities on the statement of financial position.
The directors of the Company are not aware of any other contingent
liabilities in relation to the parent entity, other than those disclosed
in the financial statements.
106 | Centuria Capital Group – Annual Report 2021
LISTED: NISHI 2 PHILLIP LAW STREET, CANBERRA, ACT
F Other
F1 SHARE-BASED PAYMENT ARRANGEMENTS
(A) LTI PLAN DETAILS
The Company has an Executive Incentive Plan (“LTI Plan”) which forms
a key element of the Company’s incentive and retention strategy for
senior executives under which Performance Rights (“Rights”) are
issued.
Each employee receives ordinary securities of the Group on vesting
of the performance rights. No amounts are paid or payable by the
recipient on receipt of the performance rights or on vesting. The
performance rights carry neither rights to dividends nor voting rights
prior to vesting.
It is expected that future annual grants of performance rights will be
made, subject to the Board’s determination of the overall performance
of the Group and market conditions. The vesting of any performance
rights awarded will be subject to attainment of appropriate
performance hurdles and on the basis of continuing employment with
the Group.
Further details of the LTI Plan are included in the Audited remuneration
report from page 55 to page 68.
2021
2020
(B) MEASUREMENT OF FAIR VALUES
The fair value of the rights was calculated using a binomial tree
valuation methodology for the Rights with non-market vesting
conditions and a Monte-Carlo simulation for the Rights with market
vesting conditions.
The inputs used in the measurement of the fair values at grant date of
the rights were as follows:
Tranche 6
Tranche 7
Tranche 8
Expected vesting date
31 August
2021
31 August
2022
31 August
2023
Share price at the grant date
$1.32
$2.13
$2.51
and $2.37
Expected life
Volatility
Risk free interest rate
Dividend yield
2.6 years
2.9 years
2.8 years
18%
18%
26%
1.75%
6.5%
0.76%
4.5%
0.11%
and 0.12%
4.2%
The following table sets out the fair value of the rights at the respective
grant date:
Performance Condition
Tranche 6
Tranche 7
Tranche 8
Performance rights outstanding
at the beginning of the year
Performance rights granted
during the year
Performance rights vested
during the year
Performance rights outstanding
at the end of the year
7,090,373
5,727,134
Growth in FUM
$1.11
$1.87
-
3,861,014
2,892,669
Absolute TSR
$0.19
$0.79
$1.29
and $1.10(i)
(1,991,288)
(1,529,430)
Relative TSR
-
$1.75
and $1.58(ii)
-
8,960,099
7,090,373
(i) $1.29 for Chief Executive Officers and $1.10 for other employees.
(ii) $1.75 for Chief Executive Officers and $1.58 for other employees.
The performance objectives for 2,297,578 of the performance rights
issued under Tranche 6 were met in full at 30 June 2021. As a result,
these rights will vest on 11 August 2021.
During the year, share based payment expenses were recognised of
$3,058,000 (2020: $1,737,023).
RECOGNITION AND MEASUREMENT
Equity-settled share-based payments to employees and others
providing similar services are measured at the fair value of the equity
instruments at the grant date.
The fair value determined at the grant date of the equity-settled
share-based payments is expensed on a straight-line basis over the
vesting period, based on the Group’s estimate of equity instruments
that will eventually vest. At the end of each reporting period, the
Group revises its estimate of the number of equity instruments
expected to vest. The impact of the revision of the original estimates
with respect to non-market vesting conditions, if any, is recognised
in profit for the year such that the cumulative expense reflects the
revised estimate, with a corresponding adjustment to the equity-
settled employee benefits reserve.
Centuria Capital Group – Annual Report 2021 | 107
Notes to the financial statements
For the year ended 30 June 2021
F2 GUARANTEES TO BENEFIT FUND
F3 FINANCIAL INSTRUMENTS
POLICYHOLDERS
Centuria Life Limited (“CLL”) provides a guarantee to policyholders
of two of its Benefit Funds, Centuria Capital Guaranteed Bond Fund
and Centuria Income Accumulation Fund (collectively “Funds”) as
described below.
If CLL is required under the bond rules to pay policy benefits to a policy
owner as a consequence of the termination of a bond or the maturity
or surrender of a policy, and CLL determines that the sums to be paid
to the policy owner from the bonds shall be less than the amounts
standing to the credit of the relevant accumulation account balance
(or in the case of a partial surrender, the relevant proportion of the
accumulation account balance), CLL guarantees to take all action
within its control, including making payment from its management fund
to the policy owner to ensure that the total sums received by the policy
owner as a consequence of the termination, maturity or surrender
equal the relevant accumulation account balance, or in the case of a
partial surrender, the relevant proportion thereof.
No provision has been raised in respect of these guarantees at this
time for the following reasons:
• The Funds follow an investment strategy that is appropriate for the
liabilities of the Funds. The Funds cannot alter their investment
strategy without the approval of the members and APRA, following
a report from the appointed actuary;
• The Funds must meet the capital adequacy standards of APRA which
results in additional reserves being held within the Funds to enable
the Funds to withstand a “shock” in the market value of assets. If
the Funds can withstand a shock in asset values and still meet their
liabilities from their own reserves, then this further reduces the
likelihood of the Funds calling on the guarantee provided; and
• CLL also continues to meet the ongoing capital requirements set
by APRA.
108 | Centuria Capital Group – Annual Report 2021
(A) MANAGEMENT OF FINANCIAL INSTRUMENTS
The Board is ultimately responsible for the Risk Management
Framework of the Group.
The Group employs a cascading approach to managing risk, facilitated
through delegation to specialist committees and individuals within
the Group.
The Group is exposed to a variety of financial risks as a result of its
activities. These risks include market risk (including interest rate
risk and price risk), credit risk and liquidity risk. The Group’s risk
management and investment policies, approved by the Board, seek to
minimise the potential adverse effects of these risks on the Group’s
financial performance. These policies may include the use of certain
financial derivative instruments.
CLL has also established an Investment Committee. The Investment
Committee’s function is to manage and oversee the Benefit Fund
investments in accordance with the investment objectives and
framework. Specifically, it has responsibility for setting and reviewing
strategic asset allocations, reviewing investment performance,
reviewing investment policy, monitoring and reporting on the
performance of the investment risk management policy and performing
risk management procedures in respect of the investments.
From time to time, the Group outsources certain parts of the
investment management of the Benefit Funds to specialist
investment managers including co-ordinating access to domestic
and international financial markets, and managing the financial
risks relating to the operations of the Group in accordance with an
investment mandate set out in the Group’s constitution and the
Benefit Funds’ product disclosure statements. The Benefit Funds’
investment mandates are to invest in equities and fixed interest
securities via unit trusts, discount securities and may also invest in
derivative instruments such as futures and options.
The Group uses interest rate swaps to manage interest rate risk and
not for speculative purposes in any situation. Hedging is put in place
where the Group is either seeking to minimise or eliminate cash-flow
variability, i.e. converting variable rates to fixed rates, or changes in the
fair values of underlying assets or liabilities, i.e. to convert fixed rates to
variable rates.
Derivative financial instruments of the Benefit Funds, consolidated into the
financial statements of the Group under AASB 10 Consolidated Financial
Statements, are used only for hedging factual or anticipated exposures
relating to investments. The use of financial derivatives in respect of
Benefit Funds is governed by the Benefit Funds’ investment policies,
which provide written principles on the use of financial derivatives.
(B) CAPITAL RISK MANAGEMENT
The Group manages its capital to ensure that entities in the Group will
be able to continue as going concerns while maximising the return to
stakeholders through the optimisation of debt and equity capital. This
overall strategy remains unchanged from the prior year.
The Group’s capital structure consists of net debt (borrowings, offset
by cash and cash equivalents) and equity of the Group (comprising
issued capital, reserves and retained earnings).
The Group carries on business throughout Australia and New Zealand,
primarily through subsidiary companies that are established in the markets
in which the Group operates. The operations of CLL are regulated by
APRA and the management fund of CLL as a minimum Prescribed Capital
Amount (PCA) that must be maintained at all times. It is calculated monthly
and these results are reported to the Board each month. The current level
of share capital of CLL meets the PCA requirements.
In addition, Centuria Property Funds Limited, Centuria Funds
Management Limited, Centuria Property Fund No.2 Limited, Centuria
Healthcare Asset Management Limited and Heathley Funds Distribution
Limited have AFS licences so as to operate registered property trusts.
Regulations require these entities to hold a minimum net asset amount
which is maintained by way of cash term deposits and listed liquid
investments.
The valuation technique used to determine the fair value of the
Group’s reverse mortgage loan book is as follows:
• the weighted average reverse mortgage holders’ age is 82 years;
Operating cash flows are used to maintain and, where appropriate,
expand the Group’s funds under management as well as to make the
routine outflows of tax, dividends and repayment of maturing debt.
The Group regularly reviews its anticipated funding requirements and
the most appropriate form of funding (capital raising or borrowings)
depending on what the funding will be used for.
The capital structure of the Benefit Funds (and management fund)
consists of cash and cash equivalents, bill facilities and mortgage
assets. The Benefit Funds also hold a range of financial assets for
investment purposes including investments in unit trusts, equity and
floating rate notes. The Investment Committee aims to ensure that
there is sufficient capital for possible redemptions by policyholders
of the Benefit Funds by regularly monitoring the level of liquidity in
each fund.
The Benefit Funds have no restrictions or specific capital requirements
on the application and redemption of units. The Benefit Funds’ overall
investment strategy remains unchanged from the prior year.
(C) FAIR VALUE OF FINANCIAL INSTRUMENTS
(i) Valuation techniques and assumptions applied in
determining fair value
The fair values of financial assets and financial liabilities with
standard terms and conditions and traded on active liquid markets are
determined with reference to quoted market prices (includes listed
redeemable notes, bills of exchange, debentures and perpetual notes).
The fair values of other financial assets and financial liabilities
(excluding derivative instruments) are determined in accordance
with generally accepted pricing models based on discounted
cash flow analysis using prices from observable current market
transactions and dealer quotes for similar instruments. Discount
rates are determined based on market rates applicable to the financial
asset or liability.
• the future cash flows calculation is related to borrowers’ mortality rates
and mortality improvements. The data is sourced from mortality tables
sourced from externally published data.
• fixed or variable interest rates charged to borrowers are used to project
future cash flows;
• a redemption rate, which is based on historical loan redemption
experience, applies to future cash flow forecast; and
• year-end yield curve plus a credit margin is used to discount future cash
flows back to 30 June 2021 to determine the fair value.
(ii) Valuation techniques and assumptions applied in
determining fair value of derivatives
The fair values of derivative instruments are calculated using quoted
prices. Where such prices are not available, discounted cash flow
analysis is performed using the applicable yield curve for the duration
of the instruments for non-optional derivatives, and option pricing
models for optional derivatives.
The valuation technique used to determine the fair value of the Fixed
for Life interest rate swaps is as follows:
• the weighted average reverse mortgage holders’ age is 82 years;
• the expected future cash flows in relation to the swaps are based on
reverse mortgage borrowers’ expected life expectancy sourced from
mortality tables provided by the actuary; and the difference between
the fixed swap pay rates and forward rates as of 30 June 2021 is used
to calculate the future cash flows in relation to the swaps; and year-end
yield curve plus a credit margin is used to discount future cash flows
back to 30 June 2021 to determine the fair value.
(iii) Fair value measurements recognised in the statement
of financial position
The following table shows the carrying amounts and fair values of
financial assets and financial liabilities, including their levels in the fair
value hierarchy for financial instruments measured at fair value.
The table provides an analysis of financial instruments that are
measured subsequent to initial recognition at fair value, grouped into
Levels 1 to 3 based on the degree to which the fair value is observable.
• Level 1 fair value measurements are those derived from quoted
prices (unadjusted) in active markets for identical assets or
liabilities.
• Level 2 fair value measurements are those derived from inputs other
than quoted prices included within Level 1 that are observable for
the asset or liability, either directly (i.e. as prices) or indirectly (i.e.
derived from prices).
• Level 3 fair value measurements are those derived from valuation
techniques that include inputs for the asset or liability that are not
based on observable market data (unobservable inputs).
There were no transfers between Level 1, 2 and 3 in the period.
Centuria Capital Group – Annual Report 2021 | 109
Notes to the financial statements
For the year ended 30 June 2021
30 June 2021
FINANCIAL ASSETS
Cash and cash equivalents
Receivables
Financial assets
Financial assets
Financial assets - mortgage backed assets
Reverse mortgages receivables
FINANCIAL LIABILITIES
Payables
Measurement
basis
Fair value
hierarchy
Carrying
amount
$’000
Fair value
$’000
Amortised cost
Not applicable
273,351
273,351
Amortised cost
Not applicable
127,197
127,197
Fair value
Fair value
Fair value
Fair value
Level 1
Level 2
Level 3
Level 3
811,661
811,661
123,373
123,373
1,181
1,181
54,309
54,309
1,391,072
1,391,072
Amortised cost
Not applicable
88,675
88,675
Benefit Funds policy holders' liability
Amortised cost
Not applicable
303,650
303,650
Borrowings (net of borrowing costs)
Amortised cost
Not applicable
426,642
430,576
Interest rate swaps - reverse mortgage fixed-for-life
Call/Put option liability
Fair value
Fair value
Level 3
Level 3
31,205
22,690
31,205
22,690
872,862
876,796
30 June 2020
FINANCIAL ASSETS
Cash and cash equivalents
Receivables
Financial assets
Financial assets
Financial assets - mortgage backed assets
Reverse mortgages receivables
FINANCIAL LIABILITIES
Payables
Measurement
basis
Fair value
hierarchy
Carrying
amount
$’000
Fair value
$’000
Amortised cost
Not applicable
174,458
174,458
Amortised cost
Not applicable
68,729
68,729
Fair value
Fair value
Fair value
Fair value
Level 1
639,398
639,398
Level 2
Level 3
Level 3
73,920
73,920
1,195
1,195
58,904
58,904
1,016,604
1,016,604
Amortised cost
Not applicable
76,532
76,532
Benefit Funds policy holders' liability
Amortised cost
Not applicable
311,535
311,535
Borrowings (net of borrowing costs)
Amortised cost
Not applicable
265,051
267,907
Interest rate swaps - controlled property funds
Interest rate swaps - reverse mortgage fixed-for-life
Call/Put option liability
Fair value
Fair value
Fair value
Level 2
Level 3
Level 3
636
32,752
17,167
636
32,752
17,167
703,673
706,529
The Group determines Level 2 fair values for financial assets and liabilities without an active market based on broker
quotes. Level 2 fair values for simple over-the-counter derivatives are also based on broker quotes. Those quotes
are tested for reasonableness by discounting expected future cash flows using market interest rates for a similar
instrument at the measurement date. Fair values reflect the credit risk of the instrument and include adjustments to
take account of the credit risk of the entity and counterparty where appropriate.
110 | Centuria Capital Group – Annual Report 2021
(iii) Fair value measurements recognised in the statement
of financial position (continued)
The Level 3 financial asset held by the Group is the fair value of the
residential mortgage receivables attributable to interest rate risk.
The Level 3 financial liability held by the Group is the fixed-for-life
interest rate swaps. These items are designated in a fair value hedging
relationship, with the fair value movements on the swaps offset by
the fair value movements in the mortgage receivables. However, as
the Group has only designated the fair value movements attributable
to interest rate risk in the hedging relationship, any other fair value
movements impact the profit and loss directly, such as credit risk
movements.
KEY ESTIMATES AND JUDGEMENTS
The fair value of the 50-year residential mortgage loans and 50-
year swaps are calculated using a valuation technique based on
assumptions that are not supported by prices from observable current
market transactions in the same instrument and not based on available
observable market data due to the illiquid nature of the instruments. A
discounted cash flow model is used for analysis using the applicable
yield curve out to 20 years, with the yield curve at 20 years employed as
the best proxy for subsequent rates due to non-observable market data
and to reflect the average remaining life expectancy of the borrowers.
Assumptions and inputs used for valuation of reverse mortgage loan
receivables:
(iv) Reconciliation of Level 3 fair value measurements of
financial assets and liabilities
• The loan interest compounding period is the expected remaining life
of the borrower;
Other
mortgage
backed
assets at
fair value
$’000
Reverse
mortgages
fair value
$’000
Fixed-for-life
interest rate
swaps
$’000
Call/Put
option
liability
$’000
Total
$’000
Year ended 30 June 2021
Balance at 1 July 2020
1,195
58,904
(32,752) (17,167)
10,180
Loan repaid
(14)
(2,126)
720
- (1,420)
-
- (5,523) (5,523)
2,965
(1,925)
(5,152)
8,080
-
-
1,040
2,928
Call/Put option liability
Accrued interest
Attributable to interest
rate and other risk
Attributable to
credit risk
Balance at
30 June 2021
-
-
-
-
(282)
(5,328)
- (5,610)
term rates on 30 June 2021;
1,181
54,309 (31,205)
(22,690)
1,595
• Mortality rates for males and females are based on portfolio-
adjusted 2013-2015 Life Tables;
• The compounding interest rate is the fixed rate of loan for the period
from day 1 up to the point of time when loan carrying amount equals
the property value. After that point of time, the loan compounding
rate will be reduced to the same as long term residential property
growth rate determined by Management, on the grounds that any
fixed rate exceeding the property growth rate will not be recovered
after that point of time;
• For 30 June 2021 valuation, the property growth rates are 3.5% for
FY22, 3.5% for FY23, then reverted to a 3.5% flat rate from FY23
onwards;
• Discount factors are calculated based on the market quoted long
• The 1.2% flat credit risk premium, reflecting the portfolio default
profile on 30 June 2021, is added to the monthly cash flow discount
factors to discount future cash flows generated by the reverse
mortgage loans.
Assumptions and inputs used for valuation of the 50-year interest
rate swaps:
• Mortality rates for males and females based on portfolio-adjusted
2013-2015 Life Tables. The improvement factor tapers down to 1%
p.a. at age 90 and then zero at age 100;
• Joint life mortality is calculated based on last death for loans with
joint borrowers;
• 45% of the residential mortgage loan portfolio consists of joint lives;
Other
mortgage
backed
assets at
fair value
$’000
Reverse
mortgages
fair value
$’000
Fixed-for-life
interest rate
swaps
$’000
Call/Put
option
liability
$’000
Total
$’000
Year ended 30 June 2020
Balance at 1 July 2019
1,215
53,720 (28,083)
- 26,852
Loan repaid
(20)
(1,646)
465
- (1,201)
Call/Put option liability
Accrued interest
Attributable to interest
rate and other risk
Attributable to
credit risk
Balance at
30 June 2020
-
-
-
-
-
- (17,167) (17,167)
• Discount factors are calculated based on the market quoted long
2,871
(1,760)
4,782
(4,669)
(823)
1,295
-
-
-
1,111
113
472
term rates on 30 June 2021;
• The 1.171% flat credit risk premium, reflecting the business default
profile on 30 June 2021, is added to the monthly cash flow discount
factors to discount future cash flows generated by the reverse
mortgage loans.
1,195
58,904 (32,752) (17,167)
10,180
Centuria Capital Group – Annual Report 2021 | 111
Notes to the financial statements
For the year ended 30 June 2021
RECOGNITION AND MEASUREMENT
The Group enters into derivative financial instruments such as interest
rate swaps to manage its exposure to interest rate risk.
(E) LIQUIDITY RISK
The Group’s approach to managing liquidity is to ensure that it will
always have sufficient liquidity to meet its liabilities.
Derivatives are initially recognised at fair value at the date a derivative
contract is entered into and are subsequently remeasured to their fair
value at each reporting period. The resulting gain or loss is recognised
in profit or loss immediately unless the derivative is designated and
effective as a hedging instrument, in which event, the timing of the
recognition in profit or loss depends on the nature of the hedge
relationship.
(D) CREDIT RISK
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Group.
The Group has adopted a policy of only dealing with creditworthy
counterparties and obtaining sufficient collateral or other security,
where appropriate, as a means of mitigating risk of financial loss from
default. The credit risk on financial assets of the Group and the parent
recognised in the statement of financial position is generally the
carrying amount, net of allowance for impairment loss.
Concentration of risk may exist when the volume of transactions limits
the number of counterparties.
(i) Credit risk of reverse mortgages
Concentration of credit risk in relation to reverse mortgage loans
is minimal, as each individual reverse mortgage loan is secured by
an individual residential property. The loan is required to be settled
off from the proceeds of disposal of the secured property after the
borrower’s death.
Individual property valuations are conducted at least every 3 years in
accordance with financier’s requirements. At 30 June 2021, the highest
loan to value ratio (LVR) of a loan in the reverse mortgage loan book is
117% (2020: 131%), and there are 77 out of 182 (2020: 69 out of 196)
reverse mortgage loans where the LVR is higher than 50%.
(ii) Credit risk on other financial assets
Credit risk on other financial assets such as investments in floating rate
notes, standard discount securities and unit trusts is managed through
strategic asset allocations with creditworthy counterparties and the
on-going monitoring of the credit quality of investments, including
the use of credit ratings issued by well-known rating agencies. The
exposure of credit risk in respect of financial assets is minimal.
The Group does not have any significant credit risk exposure to any
single entity in other financial assets or any group of counterparties
having similar characteristics.
The liquidity risk is managed for the Group at a corporate level. Bank
account balances across all entities, current and future commitments,
and expected cash inflows are reviewed in detail when the monthly
cash flow projection is prepared for management purposes and
presented to the Board at its regular monthly meetings. By comparing
the projected cash flows with the assets and liabilities shown in the
individual and consolidated statements of financial position, which
are also prepared on a monthly basis for management purposes and
presented to the Board, liquidity requirements for the Group can be
determined. Based on this review, if it is considered that the expected
cash inflows plus liquidity on hand, may not be sufficient in the near
term to meet cash outflow requirements, including repayment of
borrowings, a decision can be made to carry out one or more of the
following:
• renegotiate the repayment terms of the borrowings;
• sell assets that are held on the statement of financial position; and/or
• undertake an equity raising.
This, combined with a profitable business going forward, should
ensure that the Group continues to meet its commitments, including
repayments of borrowings, as and when required.
The Group’s overall strategy to liquidity risk management remains
unchanged from the prior year.
The following table summarises the Group’s remaining contractual
maturity for its non-derivative financial liabilities with agreed
repayment periods. The tables have been prepared based on the
undiscounted cash flows of financial liabilities based on the earliest
date on which the Group and the parent can be required to pay. The
tables include both interest and principal cash flows. To the extent that
interest flows are at floating rate, the undiscounted amount is derived
from interest rate curves at the end of the reporting period.
The policyholders in the Benefit Funds are able to redeem their policies
at any time and the Benefit Funds are therefore exposed to the liquidity
risk of meeting policyholders’ withdrawals at any time. The Investment
Committee aims to ensure that there is sufficient capital for possible
redemptions by policyholders of the Benefit Funds by regularly
monitoring the level of liquidity in each fund.
112 | Centuria Capital Group – Annual Report 2021
Non-derivative financial liabilities
On
demand
$’000
Less than
3 months
$’000
3 months
to 1 year
$’000
1-5 years
$’000
5+ years
$’000
Total
$’000
2021
Borrowings
Payables
Call/Put option liability
-
-
-
Benefit Funds policyholder's liability
303,650
782
12,658
477,917
88,675
-
-
-
-
-
-
28,141
-
-
-
-
-
491,357
88,675
28,141
303,650
Finance lease liabilities
-
822
2,403
13,285
10,050
26,560
303,650
90,279
15,061
519,343
10,050
938,383
Total
2020
Borrowings
Payables
Call/Put option liability
-
-
-
1,010
72,001
221,360
76,532
-
-
-
-
-
-
24,942
-
-
-
-
-
294,371
76,532
24,942
311,535
Benefit Funds policyholder's liability
311,535
Finance lease liabilities
-
443
1,404
8,938
11,779
22,564
Total
311,535
77,985
29,603
255,240
11,779
729,944
The following table summarises the maturing profile of derivative financial liabilities. The table has been drawn up
based on the undiscounted net cash flows on the derivative instruments that settle on a net basis.
Derivative financial liabilities
On demand
$’000
Less than
3 months
$’000
3 months
to 1 year
$’000
1-5 years
$’000
5+ years
$’000
Total
$’000
2021
Interest rate swaps
Total
2020
Interest rate swaps
Total
-
-
-
-
66
66
51
51
212
212
867
867
2,342
2,342
45,171
45,171
47,791
47,791
1,874
1,874
49,159
49,159
51,951
51,951
(F) MARKET RISK
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market prices. Market risk comprises interest rate risk and price risk. Due to the nature of assets held by
the Group (excluding the Benefit Funds), there is an asset and liability management process which determines the
interest rate sensitivity of the statement of financial position and the implementation of risk management practices
to hedge the potential effects of interest rate changes. The Group manages the market risk associated with its
Benefit Funds by outsourcing its investment management. The Investment Manager manages the financial risks
relating to the operations of the Benefit Funds in accordance with an investment mandate set out in the Benefit
Funds’ constitution and PDS. There has been no change to the Group’s exposure to market risks or the manner in
which it manages and measures the risk.
Centuria Capital Group – Annual Report 2021 | 113
Notes to the financial statements
For the year ended 30 June 2021
(i) Interest rate risk management
The tables below detail the Group’s interest bearing financial assets and liabilities.
Weighted
average effective
interest rate
%
Variable
rate
$’000
Fixed
rate
$’000
Total
$’000
2021
FINANCIAL ASSETS
Cash and cash equivalents
Other financial assets held by Benefit Funds
Reverse mortgage receivables
Total financial assets
FINANCIAL LIABILITIES
Borrowings
Total financial liabilities
Net interest bearing financial
assets/(liabilities)
2020
FINANCIAL ASSETS
Cash and cash equivalents
Other financial assets held by Benefit Funds
Other interest bearing loans
Reverse mortgage receivables
Total financial assets
FINANCIAL LIABILITIES
Borrowings
Total financial liabilities
0.13%
0.88%
8.71%
247,100
122,219
710
26,251
3,825
53,509
273,351
126,044
54,219
370,029
83,585
453,614
3.54%
(397,276)
(29,366)
(426,642)
(397,276)
(29,366)
(426,642)
(27,247)
54,219
26,972
Weighted
average effective
interest rate
%
Variable
rate
$’000
Fixed
rate
$’000
Total
$’000
0.24%
0.71%
10.00%
8.64%
150,752
79,902
-
1,181
23,706
81,397
6,702
57,723
174,458
161,299
6,702
58,904
231,835
169,528
401,363
4.19%
(171,228)
(93,823)
(265,051)
(171,228)
(93,823)
(265,051)
Net interest bearing financial assets
60,607
75,705
136,312
(ii) Interest rate swap contracts
Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate
interest amounts calculated on agreed notional principal amounts. Such contracts enable the Group to mitigate the
risk of changing interest rates on the fair value of fixed rate financial assets held and the cash flow exposures on the
issued variable rate debt.
The following table details the notional principal amounts and remaining expiry of the Group’s outstanding interest
rate swap contracts as at reporting date. These swaps are at fair value through profit and loss.
114 | Centuria Capital Group – Annual Report 2021
Pay fixed for floating
contracts designated as
effective in fair value hedge
Controlled property funds interest rate swaps
50 years swaps contracts
Average
contracted rate
Notional
principal amount
Fair value
2021
2020
2021
2020
2021
2020
%
-%
7.48%
%
$'000
$'000
$'000
$'000
1.11%
7.48%
-
70,000
-
(636)
9,301
9,301
9,921
(31,205)
(32,752)
79,921
(31,205)
(33,388)
(iii) Interest rate sensitivity
The sensitivity analysis below has been determined based on the parent and the Group’s exposure to interest rates
at the balance date and the stipulated change taking place at the beginning of the financial year and held constant
throughout the reporting period, in the case of financial assets and financial liabilities that have variable interest
rates. A 25 basis point (0.25%) increase or decrease represents management’s assessment of the reasonably
possible change in interest rate.
At reporting date, if variable interest rates had been 25 (2020: 25) basis points higher or lower and all other variables
were held constant, the impact to the Group would have been as follows:
Consolidated
Interest rate risk
Interest rate risk
Effect on profit after tax
Change in variable
2021
Change in variable
2020
+0.25%
-0.25%
+0.25%
-0.25%
2021
$’000
(496)
500
2020
$’000
(181)
109
The methods and assumptions used to prepare the sensitivity analysis have not changed in the year. The sensitivity
analysis takes into account interest-earning assets and interest-bearing liabilities attributable to the securityholders
only, and does not take into account the bank bill facility margin changes.
(iv) Fair value hedges
The Group held the following instruments to hedge exposures to changes in interest rates.
Interest rate swaps - as at 30 June 2021
Net exposure ($'000)
Average fixed interest rate
Interest rate swaps - as at 30 June 2020
Net exposure ($'000)
Average fixed interest rate
Maturity
1-6 months
6-12 months
More than one year
-
-
-
-
-
-
-
-
9,301
7.48%
9,921
7.48%
The amounts relating to items designated as hedging instruments and hedge ineffectiveness were as follows.
Interest rate swaps
30 June 2021
30 June 2020
Nominal Amount
$’000
9,301
9,921
Carrying amount
Assets
$’000
-
-
Liabilities
$’000
(31,205)
(32,752)
Hedge ineffectiveness
recognised in profit or loss
$’000
84
38
Interest rate swaps are recognised as interest rate swaps at fair value line item in the statement of financial position.
The line item in the profit or loss statement that includes hedge effectiveness is within finance costs.
Centuria Capital Group – Annual Report 2021 | 115
Notes to the financial statements
For the year ended 30 June 2021
F4 REMUNERATION OF AUDITORS
Amounts received or due and receivable by KPMG:
Audit and review of the financial report
Other services including AFSL and compliance plan audits
Non-audit services
2021
$
711,048
141,611
162,500
1,015,159
2020
$
420,565
125,500
114,266
660,331
F5 EVENTS SUBSEQUENT TO THE REPORTING DATE
In July 2021, $34,100,000 cash consideration was received for the two final social affordable housing developments,
45 Pendlebury Road, Cardiff NSW and 357-359 Mann Street, North Gosford NSW.
Other than the above, there has not arisen in the interval between 30 June 2021 and the date hereof any item,
transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect
significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future
financial periods.
116 | Centuria Capital Group – Annual Report 2021
Directors’ Declaration
For the year ended 30 June 2021
In the opinion of the Directors’ of Centuria Capital Limited:
(a) the consolidated financial statements and notes set out on pages 72 to 116 and the Remuneration Report set out on pages
54 to 68 in the Directors’ Report, are in accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements, and
(ii) giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance for the financial year
ended on that date, and
(b) there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable.
Note A1 confirms that the consolidated financial statements also comply with International Financial Reporting Standards as issued
by the International Accounting Standards Board.
The Directors have been given the declarations by the Joint Chief Executive Officers and Chief Financial Officer required by section
295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of Directors.
Mr Garry S. Charny
Director
Mr Peter J. Done
Director
Sydney
11 August 2021
Centuria Capital Group – Annual Report 2021 | 117
Centuria Capital Group – Annual Report 2021 | 117
Independent Auditor’s Report
To the stapled security holders of Centuria Capital Group
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
Centuria Capital Limited (the Company) as
the deemed parent presenting the stapled
security arrangement of the Centuria
Capital Group (the Stapled Group Financial
Report).
In our opinion, the accompanying Financial
Report is in accordance with the
Corporations Act 2001, including:
•
•
giving a true and fair view of the
Stapled Group’s financial position as
at 30 June 2021 and of its financial
performance for the year ended on
that date; and
complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
Basis for opinion
The Financial Report of the Stapled Group comprises:
• Consolidated statement of financial position as at 30
June 2021
• Consolidated statement of comprehensive income,
Consolidated statement of changes in equity, and
Consolidated statement of cash flows for the year
then ended
• Notes including a summary of significant accounting
policies
• Directors’ Declaration.
Centuria Capital Group (the Stapled Group) consists of
the Company and the entities it controlled at the year-
end or from time to time during the financial year and
Centuria Capital Fund and the entities it controlled at the
year-end or from time to time during the financial year.
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for
the audit of the Financial Report section of our report.
We are independent of the Stapled Group and the Company in accordance with the Corporations Act
2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the
Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other
ethical responsibilities in accordance with the Code.
@2021 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms
affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name
and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited
by a scheme approved under Professional Standards Legislation.
101
118 | Centuria Capital Group – Annual Report 2021
Key Audit Matters
The Key Audit Matters we identified are:
• Accounting for acquisitions
• Recognition of performance fee
income
• Recoverable amount of goodwill and
indefinite life intangible assets
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in
our audit of the Financial Report of the current period.
These matters were addressed in the context of our
audit of the Financial Report as a whole, and in forming
our opinion thereon, and we do not provide a separate
opinion on these matters.
Accounting for acquisitions
Refer to Note E2 to the Financial Report
The key audit matter
How the matter was addressed in our audit
During the year, the Stapled Group acquired
98.4% interest in Primewest Group Limited
(‘Primewest’) with the remaining 1.6% under
compulsory acquisition and subsequently
settled in July 2021.
Acquisition accounting is identified as a key
audit matter given the significance to the
financial statements and the significant
judgment required to assess the:
•
•
•
•
Effective date of the transaction based on
the evidence and determination of the date
of control and consolidation;
Fair value of consideration transferred;
Fair value of acquired assets and liabilities
including the value of identifiable intangible
assets (e.g. management rights); and
Recognition of goodwill arising from the
acquisition;
We involved valuation specialists to supplement
our senior audit team members in assessing
this key audit matter.
In performing our procedures, we:
• Obtained an understanding of the acquisition
by examining the transaction documents.
•
•
Considered the Stapled Group’s determination
of the date control was obtained. We did this
by evaluating the facts and circumstances of
the transaction and their relevance to the
Stapled Group’s assessment of control and
impact on the date control was obtained.
Assessed the Stapled Group’s determination
of the fair value of consideration transferred,
considering all available information including
published prices and contractual agreements.
• Worked with our valuation specialists to
assess the Stapled Group’s determination of
fair value of acquired assets and liabilities. In
particular, we focused on the fair value of
identifiable intangible assets (e.g.
management rights).
Evaluated the recognition of goodwill against
accounting standard requirements.
Assessed the appropriateness of the relevant
disclosures in the Financial Report against
accounting standard requirements.
•
•
102
Centuria Capital Group – Annual Report 2021 | 119
Recognition of performance fee income ($17.9m)
Refer to Note B2 to the Financial Report
The key audit matter
How the matter was addressed in our audit
The Stapled Group, in its capacity as a property
fund manager, earns performance fees based
on agreements with some of its managed
property funds. Performance fees are triggered
when underlying funds internal rate of return
exceeds the agreed hurdle rate.
Recognition of performance fee income is
considered a key audit matter due to the:
• Quantum of performance fee income,
representing 8% of the Stapled Group’s
total revenue; and
•
Significant judgement exercised by us in
assessing the amount of performance fees
recognised by the Stapled Group. The key
assumptions impacting the amount of
performance fees, are subject to estimation
uncertainty, bias and inconsistent
application. This increases the risk of
inaccurate forecasts or a wider range of
possible outcomes for us to consider.
Increased time and effort is spent by the
audit team in assessing these key
assumptions.
The amount of performance fees recognised
are impacted by key assumptions including:
•
•
•
Fair value of underlying investment
properties held by the funds. The valuation
of investment properties contains
assumptions with estimation uncertainty
such as expected capitalisation rates and
market rental yields. This leads to additional
audit effort due to the differing
assumptions based on asset classes,
geographies and characteristic of individual
investment properties.
Forecast fund end date. The fund end date
impacts the level of returns that can be
achieved over the course of the funds life
and may change depending on
management’s view of when maximum
value can be obtained for unitholders of the
fund.
Constraint. This is impacted by the Stapled
Group’s expectations of how much of the
performance fee is highly probable of being
received in accordance with the
requirements of the accounting standards.
In performing our procedures, we:
Read the Stapled Group’s agreements with
managed property funds to understand the
key terms related to performance fees,
including hurdle rates.
Evaluated the Stapled Group’s accounting
policies regarding the recognition of
performance fee income against accounting
standard requirements. This included
assessing the Stapled Group’s policies for
constraining performance fee income and
valuing investment properties against
accounting standard requirements.
Assessed the scope, competence and
objectivity of the fund’s external experts and
their internal valuers to fair value the
underlying investment properties held by the
funds.
Challenged specific property fair value
assumptions such as capitalisation rates and
market rental yields by comparing to market
analysis published by industry experts, recent
market transactions, inquiries with the Stapled
Group, historical performance of the
underlying investment properties and using
our industry experience.
Assessed the Stapled Group’s determination
of the forecast fund end date based on the
underlying managed property fund
agreements, the fair value of underlying
investment properties, the Stapled Group’s
fund strategy and history of extending fund
term end dates.
Recalculated the Stapled Group’s performance
fee recognised against hurdles in the
underlying performance fee agreements with
managed property funds.
Challenged the constraints applied in
determining the amount of performance fees
that are highly probable of bring received by
the Stapled Group, based on the Stapled
Group’s estimate of current and forecast
property fund performance. We used our
knowledge of the Stapled Group, their past
performance, business, and our industry
experience.
•
•
•
•
•
•
•
103
120 | Centuria Capital Group – Annual Report 2021
Recoverable amount of goodwill and indefinite life intangible assets ($790.6m)
Refer to Note C6 to the Financial Report
The key audit matter
How the matter was addressed in our audit
A key audit matter is the Group’s annual testing
of goodwill and indefinite life intangible assets
for impairment, given the size of the balance
(being 31% of total assets) and sensitivity of
the forward -looking assumptions to small
changes. We focused on the significant
forward-looking assumptions the Stapled Group
applied in their value in use model, including:
•
Forecast operating cash flows, growth
rates and terminal growth rates (taking into
consideration future growth in funds under
management and transactional fees). The
Group’s model is sensitive to small
changes in these assumptions, which may
reduce available headroom. This drives
additional audit effort specific to their
feasibility and consistency of application to
the Group’s strategy.
• Discount rate - this is complicated in nature
and varies according to the conditions and
environment the specific Cash Generating
Unit (CGU) is subject to from time to time.
The Group’s modelling is highly sensitive to
changes in the discount rate.
We involved valuation specialists to supplement
our senior audit team members in assessing
this key audit matter.
In performing our procedures, we:
•
•
•
•
Considered the appropriateness of the value in
use method applied by the Stapled Group, to
perform the annual test of goodwill and
indefinite life intangible assets for impairment,
against the requirements of the accounting
standards.
Compared the forecast cash flows contained
in the value in use model to the Board
approved forecast.
Assessed the accuracy of previous Stapled
Group forecasts to inform our evaluation of
forecasts incorporated in the model.
Challenged the Stapled Group’s significant
forecast cash flow and growth assumptions:
-
Challenged the Stapled Group’s
significant forecast cash flows by
comparing baseline cash flows to actual
historic cash flows and comparing key
events to the Board approved plan and
strategy.
- With the assistance of our valuation
specialists, compared terminal growth
rates to published studies of industry
trends and expectations, and considered
differences to the Stapled Group’s
operations. We used our knowledge of
the Stapled Group, their past
performance, business and customers,
and our industry experience.
-
Checked the consistency of the forecast
growth rates to the Stapled Group’s
stated plan and strategy and our
experience regarding the feasibility of
these in the economic environment in
which they operate.
• Worked with our valuation specialists to
independently develop a discount rate range
considered comparable using publicly available
market data for comparable entities, adjusted
by risk factors specific to the Stapled Group
and the industry it operates in.
104
Centuria Capital Group – Annual Report 2021 | 121
•
•
Considered the sensitivity of the model by
varying key assumptions, such as forecast
growth rates, terminal growth rates and
discount rates, within a reasonably possible
range. We did this to identify those
assumptions at higher risk of bias or
inconsistency in application and to focus on
our further procedures.
Assessed the disclosures in the financial
report using our understanding of the issue
obtained from our testing and against the
requirements of the accounting standards.
Other Information
Other Information is financial and non-financial information in the Stapled Group’s (Centuria Capital
Group) annual reporting which is provided in addition to the Financial Report and the Auditor's Report.
The Directors are responsible for the Other Information.
The Other Information we obtained prior to the date of this Auditor’s Report was the Directors’
Report, Remuneration Report, the Stock Exchange Appendix 4E and Additional stock exchange
information. The About Centuria, Vision & Strategy, Australasian Real Estate Platform, Key Metrics,
Key Financial Metrics, Chairman’s Report, Joint CEO Report, Expanding our Funds Management
Platform, Centuria’s Dual Growth Strategy, In-house Management & COVID-19 and A Focus on
Environmental, Social & Governance (ESG) are expected to be made available to us after the date of
the Auditor's Report.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
and will not express an audit opinion or any form of assurance conclusion thereon, with the exception
of the Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other
Information. In doing so, we consider whether the Other Information is materially inconsistent with
the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
We are required to report if we conclude that there is a material misstatement of this Other
Information, and based on the work we have performed on the Other Information that we obtained
prior to the date of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001
•
•
implementing necessary internal control to enable the preparation of a Financial Report that
gives a true and fair view and is free from material misstatement, whether due to fraud or
error
assessing the Stapled Group and Company’s ability to continue as a going concern and
whether the use of the going concern basis of accounting is appropriate. This includes
disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless they either intend to liquidate the Stapled Group and Company or to
cease operations, or have no realistic alternative but to do so.
105
122 | Centuria Capital Group – Annual Report 2021
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
•
to obtain reasonable assurance about whether the Financial Report as a whole is free from
material misstatement, whether due to fraud or error; and
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
Auditor’s Report.
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report
of Centuria Capital Limited for the year
ended 30 June 2021, complies with
Section 300A of the Corporations Act
2001.
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration
Report in accordance with Section 300A of the
Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in
pages 14 to 36 of the Directors’ report for the year
ended 30 June 2021.
68
55
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
KPMG
Paul Thomas
Partner
Sydney
11 August 2021
106
Centuria Capital Group – Annual Report 2021 | 123
Corporate Governance Statement
The corporate governance statement for CNI was last updated on 28 September 2021 and is available on
the Centuria website at https://centuria.com.au/centuria-capital/corporate/sustainability/governance/.
124 | Centuria Capital Group – Annual Report 2021
HEALTHCARE: 32 MORROW STREET, TARINGA, QLD
Centuria Capital Group – Annual Report 2021 | 125
Additional ASX information
The securityholder information set out below was applicable as at 6 August 2021.
DISTRIBUTION OF SECURITIES
Analysis of numbers of securityholders by size of holding:
Holding
1 - 1000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Number
of holders
Number
of securities
1,764
4,732
1,346
1,515
208
846,611
12,014,511
9,591,401
42,759,032
722,660,978
9,565
787,872,533
There were 256 holders of less than a marketable parcel of securities holding 8,149 securities.
TOP 20 SECURITYHOLDERS
The names of the twenty largest holders of securities are listed below:
Number held
145,714,383
135,484,935
58,893,435
50,887,204
33,110,048
32,862,905
31,958,042
28,377,402
26,142,468
17,925,886
14,305,231
9,536,034
9,163,336
6,482,446
5,831,222
5,814,571
5,506,582
5,036,342
4,794,770
4,344,364
Percentage
of issued
securities
18.50
17.20
7.48
6.46
4.20
4.17
4.06
3.60
3.32
2.28
1.82
1.21
1.16
0.82
0.74
0.74
0.70
0.64
0.61
0.55
632,171,606
80.26
Number held
Percentage
53,421,706
50,887,204
38,658,027
142,966,937
7.10%
6.46%
6.60%
20.16%
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
HWM (NZ) HOLDINGS LIMITED
NATIONAL NOMINEES LIMITED
PENTEK HOLDINGS PTY LTD
TOPSFIELD PTY LTD
CIRCLESTAR PTY LTD
THE TRUST COMPANY (AUSTRALIA) LIMITED
BNP PARIBAS NOMINEES PTY LTD
BNP PARIBAS NOMS PTY LTD
GH 2016 PTY LTD
BNP PARIBAS NOMS (NZ) LTD
MARK EDWARD FRANCIS & ROCKRIDGE TRUSTEE COMPANY LIMITED
UBS NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
PARITAI PTY LIMITED
BRISPOT NOMINEES PTY LTD
RESOLUTE FUNDS MANAGEMENT
SUBSTANTIAL HOLDERS
Substantial holders in the Group are set out below as at 6 August 2021.
The Vanguard Group, Inc.
HWM (NZ) Holdings Limited
BlackRock Inc.
VOTING RIGHTS
All ordinary securities carry one vote per security without restriction.
126 | Centuria Capital Group – Annual Report 2021
Corporate directory
CONTACT US
Shareholder Enquiries
1800 182 257
HEAD OFFICE
Centuria Capital Limited
Level 41, Chifley Tower,
2 Chifley Square
SYDNEY NSW 2000
T. (02) 8923 8923
F. (02) 9460 2960
contactus@centuria.com.au
SHAREHOLDER
ENQUIRIES
Boardroom Pty Limited
Centuria Capital Limited,
GPO Box 3993
Sydney NSW 2001
FRIENDLY SOCIETY
INVESTOR ENQUIRIES
Centuria Life Limited,
Level 32, 120 Collins Street
Melbourne VIC 3000
T. 1300 50 50 50
T. 1800 182 257
contactus@centuria.com.au
E. CNI.Enquiry@CenturiaInvestor.
com.au
GROUP CHIEF
RISK OFFICER AND
COMPANY SECRETARY
Anna Kovarik
Level 41, Chifley Tower,
2 Chifley Square
SYDNEY NSW 2000
T. (02) 8923 8923
F. (02) 9460 2960
Disclaimer
This annual report is provided for general information purposes only. It is not a
prospectus, product disclosure statement, pathfinder document or any other
disclosure document for the purposes of the Corporations Act and has not been,
and is not required to be, lodged with the Australian Securities & Investments
Commission. It should not be relied upon by the recipient in considering the
merits of CNI or the acquisition of securities in CNI. Nothing in this annual report
constitutes investment, legal, tax, accounting or other advice and it is not to
be relied upon in substitution for the recipient’s own exercise of independent
judgment with regard to the operations, financial condition and prospects of CNI.
The information contained in this annual report does not constitute financial
product advice. Before making an investment decision, the recipient should
consider its own financial situation, objectives and needs, and conduct its own
independent investigation and assessment of the contents of this annual report,
including obtaining investment, legal, tax, accounting and such other advice as it
considers necessary or appropriate.
This annual report has been prepared without taking account of any person’s
individual investment objectives, financial situation or particular needs. It is not
an invitation or offer to buy or sell, or a solicitation to invest in or refrain from
investing in, securities in CNI or any other investment product. The information
in this annual report has been obtained from and based on sources believed by
CNI to be reliable. To the maximum extent permitted by law, CNI and the members
of the Centuria Capital Group make no representation or warranty, express or
implied, as to the accuracy, completeness, timeliness or reliability of the contents
of this annual report. To the maximum extent permitted by law, CNI does not
accept any liability (including, without limitation, any liability arising
from fault or negligence) for any loss whatsoever arising from the use of this
annual report or its contents or otherwise arising in connection with it. This
annual report may contain forward-looking statements, guidance, forecasts,
estimates, prospects, projections or statements in relation to future matters
(‘Forward Statements’). Forward Statements can generally be identified by
the use of forward looking words such as “anticipate”, “estimates”, “will”,
“should”, “could”, “may”, “expects”, “plans”, “forecast”, “target” or similar
expressions. Forward Statements including indications, guidance or outlook on
future revenues, distributions or financial position and performance or return
or growth in underlying investments are provided as a general guide only and
should not be relied upon as an indication or guarantee of future performance.
No independent third party has reviewed the reasonableness of any such
statements or assumptions.
Neither CNI nor any member of Centuria Capital Group represents or warrants
that such Forward Statements will be achieved or will prove to be correct
or gives any warranty, express or implied, as to the accuracy, completeness,
likelihood of achievement or reasonableness of any Forward Statement
contained in this annual report. Except as required by law or regulation, CNI
assumes no obligation to release updates or revisions to Forward Statements
to reflect any changes. The reader should note that this annual report may also
contain pro-forma financial information. Distributable earnings is a financial
measure which is not prescribed by Australian Accounting Standards (”AAS”)
and represents the profit under AAS adjusted for specific non-cash and
significant items. The Directors of CFML consider that distributable earnings
reflect the core earnings of the Centuria Capital Fund. All dollar values are in
Australian dollars ($ or A$) unless stated otherwise.
Centuria Capital Group – Annual Report 2021 | 127
Centuria Capital Group – Annual Report 2021 | 127
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